A local real estate executive is opening the mid-Atlantic branch of a firm seeking to capitalize on the housing market slump by investing in troubled residential real estate projects.
LandCap Partners, which debuted last week and has offices in Los Angeles, Florida and Tysons Corner, has secured $350 million from private equity firms for its investments and plans to leverage upto $1 billion in available funding, the company said.
“The market is very volatile right now, and you have a lot of builders who are just trying to reposition their assets, and we’re there to kind of help them to do that,” said Steve Coniglio, head of the company’s mid-Atlantic division.
Coniglio, who previously headed KB Home’s mid-Atlantic Division and was land acquisition director for Pulte Homes, said LandCap will offer to take languishing residential real estate off builders’ books for rates that may be less than what the builder paid during the housing market boom.
“We’re the liquid outlet for a lot of these guys,” he said. “One of the keys for us is to partner with them and do multiple projects and deals with them.”
Coniglio said D.C.’s strong economy and continued demand for land inside the beltway made the Washington area a draw for the company.
David Porter, vice president of research for market intelligence for Hanley Wood, said the current real estate market is ripe for such new ventures.
“If they can alleviate some of the financial strap these guys are in, I think it’s a great idea, and it might help save some of these builders who are in over their heads,” Porter said.
“As long as the waters are muddied by the financial crisis that we’re having now, companies are going to continue to be opportunistic to make some money,” he said.
“I think you’ll see more of these firms arise.”
