Building the right team to get from concept to completion
It takes a lot to pull off a multimillion-dollar development project. Start with just the major details: acquiring the land, negotiating the lease, working on the entitlements, raising capital, originating a construction loan and then a permanent loan, creating an operational plan, and eventually even preparing for disposition. And it takes a comprehensive team effort; developer, architect, attorney, contractor, lenders and experienced consultants—all are critical components.
The NAI Elliott Capital Markets Team consults with developers, attorneys and their clients to compile strong teams and bring the elements necessary to ensure projects succeed.
An experienced developer approached Joe Sandahl, senior director at NAI Elliott and a member of the NAI Elliott Capital Markets Team, to discuss an intriguing project. He already had a piece of land under contract, and had been working with the State of Oregon on a large requirement: a headquarters complex for the Oregon State Police and the Oregon State Fire Marshal. An RFP had been out in the market for a considerable time, but no developer had come up with the right total package to meet the State’s needs. This developer had already made considerable progress communicating with the State—but he was looking for specific expertise to get the project to the finish line.
In order to successfully complete the team and pull off the nascent project, the developer needed help mitigating the risks and maximizing the opportunity. The complexity involved in a project of this scope required someone with a deep knowledge base in multiple areas, and a proven network of resources and connections. The developer trusted Joe and respected both his experience and his strategic acumen. He asked Joe to come aboard to help pull together the optimal team for the project—and then make the deal happen.
Joe served as a consultant to the developer on many of the project’s key elements:
• Pro forma modeling: Designing an interactive development pro forma with cash-flow models.
• Land acquisition: Assisting the developer with performing due diligence on the site, and arranging for third-party vendors to perform soil studies, environmental analysis and other investigations, as well as helping with closing the purchase of the land.
• Raising equity capital: Introducing qualified and well-suited potential investors and capital partners to the developer for this specific development project.
• Partnership creation: Advising the developer and his legal counsel to create the desired partnership structure between the developer and the investors.
• Land closing/lease execution: Working closely with the developer and his legal counsel on both these critical components.
• Lease agreement: Advising on aspects of the lease agreement including market analysis, rent analysis and operating expense estimates.
• Architecture and planning: Assisting the developer through the design and entitlement process.
• Construction loan: Originating the construction loan for the project.
• Property management: Providing guidance on operational management of the facility.
• Permanent loan: Arranging a permanent loan after the construction project reached stabilization.
After the project was completed, Joe continued his involvement—all the way through to a successful disposition. While the developer and the investment partners had not contemplated selling the property early in the pro forma time frame, in time Joe became aware of a prospective buyer with a unique acquisition need. He facilitated the off-market sale of the property to this buyer, at terms well exceeding pro forma expectations.
A successful consultant is able to see the big picture, then roll up their sleeves and tackle the minutiae—providing their specific talents and helping build highly capable teams by connecting hand-selected individuals who bring different skills.
The OSP HQ project was a success because of the team of accomplished professionals that came together—first the developer and the consultant, followed by the tenant, investors, architects, attorneys, contractors, lenders and others. Joe provided this stellar team with insight, skills and guidance, helping the project benefit everyone involved.
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