In Hudson's view, the turmoil in the credit and capital markets creates
opportunities uniquely suited to its investment strategy and discipline.
Opportunities created by current market conditions include:
- Purchase of performing and non-performing
discounted debt:
There is a broad spectrum of distressed or liquidity-constrained
sellers including investment banks, CDO lenders, regional banks, savings
and loan institutions, and the FDIC liquidating loans or pools of loans.
- Originate high yield debt investments:
The retreat of more traditional real estate lender is resulting
in attractive risk-adjusted returns on first mortgage loans, and more
stringent underwriting by first mortgage lenders is creating additional
demand for subordinate debt at higher yields while lower in the capital
stack.
- Source compelling equity and
preferred equity investments:
Current market conditions have increased demand for equity to capitalize
on the acquisition and recapitalization of distressed assets as well as
liquidity constrained franchises.
While there are significant opportunities resulting from the credit
crisis, every real estate investment must be evaluated on the basis of sound
real estate fundamentals. Hudson's due diligence process, developed over
two decades, examines a range of scenarios with strong emphasis on the downside
risks. In addition, since its founding Hudson has focused on complex, management-intensive
assets. The skills and management tools developed over Hudson's history
are well suited for the current challenging economic conditions.
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