This week: swinging clubs, slinging mud, and the delicate art of the sledgehammer.
Hole in One
Dublin, Ohio-based Epcon Communities didn't have to look far for a natural fit for its sports marketing push. By sponsoring LPGA member Mollie Fankhauser-Cavanaugh for the 2008 season, Epcon will gain a fellow Ohio native (named 2007 Ohio Golfer of the Year) who also appreciates the national condo developer. Not only has Cavanaugh lived at Epcon properties, she also worked for the company for several years before finding her calling on the links. "As a former employee and resident of Epcon Communities, I am proud to wear its name and be a representative for the company," Cavanaugh said in a Jan. 15 statement announcing the sponsorship. "It's a great honor to have such a prominent sponsor, especially in my first year in the LPGA." Epcon expects that Cavanaugh will offer them strong exposure to its target demographic of boomer women and young professionals.
Really Windy City
Chicago multifamily player Rezmar-a partnership between Antoin "Tony" Rezko and Daniel Mahru-had a brief cameo during a Jan. 21 Democratic presidential primary debate between candidates Barack Obama and Hillary Rodham Clinton, who pulled off the gloves and didn't hold back any punches. In response to Obama's claim that he was helping unemployed workers on the streets of Chicago while Clinton was a "corporate lawyer sitting on the board at Wal-Mart," the former First Lady shot back that she was busy fighting misguided Republican policies while Obama was "practicing law and representing your contributor in his slum landlord business in inner-city Chicago." Clinton was likely referring to Rezmar, which contributed $1,000 to the Obama campaign, even as the developer was charged last fall with demanding kickbacks from the Illinois governor's office on state business deals. According to an analysis by the Chicago Sun-Times, of the 30 largely tax-funded multifamily deals Rezmar has been involved in, more than half have foreclosed.
Due-structive Diligence
Keith Moon?The Who's oft-amphetamined drummer, infamous for throwing televisions out of windows, dropping explosives in toilets, and driving a Lincoln Continental into a hotel pool?may finally have met his multifamily match. As part of its due diligence process, Chicago-based Laramar Group is asking sellers to allow a member of its team to rent an apartment while the property is under contract and all but destroy the unit. "You get a bunch of sledgehammers and some goggles, and you just go to town," explains Laramar CEO Dave Woodward. "You pull the cabinets down; you open up the walls; you just tear the thing apart. It's great."
Laramar?which specializes in hairy value-add rehabs?guarantees complete repair of the unit should the deal fall through. Woodward says the hands-on demolition is helpful as part of a larger unit-to-unit, lease-to-lease due diligence process that is required in deeper rehab deals. "It's a neat little trick," Woodward adds. "We try it every time, and obviously, we can't always do it, but it's really cool when we can. So you drop $1,000 in rent on a unit for a couple months...the downside is very small for a $30 [million] to $40 million acquisition, especially if you find some surprises."
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