The StreamCo Advantage combined with our Singular Focus enable us to produce tangible results for our clients. Below are a few examples of value added services which StreamCo delivered upon assuming management of various properties.
ADDING VALUE: HARRISBURG, PA
Situation
Upon assuming management on an institutional industrial/flex portfolio in Central Pennsylvania, we discovered that a 15,000 square-foot Tenant had changed their business model and wanted to close down the location despite having several years left on their lease agreement.
Actions
StreamCo researched the situation and options at hand. While the Tenant was legally obligated to pay the full amount under the lease, their faltering financial strength made it clear the Tenant would not be able to meet their lease obligation. We would likely have a long and costly court battle ahead of us in order to collect that money.
Results
Recognizing this situation as a potential opportunity, we quickly put the space on the market and secured a new Tenant in a long-term lease and a similar rental rate. Further, we were able to negotiate a “buy out” with the departing Tenant equating to 50% of their remaining obligation. This deal secured the owners a surplus of over $75,000 directly to the bottom line, and a longer term lease with a credit tenant.
LEASE BUYOUT: GREENSBORO, NC
Situation
StreamCo was awarded management of an office building in Greensboro, NC and became aware of a 4,500 square-foot Tenant who had vacated their space in the building but was still paying rent in full. Although this situation was not hurting the cash flow on the property at the time, a future vacancy was inevitable along with tenant improvement expenses to find a new user.
Actions
Recognizing this situation as an opportunity for unbudgeted cash flow, StreamCo immediately designed a blitz marketing campaign on the space described above. Soon thereafter, StreamCo had identified a suitable replacement tenant and agreed to terms on a new long-term lease with minimal upfront expenses. Simultaneously, StreamCo negotiated a lease buyout with the previous tenant which provided for termination of their lease in exchange for a substantial termination payment from the tenant.
Results
The successful negotiation with the departing tenant yielded a buyout equaling approximately 60% of their remaining obligation. A new, strong-credit tenant was secured in the space with a five-year lease, and an upcoming vacancy was eliminated. This deal secured unbudgeted income of over $120,000 from the buyout for the owners. A passive asset manager would have been content to let this space sit for 2.5 years as the prior tenant was still paying rent. StreamCo recognized the opportunity to secure extra cash flow for the owners, eliminate a vacancy, and put the owners in a more secure position going forward.
COMPETITIVE BIDDING: HARRISBURG, PA
Situation
A Harrisburg, PA property was located in a flood zone. As it became time to renew the annual flood policy, the renewal premium had increased to over $40,000. We thought this expense was excessive and saw the potential to lower our costs.
Actions
StreamCo performed due diligence on flood mapping in the Harrisburg area. Through this process, we discovered that the property was eligible for a grandfathered rate on flood insurance through FEMA.
Results
StreamCo bound a new insurance policy with better coverage for $2,155. Not only, did StreamCo lower flood insurance costs going forward, we also requested an insurance refund for the entire period of ownership. This action added $72,000 to the investor’s bottom line. StreamCo takes an aggressive approach to lowering property expenses without compromising on service standards. We systematically re-bid contracts and keep a close eye on market costs and need/work scope for every expense line item.
ATTENTION TO DETAIL: STREAMCO PORTFOLIO
Situation
Upon takeover of five new properties at one time in early 2009, we doubled the number of investors under our management and the entities of which they were members. We immediately saw a potential to decrease the cost of the entity maintenance by using one company to maintain all of the LLCs and utilizing the effects of scale.
Actions
StreamCo researched three new companies who offer registered agent services. We were able to negotiate an outstanding price for the new and existing investors. During the takeover process we also checked the good standing of all of the new LLCs and came across a number of delinquent entities. We initiated the process of curing them immediately.
Results
By consolidating the entities under one registered agent, StreamCo saved close to $16,000 in one year for our existing investors. These savings translate to up to a 35% decrease in cost for individual investors, depending on the state in which they are doing business.
