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Asset Assessment

Capital Partners

Bank Clients

Our process focuses on minimizing risk through extensive analysis while maximizing return through a thorough understanding of the marketplace and stringent project cost controls.

 

ASSET ASSESSMENT

The Problem

Due to the rapidly changing economic environment, financial institutions and private equity firms alike are experiencing unprecedented volatility in real estate asset performance, valuation, and viability. The volume of distressed assets has made it challenging for Senior Loan Officers, Special Assets Managers, REO Department Managers, and Real Estate Asset Managers to collect the appropriate information and effectively assess an asset’s overall business worth/viability. As a result, business decisions pertaining to specific assets compared to an overall portfolio have become overly challenging from a financial as well as a risk management perspective.

The Solution

GS Companies, LLC’ s proven Asset Assessment Process is an effective and efficient resource to quickly gather and interpret the right information to enhance the ability for senior bank executives and asset managers to make the right real estate asset decisions. In addition, whether the ultimate path is to sell or hold the asset, GS Companies is positioned to provide supplemental services in:

  • Identifying third party buyers/investors
  • Formulating business plans for each asset
  • Entitlement research
  • Municipality management
  • Overall asset management

The Approach

The Asset Assessment Process focuses on five key areas with the level of detail dependent on the current life-cycle stage of the asset. These factors are combined with unique issues that are inherent in every project to formulate an overall recommendation to assist with the Firm’s business decisions.

Market Factors

  • General Condition of the asset.
  • Marketability based on location, product, price, amenity, etc.

Operational Factors

  • Work in process status.
  • Short term and on-going development costs/exposure.

Municipal Factors

  • Zoning, approvals and permitting status.
  • Surety and warranty obligations.

Environmental Factors

  • State and federal permit status.
  • Cost and/or compliance exposure moving forward.

Financial Risks/Exposure

  • High level cost estimate of expected short and medium-term costs.
  • High level opinion of asset’s value

Timing and Deliverables

Each Asset Assessment takes between three and six weeks to complete, depending on the complexity of the asset and submarket. Findings are delivered and presented in a professional format and dialog to facilitate the Bank’s business decision process.

Sample Engagements

Developer Goes Under

  • GS Companies was approached by a top-five national bank to assist its newly formed REO department to quickly assess 11 properties in the Charlotte, Raleigh, and Orlando MSAs. The properties were all managed by a single developer that had recently filed for Chapter 7. Over a two week period, the GS team quickly gathered, analyzed, and organized the pertinent market, operational, and financial information related to each project. As a result, the Bank was able to understand each asset’s viability and value and quickly assess whether to hold or sell each property.

Product/Market Mismatch

  • A regional bank was in the process of foreclosing on a large parcel where the developer had defaulted on its loan and gone out of business. GS Companies performed a comprehensive assessment which included meeting with municipal officials to better understand the politics related to the project. The conclusion was that the development was not feasible under its existing approved plans due to a complete disconnect between the final product and the overall market demand. As a result the Bank had a much clearer understanding of the project’s viability and value and quickly decided to place the parcel on the market at a more realistic asking price.

Good Assets Soft Market

  • A regional bank wanted to better understand some key entitlement issues on three different developments, each at different stages of the development process. The Bank wanted to better assess the risk associated with each asset prior to foreclosing on the properties. GS Companies performed a highly focused assessment by meeting with city, county, engineering, and environmental resources to formulate a risk profile for each project. As a result, the Bank determined that each asset was viable and should fare well as the housing market improves. GS Carolina is currently working with the Bank to manage each asset and identify potential buyer

Learn more about our services or contact us to discuss your individual needs.

©2011 GS Companies, LLC
These materials are used for advertising purposes, and the community developments, features, facilities and amenities described and depicted herein are based upon current development plans which are subject to change without notice.