Alchemy Properties wants to turn distress into gold

Joel Breitkopf
In what may be an attempt to live up to its name, luxury condo developer Alchemy Properties plans to invest in the development and rehabilitation of distressed properties.

With a new initiative in place to invest in the properties, Alchemy will target partially finished developments and overleveraged rental-to-condo conversions.

Although the down market has spawned a number of distressed asset investment programs, Joel Breitkopf, a partner at Alchemy, said he’s confident that his firm’s initiative — it’s not a formal distressed asset fund — will stay ahead of the pack. He says that an understanding of the numbers behind residential development gives them an edge over other investors.

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“When a developer is under pressure, they tend to cut corners and their subcontractors tend to cut corners,” Breitkopf said. He said that his firm’s hands-on experience evaluating potential developments will help it avoid dangerous, poorly constructed investments.

“We’ve always focused on the downside of our transactions, as the upside usually takes care of itself,” Breitkopf said.

Breitkopf said that he plans to keep the program small, possibly investing in five to 10 buildings over the next 24 months.