News
MASTER OF DISTRESS
April 25, 2012
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| Most shopping lists consist of bread, milk, and eggs. But HFZ Capital Group founder Ziel Feldman wants headaches, zoning issues,legal problems, and partnership disputes, he told the Appraisal Institute on Monday. The properties like One Madison Park, 303 E 51st St, and 40 Broad St he’s acquired have a bit of each. He told Cushman & Wakefield valuation and advisory practice leader Eric Lewis he’s particularly bullish about multifamily. “I’m a student of demographics, and we’re one of the non-Muslim countries that is growing with 2.1 kids per family,” he says (we never figured out what happened to the other 0.9 of the third child). And that’s increasing to three per family with immigration. HFZ partnered with Related to acquire the debt on One Madison Park, even with no end in sight to litigation claims. He said the JV hopes to hit the market with renovated units, which he estimates will go for $2,500 to $3,000/SF, by October or November. |
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| Ziel with KTR Valuation and Consulting Services’ Theresa Nygard, AI chapter prez. When HFZ acquired the mortgage to 40 Broad St, there were 110 apartment units left, but after a repositioning, there are now only 25, mostly penthouses, he says. There was a blip in sales until Occupy Wall Street cleared out, but he says that most buyers are overseas investors waiting for the market to mature. And the biggest challenge at 303 E 51st St, the site of 2008’s deadly crane collapse, is removing the attached stigma, he says. It bought and foreclosed on the mortgage, worked on a deal with previous sponsors, and fixed all the zoning issues—and now a 32-story condo tower is rising on the site. Distress in Manhattan has been a fraction of what he expected, but he says there will be more opportunity to buy overleveraged deals. “But not at the prices you saw in ’09.” |
