Liquidation Firm Branches Out With New Real Estate Division

Woodland Hills-based Great American Group, which specializes in asset disposition, valuations and appraisals, is launching a real estate division that executives believe represents a significant growth area for the firm. The company on Jan. 4 hired a team of 10 real estate advisors that worked with New York- based Keen Consultants to launch the new division, which will provide both distressed and healthy companies analysis, valuation and strategic real estate planning services; as well as real estate acquisition and disposition services. At a time when economic uncertainty and constrained capital markets are still significant issues, the new division may find a growing market of businesses in financial distress looking to convert assets to cash, or needing help to leverage assets in order to improve cash flow through the repositioning and restructuring of real estate commitments. “People are still nervous about the economy, and we bring long track records of success and of doing things quickly and efficiently,” said Harold Bordwin, who was the managing director at Keen Consultants and will serve as co-president of the new division. A big component of the division’s work will also center around lease negotiations as market rents have come down significantly and many businesses find themselves engaged in leases that are not reflective of market reality, said Bordwin. Keen Consultants, which has evaluated, negotiated and/or disposed of an excess of 200 million square feet of real estate and leases and, in the past five years, has completed more than $1.3 billion in transactions, will now operate entirely as GA Keen Realty Advisors, Bordwin said. New business lines Bringing on the Keen Consultants team and expanding the company’s real estate offering is another step toward growing complementary business lines at the company, said Laura Drummond, vice president of marketing for Great American Group. Real estate, she said, was one of the growth initiatives identified as part of the company’s strategy back when it went public in 2009. Great American, a 35 year-old firm which during the downturn conducted liquidation sales for retailers such as Circuit City and Mervyns, has seen a gradual slowdown of retail liquidation opportunities as economic conditions for retailers and credit markets improve. This has led to decreased revenues. For the third quarter ended Sept. 30, 2010 the company reported total revenues of $13.9 million, compared to $15 million in the third quarter of 2009. Over the past two years the company has looked to expand and diversify its operations beyond liquidation. Financing unit In October 2009, Great American formed retail financing division GA Capital, LLC, to focus on retailers that are in need of junior secured loans for growth capital, working capital, and turnaround financing. The subsidiary targets loans that are between $10 million and $100 million and secured by collateral such as inventory, real estate and intellectual property. In March of 2010, GA Capital assisted Borders Group in securing a $90 million term loan, which was part of a larger re-financing effort by the company. “Real estate was another growth initiative identified in our strategy, as was GA Capital,” Drummond said. “We are continuing to look for opportunities for growth.” Great American Group HEADQUARTERS: Woodland Hills CORE OF BUSINESS: Asset disposition, valuation and appraisal services CEO: Andrew Gumaer, 49