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IT
WAS OUR PRIVILEGE -The Summit Of The Americas was held
in Miami. CPS hosted a reception for the visiting president
of a South American nation.
At
the President's request, we worked with the Prime Minister,
consulting with both about establishing investment opportunities
to fund development of the electrical power grid in their
country - using sale/leaseback strategies based upon "credit"
and corporate real estate transactions in the US.
MAKING
THE MOST OF SPACE - The owner of 80 restaurants had a
thriving cafe in Paris, occupying rather small space. His
place always was full. It took many weeks to get a reservation.
For years, he watched the contiguous space, thinking he might
want to expand.
Finally,
the area next-door was offered, at the same rent. It was a
chance to add 25% more seats. But, after calculating numbers,
he realized the added space did not represent profit.
It
would cost more in overall rent, and require more payroll.
Yet he already had the best staff. Any others would not be
as good. Also, with more seats, there would be shorter lines
waiting for tables. Less time for reservations would diminish
his reputation. When patrons had trouble getting a table,
it gave prestige once they succeeded.
So,
in the end, he turned down the space next door. Then, he raised
menu prices by 25%!
DEFINING
MOMENTS - Three events underscore the planning of the
Greater Miami Performing Arts Center.
1)
Sears, Roebuck & Co. donated an entire city block. They
knew!
2)
Cesar Pelli & Associates created a brilliant site plan.
It incorporates opposing footprints aligned on the NE to SW
axis of dual parcels, converting boulevard into plaza, designing
a true activity center with potential for performances inside,
outside, on the terraces, at street level, separately or spanning
the entire complex.
3)
In a barren room, seated face-to-face across a bare metal
table, Russell Johnson, Artec Consultants (designed the acoustical
system) asked James Jude, "What do you want the audience
to feel during concerts?" And, James Jude replied, "I
want the audience to feel the music down to their toes!"
"How
value is added to US real estate ownership" >>
In
real estate, the sum of the parts often is greater than the
value of the whole. Profits are enhanced using rights to divide,
subdivide, lease, sublease, finance, refinance, and exchange,
sell, or transfer possessory interests in various components.
Land
use, zoning, internal and external access, visibility, circulation,
off-site and on-site amenities, a host of details distinguish
each property. Timing distinguishes markets. And, using a
variety of negotiating techniques makes deals. Putting this
knowledge to work is why CPS delivers results.
LESS
IS MORE - It was love. A New York kind of building; even
a florist in the lobby. As CPS searched for new offices, in
an adjacent space, a great desk was spotted (like the legendary
excluded flower pot) - a must have! But, CPS broker said to
herself, "Why are you in love? It's your money!"
Then,
making more inquiries, over the phone, a man exclaimed, "I
know your voice!" About 15 years ago, when representing
a Dutch oil company, we negotiated with him. Now, his newly
acquired big, bustling, plain vanilla buildings had the right
size space, at 70% less rent than that lovable place. For
starters.
After
negotiating, effective rent at the end of five years came
to less than starting base rent in the first space. No sooner
than the economical deal was signed, there was a call from
Jenny's, "Schnell!" Now, nestled in a white woven
basket, exquisite velvety scarlet blossoms rise above incredible
dark green leaves - perched perfectly on that new desk. It
pays to NEVER love property, In The Real (estate) World!
GOOD
DEALS ARE IN THE DETAILS - a long-term lease was negotiated
for the full penthouse floor in a Class-A office building.
On behalf of the international owner of businesses located
on every continent, many "working meetings" ensued,
although CPS client seldom attended.
At
the end, with attorneys and all principals present, without
warning a line item was expressed differently, notably increasing
effective rent. A signal to our client. Out came our file
- with notes sent by landlord.
The
deal changed back to previously agreed terms. It saved our
client six figures over the life of that lease. Those dollars
were part of his corporate bottom line, to be capitalized
in the value of the business.
SUPPLY
AND DEMAND MAKES THE DIFFERENCE - an institutional investor
acquired a downtown site for its own headquarter facilities.
The economy turned. They changed direction. For four years,
they attempted to sell the property. For four years they were
unsuccessful.
Then
they sought brokerage expertise. Our analysis indicated an
alternative use would be feasible, for which there was pent-up
demand, and liberal air rights. Marketing changed. The asking
price remained the same, but emphasis was placed upon potential
in a development pro forma. The site was sold, at full price,
closing within four months.
READY
FOR ANYTHING . . . ALTHOUGH IN THE BEGINNING, IT WAS TO BE
SIMPLE - The largest Norwegian company operating in Florida
engaged CPS to do a search for strategic location in either
of two counties and specific property for medium term lease.
Then, their thinking evolved.
Before
it was over, with their strong credit and impressive global
business history presented, a sub-lease with a former tenant
was initiated. Later renegotiated with landlord into a cancellation
of the prior interest. Leading to extended terms and below
market rent for our client.
At
this point, our joint strategy expanded to identify back-up
properties, a fall-back position, so our client could bargain
from strength. An option to purchase was negotiated subsequently.
Finally a contract concluded. First the lease closed. Next,
the option was activated. Finally, the sale closed, but only
after each member of the Board of Directors traveled to Florida
to inspect and approve the property.
FAIRNESS
IN A FEEDING FRENZY - within ten days into a normal listing
of an apartment building, there were ten offers for the property,
phones ringing non-stop. Negotiations led most offers above
the asking price. To be fair, we invited all Buyers to meet
with the Seller, to make their best and final offer. One was
selected. It closed. The frenzy ended.
IT
ALWAYS PAYS TO HAVE BACK-UP POSITIONS - CPS was selected
by a national corporate owner to sell excess vacant land -
"dirt" - two parcels sited in the same trade area.
The location had no activity for years - a steady-state -
price per square foot was declining.
Our
marketing efforts resulted in multiple contracts offered simultaneously
by three buyers for one parcel. The second parcel, with different
zoning, was presented based upon the "unit cost"
value of its development rights. Two buyers made offers at
the same time. Both parcels closed, highest and best price.
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