Knight Frank

BACKGROUND

Introduce your business and what you do there.

We’re a multi-strategy investment firm that manages over 12 to 13 billion with offices in the US, Europe, and Asia. I spearhead a strategy focused on portfolio financing that could include portfolios of real estate and non-real estate assets.

OPPORTUNITY / CHALLENGE

What challenge were you trying to address with Knight Frank?

When we look to evaluate the portfolio’s net asset value or the equity value, and if it has real estate assets, we typically hire outside experts because the regional offices of those firms like Knight Frank all have expertise in those particular areas.

We were looking to hire specific people within Knight Frank who had expertise in that region and asset class, including multi-family office buildings and student accommodations. We’re trying to get them to give us their independent review of the valuations of their building assets that were part of our collateral pool.

SOLUTION

What was the scope of their involvement?

We did a project in June. We had the deal in hand, meaning under exclusivity. We have a borrower who has a portfolio of real estate assets, and each of the underlying assets had leverage. They were also looking at some additional leverage at the portfolio level.

Once we got the terms agreed upon between the borrower and us, the next step was to confirm the diligence. The diligence could be both property diligence and any other non-property diligence like environmental and other issues.

We hired Knight Frank in this instance to help us evaluate student accommodation assets in Europe. We had one person that we knew at Knight Frank that put us in touch with the European arm, and within the London office, we basically had them go and give us a quote on providing the framework evaluation for four or five assets within Spain and Ireland.

We then had the terms of engagement defined with them regarding pricing, scope, and timing. It was a time-sensitive project, and it needed to be done in less than three weeks. We had them do the diligence that they would typically use.

What is the team composition?

We worked with about two dozen people—some in Europe, in Asia, and in the US.

How did you come to work with Knight Frank?

Knight Frank is one of the top five organizations that we deal with daily regarding real estate financing. Since the borrower itself was using another organization, we decided not to use them for financing and use Knight Frank because they would provide an independent peer review.

We had known Knight Frank as an organization for over ten years in the US, so it was not a new relationship. We felt they were qualified enough to help us to do the diligence on the assets without any conflict of interest.

How much have you invested with them?

For every project, we’ve spent about $50,000. We have done at least 30 projects with their team.

What is the status of this engagement?

Our first project started with them in April 2011.

RESULTS & FEEDBACK

What evidence can you share that demonstrates the impact of the engagement?

Qualitative and quantitative, they seem to be better than other groups. Knight Frank is more organized and centralized. I think they’re also easier to deal with and more flexible. We have another project that we’re going to use them for regarding properties in Australia, Japan, and potentially the US.

How did Knight Frank perform from a project management standpoint?

We communicate through email and phone.

What did you find most impressive about them?

Their team assisted with a time-sensitive deliverable, a peer-review evaluation in June across assets spread out across multiple geographics. That was a great experience with them.

Are there any areas they could improve?

When people think about real estate, they think about CBRE, which is the first name that comes to mind, and less so, Knight Frank. I don’t know whether they should market themselves more or less, but I think they’re a pretty good shop. They just need to be out there more.

Do you have any advice for potential customers?

Be very specific in the scope because it can vary, and be very emphatic about the timelines and stick to them. Knight Frank can be pretty flexible and easy to work with. I would suggest them without a doubt.