Insignia Financial Group was a company that invested in

apartment An apartment (American English), or flat (British English, Indian English, South African English), is a self-contained housing unit (a type of residential real estate) that occupies part of a building, generally on a single story. There are ma ...

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 one billion (1,000,000,000, i.e., a thousand million) units of a given currency, usually of a major currency such as the United States dollar, euro, or pound sterling. The American busin ...

Andrew L. Farkas and was headquartered in

Greenville, South Carolina Greenville (; locally ) is a city in and the seat of Greenville County, South Carolina, United States. With a population of 70,720 at the 2020 census, it is the sixth-largest city in the state. Greenville is located approximately halfway be ...

. 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 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 Farkas and ...

, the nephew of Alexander S. Farkas, its former

chief executive officer A chief executive officer (CEO), also known as a central executive officer (CEO), chief administrator officer (CAO) or just chief executive (CE), is one of a number of corporate executives charged with the management of an organization especially ...

, and the son of Robin Farkas, its former

chairman The chairperson, also chairman, chairwoman or chair, 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 grou ...

. The company received financing from

Lehman Brothers Lehman Brothers Holdings Inc. ( ) was an American global financial services firm founded in 1847. Before Bankruptcy of Lehman Brothers, filing for bankruptcy in 2008, Lehman was the fourth-largest investment bank in the United States (behind Gol ...

. 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 stock which are intended to be freely traded on a stock exchange or in over-the-counter markets. A public (publicly traded) company can be listed on a stock exchange (l ...

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 investment ...

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 mo ...

, 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 can be described as an insurance policy taken out by a business to compensate tha ...

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 Urb ...

of giving $7.6 million in kickbacks to owners of

subsidized housing Subsidized housing is government sponsored economic assistance 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 housin ...

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

Cleveland, Ohio Cleveland ( ), officially the City of Cleveland, is a city in the U.S. state of Ohio and the county seat of Cuyahoga County. Located in the northeastern part of the state, it is situated along the southern shore of Lake Erie, across the U.S. ...

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

Aimco Aimco or Apartment Investment and Management Company is a publicly traded real estate investment trust. As of December 31, 2020, the company owned 27 apartment communities comprising 6,342 apartment units in 12 states and the District of Columb ...

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 Seymour Milstein (July 21, 1920 – October 2, 2001) was an American real estate developer and philanthropist. Early life and education Milstein was born to Jewish family New Valley LLC New Valley LLC is an American investment company owned by Vector Group. History Western Union was renamed New Valley in the early 1990s as the corporate parent of all Western Union-related businesses. In 1994, New Valley sold its Western Union bu ...

for $73.5 million. In 2003, the remainder of Insignia was sold to

CBRE Group CBRE Group, Inc. is an American commercial real estate services and investment firm. The abbreviation CBRE stands for Coldwell Banker Richard Ellis. It is the world's largest commercial real estate services and investment firm (based on 2021 reven ...

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