February 14, 2014
Commercial Real Estate Direct
by Dan Moynihan
First Financial Network has launched marketing for its latest quarterly loan offering, involving 75 loans with a balance of $48 million that are being offered on behalf of three sellers. It's also selling 39 foreclosed properties with a value of $34 million.
The Oklahoma City loan-sales specialist launched its series of quarterly offerings last September and has since held two, completing the sale of some 89 percent of the assets that it had offered.
It's taken an innovative approach to selling loans at its events. It doesn't take a listing fee from sellers. Instead, it only gets paid when a prospective buyer makes an offer for a loan or asset that meets or exceeds the seller's strike, or reserve price. But it doesn't simply list sellers' loans. It puts every loan it offers through a rigorous due-diligence process to ensure that the pricing expectations of its seller-clients are realistic.
Prospective bidders started conducting due diligence earlier this week for its upcoming offering and will turn in indicative bids on Feb. 28. Final bids are due March 20.
By using a two-stage process, First Financial can provide its seller-clients a strong idea of where final bids will come in. In the event indicative bids are well below what seller expectations were, investors could be spared the expense of completing thorough due diligence to come up with their final offers.
The loans being offered this time around are a mix of performing and nonperforming commercial mortgages, business loans and residential mortgages. Roughly 55 percent of the pool balance is performing. Collateral includes retail, apartment, office, hotel, senior housing and industrial properties. Properties are scattered among 14 states, with concentrations in Missouri, Illinois and Kansas.
Separately, First Financial has been tapped by the FDIC to offer a $32 million portfolio of mixed-quality loans backed by residential and apartment properties and land. It's also offering $4.6 million of loans backed by bank stock.
The 136 property loans are backed by properties that are concentrated in Tennessee, Georgia, Wisconsin and Florida.
Investors are slated to start conducting due diligence on Feb. 24 and will turn in offers on March 25.
For additional details on either offering, contact First Financial at 405-748-4100.