In a further effort to streamline its operations and boost its bottom line, Edwards Theatres Circuit Inc. has awarded a two-year contract to Jones Lang LaSalle Americas Inc., to manage the Newport Beach-based theater chain’s 3.4 million-square-foot real estate portfolio.
Financial considerations of the contract were not available and Edwards declined to comment on the amount of money it hoped to save through the agreement.
However, the decision to outsource property management is another step in the theater chain’s transformation and emergence from the shadows of Chapter 11 bankruptcy.
“One key element of this agreement is to utilize our asset-management model to improve profitability,” said Bill Suits, senior vice president in corporate account management for the Los Angeles office of Chicago-based Jones Lang LaSalle.
The two-year contract provides Jones Lang LaSalle with the responsibility for property management and asset management.
“Our on-site staff has much experience with retail management,” Suits said.
The two-year agreement went into effect May 1 with Jones Lang LaSalle committing four employees on-site to the Edwards account.
The theater’s 3.4 million square feet of space is predominantly leased as opposed to owned.
“We have already established a system to track the company’s extensive leased properties,” said Suits. “Monitoring the terms and obligations of the varied leases is a complicated but critical component of Edwards’ business that has a direct affect on revenue.”
The monitoring system includes a Web-based lease administration program that allows for a more centralized approach to tracking Edwards’ real estate portfolio.
“All prior monitoring had been done manually,” Suits said.
The idea of hiring Jones Lang LaSalle was to have someone that could handle the role of day-to-day property management and lease administration and provide the management and resources to handle that side of the business quickly, according to Edwards officials.
“We have been very pleased,” said Bill Hall, director of real estate for Edwards. “The on-site Jones Lang LaSalle staff has, in the first four months of activity, provided substantial cost savings to Edwards.”
Among the firm’s cost-cutting measures are the renegotiation of hundreds of service contracts for such things as cleaning, maintenance and repair, as well as studying Edwards’ property taxes and energy consumption.
Edwards filed for Chapter 11 bankruptcy in August of 2000. Last month, the bankruptcy court OK’d a recovery plan that included a $56 million investment by Denver businessman Philip Anschutz and Los Angeles-based Oaktree Capital Management LLC, giving them 51% of Edwards. n
