Atlantic American Trust Case Study

President and Chief Executive Officer: 1995 - 1998

Executive Summary


AAPT was the successor company to Bell Atlantic Properties, formed through the largest management buyout of a commercial real estate company in the United States in the 1990s. After a three-year hold, including the merger of Commonwealth Atlantic Properties into AAPT, the company was sold to Brandywine Realty Trust at 3.5x equity to all shareholders.


Investors:  Lazard Freres


Background


AAPT was a private real estate investment trust with commercial and industrial real estate holdings located in the mid-Atlantic region of the United States. The company was formed with  the backing of Lazard Freres Strategic Realty backing of Jim Still and the Bell Atlantic Properties management team in the buyout of Bell Atlantic Properties. The company had over $750 million of assets, $250 million revenue, and 75 FTEs.


Challenge


After completion of the management buyout of Bell Atlantic Properties, our team merged a separate company – Commonwealth Atlantic Properties (“CAP”) – into AAPT resulting in a doubling of size of the total entity. CAP owned a series of Class A suburban office properties located in the major counties surrounding Washington, DC. Integration of the CAP organization included a full-scale assimilation of the entire senior management, property management, and leasing teams. The challenge entailed merging the entities effectively while maintaining strong performance results in the operations of the two entities.


AAPT Performance Results


· Doubled in size via roll-up of separate entity, integrating an entire management and operating infrastructure

· Drove revenue growth of 18% per year during hold period

· Drove 15% cash flow CAGR during hold period

Exit at 3.5x invested equity after three-year holding period.

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