In a recent NJBIZ Triple Play, Sandy Herrick was asked to discuss three things that private investment firms accomplish with their funding. Following is an excerpt:
1. Solving problems: Limitations on conventional financing remain as institutional lenders continue to shy away from complex transactions.
2. Stabilizing properties, and, by extension, neighborhoods: A mismanaged or neglected property is frequently an eyesore, adding little benefit to the neighborhood. Injecting turnaround capital increases the value of a property.
3. Restructuring balance sheets: Markets are more stable than in recent years. That said, banks and insurance companies are still working to clear their balance sheets of troubled properties. Private real estate companies will step in to purchase those nonperforming loans.
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