New EVP Advances CBRE Asset Strategy

Achtemeier joins CBRE after 14 years with City of Industry-based Majestic Realty, most recently as vice president and director of capital markets, before which she spent 10 years in the commercial real estate department of the Principal Financial Group. She says that she and Longo, "both feel very strongly that the best way to create value right now is not just to focus on individual transactions," but to analyze a client's entire capital structure and asset base to determine how best to shore up values, maintain liquidity and outline an overall strategy for the portfolio.

[IMGCAP(2)]"Liquidity and long-term capital planning for your entire portfolio are very important right now," Achtemeier says. "You really can't just look at individual assets, you have to look at your entire asset base and liability base so that you can be formulating a strategy for the whole portfolio." She and Longo will be advising clients on equity and debt strategies, capital raising, financings, debt restructures, acquisitions and dispositions.

Achtemeier and Longo are looking at not only current market conditions but also what they see coming down the road. They cite the significant amount of debt that will be rolling over in the next 24 months, and Longo points out that determining portfolio strategies in light of that rollover will require broad-ranging expertise. "It's not just a capital markets play, it's understanding the fundamentals of the real estate," Longo explains.

When the investment market was booming, Longo worked on some of the largest deals in the country, including portfolio sales in the hundreds of millions of dollars. She says that it will be some time before those days return, but in the meantime there will be a host of recapitalizations and restructurings that will make up a large part of the next wave of transactions. "We think that there are going to be a lot of opportunities going forward in every direction," Longo says. "That's why we are glad to have Val on board. It was an opportunity for CBRE to have someone join the firm who knows how to look at the portfolio from the ownership perspective and bring a different dimension to our clients."

One of the opportunities that Longo and Achtemeier point to is joint ventures. "You're going to see more and more owners look at bringing in joint venture partners," Achtemeier says. Even in the cases of strong portfolios, the owners may need additional liquidity, she explains. At the same time, investors will find the yields attractive, so there will be joint venture capital partners ready to step in. In addition, she foresees that some public companies will go private and vice versa, which will create additional need for portfolio strategies.

The time to formulate those strategies is now, according to Achtemeier, who says that waiting too long before talking with lenders and capital sources can create or exacerbate problems associated with refinancing or recapitalizing. Owners need to be very sophisticated in their talks with lenders, explaining their strategies and their recapitalization plans, she says.

"You need to talk about the strength of your existing portfolio and the properties you have, and what you're doing on the asset management side to renew tenants and to keep net income as high as possible," Achtemeier says. The capital markets "were so frothy for so long" that a lot of owners got away from that kind of asset management, she observes.