Client Snapshot
Industry:
Real Estate Development, Investment & Property Management
Location:
USA — East Coast and West Coast; 5 cities
Portfolio:
165 developed properties across residential and commercial real estate
Service Scope:
Partnership dissolution analysis, property allocation modeling, scenario analysis, and portfolio optimization
Key Highlights
Portfolio Scope:
100+ properties reviewed for equity separation
Analysis Depth:
30 years of financial data reviewed
Financial Modeling:
ROE, IRR, NPV, debt analysis, and scenario modeling
Outcome:
Supported optimal post-split portfolio allocation and reduced litigation exposure
Client Background
The client is a real estate development, investment, and management firm with over 100 years of collective experience across residential and commercial real estate. Over time, the firm developed 165 properties across five cities on the East and West Coast of the U.S.
The firm operated as a partnership with multiple partners. Due to irreconcilable differences, the partners decided to split the business. OHI supported one group of managing partners by evaluating multiple post-dissolution scenarios and helping identify the most favorable property allocation strategy.
Business Challenge
The client needed a rational, financially supported separation plan that optimized property allocation, minimized partner payouts, and reduced litigation risk.
Complex Equity Separation
More than 100 properties had different equity ratios across partners, making allocation and payout calculations highly complex.
Property Performance Analysis
Each property needed to be evaluated based on profitability, debt position, historical performance, and future value potential.
Multiple Separation Scenarios
Different separation options had to be modeled with execution timelines, costs, benefits, and risks.
Litigation and Decision Support Needs
The client required a clear financial report to support discussions with the law firm and justify the selected separation strategy.
With decades of financial history and varied ownership structures, the separation process required more than a basic property split. The client needed a defensible financial model that could compare scenarios, support negotiations, and identify the most beneficial post-split portfolio.
OHI's Approach & Solution
Property Allocation Based on Equity Share
- Started with asset allocation based on current market value, debt position, and property-level depreciation.
- Analyzed properties by ownership ratio to reduce the amount payable to other partners.
- Grouped properties by location and ownership structure to create practical post-split portfolios.
- Prioritized properties based on higher client equity, market conditions, and property condition.
Property-Level Performance Analysis
- Reviewed historical financial data to identify properties with weak or negative performance.
- Calculated ROE using seven years of financial data to assess whether each asset was beneficial for takeover.
- Prepared property-level report cards covering profitability, debt position, net savings, and operating performance.
- Identified properties suitable for sale where long-term performance was weak.
Separation Scenario Modeling
- Compared multiple separation plans using ROE, IRR, NPV, debt analysis, and cash flow impact.
- Evaluated “Fire Sale” and “Tenants in Common 1031 Exchange” options.
- Modeled capital gains, sale expenses, equity impact, future turnaround possibility, and settlement funding requirements.
- Built a soft-coded Excel model for sensitivity analysis, scenario testing, and property/entity/portfolio-level evaluation.
Results & Impact
| KPI | Before OHI | After OHI | Improvement |
|---|---|---|---|
| Portfolio Separation Strategy | Multiple possible split scenarios with limited clarity | Financially modeled separation strategy | Clear decision framework |
| Property Allocation | Complex ownership ratios across 100+ properties | Allocation based on equity, debt, location, and asset performance | Optimized post-split portfolio |
| Scenario Analysis | Limited comparison of separation options | Fire Sale and Tenants in Common 1031 options modeled | Better negotiation support |
| Financial Analysis | Property performance not clearly ranked | ROE, IRR, NPV, debt, and net savings analysis completed | Stronger property selection |
| Litigation Exposure | Risk of prolonged dispute and unclear settlement position | Rational financial support for final separation plan | Reduced litigation cost risk |
OHI’s analysis helped the client rationally evaluate multiple separation scenarios and identify the most suitable post-split portfolio. The model supported divestment of weaker assets through the Fire Sale option while helping retain stronger income-producing properties through the Tenants in Common 1031 structure.
“OHI’s financial modeling gave us a clear, defensible view of our property options during a complex partnership separation. Their analysis helped us reduce uncertainty and move toward a favorable post-split portfolio.”
Managing Partner
Real Estate Investment & Management Firm
Navigate complex real estate portfolio separation with confidence
Model equity, debt, tax impact, and property performance to identify the most favorable portfolio allocation strategy.
