JLL Launches JV with Real Estate Disposition to Auction Commercial Property
- Sep 17, 2009
Chicago–In response to a growing need for owners, banks and servicers to quickly liquidate commercial property, real estate owned (REO) and both distressed and non-distressed commercial notes, Jones Lang LaSalle has launched a joint venture with Real Estate Disposition LLC (REDC) to provide an online auction sales platform that creates a market for optimal commercial property and note disposition.
“As part of our Value Recovery Services, we have been striving to provide our clients with new and inventive ways to re-balance their real estate portfolios through increased avenues to accessing capital,” says Jay Koster, president of Jones Lang LaSalle’s Capital Markets practice. “This is an important new development for our clients as they can now maximize the value of their assets in a timely manner without upfront fees. Using an auction opens up a viable trading marketplace given market pricing is transparent.”
Since 2007, REDC has closed more than $5 billion in real estate asset sales at auctions, including more than $3.4 billion in 2008 alone.
The commercial property auctions will debut with a 100,000-square-foot commercial property sale in October.
Investors can auction notes of all property types including multi-housing and a variety of debt instruments including first liens, second mortgages, whole notes, and sub-performing or non-performing notes.
“With the default rate on commercial mortgages held by U.S. banks expected to rise to the highest level in 17 years in the fourth quarter of 2009, the smaller regional banks will have less time and government intervention to delay and pray much longer,” says Bart Steinfeld, managing director of Jones Lang LaSalle’s Real Estate Investment Banking practice. “They need a solution to move loans and property easily off their balance sheets now. We expect the community banks to begin selling their small balance loans first, and our note auction platform will be a formidable tool for financial institutions seeking to consolidate and monetize loans of all sizes off their balance sheets.”
Mike Mounts, managing director of Jones Lang LaSalle’s Real Estate Investment Banking team, says, “For many months, we have been seeking ways to capitalize those ‘forgotten’ or hidden assets on our clients’ balance sheets. The ability to reach a wider audience of new buyers combined with a platform of proven results will create an unbeatable way to maximize recovery.”