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Real Estate, Development & Construction| Client Successes

ESOP Client Sells Real Estate to a REIT to Enhance Value

Situation

Our client, a 100% ESOP-owned S corporation had $183MM in debt and due to a decline in its industry in 2013, it was at risk of not meeting certain financial covenants related to its debt. We helped it engineer a sale of its real estate to a REIT.

Result

Our client’s debt was reduced to $43MM, and going forward it will expend only half of its cash flow on rent, which resulted in a significant increase in equity value to the ESOP and avoided potential default on its loans.