News and insights | Real Estate Special Situations: The Value of Independent Management

Real Estate Special Situations: The Value of Independent Management

September 2022

In times of turnaround, it is essential that real estate businesses are actively managed to protect and enhance value, especially if management bandwidth is stretched.

THM has a dedicated Real Estate service line focussed on supporting companies across Europe in complex real estate situations. Our real estate services and experience complement the full lifecycle of a real estate situation and are focused on the specific challenges faced by companies in financial distress through to recovery.

Here are five key benefits of independent management in complex real estate situations.

  • Board and management independence, and rigorous corporate governance are of paramount importance to ensure that value is preserved and maximised for stakeholders.
  • Accurate and timely financial reporting, disclosure of significant events and effective processes to disseminate information are key to ensuring that stakeholders are suitably informed to enable them to make the right decisions.
  • Recruiting a dedicated team to support and enhance the existing management team can be key to unlocking value and managing non “business-as-usual” processes.
  • This is particularly the case in instances where the operating company has fallen away or where properties are held across various jurisdictions where there may be complex regulatory or tax requirements.
  • An in-depth review of all available options by a board and management team that have relevant experience and bandwidth – coupled with the ability to articulate the best course of action to key stakeholders – is crucial when seeking to prepare assets for sale to maximise value.

Properties are often sold as individual assets, leaving the property company 'shell'. These must then be wound down to ensure that there are no unintended financial or legal consequences (for example unplanned tax liabilities or falling foul of local jurisdictional rules) that may impact on the overall recoveries from the sale.

With our Real Estate service line, we provide support and deep situational experience to address the specific challenges faced by real estate businesses in financial distress through to recovery.

We have led many large European real estate businesses with debt in excess of £19bn through restructuring and value delivery processes.

We work with real estate owners, tenants and construction groups, and have a deep understanding of their different perspectives and requirements.

Our approach is to provide small, hands-on teams – with relevant experience – to work alongside companies and their boards, providing management with the necessary bandwidth to focus on the day-to-day running of the company.

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