By Keat Foong, Executive Editor
In its search for distressed properties, Conix Inc. may have a special tool that may not be at the disposal of many other market players. “Five years ago, we built a proprietary platform that helps us understand what is happening in the balance sheet of some 8,000 banks,” says Cash Doye, managing director of Conix Capital Markets. The company then narrowed that list to about 300 banks that ultimately hold assets that are of interest to Conix.
Competitive strategies such as this help Conix compete for sought-after value-added opportunities in the marketplace today. The company, which invests exclusively in distressed real estate, announced it purchased a record 542 residential properties and 1,414,893 square feet of multifamily living and commercial self-storage space in the second quarter. The company says this acquisition volume represents a 26 percent increase over its record results in the previous quarter.
Doye says Conix acquires in all states except Alaska and North Dakota, and it has bought a considerable amount of distressed multifamily properties in the Southeast, in the Atlanta MSA, as well as in markets including as Phoenix and Tucson.
“Ultimately we are looking for value-add opportunities in Class B and Class C properties in which we can take a project in physical or financial distress, revitalize that project and create tremendous housing opportunities for the local community in that submarket,” explains Doye. Doye emphasizes the company strives to provide Class A-quality security, service, presentation and community to all its residents whether they live in Class A or Class C communities.
Almost all of Conix’s distressed real estate properties, says Doye, are acquired by way of bank-direct negotiations, whether the assets are non-performing notes or fee simple real estate, or through the bankruptcy channel, whereby the company comes in to fund the former sponsor and developer. Additionally, Conix also works with a network of realtors and asset managers that bring it off-market opportunities, says Doye. “Ninety-five percent of the assets we acquire are not principal market transactions, that is, they are not MLS-listed transactions.”
It helps that members of Conix’s management team have spent the past 20 years building relationships, says Doye. “It is not easy to find distressed opportunities,” he agrees. “You have to have the right relations in place…Our biggest competitive advantage at this point is our access to distressed opportunities.”