BEFORE: Institutional Owner User

AFTER: Six High End Single Family Residences
Sold for Development Value of $1,500,000

Garnered Total Sales Proceeds of 8.5M

BEFORE: Institutional Owner User

Sold for Development Value of $1,500,000
AFTER: Six High End Single Family Residences

Garnered Total Sales Proceeds of 8.5M

The sale of this Asset drew on an exceptionally diverse bundle of services!

Case Study : The Charles Bierman Home for the Aged

Ground up Single Family Development

The Charles Bierman Home for the Aged was a 29 bed nursing home on 2.5 acres, having non-conforming grandfathered use in a single family zone located in the Township of Montclair in the State of New Jersey.

It was determined by our team that this site was a candidate for development. Before contacting the Chairman of the Board for the Home we performed a Development Feasibilities for two Primary Use Scenarios with secondary options:

  • Retain Current Use facilitated by a complete interior and exterior renovation:
    • A full Cost/Revenue Analysis was generated using Income and Expense data primarily from the State of New Jersey Department of Human Services Standards.
  • Full Ground Up Development using three residential unit yield scenarios. Two within zoning and one requiring multiple variances:
    • Six Single Family high end residence (This was ultimately approved)
    • Seven Single Family high end residences
    • Twelve condos or apartments retrofitted within the existing 12,000 SF structure.

The feasibilities included but were not limited to:

  • Formal Site Plans showing lot delineation, structure footprints, common areas, vehicular access, parking areas, landscaping and exterior lighting
  • Possible finished product elevations
  • Fully vetted and supported Aged Cost/Revenue Analysis for all three Ground Up Development Scenarios

The numbers spoke loudly showing the 12 Unit Condo Retrofit Scenario as having the highest returns. However, a meeting with township planning revealed that the condo retrofit would not be approved but that high end single family would be. After confirming and adjusting our findings we approached the Chairman of the Board for the Home, Mr. Ray Blau. After several meetings and a presentation to the Board of Directors The Walters Group was awarded the listing. Mr. Blau attributed the award to our Valuation Due Diligence performed prior to and as part of the listing presentation. Two other “corporate” firms had presented for the listing.

Because the site had been vacant for over a year a full interior (16,000 SF) and exterior (2.5 acres) clean-up was needed to present the site to the regional buyer community. Mr. Blau asked TWG to define and manage all aspects of the Property Preparation. We removed six 20 yard dumpsters filled with interior and exterior debris from the site.

After the site became presentable and able to be photographed we proceeded to marketing exposing the sale offering to the regional development community through a myriad of vehicles. All Marketing was placed within the first week of the offering inviting all to a catered Investor Open House, attended by Real Estate editors, including the editor of The Star Ledger, and over 75 investor/developers from the region.

Within two weeks from our “Open Date” six offers were consolidated in to a hybrid auction format for review by the Chairman of the Board and the Board of Directors. TWG represented and generated LOI’s for five of the six developers . The multiple offer presentation included a brief dossier on each buyer candidate which included:

  • A company biography showing recent projects
  • Financial documentation
  • Lender Intent to Lend
  • A probability analysis of approval for sought yields

We recommended a buyer offering very good terms and intent to develop but was not the highest monetary number. This LOI was signed by our seller client.

Once attorneys enter the deal it is not uncommon for the buyer to attempt to renegotiate agreed upon terms from LOI to Contract. We reviewed every contract draft iteration/amendment to protect our seller client from a less favorable change or a provision that might delay or hinder closing.

Getting from fully executed contract to the closing table can also be challenging. We did not/do not step back once an Effective Date has been established and move to our Transaction Management Phase:

  • A time table for all dates identified within the contract was distributed to buyer, seller and their representation:
    • Deposit submission (s) deadlines
    • Inspection(s) period expirations
    • Full Development Application Submission Date
    • Development Approval Contingency Date
    • Lender Unconditional Commitment Expiration
    • Closing Date (considering Appeal and Resolution Periods)
  • All planning board meetings were attended by myself and or a staff member and reports of same were submitted to the board
  • We had met with the Historic Preservation Commission as part of the Valuation process and there was no intended or “possible” designation. However, once the property went under contract the HPC revised their position seeking nomination. We met with the HPC and Town Council Members on more than one occasion presenting interior and historic archival photos and data that ultimately dissuaded Historic Designation
  • With seller authorization we met with many of the surrounding neighbors outlining the many benefits of the development. We believe these meetings quelled much of the possible public opposition
  • Seller had performed a Phase 1 a few years prior to the sale. However, buyer inspection revealed a contamination that required remediation. The Walters Group was brought in to manage the remediation from Phase 2 to receipt of RAO

The sale of the Charles Bierman Home For the Aged was one of the most intricate, diverse and time intensive transactions in our history. It ultimately closed with approval for the six unit single family scenario outlined and supported in our initiating feasibility presented to the board before the listing was signed and as part of our marketing campaign to the regional investor community.