If apartment owners want to achieve high returns on buying debt on distressed properties and projects, they need to do their homework so they well know what they’re getting into and what these transactions offer.  “Most people who currently have debt maturing and who have had debt on those properties for a very short period of time have seen a decrease in cash flow or a change in valuation,” says David J. Neithercut, president and CEO of Equity Residential, a Chicago-based REIT that owns more than 147,326 apartment units. “They will have a real challenge dealing with that debt maturity.” 

Apartment owners could easily find the same problems that have doomed many single-family home buyers.  And that is cheap and readily available debt requiring very little upfront cash.  This provides owners with cash to come forward and accumulate mortgages. 

With the huge amount of distress in the market today, savvy investors with capital are positioning themselves to respond.

To read the entire article, see http://www.multifamilyexecutive.com/industry-news.asp?sectionID=547&articleID=820515

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