CFO Intelligence Magazine – Spring/Summer 2024

Andrew Zezas

Real Estate Stategies Corporation, Strategist and CEO

When businesses go through a transformation — reconfiguring their operations for greater growth and efficiency, for a current or potential M&A, or to drive returns for stakeholders — real estate assets often play a significant role, notes Andrew Zezas, Strategist & CEO of Real Estate Strategies Corporation, a New Jersey-based corporate real estate advisory and transaction services firm. During any transformation effort, companies that are advised by expert real estate strategists can better achieve operating and financial efficiencies, and position themselves for greater growth.

“Your company’s opportunities may vary, depending on the status of the assets, so a strategic first step will involve reviewing and categorizing your real estate,” he says. “Outside of bankruptcy, an experienced strategic real estate advisor can assist in determining how owned facilities may be refinanced, sold, leased in total or in part to third parties, or positioned to generate revenue. And in the case of a company that is emerging from bankruptcy, a court-appointed trustee will frequently collaborate with transaction experts to position real estate assets to enhance the company’s operating efficiencies, so the company will emerge as a stronger entity.”

OWNED FACILITIES

According to Zezas, a company that owns its facilities should seek to deploy them in a way that promotes financial efficiency. If your company owns the assets outright, securing corporate financing or commercial mortgage debt may present opportunities to generate cash. However, today’s relatively high interest rates, and the foundational reasons for the company’s transformation, may reduce the attractiveness of that option. In contrast, a sale-leaseback could represent a better opportunity to monetize the assets.”

“Consider though, that such a sale-leaseback will be contingent on securing a purchaser-investor who is comfortable with the cash flow generated by the assets, and the creditworthiness of the tenant-occupants. In the alternative, your company may wish to consider converting the property to a condominium ownership, and selling portions to one or more third parties.”