Asset valuation for today’s fast-moving private capital

Opportunities for private capital are growing faster than ever in today’s more constrained financing environment. To help smaller and mid-sized private equity firms and debt funds take advantage of emerging opportunities, CREModels provides informed, holistic and pragmatic liquidation-value assessments of all assets in play.

On the real estate front, we rely on our decades of experience in real estate modeling, valuation and due diligence to provide thorough, up-to-date assessments of properties across all sectors, in some cases augmenting existing MAI appraisals by providing much-needed context and interpretation.

Acting as the “quarterback” on these valuation projects, we also team with veteran consultants in sectors such as life sciences and manufacturing to provide liquidation-value assessments for collateral that can include…

• Production and plant support equipment
• Furniture and fixtures
• Intellectual Property (IP)
• Retail or wholesale inventories

Benefits of informal asset-valuation

By providing a comprehensive, up-to-date picture of the potential recovery, CREModels’ asset-valuation services give private equity firms and debt funds more confidence to provide new options to borrowers in search of capital needed for refinancing, turnarounds, M&A and more.

“Our asset-valuation projects also can be of tremendous utility to others in the real estate world—for example, property tax attorneys who need new perspectives on the existing appraisal when disputing tax bills with the municipality,” noted CREModels Managing Director Mike Jaworski. “Defined appraisal methodologies such as sales comps, replacement cost and income have always been, and continue to be, important, but they don’t always tell the whole story.”

CREModels brings unique advantages to the table when assessing real estate value, in particular, added CREModels Managing Director Mike Harris.

“We’re able to look at the deal from all angles and provide an objective, open-minded perspective, free of the limitations that can sometimes be associated with formal appraisals,” he said. “For example, we’re accustomed to working with a much-more robust set of real estate variables as part of our financial modeling process. Our analysts also work on a daily basis across the capital stack with GPs, LPs and lenders. They have seen every imaginable property type and situation across thousands of projects nationwide.”  

CREModels’ growing bench of expert asset-valuation partners boast expertise in areas such as packaging, life sciences, manufacturing, warehouse/distribution, food production, renewable energy, pharmaceutical/nutraceutical production, and more. These consultants help private equity and debt firms get a handle on liquidation values that can be a bit counterintuitive.

“In the past few years, we have seen more business failures by companies that own advanced, nearly new equipment, often purchased when they were first starting out, flush with VC financing,” Jaworski said. “But that squeaky clean condition doesn’t necessarily mean the machinery and equipment is valuable. You need expertise to properly judge factors such as reusability and go-forward market demand.”

In the course of managing these projects as a third-party QB, CREModels also provides various transactional services, managed services, and enterprise solutions. “It’s everything from financial modeling and due diligence to lease abstraction and portfolio reviews,” Harris said. “We can function as a one-stop-shop, whether the client is a private debt fund or a borrower involved in commercial or industrial real estate.”