Tuesday, 03 August 2010

Fairfield Residential Emerges from Bankruptcy

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Commercial Real Estate Direct Staff Report

Fairfield Residential Co., one of the country's largest apartment owners, has emerged from bankruptcy after selling a 65 percent stake in itself to Brookfield Asset Management.

Brookfield received the stake in exchange for $29 million that it provided in a co-investment with the California State Employees' Retirement System and Fairfield's management team, and separately committing another $150 million to fund future investments by Fairfield.

Fairfield and 14 of its subsidiaries entered bankruptcy reorganization last December, saying the collapse of the credit markets made it difficult to address their capital needs. Its individual property entities were not part of the filing.

The San Diego company owns 55,000 units primarily in coastal markets and last year was 16th on the National Multi Housing Council's ranking of largest multifamily owners.

"Fairfield is a best-in-class company," said David Arthur, managing partner of Brookfield, which owns 6,200 multifamily units through two investment funds, and operates residential brokerage and relocation businesses. "We are excited by the opportunity to work together, building on our respective experience in real estate services."

Christopher Hashioka, Fairfield's chief executive, said the recapitalization "put us on solid footing for building our business and positioning us to take advantage of exciting growth opportunities."

It will use the recapitalization proceeds to begin paying back creditors and to maintain its property and asset management and construction services. It also is expected to look to expand its portfolio through acquisitions, joint ventures and development.

The company is a merchant builder that it sells most of what it develops. Its specialties include luxury units, student housing and for-sale condominiums.

Comments? E-mail John Covaleski or call him at (267) 247-0112, Ext. 208.

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Additional Info

  • Syndicate to Realpoint: No
  • Subject: Bankruptcy/Foreclosure (BKRPT)
  • Deal Name: Bear Stearns Commercial Mortgage Securities Trust, 2006-PWR12
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