SMITH-TRG Insight, Proactive CRE Value Creation Strategies, by Richard D Smith, CEO, SMITH-TRG
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SMITH-TRG Insight, Proactive CRE Value Creation Strategies, by Richard D Smith, CEO, SMITH-TRG

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Richard D Smith briefs Commercial REITs (with non or underperforming assets) on how to create new sources of sustainable value with Hidden Asset Value Solutions (HAVS) a proprietary SMITH-TRG ...

Richard D Smith briefs Commercial REITs (with non or underperforming assets) on how to create new sources of sustainable value with Hidden Asset Value Solutions (HAVS) a proprietary SMITH-TRG service. Presentation is a collateral piece for reading, not presenting.
http://www.SMITH-TRG.com

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SMITH-TRG Insight, Proactive CRE Value Creation Strategies, by Richard D Smith, CEO, SMITH-TRG Presentation Transcript

  • 1. Copyright 2011 SMITH-TRG, All rights reserved. SMITH-TRG Insight Actionable Strategies for Proactive Commercial Real Estate Value Creation SMITH-TRG
  • 2. Copyright 2011 SMITH-TRG, All rights reserved. A Owners/Investors Briefing Presentation This is a collateral piece provided to Commercial Real Estate and Retail client personnel for reading, not presenting. Presentation excludes SMITH-TRG and client proprietary or confidential information. Vision. Insight. Innovation. Strategy. Solution. Value Creation. SMITH-TRG
  • 3. contentsCopyright 2011 SMITH-TRG, All rights reserved.  Market Environment  Actionable Strategies – Hidden Asset Value Solutions (HAVS)  Why Act NOW? Vision. Insight. Innovation. Strategy. Solution. Value Creation. SMITH-TRG
  • 4. Market Environment…Copyright 2011 SMITH-TRG, All rights reserved. Many suburbs and smaller cities are dotted with buildings that are no longer generating enough cash to pay their mortgages. Source: Reis Vision. Insight. Innovation. Strategy. Solution. Value Creation. SMITH-TRG
  • 5. Copyright 2011 SMITH-TRG, All rights reserved. Plainfield, New Jersey 219,000-square-foot strip mall whose Kmart closed and boosted vacancy rate above 50%. Center also lost a Pathmark grocery store, Ruby Tuesday, and J.P. Morgan Chase bank branch. Source: city officials SMITH-TRG
  • 6. Copyright 2011 SMITH-TRG, All rights reserved. Westminster, Colorado 1.2-million-square-foot 34 year old mall, once home to a Macys, Trail Dust Steak House and Mervyns, sales-tax generation plummeted in 2010 to $1.5 million from $8.5 million in 2000 Source: city officials SMITH-TRG
  • 7. Copyright 2011 SMITH-TRG, All rights reserved. Vacancy rates of country’s four billion square feet of office space still near a record 18% … about 250 empty Empire State Buildings. SMITH-TRG
  • 8. Copyright 2011 SMITH-TRG, All rights reserved. Even as the economy picks up steam, many of nations malls and shopping centers are suffering a hangover due to massive building boom and changing consumer shopping habits. SMITH-TRG
  • 9. Outlook is especially bad forCopyright 2011 SMITH-TRG, All rights reserved. strip malls & neighborhood shopping centers. 11.1% vacancy rates expected 4Q-2011… up from 10.9% and highest since 1990. Source: Reis SMITH-TRG
  • 10. Copyright 2011 SMITH-TRG, All rights reserved. Malls and strip centers were built for growth that never came. One billion square feet of retail space was added in 54 largest U.S. markets since start of 2000 Source: CoStar Research SMITH-TRG
  • 11. Copyright 2011 SMITH-TRG, All rights reserved. Retail demand and supply index gap remains. Chart Source: MIT Center for Real Estate SMITH-TRG
  • 12. Copyright 2011 SMITH-TRG, All rights reserved. Retailing ‘ONLINE’ surged to 12% of total sales during 2010 holidays. SMITH-TRG
  • 13. Copyright 2011 SMITH-TRG, All rights reserved. Collectively -- such problems are driving up delinquency rates on commercial mortgage backed securities (CMBS) to record 9.34% ... less than 1% in 2007. Source: Reis SMITH-TRG
  • 14. Actionable strategies . . .Copyright 2011 SMITH-TRG, All rights reserved. HAVS ‘Hidden-Asset Value Solutions’ (HAVS a proprietary service offering of SMITH-TRG) Vision. Insight. Innovation. Strategy. Solution. Value Creation. SMITH-TRG
  • 15. Copyright 2011 SMITH-TRG, All rights reserved. HAVS enables CRE holders/owners to create new sources of sustainable value from non or underperforming assets SMITH-TRG
  • 16. • Office Buildings • Shopping Malls (Mega or Regional)Copyright 2011 SMITH-TRG, All rights reserved. • Strip Malls (Regional or Community) • City Center Developments HAVS • • Hotels/Resorts/Golf Courses Sport Stadiums (Pro & Collegiate Venues) qualified • Entertainment Complexes • Big Box Retailers candidate properties • Retail Chains (National/Regional) • Undeveloped Land • Mass Transit Systems • Parking Lots (Covered Structures or Open) SMITH-TRG
  • 17. Copyright 2011 SMITH-TRG, All rights reserved. assets qualify? Will yourSMITH-TRG
  • 18. Copyright 2011 SMITH-TRG, All rights reserved. Of 1,000+ commercial properties surveyed – 99.8% classified as HAVS eligible SMITH-TRG
  • 19. Copyright 2011 SMITH-TRG, All rights reserved. New Value ‘HAVS’ Opportunity  monthly recurring revenue  income drops to bottom line  potential upside - $5 dollars per square foot, per month SMITH-TRG
  • 20. Copyright 2011 SMITH-TRG, All rights reserved. Results will vary by asset type, size & location SMITH-TRG
  • 21. Why Act NOW?Copyright 2011 SMITH-TRG, All rights reserved. Pay Now or Pay Later, the cost of not pursuing proactive strategies Vision. Insight. Innovation. Strategy. Solution. Value Creation. SMITH-TRG
  • 22. Copyright 2011 SMITH-TRG, All rights reserved. Sustaining asset value is more complex than ever. Source Fragile Recovery Chart: JP Morgan Chase SMITH-TRG
  • 23. Copyright 2011 SMITH-TRG, All rights reserved. Contact SMITH-TRG today and schedule your CRE Owners/Investors Briefing. Vision. Insight. Innovation. Strategy. Solution. Value Creation. SMITH-TRG