Thought Leadership

A Global Manufacturing Company with its North America headquarters in the U.S., secured an agreement through a bankruptcy trustee, to acquire the assets in bankruptcy of its number two industry competitor. Those assets included fourteen (14) leased manufacturing and distribution facilities situated in the U.S. and Canada, totaling approximately 689,711 square feet. The manufacturing company needed a solution to significantly reduce the lease costs of all facilities within an extremely short two weeks, or acquiring the facilities at the price it negotiated with the bankruptcy trustee would not be viable, time would run out, and the deal to acquire the assets would collapse.

The manufacturing company engaged Real Estate Strategies Corporation to renegotiate all fourteen leases inside of the ridiculously short two week time frames, a mammoth undertaking, considering that in the norm, each such renegotiation would require three to six months, or longer, to complete.

In twenty-four hours, Real Estate Strategies Corporation completed an overnight assessment of projected outcomes, accepted the highly speculative and unusual engagement, and entered into immediate negotiations with all fourteen landlords. Faced with immediate vacancy or the opportunity to enter into long-term leases with a high-credit global company instead of their now bankrupt tenant, each landlord expressed interest in cooperating in restructuring those leases.

In a feat at which no one expected it to succeed, Real Estate Strategies Corporation restructured all fourteen leases, secured concessions that resulted in significant occupancy cost reductions, negotiated favorable lease terms, completed all negotiations, and secured commitments from all fourteen landlords within the two week time period required by the manufacturing Company and the bankruptcy trustee. The resulting $19.96 million overall transaction created a reduction in the manufacturing company’s future occupancy costs by a projected $17.2 million, and solidified its ability to acquire the bankrupt operating assets of its number two competitor profitably, and ensure an feasible operational transition.

A Global Europe Based Ingredients Manufacturing Company, with North America headquarters located in the U.S., identified it seven building 201,000 square foot office, laboratory, production, and distribution campus as surplus. Real Estate Strategies Corporation presented its approach to divesting of the campus in a manner that would yield the greatest return to the Ingredients Manufacturing Company and competed against four of the largest real estate services companies in the world. The Ingredients Manufacturing Company selected Real Estate Strategies Corporation and engaged it as the company’s exclusive representative to advise in achieving the company’s objectives, protect its interests, plan and execute the sale of the surplus properties.

Real Estate Strategies Corporation assessed each individual building, devised a unique strategy designed to capitalize on the offering, executed a highly-targeted promotional campaign, projected time-to-completion and expected achievable returns, and confirmed its original approach as viable to the Ingredients Manufacturing Company.

Beating its own expectation by many months, Real Estate Strategies Corporation’s approach provided positive for the Ingredients Manufacturing Company, in timing and financially.  Real estate Strategies Corporation completed the sale of each building to separate buyers, each of which were best able to capitalize on the features of the individual buildings they acquired and exceeded the Ingredients Manufacturing Company’s sale proceeds expectations by approximately twenty-two percent (22%).

A Japan-Owned Healthcare Technology Sales Company sought to assess the beneficial opportunities of consolidating its owned North America headquarters and sales operation with its leased out of state research, assembly and distribution facility, as a means of driving operating and financial efficiencies and reducing occupancy costs and related risks.

Real Estate Strategies Corporation assessed the opportunity cost along with the operational benefits of achieving the Healthcare Technology Sales Company’s preferred real estate objectives and recommended an alternate approach that substantially exceeded its objectives.

Instead of consolidating both facilities into a single larger facility, Real Estate Strategies Corporation recommended the retention of the out-of-state leased facility. The solution included a partial consolidation of operations from the headquarters and sales facility into the out-of-state facility in conjunction with restructuring that lease to drive down occupancy costs and create a long-term stabilized occupancy consistent with the Healthcare Technology Sales Company’s business objectives. The strategic approach also included monetizing the owned headquarters and sales facility through a sale and short-term lease back in advance of relocating the headquarters and sale functions to a separate in-state smaller leased facility.

Real Estate Strategies Corporation planned and executed all aspects of both transactions and completed all components of the overall strategy within the Healthcare Technology Sales Company’s time requitements. The completed transactions associated with the multi-part successive transactions exceeded the company’s financial objectives for restructuring the out-of-state lease and for monetizing the owned headquarters and sales facility.

A Japan-Owned Healthcare Technology Sales Company sought to assess the beneficial opportunities of consolidating its owned North America headquarters and sales operation with its leased out of state research, assembly and distribution facility, as a means of driving operating and financial efficiencies and reducing occupancy costs and related risks.

Real Estate Strategies Corporation assessed the opportunity cost along with the operational benefits of achieving the Healthcare Technology Sales Company’s preferred real estate objectives and recommended an alternate approach that substantially exceeded its objectives.

Instead of consolidating both facilities into a single larger facility, Real Estate Strategies Corporation recommended the retention of the out-of-state leased facility. The solution included a partial consolidation of operations from the headquarters and sales facility into the out-of-state facility in conjunction with restructuring that lease to drive down occupancy costs and create a long-term stabilized occupancy consistent with the Healthcare Technology Sales Company’s business objectives. The strategic approach also included monetizing the owned headquarters and sales facility through a sale and short-term lease back in advance of relocating the headquarters and sale functions to a separate in-state smaller leased facility.

Real Estate Strategies Corporation planned and executed all aspects of both transactions and completed all components of the overall strategy within the Healthcare Technology Sales Company’s time requitements. The completed transactions associated with the multi-part successive transactions exceeded the company’s financial objectives for restructuring the out-of-state lease and for monetizing the owned headquarters and sales facility.

A growing U.S. based Pharmaceuticals Company sought to relocate its headquarters and operations offices from the austere facility in which it was founded to a new facility commensurate with the reputation it had achieved as a rapidly growing company developing exciting new products. The Pharmaceuticals Company engaged Real Estate Strategies Corporation to advise it in planning and executing its intended 50,000 square foot lease transaction within a very short one hundred twenty days in order for the company to meet operating deadlines set forth by its Board of Directors. A transaction of such magnitude typically requires six to twelve months to complete at a normal pace.

Real Estate Strategies Corporation analyzed various geographies and identified the region that offered the optimal combination of available high-quality properties in an area convenient to ethe homes of its executive leadership and one in which high-caliber industry-experienced talent was readily available. Real Estate Strategies Corporation recommended a short-list of viable properties, negotiated with multiple landlords, advised the Pharmaceuticals Company as to which property presented the most viable combination of access, prestige, and viable lease terms that would support its operating and rapid growth objectives, and in a matter of only weeks planned and executed a long-term transaction on excellent terms.

The Pharmaceuticals Company completed the transaction, oved-in to its new headquarters and operations office, hired an army of experienced industry employees, developed acclaimed products, and continued its rapid ascent. Within a few short months, the Pharmaceuticals Company accepted a buyout offer from a large global company and directed Real Estate Strategies Corporation to dispose of its facility as quickly as possible.  Real Estate Strategies Corporation assessed the features of the newly constructed facility and based thereon, determined that a professional services company would most easily capitalize on the facility’s design and other offerings, and executed a targeted marketing campaign designed to attract likely occupants. Within two months, Real Estate Strategies Corporation secured the interest of a prominent national law firm seeking to expand its offices in the area and completed the disposition of the Pharmaceutical Company’s former headquarters and operations office on viable terms, thereby eliminating any real estate related obstacles to the company’s acquisition by the global company.

A Food Ingredients Company located in Canada, the North America subsidiary of a Germany based global Food Ingredients Development and Manufacturing Company, occupied four adjacent leased facilities totaling approximately 186,000 square feet that were critical to the core of its North America manufacturing and sales operations. The Food Ingredients Company identified operating efficiencies that resulted in one of the four properties being deemed surplus and engaged Real Estate Strategies Corporation to review all four facilities and their corresponding lease transactions, and to dispose of the surplus facility.

Real Estate Strategies Corporation’s review of operations and occupancy strongly suggested that greater operating and financial efficiencies could be achieved beyond those sought by the Food Ingredients Company. By disposing of the surplus property and consolidating the other three facilities into a single building utilizing more efficient design and less square feet, the Food Ingredients Company could drive event greater operational efficiency, while reducing occupancy costs. However, further analysis determined that the capital investment in equipment and other infrastructure required to consolidate operations would have been sufficiently significant and the process would have greatly disrupted production. Accordingly, a consolidation was therefore deemed non-viable.

The Food Ingredients Company determined that the long-term occupancy stability of the three remaining mission-critical facilities was its single greatest priority, given that each building was very different in quality and features and the facility leases would all expire at varying dates over a period of years. The existing occupancy circumstance created significant operating risk. The facility leases had been acquired separately by the previous company ownership and were held by three separate and very different substantial regional landlords, each of which had its own very specific investment criteria. One landlord was an entrepreneur, one was a large privately-held developer with a substantial regional industrial portfolio, and the third was an Asia-based financial and real estate investment fund.

Based on the Food Ingredients Company’s charge to create a long-term stable occupancy for the entire remaining three building operation, Real Estate Strategies Corporation separately and directly engaged each landlord in managed negotiations commensurate with the strategic value to the Food Ingredients Company of the three-facility portfolio and the component operational importance and value of each facility.

Real Estate Strategies Corporation managed the multi-tier negotiation and restructured all three leases in a manner that resulted in a long-term stable occupancy. It secured same-time lease expirations at lower cost financial terms and negotiated options for landlord-paid allowances. The Food Ingredients Company achieved its strategic objectives, mitigated associated real estate driven operational risk, and secured the balanced long-term operating and occupancy approach it sought.

A Publicly-Held Nutraceuticals Manufacturer based in the northeast U.S. sought to renegotiate and extend the terms of the commercial real estate lease for its major operations facility, that housed headquarters, back-office, production, and distribution. Investors in the landlord entity included two members of the Nutraceuticals Manufacturer’s executive leadership, in addition to others not related to the company, making for a potentially challenging negotiation that could violate. The pharmaceutical company’s CFO recognized the possibility that common executives operating in both the company and landlord entities could raise serious issues pertaining to corporate governance, securities law, fiduciary duty, and shareholder concerns, that such a matter warranted appropriate SEC disclosure and could increase risks of shareholder and securities litigation, company and executive reputational damage, and otherwise. The CFO sought to engage an unrelated third-party real estate advisor to protect the pharmaceutical company’s interests.

The CFO engaged Real Estate Strategies Corporation to assess the situation and advise the company on a number of corresponding matters, including guidance as to fair market value commercial lease and rental terms, then-current market conditions, alternate occupancy scenarios and opportunities, optimal transaction structure to support the company’s operating objectives, and otherwise. Real Estate Strategies Corporation provided the Nutraceuticals Manufacturer with independent assessment of terms proposed by the landlord, analyses, and guidance as to how best to secure terms favorable to the company in a manner that would be confidential and avoid potential conflicts-of-interest and legal challenges.

Real Estate Strategies Corporation provided expert information, intelligence, and counsel, and successfully assisted the Pharmaceutical Manufacturer in securing and completing a successful transaction on favorable terms that achieved the company’s operating and financial objectives.

The Operating Subsidiary of a Global Company identified its mid-sized former mid-west U.S. headquarters facility as surplus and sought to divest of it. The global company engaged Real Estate Strategies Corporation to sell the property at not less than a required minimum price in support of how the company reported the property’s value on its P&L. Real Estate Strategies Corporation determined that in the regional market, the property was, at the same time, superior to other available properties in some of its features and deficient in others.

Real Estate Strategies Corporation created a focused promotional campaign and brought the mid-sized headquarters facility to market, immediately attracting prospective occupant acquirers that could best capitalize on the property’s most beneficial features.  In only a few months, Real Estate Strategies Corporation negotiated exceptional sale terms on behalf the global company and completed the timely sale quickly at a price that exceeded the global company’s minimum required sale price by greater than ten percent (10%).

The new CFO at a Japan-owned Business Services Company, headquartered in the U.S., sought to bring business strategy to a badly managed nationwide real estate portfolio consisting of client-facing office, sales, and service facilities. The portfolio was overseen by a manager who utilized a tired, time-wasting, and inefficient transaction-based system, that resulted in significant management distractions and poorly executed transactions based on a poorly conceived and outdated approach.

Real Estate Strategies Corporation confirmed the CFO’s concerns, interviewed executive leadership and senior management to identify flaws in the existing outdated real estate procedures and to identify needs and opportunity. In a few short months, Real Estate Strategies Corporation recommended a series of procedural and personnel changes and a corresponding portfolio-wide intelligent real estate strategy that aligned with Business Services Company’s defined operating and financial objectives, turned-around the counter-productive real estate processes, and resulted in the company engaging key new executive real estate leadership and putting into place intelligent processes that optimized the company’s real estate and achieved the balance its CFO sought.

A Home for Emotionally Challenged Children occupied a building, in which it provided services to its clients. It leased the facility from the landlord, a Convent of nuns who had founded the Home decades earlier. The Convent and Home each had Boards of Trustees that were populated by some of the same nuns and lay people, the commonality of which posed potential conflicts-of-interest, created issues associated with maintaining independence, and sometimes made it challenging for the Home’s Board of Trustees to be effective in its role in governance, oversight, and maintaining strategic direction.

The Home experienced challenges with maintenance and repair of the facility it occupied, which it believed were the landlord’s responsibilities to resolve. The landlord disagreed. The Home needed the issues resolved, so that it could continue to deliver much needed services to those in its care.

Real Estate Strategies Corporation, through its Pro Bono Real Estate Services, met with all parties, reviewed lease agreements and related documents, assessed the challenges, considered alternate resolution approaches, and created a communications and solutions strategy that cleared the path for resolution of facility challenges, clarified obligations of the parties, and the continuation of services to those who relied on the Home.

A local Church, that constructed an on-campus building for its internal childcare ministry, found that the ministry was not ready to occupy the new facility. The Church’s seniors ministry, needing a facility of its own, agreed to temporarily occupy the newly prepared facility and relocate when the childcare ministry would be ready. Two years later, when the childcare ministry was ready to move into the facility, the seniors ministry, having embedded in the facility by that time, refused to vacate. The two internal related groups and the Church Board of Trustees attempted to resolve the situation over many months, to no avail.

The Church contacted Real Estate Strategies Corporation for guidance in achieving a viable resolution. As part of its Pro Bono Real Estate Services, Real Estate Strategies Corporation met with the Board of Trustees and the Church’s Pastor and devised a simple process that included preparing an alternate on-campus building for use by the seniors ministry and providing that ministry with additional time to remain in the facility they occupied, so that the childcare ministry could eventually occupy its intended building in a reasonable time frame.