Rich Kruse

Friday, October 9,

2009 Business First of Columbus - by Brian R. Ball

Gryphon Realty Advisors has joined the United Country Real Estate Inc. network in a bid to expand its auction house division and diversify into the sale of condominiums and single-family houses.

Rich Kruse, president of Gryphon USA Ltd., the brokerage’s parent, said the affiliation with the Kansas City, Mo.-based network will mean a rebranding of his firm to United Country Ohio Realty & Auction Group.

Gryphon and its affiliate Gryphon Asset Management LLC became known as marketers and receivers of distressed real estate amid an unraveled housing market and slump in commercial real estate. Its high-profile commercial assets under receivership include the Northeast Business Campus office park and Thom’s Grandview restaurant.

Kruse wants to broaden his auction business and extend his reach into the residential and commercial real estate markets for when they recover.

“It’s a big risk in this (economic) environment,” he said, “but we’ve calculated it.”

Beyond the country

United Country operates primarily in rural areas through 650 franchised offices in 42 states and in Costa Rica. It entered Ohio in 2007 through franchises in Newport and Woodsfield in eastern Ohio. Walton Realty & Auction Company LLC in Upper Sandusky joined the network in February.

United Country brokerages typically market farm land, ranches, recreational properties and homes in small towns. But the network has expanded into larger cities, including Indianapolis and Dallas, driven in part by the creation of an auction division in 2007.

About 70 United Country brokerages, including Ohio Realty & Auction, offer auction services.

“A lot of our buyers want to move out to the country,” said United Country spokeswoman Mary Carver. “But as we entered the auction industry, we found we have buyers and sellers wanting to work with affiliates located in more urban markets.”

Kruse said the auction services and networking prospects with other brokerages attracted him to United Country. He also sees the affiliation as a way to offer brokerage services in the residential and commercial real estate markets.

“On top of helping out our auction group,” Kruse said, “this creates an opportunity for growth into general brokerage ... that’s just not focused on distressed assets.”

Leveraging contacts

Business diversity has become more important as a growing field of brokerages tap into the increasing supply of distressed properties.

“Having a real estate brokerage primarily focused on distressed assets was all well and good when we were the only ones doing it,” Kruse said. “There’s going to be more of a need for residential folks and nondistressed properties.”

Kruse said he has seen “a shimmer of hope” as the housing market has begun to stabilize amid expectations of a recovery within two years. He intends to launch the residential business during that time through referrals from banks and law firms that have done business with Gryphon’s receivership practice.

“We’ll work with our current corporate clients to jump-start that,” he said. “We’ll move on from there.”

Kruse said the slow economic recovery gives the real estate firm time to establish itself.

United Country has a commercial referral agreement with Colliers International Property Consultants Inc., but Kruse said he expects Ohio Realty & Auction eventually to expand more into the marketing of sound properties valued at $750,000 to $3 million.

“There’s this middle market where you don’t have a lot of people playing that’s too small for the larger brokerages and too big for the smaller brokerages,” he said. “It’s probably an area where we can continue to work on growing the commercial side.”

Realtor Appreciation Night Introducing United Country Ohio Realty & Auction

Sponsored by: Donerick's Pub, First American Title & United Country Ohio Realty & Auction Group

When: Wednesday, October 21, 2009

Time: 5:30 - 7:30 PM

Where: Donerick's Pub - 6711 Dublin Center Dr., Dublin, OH 43017

Attention Realtors, Agents & Brokers - Please join in welcoming United Country Realty & Auction Group to the Central Ohio real estate community. Meet old friends and introduce yourself to new ones.

Appetizers and Complimentary Drink Tickets will be provided for all Ohio agents and brokers who present a brokerage business card or ID.

March 6, 2009 Business First of Columbus - by Brian R. Ball

A six-building office campus in northeast Columbus has ended up in receivership after lender Bank of America foreclosed on the 200,000-square-foot complex.

Franklin County Common Pleas Court Judge Michael Holbrook appointed Gryphon Asset Management LLC on March 2 as receiver for the Northeast Business Center properties. In its Feb. 27 lawsuit, Bank of America accused an affiliate of Chicago-based Rushmore Properties LLC of failing to pay $37,835 in interest payments due Jan. 1 on two loans with an outstanding balance of $9.42 million.

The landlord bought the Corporate Drive portfolio in June 2006 for $9.7 million, according to public records.

Gryphon President Rich Kruse said initial plans call for examining the property's condition and its leasing history before developing a leasing and asset disposal strategy.

"At this point, what that strategy will be is undetermined," Kruse said. "We have to get the lay of the land."

Rushmore bought the property from lender Wrightwood Capital, which had taken control from ARFO Northeast LLC in November 2005 in lieu of foreclosure. ARFO had paid $12.7 million for the properties in December 1998, according to public records. Rushmore financed the acquisition through LaSalle Bank, which Bank of America has since purchased.

A Rushmore representative could not be reached for comment. Holbrook's order said the investor's attorneys did not oppose the appointment of a receiver.

A search of the LoopNet Inc. real estate database shows the property owner had put four of the buildings on the market for $8 million through the Chicago office of the Grubb & Ellis Co. brokerage. Public records also show three of the six properties have mechanic's liens totaling $186,000 for maintenance and other improvements.

Kruse said a CB Richard Ellis Group Inc. leasing team has some prospective tenants, but signing those clients likely will mean spending cash for tenant improvements.

March 6, 2009

Business First of Columbus - by Brian R. Ball

The lender to a foreclosed hotel in Delaware hopes a bit of extra marketing will help it avoid the typical two-step auction process to getting a troubled asset off its balance sheet.

Ciena Capital Funding LLC has hired Lewis Center-based Gryphon Realty Advisors and Oklahoma-based auctioneer National Commercial Auctioneers to drum up interest among investors and hotel operators in the planned March 18 sale of the four-story, 104-room Delaware Hotel at 351 S. Sandusky St.

Lenders who foreclose on a property wind up with the title when a sheriff's sale fails to attract an acceptable price.

"The bank wanted to see if, by marketing the property, they can get more attention than through the (sheriff's sale) legal ads," said Gryphon Realty President Rich Kruse. "It's about getting it done now."

A buyer must pay at least $860,000, or two-thirds of the $1.29 million appraised value of the 37-year-old property, to win the public sheriff's auction.

Ciena Capital filed a foreclosure lawsuit July 31 against owner Pragat Prayosha LLC, which took out a $1.65 million loan in March 2007.

The property sits on 5.4 acres and includes a restaurant, banquet facilities and an indoor pool.

Public inspections of the property will take place March 11 and 18.

Kruse said he expects lenders to follow Ciena's game plan as the faltering economy forces more properties into foreclosure.

"We're seeing a little bit of change in mentality among lenders," he said.