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Been There, Done That, Time to
do it Again!
Dear Friends,
I understand that in the NY
offices of Ernst & Young hangs a sign that says “A recession
is a terrible thing to waste.” We couldn’t agree more. Ken
Balin started AMC Delancey in 1992 in the depths of the last
deep real estate recession. Through the ensuing years we
have applied a consistent investment philosophy: Focus on
the downside and the upside will take care of itself. As a
result of our focus on the fundamentals of the deal and not
what other market participants are doing, we didn’t do many
deals over the last several years and we became a net seller
of assets. This contrarian approach got us a lot of funny
looks from other market participants at the time, but today
we feel vindicated.
Many have been shocked by the
suddenness and sharp drop in values that have come in the
wake of the loss of liquidity in the capital markets. We
believe that this systemic shock will take awhile to work
its way through the system before there will be good buying
opportunities. However we don’t see this storm passing soon
and expect further pain before recovery. When the
opportunities come they will most probably be in the form of
distressed debt, and we will use the same consistent
underwriting standards as we have in the past. We will
continue to review investment opportunities and invest, but
we don’t expect to be investing in the near term.
In the mean time, we have begun
making ourselves available to lenders and others that need
help working through these difficult times. Those of you who
know us well know that in addition to our reputation for
honesty and integrity, we pursue everything we do with
persistence and tenacity. We have been involved in many
complex restructurings at both the asset and entity levels,
and enjoy the challenge in “putting together the jigsaw in
the back of the RV rolling down a bumpy road.” If you want
our help or know someone that needs us please contact me.
Sincerely,
Michael C. Wachs
President and Chief Operating Officer
AMC Delancey Group, Inc.
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