EQUITY Hudson Realty Capital invests directly in real estate and acquires under-performing mortgages, "value-added" properties and real estate-related instruments. Hudson also specializes in "mid-sized" transactions that are too large for individuals and too small for larger, institutional investors.
Over the past two decades the principals of Hudson have invested nearly $4 billion in distressed or "value-added" real estate transactions on behalf of institutions and individuals. This has been achieved through the purchase of sub/non-performing debt and the acquisition and/or recapitalization of commercial properties.
While the opportunity which defines a "value-added" real estate investment changes depending on the fundamentals of the underlying real estate market or capital market needs, the investment strategy remains constant. Whether the arbitrage opportunity is presented because of a lack of conventional financing for out-of-favor assets or markets, or via a motivated seller due to merger and/or timely liquidity needs, the principals of Hudson have established a long track record of identifying and capitalizing on these opportunities in the appropriate risk-to-return profile.
Hudson is comfortable investing in opportunities at any point in the capital structure, as either preferred equity or a direct capital partner equity in a transaction. Hudson will acquire the secured position in over/mis-leveraged transactions and, typically, will co-invest with a local operating partner who has working knowledge of the asset and market.
Existing Office/Warehouse Building, Conshohocken, PA
In December 2006, Hudson closed an equity investment in a partnership which purchased a 623,020 square foot former tire production facility converted to a Class B office/warehouse building. The equity investment and the proceeds of a first mortgage loan were used to purchase the property, located in Conshohocken, PA, and fund leasing and capital improvements. The Sponsor implemented a marketing and leasing plan, continues to make capital improvements, and expects to reach 90% occupancy by year-end 2007. The partners plan to refinance the building when it is leased up.
Existing Office Building, Phoenix, AZ
In April 2005, Hudson along with a repeat partner acquired a 20-story, 243,000-square-foot office tower and an adjacent parking lot with development rights for up to 700,000 square feet of additional space. The property is located in downtown Phoenix, AZ and was acquired for conversion to office condominiums. Based on extensive experience in the Phoenix office market, Hudson believed the prior owner’s strategy of operating the property on a rental basis did not maximize its potential value. As a result, Hudson anticipated significant demand for the space as office condominiums. However, preliminary interest from numerous buyers showed pricing levels for the property above Hudson's underwriting analysis, and the property was sold in its entirety in January of 2007.
