Insignia Financial Group was a company that invested in

apartment An apartment (American English, Canadian English), flat (British English, Indian English, South African English), tenement (Scots English), or unit (Australian English) is a self-contained housing unit (a type of residential real estate) that ...

s that were financially distressed, with the goal of increasing value via

recapitalization Recapitalization is a type of corporate reorganization involving substantial change in a company's capital structure. Recapitalization may be motivated by a number of reasons. Usually, the large part of equity is replaced with debt or vice versa. ...

. It was founded and controlled by

billionaire A billionaire is a person with a net worth of at least 1,000,000,000, one billion units of a given currency, usually of a major currency such as the United States dollar, euro, or pound sterling. It is a sub-category of the concept of the ultr ...

Andrew L. Farkas and was headquartered in

Greenville, South Carolina Greenville ( ; ) is a city in Greenville County, South Carolina, United States, and its county seat. With a population of 70,720 at the 2020 United States census, 2020 census, it is the List of municipalities in South Carolina, sixth-most pop ...

. It was the largest manager of apartments, controlling 300,000 apartment units at its peak. The company was sold in two tranches in 1999 and 2003.

History

Insignia was launched in 1990 by Andrew L. Farkas with about $5 million in family money. Farkas is the grandson of George Farkas, the founder of

Alexander's Alexander's, Inc. is a real estate investment trust that owns 7 properties in New York metropolitan area, including 731 Lexington Avenue, the headquarters of Bloomberg L.P. It is controlled by Vornado Realty Trust. It was founded by George Farka ...

, the nephew of Alexander S. Farkas, its former

chief executive officer A chief executive officer (CEO), also known as a chief executive or managing director, is the top-ranking corporate officer charged with the management of an organization, usually a company or a nonprofit organization. CEOs find roles in variou ...

, and the son of Robin Farkas, its former

chairman The chair, also chairman, chairwoman, or chairperson, is the presiding officer of an organized group such as a board, committee, or deliberative assembly. The person holding the office, who is typically elected or appointed by members of the gro ...

. The company received financing from

Lehman Brothers Lehman Brothers Inc. ( ) was an American global financial services firm founded in 1850. Before filing for bankruptcy in 2008, Lehman was the fourth-largest investment bank in the United States (behind Goldman Sachs, Morgan Stanley, and Merril ...

. 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. In October 1993, the company became a

public company A public company is a company whose ownership is organized via shares of share capital, stock which are intended to be freely traded on a stock exchange or in over-the-counter (finance), over-the-counter markets. A public (publicly traded) co ...

via an

initial public offering An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investm ...

led by Lehman Brothers. In 1996, the company acquired the Edward S. Gordon Company for $74 million. Gordon then worked for Insignia until his death in 2000 from

colon cancer Colorectal cancer (CRC), also known as bowel cancer, colon cancer, or rectal cancer, is the development of cancer from the colon or rectum (parts of the large intestine). Signs and symptoms may include blood in the stool, a change in bowel ...

, at which time Insignia received $19.1 million from a

key person insurance Key person insurance, also called keyman insurance, is an important form of business insurance. There is no legal definition of "key person insurance". In general, it is an insurance policy taken out by a business to compensate that business for ...

policy taken on his life. In 1997, the company was accused by the

U.S. Department of Housing and Urban Development The United States Department of Housing and Urban Development (HUD) is one of the executive departments of the U.S. federal government. It administers federal housing and urban development laws. It is headed by the secretary of housing and ur ...

of giving $7.6 million in kickbacks to owners of

subsidized housing Subsidized housing is a subsidy aimed towards alleviating housing costs and expenses for impoverished people with low to moderate incomes. In the United States, subsidized housing is often called "affordable housing". Forms of subsidies include d ...

. The company paid to settle the case without admitting any wrongdoing. In 1997, the company acquired

Cleveland, Ohio Cleveland is a city in the U.S. state of Ohio and the county seat of Cuyahoga County, Ohio, Cuyahoga County. Located along the southern shore of Lake Erie, it is situated across the Canada–United States border, Canada–U.S. maritime border ...

-based Realty One for $39 million. In 1998, the company sold its apartment investment division to

Aimco Alberta Investment Management Corporation (AIMCo) is a Canadian crown corporation and institutional investor owned by the Government of Alberta, established to manage several public funds and pensions headquartered in Edmonton, Alberta. AIMCo was ...

for $910 million in cash and stock. In 1999, the company acquired

Douglas Elliman Douglas Elliman is an American real estate company. Douglas Elliman employs more than 7,000 agents and has 113 offices in New York City and across the country. The company also has a number of subsidiaries related to real estate services such as ...

from the family of Seymour Milstein for $65 million in cash. In March 2003, the company sold Douglas Elliman to an affiliate of New Valley LLC for $73.5 million. In 2003, the remainder of Insignia was sold to

CBRE Group CBRE Group, Inc. (an initialism of Coldwell Banker Richard Ellis) is an American commercial real estate services and investment firm with corporate headquarters in Dallas, Texas and global financial headquarters at Lever House in Midtown Manh ...

for $415 million in cash.

References

{{Reflist, 1 Financial services companies established in 1990 Financial services companies disestablished in 2003 Defunct companies based in South Carolina