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May 20, 2016

A&M was engaged to review individual property performance in operations, marketing and overall market positioning of student housing multifamily assets throughout the U.S. 

Client Mandate
An owner and operator of student housing assets was interested in understanding portfolio-wide operating issues, financial issues and the ability to meet financial obligations over an interim and long range period. The client required an objective review of its portfolio and unbiased assessments of financial and operational historic and future performance. The client wanted to understand performance of the portfolio to industry benchmarks, an opinion on the adequacy of existing financial and human resources, the portfolio’s ability to generate sufficient NOI to meet debt service and an executable plan to correct financial and operational issues.

A&M’s Approach
Our professionals were engaged to review individual property performance in operations, marketing and overall market positioning of student housing multifamily assets (2,700 beds) throughout the U.S. The goal of the engagement was to develop and implement a streamlined approach to resolve day-to-day operating issues, develop uniform and efficient property operating plans, perform an intermediate and long term cash flow, quantify net income available to meet debt service and assess overall ability to meet loan covenants.

Our efforts involved the following major activities:

  • Review physical condition of assets to provide a comprehensive plan to remedy deferred maintenance and develop a budget for capital expenditures 
  • Interview on-site property management and conduct student surveys to obtain quantitative data to assist in re-positioning efforts
  • Compare historical operational performances and current budget expenditures against industry standards and recommend property operating performance opportunities
  • Analyze rent rolls to identify short-term and long-term risks and develop plans to mitigate revenue loss and review general ledgers and bank statements to identify potential areas of fraud
  • Conduct internal audits of property contracts and lease agreements to identify legal exposures
  • Conduct performance reviews of existing on-site property management

Results
We identified strategies to improve short-term cash flow across the portfolio, thus supporting the ability for the portfolio to meet servicing requirements. Our operational experiences were instrumental in identifying critical and affordable expenditures to enhance the competitiveness of each asset in its respective market. A&M professionals also designed and implemented standard financial and operating performance reports, enhancing the availability of property level information and the ability to benchmark across the portfolio and, more broadly, against the industry.