Stalled Condo Projects Eyed

Stalled Condo Projects Eyed IRVINE, CA, - The market timing is near perfect for the newly formed Sycamore Urban Properties, a firm that specializes in acquiring and stabilizing new and converted condominium properties that have fallen into distress since the housing bubble burst.

The company recently completed its first acquisition - a 41-unit, newly constructed townhome development in Rancho Cucamonga, Calif. - and is actively pursuing other properties as the multi-family housing market begins to thaw and become more active. Sycamore Urban purchased the note for the Rancho Cucamonga asset in September, 2008 and successfully navigated through the bankruptcy process and took title to the property via foreclosure earlier in March of this year.

"There are numerous quality properties out there in various stages of completion that have fallen victim to nothing more than bad timing, and we anticipate many of these notes and properties changing hands via note sales or bank REO sales," said Sycamore Urban President Mitchell Bradford, who founded the firm in early 2008 with company CEO Lew Halpert.

"When the market returns to some level of normalcy, shrewd acquisitions will lead to generous returns over time - as long as the investor has equal portions of patience, cash and courage," Bradford added.

Sycamore Urban is positioning itself for a market return in three to five years, when consumer interest in such multi-family residential properties is projected to be very high with new construction unable to meet the demand at competitive prices.

The firm is working with financial institutions to acquire notes and assets of distressed multi-family property in California, Arizona and Nevada. In doing so, the Sycamore Urban leadership will bring to bear nearly seven decades of combined investment, development and homebuilding experience.

Halpert is a 35-year commercial real estate veteran, including 16 years of partner-level experience at Kennedy-Wilson, a nationwide real estate services and investment firm. He has been involved in the acquisition, rehabilitation and resale of more than $3 billion dollars of real estate throughout the United States and internationally, including the acquisition of nearly 100 failed and/or fractured condominium developments during his career.

Bradford brings 20 years of experience in the homebuilding industry to Sycamore Urban, having served in senior roles at companies including Kaufman and Broad, Ryland, William Lyon Homes and John Laing Homes. He has purchased and sold more than a billion dollars in property in his career and entitled more than 5,000 residential lots. Bradford has served as president of both the Building Industry Association of Southern California and the Orange County chapter.

Sycamore Urban also includes Vice President Daniel Flynn, who has purchased, entitled and financed over 2,000 lots - as well as multi-family and mixed-use projects - throughout Southern California over the past 12 years. Flynn was most recently employed as vice president for John Laing Homes.

The multi-family market in this region has seen condominium prices decline by as much as 50 percent, and many are trading at prices well below replacement value.

Once the market begins to recover, Bradford said, there will be a strong demand for condos, particularly in the more affordable price ranges, due to a limited supply. Inflationary pressure on pricing for housing also is expected as a result of the scarcity of developable land, long and arduous entitlement approvals, lack of infrastructure and shortages of labor and materials, he said.

As the market begins recovery, Sycamore Urban will be positioned to bring its properties to the market either through bulk sales or as individual units sold through traditional retail sales programs.

"The timing couldn't be better for us," Bradford said. "We're entering this market at a time of tremendous opportunity - and when we emerge we hope to have taken control of several thousand condominium units in supply-constrained locations."

Sycamore Urban Properties is a value-added, multifamily investor and developer focused on the acquisition of partially or fully complete distressed condominium or apartment-to-condominium conversion projects. Its primary mission is to work with borrowers and/or banks to purchase distressed properties, including bank Real Estate Owned (REO) assets and/or notes. Each asset acquired will be completed and leased to stabilization with an intended holding period sufficient for market recovery. The disposition strategies will include sales of assets at attractive capitalization rates or disposition via traditional retail sales programs.

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