Distressed Asset Trading Desk
CRE Xchange brings liquidity, security and efficiency to the distressed commercial note and bank owned commercial property marketplace. The CRE Xchange Trading & Sales desk facilitates the acquisition of commercial Non-Performing Notes (NPN), Distressed Performing Notes and REO properties properties, to our pre-qualified member equity investors.
The CRE Xchange Sales & Trading desk is comprised of experienced professionals with expertise in the valuation and pricing of commercial assets, management of trade executions, and research of strategic market opportunities. The principals of CRE Xchange have established relationships with key individuals within the nations major investment banks, GSE’s and regional banks, thus enabling CRE Xchange to have access to unique and lucrative commercial asset acquisition opportunities.
Below is a brief outline of the typical process flow of the CRE Xchange trading desk for distressed loan acquisitions:
- Equity Buyer Registration and Qualification:
- Confidentiality Agreement (CA):
- Matching Assets with Equity Buyers:
- Non-Disclosure Agreement (NDA):
- Memorandum and Preliminary Asset Evaluation:
- LOI, POF, PSA and Deposit:
- Due Diligence & Closing:
We conduct a phone consultation with each new prospective equity buyer, to ascertain that buyers asset acquisition parameters and to also insure that the buyer meets the financial and security requirements required by the financial institutional sellers.
Once an Equity Buyer has become a registered member, a Confidentiality Agreement (CA) will be executed by the Buyer. Said CA assures that our Member Equity Buyers will not disseminate details of the assets for sale to any other party, and will also assure us that our selling sources are kept confidential.
Once the CA is executed, the CRE Xchange trading desk will begin to match distressed assets available for sale, with the specific purchasing criteria of our Member Equity Buyers. When the trading desk has established a asset – buyer match, the Equity Buyer is contacted by our sales team that there is a REO, or Note asset available for purchase that meets their criteria. If the Equity Buyer expresses prelimianry interest in the subject asset, then the Buyer is requested to execute a property specific NDA.
At this step, the Equity Buyer is requested to review and sign the seller generated Non-Disclosure Agreement (NDA). If the seller does not have an established NDA, then CRE Xchange will supply one on the sellers behalf.
Once the NDA has been executed by the buyer and seller, then the Property/Offering Memorandum will be deliverd to the Buyer. a distressed asset has been identified and matched with buyer, the prospective investor buyer can begin a preliminary evaluation of the subject loan(s) and secured asset(s). Such prelim evaluation may include property value estimation and market condition research, so buyer may determine a current market value of the distressed loan asset and a target acquisition price.
At this point, the buyer would generate a Letter of Intent (LOI) facilitated by CRE Xchange. Said LOI incorporates basic information such as the Buyer Name, address and contact info, Asset to be purchased, Indicative Offer price in line with the banks Strike Price, and other information. Once this LOI is presented to the selling bank, and basic price and terms have been agreed, a Purchase and Sale Agreement (PSA) will be generated by seller. Equity Buyer will need to provide Proof of Funds (POF) to close. All purchases are to be All Cash, and a refundable deposit of approximately 2% to 10% is to be delivered.
Once the equity buyer and institutional seller have agreed and executed the PSA, the formal Due Diligence period will begin. Due Diligence periods typically range from 7 to 21 days, and may consist of property appraisals, property inspections, review and loan note and trust deed, title reports, and more.
NOTE:In some transactions with some Banks, the above process flow is different as follows; In some circumstances the selling financial institution will deliver to a pre-qualified and approved Equity Investor all of the Due Diligence documentation upfront, and Equity Investor is to conduct their Due Diligence investigations prior to the execution of the LOI and PSA. Once the LOI and PSA are executed and non-refundable Deposit is to be delivered, and the Equity Buyer must close with cash in 5 to 7 days, or forfeit entire deposit.