Bound Brook, NJ - Charlotte-based Mountain Real Estate Capital (MREC) recently closed another distressed acquisition: Carriage Park, a 144-unit condominium site in Bound Brook (Somerset County), New Jersey from an affiliate of Capital One Bank. The property was previously improved with a five-story partially completed building, but it burned to the ground two days prior to MREC's intended August 2010 acquisition date. Despite the fire, MREC advised Capital One that it wanted to acquire the property. The parties worked together in the subsequent months to manage the demolition, insurance submissions and ultimately the purchase of the property by MREC.
"When the property burned, we needed to resolve several substantial challenges," remarks MREC's Chief Executive Officer Peter Fioretti. "Once the surrealism of the fire just two days before closing wore off, we realized what we still liked about this project – 144 entitled homesites in central New Jersey. The bank patiently worked with us towards our common goal, which also required cooperation from the Borough of Bound Brook to modify development and other agreements, which we greatly appreciate. We can now focus on this project in this vibrant community."
Carriage Park was originally conceived, entitled and constructed by the Kalian Companies of Red Bank, New Jersey. Kalian represented the bank in the sale of the property to MREC and will continue to assist MREC in the development of the project going forward.
"We have always believed, and still do, that Carriage Park will prove to be one of the premier multifamily projects in the state," explains Patrick Kalian, president of Kalian Companies. "What was required as a result of the economic turndown was a strong capital commitment and shared vision, both of which we knew Mountain would have based on our dealings with them over the last 15 years. Within days of introducing them to the bank, a deal was struck. When the fire gave Mountain the right to walk, they instead worked with the bank to close, and we are thrilled they did."
MREC is organized to invest $1 billion in bank REO/NPL with a focus on residential development projects to be either acquired or restructured/recapitalized for existing borrowers. MREC has recently acquired more than $630 million of loans/assets from 20 different banks. These NPL/REO acquisitions total approximately 8,000 lots plus another 7,500 acres of developable land. Its nationwide team of investment managers and local development and builder partners enabled MREC to quickly close these transactions.
"As a result of the fire and everything that was affected by it, Carriage Park turned out to be one of the more challenging REO acquisitions we have undertaken," comments MREC's Chief Investment Officer Arthur Nevid, who heads the company's bank portfolio acquisition program. "Our company was founded in New Jersey and we were determined to re-enter the market–abandoning this opportunity was not an option. We are extremely excited to move forward with this acquisition, and we are speaking to other New Jersey banks about additional potential REO and note acquisitions."
MREC's corporate headquarters is in Charlotte and its homebuilder joint venture program is based out of its Minneapolis office. The national origination team has additional offices in Atlanta, Los Angeles, Richmond, Va. and Newport Beach, Calif. Most of the group is comprised of former bank REO managers who had been responsible for the management and disposition of 46,000 lots and homes valued at more than $2 billion.
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About Mountain Real Estate Group
The Mountain Real Estate Group is focused on expanding its acquisition program by purchasing asset portfolios and NPL/REO assets direct from banks. Additionally, the group provides capital through flexible debt arrangements, joint purchases, and restructure of current debt to its builder/developer/investor partners. Mountain's equity fund is positioned to invest up to $1 billion in these types of opportunities.
Since 1993 Mountain has been a leading private capital source to its partners. Mountain Real Estate Capital is the equity investment arm of the Mountain Real Estate Group. Other affiliates include its lending group, Mountain Funding, LLC, and its management and special servicing group, Mountain Asset Management Group, LLC. More information can be found at http://www.mountainrecapital.com.
