Nine months and counting, and we are still standing, recovering slowly. After much turmoil, we are in one piece as a nation, albeit divided on many issues and with much work on uniting together before us. Best of all, there is quite miraculous news on the horizon for a variety of highly effective vaccines!
As we recently celebrated Thanksgiving, we reflect on the many things we have to be thankful for; which includes a gradually recovering commercial real estate economy - likely with many bumps in the road ahead.
Welcome to our 4th Quarter 2020 Newsletter, which includes:
- The firm's assistance in site assemblage for the Inglewood Basketball and Entertainment Complex (IBEC), which will be the new future home of the LA Clippers NBA team.
- Real estate development and campus planning challenges being faced by small colleges throughout the nation, and how Norris Realty Advisors is lending a hand in future planning and due diligence.
- Assistance provided on a complex arbitration matter in the renegotiation of a high value ground lease.
- A thoughtful article on the emerging real estate market recovery from the pandemic, as viewed through the lens of history.
As always, we are here to support you with careful market research and consulting, assistance with family real estate portfolio decisions, complex litigation support, or simply answering a question. After our decades of service, we know a wide array of professionals that can help you, and we're honored connect you together.
Steven R. Norris, MAI, CRE
Norris Realty Advisors
Inglewood Clippers Stadium
Site Acquisition Assistance Headline
The NBA has successfully completed its season from within the "Orlando Bubble". However, the league has a much longer view on the future of professional basketball, extending years into the future.
As part of this long term view, Norris Realty Advisors has recently been involved in assisting in the process of the site assemblage and acquisition for the future home of the Los Angeles Clippers NBA franchise.
The firm has reviewed a series of appraisals conducted for City-owned sites that will be included in the IBEC site
In addition, we have been called on to conduct individual valuations for a number of privately held properties that will be acquired as part of the overall development. These sites have included commercial, industrial, and hospitality uses. Also included is vacant land - some of which is "landlocked"; without access to surrounding streets.
All of this advance planning, preparation, and due diligence is working toward the goal of the opening of the stadium and surrounding facilities for the 2024 NBA Season.
Smaller US Colleges Face Major
Future Real Estate Planning Challenges
Many smaller independent colleges and universities throughout America have been facing mounting troubles over declining enrollment, rising costs, and the movement of education to the Internet. Additionally, many of these schools feature campuses planned and designed decades ago, with buildings impacted by deferred maintenance.
Over the past year Norris Realty Advisors has been asked to provide consulting services to a well-know small college as they consider significant investment and expansion in development land many states away from their longstanding campus location.
Our analysis involved complex long term cash flows for potential development, as well as counseling in a potential joint venture agreement.
I addition to this we have been working with the Counselors of Real Estate (CRE) via the Consulting Corps
to aid in the identification of other smaller colleges facing similar challenges with their real estate holdings.
Arbitration Panels Provide Clarity
on Complex Disputes Over Land Value
Arbitration is the process of settling legal disputes expeditiously, without the need for a formal court setting. For years, this process has been used to settle complex legal matters in a more timely, simplified and economical process than lengthy court disputes. Matters relating to property location and client confidentiality are crucial to this process.
In recent months, Steven Norris was the Panel Chair of three valuation professionals, tasked with determining the underlying land value on a high-value property in Southern California. The land value estimate was key to the determination of fair market ground rent in the future years of a long term ground lease. Estimation of value was not a simple task, as the property had been improved for many years and is still generating significant revenue for the improvement owners. Easements providing access to neighboring properties were considered in the analysis. Also, the zoning for the property had been modified over the decades of the ground lease, further complicating the estimate of fair market land value.
Over several months research was conducted, previous appraisals were reviewed, inquiries were made, and testimony was taken. Following this, a large number of factors impacting the property were carefully reviewed, discussed, and analyzed. An opinion of the fair market land value was determined by the panel. This approach to real estate dispute resolution is a useful alternative to prolonged and costly court battles.
The Pandemic in the Context of Historyline
At the onset of the pandemic, a dear friend recommended to me a book that was of great aid in putting the fear and anxiety of Covid19 into the proper perspective of history. It seems we are a culture obsessed with "the now", risking further ignorance of the vital importance of history in shaping our responses to the trials of life.
The Splendid and the Vile is the story of Winston Churchill's first year in office at the onset of World War II. I highly recommend this book to everyone. As a child in the 1960's I would sit at the dinner table and listen to my own Father go on about his World War II adventures for what seemed countless meals. My Dad was a B-17 flight instructor and pilot, completing his service in the South Pacific during the final year of the war. Now I have greater appreciation for those stories and the part history plays in broadening our perspective and wisdom.
Churchill spoke after the one of the initial battles of the war in Africa, saying, "This is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning."
It strikes me that this is almost precisely where we all are now, with covid cases continuing their rise across much of the western world, combined with the more distant hope of relief in the form of vaccines in the coming months. In this context, I would like to share with you a recent article by my CRE colleague and friend, Dr. Hugh Kelly, entitled: "Had Enough Disruption Yet? Economic Reflections After the (First) Summer of COVID-19".
This article gives much needed perspective from history; you will read of Roosevelt, Albertus Magnus the 13th century philosopher, Alan Greenspan, and everyone's' favorite economist, Joseph Schumpeter. And the hidden gem of Dr. Kelly's article is his prior employment as an appraiser for the Landauer firm in New York!
Really now, you owe it to yourself to pause for a while and read this fascinating perspective! History matters.
|Thank you for taking the time to review our Newsletter. We greatly value our relationship with clients, peers, and friends of the firm. Contact us directly with any questions.|
Steven R. Norris, MAI, CRE
Norris Realty Advisors