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City Realty Vinings V8

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  • 1. BANK ADVISORY SERVICES PROPOSAL SEPTEMBER 04, 2009
  • 2. OUTLINE • CURRENT SITUATION – MARKET – BANK GROUP • A BETTER ANSWER • A BETTER APPROACH • WHY CHOOSE US? • NEXT STEPS • APPENDIX 2
  • 3. CURRENT SITUATION: THE MARKET • THE COBB COUNTY ZONING AUTHORITIES VOTED AGAINST REZONING TO ALLOW FOR A CONVERSION OF THE RESIDENTIAL CONDO PORTION OF THE PROPERTY TO RENTAL UNITS FOR A FIVE YEAR PERIOD • THE VELOCITY OF CONDO SALES HAVE GREATLY DIMINISHED IN THE ATLANTA AREA, WITH APPROXIMATELY 4,900 UNITS CURRENTLY IN UNSOLD INVENTORY • OVER 1,500 OF THESE UNITS, INCLUDING THREE OR MORE ENTIRE BUILDINGS, WILL BE FORECLOSED ON OVER THE NEXT FOUR MONTHS, FURTHER DEPRESSING THE MARKET. • ALL OF CORUS’ 1,700 UNITS (THE ATLANTIC, LUXE AND THE BROOKWOOD) WILL COME BACK ON THE MARKET AT ONCE SOMETIME OVER THE NEXT FEW MONTHS • A GOOD PORTION OF THE 572 INTOWN CONDOS SOLD IN 2009 HAVE BEEN THROUGH AUCTIONS OR AT DEEP DISCOUNTS OF 35% OR MORE. • THE BULK OF THE AUCTION SALES HAVE BEEN IN THE $160-$175 RANGE PER SQ. FT. IN PROJECTS THAT HAD ALREADY BEEN APPROVED BY FANNIE MAE OR FREDDIE MAC • THERE IS NO EVIDENCE OF RESEARCH ON EITHER CONDOS OR APARTMENTS IN THE IMMEDIATE AREA FOR THIS PROJECT. 3
  • 4. CURRENT SITUATION: BANK GROUP • EACH BANK HAS – DIFFERING LEVELS OF PARTICIPATION – DIFFERING CAPITAL STRUCTURE – PROBLEM LOANS – GOALS IN ADDITION TO GETTING PAID BACK AS SOON AS POSSIBLE. • INTER-CREDITOR AGREEMENT DOES NOT ADEQUATELY ADDRESS FDIC CLOSURE OF VARIOUS PARTICIPANTS • TWENTY-FIVE OWNERS WITH EQUAL DECISION MAKING CANNOT, BY DEFINITION, BE NIMBLE. • THE NEW STRUCTURE WILL REQUIRE OWNERSHIP TO MAKE END LOANS TO THE CONDO PURCHASERS. 4
  • 5. CURRENT SITUATION: BANK GROUP, CONT. • TACTICAL NEEDS – IMMEDIATE RESEARCH NEEDS TO BE CONDUCTED ON THE SPECIFIC MARKET – COMMERCIAL LEASES NEED TO BE MADE – TENANT IMPROVEMENT DOLLARS NEED TO BE SPENT TO MAKE NEW LEASES – SALES AND LEASING MUST RESTART – OPERATION OF THE VARIOUS CONDO ASSOCIATIONS CURRENTLY BEING MANAGED BY THE DEVELOPER MUST BE ADDRESSED – FUNDING OF THE VARIOUS CONDO ASSOCIATIONS CURRENTLY BEING MANAGED BY THE DEVELOPER MUST BE ADDRESSED – A STRUCTURE MUST BE PUT IN PLACE FOR END LOANS 5
  • 6. CURRENT SITUATION: BANK GROUP, CONT. • STRATEGIC NEEDS – FORM A STRUCTURE AMONG PARTICIPANTS SO THAT THEY CAN MAKE THE RIGHT DECISIONS TO PRESERVE THE ASSET VALUE – CREATE A STRUCTURE CAPABLE OF ASSUMING PROJECT OWNERSHIP – SECURE AND ASSESS RESEARCH IN ORDER TO EXPLORE ALTERNATIVES AND ASSESS THE REALITIES OF THE CURRENT SITUATION – ESTABLISH SOME TYPE OF OWNERSHIP ENTITY – RE EVALUATE THE ASSET TO ESTABLISH ACCURATE FINANCIAL STATEMENTS – ADDRESS AND ASSESS VARIOUS WRITE OFFS, RESERVES ETC – ORGANIZE AND COMMUNICATE 6
  • 7. A BETTER ANSWER AN INDEPENDENT FACILITATOR WILL HAVE THE WHEREWITHAL TO… •ACCOMMODATE INTERBANK TRANSFERS OR SALE OF LOAN PARTICIPATIONS BETWEEN THE OWNERS •ACT AS A GO BETWEEN AND COMMUNICATOR WITH THE MANY ENTITIES •AGGRESSIVELY MANAGE LEGAL FEES TO LESSEN IMPACT ON CASH REQUIREMENTS •ACT AS AGENT GROUP TO ALLOW THE ASSET MANAGER TO DO ITS JOB. •ENSURE ESSENTIAL INFORMATION FLOW THROUGH CONFERENCE CALLS AND REPORTING •ESTABLISH CURRENT VALUATIONS •CONDUCT OFFICE NEGOTIATIONS WITH PROFICIENCY •DELIVER ACCURATE AND TIMELY FINANCIAL STATEMENTS AND CASH REQUIREMENT PROJECTIONS. •AFFECT WRITE-DOWNS AND RESERVES •SEAMLESSLY HANDLE THE RAMIFICATIONS OF PREVIOUS OWNERS FAILURES •NEGOTIATE THE SALES AND TRANSFER OF OWNERSHIP POSITIONS THAT ARE IN DEFAULT OR IMPACTED BY REGULATORY REQUIREMENTS 7
  • 8. A BETTER APPROACH. CONT. • THE CITY REALTY ADVISORS ADVANTAGE – NOT LIMITED BY LEGACY THINKING : FOCUSED ON WHAT IS BEST FOR THE BANK GROUP – AN EXHAUSTIVE APPROACH TO ASSESSING EVERY ALTERNATIVE E.G. CONVERT, LEASE PURCHASE, AUCTION, ETC. – A HIGHLY EXPERIENCED AND RESPECTED ADVISORY/WORKOUT TEAM – INDEPENDENCE FROM BORROWING ENTITY, EQUITY PARTNER OR BANK OWNERS – FINANCIAL REPORTING SYSTEMS DESIGNED FOR LENDERS, EXECUTIVE COMMITTEES AND REGULATORS, EXECUTED BY PROFESSIONAL – BUSINESS LINE (RESIDENCES, RETAIL, OFFICE) VALUATION FOR FINANCIAL USE – MONTHLY PROFIT AND LOSS, CHANGES IN FINANCIAL CONDITION AND BALANCE SHEET AND EVERGREEN CASH FLOW PROJECTIONS – ANNUAL REPORTS AND OUTSIDE AUDITING – PERIODIC REPORTING FOR LENDERS AND REGULATORS – TAX APPEAL RESULTS – ONE STOP SHOP FOR ALL INQUIRIES AND NECESSITIES – MINIMIZE LEGAL FEES AND ARGUMENTS BETWEEN THE CONSTITUENCIES 8
  • 9. A BETTER APPROACH. CONT. ONE GOAL EXTRACT AS MUCH VALUE AND GET AS MUCH MONEY FROM THE ASSET AS POSSIBLE 9
  • 10. WHY CHOOSE US? • LOW COST, LOW RISK; BANK GROUP CAN TERMINATE WITH 30 DAYS’ NOTICE • INDEPENDENT CONTRACTOR: OVERHEAD, INSURANCE, OFFICE SPACE, ETC. IS AT OUR COST • WE’RE A LOCAL BUSINESS. THE LEASING OF NEIGHBORHOOD RETAIL, OFFICE AND CONDO SALES IS ALMOST 100% LOCAL. NO NEED, AS THE BROOKWOOD DID, TO PUT A FOUR COLOR BROCHURE IN THE SUNDAY NEW YORK TIMES FOR FOUR WEEKS. • WE, THE PRINCIPALS, WILL BE ON-SITE IN THE SALES OFFICE UNTIL ITS SOLD, AND THEN A CONDO UNIT. • YOUR CONTACT WILL BE DIRECTLY WITH US, BI-WEEKLY, REPORTING BY EMAIL TO EACH LOAN OFFICER.
  • 11. NEXT STEPS • ADVISORY AGREEMENT SIGNED • COMPLETE REVIEW & ANALYSIS OF ALL FINANCIALS AND UNIT INVENTORY • NEW MARKET ANALYSIS (TO POSSIBLY BE COMPLETED BY HADDOW & COMPANY) • ASSET VALUATION AND ALTERNATIVE MODEL TO BE COMPLETED • PRELIMINARY FINANCIAL STATEMENTS 11
  • 12. NEXT STEPS, CONT. •AS REQUIRED • HIRING -MANAGEMENT (APARTMENTS) -LEASING (RETAIL) -SALES (OFFICE) • REPORTING MODEL -COMMENTS FROM PARTICIPANTS • INVESTIGATION TO THE EXTENT THAT BANKS CAN AND WILL CONTRIBUTE TO THE PROCESS • COMMUNICATION WITH THE COMMUNITY • BEGIN LEASING AND RESTART RESIDENTIAL SALES • TAX APPEALS • INVENTORY • SECURING INTELLECTUAL PROPERTY • RE-EVALUATION • END USERS FINANCING MODEL • PRICING MODEL 12
  • 13. STRUCTURE RESUMES COST APPENDIX
  • 14. BANK GROUP NEW OWNERSHIP ENTITY ASSET MANAGEMENT ACCOUNTING MANAGEMENT BUILD OUT SALES LEASING TENANT BANK BUSINESS LINE IMPROVEMENT OFFICE RETAIL OFFICE REPORTING ACCOUNTING FUNDING AUDIT OFFICE RETAIL PROPERTY ANNUAL INCOME TAXES TAXES REPORTS
  • 15. 15
  • 16. TIM HOLDROYD – ACCOMPLISHED REAL ESTATE AND WORKOUT SPECIALIST WITH OVER 25 YEARS OF HANDS ON EXPERIENCE IN THE REAL ESTATE AND BANKING FIELDS. – PERFORMED AS THE ASSET MANAGER IN THE EASTERN UNITED STATES FOR THE TORONTO DOMINION BANK FROM 1983 UNTIL 1987, AND FOR THE BANK OF NOVA SCOTIA, COUNTRY- WIDE, FROM 1991 TO 1996. – PROVIDED TECHNICAL AND ANALYTICAL ANALYSIS FOR BOTH PUBLIC AND PRIVATE CORPORATIONS AND APPRAISERS, AND ACTED AS A PROFESSIONAL EXPERT WITNESS ON LAND AND PROPERTY VALUES TO BOTH THE DOT AND GEORGIA TECH. 16
  • 17. TIM HOLDROYD • 1982- 1985 DIRECTOR TORONTO DOMINION BANKS WORK OUT GROUP IN FLORIDA. – PRESIDENT HOME OWNERS ASSOCIATION: – 1585 INDIAN TRAIL MIAMI – MADEIRA BEACH YACHT CLUB , MADEIRA BEACH FLORIDA – MARINA POINT, DAYTONA BEACH – ADVENTURA HIGHLANDS, ADVENTURA, FLORIDA – SINGER ISLAND, HOLIDAY INN • 1986- VICE PRESIDENT – TORONTO DOMINION BANK, NY, NY – RESPONSIBLE FOR OF ALL CONDO LENDING IN THE CITY • 1987- SENIOR VICE PRESIDENT BANK OF NOVA SCOTIA, REAL ESTATE LENDING- ATLANTA • 1991- 1997- AS DIRECTOR OF BANK OF NOVA SCOTIA’S WORKOUT GROUP OUTSIDE NEW YORK SOLD APPROXIMATELY 1 BILLION IN REAL ESTATE, ACROSS THE UNITED STATES, INCLUDING SIX EMBASSY SUITE HOTELS, NUMEROUS LAND HOLDINGS OFFICE AND INDUSTRIAL BUILDINGS. 17
  • 18. TIM HOLDROYD • 1991- ASSEMBLED AND CLOSED THE STREETS OF WHAT IS NOW THE FEDERAL RESERVE SITE AND THE MILLENIUM IN MIDTOWN BUILDING • 1992- ACTING AS ASSET MANAGER, SOLD 10 PEACHTREE PLACE 310,000 SQ. FT. OFFICE 1992- SOLD ATLANTA FINANCIAL CENTER NORTH TOWER 210,000 SQ. FT OFFICE TOWER IN BUCKHEAD – HEADED THE BANK GROUP THAT ACQUIRED FOREST FAIR MALL IN CINCINNATI, OHIO A 1.8 MILLION SQ. FT SHOPPING CENTER, ANCHORED BY B ALTMAN, BONWITT TELLER AND BIGGS • 1998-2009 SOLD OVER 70 PARCELS OF LAND IN MIDTOWN, CREATED THE COMMUNITY IMPROVEMENT DISTRICT IN MIDTOWN • SAT ON THE COMMITTEE OF FIVE FOR TWO YEARS THAT REWROTE THE CITY’S SPI, ZONING REGULATIONS FOR URBAN LAND, LEASED 300,000 FT. OF OFFICE SPACE AND DEVELOPED ENGLISH AVENUE YARDS, A 100,000 CENTER FOR ARTISTS. • ADVISED AND SPOKEN TO 10 CONDO ASSOCIATIONS INCLUDING THE PONCE CONDOMINIUMS AND 2520 PEACHTREE ROAD 18
  • 19. TIM HOLDROYD • 1993- SOLD RIVERWOOD 100, A 505,000 SQ. FT. OFFICE TOWER IN COBB COUNTY • 1998- FOUNDED CITY REALTY ADVISORS, IN ATLANTA • 2004-2007 ACTED AS THE BROKER FOR MOST OF NOVARE GROUP’S LAND PURCHASES IN MIDTOWN, INCLUDING THE ASSEMBLAGE OF 6TH, ,7TH PEACHTREE AND JUNIPER STREETS, • 2005-SOLD THE MEDICAL ARTS BUILDING, WITH A HISTORIC DESIGNATION IN 2005 • 2008-REZONED THE 30,000 SF SITE AT 10TH & WILLIAMS TO ACCOMMODATE A 300,000 SF HOTEL, INCLUDING THE ACQUISITION OF AIR RIGHTS FROM A HISTORIC SITE. • 2009-ASSET MANAGER AND DEVELOPER FOR LAZ PARKING. ASSISTED IN THE ACQUISITION OF SURFACE PARKING LOTS AND PARKING DECKS IN THE SOUTHEAST, INCLUDING THEIR REDEVELOPMENT AND POSITIONING.
  • 20. TIM HOLDROYD • REFERENCES – LAWRENCE AYLIFFE, OWNER LA, INC., CONDO MARKETING, TORONTO, ONTARIO – JIM BORDERS, PRESIDENT NOVARE, ATLANTA GEORGIA – STEVE BAILE, PRESIDENT DANIEL CORP, ATLANTA, GEORGIA – DAVID HADDOW, HADDOW AND COMPANY ATLANTA, GEORGIA – STAN KRYDER, PRESIDENT MIDTOWN BANK AND TRUST – CHARLIE SHARBAUGH, PAUL HASTINGS, GENERAL REAL ESTATE LAW – DOUG DILLARD, ZONING – BURT BRUTON, GREENBERG TRAURIG'S, CONDO LAWYER, MIAMI, FL – GEORGE CALLOWAY, SPECIALIZED TITLE SERVICES ATLANTA, GA – EVE LEWIS, PRESIDENT URBANIZATION, LARGEST CONDOMINIUM RESEARCH FIRM IN NORTH AMERICA, TORONTO, ONTARIO – ABE SCHEAR, PHIL SKINNER, ARNOLD GOLDEN & GREGORY, RETAIL LEASING – STUART MEDDIN, THE MEDDIN COMPANY 20
  • 21. JIM RILEY • OVERVIEW • AN ACCOMPLISHED HANDS-ON FINANCIAL AND ADMINISTRATIVE PROFESSIONAL WITH EXPERIENCE IN A WIDE RANGE OF TYPES AND SIZES OF ENTERPRISES – PROVIDED TECHNICAL ACCOUNTING AND FINANCIAL MANAGEMENT AND ANALYSIS SERVICES FOR NEWLY FORMED PRIVATE FIRMS IN THE REAL ESTATE BROKERAGE, CONSTRUCTION, DEVELOPMENT AND COMMERCIAL PROPERTY MANAGEMENT INDUSTRIES AND FOR LARGE INTERNATIONAL FIRMS IN THE HOSPITALITY, REAL ESTATE INVESTMENT, MINING AND PETROLEUM/PETROCHEMICAL INDUSTRIES. – EXPERIENCED IN THE ORGANIZATION, STAFFING, TRAINING AND MANAGEMENT OF THE ACCOUNTING FUNCTION WITH EMPHASIS ON ESTABLISHING EFFICIENT AND EFFECTIVE PROCESSES FOR PROVIDING TIMELY AND ACCURATE INTERNAL AND EXTERNAL REPORTS TO MANAGEMENT AND OTHER STAKE HOLDERS. 21
  • 22. JIM RILEY • ASSISTED MULTI-FAMILY GENERAL CONTRACTOR GROW FROM $8 MILLION TO OVER $40 MILLION IN 2 YEARS • DEVELOPED ACCOUNTING AND FINANCIAL CONTROL AND REPORTING PROCESSES FOR A NEWLY FORMED TOWN-HOME DEVELOPER WITH OVER $30 MILLION IN PROJECTS IN GEORGIA AND NORTH CAROLINA • MANAGED LENDER AND OWNERSHIP RELATIONS, DEVELOPED ACCOUNTING AND ANALYSIS TOOLS AND PREPARED FINANCIAL STATEMENTS AND BUSINESS PLAN FOR A RESIDENTIAL DEVELOPER OF: • $120 MILLION, 498 UNIT CONDO DEVELOPMENT • $16 MILLION, 101 UNIT CONDO DEVELOPMENT • RESPONSIBLE OF ALL HR FUNCTIONS. • SELECTED AND IMPLEMENT ACCOUNTING AND MANAGEMENT SOFTWARE FOR NEWLY FORMED MANAGEMENT DIVISION. • ASSISTED IN THE TAKEOVER OF TWO 200,000 SQUARE FOOT, MULTI-TENANT OFFICE BUILDINGS. • SUPERVISED THE OPERATION OF 145 UNIT APARTMENT COMPLEX. • INTERIM ASSET MANAGER FOR $50 MILLION HOTEL DEVELOPMENT FUND DURING TAKEOVER OF PARENT COMPANY. ESTABLISHED FUND VALUE AND OPERATING PARAMETERS FOR NEW OWNER. NEGOTIATED SALE OF 2 POORLY PERFORMING HOTELS AND ARRANGED FOR FAVORABLE RESTRUCTURE OF OWNERSHIP OF A THIRD HOTEL. 22
  • 23. JIM RILEY • ESTABLISHED AND MANAGED FINANCIAL, ACCOUNTING, BUDGETING, ANALYSIS AND REPORTING FUNCTIONS FOR NEWLY FORMED U.S. REAL ESTATE INVESTMENT AND MANAGEMENT COMPANY REPRESENTING VARIOUS SWEDISH INSTITUTIONAL INTERESTS. • WITHIN A 30 DAY PERIOD, TOOK OVER MANAGEMENT AND REPORTING FOR 535 HIGH-RISE APARTMENT UNITS, 500,000 SQUARE FEET OF OFFICE SPACE WITH OVER 100 TENANTS, TWO HOTELS AND OWNER REPRESENTATION AND ANALYSIS FOR A $250 MILLION PORTFOLIO OF CLASS A PROPERTIES. • IMPLEMENTED THE AMSI INTEGRATED RESIDENTIAL AND COMMERCIAL PROPERTY MANAGEMENT, ACCOUNTS PAYABLE AND GENERAL LEDGER SYSTEM. • RECRUITED, TRAINED AND SUPERVISED A 5 PERSON ACCOUNTING STAFF THAT SUCCESSFULLY MET STRINGENT REPORTING REQUIREMENTS FOR 5 SEPARATE SETS OF OWNERS, AUDITED BY 3 SEPARATE GROUPS OF CPAS. • DEVELOPED PROCEDURES FOR CONTROLLING OVER $10 MILLION IN RENOVATION AND CAPITAL IMPROVEMENT PROJECTS. • MANAGED FINANCIAL, ACCOUNTING, AND ANALYSIS FUNCTIONS FOR A PRIVATELY HELD REAL ESTATE INVESTMENT AND MANAGEMENT COMPANY. • DEVELOPED AND MAINTAINED BANKING RELATIONS WITH OVER 30 SEPARATE LENDERS DURING A VERY DIFFICULT DOWN REAL ESTATE MARKET. • RECRUITED, TRAINED, AND OVERSAW DAY-TO-DAY PROCESS OF FULLY DIVERSIFIED ACCOUNTING DEPARTMENT. • DIRECTED BUDGETING AND FORECASTING FOR $150 MILLION INVESTMENT PORTFOLIO COMPRISED OF OVER 95 PROPERTIES OWNED BY 45 SEPARATE PARTNERSHIPS. 23
  • 24. JIM RILEY • PROFILE – GWL CONSTRUCTION – V. P. FINANCE & ADMINISTRATION – VISCAYA DEVELOPMENT – V.P. FINANCE & ADMINISTRATION NOVARE GROUP, INC. – SR V.P. – FINANCE & ADMINISTRATION – US FRANCHISE SYSTEMS – ASSET MANAGER – SCANAMERICAN PROPERTY MANAGEMENT, INC. – SENIOR VICE PRESIDENT/CO-OWNER – TRILLIUM MANAGEMENT, INC. – CONTROLLER – GEORGIA GRANITE COMPANY – CONTROLLER – HELLER FINANCIAL, INC – ASSISTANT CONTROLLER/ASSISTANT ACCOUNT EXECUTIVE – EXXON CORPORATION & GOOD HOPE REFINING - INTERNAL AUDITOR, FINANCIAL ANALYST, REFINERY CONTROLLER •  CREDENTIALS – CERTIFIED PUBLIC ACCOUNTANT (INACTIVE) - LOUISIANA – BBA ACCOUNTING, CUM LAUDE, UNIVERSITY OF MIAMI, CORAL GABLES, FLORIDA  24
  • 25. PROPOSED FEE COST STRUCTURE ADVISORY & DUE DILIGENCE • HOURLY BASIS PLUS ALL OUT OF POCKET EXPENSES - TIM HOLDROYD $200 PER HOUR - JIM RILEY $125 PER HOUR - LAURA KING $50 PER HOUR • APPROVALS SOUGHT OVER ANY EXPENDITURE OVER $2,000. 25
  • 26. PROPOSED FEE STRUCTURE NEW ENTITY • $8750 PER MONTH FOR ASSET MANAGEMENT PLUS OUT OF POCKET EXPENDITURES • ASSET MANAGER INTENDS TO ALLOW THE OFFICE SALES TO CONTINUE AS-IS WITH PARKSIDE LEADING THE SALES. 1.5% FEE UPON SALE • AM INTENDS TO LEASE RETAIL SPACE AND SELL ALL THE RETAIL SPACE AS A CONDOMINIUM UNIT. • NORMAL LEASING COSTS WILL APPLY, 1.5% FEE UPON SALE • SALE OF ALL RESIDENTIAL UNITS, 1.5% UPON SALE, IN ADDITION TO NORMAL COMMISSIONS PAID TO RESIDENTIAL SALES BROKERS 26