Preparation for the refinancing of a portfolio of real estate assets

Sector of activity: Real estate
Size (value of assets in €bn): 1.2

Context

  • The real estate company was preparing to refinance its assets whose debt had reached levels of over 65% with maturity dates of less than one year.
  • The portfolio, mainly consisting of offices, had a high level of vacancies and major tenants were due to depart in the near term.

Our mission

  • Assistance with the modeling of a BP by asset, in a context of high uncertainty in terms of maintaining the current rental conditions
  • Modeling of cash flow forecasting for each asset to determine the scope and timetable for the necessary refinancing
  • Modeling of a stress test on the rental base (lease rent vs market rental value) and identification of impacts on refinancing conditions
  • Assistance with the modeling of 3-year investment plans relating to the rental business and cash flow after paying off interest on debt
  • Support for the company in discussions with its creditors
  • Specific analysis of opportunities to sell off certain assets

Results

  • The business plans made it possible to prepare refinancing of all assets in the portfolio until a sovereign fund came forward to buy the entire portfolio

Key success factors

  • Extensive knowledge of the sector
  • Ability to link the operational management of assets with financial impacts on the asset’s cash flow
  • Definition of a model tailored to the specific features of each asset in the portfolio
  • Full familiarity with the context of restructuring, which allowed us to anticipate/understand the expectations of each player