Two-timing distressed funds

From the New York February issue: This much we know: There’s billions of dollars on the sidelines waiting to buy distressed real estate. But don’t be fooled: There’s also plenty of double-counting going on. Adelaide Polsinelli, for example, has been fielding countless calls from distressed real estate fund managers and vulture investors lately, all looking for New York commercial real estate at rock-bottom prices. But with sellers still unwilling to part with their properties at deep discounts, investors are getting restless. Polsinelli, a broker and associate vice president of investments at Marcus & Millichap Investment Services, said: “Investors are jumping from fund to fund in the hopes that someone is actually doing deals.” She said they’re frequently committing the same money to each of those distressed funds. In turn, those funds are going out into the marketplace touting that cash. “I wouldn’t be surprised if there were double-counting going on,” said Lawrence Lenzner, a partner at Patterson Belknap Webb & Tyler, who represents funds and property owners.  [more]