Post Forays into Foreclosure, Distressed Debt Arena
- Aug 04, 2008
By Anuradha Kher, Online News EditorAmarillo, Texas–Marking the company’s initial foray into the foreclosure and distressed debt arena, Post Investment Group LLC recently acquired the 328-unit Foxfire Apartments in Amarillo, Texas. The project, which is currently in an advanced state of disrepair, was purchased out of foreclosure.“The company has developed a new alternative investment platform which will target distressed debt and non- performing multifamily transactions,” says Jack Ehrman, principal and director of acquisitions for Post. “The over-leverage and asset aggregation associated with the Commercial Mortgage Backed Securities (CMBS) era has resulted in banks being forced to take back quality investments as a result of poor management and undercapitalization. As such, Post will utilize our breadth of operational and transactional experience to identify and return blighted assets to both market and historical performance through capital infusion and professional oversight.”Foxfire Apartments, located at 4101 West 45th St., was constructed in two phases between 1974 and 1980 on a 13.9-acre lot. While the asset’s overall structures, consisting of 41 two-story buildings, remain in average condition, the unit interiors and aesthetic appeal have been neglected due to severe mismanagement. As a result of the prior ownership’s inability to renovate units, property-level occupancy has declined from the historical trend of 95 percent to under 40 percent. The Amarillo comparable sub-market averages only 5 percent vacancy. The property was purchased in an off-market transaction. Post plans to renovate and upgrade unit interiors, which it sees as a substantial driver to rental stabilization. Exterior improvements designed to drastically improve curb appeal are also planned. “While Amarillo is a tertiary market, it is a remarkable self-contained region that exhibits the economic and rental metrics we associate with a healthy, stable investment environment,” says Jason Post, president of Post.Post acquired this property in a joint venture with a Los Angeles-based private asset management company. Chicago-based Wrightwood Capital provided the renovation loan.