ST. PETERSBURG — The collapse of a New Orleans bank is proving a boon to a fast-growing St. Petersburg real estate finance firm.
Directed Capital has acquired $80.2 million in distressed loans originated by the failed bank and collateralized by hotels, apartments and dozens of other commercial properties in Louisiana. The company bought the loans from the Federal Deposit Insurance Corp. with the help of a $150 million line of credit from Goldman Sachs.
"This really represents Directed Capital’s continued growth as a company," CEO Chris Moench said Monday. "In this past year our assets under management increased to right at $350 million so it’s quite an accomplishment for a St. Petersburg boutique firm."
Directed Capital, which also uses investors’ money to buy distressed properties, works with borrowers to resolve their financial problems so the businesses can produce enough cash flow to make the loan payments and repay the investors with interest. The company’s funds return a net average of 12 to 16 percent a year, vice president Nick Griffin said.
The most recent loans came from First NBC Bank, founded in 2006 and backed by many prominent Louisianians include Peyton and Eli Manning, the New Orleans-born star NFL quarterbacks. But the bank, considered a key player in the city’s recovery from Hurricane Katrina, failed last April and was sold to Whitney Bank, leaving the FDIC with about $2 billion in shaky loans.
Directed Capital acquired 57 loans whose collateral included restaurants, two art galleries, a used car dealership and several apartment complexes. Most of the properties are in the New Orleans area with the rest spread around the state.
"We looked at more than just the $80 million (in loans) we purchased but the pool we purchased was the best for our group and our talents," Moench said. "We had our entire team working on the transaction; it was a very big transaction for our company."
Directed Capital has a total of 36 employees in downtown St. Petersburg and an office in San Diego, Calif.
The company recently issued its final capital call for its current fund, its seventh, and plans a new offering later this year. Since it started in 2001, Directed Capital has raised more than $225 million in equity and acquired more than $1.3 billion in underperforming commercial real estate loans.
Contact Susan Taylor Martin at [email protected] or (727) 893-8642. Follow @susanskate