August 25, 2014
Commercial Real Estate Direct Staff Report
by Commercial Real Estate Direct Staff Report
First Financial Network is offering 154 performing and nonperforming loans and foreclosed real estate with a balance of $74.1 million on behalf of 10 sellers at its next quarterly loan sale.
The offering is the fifth such event by the Oklahoma City loan-sales specialist, which last September launched what would become a series of quarterly sales events through which banks, investment funds, special servicers and others could efficiently market their unwanted real estate assets.
Since launching its series, First Financial has offered nearly $350 million of assets, including those currently on the market. Roughly 75 percent of the assets it's offered have involved commercial mortgages, the remainder was a mix of loans backed by residential properties, land and business assets.
It's completed the sale of just more than 74 percent of what it has offered, by balance. But that's likely to climb in its upcoming offering.
First Financial previously had offered loans through a two-stage bidding process - a change from how it's historically offered loans. Under its two-stage process, prospective investors would submit indicative offers based on high-level due diligence on the assets they were interested in buying. If preliminary offers met or exceeded the sellers' pricing expectations, the prospective bidder or bidders would be invited to conduct thorough due diligence and submit final offers.
For its upcoming event, First Financial is going back to its usual single-round bidding. It has run the assets it's offering through its valuation models and come up with reserve prices that have been accepted by its sellers. Its historical completion rate for loans offered through its single-stage bidding events is close to 97 percent.
The thinking is that prospective investors, aware that the loans that are being offered are nearly assured of being sold at the highest price offered, will be more willing to make offers.
The assets being offered at the upcoming event are scattered among 19 states. They've been grouped into 10 pools, based on their seller, which include banks, investment funds, a special servicer and real estate company.
First Financial will take offers on Sept. 10 and aims to complete sales by Sept. 19. For additional details, contact the company at (405) 748-4100.
Comments? E-mail Orest Mandzy, or call him at (267) 247-0112, Ext. 211.