Using $ 100 Million ‘War Chest’, New Orleans Developer Targeting Commercial Properties | Economic news
Local developer Anthony Marullo began buying properties using a $ 100 million ‘war chest’ that he raised to primarily buy business premises that ran into cash flow issues due to the coronavirus pandemic.
Marullo, who is the third generation of the family that has owned the French Market Restaurant & Bar on Decatur Street since 1965, and who himself has owned other bars and restaurants in the French Quarter, has over the past two decades been a portfolio in the city of around 600 multi-family dwellings with its real estate partners.
The strategy of the new company – which he called the “Louisiana Revitalization Fund” – is to target a mix of real estate opportunities. Some real estate purchases will focus on successful businesses that already have high traffic retail operations. Other purchases will target properties whose businesses suffered a steep decline during the pandemic, including restaurants.
The idea is that stronger commercial properties will strengthen the portfolio in order to attract banks and other lenders.
Marullo started the new business with the purchase of two properties that have strong operations: the Meineke Car Care Center at 4243 Canal St. and the Gulf Coast Spirits liquor and convenience store on Florida Street in Mandeville.
The 4,000-square-foot Meineke building was owned by a company controlled by Barry Kern, owner of Mardi Gras World, and former energy director Michael B. White. He was valued in 2020 by the Orleans Parish Appraiser at $ 400,000, although Marullo did not disclose what he paid for it.
When it comes to struggling businesses, says Marullo, “We try to find good operators who may own a property and find themselves in a situation where they have used up their cash from the (Federal Protection Program Relief Fund. paychecks), the pandemic has hit them really hard, and they’re trying to make a decision: “Should I stay or should I go?” “
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The deal offered to these struggling businesses will be that Marullo will buy the property and re-lease it to operators so they can continue, but as tenants rather than owners.
Marullo said he raised $ 20 million in equity from his own funds as well as three local investors he declined to name. This is combined with a loan from local lender BankPlus, and he expects other lenders to join the project.
Marullo is a member of the board of directors of American Bank & Trust, a small community bank run by Alton Mcree. He was appointed a year ago to the board of directors of the Louisiana Housing Corporation, reflecting his work in developing affordable housing.
He said his experience as a member of the bank’s board of directors and watching his family restaurant navigate the pandemic led him to the idea of finding businesses that needed to use their real estate assets. ‘a way that would allow them to continue.
“Last year was extremely difficult and we got to a situation where the PPP was running out (for the restaurant in the French market), and if we hadn’t had other sources of funding, it could have been well, much worse, “said Marullo. , adding that the restaurant is now doing better than before the pandemic since the rollout of the vaccination triggered pent-up demand.
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The troubled real estate fund is expected to close deals on properties in Shreveport as well as the New Orleans area, Marullo said.
Tim Thompson of Urban Properties said his company “identifies markets and selects assets within them,” in partnership with Marullo. Urban Properties will provide the underwriting and be the broker for the transactions, he said.
Separately, Marullo Property Inc., Marullo’s leading real estate investment company, purchased a 14,000 square foot office building at 4401 Veterans Memorial Blvd. as it expanded to commercial real estate last September. Tenants include Nola Dermatology and Axis Realty Group.
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Marullo’s largest residential development to date was the Gilmore Park apartment complex in Algiers, for which he spent more than $ 1 million to modernize it two years ago with his partner Brad Jongbloed.
The resort, near Behrman Park, was built in the 1960s as family accommodation for the US Navy. Developers targeted half of the 82 rental units to be considered affordable housing for people with qualifying income.