Commercial Real Estate
PROJECT OBJECTIVE
Stabilise and turn around an over‑levered, under‑managed London serviced office business by reshaping the portfolio, recapitalising the balance sheet, and realigning incentives to restore cash generation and enable a successful exit.
Client Challenges
&
Pain Points
- High levels of leverage with pending debt maturity.
- Unmotivated management, as incentive plan put in place by private equity owner was incurably “out of the money”.
- Falling pricing in several markets, accompanied by falling levels of occupancy.
- Overexpansion into markets outside core London base, often via expensive leases that ran counter to ownership model and increased operating leverage.
Approach
&
How We Helped
- Implemented strategic review of portfolio, leading to recommendation and execution of exit plan from non-accretive properties.
- Recapitalised company, including a separation of the operating company from the property company and a debt refinancing.
- Created of a new management incentive plan to realign management incentives with investment performance.
- Focused on driving leasing performance at remaining properties combined with proactive positioning for a sale of the business.
Value
Provided
- Financial distress eliminated through non-core asset sale, recapitalisation and refinancing.
- Improved financial performance creating significant net operating cash flow.
- Ultimate sale of business with recovery of entire initial investment and recapitalisation funds, despite a major prior writedown by owner.
