14 Feb Underperforming Office Investment with Challenged Ownership Group
Client Challenge:
A high net worth client desired to improve the operating performance and value of an investment in a 375,000 sf office building in NYC that was suffering from dysfunctional partnership dynamics. Our client also desired to partially monetize its investment in the property to diversify concentration risk and generate funds for alternative investments.
Arcturus Solution:
Conducted a full review of operations, leasing, expenses, reimbursements, capital expenditures and market positioning
Developed a revised budget, leasing strategy and long term asset management plan to reposition asset
Acted as an intermediary between divided ownership group in order to facilitate enhanced relations, improved decision making and support for investment plan
Developed and offered an asset recapitalization/joint venture plan to a select group of potential new third party investors
Negotiated with secured mortgage lender to assign existing loans and avoid prepayment penalties
Key Outcomes:
Recapitalized project with a new investor at pricing 25% greater than client’s expectations
Created savings in excess of $25 million through successful negotiations with lender to approve loan assumption vs. requiring prepayment
Structured preferred equity position to allow client to receive income post-sale and participate in future appreciation