ELIZABETH, NJ-Helios Capital Advisors has sold a non-performing commercial loan on a 104-unit apartment building to an unnamed New York/New Jersey regional investment group, GlobeSt.com has learned.
The note was acquired from a New Jersey regional lender for $7.3 million, the total of the unpaid balance, though the actual debt had come to $9.5 million due to default interest and late charges, Jonathan Horn, Helios senior managing director, tells GlobeSt.com. “They did have to take a discount,” he says.
The discount does not reflect the quality of the property, he notes, which has good occupancy, with half the units renovated in the last two to three years. Located within minutes from Routes 1, 9 and 28, and Interstate 95, it features an on-site superintendent and garage parking. “It was a good-performing asset,” Horn says. “The owner paid too much for it.”
The deal was closed within two weeks, as the lender required that it be complete by the end of the second quarter to comply with accounting procedures that require it to write down a reserve on a quarterly basis. The new owner hopes to acquire the building outright eventually, Horn adds.
Expect to see more such transactions for the next few years, Horn says, as debt continues to mature and defaults work their way through the system. “A lot of the debt we’re seeing now, these lenders have been trying to sell for a year and a half,’ Horn says. “They want to get it out the door.”
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