We’re a management group focused on leveraging our resources to make projects happen.
We develop real estate and manage construction for ourselves and our clients. We consult on new or existing projects. We manage real estate and operate affiliated businesses.
We’re diligent, accountable and finish what we start. We understand the big picture and manage the day to day tasks.
A project’s objectives are universal, typically related to minimizing risk, maximizing value, containing costs, meeting time deadlines, ensuring quality and successfully completing the project.
An experienced, skilled, and accountable project team does their homework, develops a plan, and makes a project happen. Planning, teamwork, execution and personal character can move mountains.
The performance of the project team will depend on the people managing the project, their character, competence and accountability. People will perform their specific roles at the highest level when the overall project objectives are understood. The intent of team members and scope of services specific to the project need to be clear within the four corners of their contracts. Team members use their strengths to support another’s weaknesses. Strong team members can do more than their contract obligates them to do and share in the success and satisfaction of a job well done. When a team works effectively obstacles are overcome with integrity, skill, tenacity and experience. Good teams develop good projects.
Is the project feasible, and by whose standards? Why this project concept? What is the exit strategy? Are there better alternatives? Should we sell, hold or develop? What are the costs? What are the risks? These are a few of the questions typically encountered on many projects. Whether considering a new development, or improving the performance of an existing asset, we take a hard look at where we are, and clarify the direction we’d like to go. Considering multiple development scenarios along side thorough due diligence establishes a baseline to work from. In order to identify key project components we align financial analysis with bricks and mortar, coupled with market research and regulatory review. Some projects are worth doing, some are not. Measure twice, cut once.
How much will the project cost? How long will it take to complete? How will a lender underwrite us? What is our Internal Rate of Return? How much equity do we need? How long will our capital be at risk? Financial modeling analyzes development opportunities, organizes deals, exposes risk, and contemplates multiple scenarios to strengthen the financial structuring of a project. Each project is unique, as are the people involved. We work to develop a common financial language for talking, reviewing and thinking about a project. We are competent building spreadsheets from scratch using Excel, or working with established software, such as Argus or Yardi. Aligning the objectives of ownership with the realities of a project and market, within a viable financial model, saves time and money. The first dollar in a deal carrys the most risk.
Can we permit this development? Is this density allowable or will we be drafting and negotiating new regulations? Does the local community support smart growth or form based codes? If we add another floor, does the building code require a different structure? Does the conceptual design function with respect to costs and market demand? Permitting and design are essentially linked, one without the other changes everything. To evaluate the feasibility of a project, we will assess the regulatory, market, and community conditions influencing design and permitting strategies. Due diligence allows us to clarify what we can or cannot do by right and thus develop our conceptual designs. Moving forward in design development and we settle into a project schedule while continuing to refine the projects financial structure. Form follows function, or function follows form, or a little bit of both can work too.
Who leads our team and manages the overall development process? How do we manage a development project when we’ve got our core operations to run? Who does what, and how do we get it done? We’ve developed, owned and operated real estate in New England since the early 1980′s, through 3 recessions, a couple of booms, changing demographics and ever-changing financial conditions. Whether we own the real estate or represent the owners, we establish a development plan, assemble a qualified team and manage the process. One thing we know, when managed well, a project has a better chance of success than if managed poorly.
The project funding has been secured, so, how do we best manage the process and cash flow? Does the project chart of accounts align from proforma, through the schedule of values, accounting and tax preparation? How do we run sensitivity analysis for cost savings or overruns? If we complete construction two months early, or two months late, how are the costs affected? You’ve capitalized the project and are ready to build. Managing the money on a project requires significant resources and daily action. The flow of funds drives the pace of construction, from lender, through developer, contractors, consultants, vendors, and subcontractors. We’ve managed over 100 projects, and experienced enough to know that being properly capitalized, and able to effectively manage the flow of funds allows the team and project to realize success.
How do we manage construction? Hire a General Contractor, Design Build Contractor, Construction Manager, Self perform with Sub Contractors? What construction delivery method works best for us? Do we hire project managers, or a clerk of the works? Who takes on the construction risk? What does my lender require? Do we need bonding capacity? Who will we fit with and how do we know before we start construction? Each project, and ownership entity, could answer these questions in vastly different ways. We’ve built for ourselves, and a wide variety of clients. Developing and syncing project scope, specifications, construction documents, bidding results and their associated costs sets the baseline. Awarding a construction contract, and managing the process comes next. Delivering the project on time, within budget and of quality achieves substantial completion. Closing out the punch list and the warranty period is the end game.
Are the bid documents clear and complete? Are the construction documents aligned properly? Are there adequate contingencies for unforeseen and unforeseeable conditions? If we change this project scope, will the cost savings ripple positively or negatively through the costs? Have bidders considered means and methods? Have the bidders created a backroom list of potential change orders? Or, have they come to the table with scope omissions tallied and clear value engineering? Although a standard specification has only sixteen divisions, and design professionals adhere to licensing standards, there are a myriad of considerations to cobble together when defining and allocating construction costs. We often get what we pay for, and since construction costs are usually 60% or more of a project’s proforma, bidding and value engineering demands diligence, experience and time to get it right. Once the construction contract is settled, and work has begun, the project team will be supported with a solid performance by the pre-construction team.
How do we maximize the value of our property, portfolio or debt obligations? How do we convert a historic, but vacant, manufacturing building into affordable assisted living? We’ve permitted this raw land for luxury condominiums, and the market is heading toward, right sized, green, sustainable housing; can we amend our existing permits? The useful life of our retail dealership is over, though the land is a class A site, how do we re-position this asset to attract qualified, well capitalized buyers? Should we re-develop, hold, sell, or auction this real estate asset? What worked fine yesterday, isn’t working today, so, lets assess our options. If the burn rate is too high, re-structure the debt, re-capitalize the project or dispose of the asset. If the equity and debt is patient, and focused on preserving value, take a hard look at assets performing in the current marketplace, location or project type. Follow the money, when banks aren’t lending and appraisers comp foreclosures and short sales, there is opportunity. Equity has more value, production costs are lower, supply goes unmet and demand reappears. In our experience, obstacles can be converted into opportunities.
Carbon footprint, Innovation, Social Responsibility, Energy savings, LEED, Sustainability, Environmental Stewardship…What does green mean for my project? Does going green add costs to our project which are not offset through increased energy efficiency, or aid in establishing a broadened marketing lead base? Is LEED the rating system for our project? Isn’t designing a green project just using common sense and good building practices? As LEED Accredited Professionals, and working on a few LEED registered projects, we believe green is here to stay and a cost effective way to develop, design and build. The vast majority of design principles supporting the LEED rating systems have been used by people since cave dwellers sited their front doors. How to work with the sun, the water, the land, the region’s materials, the climate, the local vegetation, these are not new concepts. How to effectively and efficiently incorporate these primary elements of our natural environment into a whole building approach to create more sustainability for our homes and a healthier environment is what LEED is all about.
How do we increase our net operating income? Are we operating as effectively as we can? How can we drive our revenues higher while containing our expenses? Are there additional revenue streams we’re missing? Is now the time to cut costs, or invest more capital to raise income? Are we competitive in our marketplace and business? Are the business assumptions based in reality or wishful thinking? Operating a business is managing people, product and process, requiring hard work, innovation, skill and commitment. An income and expense statement, balance sheet and tax return may tell us where we are. Next years operating budget, marketing plan and staffing analysis may suggest where we’d like to go. The challenge is getting there and then building on success. Not all business models work, but most that are working can increase their net operating income. Onward and upward.
What are the options for this real estate asset? How do we add value and maximize returns? The proforma may suggest an economic windfall, but, can we permit and sell, or lease the property? How does an appraiser, or lender, or broker view our development concept? Will we be able to navigate through regulatory permits and entitlements? How much due diligence underpins the development plan, and how accurate are the assumptions? When working to determine highest and best use for a real estate asset, its important to accept what works in plan, doesn’t always work in the project. Alongside thorough due diligence and experienced modeling, real estate projects need flexibility and exit strategies built into highest and best use analysis. What may work today, could need a new approach tomorrow.
What if we end up operating the business we developed the project for? Do we have the resources and experience to manage the operations if need be? We’ve developed projects with the intent to hire third party operators, or flip the business operations, and ended up establishing our own operations. We’ve learned the differences between developing a building and moving on, compared with operating a business and staying put. Along the way, it became apparent that successfully run businesses, whatever the industry, share common characteristics. They have solid people that take care of business and work as a team. A team that knows its strengths and weaknesses, and accounts for them both. A team that takes care of its clients, and also itself. A team that learns, grows and is accountable. A team with integrity. While the technical acumen required to operate a business is mandatory, the people and the clients are what matter the most.
If we build it, will they come, who are they and where will they come from? How do we define and target our market? Does our pricing and product fit our market? How do we compare with our competitors? How do we develop, cultivate and close our leads? Are we marketers or sellers? What’s up with social media and networking, Google analytics and trends, smart phones and blogs? We’ve developed 120 units, when 100 would have worked better. We’ve built 160,000 square feet, when 200,000 would have matched market demand. The point is we have learned from our mistakes, marketing and selling, is much the same as designing and building, just less tangible. See it, plan it, do it. Right development, right location, right time, right team, that’s what matters most.
How do we manage this property? Is it more cost effective for us to manage, or hire a third party? Is there an association of owners or renters to manage? Is our first year forecasting conservative? Do we have a 1, 3, 5 year operating plan? What should our replacement reserve and capital expenditure budgeting and process be? How do we deliver timely, cost effective and quality services? Do we communicate well and listen to our clients? During design, development and construction, its important to make long term decisions, whether owner or manager of the property. Once the property is up and running, start building the capital base and quickly addressing the needs of end users and tenants. A satisfied buyer, renter or client is the best referral a property owner and manager can have.
What do our buyers or tenants need as they occupy the project? Is the construction work substantially completed, or actually complete? Are the systems functioning as designed? Does the property have unexpected warranty issues? Are the operating manuals and property management team in place? Have we allocated enough resources to manage not only the warranty period, but also, our clients expectations? When design is complete, construction can begin. When construction is complete, the transition to end users begins. Projects need closers, akin to a baseball team. Once construction is complete, the starting team needs to be replaced by dedicated relievers, with different skill sets, who manage clients and resolve problems. After the first year of operations, the property and the people involved will be settled in. We add the first year of operations to our development and construction schedule, to cover all of the bases.
