Investors Complete Purchases in First Round of FHFA Distressed Property Sales

The Federal Housing Finance Agencyrn(FHFA) announced today that the Cogsville Group, LLC is the second successfulrnbidder in the agency’s owned real estate (REO) pilot initiative.  The group has purchased 94 properties held byrnFannie Mae in Chicago.  According to FHFArnall properties were sold near or above market value.</p

On September 10 FHFA revealed the firstrninvestor group to purchase through the program was Pacifica Companies, LLC whichrnbought 699 Fannie Mae properties in Florida. rnAt that time FHFA said that 541 properties in Atlanta were not awardedrnand will be evaluated for disposition through Fannie Mae’s retail sales operationrnor through future structured transactions. </p

Both sales were described as “ModifiedrnCash Flow (2:1)”.  The Pacificrntransaction had a third party value of $81.5 million and the company paid $12.3rnmillion for its “bidder interest.”  ThernChicago deal had a third party value of $13.7 million and Cogsville paid $2.1 million.   The remaining structure was described as “10%rnof equity cash flow shifting to 50% after Shift Threshold”.  In the case of Pacific that threshold isrn$49.31 million and for Cogsville it is $8.39 million.</p

Pacifica Companies is a privately heldrnreal estate developer, investor, owner, and manager located in San Diego,rnCalifornia.  Its portfolio includes hotels,rnmixed use projects, master planned communities, industrial, office, and retailrndevelopments, senior housing, multifamily housing, and single-familyrncommunities in the U.S., Mexico, and India.</p

The Cogsville Group was founded in 2006rnby Donald Cogsville, a former member of the U.S. National Soccer Team and thernprofessional San Diego Sockers.  The firmrnacquires distressed commercial real estate assets and in 2010 acquired thernsecond largest distressed commercial portfolio ($1.8 billion) in the history ofrnFDIC. </p

FHFA said that Fannie Mae will continuernto offer for sale pools of properties in markets across the U.S. and interestedrninvestors can continue to qualify as purchasers through the pilot program.

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