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Real Estate Asset Management Plan


Real Estate Asset Management Plan document sample

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      Real Estate Asset Management Plan
                 FMFADA Board
                  May 15, 2009
      Today’s Agenda
       Fort Monroe real property portfolio
       Real estate goals and objectives (Action Item)
       Interim leasing program
       Pre-paid residential leaseholds
bae    New development on ground leases
       Monetizing real estate
       RFQ/P Strategy
      Fort Monroe Real Property Portfolio

          Fort Monroe and Old Point Comfort are
          significant assets:

bae       •   570 acres on Hampton Roads/ Chesapeake Bay
          •   1.9M sq.ft. existing structures
          •   Rich natural and cultural resources
          •   The “key” to the South
      Real Estate Challenge
       Fort Monroe is a large-scale, mixed use project
        •   127 single-family homes and duplexes & 168 historic and non-historic apartments
        •   197,500 square foot Chamberlin Hotel offering senior housing lease with a private party.
        •   758,500 square feet of existing office space
        •   95,800 square feet of storage and industrial shop space

bae     •
            324,800 square feet of community and recreational facilities
            332 slip marina with 31,400 square feet of support space
        •   Special event venues/ Casemate Museum, Fort Monroe Moat, and coastal defense batteries
        •   New construction opportunities in the Historic Village, Entry Gate, and North Gate planning areas

       No existing residential or commercial identity
       Leasing and development to occur in a highly visited,
       publicly accessible location
       Balancing the interests of stakeholders and FMFADA’s
       financial sustainability
      Asset Management Plan is Key Driver

         The Fort Monroe Real Estate Asset Management Plan:
          •   Sets the goals and objectives
          •   Identifies key challenges
          •   Formulates strategies to realize goals and objectives
          •   Provides a direction and road map for FMFADA staffing and leasing

bae           activities

                                                      FMFADA Real
                                                      Estate Staffing

                                                      EDC Application
                 Real Estate Asset
                 Management Plan

                                                      Lease/Contract Terms
      Goals and Objectives

      Need final feedback and approval of Goals and Objectives

      Five focus areas:
          •   Summary of Overall Goals and Objectives

bae       •   Financial

          •   Historic Preservation

          •   Operational

          •   Economic Development

      Revised draft based upon comments and suggestions
      made in March 2009 meeting
      Interim Leasing

        Balance need for early revenue and historic preservation with
        protection of Fort Monroe/Old Point Comfort image

bae     Lessons Learned:
        Presidio of San Francisco
         •   Vandalism and theft of appliances
         •   Homeless encampments
         •   Higher rehabilitation costs
      Interim Leasing Concepts - Residential

         Proposed concept:
         Fort Monroe Residential Rental Program
         Target market segments:

          •   Military families renting “on the economy”

bae       •
                •   81,000 military personnel in area
              Foreign personnel assigned to Tidewater area military commands
                •   200-300 annual inflow of families
          •   Visiting faculty & graduate students at area colleges & universities
          •   Other federal agencies with “detail” employees
          •   Local public safety agency employee households

         Seeking short-term tenancies to give FMFADA flexibility to
         implement long term rehabilitation and residential
         leasehold program
      Interim Leasing – Residential (continued)

          Required improvements:

          •   Limit to units requiring only cosmetic Improvements –
              “paint and patch”

bae       •   Improve landscaping at Wherry Housing


          •   RFP for residential property manager
          •   Master lease with Army pending transfer
          •   Start mid- to late 2010
      Interim Leasing Concepts - Commercial

        Identify buildings that are ADA compliant and require
        minimal investment for occupancy, including:
         •   13 recently constructed “butler” buildings with flexible floor plans (85,000 sq.ft.
         •   Building 100 (25,900 sq.ft.)

bae     Target existing office tenants in local market

        Target technology and clean-tech firms needing shop and
        storage space

        Lay marketing and “proof of concept” ground work for
        identification of anchor tenant
      Residential Leasehold Program
        Proposed concept:
        Offer long-term (50+ year) leases of historic residences with pre-
        payment of rent
        Establish endowment/pay for capital costs with proceeds

bae      •
             Pioneering product in Hampton Roads
             Need to develop support infrastructure (e.g, local lenders, brokers, title
         •   Avoiding fixed rental rates/avoiding “surprises” to leaseholders
         •   Capturing future property appreciation

         •   Sea Colony, Delaware                            •   Hawaii
         •   Pensacola, Florida                              •   Santa Inez, California
         •   Jekyll Island, Georgia                          •   Universities/Colleges
         •   Palm Desert/Palm Springs, California            •   Land Trusts
      New Construction - Ground Leases

        New development proposed in Entry Gate, North Gate and
        Historic Village (infill)

        Lead for infrastructure planning, design, financing and
bae     construction
         •   Cost sharing agreements

        Long term leases (50+ years) required

        Potential structures:
         •   Base rent with reappraisals
         •   Participation leases
         •   LLC or JV
      Capital Requirements: “Three Buckets”

         Reuse and redevelopment of Fort Monroe will
         require significant capital at three levels:

               Low                   Medium                      High
bae       Interim Leasing
        •Own land and
          improvements “free &
                                  • Own land and
                                                           New Construction
                                                           • Own land only
                                                           • New construction of
          clear”                    improvements “free &     improvements &
        •Minor upgrades             clear”                   infrastructure
        •Little capital at risk   • Moderate unit rehab    • Highest capital
        • Exposure to “market”    • Site & parking           requirement
          risk                      improvements           • Highest level of risk
        • Leasing and property    • 3rd-party capital      • 3rd-party capital
          management functions      required                 required

         This suggests different contractual arrangements
         and deal structures with private management and
         development entities.
      Monetizing Fort Monroe’s Real Estate
         To maximize revenue flow to FMFADA, need to
         structure public-private partnerships carefully:

          •   No “one-size fits all” solution
          •   Segregate projects by capital requirements and risk
          •   Minimize lease “sandwiches” or developer “spin-offs” ( e.g., master
bae       •
              developer-sub-developer master lease/sublease arrangements)
              Segregate projects based on unique uses (e.g., marina and resort)
          •   Leverage tax-exempt debt-issuance capacity of FMFADA to enhance
      RFQ/RFP Strategy

        RFP for leasing and property management entity
         • Flexible outcomes (e.g., one or more firms)
         • Ability to segregate commercial leasing from property management
         • Action: Fiscal year 2010
bae     RFQ, RFP, and ENA for Master Developer
         • National outreach
         • Experience and financial resources key criteria
         • Use selection process to get up front concessions
         • Action: Fiscal year 2010

        RFP for marina operator in partnership with U.S. Army
         • Element of negotiated fair-market value Economic Development Conveyance
         • Upgrade and expand marina operations
         • Action: Fiscal year 2011
      Master Developer Panel Structure
      Top developer talent required to make Fort Monroe/Old
      Point Comfort a world class destination

       Convene national panel of experts
        •   Commercial Lending/Finance

bae     •
            Real estate
            Historic preservation
        •   Economic development
        •   Planning/architecture

       Three panel meetings
        #1: Review all Request for Qualification submittals
               •   Select 3 to 5 qualified finalists

        #2: Review proposals and invite “final offer” or “final business terms”
               •   Master Developer interviews and economic proposals

        #3: Make final developer selection and recommendation to FMFADA Board

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