Spanish Firm Wants to Buy Distressed Assets in Manhattan

Twenty9th Park Madison

New York–Espais Promocions Immobiliàries (Espais) plans to continue its expansion internationally by developing new projects in Florida and pursuing the acquisition of several properties in the New York market. In addition to working with Spanish banks in South Florida to develop REOs or bank-owned properties, Espais is investing in several distressed Manhattan projects.

Andres Hogg is spearheading Espais’ U.S operations. He is an Argentinean-born architect who developed his own architecture, construction and development firm in Buenos Aires before coming to the U.S. and joining the firm. Hogg says, “We are in the period of guessing now and hopefully one day soon we realize we guessed properly. So I guess that right now the market is stabilizing. Prices are making sense again and if someone has cash, he or she should buy. Financing continues to be elusive.”

Espais opened its New York City office in 2006 and has completed its first U.S. project, Twenty9th Park Madison, a 34-story, 142-unit condominium project. Despite the challenging market, Espais also paid off the $114-million loan that funded the construction of the condominium ahead of schedule in summer 2009.

Now Espais is expanding its real estate portfolio and is in the process of acquiring properties in New York’s Midtown, West Chelsea and Upper East Side neighborhoods. The company plans to identify and invest in additional distressed assets in the New York City market through its newly formed joint venture with one of Manhattan’s top mortgage brokers. “We are cautious about where we buy—the locations that have proven themselves and not the upcoming neighborhoods,” says Hogg. “There are a lot of distressed properties in New York but they haven’t come onto the market yet, because banks and borrowers are trying to work out the loans. However, I predict they will all be for sale at some point.”

Hogg also explains that the company will invest in distressed properties but not those are too cheap. “Sometimes when something is too good to be true, it isn’t true at all. There are properties that were about 45-50 percent higher in price a couple of years ago and are now deemed distressed. People made some very optimistic assumptions about some properties that were not fulfilled. We have an opportunity to help them and make use of the deals out there,” says Hogg. While there were bid wars only a few years ago, today there are very few people who can afford to buy distressed assets. “This is because the buyer has to not only buy the property but also invest money in renovations etc.,” adds Hogg.

Espais is looking to aligning with new partners such as Spanish financial institutions, banks and companies in order to expand as a firm.