ATLANTA--(BUSINESS WIRE)--UC Asset announced today that it is offering a pandemic mortgage debt relief program for businesses experiencing financial emergencies due to the COVID-19 pandemic.
Commercial properties are taking a huge hit in metro Atlanta area. According to a report released April 20 by Atlanta consulting firm Bleakly Advisory Group, the coronavirus pandemic may push retail vacancy across metro Atlanta to at least 40%, creating an unprecedented challenge for mall owners and other landlords. Socially-driven businesses, such as restaurants, lounges and clubs, also have experienced a record-breaking economic loss.
A property owner half-way through their mortgage loan could face dilemma if the property cannot generate enough cash flow to remain current on their payments. Many loan companies are offering a grace period, but that may not be enough to save some businesses. An owner may have to liquidate the property to cover the mortgage, which at the current market situation may result in him/her losing the majority, even all, of his/her equity in the property. It is every possible that the owner will end up in debt.
As a company based on the principle of supporting and improving communities, UC Asset is offering property owners in this situation an opportunity to partner with the company to save their own equities. The basic concept is for UC Asset to acquire part or all of a property of concern, by issuing preferred shares to the current property owner. The current property owner will become a preferred shareholder. Depending on the structure of the deal, UC Asset will take responsibility in paying the mortgage for at least a long enough period till the pandemic crisis is over, or, in a whole acquisition deal, UC Asset will pay for all remained mortgage balance.
Under this arrangement, the property owner will retain his/her interest in the property. Even under a whole acquisition deal, the property owner will be entitled to receive profit as a preferred dividend, from the continuous operation of the property.
“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 return for our investors in the near future.”
UC Asset is structured as a Master Limited Partnership (MLP) rather than a real estate investment trust (REIT) in order to focus on long-term value growth. The company is among one of the very few real estate MLPs trading on US public markets, and the only one on OTCQX. This unique legal structure empowers UC Asset to take a longer-term approach to real estate investments, because MLPs do not have to constantly make cash distributions as REITs are required to do.
“UC Asset can leverage all its cash to buy in properties, which is especially advantageous in distressed times when cash is king,” says Larry Wu, UC Asset founder. “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. Now we are entering into commercial property market, where the property price had taken a much harder hit, and we are ready to write checks. Furthermore, we are in negotiation of raising more capital from high-net worth investors, and hopefully we will close some deals soon.”
About UC Asset LP
UC Asset LP is a limited partnership formed for the purpose of investing in real estate for development and redevelopment, concentrating in metropolitan areas of Atlanta, GA and Dallas, TX. For more information about UC Asset, please visit: www.ucasset.com
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