Because loans secured by multifamily assets are in high demand, many institutional investors that bought multifamily portfolios from community banks in ’07, ’08, and ’09—many no closer to owning them than when they purchased the loans—are selling individual loans to private investors, Besen Group’s Jonathan Horn tells us. NY and NJ loans entail a long legal process for loan-to-own investors, and private investors are more patient. The funds that are selling may not have achieved the across-the-board 30% returns for which they'd hoped, but they got high teens on some and exceeded expectations on others, as NY and NJ properties held their value through the recession. Meanwhile, national banks continue to sell portfolios of notes.

Here is Besen’s open workspace in Red Bank, NJ. The company is taking its note sales prowess to Europe, having been retained by European banks to sell notes totaling an unpaid principal balance of more than €300M to US-based banks and funds. That includes an assignment to sell a Belgian bank’s performing-loan portfolio secured by assets in Romania, Slovakia, the Czech Republic, and Poland. Jonathan says the bank is exiting markets beyond its country's borders, just as US banks returned to a local focus in ’08 and ’09.