Monday, January 25, 2016

National Asset Services Spruced Up 300 Four Falls for Sale

by Steve Lubetkin,
The recent sale of 300 Four Falls came in part because of two years of revitalization efforts by National Asset Services, which says it created greater marketability for the property's sale by a tenant-in-common ownership structure counting down a maturing loan.

As reported last week, an affiliate of Maguire Hayden Real Estate Company has acquired the seven-story West Conshohocken office property for $98.4 million.

“The TICs decided to change management, because they felt that there were challenges that were not being addressed to their satisfaction by the previous manager,” Karen E. Kennedy, president and founder of NAS, tells exclusively. “We were brought in based on relationship and track record.”

Not to be confused with the actual building tenants, tenants-in-common are collections of investors, and in fact many tenants-in-common are “serial TICs,” says Kennedy, with portfolios of different investments across the country, with whom NAS works on other assets.

Although news reports about the recent property sale indicate that it changed hands at about the same price as its last sale, Kennedy notes that the property’s value had suffered, and takes credit for pulling the value back up.

“We were brought in when there was a loss in equity, and we were able to restore that,” she says. “That was our goal and our marching orders, and we were successful. To do that in less than three years is a pretty strong statement about the value of the property and the challenges that we faced.”

NAS assumed asset management responsibility for 300 Four Falls, a 298,371 square-foot, class A office property, in February 2014.

“When you have TIC properties, unfortunately, that structure often means there isn’t sufficient cash to do deals,” Kennedy says. “There’s no money for commissions, and brokers, fairly enough, need to make money as well, and tenants need landlords they can rely on to maintain their building in a first-class way. We restore that and get rid of that stigma wherever we can. That’s what we did in this case. The TICs stepped up and wrote checks, and added to their investment as owners do, but they did so because they knew we would be making decisions as an asset-manager, as a single point of contact between the brokerage community and the TICs as co-owners, and between the lender who also needed to get on board with this.”
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