Case Detail

Case Summary

Business as Unusual: Managing Commercial Property in Distress

Case Number: 5-413-759, Year Published: 2014, Revision Date: May 12, 2016

HBS Number: KEL857

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Authors: Craig Furfine

Key Concepts

Cash flow analysis, Financial analysis, Financial strategy, Private equity, Real estate, Strategic positioning, Valuation


In January 2010, Benedict Clarke, general partner of a small real estate private equity venture, faced difficulty with one of his properties. When purchased in early 2007, Tulaberry Plaza was a thriving retail shopping center outside Orlando, Florida. The financial crisis and severe economic downturn forced Tulaberry’s anchor tenant into bankruptcy and weakened the other tenants in the plaza. Clarke now faces pressures placed on him by his limited partners, who were shown rosy projections of the returns they would receive, and by his lender, who is presently taking most of the property’s cash flow to satisfy required debt service. Clarke must devise a plan that presents the most logical and profitable way forward, while also justifying his actions to elicit the necessary support from the others involved in the transaction. The case asks students to make decisions from the perspective of Clarke, giving them an appreciation not only of the details of strategic decision-making in real estate leasing, but also of the interplay between lenders and equity partners when managing a commercial property in distress.

Learning Objectives

After reading and analyzing the case, students will be able to:

  • Choose the right tenant for a retail establishment, with an understanding that it may not be the one that promises to pay the most rent
  • Identify the connections among commercial property performance, mortgage loan covenants, and partnership agreements, all of which can influence optimal decision-making

Number of Pages: 19

Extended Case Information

Teaching Areas: Finance

Teaching Note Available: Yes

Geographic: Orlando, Florida, United States

Industry: Real estate management

Organization Name: Fictional

Decision Maker Position: General partner

Decision Maker Gender: Male

Year of Case: 2010