UC Asset partners with distressed property owners to ease the impact of COVID-19 on businesses
Real estate investment company UC Asset has launched a pandemic mortgage debt relief program for property owners facing financial hardships due to the coronavirus crisis.
As it enters the commercial real estate industry, the company focuses its investments on Atlanta's pandemic-hit market, where commercial properties report unprecedented economic loss during the COVID-19 outbreak.
Through the program, the company is offering to pay for the property owner's mortgage until the pandemic is over, in return for a share of the property's equity. Depending on the deal, US Asset said that owners could either choose to sell a part of their property and become preferred shareholders or sign under a whole acquisition where UC Asset would pay for all remaining mortgage balance.
“UC Asset can leverage all its cash to buy in properties, which is especially advantageous in distressed times when cash is king,” UC Asset founder Larry Wu said. “This is a critical part of our strategy to stay ahead of the curve. Last month we liquidated two residential properties before the residential property price responded to the pandemic crisis. Our cash position is robust after that move. Furthermore, we are in negotiation of raising more capital from high-net-worth investors, and hopefully, we will close some deals soon.”
Property owners will remain entitled to an interest in the property and receive profit as a preferred dividend, even under the whole acquisition deal.
“Partnering with distressed property owners is a bold move for a relatively young company. It can be a risky offering if the pandemic will lead to a longer recession that lasts for years,” said Greg Bankston, managing partner of UC Asset’s GP. “We believe the recession caused by COVID-19 will be sharp but short. In 12 to 24 months, it will be over. The value of these properties will regain, and the cash inflow will recover. The investment we are making today will not only provide relief to local business and property owners for now but also yield great returns for our investors in the near future.”
