Avison Young Restructures Debt

TORONTO – (Realty News Report) – Avison Young, a commercial real estate brokerage and real estate services company with a significant office in Houston, announced it has reached a deal to restructure its debt.

The company said it agreed to “a comprehensive deleveraging transaction” that “has reduced its financial obligations by more than half and has secured additional capital to advance its strategic goals.”

Avison Young said it entered into an agreement with its lenders through which the company was not required to make certain payments on its term loan. The company said it has made all required payments during this process.

“This transaction is an incredibly exciting step forward and positions Avison Young with the financial flexibility to invest in growth and continue to deliver for our clients,” said CEO Mark E. Rose.

Avison Young said it enters into this consensual transaction with a group representing substantially all of the Company’s existing lenders and capital partners. Through the Transaction, Avison Young has stabilized its financial foundation and secured additional resources to invest in the people and solutions that will improve the company’s ability to serve its clients and partners well into the future.

In a press release Monday, Avison Young said the transaction “preserves Avison Young as a Principal-led and owned firm, with Principals and management retaining a significant majority ownership stake in the company.”

The softness in the office market, in addition to other property sectors, has reduced revenues at many commercial real estate firms across the country recently.

Wade Bowlin – Head of Avison Young’s Houston Office

Wade Bowlin is Principal and Managing Director of Avison Young’s Houston office.

Last year, in an appearance on The Ralph Bivins Project podcast Bowlin noted the softness in the Houston office market, which currently has a vacancy rate around 25 percent.

“We have about 290 million SF of office product in the Houston metroplex. 11 million is Class C. And 87 million is Class B, and about half of that is – as you said – obsolete. It’s a crazy statistic,” Bowlin said in 2013 on The Ralph Bivins Project. “Houston has been flat on office absorption. The difference is that we have absorbed 1.2 million SF of Class A office space. Between Class B and Class C, there is a negative 1.2 million SF in absorption. Clearly, there are buildings that will never be leased as office buildings.”

Photo credit: Mark Rose, photographed by Jamie Kelter-Davis of Women Photograph

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