BANKRUPT MAJOR TENANT
In 2008, the retailer Circuit City filed for bankruptcy and left many landlords with 40,000 square foot “anchor tenant spaces” or “big box” spaces vacant. TIAM experienced this at a suburban strip center in metro Atlanta.
Review the business model associated with the retail property to consider a use which offers the highest return for the ownership. This particular property had many unique features which offered both an opportunity and challenge to redefine the use. Furthermore, the long-term conduit loan matured within 18 months of the filing of the chapter 11 by Circuit City. Through aggressive marketing and negotiations with the local government and stakeholders in the property, TIAM was able to subdivide the Circuit City building and sell to an owner/user at a strong price. The cash flow enabled us to pay off the debt for the remaining retail property.
In 2008, as Lehman Bros. and Bear Sterns collapsed and the financing market slammed into a complete standstill, a loan for one of TIAM’S apartment communities came to maturity. The mortgage payments were current; however, it was time to refinance with a lender who was unwilling to work out a solution. The unique circumstances of the location of this property enabled us to engage the local congressman, who was able to work with the lender. The lender agreed to a reasonable extension which allowed us time to close a HUD 223(f) loan at a fixed interest rate for 35 years. The HUD 223(f) refinancing allowed us the funds to create a new business model which included renovating the property and remarketing at higher rents.
TIME TO SELL
TIAM managed a 100,000 sqft office park with debt that matured in November, 2008. We were able to get a short-term loan extension; however, the lender offered the ownership a discount if a sale could be achieved. The property closed within 90 days at a price which returned cash to the owners and satisfied the lender.
CONTROL YOUR SURROUNDINGS
At an apartment community located in an area of transitory residents, resident retention and new leasing efforts were thwarted by public knowledge of a crime that occurred at a competitive property. While security measures and local police were present at the TIAM managed property, other landlords were reluctant to increase their attempts at security. TIAM resolved this potentially devastating marketing dilemma by creating a unified market area security council. The Community Managers of all competitive properties were invited to learn about TIAM’s security plan, the vendors, the cost involved, and the potential for improving leasing and occupancy in the area. TIAM forged a bond for the communities which are now cooperating and benefitting from the joint effort. A community center has been developed at this property which has created an opportunity for community-based lifestyle for many of the families that reside at this property including an after-school learning program, Girl Scouts, tutoring, and a computer learning lab.
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