Eric Silverman, managing director of Needham, Mass.-based Eastham Capital, is seeing a number of deals in the distressed sector. Between 2011 and 2012, his company fully invested its $34 million Fund II in about 17 properties and 4,500 multifamily units. Silverman has subsequently started Fund III, a $50 million fund that already has a number of properties in the pipeline. “There are a lot of opportunities, and distressed assets absolutely still exist,” says Silverman.Silverman’s experience may seem counter to the trend of disappointment among investors generally with the amount and quality of distressed multifamily opportunities in the past few years. “The expectation coming out of the down cycle is that it would be like the RTC days—a free-for-all. That didn’t happen,” observes Steven Jaffe, executive vice president and general counsel of Los Angeles-based BH Properties LLC. If anything, there may be even fewer distressed properties in the U.S. today. As real estate property performance and values improve, more capital becomes available to the sector, and interest rates drop ever lower.
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