July 16 2014
Allegiancy Sets Out to Save Distressed Commercial Real Estate Property In Georgia
Owners of 90,000-square-foot office building in Gainesville award real estate asset management contract to Richmond, Va.-based firm to salvage investment.
For immediate release: July 16, 2014
RICHMOND, VA: With a building deteriorating from water damage and the impending threat of defaulting on a bank loan, the ownership group of the Jewell Parkway commercial office space in Gainesville, Ga. turned to Allegiancy to take over their property’s asset management to save their investment.
“When you walk into a building and see that a first floor tenant has ripped out part of the wall board because of repeated water damage, you know that you are taking over a challenging property,” said Chris Sadler, President of Allegiancy, a Richmond, Va.-based real estate asset management firm specializing in office buildings.
“But that is what we do. It’s what we know and what we’re good at. We get in and reassure tenants that it’s a new day. We get vendors back to work, gain the confidence of the lender and stabilize the property to save the investment.”
For the Jewell property, with just more than 90,000-square-feet and a value of $10 million, Allegiancy also had to move fast.
“There was a trifecta of problems,” Sadler said. “Unhappy tenants, no money to fix the damaged building and a loan that was going to go into default.”
For quick turnarounds of a property of this magnitude, “action is required,” said Coni Rathbone of the Zupancic Rathbone Law Group, nationally known for advising clients about their commercial real estate investments.
Jewell’s ownership group selected Allegiancy based on the results of a rigorous analysis of competing firms led by Rathbone, who helped the property owners get away from the value destruction and neglect of the previous asset managers.
“We look for a manager that has a track record of putting the owners’ interest first and getting the job done right and done quickly,” Rathbone said. “Owners who have taken my recommendation to work with Allegiancy have been pleased with their performance because they manage the properties as if they were their own, leveraging their expertise to make decisions with the highest impact. The owners know that their investment is in good hands. ”
Immediately after winning the contract, Allegiancy’s senior leadership took action, arriving on site at Jewell Parkway to complete a full assessment, evaluating every part of the property, from the grounds and maintenance to tenant relations and leasing operations, said Dan Simons, Allegiancy’s Chief Operating Officer.
“As is typically the case, an ongoing lack of attention to detail creates a greater need for capital down the road,” Simons added, noting the gross water damage and other maintenance issues leading to the deterioration of the building itself. “Fortunately for the owners and tenants, we quickly assess, correct and lead forward.”
According to Frank Simpson, Jewell’s broker, Allegiancy’s responsiveness and attentiveness to the building has “already resulted in higher leasing velocity and increased occupancy.”
Why such quick results? While it’s still early in the contract, Allegiancy has already created and executed a new capital plan, worked directly with the bank to restructure the debt to prevent the owners from going into default and restored confidence in the current tenants, helping build the necessary forward momentum to gain new tenants in the building and increase cash flow.
Allegiancy’s focus on each property as a stand-alone business allows them to align the goals of all stakeholders – property owners, tenants and their own investors – and get results.
Jewell Parkway is not the first property Allegiancy pulled back from the brink using the principles and processes they know work.
Among the many success stories for Allegiancy is Signature Place, a large office building in Greensboro, N.C., that was once much like Jewell Parkway. When Allegiancy took over the asset management there, two major tenants had not been reimbursed $1.5 million for improvements they made and the property was in danger of defaulting on its mortgage. Today, Signature Place is performing well and building cash reserves.
Allegiancy also has recently won new asset management contracts in Florida, North Carolina and Ohio.
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Allegiancy is changing the business of asset management for commercial real estate owners and investors. With an advanced technology platform and singular focus on serving as the owners’ advocate, the company brings fresh vigor to an often poorly understood business. Combining its proactive Value Assurance? operational rigor with an intense focus on cash flow and profitability, Allegiancy is expanding on a track record of more than four decades of success.
Headquartered in Richmond, Va., and led by a team of seasoned professionals and more than 100 years of experience, Allegiancy manages properties that have outperformed their peers by 45% since 2006. The company has more than $300 million in assets under management (AUM) and delivers clients attractive returns and profitable, hassle-free investments in commercial real estate.
More information about Allegiancy may be found at www.allegiancy.us.
March 07 2017