ENGLEWOOD CLIFFS, NJ-Billy Procida, the iconoclastic private equity lender based here, tells GlobeSt.com his 100 Mile Fund will close out 2013 earning better than a 16% return on capital investments of around $50 million for the year.
Despite banks having become very aggressive again in competing with private capital to provide real estate financing, Procida says, “there are still spots for guys like us” – meaning his seven-person team based in this Bergen County suburb.
“I was a builder. We are really contractors and developers, playing the part of bankers. We know the assets we work with, and function as consultants in addition to being lenders,” says Procida, who made his start building market-rate housing and strip retail in the Bronx.
A live-wire personality who at one point in his career talked himself into an internship with Donald Trump, Procida says he likes getting called in when “something blows up” and a small-to-medium-size project needs a jump start or restructuring.
“At that level, bigger is not better for the developers,” he says. “They would rather deal with us, even for a point or two more, because they like us, trust us, and we can help them get a project on track.”
In the first nine months of this year, Procida's fund showed a 16.97% annualized return on $46 million worth of loans. Since its start in the fall of 2011, the 100 Mile Fund has lent more than $100 million. The fund is so named because it considers projects within 100 miles of the George Washington Bridge.
Procida Advisors, the parent company begun in 1995, has completed over $1 billion in transactions ranging from $2-$50 million.
This year, one of the fund's major projects was a $12.3 million infrastructure and construction loan to the developers of Nobility Crest at Brick, a residential/retail project in Brick Township where there is high demand for reasonably priced housing post-Superstorm Sandy.
“We're also about to close on a $13.5 million deal in Philadelphia,” Procida tells GlobeSt.com, but he said it was too soon to provide details on that one.
In New York City this year, the fund provided a $10 million bridge loan to Ladera II for development of a mixed-use project at 300 West 122nd St. in Harlem; and a $5.55 million construction loan for Greystone's development of 43 waterfront townhomes on City Island.
Other transactions included a $3.58 million discounted debt purchase on five mixed use properties in Bergen County and a $2.65 acquisition/renovation loan for three multifamily/retail buildings in Paterson.
Procida says he continues to be “a believer” in residential real estate development, as long as it is what he calls “wholesome housing.”
“We don't like McMansions, we don't like high-end specialty stuff,” he says. “Right now, we are involved with more than 400 townhomes under construction in the $240,000-270,000 price range.”
Procida says he believes the niche for the 100 Mile Fund's style and moderate-sized project lending will continue to generate high returns in the coming year.
There are plenty of mega-projects at the high end under construction in the region, Procida says. “We like to play around the edges of that, where you can't really get that hurt – no matter how much the market fluctuates.”
“Am I buying trophy buildings in Manhattan?” he says. “No way! I don't see how to make any money doing that.”
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