Real Estate Redevelopment / Acquisition and Turn Around of Troubled Properties

vscre  /   June 17, 2020

All avenues to redevelop on a value-added basis, rebrand, reconfigure and reposition the asset are explored to maximum occupancy, build value and wealth.

The acquisition criteria for Charles A. Von Stein, Inc. is to find underutilized properties where the full potential of the important attributes of the commercial property to the commercial tenant base can be fully realized through thoughtful value engineered renovation, consumer-oriented management practices, and aggressive marketing to lease up the property post renovation.

The primary criteria used to select and find properties and are important in providing a foundation for success are as follows:

  • Price per square foot of $65.00 per square foot or below (Adjusted for special location factors like waterfront properties, adjacent to major attractive elements in the community or submarket)
  • No major functional obsolescence (Functional obsolescence is a reduction in the usefulness or desirability of an object because of an outdated design feature.  Functional obsolescence can be further broken down into curable and incurable obsolescence. Curable obsolescence is a deficiency of an asset that can be remedied through addition or modernization. Incurable functional obsolescence is a defect that either cannot be cured or is not financiallypractical to cure.)
  • Located on or directly adjacent to a major road
  • Undermanaged and/or under leased property offering potential for appreciation

Secondary but not as important criteria

  • Multi-tenant buildings/complexes offering the ability to have multiple sources of income from multiple tenant to pay bills
  • Ideally some income in place to create a built-in return before renovation

These variables are adjusted periodically to account for changes in economic conditions and consumer preferences. Strong compelling in any of these areas can override deficiencies in other areas but in general these criteria are a standard that is not deviated from. The actual criteria are much more detailed, but this is the core tenets of such.

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