Turnaround Management

Turnaround management is a process dedicated to community renewal. Turnaround Management involves management review, detailed financial analysis; root failure cause analysis, and SWOT analysis to determine why the community is underperforming. Once the analysis is completed, a long term strategic plan and restructuring plan are created and implemented for sustainable results.

• The FDIC foreclosed on a senior community in Houston, Texas, and asked Grace Management, Inc. to manage it. The property was in turmoil and in financial default with 50% occupancy rate. Grace Management, Inc. brought stability to the property and raised occupancy to 95 percent in two years. The property became cash positive, and we estimated that our efforts added over $3 million to the sales value of the property.
• Grace Management, Inc. took over a senior community in Cleveland, Ohio, which was in default. At that time, the building was 70 percent occupied and had an outstanding accounts payable balance of over $75,000. Within one year, Grace Management, Inc. eliminated all outstanding payables, reduced ongoing operational expenses by approximately 22 percent, and began making the first regular payments to HUD. By the end of the year, occupancy was up to 80 percent, despite the loss of almost 15 percent of the original residents who were not appropriate residents for the independent living community. Property sold 2 million dollars more than its appraised value. Grace Management, Inc. was credited by HUD officials for the property's increased value.
• A portfolio of four privately held multi-family apartment complexes and three office buildings had been under-performing. Grace Management, Inc. increased revenues by 51 percent for the first year and another 10 percent for the following year (while expending over $200,000 in property improvements). Property appreciated more than 18 million dollars during our 10 years of management.
• A 209-unit age restricted condominium association in Atlanta, Georgia, was in foreclosure, and MONY, the mortgage holder, selected Grace Management, Inc. to turn-around the property. This condominium community had sustained considerable damage to its reputation over the previous three years and was only 20% sold out. Within six months and with the infusion of $300,000 in much needed improvements along with the implementation of a solid management and marketing plan, the image had been successfully restored. All units were sold in less than three years.
• Grace Management, Inc. was selected to convert a 200-unit multi-family building in Atlanta, Georgia to a senior's full-service community. The building was converted from a multi-family property at 80 percent occupancy to a senior's specific property with 95 percent occupancy (at 230 percent of original revenues) in three years. We continue to operate this property with sustained occupancies over 93% over the last 16 years.
• Grace Management, Inc. has been a court appointed receiver on an 89 unit senior community in Medford, Oregon. Grace Management, Inc. officials testified as expert witnesses in hearings leading up to the receivership. Significant problems with proper licensing and insurance were the immediate concerns. The property was stabilized within three months and successfully sold at the foreclosure sale several months later. Lenders credited Grace Management, Inc. for the quick sale, our ability to recover outstanding loan obligations.
• Grace Management, Inc. assumed the management of a very challenging foreclosed senior assisted living property in Lubbock, Texas. Primary market area of this property is in the less desirable area of downtown Lubbock. We repositioned the property, working with outside healthcare agencies to minimize the insurance risks and costs. A Grace Management, Inc. official represented the lender/owner at city planning hearings on long outstanding fire and life safety issues. Property was successfully sold to a local operator.
• Grace Management, Inc. assumed responsibility on New Year's Day for a large urban senior independent and assisted living property in Silver Spring, Maryland. This property had been poorly managed for years. A reduction in staffing occurred within 60 days with programs instituted to ensure professional financial and operational management of the asset. A building renovation program that involved over three million dollars to remodel and update the property was coordinated by on site Grace Management, Inc. representatives as a part of our repositioning efforts. Property was successfully sold to a local not for profit operator.
• Grace Management, Inc. took responsibility for a group of small CBRF (Community Based Residential Facilities) homes scattered throughout Wisconsin. We were given two days notice to assume control of the properties after an unsuccessful loan restructuring. The repositioning of the properties began with a name change, building modifications and code upgrades. New county contracts were negotiated to improve occupancy. The properties were successfully re-positioned and the portfolio was sold to others. It was an extremely challenging and time-consuming assignment that others declined to undertake. We worked with the new buyers to assist with licensing and insurance issues during the transition.
• Grace Management, Inc. was a court appointed receiver on a portfolio of properties, which were lender owned in Grand Rapids, Michigan. Grace Management, Inc. coordinated licensing standards, operational and communications efficiencies and assisted in the sale of the portfolio.
• Criimi Mae hired Grace Management, Inc. to assume receivership of a153-unit independent senior property in the Detroit area. Grace Management, Inc. took responsibility for coordinating approximately 1 million dollars in deferred maintenance and property improvements to position the property for sale. We were credited with increasing property value by over 2 million dollars.
• GMACCM and Allied Capital (now called CW Capital) to assume responsibility for a 151-unit independent and assisted living senior community in Denver, Colorado selected Grace Management, Inc. After extensive property improvements, occupancy levels increased to a level where the property may be sold. The sale, which was engineered by Grace Management, Inc., generated 1.2 million dollars more than the appraised value.
• A defaulted Owner/borrower at the suggestion of lender engaged Grace Management, Inc. (after two other management groups had exhausted available funds) with the sole purpose of closing down two operating USDA financed properties. After extensive discussions with Trustee attorneys Grace Management, Inc. increased occupancy to over 95% in one property and 60% in other one before public auction. After Grace Management, Inc.'s involvement, both properties appreciated 15.2 million dollars more than appraised values at time of initial assumption of management.
• A pension fund advisory group engaged Grace Management, Inc. to coordinate a potentially hostile assumption of a high end portfolio of eight locations of assisted and memory care communities. The portfolio consisted of over 600 licensed beds in three campuses and two free standing locations in NC, SC and TX. At the time of our engagement the properties were at approximately 31% occupied with a NOI margin of approximately 12%. Additionally, the original developer's management company was costing over $1.0MM a year in negative operating costs for the pension funds. The portfolio was recently sold in Nov 2009 with occupancy at 95% and a NOI slightly over 30%.