In the global economy, those operating within the real estate sector have arguably seen the largest impact on their operating margins since the start of the worldwide recession in 2008.
Although market conditions within the real estate sector have improved since the global recession of 2008, it is not a consistent picture with commercial and residential asset classes in selected regions benefiting from double digit growth. However, the past seven years having left financial scars with many investors, developers and landlords have endured a perfect storm of plummeting asset values, poor yields, vacant premises, rates liabilities and insolvent tenants. Combined with difficultly obtaining competitive finance facilities, this has led even the best run real estate businesses to the edge of insolvency.
Our significant advice includes the following:
We can review property portfolios in the cold light of day so that lenders are able to fully consider solutions such as debt forgiveness, in the realisation that values may not return to their pre-recessionary levels. Having acted within the market to support lenders and borrowers in this regard, we work carefully to match the realistic expectations of lenders by designing in a premium if the property is eventually sold at a higher price.
Stimulating transaction flow has never been more important for real estate companies; our advisory services are delivered from a position that is independent of your assets and the bank lending in place. As a result, we are increasingly called upon to help provide a more realistic impression of valuations which can help attract potential investors.
In a challenging market, we have acted as a trusted intermediary by negotiating favourable repayment and debt management programmes devised to achieve mutual benefit for both sides. Support from the banking sector remains weak; however, through early intervention when portfolios are under strain, coupled with our teams experience in sustaining businesses through the decline, means we have received a sympathetic ear from lenders so that the underlying weakness of assets can be collectively addressed.
Situations where investors have been deceived into dubious or non-existent property and rental opportunities overseas can significantly impact on the overall health of a business. Our forensic real estate experts are able to uncover frauds and help recover lost investments.