Our investors are particularly excited about the opportunities to continue to invest in a prudent and disciplined strategy, especially in a time where prevailing return levels and investment choices aren’t great.
Irvine, CA (PRWEB) September 14, 2011
Southern Pacific Group, Inc. has completed its first acquisition since the principals of the firm started the company this past June. The deal involved the acquisition of a sub-performing high-yield note on a stabilized apartment complex in Fresno, CA.
Southern Pacific made the purchase as part of its long-term strategy of building a portfolio of sub-performing commercial loans that can be restructured and held in portfolio, providing robust risk-adjusted returns over the mid-long term investment horizon. “When compared to Treasuries, these loans provide annual yields that are 10-20 times greater depending on the investment timeline, and at risk levels that are extremely low relative to those returns,” commented Daryl Schwartz, co-founder of Southern Pacific Group.
Southern Pacific Group leveraged its banking relationship to privately negotiate the sale of the loan directly from the bank and closed the deal within two weeks of coming to terms with the bank. “This deal reflects the importance of maintaining key relationships and having a solid reputation in the market. Counterparty risk keeps banks leery of selling assets and, all too often, they get burned by firms tying up a deal, going out to look for the cash, and not closing. A good bit of the bank’s time is wasted and asset value deterioration is also an issue in those instances,” remarked Schwartz.
The principals of the firm started Southern Pacific Group, Inc. in June of this year after successfully leading the acquisition of over $250 million of residential and commercial real estate debt and equity for a prior firm. “Our work and experience over the past four years has helped us learn to navigate the unique opportunities and situations that distressed assets provide, and how to appropriately manage to the best outcomes for those assets.”
“We continue to see a significant amount of deal-flow directly from the banks and our current strategy allows us to selectively choose one-off loans or portfolios of loans that fit our need for current reasonable yield and solid long-term capital appreciation. Our investors are particularly excited about the opportunities to continue to invest in a prudent and disciplined strategy, especially in a time where prevailing return levels and investment choices aren’t great.”
About Southern Pacific Group (http://www.southernpg.com)
Southern Pacific Group is a full-service real estate investment firm that provides Investment Management and Advisory services for its investors and financial partners. Southern Pacific seeks to preserve investor capital and deliver exceptional risk-adjusted returns through strategic investments in opportunistic commercial real estate debt and equity.
Though Southern Pacific Group seeks to capitalize on short-term, high-yield opportunities, the firm holds a long-term view of real estate and applies its view in developing and growing sustainable wealth for itself and partners.
The management team possesses complimentary backgrounds and shares a disciplined approach to the due diligence, acquisition, and management of real estate and real estate-related assets. Spanning the last three decades, the team has underwritten more than $5 Billion in real estate transactions, and acquired, managed, or developed over $400 Million in real estate and real estate-related investments. The team combines an expertise in the sourcing, underwriting and management of both residential and commercial assets.