Description of Services
The principals of PREIT Capital Advisors and the leadership team of Pennsylvania Real Estate Investment Trust have broad and deep relationships within every channel of the Commercial Real Estate Industry.
Whether a situation calls for Senior Debt, Mezzanine Debt, Private Equity, Development Equity or whether it concerns banks, CMBS investors, insurance companies, loan servicers, pension funds, investment funds, or high net worth individuals, above all, PREIT Capital Advisors brings access at the highest levels of decision making to its clients.
It is not uncommon, during times of distress, for the Lender/Borrower relationship to completely breakdown. This often results in poor flow of information, misinformation, and sometimes even non-communication. When reporting stops and "visibility" as it relates to collateral assets disappears lenders are at a decided disadvantage.
PREIT Capital Advisors' principals are seasoned workout professionals with principal investing backgrounds. Their suite of services coupled with the PREIT platform levels the playing field for lenders and opens the way for a resumption of accountability and transparency or, if needed, an orderly change of control of the property or properties for the purpose of immediate sale or an extended holding period.
While real estate appraisals are useful tools in gauging resolution and restructuring strategies, they are dependent on stable markets to provide good valuation clarity. When markets are in dislocation causing declines or aberrations in trading characteristics, lenders often find themselves caught between the need to comply with regulations or internal policy and the need for relevant market guidance. In order to chart an optimal course in today's difficult environment, it is critical to understand market value at all levels and under different scenarios.
PREIT Capital Advisors brings institutional quality analysis to bear on behalf of clients with an eye towards pragmatically maximizing value and minimizing impairment in a timely fashion. Sometimes, this involves laying out a valuation not only on an as-is basis, but also from an ROI standpoint. Would additional investment create significant incremental value? Is upside sufficient to justify internal client level investment or an effort to obtain 3rd party capital on a competitive basis?
Members of our team have done extensive work on behalf of institutional clients such as Equitable, CALPERS (California) and PSERS (Pennsylvania) and bring the benefit of hundreds of years of collective experience and know how as principal investors, appraisers and advisors.
The value of thorough and complete Pre and Post-Foreclosure Due Diligence is critical to developing recovery strategies that maximize recovery options. In situations involving bankrupt borrowers or abandoned properties, understanding the source and sustainability of revenue, the nature and veracity of expenses, and the extent of deferred capital and operating expenditure can significantly improve decision and outcome quality. The demands of such analysis and target setting are substantial and complex.
PREIT Capital Advisors has the infrastructure and the skill sets to reliably and consistently deliver against the needs of these types of demands and to place its client in a position to make the right decisions relative to the determination of whether or not foreclosure is appropriate and to provide guidance in allocating resources should foreclosure be the course of action chosen.
It is not always clear to lenders who face the decision of taking possession of their collateral what demands and requirements will follow. Frequently, the inability to clearly articulate and delineate these demands and requirements heightens the risk associated with collateral property recapture. Moreover, most lenders are under-resourced in asset management and portfolio management infrastructure, further increasing the chances of missing opportunities to maximize operating efficiencies.
Having acquired very significant portfolios (including, among others, The Rouse Company and Crown American Mall retail portfolios) over the last several decades, the PREIT Capital Advisors platform has deep, broad and highly pragmatic experience in these disciplines. As a result, properties can be quickly and efficiently assessed and added to the existing platform providing the client with detailed reporting and assurance that nothing has been missed.
The parent company of PREIT Capital Advisors has, for several decades, been one of the most prolific acquirers, developers and redevelopers of retail and office projects on the East Coast in general and particularly in the Delaware Valley. Much of the company's success can be attributed to its favorable relationships with municipalities who have come to value its meticulous planning and execution. This relationship of trust and performance is a valuable intangible that PREIT Capital Advisors can translate into financial value for its clients.
In times of changing market conditions, lenders may find that the original development premise for their projects no longer fulfills the economic and value expectations that were originally underwritten. When this happens, the ability to re-size, reconfigure or add a use or uses to an existing property can make the difference between a protracted resolution characterized by successive mark downs and a creatively conceived repositioning with renewed prospects for value creation that maximizes recovery.
PREIT Capital Advisors has the people, track records and access to capital to optimize the results of a development or redevelopment decision in a timely way. At the same time, it has the experience in weathering downturns to view such scenarios pragmatically and avoid efforts that are wasteful from the standpoint of time, money and reputation.
Asset Management is not a static function. When applied using sound Strategy and Asset Optimization initiatives, it often makes the difference between solvency and insolvency, especially in highly competitive markets. Often a simple analysis of income and expense matters that were typically taken for granted can lead to the identification of overlooked revenue and expense savings such as tax appeals and other commoditized services that can enhance net operating income.
The PREIT Capital Advisors platform goes through every line item of a property's Income Statement and Balance Sheet to develop a tactical plan for maximizing revenues and cash flow on a sustainable basis through real time budgeting and forecasting, reducing expenses through ongoing variance analysis, leveraging economies of scale and scope, and managing capital needs with transparent reporting on a continuing basis.
Tenant retention and identification of prospective tenants capable of contributing to the long term stabilization of a property are often treated as passive efforts by owners in distress. Too often, their distress motivates them to manage for short term cash considerations, allowing their facilities to fall into disrepair and overlook the need to provide basic tenant services.
As a result, prospects for additional leasing weaken because of reputational issues and because existing tenants are dissatisfied. In the absence of lender intervention, the property value quickly diminishes while the cost of remediation escalates, dissipating the prospects for protecting the lender's exposure.
PREIT Capital Advisors has access to the complete leasing and management platform of its publicly traded REIT affiliate, which includes broad and deep tenant relationships, an active management and leasing culture and access to accurate market intelligence. These resources combine to create a powerful value creation engine that can accelerate the process of recovery and minimize future loss.
An affiliate of Pennsylvania Real Estate Investment Trust® www.preit.com