Author Topic: Pitching to a developer  (Read 309 times)

Watchmaker

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Pitching to a developer
« on: July 29, 2020, 10:48:24 AM »
My city owns the 1 acre block behind my house. Right now it houses a city garage, but they are building a new garage somewhere else so it will soon be vacant. The city put out a RFP for re-development of the block with a goal of a mix of commercial, residential, and retail. The original RFP went out the same week as our lock down started and I don't think they got any proposals. They've just extended the deadline.

This is a small town; there are no professional developers here that (I think) would be capable of handling this size a job.

My questions to this more development savvy group are:

-Would developers from larger cities conceivably be interested in bidding on a project like this?
-Would pitching to developers to get them to make a proposal have any chance of working?
-Any other suggests for getting the word out/getting people interested in the project.

I don't have a strong opinion about what should be done with this block; I'm just wanting the city to get serious bids so 1) they actually do *something* with it, 2) it doesn't get done half-assed by some local with no experience.

Dicey

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Re: Pitching to a developer
« Reply #1 on: August 01, 2020, 10:02:28 AM »
Anecdata only, but from what I hear, many developers, especially small ones, are keeping their hands in their pockets. Too many unknowns at present.

Best thought is to keep following this project and vigorously object if someone proposes something inappropriate.

slugsworth

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Re: Pitching to a developer
« Reply #2 on: August 02, 2020, 12:12:08 AM »
1 acre block? I'm guessing that is a typo, but not sure what it should be.

What part of the country are you in? . . . I assume you are in the US? 

You haven't given enough info about your town/metro to answer whether or not a developer from a larger city would be interested.

Pitching to developers can work.

There are a few commercial real estate listing platforms, but  eh. . . Getting press is helpful.

affordablehousing

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Re: Pitching to a developer
« Reply #3 on: August 03, 2020, 10:26:35 AM »
Interesting situation! It could help if you know any architects who would be willing to take a look at the zoning or the rfp, see the bulk of building and uses allowed, and make a really rough massing study to help stimulate some ideas for developers. Is the City expecting to get paid for the lot or is it providing development incentives?

Watchmaker

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Re: Pitching to a developer
« Reply #4 on: August 03, 2020, 10:48:50 AM »
1 acre block? I'm guessing that is a typo, but not sure what it should be.

Nope, that's correct. Lot might have been a clearer word to use, but it is a whole block in the sense that it has public roads on each side. Part of the problem with attracting attention is that it's just not that big a project. I think the city is hoping for 10-15 residential units, plus some office and/or retail.

What part of the country are you in? . . . I assume you are in the US? 

You haven't given enough info about your town/metro to answer whether or not a developer from a larger city would be interested.

Midwest. Small town (<10,000 pop.). Little bit different than most small towns in the Midwest in that the city is fairly dense and geographically constrained from growing, so infill in more important. 

Watchmaker

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Re: Pitching to a developer
« Reply #5 on: August 03, 2020, 10:51:05 AM »
Interesting situation! It could help if you know any architects who would be willing to take a look at the zoning or the rfp, see the bulk of building and uses allowed, and make a really rough massing study to help stimulate some ideas for developers. Is the City expecting to get paid for the lot or is it providing development incentives?

The city and state are providing some incentives. Good idea about getting an architect in for a massing study. Any clue what something like that would cost for this size project?

slugsworth

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Re: Pitching to a developer
« Reply #6 on: August 03, 2020, 12:13:44 PM »
If the city is looking for 10-15 units, plus a little commercial, that really isn't going to raise to the level of a larger developer.  Maybe, if the City is interested in infill and you think that the local capacity is lacking, you could encourage the city to help build some capacity.  This group does training and might be of interest https://www.incrementaldevelopment.org/ 

I agree about having a massing study and/or a market study, especially if the city wants to micromanage the commercial uses.

theoverlook

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Re: Pitching to a developer
« Reply #7 on: August 03, 2020, 01:36:00 PM »
A one acre lot in a small midwestern town hardly seems worth proposals for development. Maybe that's why they didn't get any proposals. One acre lots aren't worth enough to attract the attention of developers unless they're somewhere very desirable.

affordablehousing

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Re: Pitching to a developer
« Reply #8 on: August 03, 2020, 02:56:50 PM »
My bet would be for a small scale site like 1 acre, you could try to get an architect to do the massing study for a nominal fee, like $500, and pitch it as an opportunity for them to be in front for designing the project should a developer bite. If the City is invested in developing this, they may be willing to pick up the tab. Real estate brokers may also have go to architects they can recommend who do this cheaply for land sales. A vacant lot doesn't spark much imagination, but a crude rendering of 8 townhomes usually invites more bids.

Michael in ABQ

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Re: Pitching to a developer
« Reply #9 on: August 03, 2020, 03:20:23 PM »
If it's on the main street there's a slight chance of getting something like an AutoZone or Dollar General or some other national retailer. Those large national retailers typically work with a group of developers who will build stores for them based on a guaranteed build to suit lease. I.e. if the developer builds them a store to their specifications, they will agree up-front to rent it for 10, 15, 20 years. The developer can get bank financing based on that because they know that it will cost them say $700k to build it but they can sell it to an investor for maybe a million who then gets a nice steady rent check every month for the rest of the lease term.

A lot that size might be worth a few dollars per square foot. Say $100-150k. Even if the city threw the land in for free that's not worth that much if you're talking 10-15 units, basically saving $10k a piece on something that will probably cost $100-150k a unit to build. The best bet is a local homebuilder who wants to take on a larger project. I can't see many developers from larger cities going into such a small market where they don't know the nuances of the zoning, don't know the market, don't know the demand, etc.