Distressed Bank Property Acquisition

Michael Sonnenfeldt built a real estate merchant bank that capitalized on acquiring distressed properties during the late 1980s market crash. The business leveraged the opportunity to buy properties from failed banks and government takeovers.

Key Points:

• Market Timing & Opportunity:

  • Launched after 1987 stock market crash
  • Real estate market followed the stock crash
  • Banks were failing and properties became distressed
  • Federal government had taken over many bank assets

• Business Model:

  • Acquired properties from:
    • Failed banks
    • Federal government holdings
  • Built portfolio to approximately $1 billion in assets
  • Focused on buying distressed real estate at discount prices

• Strategic Advantage:

  • Entered market at bottom after crash
  • Had capital available when others didn't
  • Could acquire properties at distressed prices
  • Scaled to hundreds of properties

• Exit:

  • Successfully sold the business in 1998
  • Built significant value through market timing and scale