Hayden Properties Capital Investments wants to raise as much as $250 million for R.E. Distress, L.P., an apartment fund that will target troubled multifamily properties around the U.S. "The current financial turmoil is a great time for a strategy to acquire distressed assets and get them cash flow positive," said Bill Kallman, VP of financial operations. Additionally, the apartment sector is the only one where financing is relatively available, with the GSEs such as Fannie Mae and Freddie Mac actively lending. Hayden Properties wants to raise as much as $250 million for the fund.
The company, which has been buying distressed properties since the days of the Resolution Trust Company, has a $200 million portfolio. In the past, the firm has targeted properties in South and Southwest but will now look anywhere in the U.S. "Our current holdings are grouped in parts of Georgia, suburbs of Memphis, Texas and Arizona, outside of the Phoenix area," Kallman said.
The fund, with a minimum investment of $3 million, is open to high-net-worth and institutional investors. A typical acquisition for the fund would be $10 million to $25 million, or complexes of at least 200 units. The company will look at
properties that are troubled, either on the debt side or the operation side. "We are willing to do the necessary rehab, we have internal construction management capabilities and a long-term relationship with an excellent property management organization," he said. The firm has produced an average IIR of approximately 35% over the last 10 years.
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