National multifamily owner and operator The Lynd Group and Declaration Partners, a private investment firm, have formed a programmatic partnership to invest in multifamily asset workouts and distressed situations. So far, the partners are actively advising on several portfolios involving 23,000 units.
“As we enter a phase of significant change in the real estate landscape, where adaptability and agility will likely be essential, we saw the importance of aligning ourselves with experienced partners who share our vision and are well positioned to capitalize on emerging opportunities,” said CEO A. David Lynd. “We are confident that our new partnership achieves this goal, and we look forward to leveraging our combined strengths to navigate the dynamic market ahead.”
The Lynd Group, based in San Antonio, is relying on its experience over the past 25 years turning around distressed assets and helping other owners and investors work through financial challenges. According to Lynd, since the Great Financial Crisis, the firm has purchased over $1 billion of distressed notes secured by 40 properties, requiring restructuring, foreclosure, and bankruptcy actions.
“Since 2008, we got pretty good at investing in and turning around distressed real estate and believe we are well qualified and positioned to help others who are trying to hold on to their properties,” said chief operating officer Justin Utz.
Ron Dalal, a partner at Declaration Partners, said Lynd’s relationships and track record with complex situations are complementary to his firm’s flexible and longer-duration capital.
“We are excited to work with Lynd toward our goal to recapitalize/acquire properties as co-general partner or common equity as well as provide gap capital in the form of preferred equity for overleveraged owners of apartment communities,” he added.
So far this year, Lynd has been retained to advise on a 10,000-unit portfolio in the Northeast, 1,000 units in Central Louisiana, and 1,000 units in the South Central region. It also recently signed a joint-venture agreement with a Houston-based multifamily investment firm to evaluate and shore up a 2,600-unit portfolio.
According to Lynd, its goal is to successfully work with each lender to craft a solution that addresses needs and creates value for both sides. When hired as an adviser, Lynd takes over property management, walks each unit, and conducts audits on existing leases and renovation needs.
“Many times, the borrower and lender have reached an impasse where sharing facts and dealing in reality become a challenge,” Lynd explained. “Our role is to bring a fresh set of facts with a clear path forward to devise a better result than foreclosure and disputes where both sides practice mutually agreed destruction.”
