Supported $200M+ Acquisition by a Private Equity & Investment Manager with Expert Underwriting, Modeling, Aggregation & Pricing

A private equity and investment management firm was working on the acquisition of a mortgage real estate investment trust (REIT) and its underlying collateral. The client made a preliminary bid of $200 million and was faced with a short due diligence period to review the REIT’s portfolio, perform a more comprehensive assessment of its value, and revise its bid accordingly. The assets were comprised of legacy securitizations containing 66 loans, some underwritten years earlier, on a variety of commercial properties in major cities and tertiary markets across the U.S. As part of the client’s due diligence, each asset had to be re-underwritten and assigned a value and loss/timing projections. This would allow the client to revise its bid based on the aggregate value of the bonds. However, the client needed experienced underwriters who could evaluate dozens of loans in a very short window. 

The client engaged SitusAMC to underwrite the pieces and determine an accurate price for the whole portfolio. The SitusAMC team created a physical and digital “war room” to collect and organize the existing documentation on the loans. Legacy pools often come with a dearth of due diligence and borrowers tend to be unresponsive to requests for information since the loans have already been funded. So SitusAMC analysts had to get creative in their research. In one instance that meant identifying and interviewing a veteran local real estate broker who was familiar with every commercial building in a particular sub-market. To properly analyze the information it gathered, SitusAMC created two main underwriting models from scratch – a more complex model for high-risk loans and an abbreviated model for the others. 

Ultimately, SitusAMC provided the tools and price calculation the client needed to understand the true value of its purchase, complete the final negotiation and close on the deal in the time frame required.