Financial Structuring

Background

Sophisticated financial modeling and technology dominate the market today. With the impetus of recent accounting changes for companies, there is greater focus on balance sheet and income statement optimization. As real estate moves from an asset or liability on the balance sheet to an actual business driver and enabler for workforce, supply chain, customer experience—these changes create unique financial opportunities for alternative ownership structures that provide flexibility and control to align with the future of your operations. Our team delivers immediate benefits to the corporate balance sheet and P&L.

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80%
of companies are not taking advantage of new FASB/IFRS rules
~$3T
in lease liabilities coming on-balance sheet under ASC 842

Delivering Results

Generating Cash Flow and Raising Capital

There are hundreds of millions of dollars in savings, value creation, and cost avoidance that could be leveraged for your company. Our team advises companies on how to turn owner-benefits into generating additional cash flow and capital that can be reinvested back into the business, employees, technology, and enhancing your product/service offerings. Our team uncovers these opportunities and provides creative structures that would otherwise not be visible or available to clients without the expertise of our team.

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Better Outcome, Less Risk

Reducing costs may require firms to change the traditional landlord relationship as part of an overall portfolio optimization strategy including closing, subleasing, terminating, selling or restructuring non-performing asset.  Financial structuring is optimized when performed with our Core Asset Strategies that optimizes labor, workplace, consolidations and co-locations. We work closely with a team of global capital markets and investment banking professionals to develop financial and operational packages for owners and tenants that drive flexibility, provide control, and mitigate risk.

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Process Before Space

To affect cost reduction, it can be less politically abrasive to reduce space rather than headcount and in fact space optimization typically improves workplace effectiveness, behaviors, and communications. Financial structuring ensures space optimization is integrated with the financial transaction to optimize cost.

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Market Conditions and Economics

Understanding the impact of credit rating, taking in account global policies/regulations, market conditions and local economics in specific geographies to create favorable options for our clients. Looking out into the horizon of 5-10-15 year asset planning, our solutions take into consideration where you operate today and the trends impacting your operations and industry in the long-term.

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Flexible Forecasting and Sensitivity Analysis

While there is no certainty in forecasting, there is a level of confidence, accuracy, and predictive analytics applied to ensure forecasts are as flexible and updated as possible. Understanding the sensitivity of key drivers, our team builds flexible models and sensitivity analysis to aid the presentation of results. We create robust, integrated forecast models suitable for analysis, valuation and structuring.

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Scenario Planning, Debt Modeling, and Structuring

We provide solutions for various ownership structures that should be considered, at what price they become feasible or worth doing, and ultimately how they should be financed. We focus on the modeling of asset ownership based on carefully constructed assumptions, adjustments and detailed calculations to understand whether the ownership position is value enhancing. Several factors to determine sale value and proceeds including location, credit, cap rate, breakeven and residual value, among others.

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Investment Roadmap

We utilize a real estate investment risk approach to evaluate operational criticality within an organization’s operational infrastructure to advise on corresponding holding strategies for those assets. Our Core, Strategic, Operational and Divestiture framework is used to position each asset relative to the current and future use and the impact of the economic conditions. This process is one that applies equally well to expansion of the organization’s operating needs (purchase or lease of new facilities), and also helps build business cases for strategic disposition activities (sale, planned exit, or sale/leaseback).

Our Principles

Optimizing balance sheet and income statement treatment for corporate real estate by utilizing asset monetization or run rate savings as the potential funding source and driver that links individual assets to the long term business strategy.

Mergers +
Acquisitions

Corporate real estate is one of the top three assets for every company and is often ignored in M&A transactions. Having a defined real estate strategy and determining how to handle the portfolio before, during and after a M&A transaction is critical to a strategic acquisition’s overall success.

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Core
Asset Strategy

Real estate is oftentimes the second largest expense facing a corporate income statement. Only second to labor, it moves the bottom lines of thousands of domestic and foreign companies. An aggressive spend reduction program can lead to tens of millions of dollars in lower operating expenses.

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