Atlanta-based real estate investment company announced that it is offering a pandemic mortgage debt relief program for businesses experiencing financial emergencies due to the COVID-19 pandemic.
“Partnering with distressed property owners is a bold move for a relatively young company,” said Greg Bankston, managing partner of UC Asset’s GP. “It can be a risky offering if the pandemic will lead to a longer recession that lasts for years.”
“We believe the recession caused by COVID-19 will be sharp but short. In 12 to 24 months it will be over. The value of these properties will regain, and the cash inflow will recover. The investment we are making today will not only provide relief to local business and property owners for now, but also yield great return for our investors in the near future.”
Commercial property owners who have issues keeping up with their mortgage payments may participate in the mortgage partnership and have their monthly mortgage obligations transferred to UC Asset.
This opportunity is specifically offered to commercial property owners in the metro Atlanta area, who have outstanding mortgage balance between $500 thousand to $5 million, and whose property income has been impacted by the COVID-19 pandemic.
Under a mortgage partnership, UC Asset will become the commercial property owner’s business partner and will take over all mortgage payments on the concerned property (including any past-due payments).
In return, UC Asset will be entitled to receive a fair share of the future income generated from the concerned property. The terms and conditions are flexible, and may generally be more favorable to property owners than other options such as “hard money” loans.
“UC Asset can leverage all its cash to buy in properties, which is especially advantageous in distressed times when cash is king,” said Larry Wu, UC Asset founder. “This is a critical part of our strategy to stay ahead of the curve.”
“Last month we liquidated two residential properties before the residential property price responded to the pandemic crisis. Our cash position is robust after that move. Now we are entering into the commercial property market, where the property price had taken a much harder hit, and we are ready to write checks. Furthermore, we are in negotiations of raising more capital from high-net-worth investors, and hopefully, we will close some deals soon.”
Commercial properties are taking a huge hit in metro Atlanta area. According to a report released April 20 by Atlanta consulting firm Bleakly Advisory Group, the coronavirus pandemic may push retail vacancy across metro Atlanta to at least 40 percent, creating an unprecedented challenge for mall owners and other landlords.
Socially-driven businesses, such as restaurants, lounges and clubs, also have experienced a record-breaking economic loss.
A property owner half-way through their mortgage loan could face a dilemma if the property cannot generate enough cash flow to remain current on their payments. Many loan companies are offering a grace period, but that may not be enough to save some businesses.
An owner may have to liquidate the property to cover the mortgage, which at the current market situation may result in him/her losing the majority, even all, of his/her equity in the property. It is very possible that the owner will end up in debt.
“COVID-19 has hit Atlanta’s small businesses hard and financial analysts are saying things will get even harder over the upcoming months,” said Christal Jordan, UC Asset’s investor relations director. “I know numerous business owners that have taken huge hits because of the restraints placed on social gatherings. Our firm is relatively new to the Atlanta area but we want to do our part in strengthening the economy of Atlanta.”
Jordan continued, “Small business owners are the heartbeat of this economy and if we can partner with commercial business owners in peril to prevent them from having to sell their business then we’ve done a good thing.”