STRATEGY CONSULTING GROUP

 
 
              SCG

REAL ESTATE

SCG's core competence in asset valuation and risk has made us an especially valuable partner in real estate decision-making, whether developing strategies to maximize the value of a specific residential, commercial or industrial property or pinpointing the sources of risk and value in real estate portfolios.
 
We are working with leading real estate developers throughout the world providing a seamless interface among public owners, private developers, and technical and legal advisors.
 
SCG pioneers the decision and risk analysis of real estate valuation in savings and loan econimic crisis in 2005-2008. Our work recognizes correlations among real-estate-owned assets that can influence value under different economic scenarios, providing a foundation for decision-making required to effectively manage and optimize the portfolio. Our evaluations have stood up to rigorous capital market and rating agency scrutiny.We have assisted clients with a wide range of real estate decisions, including investment, financing, development and build-out, operating strategy, work-out, acquisition and divestiture, portfolio, and securitization. We work closely with the leading real estate developers throughout the world providing a seamless interface among public and private developers and technical and legal advisors. In this capacity we support our clients by:
  • Developing the optimal strategy and business model for their projects
  • Conducting financial analysis; quantifying the risk and return of the strategy and business model
  • Defining the legal structure that best supports the business model
  • Translating the legal structure and business parameters into the supporting legal agreements.
 
Our clients have included large private players, public owners, and leading banks in the U.S. and globally, including developing nations; and our competence spans analyzing hundreds of real properties, including office, retail, hotel, multifamily, residential, medical, warehouse, and agricultural. In addition, SCG has extensive consulting experience for clients in real estate-related businesses, such as mortgage lending, property/casualty insurance, and relocation services.
 
Strategic development advice that looks beyond the short term
Drawing upon the team’s practical market knowledge, financial expertise and development experience, SCG team provides advisory services for all types of development projects throughout the world

The team’s services include:
  • Real estate market analysis
  • Feasibility analysis and development appraisal
  • Risk assessment
  • Development strategy
  • Market studies and investment strategies
  • Public private partnerships
 
Our consulting services inform the development process, guiding the masterplanning of large sites and reducing development risks, with a mandate to ensure each project is best suited to the needs of the anticipated market to optimise value to the client.

Across the region SCG team brings sound advice to development projects of all types, built on rigorous analysis and a deep understanding of property market fundamentals. We have advised on developments around the world including many of the local and regional projects:
  • Single plots to new cities
  • Large scale mixed use projects
  • Residential resort developments
  • Office towers and business parks
  • Logistics centres and light industrial 
  • Transport related development (airports, ports and rail terminals)
 
 

Transaction Strategy, Due Diligence and Management

Acquiring real estate assets in today’s challenging environment requires in-depth understanding of values, real estate fundamentals and structuring alternatives. Our real estate professionals collaborate to provide expert transaction strategy, due diligence and planning services to leading public and private real estate companies including owners/developers, REITs, financial institutions, private equity funds, insurance companies, governments, and origination and securitization groups.


    Strategy

  • Transaction structuring strategies and capital markets
  • Offering memoranda and investment books
  • Financial modeling:
    • Asset- and portfolio-level cash flow and DCF (Excel, DYNA, Argus)
    • JV and promote modeling for IRR and return analyses
    • Public-to-public, private-to-public and public-to-private pro forma modeling
    • Development deal pro formas
    • Sensitivity analyses

    Due Diligence

  • Corporate-level M&A due diligence
  • Property-level due diligence and site inspections
  • Market assessments and valuations
  • Expense recovery analyses (operating expenses, real estate taxes, CPI escalations, porters wage, HVAC)


Valuations

The absence of a market-based pricing mechanism requires the expertise in appraisal/valuation of real property assets and debt. Real estate is a critical strategic resource, and our business is founded on the premise that valuation expertise represents one of the single most significant elements required in real estate investment activity.  We assist our clients with single assets to major national real estate portfolios, either underwriting the property cash flows for disposition or providing due diligence for third-party purchasers.

 

    Solutions

  • Bank portfolio and values
  • Debt
  • Real property appraisal and portfolio valuations
  • Market studies, feasibility, and highest- and best-use studies
  • Valuations for financing, corporate planning, and mergers and acquisitions
  • Valuation for financial reporting (FAS 157 and IFRS)
  • Purchase price allocation (FAS 141)
  • Financial modeling
  • Appraisal management and review
  • Partial interest valuations
  • Litigation support, including tax analysis and divorce/partnership/estate

    

Real Estate/Loan Restructuring & Workout

Today, many real estate investments and entities face the challenge of maturing debt, declining cash flow after debt service, complex capital structures and falling values. Owners and lenders alike face complicated issues and considerations in deciding whether and how to restructure to preserve value and potential upside, as well as maximize recovery. Declining values, debt service coverage ratios, and property fundamentals affect land development, hotels and resorts, retail properties and office buildings. Solving the complex business, tax and legal issues involved in extending and restructuring these deals requires a highly experienced and seasoned team of professionals.

    

    Solutions

  • Cash flow, liquidity, entity, asset and liability analyses
  • Value and claim recovery analyses under liquidation, deed in lieu, foreclosure, and restructure scenarios
  • Evaluate economic position, rights and remedies of various stakeholders; identify the business implications and leverage points of key agreements
  • Identify assets to keep and where to concentrate restructuring efforts
  • Identify loan restructuring and/or extension issues including pay downs, escrows, cash controls, A:B note splits, provisions for new money
  • Develop strategies to preserve value, cut losses, save costs, improve operations and solve tax issues
  • Develop business case for restructuring, modifying or extending loans
  • Prepare term sheets and negotiate restructuring as appropriate
  • Implement restructuring plan

 

 

Portfolio Optimization

A regular program of portfolio optimization that aligns real estate portfolios of all product types and structures with investment and liquidation goals is needed today to maximize value. Every asset needs to be evaluated for its current value and ongoing contribution to expected returns. We develop comprehensive asset and portfolio revaluation and repositioning strategies for all asset classes and will assist our clients to determine core portfolio, surplus assets, acquisitions, development and management opportunities. 


    Strategy

  • Alternative use scenarios
  • Analysis of tax positions 
  • Long- and short-term hold-sell analysis
  • Asset improvement programming
  • Asset repositioning strategies
  • Transaction strategies and planning
  • Budgeting and capital planning
  • Acquisition and disposition strategies


    Due Diligence and Underwriting

  • Current state analysis
  • Valuation/appraisal
  • Due diligence and underwriting
  • Financial modeling
  • Lease analysis and database development


    Implementation

  • Financial outsourcing and interim management
  • Vendor contract analysis and RFP management
  • Site inspections and assessments