National and International Commercial Real Estate News

DISTRESSED US REAL ESTATE ASSET OPPORTUNITY

SUMMARY

The current market represents a unique investment opportunity to acquire US real estate assets at discounted values. The Savings and Loan crisis of the mid to late 1980’s is the most recent example of a similar condition. Most analysts believe that the current credit market instability is potentially significantly larger than the S & L crisis. However, the global economy is much different today than in the 1980’s and there is much more capital available to take advantage of distressed opportunities today than previously. The Vertical Realty Advisors, LLC (VERTICAL REALTY) approach to NPN disposition facilitates a direct and transparent transaction that satisfies the interests of both the Seller and Buyer.

Recent conditions in the credit markets and unprecedented levels of foreclosures in the U.S real estate market has created a surge of Buyers trying to take advantage of the asset discounts generated by forced liquidation. The process has been very frustrating because of a lack of transparency and unrealistic expectations in the marketplace. Adding to the confusion is an increasing number of peripheral real estate “professionals” attempting to enter the market with promises of direct access to Seller or Seller Representatives and Buyer’s with billions of dollars of funding. The majority of these groups lack the experience, viable connections, and sophistication to handle a bulk sale of portfolio assets.

OPPORTUNITY

In order to streamline the process and based on demand criteria, (VERTICAL REALTY) has been working directly with known supply side principals to develop access to non-performing portfolio assets assembled for the market. This transaction process complements the sellers existing distribution platform by enhancing transparency of the end-buyers criteria for asset mix as well as Seller’s increased exposure to pre-qualified Buyers.

The significant driver of the (VERTICAL REALTY) platform is the scope of knowledge of their principals in financial market and the due diligence that has been performed on the sources of assets prior to introduction of any package to the market. To avoid any possible obstacle in delivering the inventory (VERTICAL REALTY) has closed on two packages on their own and utilized that experience to implement a simplified but effective protocol in delivering the assets.

PROTOCOL

Through established relationships with leading financial institutions, (VERTICAL REALTY) is positioned to source portfolios of non-performing note (NPN) to fulfill client investment interest. Acting exclusively on behalf of direct, principal buyers, the (VERTICAL REALTY) /Buyer relationship is supported as follows:

1) NCND is executed between (VERTICAL REALTY) and Buyer representative for Buyer protection.

2) Buyer and (VERTICAL REALTY) connect to discuss transaction procedures, to qualify Buyer, and for (VERTICAL REALTY) to understand

Buyer requirements in the form of a Letter of Interest (LOI) which outlines the Buyers investment criteria, size and

any specific parameters the Buyer may desire. For example: pools may be defined by State, by appraised values, ZIP Codes or for other specialized interests. Generally speaking there is a correlation between criteria limitation and price, the more specific the Buyer requirements are, the more expensive the pool, conversely, the less restrictive a Buyer’s requirements, the less expensive the pool, i.e. type specific vs. National pools.

3) Seller Attorney and Buyer Attorney are then connected for verification of funds, accessibility of product and execution of an asset sale agreement, after which the conforming pool of assets is delivered into escrow, generally within 24 to 72 hours.

4) The Due diligence period is usually 3 to 5 days and is negotiable for the Buyer.

5) Closing is a mutually agreed to date between principal parties.

* Longer timeframes are needed if overseas funds need to be cleared in compliance with the Patriot Act.