Guardian Management LLC Signs Agreement to Acquire Atherton-Newport Assets in Excess of 4,000 Multifamily Units

Business Wire, Nov 19, 2008

Deal Comes 60 Days after Company Completes Acquisition of Southern California and Arizona offices of International Brokerage Firm Sperry Van Ness

PORTLAND, Ore. -- Guardian Management LLC (Guardian), a Pacific Northwest real estate investment and asset management firm specializing in multifamily housing investments, has signed preliminary agreements to acquire the real estate portfolio of Atherton-Newport Investments (ANI). ANI is a multifamily housing firm, based in Orange County California, which has been working under Chapter 11 reorganization since January. The assets to be acquired by Guardian include more than 4,000 apartment units, located in Las Vegas, Miami, Phoenix, and Seattle. Avalon Holdings, a diversified investment company also based in the Pacific Northwest, working with Guardian, initiated and structured the transaction.

Over a period of almost a year, ANI's creditors committee, interviewed and received qualifications from more than 15 potential buyout and take-over candidates. The creditors committee, chaired by Steve Trax, principal of MTX Wealth Management LLC of Bethesda, MD, consisted primarily of ANI's noteholders who had advanced, in the aggregate, more than $30.0 million to ANI. In the end, Guardian was chosen as the strongest candidate of the group. "Guardian was selected because of its experience and expertise in handling complex troubled assets," said Trax. "We couldn't have found a better partner. They were creative in working with the Committee to develop a structure that meets the needs of the initial capital investor base."

Robert Opera, attorney for the creditors committee, was instrumental in evaluating noteholders' options, negotiating agreements with ANI's secured creditor and with Guardian, and getting the Agreements executed. Opera is a partner at Winthrop Couchot Professional Corp, a bankruptcy and reorganization law firm located in Newport Beach, CA.

Guardian Management LLC is in the process of acquiring the Atherton-Newport assets through implementation of its first strategic investment fund. That fund, was also utilized in the acquisition of the Southern California and Arizona offices of Sperry Van Ness, one of the largest commercial real estate investment brokerage firms in the nation. Guardian closed the Sperry Van Ness acquisition in September 2008.

"We are confident in our abilities to restructure and reposition these assets," said Tom Brenneke, president of Guardian Management LLC. "This acquisition is the perfect fit in satisfying the goals of our first fund and positions us to leverage the resources of our affiliated team members."

Founded in 2001, Atherton-Newport Investments used investor loans as capital to take equity positions in 19 portfolio companies holding an aggregate of approximately 5,000 apartment units located in Washington State, Nevada, Arizona, Florida, and California. Atherton-Newport filed for Chapter 11 bankruptcy protection in January 2008.

About Guardian Management LLC

Founded in 1971 and headquartered in Portland, OR, Guardian Management LLC is a privately held third generation real estate management and investment firm. Specializing in real estate investments and property management services, Guardian's diverse real estate experience offers property owners and investors a valuable combination of market expertise and contacts. Currently, Guardian's management portfolio consists of more than 130 multifamily properties, totaling approximately 12,000 apartment units located throughout seven states. Guardian owns approximately 50 percent of its portfolio and employs more than 400 people. For more information, visit www.guardianmanagementllc.com.

About Avalon Holdings

Avalon Holdings is a privately held diversified real estate investment company based in the Pacific Northwest. With offices in both Portland, OR and Seattle, WA, Avalon provides value to its clients through the offering of extensive real estate development, financing, restructuring, and repositioning services. With extensive experience in providing solutions to specialty situations including work out, bankruptcy, and litigious settings, Avalon often specializes in unlocking value from distressed situations. Avalon and its affiliates have comprehensive experience across all real estate product types, with focus on mixed-use, multi-family, hospitality, gaming, and land development.