As a result of the economic uncertainty, the federal government has dramatically increased the pressure on banks to improve capital ratios by liquidating distressed assets. The Federal Reserve Board of Governors anticipates that commercial real estate mortgage maturities will increase from $320 billion in 2010 to $420 billion in 2012.
According to Foresight Analytics, 50% of those will not qualify for refinancing, leaving an estimated $181 billion in non-current C&I and CRE-backed loans ready to be auctioned by struggling banks at pennies on the dollar. Already, the FDIC has closed 447 institutions between the start of 2008 and June 2012. Another 772 representing $292 billion in assets have been flagged by the FDIC as “problem banks” and are selling off their distressed assets.
The Asset Revitalization Solutions principals have been actively engaged in distressed asset investing since 1985 and recognize the unprecedented opportunity in the current market for experienced sub-performing asset investors to obtain secure, high-yield portfolios. Having analyzed over $50 billion and having directly managed and liquidated $15 billion, the principals have seen return percentage as high as in the mid-twenties . Recently, Asset Revitalization Solutions has successfully purchased more than $100 million in distressed debt in the past 15 months and averages an internal rate of return between 15–21%.