Bank Real Estate Restructuring
19.04.2010

Brief

Forton International was selected by a leading Bulgarian bank to consult on strategic approaches for extracting the optimal value from their real estate assets by sale, sub-lease or management approaches in the current market conditions. Our assistance involved property valuations, which served as the basis for elaborating the restructuring model for the bank’s real estate portfolio.

Solution

Before the valuation process and financial modeling of different scenarios, Forton performed in-depth market research and analysis of individual properties. The project spanned 35 properties in 23 locations throughout the country and had a short time to delivery, being scheduled for completion within less than 45 days. The services Forton provided were as follows:

  • Market Research and Inspections – In September 2009, Forton performed an analysis of local submarket trends and property inspections.
  • Valuation Process – Forton’s team gave an independent professional opinion on the fair market value of each property by applying at least two valuation approaches.
  • Strategic Advisory – The financial implications from several restructuring scenarios were evaluated and adjusted to the specifics of the bank’s operational structure. The main challenge was to determine the proper strategic disposal of each property and to filter the assets into relevant portfolio groups.

Conclusion

Several portfolio tranches were differentiated based on the selected disposal or management scenarios.
Forton identified the optimal transaction structures for the different groups of assets with the purpose of unlocking maximum value from the bank’s property portfolio.