Market Trends
“The sum of the parts...may be greater than the whole”
Rising real-estate values provide a cyclical opportunity for repositioning assets and generating cash. According to the WSJ, March 25, 2015 edition, Sears Holdings Corp just announced that it would split off as many as 300 of their best locations into a separate company by June to raise money. Hudson’s Bay Co., the Canadian parent company of Saks Fifth Avenue and Lord & Taylor, announced last month a joint venture with U.S. mall operator Simon Property Group to sell and lease back 42 of their department stores with plans to split off the venture into a real estate investment trust (REIT). And Darden Restaurants, the world’s largest full service restaurant company, with brands such as Olive Garden, Long Horn Restaurant and Capital Grille, is exploring options for monetizing its real estate portfolio.
Do those same metrics hold true for the small, individual operator/investor as well? Absolutely. It’s all about cleaning up the balance sheet. Whether you are a single or multiple property owner, with one or several locations, owner occupied or landlord, keeping an eye on the bottom line is crucial. Think in terms of a property “check-up”. How healthy are my real estate assets? How often should the portfolio be examined/monitored? The short answer is constantly. Absenteeism on the property front does not make the pocketbook grow fonder. On the other hand, too much tweaking, tinkering and meddling will get you into trouble every time, a clear sign one is chasing the market. An annual in-depth performance review should be mandatory, coupled with an analysis to determine options for unleashing value and cash.
Rather than disposing of a real asset in its entirety, think in terms of its parts. Consider the example of a property comprised of land and a single building with multiple tenants. Options abound: sell the building only and retain the land in the form of a ground lease, sell the ground lease and retain the building, or convert the property to a condominium (include the site as part of the value for each unit or once again, retain the land in the form of a ground lease to the condo association and sell the bricks and mortar only). Liquidating an asset in parts will not always be the best solution, but it deserves equal consideration before making a final decision.
Check with Bill and Greg to help you navigate through these unchartered waters.
Services
Off-Market Opportunities
The Portsmouth commercial market is replete with property owned for many years by the same family or entity. Whether as an owner or an active investor, often times you may be approached to see if you would be interested in selling your property or purchasing a new one.
What to do and how best to respond? As this month’s Market Trends article suggests, you need to analyze your situation to see if you would consider selling or buying property, but only if the transaction meets the goals you and your family have established. These circumstances often require off market representation, which means the Whalen Wagner Team will use its expertise and client base to help develop a strategy which will enable you to achieve your goals, within the parameters you establish, by matching buyers and sellers with similar needs.
As a seller, you will want to address the following:
¨ What is the up-side potential of my property?
¨ How does the market perceive my property?
¨ Are there investors looking for my type of property
¨ How do investors evaluate the worth of my property?
¨ What can I do to increase its value?
As an investor you will want to explore the following:
¨ What types of properties meet my objectives?
¨ Are there properties in Portsmouth which meet that criteria?
¨ What is the best way to contact a prospective seller?
¨ Who can I rely upon to represent me in the marketplace?
¨ Are there opportunities in both the private and public sector?
As local service providers with a long track record of success, the Whalen Wagner Team will guide you through the process of making more informed decisions that will minimize cost and maximize value. With the Whalen Wagner Team you get an ally and aide-de-camp for sound advice and real estate stewardship.
Call us today for a creative perspective on how to advance your business plan and real estate objectives.
Greg Whalen
o: 603.637.2019 | c: 603.674.7800
Bill Wagner
o: 603.637.2014 | c: 603.494.7967
28 Deer Street Suite 301 | Portsmouth, NH 03801 | 603.431.3001
nainorwoodgroup.com | info@nainorwoodgroup.com
nainorwoodgroup.com | info@nainorwoodgroup.com
