Distressed Property Resolution Transitions

Wesley E. Finch, as operating director of his former employer, was retained by Massachusetts Housing Finance Agency to takeover, workout and reposition 929 House, 929 Massachusetts Avenue, Cambridge, Massachusetts and 808 Memorial Drive, Cambridge, Massachusetts. These two projects, totaling 500± units, were repositioned and today, over thirty years later, provide quality, affordable and market rate housing in the area between Massachusetts Institute of Technology and Harvard University.

TFG tackled a financially distressed 423-unit, HUD-financed, high-rise, rental property in the Boston, Massachusetts suburb of Chestnut Hill. TFG stabilized the property and converted it to condominiums (the first HUD-financed building to be converted to luxury condominiums in the United States). Today, twenty-five years later, the property, called The Towers of Chestnut Hill, remains the preeminent luxury condominium in the Chestnut Hill area.
TFG was brought in by a group of mortgagees, who had foreclosed on their debt, to develop, construct, market and manage the revitalization of the Somerset Hotel located on Commonwealth Avenue in Boston’s historic Back Bay. Built at the turn of the century, the old Somerset Hotel had seen better days. Two developers had walked away from the deal and a third was foreclosed out. With TFG’s broad market knowledge and its sense of the product that would sell at this location, it was able to revive the grand old property as housing. This helped stabilize a key Commonwealth Avenue block, between Massachusetts Avenue and Kenmore Square, that was in danger of becoming a college campus extension, and it triggered significant new investment in the area. Within 18 months, the property was renovated, the first phase of the project sold out, TFG redesigned the second phase to suit appropriate target market groups, oversaw construction, and successfully sold out the complex. Today units in the building are selling at prices approaching $1,000,000.
In November, 2003, TFG, working with its long-term joint venture partner, Daejan, PLC (a London Stock Exchange listed property company) took over the operation of 513 severely distressed rental units contained within a 774 unit condominium association in Lauderhill (just west of Fort Lauderdale), Florida. TFG also manages the condominium association. Units within the property were generally selling in the low $70,000’s in November, 2003. By November, 2005 similar units were selling in the mid $160,000’s, with “after bubble” sales prices now starting at $120,000+.

The Finch Group was retained to restructure the financing, both debt and equity, of Prince Hall Plaza Apartments in Harlem, NY. Early on, during the due diligence period, TFG determined, that prior to any possible financial restructuring the property required an immediate and extensive triage effort. It was clear that Ownership, as represented by the Board of Prince Hall and prior management, neglected to carry out the obligation to properly oversee the property and were entirely deficient with HUD mandated compliance regulations. TFG began by implementing a series of internal controls, a $547,000 Weatherization Program through the Northern Manhattan Improvement Corporation, dismissed current management, terminated Prince Hall’s relationship with unionized employees, settled most of the outstanding law suits/judgments and brought in, as of May 1, 2011 Multifamily Housing Management as the property manager. Once TFG, along with the new Board of Directors and management, placed the operations of Prince Hall back on an “even keel,” the JV submitted a refinancing application for the recapitalization and rehabilitation of Prince Hall to New York City Housing Development Corporation to underwrite new financing. On September 3rd, 2015 Prince Hall closed on its conversion to permanent financing. Today the property is fully occupied, operating at positive cash flow and providing quality affordable housing for senior citizens of limited financial means.

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