Case ID: 899144
Solution ID: 1816

AMB Consolidation Case Solution

Case Solution

Anne Shea, assistant v . p . in the Curators' Fund (The Fund), accounts for trading roughly $80 million in tangible-estate assets. Under 3 years ago, Anne invested $40 million right into a commingled fund operated by AMB Institutional Real estate Experts, Corporation., a number one pension fund consultant and resource manager. She'd been happy with The Fund's relationship with AMB trading with AMB provided an expense-effective, value-added method for The Fund to directly own property. Lately, AMB suggested to consolidate all of the qualities under its management right into a REIT and to accept new REIT public. Anne faces a choice: accept to the roll-up by swapping her shares within the commingled fund for shares within the REIT, or sever ties with AMB by liquidating her position within the commingled fund in a cost comparable to the fair market price from the assets prior to the roll-up and public offering. Additionally towards the concentrate on REITs, qualitative issues within the case range from the prevalence of conflicts-of-curiosity about most facets of the highly fragmented property industry. The mechanics of the consolidation, its valuation of the management business, and the idea of "franchise value" will also be addressed.

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