From WSJ.com and The Real Deal-South Florida: Q & A with Frank Mackle
By Jennifer LeClaire
Venny Torre and Frank Mackle smell opportunity. In fact, they see the proverbial perfect storm in the real estate industry and are betting on a potentially profitable niche: distressed property workouts.
The real estate building veterans last November launched Miami-based Torre Mackle Group, a firm specializing in completing distressed real estate projects and Chinese drywall remediation.
The duo is on to something. South Florida ranks third among U.S. markets for the volume of commercial real estate and condo projects in some level of financial distress. The region has at least 232 known troubled assets, representing more than $6 billion in problematic loans, according to the latest report from Real Capital Analytics.
Torre Mackle's first project is Terzetto Villas, a 62-home development in Aventura. Construction of Terzetto Villas was halted last year when its developer, Merco Group, defaulted on its financial obligations. Now the property's receiver and Ocean Bank have hired Torre Mackle to resume construction in hopes of maximizing the unfinished asset's value.
The Real Deal caught up with Frank Mackle to discuss the complex issues of distressed real estate workouts, how banks determine whether it's worth it to complete a project, and the opportunities for firms like his over the next couple of years.
How much of the work on these types of deals are you able to salvage?
Many of these buildings don't have windows and doors installed, so you have some moisture issues. Sometimes you have to throw out the drywall because moisture had accumulated in the six to eight months of the building sitting stagnant. We've seen roofs that need to be replaced because the final layer wasn't applied and the sun started to damage the roof. Many assets are deteriorating because the properties are in some stage of foreclosure and there's no money to protect and preserve them.
Submitted by Anonymous on Fri, 08/14/2009 - 11:10am
MIAMI, FL - July, 2009 -The Torre Mackle Group, Inc., a Miami-based construction and development firm specializing in the completion and remediation of distressed real estate assets, has been engaged to finish the construction of Terzetto Villas, a 62-unit residential complex in Aventura, Florida. The contract was awarded following a court decision appointing a receiver when the property's developer defaulted on its financial obligations. Following detailed cost and feasibility analyses, the project's receiver and largest creditor, Ocean Bank, decided to move forward with completion of the project.
The Torre Mackle Group launched its distressed asset practice in late 2008 in response to the growing number of troubled commercial and condominium properties in South Florida. The region, currently home to at least 232 known troubled assets representing $6.9 billion in problematic loans, ranks third in the U.S. for the volume of commercial real estate and condo projects now at some level of financial distress, according to the independent research group Real Capital Analytics.
Frank Mackle, Principal of The Torre Mackle Group, believes the ‘perfect storm' underway in the real estate industry has created a niche for firms with expertise in inheriting construction projects midstream. "Many owners and developers defaulted on their financial responsibilities when the real estate bubble burst, prompting lenders to seize their unfinished properties. Because distressed asset remediation is not a bank's core business, these institutions rely on firms like The Torre Mackle Group to help determine the best course of action for the property and execute that plan," said Mackle.
Submitted by Anonymous on Mon, 07/27/2009 - 7:29am