Real Estate Transaction Advisory
Advised over $40 billion in transactions
Green Street’s Advisory Services group provides our deep knowledge of capital markets and commercial real estate to provide actionable, independent advice on complex real estate transactions. We advise clients that are considering, evaluating or completing an acquisition or sale. Our group has extensive experience with transactions involving operating partnership (OP) units, among other areas.
Real Estate Transaction Guidance involves:
- Analyzing the historical performance and operating fundamentals of a property sector or operating platform.
- Evaluating the pricing across private and public markets.
- Assessing the quality of a portfolio being acquired or sold.
- Initiating comparative analysis of the portfolio strategy.
- Completing valuation of the operating company, REIT or real estate portfolio
Transaction Advisory Case Study 1
The Client: A $120+ billion employee retirement fund
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Property Sector
Retail
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Deal Size
$500 million
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Portfolio Size
$35 billion high-quality retail portfolio (as part of the GGP bankruptcy)
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The Situation
The client, one of the largest and most successful U.S. pension funds, was underinvested in the retail sector and considering taking a stake in a large mall owner operating under bankruptcy protection. The client needed:
- An estimate for the current and potential value of the portfolio and the company.
- An independent assessment of the merits of an investment with particular attention to the risks assumed.
- Advice on the best terms given the fund’s desirability as a long-term investor within the context of a complex and fluid restructuring process.
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Our Solution
Green Street’s Advisory Services team evaluated the client's portfolio, analyzing each property using our proprietary mall database and warranted pricing model. The team provided estimates of value for the retail portfolio as a going concern and in a liquidation scenario. We found that the underlying value of the assets would substantially protect the client’s investment even if the company did not quickly emerge from bankruptcy. Green Street also estimated the value of the company as a whole under various scenarios based upon current pricing in a market with very limited transaction information. Finally, the team offered the client independent advice on how to most effectively negotiate for maximum return.
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The Results
In exchange for its investment, the client received equity in the reorganized company at a 25% discount to the prior day’s stock price. The client confirmed that the investment yielded substantial returns as the company emerged from bankruptcy.
Transaction Advisory Case Study 2
The Client: An $85+ billion employee retirement fund
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Property Sector
Retail
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Deal Size
$1.0 billion
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Portfolio Size
$3.0 billion high-quality retail operator
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The Situation
The client was partnered with three large institutional investors in a retail real estate operator. One of the partners was exploring a liquidation of its equity stake. As a result, our client wanted to evaluate its alternatives, including acquiring the selling partner’s stake, selling its stake alongside the selling partner, or maintaining its non-controlling existing position alongside a new partner.
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Our Solution
The engagement focused on providing the client with estimates of value for the retail portfolio in a REIT valuation context. Green Street provided an asset and entity-level valuation under various strategic options, analyzed potential execution alternatives and their associated risks and benefits, and made a set of recommendations.
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The Results
The client’s partner sold its ownership stake to a private equity sponsor at a price in line with Green Street’s estimate of value.
