Asset Rationalization is a process to determine the best use and investment of real property using strategic planning, investment analysis and identifying assets potentially surplus to requirements.
gsi‘s asset rationalization service includes the following sub-service areas:
A comprehensive asset rationalization study for multiple holdings, which includes: asset utilization review, occupancy cost review, asset valuation, and optimization analysis.
Lease versus Buy Analysis
gsi‘s Lease versus Buy Analysis begins with a valuation of the subject property according to its freehold market value (for purchase) and its fair market rent. After determining the market value of the property, we use a discount cash flow model to project the annual occupancy cost and net present value of the asset over a 10 to 15 year holding period according to a lease scenario and purchase scenario.
Based on a review of the local real estate market and specific attributes of the subject site and/or facility, gsi can recommend opportunities to optimize the asset by way of a change in use, layout, condition, or land use designation.
Cost Benefit Analysis
gsi‘s Cost Benefit Analysis is essentially a brief business case study that evaluates the cost and benefit associated with various scenarios concerning the use or holding alternatives of a real property asset. For example, gsi may consider the cost-benefit associated with the following alternatives:
- Do nothing (status quo)
- Dispose of the property “as is”
- Secure a change in land use and/or development approvals prior to sale
- Renovate the facility and re-tenant