Insignia Financial Group

Insignia Financial Group was a company that invested in apartments that were financially distressed, with the goal of increasing value via recapitalization.[1] It was founded and controlled by billionaire Andrew L. Farkas and was headquartered in Greenville, South Carolina. It was the largest manager of apartments, controlling 300,000 apartment units at its peak.[2] The company was sold in two tranches in 1999 and 2003.

For other uses, see Insignia (disambiguation).
Insignia Financial Group
IndustryReal estate
FateAcquired by Aimco & CBRE Group
Founded1990 (1990)
Defunct2003 (2003)
HeadquartersGreenville, South Carolina

History

Insignia was launched in 1990 by Andrew L. Farkas with about $5 million in family money.[1] Farkas is the grandson of George Farkas, the founder of Alexander's,[1] the nephew of Alexander S. Farkas, its former chief executive officer, and the son of Robin Farkas, its former chairman.[3]

The company received financing from Lehman Brothers.[4]

In 1990, the company acquired the assets of U.S. Shelter Corp, which managed 55,000 apartments. After the acquisition, Insignia owned or operated about $1.5 billion in real estate assets in 32 states.[5]

In October 1993, the company became a public company via an initial public offering led by Lehman Brothers.[6]

In 1996, the company acquired the Edward S. Gordon Company for $74 million.[2][7] Gordon then worked for Insignia until his death in 2000 from colon cancer, at which time Insignia received $19.1 million from a key person insurance policy taken on his life.[8]

In 1997, the company was accused by the U.S. Department of Housing and Urban Development of giving $7.6 million in kickbacks to owners of subsidized housing.[4] The company paid to settle the case without admitting any wrongdoing.[4]

In 1997, the company acquired Cleveland, Ohio-based Realty One for $39 million.[9][3]

In 1998, the company sold its apartment investment division to Aimco for $910 million in cash and stock.[10]

In 1999, the company acquired Douglas Elliman from the family of Seymour Milstein for $65 million in cash.[11]

In March 2003, the company sold Douglas Elliman to an affiliate of New Valley LLC for $73.5 million.[12][13][14]

In 2003, the remainder of Insignia was sold to CBRE Group for $415 million in cash.[15][16]

References
  1. Jones, David (November 1, 2011). "Andrew Farkas: The sequel". The Real Deal.
  2. DEUTSCH, CLAUDIA H. (June 18, 1996). "Insignia Financial to Acquire Edward S. Gordon Company". The New York Times.
  3. HOLUSHA, JOHN (July 11, 1999). "Insignia Group's Expanding Universe". The New York Times.
  4. Agovino, Theresa (October 23, 2011). "Property mogul Andrew Farkas aims for coup No. 2". Crain Communications.
  5. "RECAPITALIZING U.S. Shelter sells assets to Insignia Financial Group". GoUpstate.com. January 3, 1991.
  6. "Equity Issues This Week". The New York Times. October 11, 1993.
  7. Grant, Peter (June 18, 1996). "EDWARD S. GORDON SOLD FOR 74M". New York Daily News.
  8. Weiss, Lois (November 3, 2000). "ED GORDON'S LIFE INSURANCE POLICY PAID FIRM $19M". New York Post.
  9. "Insignia buys Realty One". United Press International. September 30, 1997.
  10. HOLUSHA, JOHN (March 18, 1998). "Residential Real Estate; Insignia Financial Announces Plans for a Corporate Restructuring". The New York Times.
  11. HOLUSHA, JOHN (May 29, 1999). "Douglas Elliman Real Estate Brokerage to Be Sold". The New York Times.
  12. Keil, Braden (March 17, 2003). "PRUDENTIAL PAYS $73.5M FOR INSIGNIA DOUGLAS ELLIMAN". New York Post.
  13. "Insignia sells Douglas Elliman". Crain Communications. March 17, 2003.
  14. "New Valley's 50%-Owned Real Estate Entity Acquires Insignia Douglas Elliman; Forms Prudential Douglas Elliman, The Largest Residential Brokerage in New York Metropolitan Area". Business Wire (Press release). March 17, 2003.
  15. Vincent, Roger (February 19, 2003). "CB Richard Ellis to Buy Insignia". Los Angeles Times.
  16. Corfman, Thomas A. (February 19, 2003). "CB Richard Ellis acquires Insignia". Chicago Tribune.
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