The following is from a January 11, 2010 Financial Times (London) article entitled “US Property Attracts Opportunistic Investment”:
A public sign of such activity [opportunistic investing] came on Friday when Colony Capital won a Federal Deposit Insurance Corporation auction for $1bn of commercial property loans formerly held by failed banks in states hit hard by the real estate downturn. The deal valued the loans at 44 cents on the dollar and was structured so the FDIC contributes $136m and holds 60 per cent of the equity, while Colony, a Los Angeles investment firm, puts in $90m for the remaining 40 per cent.
Tom Barrack, Colony founder, called the investment "an implicit bet that rates stay low" and warned: "If rates go up, everyone will be crushed."
Crushed, hmmm. I hope Colony’s partners read the Financial Times…
Steven Karbank
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