Redwood Fund to Buy Up Distressed Assets
Redwood Real Estate Partners is launching a $500m investment fund, called Occasio ResCap, in order to jump on distressed assets for sale where the seller may be out of options. "The current housing market, residential loan performance, and related foreclosure activity have created ample opportunity for us to purchase REO and non-performing whole loans," says fund manger John Duden, a founding partner of Fasthold Capital, which specialized in the acquisition, restructuring, and liquidation of residential whole loans and REO portfolios. "Our formation of the Occasio Fund and related operating platform will allow us to be an aggressive buyer and to provide sellers with an alternative exit strategy for the disposition of those assets," he adds. Redwood is known for its entrepreneurial spirit in dealing with assets. The company was founded in 1989 and is privately owned by the Chang family. "The Occasio Residential Distressed Fund is one of four real estate strategies Redwood is sponsoring in which the Chang Family will be co-investing alongside other third party investment partners," says Carl Chang. "We are pleased with the risk-adjusted returns the Occasio ResCap platform projects and our greatest successes within the single family residential space has been in buying and selling REO." With the launch of Occasio ResCap, the company aims to leverage current market conditions and acquire $500m in distressed residential real estate while offering sellers a seamless way of liquidating those assets. As an operating platform, Occasio ResCap will manage the acquisition and handle the risk analysis, pricing, underwriting and liquidation of distressed assets. Because it is a fully funded entity that is sponsored by Redwood, Occasio ResCap has the capital to close sales and mitigate sellers’ risk. Duden adds that the assets under consideration may come from any area of the country, but some regions, such as the Eastern seaboard, may be held in higher regard than others, such as rust-belt properties. However, underwriting is conducted on an asset-to-asset basis so no property is automatically excluded. Write to Jacob Gaffney. Disclosure: Author holds no investment positions.