global strategic communications powerpoint
TRANSCRIPT
Real Estate Strategy DiscussionAugust 6, 2014
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Emi CaraDirector Project Management + 1 212 [email protected]
Kelly RedlerSenior Vice President Brokerage Services+ 1 212 [email protected]
Ashley RaveslootVice President – Retail Brokerage Services+ 1 212 [email protected]
Team Introduction
Connor McCarthy Executive Vice PresidentBrokerage Services+ 1 212 [email protected]
Nick Kreilein Senior Vice President New York Consulting+ 1 212 [email protected]
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Agenda
1. Current Situation 2. Real Estate Process & Consideration 3. Market Overview4. Option Development 5. Project Management6. Why CBRE?
Appendixa. Process / Timeline b. Financial Analysis
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Current Situation: 229 West 43rd Street
Current Premises: 229 West 43rd Street, Partial 5th FloorSize: 25,000 rentable square feet (“RSF”) Initial Occupancy: 2010Lease Expiration Date: December 31, 2015Current Escalated Rent: $54 per RSF ($1,350,000 per annum)
GSC
Considerations:• GSC is in expansion mode and wants to
attract young and creative talent• GSC just landed an exclusive 1-year contract
with Yahoo! • Market conditions and rental rates have
changed since GSC’s initial occupancy
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Current Situation: 229 West 43rd Street
In April 2011, Blackstone Group acquired the office condo floors (4-16) of 229 West 43rd Street from Five Mile Capital and AFI for approximately $157 million dollars ($334/RSF).
The retail condo portion is still owned by AFI. - 5,300 RSF is leased to Haru - 70,000 RSF is leased to Lucky Strike- 32,360 RSF is available at $222 per square
foot
Availability at 229 West 43rd Street:
Commercial Ownership
Floor SQFT Asking Rent
E-16 9,767 $75.00 E-15 16,400 $75.00 E-7 57,929 $69.00 P-6 30,595 $69.00
Retail Ownership
192,714
57,10421,949
49,84328,500
13,399
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Real Estate ProcessSTRATEGIC PLANNING
(1-3 Months)OPTIONS DEVELOPMENT
(4-5 Months)TRANSACTION MANAGEMENT(3-5 Months)
POST TRANSACTION(5-12 Months)
DELIVERABLES Abstract Leases Remaining Lease
Obligation Analysis Building Stack Plan Market Education Space Programming Scenario Planning
Tour Books Space Surveys TIM/Comps Reports Qualitative Matrix Stacking Plans Financial Analysis
RFPs/Lease Proposals Proposal Comparison Final Term Sheet Lease Draft Lease Issues List Lease/Amendment
Document Execution
Keep Entire Real Estate Team Coordinated/on their Toes
Proactively Conscious of Critical Trigger Dates
SPECIFIC EXPERTISE No False Starts Early Awareness of
Options Ability to “Preempt”
Competition
Influence Pricing Credibility with Landlords
and Agents Coordinate Architects,
Engineer, Consultants and Legal Counsel
Avoid Delays/Penalties Confirmation of
Completion/Lease Commencement
Creative Growth/Contraction Strategies
Monitor Building and Peer Group Activity
Ongoing Review of Rental Invoices/Escalations
Existing Real Estate Evaluation
Needs Assessment Market Analysis Criteria
Development
Scenario Planning
Financial Analysis
Site Selection/ Evaluation
Inform Current Landlord
Negotiation & Structuring
Documentation Renewal
Proposal/Discussion Construction
Estimates FF&E Budgets Project
Timeline
Finalize Construction Drawings
Filing, Permits & Bidding
Build-out (weekly meetings)
Monitor
Relocation
REAL
EST
ATE
PROC
ESS
TIM
ELIN
E |
13-
25 M
ONTH
S
Actively develop potential transactions and cause landlords to come to us
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Renewal / Relocation Considerations
ADVANTAGES ISSUES
RENEWAL Manage size and timing of capital expenditures Less upfront capital
Space inefficiencies likely to persist without reconfiguration Potential to cause significant disruptions
RELOCATE Implement new space standards New build out and infrastructure Less disruptive to operations than renovation in-place
Potentially significant upfront capital commitment Identify comparable locations with similar views, light and air at reasonable price points
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Market OverviewAsking Rent & Availability
as of August 2014
Market Breakdown
Source: CBRE Research
MIDTOWN234.0 MSF
$73.7911.3%
MIDTOWN SOUTH73.1 MSF$66.729.7%
DOWNTOWN87.3 MSF$49.1612.2%
• “Hottest market in U.S. ”-lowest availability rate in the country
• Cool, trendy neighborhoods and workspaces• Google, Facebook, Twitter
Downtown• Residential conversions- “Live, Work, Play”• 43% surge in leasing despite new availabilities
at WTC, Brookfield Place• Lower Manhattan tax incentives• Nearly every subway line converges at Fulton
Street
Midtown• Largest central business district in the U.S.• Attractions and transportation options
Midtown South
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229 W. 43rd Street 1501 Broadway 1 Park Avenue 195
Broadway180 Maiden
Lane
Floor Plan
Building Owner Blackstone Group, L.P
Paramount Group, Inc.
Vornado Realty Trust
JP Morgan SL Green Realty Corporation
Notable Tenants • Yahoo!• IAC • 10gen
• Hardesty & Hanover
• Nederlander
• Talbot’s • T-Mobile
• The Knot• Omnicom• Harper
Collins
• Stroock & Stroock & Lavan
• Engine USASpace(s) Available (RSF)
P6 30,595
P8 33,498
P14 30,689
E4-15 42,000
E6-16 30,000
Asking Rent PSF $73 $65 $58 $55 $45
Matrix Options
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Financial Analysis
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Financial Analysis
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Heat Map – Zip Code There’s only a
2 Min. differencefrom ANY market
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(Midtown / Midtown South)
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Downtown
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Project Management – Workplace Strategy
The CBRE ApproachWorkplace AssessmentStrategy Development
Implementation
CBRE and Workplace Strategy
Workplace360 – Los Angeles
– Increased workforce by 20%– Decreased square footage by 33%
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Relevant Experience
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Organization Comparison
SENIORMANAGEM
ENT
LEASING
CONSULTING
PROJECTMANAGEM
ENT
CORPORATE
SERVICES
ASSETSERVICE
SCAPITALMARKET
S
RESEARCH
Process
CultureJUNIO
RBROK
ER
SALESPERSON
JUNIOR
BROKER
SALESPERSON
SENIOR
BROKER
JUNIOR
BROKER
JUNIOR
BROKER
SALESPERSON/ANALYST
SALESPERSON
SENIOR
BROKER
JUNIOR
BROKER
SALESPERSON/ANALYST
SENIOR
BROKER
FRANCHISE
CBRE – Collective ExpertiseTRADITIONAL BROKERAGE – Siloed Approach
PROPRIETARY DATABASE OF MARKET INFORMATIONMarket ResearchDedicated Team Of 11
Group Meetings 5 Per Week
Canvass Notes200+ Brokers In Manhattan
Deal Sheets#1 Market Share Since 1996
3rd Party Sources
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Transaction Timeline2014 2015
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Phase I.StrategicPlanning
Phase II.Option
Development
Phase III.Transaction
Implementation
Kick-offCriteria Development
Market Analysis
Scenario planning/Financial analysis
Strategy Selection
Identify relocation alternatives and tourEngage Landlord
Refine scenario planning/financial analysis
Short-list alternatives
Structure transaction and negotiate terms
Lease negotiation/documentation
Space Design
Construction
Contingency
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Next Steps
ENGAGE