Songy 2011: Restructuring to Survive (Or, Surviving to Restructure?)

Charles F. Wu; Alexander W. Schultz

Teaching Note | HBS Case Collection | August 2016

Songy 2011: Restructuring to Survive (Or, Surviving to Restructure?)

by Charles F. Wu and Alexander W. Schultz

Abstract

In 2011, Songy Partners, an Atlanta based real estate developer, was facing three distressed investments within their portfolio each with distinct sets of challenges. Having weathered a myriad of issues during the Global Financial Crisis which included operational shortfalls, failed partnerships, bankruptcies, lender consolidations, lagging tenant demand, low investment liquidity, and pending loan maturities, Songy needed a path forward for these three assets. Songy’s lenders were threatening to foreclose on all three properties and also call on corporate guarantees. The case addresses Songy’s decisions leading up to and during the crisis. Which of the firm’s challenges might have been avoidable, did the company have any leverage with its creditors, what tactics might the company employ to save its properties? Within this context, what are Songy’s responsibilities to his investors?

Keywords: distressed debt; real estate; limited partners; valuation; cap rates; Partners and Partnerships; Valuation; Investment; Property; Borrowing and Debt; Real Estate Industry; Atlanta;

Language: English

Format: Print

9 pages

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Citation:

Wu, Charles F., and Alexander W. Schultz. "Songy 2011: Restructuring to Survive (Or, Surviving to Restructure?)." Harvard Business School Teaching Note 217-014, August 2016.

Nathalie Parizat and her husband, Hugo, were contemplating a new real estate investment. For two years they had been frustrated by and lamenting their situation of paying high rents to third parties while the couple had idle cash in the bank. They also were convinced that Brooklyn's rising rents and property prices were showing no signs of abating. The couple had $100,000 in savings, which they intended to combine with mortgage financing to purchase a residential income-producing building. Nathalie focused her search on Brooklyn, narrowing it down to Williamsburg, where she thought there was better potential to make a good return on their investment. She had quit her full-time job and was planning on managing the building and the renovation—should it be needed—herself. Was she ready to take on this challenge or was she in over her head?

Case | HBS Case Collection | September 2017 (Revised December 2019)

Miami Price: Bidding on an Iconic Transit-Oriented Development Site

Charles F. Wu, Aaron Stolear, Vitali Bourchtein and Sayiddah Fatima McCree

13th Floor-Adler, a partnership of 13th Floor Investments and Adler Group, was compiling a response to a Miami-Dade County Request for Proposal (RFP). The RFP's prize was the opportunity to develop a 7.5+/- acre parking lot, adjacent to a heavy-rail rapid transit station, into a Transit-Oriented Development (TOD) in Miami. To win, 13th Floor-Adler had to submit a proposal that was the "highest and best use" for the land, catered to the County's demands for workforce housing, provided a market return for investors and compensated the County for the use of the land.
Throughout its history, Miami has been subject to a number of real estate booms and busts. Intricate expertise of Miami’s demand drivers were necessary in order to succeed. Arnaud Karsenti (MBA 2006), founder and Principal at 13th Floor Investments (13th Fl), with over $1B worth of completed transactions in the South Florida market, had this well of expertise. Furthermore, the partnership with the Adler Group, headed by Michael M. Adler, provided additional credibility for the proposal due to their 50+ years’ experience in Miami.
At "Link @ Douglas," can Karsenti and his team be "placemakers" creating a true live, work, and play environment, deliver market returns to investors and create a winning proposal that caters to the demands of the Miami-Dade County officials?

Keywords: land valuation; real estate development; real estate; land markets; land investment; Property; Design; Valuation; Real Estate Industry; Miami;

Citation:

Wu, Charles F., Aaron Stolear, Vitali Bourchtein, and Sayiddah Fatima McCree. "Miami Price: Bidding on an Iconic Transit-Oriented Development Site." Harvard Business School Case 218-034, September 2017. (Revised December 2019.) View Details

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In 2019, two Cuban entrepreneurs discussed their growth strategy, given the regulatory framework instability, for private companies, in Cuba. Experiencya Cuba offered car and apartment rentals, airport pick-up, and tours around the island, all conducted in perfectly restored American cars from the 1950s.

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Songy 2011: Restructuring to Survive (Or, Surviving to Restructure?)

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