Milwaukee, WI — National Asset Services (NAS), one of the Country’s leading commercial real estate companies, has once again delivered positive results to a group of tenant-in-common co-owners, who were facing limited options and a liquidity event that could not be met.
One Riverwood Place and Two Riverwood Place, located in Pewaukee, WI, total 197,000 square feet of Class-A office space constructed in 1999 and 2001. Like many tenant-in-common properties, purchased by investment groups prior to the 2008 recession, Riverwood had become financially challenged and unable to compete in its submarket. Unfavorable economic conditions had burdened the property to the point that management was unable to turn the property around and even meeting the loan requirements for payment of debt service was becoming more difficult. The tenant-in-common co-owners engaged NAS in 2013 to spearhead efforts to salvage the group’s investment.
Upon assuming management responsibility, NAS executives immediately implemented an aggressive leasing strategy that increased cash flow while creating more time for the company to identify and present the best recapitalization options to the co-ownership group.
NAS Salvages Commercial Real Estate Property Investment
Property co-owners selected Denver based, Broe Real Estate Group, who assumed the existing $26.5 million dollar CMBS loan under a managed affiliate. The deal consisted of a co-investment structure that allowed the tenant-in-common group to maintain their overall ownership interests in the property, while preserving tax benefits afforded to investors in a 1031 qualifying exchange property.
Riverwood marks the 24th property in just two years that NAS has delivered like results for tenant-in-common co-owners. “We were able to deliver positive results to a very deserving group of TICs who found themselves in a distressed situation with very few options,” commented Karen E. Kennedy, President and Founder of National Asset Services. “We now look forward to continue working with BROE and the co-owners to maximize value in the upcoming years.”
“NAS was able to step into a difficult situation and forge a strategic path that allowed us to keep our investment,” commented Jack Abouchar, a co-owner in Riverwood Place. “We now can focus on maximizing the property value instead of thinking about cutting our losses.”
“Fortunately, an organization with the level of experience and dedication of NAS was able to make this outcome possible for our TICs.” commented Ron Collins, another Riverwood Co-Owner. “I am pleased that NAS will continue being an important part of the property’s management team.”
Mr. Abouchar and Mr. Collins, along with 33 other co-owners, purchased Riverwood for $36.5 Million in 2007. The office complex consists of two three-story buildings in Pewaukee, WI, a submarket west of Milwaukee.
“We see Riverwood as a good investment opportunity,” commented Jim Crawford, Vice-President—Acquisitions, Broe Real Estate Group an affiliate of The Broe Group. “It’s a great property situated in a strong suburban market and we’re excited to work with NAS to lease-up the property.