Great Point has a proven history of success with takeovers of distressed or undermanaged properties. We have worked with three plan sponsors on four different assignments. The success of these takeovers was a result of underwriting the investments as if they were new acquisitions, and creating, implementing, and executing business plans to improve investment performance.
Case Study 1: Industrial Portfolio Takeover
Facts:
- December 2004
- 2,100,000 square feet
- Five cities
- Public pension plan
Challenges:
- 45 day notice
- Weak relationships with brokerage community
- Poor vacant suite preparation
- High property operating expenses
- Deferred maintenance
- Adversarial tenant relationships
Results:
- Property operating expenses lowered to market rates
- Multi-year capital plans in place
- Demonstrated commitment to brokerage community
- Leased 784,000 square feet
- Four sales; 1,275,500 square feet
- Remaining 765,000 square feet now 90% leased
- Return since takeover in the high teens
Case Study 2: Office Portfolio Takeover
Facts:
- December 2006
- 613,200 square feet
- Four cities
- Taft Hartley plan
Challenges:
- Pittsburgh building with single tenant planning to leave
- Client strategy changed during assignment
- One building largely occupied by affiliates of client
- Poor asset and financial documentation
Results:
- One asset sold for 17% gain
- Improved operations and record-keeping
Case Study 3: Office Portfolio Takeover
Facts:
- December 2006
- 630,000 square feet in suburban Boston
- Public pension plan
Challenges:
- Substantial vacancy in a very weak sub-market
- Stalled leasing; unwilling to make market leases
Results:
- Hold/sell analysis resulted in three building sales
- Increased occupancy by 27%
- Enhanced marketing program
- Leasing has outperformed market
Case Study 4: Single Office Building Takeover
Facts:
- May 2005
- Single office asset
- 114,000 square feet
- Public pension plan
Challenges:
- Short Notice (3 Days)
- Bankrupt borrower/defaulted loan from urban renewal initiative
- 100% vacant; physical deterioration
- Client had no real estate experience or internal staff
Results:
- Used relationships to quickly take possession of building; establish security and provide insurance
- Negotiated consensual plan to navigate building through bankruptcy
- Signed a 3-year lease with Fidelity Investments
- Building sold for $20M, capturing $4M of value creation
