Behringer Harvard to Capitalize on Rising Tide of Loan Sales, Workouts Through Closed-End Funds
BH Capital CEO Michael McKinney
Seizing on the fallout from the Great Recession and the nascent economic recovery, Dallas-based Behringer Harvard has formed BH Capital to acquire a blend of performing and non-performing loans secured by commercial real estate properties.
The company announced Tuesday that it will create and manage a series of private, closed-end funds that will be offered to accredited and institutional investors.
BH Capital intends to raise capital through a variety of sources, including independent broker-dealers in Behringer Harvard’s selling group, and by partnering with family offices, private wealth management groups, private equity investors, pension funds and other institutional investors.
Loan sales are expected to increase as the Federal Deposit Insurance Corp., which manages asset liquidation for failed member financial institutions, prepares to bring to market hundreds of billions of dollars of commercial loans secured by commercial real estate or other business assets, according to Behringer Harvard’s executives.
The consensus is that both sound and distressed financial institutions will ramp up loan sales as they rebalance their loan portfolios by reducing their heavy exposure to commercial real estate and other asset classes.
In particular, BH Capital sees a big opportunity to serve lenders addressing maturing debt placed during the U.S. commercial real estate market’s peak years of 2005 to 2007.
“We believe that the next three to five years will offer expanded business opportunities for experienced professionals with proven ability to acquire debt, manage workouts and sell commercial real estate assets in an improving market,” said Michael McKinney, CEO of BH Capital, in a prepared statement. “BH Capital was created to take advantage of these emerging opportunities.”
Specifically, BH Capital plans to acquire loans originating from the full spectrum of U.S. financial institutions, including sound, distressed and failed entities.
The company will operate as a separate entity while leveraging Behringer Harvard’s institutional-quality infrastructure, commercial real estate capabilities and shared services for marketing, accounting, human resources, and legal/compliance.
The management team of BH Capital includes six executives who collectively have acquired, originated, managed and sold more than $17 billion of commercial and residential loans.
In addition to McKinney, The BH Capital management team includes Randy Hughes, president and COO; Daryl Bird, executive vice president of loan acquisitions; Paul Jankovsky Jr., executive vice president of investment strategies; Kevin DeLozier, executive vice president of portfolio management; and Bryan Crow, executive vice president of finance and reporting.
Behringer Harvard creates and manages global institutional-quality investment programs for individual and institutional investors through its real estate investment trusts, joint ventures and proprietary program structures. The company also offers strategic advisory, asset management and capital market solutions.
Programs sponsored and managed by the Behringer Harvard group of companies have attracted equity of more than $5 billion. That capital has been deployed into commercial real estate transactions of more than $11 billion.
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© 2012 Penton Media Inc.
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