The same historic research that we do on issues, we do for all areas of the asset, some of the key areas include financial performance and review of all contracts for service and all leases past and present.
The historic lease data is very important as when a new manager takes on an asset they are unaware of what has been going on in regards to the past lease terms, clauses and other important info.
During our initial historic research into an asset after we had taken over we noticed that a number of the tenancies had been earning more for the complex and at a certain point the leases were discounted. Also the lease terms for this particular unit in the complex had been shortened. We wanted to know why and had a suspicion that the two units in question had leases that were undervalued. After inspection and review of all of the older marketing content that the owner had on file, we found that the agent was having trouble finding tenants and had convinced the landlord to discount the lease term and value.
This strategy had resolved the vacancy issues however it had devalued the property as a whole and this was only noticed overtime, in near the future the owner had wanted to refinance to enable him to grow his portfolio and this devaluation had caused his forecasting to be incorrect. Of course the value of a commercial asset lies in the value and tenure of its leases. After some analysis and planning we had developed a plan to re-obtain a correct valuation of the asset through leasing strategies which mainly centered on finding the correct tenant that was able to gain the most benefits from these two particular units in the complex.
Then after a period of time we proceeded to set about revaluing the property and had been able to achieve the owner’s goals and enable him to grow the portfolio.