With an initial funding of US $15 million, Futureal founder Gábor Futó is set to start a US-based venture under the name Cordia USA with the purpose of creating a portfolio of residential properties rented across the States. Focusing on three to five cities as a first step, the portfolio will include 500 homes, but later on the company intends to offer its industry experience to outside investors as well.
"Never has the American Dream been so affordable, yet so much beyond the reach of millions of families," revealed Gábor Futó, majority owner of the newly established property investment firm.
"The bursting of one of the largest credit and property bubbles in history continues to keep the developed world in a state of deep crisis. While Europe and its banking sector opted for denial and procrastination, essentially freezing the real estate market, the United States has been bold enough to face reality. Houses are foreclosed on, US residential property price are fallings, which we see as a very attractive investment opportunity."
"We intend to carry out our goals by using our own team in some cities and cooperating with partners in others similarly to the Futureal Partnership Program. This month, our first acquisitions will take place in the states of Georgia and Michigan.
"We have done extensive analytical research both on macro and micro levels before committing to the investment, but the real work still lies ahead, as our team will buy, renovate and rent these homes one at a time. Purchasing the first 500 homes will require an estimated 2,500 offers to be submitted to banks and homeowners, and we will need to visit more than 10,000 properties."
Cordia USA intends to have its leased properties sold within five years. The company believes that a new asset class is emerging in the US, allowing for the financing and selling of its single family homes as income producing portfolios.
Leading the expansion team of Cordia USA is Eran Socher, who had previously worked with Futureal as the development director of the Gold Plaza shopping center development project. Strategic management will be provided from Hungary.
Launched by Gábor Futó at the beginning of last year, the Futureal Partnership Program has so far served as the framework for four major investments with partners: the new KPMG headquarters in Budapest, the Nova Park shopping center in Poland, a substantial investment with Hines's Russian and Polish development platform and an international mezzanine financing project.
Futureal Real Estate Holding announced its 100 million Partnership Programme in 2011, with the intention of re-launching and finishing projects in Central Europe that have slowed down with the economic crisis due to the lack of a professional background or financial resources, hand-in-hand with other developers, banks or tenants. In an environment where funding has run dry, Futureal offers structured finance schemes and professional partnership to its development partners.
Over and above the financial investment, Futureal contributes with substantial added value to the success of the projects, bringing its excellent reputation and experience in leasing, design, engineering and funding to the table. With its presence in three countries, Futureal has completed projects with a total value of over 600 million over the past years, of which partnerships represented 60%.
Source: Andrea Szabó