$32.2 Million: Non-Performing Loan Sale
Holiday Fenoglio Fowler, L.P (“HFF”), has been exclusively retained to offer an opportunity for qualified investors to acquire a $32.2 Million Non-Performing Commercial Mortgage Loan Portfolio (the “Loans” or “Portfolio”). The Portfolio includes three cross-collateralized, non-performing loans in maturity default. Collateral for the Loans includes three medical office buildings located in the heart of New Jersey’s Essex County, approximately 5 miles west of Newark and 20 miles west of Manhattan (the “Collateral” or “Properties”). The tenant base at the Portfolio consists primarily of local practices spread out across a wide range of medical services, with no tenant making up more than 6,135 SF (3.8% of the total NRA).
The Properties are located in affluent areas across Essex County featuring average household income in excess of $160,000 within a three-mile radius of each property. Additionally, on average, 76,000 people live within a three-mile radius of each property providing a strong client base for tenants to benefit from. The sale presents potential investors an excellent opportunity to acquire a non-performing Loan Portfolio with upside potential.
Investment Overview
| TYPE | LOCATION | SIZE | OCCUPANCY |
| Medical Office | Livingston, NJ | 53,039 SF | 76% |
| Medical Office | West Orange, NJ | 71,462 SF | 31% |
| Medical Office | Maplewood, NJ | 38,778 SF | 95% |
| TOTAL | 163,279 SF | 60% | |
Investment Highlights
Non-Performing Senior Mortgage Loan Portfolio
The Portfolio presents the opportunity to acquire three cross collateralize, non performing, first lien senior mortgage loans.
Direct Sale From Bank
The sale provides investors the opportunity to acquire a non-performing Loan Portfolio directly from a bank. The Loans matured in July 2017 and have been declared in default since May 2017.
Loan Status Offers Investor Optionality
The Loans’ maturity default status presents investors with the optionality to workout, modify, or pursue title to the Collateral. The Assignment of Leases and Rents was put into effect on two of the properties and the third property is operating under receivership.
Exceptional Opportunistic Investment Opportunity
The Properties in the Portfolio are under performing the market and are collectively 60% leased with over 20% of the total NRA leasing on a month to month basis. Low occupancy and short remaining lease terms provide investors the opportunity to stabilize and/or re-position the collateral.
Established Medical Office Corridor
Located within 5-miles of the Portfolio, there is over 2.5 million SF of medical office. With less than 10,000 SF of deliveries within the last 12-months and no planned construction, absorption remains positive and market vacancy continues to decline.
Barriers To Entry
The state of New Jersey has extremely high barriers to entry for medical properties given their Certificate of Needs (CON) Program. These restrictions provide for limited competition and deter tenants from relocating to a competing property.
Sale Timeline
| Initial Offer Date | Wednesday, March 7th |
| Best and Final Date | Wednesday, March 21st |
| Finalize and Execute purchase and sale agreement (“PSA”) Hard Deposit posted | Friday, March 23rd |
| Closing | Week of March 26th |
Loan Sales Transaction Team
| Sean Ryan Managing Director sryan@hfflp.com 469.232.1931 |
Scott Aiese Managing Director saiese@hfflp.com 212.632.1826 |
Stephen Schwalb Associate sschwalb@hfflp.com 469.221.7777 |
Kyle Shaffer Real Estate Analyst kshaffer@hfflp.com 469.232.1903 |
New Jersey Office Specialists
| Jose Cruz Sr. Managing Director jcruz@hfflp.com 973.549.2011 |
Kevin O’Hearn Sr. Managing Director kohearn@hfflp.com 973.549.2018 |
Medical Office Specialist
| Ben Appel Senior Director bappel@hfflp.com 484.532.4214 |
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