Paul Dincin: Multifamily Workout Specialist

Chicago–Even when things go wrong, there’s money to be made–by someone with the right skill set. In recent years, Paul D. Dincin and his partner Brian Columbus have put to use their skills in assisting banks, special servicers and other financial institutions deal with their distressed multifamily properties, fractured condominium developments and other broken CRE assets. The two formed Chicago-based Catapult Real Estate Solutions just to serve that niche, bringing considerable residential real estate development to the table, having specialized for the last 15 years in multifamily projects in Chicago, Milwaukee and Minneapolis as Tandem Developers.

It’s detail work, says Dincin, principal of Catapult. The company must provide in-depth asset analysis, workout strategies, feasibility studies, construction completion, sales and leasing management for REO assets; and it must find qualified buyers. Catapult’s approach involves everything from diagnosing a troubled development’s operating problems to dealing with the aftermath of a complicated foreclosure.

While Catapult has worked with some of the larger institutions in the Midwest, the partnership is also reaching out to small- and mid-sized banks with nonperforming loans and REOs. When working as a court-appointed receiver, the company operates a property through oversight of leasing, sales, property management, revenue collection, employing legal counsel and other duties typically performed by a property’s owner.

This week MHN caught up with Dincin to ask him about this niche, and where he sees things going from here.

MHN: Is now the absolute best time to be in multifamily workouts?

Dincin: Maybe the high-water mark is just passing, but I believe that there’s still enough stock that needs attention. For our particular niche–really surrogate developers and advocates for distressed properties–there’s really quite a bit of work available. I expect that to be the case for the next few years, even as other parts of the business return to normal.

In fact, there’s a place for this kind of workout even in better times. Sometimes projects go sideways. It’s a matter of the details, about caring about those thousands of details, to be successful, and that doesn’t always happen. There’s really value in not doing things haphazardly, something that owners who find themselves with real estate they hadn’t planned on owning–banks, for instance–now appreciate perhaps more than they used to.

MHN: Describe a recent workout you’ve take on.

Dincin: One recent project was in the South Loop in Chicago. A 150-unit property had stalled out completely, and our job was to take care of all the issues. That included finishing the construction on some of the townhomes and, just as importantly, re-establishing the property’s reputation as one that’s for sale.

MHN: Why is that important?

Dincin: One of the things that’s glossed over in today’s market, where it’s all about price, is the reputation of a new-construction development. That reputation matters to the brokerage community, and it matters to the public. When a project is stalled, we re-energize it and put the shine back on it so that it’s marketable. That includes a website, signage, brokerage outreach and, in this case, cleaning up the property and solving its various issues. Of course it’s still about price, but you have to get the word out that a property’s problems have been solved and that it’s viable again.

MHN: In this case, were you the broker for the property?

Dincin: No, we handed that task off. We brought in a third-party that knows the submarket and its players, which we find is generally the best approach for us and our clients. In this case, it’s worked out. Of the 150 units, only 30 remain unsold.