According to a report by the Carlyle Group, the commercial real estate market in the U.S. bottomed out in 2010. Since then the commercial real estate market, along with the economy, has been seeing a continuing recovery.
However, Carlyle Group adds in its report that the commercial real estate market in the U.S. has divided, with pricing and funding liquidity conditions for trophy properties and other core assets differing significantly from those of the rest of the market.
Carlyle Group believes that the observed division in the commercial real estate market has led to the creation of a unique set of circumstances for opportunistic investors. While prices and funding in core assets have seen a sharp rebound, valuations of non-core assets are relatively low, the group notes in its report.
Carlyle further adds that the divergence creates excellent arbitrage opportunities in the commercial real estate market. Indeed, several companies focused on the commercial real estate market are looking at potential acquisitions. One such company is Irvine, California-
based Independent Film Development Corp. (OTC:IFLM).
IFLM is a real estate and entertainment company. It is developing a multi-pronged approach to commercial real estate acquisition and management and digital film creation and distribution.
Thursday morning, IFLM made a major announcement.
The company announced that it had signed a binding Letter of Intent (LOI) to acquire a 100% stake in C2C Restaurant Group of New York in an all stock transaction. The press release from IFLM did not provide details of the all stock transaction.
Commenting on the acquisition, Jeff Ritchie, CEO of Independent Film Development, said that with it, the company is taking its first steps into the hospitality space. Ritchie said that IFLM looks forward to working with restaurateur and celebrity chef Edward Gallagher as he opens a location in New York City’s rapidly gentrifying East Harlem.
IFLM said that the first location of the flagship restaurant will be located on Park Avenue in Manhattan. The restaurant is slated to open on October 15. The restaurant has been themed as a small plate steakhouse, with a sharing menu priced between $5.00 and $20.00.
Ritchie said that the new division is completely autonomous and is being managed by Gallagher and his team. Ritchie though noted that all revenue will be consolidated into IFLM’s balance sheet. Ritchie believes that this acquisition can enhance shareholder value.
Shares of IFLM have languished dramatically over the last year and with the Company now at a $2-Million market cap, it is hard to imagine further share price declines. That being said, until any significant buying pressure comes in and a new uptrend starts to develop, this stock, although intriguing should still be seen as too cold to handle.
