Projects

Acquisition

In circumstances where the bank and their borrower have been unable to reconcile their differences, REAM have been brought in to establish strategic asset management plans, to inject fresh equity to stabilise the assets and reduce the banks overall exposure.

Example

  • In July 2011 REAM took responsibility for a portfolio of 11 managed workspace/industrial centres totalling 750,000 sq. ft. across the UK, together with the management platform of 16 people, known as Flexspace. www.flexspace.co.uk
  • The portfolio is highly management intensive with over 400 tenants who tend to be small and medium enterprises that typically employ less than 20 people.
  • Rental income is granular with the largest three tenants accounting for less than 1% of total gross income.
  • Since acquisition by the original borrower in 2006/7, the lending bank had seen occupancy and income fall, loan covenants breached and the relationship between bank/borrower deteriorate.
  • REAM was employed to review the position and to provide options for the bank.
  • An accommodation agreement was reached between bank, borrower and REAM for REAM to acquire the portfolio.

Asset Management

When a bank concludes that the borrower has no ability to provide further equity or to manage the recovery process, REAM may be appointed by the bank as Strategic Asset Manager to let, sell and manage the properties and to maximise debt recovery.

Example

  • 81 new office properties in 17 locations across the UK.
  • 66% vacancy
  • Prepared and agreed a three year plan which included a review of existing property management and leasing agents suitability, exploring alternative use potential and setting a disposals strategy.
  • Business plan executed within 15 months and recovery for the bank increased from estimated day one proceeds from £10 million to £25 million.

Advisory

REAM have been appointed by several banking clients to undertake a thorough review of the assets securing a loan, to perform an independent review of a borrowers business plan and provide an assessment of their ability, resource and commitment to execute.

Example

  • A portfolio of seven mixed use properties with a leisure emphasis located in the Midlands.
  • 158,800 sq. ft., leased to 136 tenants with a vacancy of 49% and significant void and tenant renegotiation issues.
  • REAM recommended that the existing borrower be retained as they had the expertise and experience to deal with these specialised assets.
  • REAM, in conjunction with the borrower, prepared a strategic business plan which included a number of early sales.
  • This plan has been adopted and the facility restructured with the existing borrower.