Douglas Emmett, Inc. (“DEI”), a Fortune 500 real estate company, acquired certain health club assets which it paid a third party management company to operate on its behalf
As a real estate investment trust (“REIT”), DEI faced tax problems if it continued to generate non-real estate related income
Challenges
DEI had approached several strategic buyers on its own but was struggling to create momentum and bring buyers to the negotiating table
Moreover, DEI feared “spooking” the management company by going to a broader group of potential buyers
Solution
Within four weeks of being engaged, FocalPoint drafted a CIM and received Letters of Intent from multiple parties (who were not familiar to DEI beforehand)
FocalPoint ran this expedited process without the management company finding out
Once an LOI was signed, upon terms with which DEI was very pleased, FocalPoint helped facilitate the flow of confirmatory diligence to the buyer and assisted in the negotiations of the definitive agreements, including the real estate lease
Because the buyer knew that FocalPoint had generated multiple bids, Douglas Emmett had significant leverage in these negotiations if the buyer attempted to retrade any of the agreed upon terms
