By: Anuradha Kher, Online News Editor, Multi-Housing News
With development projects stalled across sectors, the need to deal with loans that have gone bad is one of the few growing niches of the commercial property industry. To that end, Diversified Properties has formed a partnership with industry veteran Jonathan Stein to form Diversified Realty Advisors, a real estate advisory and turnaround group providing lenders with interim portfolio or individual asset management services during the workout or foreclosure stage, as well as long-term strategies such as asset and construction management, acquisition support and disposition services.
“Our primary focus is to provide advisory services to banks on their non-performing assets, most of which happen to multifamily construction loans,” said Nicholas Minoia, partner of DRA. “We help the banks in either restructuring the loan with borrowers or in taking control of the properties which are most often fractured condos, and helping in the conversion to rentals.”
Minoia, along with Jonathan Stein, are heading the company, which currently has eight employees and more than half a dozen clients. Most of them are community lenders and banks with assets worth $200 million to $2.5 billion. Minoia was the founding partner at Pinnacle Communities and a banking executive during the savings and loan crisis of the late 1980s; and Stein is a former attorney with 20 years of loan workout experience as well as property development and distressed portfolio acquisition, management and disposition, including 15 years as an operating partner at Roseland Property Company. Both will head the company.
“Current market conditions have created a climate in which lenders are finding themselves having to take back troubled real estate projects in increasing numbers,” says Minoia.
In addition to Diversified Realty Advisors’ in-house team of professionals, the company has formed strategic partnerships with leading accountants, attorneys, engineers, architects, planners and other outside consultants to ensure expertly executed and timely implementation of assignments.
“The risk of relying on an asset management or advisory company without banking and real estate experience can be detrimental for a lender in achieving maximized returns on their assets,” says Stein. “Using the established relationships we have formed during our extensive careers in the real estate and banking industries, DRA has hand-selected the best outside consultants that compliment our in-house team of professionals to help ensure that our clients achieve their goals.”
The banks DRA is currently helping are in New Jersey and Connecticut. The company is also in talks with some companies in Manhattan.
“We believe there is always some need for workouts in the industry. Of course, the financial crisis has deepened the need for this kind of workout but we see an ongoing requirement for that,” says Minoia.
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