by Oscar Pedro Musibay
Oct 28, 2011, 6:00am EDT
The partners paid more than $100 million for the note, which had a balance of about $165 million.
The Omni deal is one of 10 transactions Tate has closed in the last two years that together comprise a $500 million portfolio.
Tate has participated in every deal, with Rok investing in nine and Perez in six. The partners target distressed assets, with the borrower sometimes participating in the purchase, which motivates it to provide “good information,” Tate said.
Assets, some of which have already been sold, run the gamut from apartments to retail and unfinished condominiums. They have been located in Arizona, South Carolina, Louisiana, Alabama, Tennessee and Florida.
Tate and Rok have a longstanding friendship that stretches back to their college years.
For their first deal together in 2009, Tate and Rok bought the first mortgage on the 103,000-square-foot Coral Landings II, a Publix-anchored shopping center in Coral Springs. The pair paid $14.5 million.
The latest purchase is Riverstone Shoppes in Parkland, which Tate and Rok bought for about $5.5 million on Oct. 21. The property was marketed as part of a $2 billion sale of distressed assets that had prior financing through commercial mortgage-backed securities (CMBS).
The threads of the distressed-asset strategy are an outgrowth of Tate’s father’s work: President Bill Clinton nominated banker and developer Stanley Tate to run the Resolution Trust Corp. in mid-1993, but Tate later withdrew his name. Stanley Tate remains chairman of Tate Capital, while Jimmy Tate is president.
The Tate family developed, built and/or managed about 12,000 single-family and multifamily residences in the U.S., and developed, operated and managed about 2 million square feet of commercial property, including hotels/casinos, golf courses, offices and industrial parks in the U.S. and the Caribbean.
Rok is the second-generation president of Rok Enterprises, succeeding his father, Natan Rok, and holds 25 years of combined banking and real estate experience. In 2006, he sold his TransAtlantic Bank to Banco Sabadell for $175 million. He owns 26 commercial and retail properties in Miami Dade County that total 1.5 million square feet. Seventeen of the properties are located in Miami’s central business district, with many on Flagler Street, making Rok the largest single owner of property on the historic street.
Dominic F. Montazemi, senior associate with the Investment Properties, Private Capital Group at CB Richard Ellis, said distressed assets in good locations offer a great opportunity for investors, partly because the volume of assets is significant.
But buyers have to work with lenders and real estate professionals to determine a price based on what rent rolls could generate currently, not what the building was projected to generate when the prior owner, which defaulted, received financing. As a result, current market prices could be discounted by half or more from the previous sale, CBRE Senior VP Scott O’Donnell said.