TORONTO, August 22, 2006 — Restructuring specialists at PricewaterhouseCoopers (PwC) demonstrated the value of innovation this week when they sold a Don Valley office tower for almost a third above current appraised value.
PwC was appointed as receiver of the property on GE Real Estate’s recommendation, in September 2005. PwC’s success means that first-mortgage holder GE is recovering the full amount of its debt on the property.
PwC partner Hazel Claxton said the company was able to “achieve maximum value” by combining the expertise of its in-house real estate practice with the financial restructuring team managing the project.
The multidisciplinary team developed an innovative approach that combined a “stalking-horse bid” with a virtual auction.
A stalking-horse bid occurs when a purchaser makes an offer to buy — often unsolicited — and the vendor accepts the offer subject to taking the property to the marketplace to see if anyone is prepared to top the original stalking-horse-bid.
Claxton explained that PwC pioneered the use of the stalking-horse process in Canada in 2001 — but said this was the first time it had been used in a real estate transaction.
“This innovation is a direct result of our ability to mix in-house expertise in both real estate and financial restructuring,” said Claxton. “PwC is unique in the industry for having all this capacity under the same roof.”
The final selling price for the 150 Ferrand was $17.8 million, topping the $16.0 million originally offered as the stalking-horse bid by more than 10% and exceeding current appraised value by $4.0 million.
About PricewaterhouseCoopers
PricewaterhouseCoopers (www.pwc.com) provides industry-focused assurance, tax and advisory services to build public trust and enhance value for its clients and their stakeholders. More than 130,000 people in 148 countries work collaboratively using Connected Thinking to develop fresh perspectives and practical advice. In Canada, PricewaterhouseCoopers LLP (www.pwc.com/ca) and its related entities have more than 4,300 partners and staff in offices across the country.
(Unless otherwise indicated, “PricewaterhouseCoopers” refers to PricewaterhouseCoopers LLP, Canada, an Ontario limited liability partnership. PricewaterhouseCoopers LLP, Canada, is a member firm of PricewaterhouseCoopers International Limited.)
