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Triple Play: What private investment firms accomplish with their funding

Triple Play is a weekly NJBIZ feature that asks top executives in New Jersey to talk about three things related to their industry.

Sandy Herrick is the founder and managing principal of Case Real Estate Capital, a real estate investment company active as a private lender, purchaser of sub- and nonperforming debt, and equity investor.

We asked Sandy to discuss three things that private investment firms accomplish with their funding.

Solving problems: Limitations on conventional financing remain as institutional lenders continue to shy away from complex transactions. The purchase of nonperforming loans can be daunting for some. Private investors fill that gap, and often the goal is to reposition the asset, enabling it to get conventional financing down the road.

Stabilizing properties, and, by extension, neighborhoods: A mismanaged or neglected property is frequently an eyesore, adding little benefit to the neighborhood. Injecting turnaround capital increases the value of a property whether the situation involves development or redevelopment, foreclosure, bankruptcy or other litigation matters.

Restructuring balance sheets: Markets are more stable than in recent years. That said, banks and insurance companies are still working to clear their balance sheets of troubled properties that are not generating positive cash flow. Private real estate companies will step in to purchase those nonperforming loans.

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