Commercial Property Asset Management
Business Challenge
The client was a business partnership with significant assets in the German commercial property sector. By retaining the services of both an international property agency and an accounting firm, they had acquired a mixed office and retail property in Germany.
Although they had planned to manage the property themselves post-acquisition, they ran into problems:
- They found that the process was too unwieldy, because of the complexity of the German tax code and legal system.
- Local agents were too expensive and were unwilling to deal with a small consortium, which had purchased a property outside of the top four largest German cities.
- The fact that none of the group could communicate in German also caused problems.
- Only 12 months into their investment, the lease of one of their tenants expired and the client was unable to replace them.
Our Approach
The client retained Farrelly & Mitchell to provide a comprehensive property and asset management service.
Benefits & Value
Farrelly & Mitchell organises the maintenance of the building and ensures its compliance with local laws and regulations. It is also the first point of contact with the tenants. And a high-quality tenant was secured to replace the tenant whose lease had expired.
Farrelly & Mitchell has also been able to reduce the cost of debt service for the property, by renegotiating the terms of the loan with the lender based on increased rents and a higher capital valuation.
The investors are no longer caught up in the day-to-day running of the project and receive annual reports to provide them with the information they need.