Transition Planning & Asset Management – Multi-Gen LA Commercial and Mixed Use Advisory

Challenge – Lineage Asset Advisors was hired by this multi-generational real estate family to advise on their 5-asset portfolio of commercial and multifamily properties in West Los Angeles.

Lineage was originally introduced to the family through a local wealth advisor. The family had owned and internally operated their real estate portfolio for many years and the 2nd generation owner’s aim was to hold the portfolio and transition the properties to his children, the next generation. The 2nd generation owner had been managing the properties conservatively without significant capital investment for many years and the properties had significant deferred maintenance across the entire portfolio. Further, the portfolio was being inefficiently managed with issues such as asset management, leasing, accounting, and maintenance that needed to be standardized and centralized. Further, the son of the owner was stepping in to assist his father in managing the real estate but did not have a real estate background thus causing disagreements between him, his father, and his siblings and creating additional stress on the family dynamics.

Solution – Lineage assisted ownership in providing a deep due diligence and assessment of the entire portfolio to better understand the inefficiencies of the portfolio and provide detailed recommendations on strategies to prioritize the curing of deferred maintenance, enhance cash flow, and increase operational efficiencies. Further, Lineage became the family’s trusted advisor and assisted both the father and his son in working through stressful and complex problems with the portfolio. The aim of Lineage’s work with the family was to establish a transition plan with the portfolio so that the family could effectively transition the real estate from generation to generation without major snafus and stressful management implications.

Outcome – Lineage was able to assist the family in effectively outsourcing the third party property management to multiple firms that specialized in managing multifamily and commercial assets in these various submarkets throughout West LA. Further, Lineage established standardized and consisted asset management and reporting protocols with the family so that every family member could be informed on the monthly happenings of the portfolio. Lineage also ran deep due diligence on the deferred maintenance of the real estate to assist the family in prioritize their capital expenditures and include in the budget. Lineage assisted the family in exploring financing strategies to fund the capital improvements and underwrote the value impact of investing in these improvements. Lineage worked with the family for two and a half years to establish the infrastructure to carry forward the assets for the benefit of the future generations. Lineage also worked in tandem with the current and future family generations to establish clearly aligned and articulated Shared Asset Plans so that the family could move forward with purpose.