Matt Mason and Lauren Leach: Repositioning Real Estate (Continued) – Turnarounds & Workouts
Matthew Mason and Lauren Leach were interviewed in Turnaround & Workouts‘ article titled “Repositioning Real Estate (Continued): Conway MacKenzie and A&G Talk About Maximizing Value.”
Last month, we asked members of Conway MacKenzie’s real estate advisory services practice and A&G Realty Partners’ non-retail properties division to explain more about what they do. This month, in this second of a two-part series, Emilio Amendola and Andrew Graiser (co-presidents, A&G Realty Partners) Lauren Leach (director, Conway MacKenzie), and Matthew Mason (managing director, Conway MacKenzie) discuss the outlook for the sector and share some success stories.
What’s the current outlook for real estate in bankruptcies and restructurings given the environment?
Mason:Given the evolving retail and housing trends, I fully expect the trend of weaker properties and retailers seeking bankruptcy or restructuring to continue. Changing consumer patterns tend to separate the innovative from those that will be left behind; history is full of such examples. As that process continues to play out there will be no shortage of restructuring opportunities, especially in the retailer and mall space.
Do you have some success stories you can share?
Mason:As receiver for the Algonquin Commons shopping center in Algonquin, Illinois, we have been very proactive in repositioning the shopping center with a focus on upgrading the draw of the retailers. While the center boasted an already strong roster of tenants, we have been able to secure leases with attractive retailers. In one instance, we were able replace national pet supply and office supply retailers with the first Nordstrom Rack location in a market, creating a regional draw and attracting new visitors to the center. In another engagement, we were brought in, post-bankruptcy, to advise a defunct retailer on the best manner in which to monetize its real estate holdings throughout the country. After careful examination, we were able to craft a portfolio plan that consisted of quick dispositions of assets of weaker locations, the mid-term lease-up and sale of others, and a full scale repositioning of an underperforming shopping center.
What’s the current outlook for real estate in bankruptcies and restructurings
given the environment?
Leach: Consumers continue to favor shopping online, and the mall space and its traditional retailers have taken a direct hit. I also worry about the impact on traditional grocery-anchored shopping center retailers given the number of meal-service and grocery delivery options available in the marketplace. It is common for a consumer to stop at other stores while out grocery shopping, but those ancillary store visits disappear the moment the consumer stops going to the grocery store and receives delivery instead.