Palisades Financial Gets Boost From Sub-Prime Bust

May 4 2007 | 12:14pm ET

The sub-prime real estate bust has been making headlines lately, but while some firms are smarting from the meltdown, others are profiting from the shakeup.

“Large institutions and banks are getting weary of the uncertainly in the marketplace and are looking to shed some of their debt,” says William Procida, founder and chairman of real estate private equity firm Palisades Financial. “That is where we come in.”

Procida’s firm, which has completed over $2 billion in transactions since it was founded in 1995 and currently manages two private equity funds, is seeing a tremendous amount of dealflow and can cherry pick its projects.

“We see hundreds of projects, and for each couple of hundred we see we may do one or two,” says Mark Zurlini, president of the Fort Lee, N.J.-based firm.

Because of this, Procida, Zurlini and the four other partners—Ira Bergstein, David McLain, James Calvano and Jack Chimento—do deals nationwide but are currently focusing most of their energy on projects closer to home in places such as New York City, Hoboken, N.J., and Bergen Country, N.J.

“We’re staying away from Florida and Las Vegas,” says Procida, who back in 1990 served as a vice president in The Trump Organization, reporting directly to Donald Trump.

While Palisades Financial provides first mortgages, bridge, mezzanine and equity financing to various types of projects, Procida sees multifamily homes as the big winners in the short-term. And he isn’t alone. A survey released this week by the real estate practice group at law firm DLA Piper reveals that multifamily homes continue to be the most attractive real estate investment opportunity in the coming year, with 26% of the real estate executives surveyed choosing multifamily over other investment options.

While Procida is busy focusing on the deal side, the firm has recently brought onboard a Wall Street veteran to beef up capital raising efforts.

Martin McGinley joined the firm earlier this year as vice president of institutional sales. McGinley, who spent the past 10 years with Knight Capital Markets, is tasked with marketing the firm’s latest fund, the Palisades Regional Investment Fund II. The fund launched last April and has thus far raised $62 million of its target $200 million. It is scheduled to close to new investors at the end of the year. 

Investors in the new fund consist of high-net-worth individuals and the six principals themselves, but McGinley is aiming to bring in foundations, endowments and other institutional investors.

“What makes us unique is we’ve been borrowers, we’ve been lenders and we have development experience. It’s the whole package,” McGinley says, adding that he is seeing interest from pension funds and endowments that are looking to diversify with a commercial real estate component in their portfolio. “Our modus operendi is preservation of capital, and we aim to provide above average returns and historically we have done that.”

The firm’s first p.e. fund launched in 2002, and has invested in transactions valued at over $500 million.

By Deirdre Brennan


In Depth

Q&A: Executive Recruiter Talks Hedge Fund Closures, Hiring Trends

Dec 19 2014 | 6:58am ET

This year, hedge funds have been closing at a rate not seen since the financial...

Lifestyle

Cooper-Hohn Won't Contest Divorce Settlement

Dec 18 2014 | 9:51am ET

The ex-wife of hedge fund billionaire Christopher Hohn will not contest a divorce...

Guest Contributor

Alternative Investment Funds Face A Communications Imperative

Dec 19 2014 | 6:10am ET

A handful of the top alternative investment firms on both sides of the Atlantic...

 

Sponsored Content

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.