Finding Upside in Real Estate’s Downturn

By Ben Steverman - 2011-09-27T18:19:45Z

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Buying Distressed Debt

High-quality properties burdened by excessive debt are a "great opportunity for investing"--the best since the savings and loan crisis two decades ago--says James Tate, partner at Tate Capital Real Estate Solutions. His family's firm has been on a $450 million "buying spree" around the country, purchasing not developments themselves but the debts that financed them. After buying the notes from banks at a discount, Tate's firm negotiates with borrowers and, because of their high debt loads, usually ends up taking possession of the properties. The firm specializes in higher-end shopping centers, which Tate says can generate strong income and fill vacancies despite the sluggish economy.

Photograph by Daniel Acker/Bloomberg