We provide a range of real estate development and advisory services for urban infill residential, multifamily and residential-based mixed-use properties, in the San Francisco Bay Area core markets, as well as master plan assets throughout California. Our roots are in community planning, our muscle memory is in development and construction, and our passion is in guiding clients through the investment, finance and development process.
Assuming you are tasked with acquiring and/or developing property for your company, public agency, family, or for your personal account, you will need to answer the following questions:
- How do I solve for the highest and best use? How do I conduct a financial analysis to prove feasibility from an investment return standpoint?
- How do I craft a business plan to finance my project? How do I secure equity investment?
- How do I select a team that can successfully achieve the necessary approvals to develop the property?
- How do I design, entitle, build, operate, and monetize a project to be consistent with local planning regulations, local politics, the neighborhood, the market and my business plan?
Please contact us to begin the conversation, so that we can help you answer these questions, and assist you in evaluating your specific needs.
We offer guidance and strategic planning for development projects for both the public and private sectors. We know the real estate development and investment process, most specifically in the San Francisco Bay Area and Sacramento MSA, from our 20 years in development in California.
Our advisory services include:
SITE SOURCING AND ACQUISITION
FINANCIAL UNDERWRITING AND FEASIBILITY ANALYSIS
INVESTMENT OPPORTUNITY PRESENTATION
ENTITLEMENT & BUILDING PERMIT PROCESSING
PROJECT MANAGEMENT/ ASSET MANAGEMENT
RECAPITALIZATION AND DISPOSITION
Our experience includes:
- current and long-range planning work in community development departments
- reviewing and writing CEQA (California Environmental Quality Act) and NEPA (National Environmental Protection Act) documents
- site sourcing
- feasibility analysis
- due diligence
- capital sourcing
- entitlements; political and neighborhood outreach
- project management and leadership
- product design management including design-build and value engineering
- construction contract negotiation and management
- sales and marketing for home builders, multifamily merchant builders, private equity investors, and private and public REITs
Our client list includes:
- local governmental agencies
- private sector owners
- family offices
- merchant builders
- private and public REITs.
ARE YOU LOOKING FOR A DEVELOPMENT SITE?
- What do you want to build?
- Where do you want to build it?
- What are your return expectations?
- What are your business plan execution goals?
- When do you want to recapitalize or monetize your asset?
1. SITE SOURCING AND ACQUISITION SERVICES:
We help you answer these questions fully in order to understand your investment strategy and acquisition criteria. We can then locate, secure or acquire property accordingly. To efficiently identify potential acquisition targets, we rely on our relationships, local knowledge, and strategic networking, as well as on fundamental awareness of market demand and timing, revenue and cost trends, political and neighborhood sentiment, and our understanding of product design. Our success stems from long-time relationships and experience in several jurisdictions, as well as from our ability to bring in vetted local experts suited to your goals.
How is AJCD different from a real estate broker?
Tony is a licensed California Real Estate Broker; however, our interest and ability does not end with the initial, up-front transaction, but rather the desired result of your business plan. Instead of offering classic brokerage services, we leverage our development experience to evaluate your business plan and how it fits into local market opportunities (versus how your business plan might have to change in order to participate in the market). Brokers are experts in finding sites and knowing the terms by which one can control, or acquire a development property, so AJCD collaborates with select brokers based on the fit between your business plan and their specific area of expertise.
How challenging is it to find development opportunities in the very competitive SF Bay Area core markets?
The San Francisco Bay Area core markets continue to become more competitive, however, opportunities still do exist for those with a solid understanding of market cycles and capital markets, as well as for those with a sufficiently flexible business plan. Flexibility in the execution of a business plan allows a family, owner, investor, developer, or builder to better mitigate risks and promote maximum opportunity through the leveraging of created or perceived value with other entities actively investing at different stages of an economic cycle, or with different return expectations.
HOW DO YOU MAKE INVESTMENT DECISIONS?
2. FINANCIAL UNDERWRITING AND FEASIBILITY ANALYSIS SERVICES:
In our underwriting and feasibility analyses we focus on the financial modeling of a proposed development, or capital investment opportunity by incorporating the following:
Planning and Design assumptions: knowledge of what product type is most marketable and possible within the current planning and building approvals, in order to produce a fit study or yield analysis by the appropriate architect
Timing assumptions: timing of entitlements, or the achievement of building approvals, construction schedule, and sales or lease-up schedule based on the product type supported by the local planning and political framework
Cost assumptions: land costs, construction or hard costs, design and entitlement or soft costs, sales or leasing and marketing costs, and financing costs vetted to comprise a sound (not hopeful) development budget, including current impact fees, financial return assumptions, and in the case of multi-family and mixed uses, current market operating costs
Revenue assumptions: development of product unit mix, revenue and absorption schedule supported by market surveys and analysis, and appropriate treatment of revenues (current revenue or projected) consistent with current expectations or tolerance of capital markets
Sale or Exit assumptions: evaluated by current market transactions and sale costs, as well as the business plan horizon relative to the preferred capital event
Sensitivity Analysis: a left-tail risk analysis used to sensitize the financial analysis to provide further insight to potential risk for investment decision making, or for the purpose of presenting the investment opportunity
3. DUE DILIGENCE SERVICES:
We conduct due diligence for infill and master plan development investment opportunities to identify risks as well as mitigants supporting the approval (or disapproval) of due diligence based on the following (not an exhaustive list):
- planning analysis
- political feasibility
- title investigation and insurance
- technical analysis of site constraints (civil, geotechnical, environmental, biological)
- architectural site and yield analysis
- initial feasibility underwriting revised to reflect the findings of collective planning, political, neighborhood, and technical analysis
- Due Diligence Report: a summary of the due diligence findings and characterizing of the associated risks and potential mitigants for the business plan supporting a recommendation to disapprove, or approve the investment of funds
The timing of due diligence is dependent on critical path items such as site surveys and public agency input, as well as the Client’s ability to provide information and input, and to make decisions. We consider 45 days to conduct due diligence to be a fast-paced but reasonable goal for ground-up development. Due diligence can be conducted faster if some of the above technical studies and analyses are complete at the onset of due diligence.
HOW WOULD YOU PRESENT AN INVESTMENT OPPORTUNITY?
4. INVESTMENT OPPORTUNITY PRESENTATION SERVICES:
We can prepare an equity presentation deck, offering memorandum, or investment memo describing your ground-up real estate development investment opportunity containing the following components:
- Project Overview: description of site and location, development plan, entitlements/zoning, background on sourcing, identification of Sponsor, current status of underlying deal structure, timeline and budget, and investment rationale
- Summary of Project Economics
- Site Map, Neighborhood Amenities
- Site Plan, Architectural Renderings
- Sources and Uses Detail
- Revenue Summary Detail
- Operating Expense Detail
- NOI Summary Detail
- Exit Assumption Detail
- Sensitivity Analysis
- Waterfall Overview
- Rental Comps, Rental Comps Map
- Land Comps, Land Comps Map
- Sale Comps, Sale Comps Map
- Organizational Chart
- Sponsor Bios and Development Team
WHAT IS THE BUILDING APPROVAL PROCESS FOR YOUR PROJECT -- HOW LONG WILL IT TAKE?
5. ENTITLEMENT & BUILDING PERMIT PROCESSING SERVICES:
We identify the approvals necessary to permit your ground-up project and recommend an entitlement strategy for achieving the desired approvals (if these determinations were not made during due diligence). We approach consultants, local experts, and the local jurisdiction to determine if your project is consistent or at odds with local plans for your site. If there is substantial risk associated with your current project plans, then we can advise you on how your proposed project might change, while still achieving the desired financial returns.
If the entitlement path was identified during due diligence, or if you are committed to proceeding initially with a specific project, we would begin the entitlement process by providing the following services:
Planning Application: work with land use attorney and various design consultants, including, but not limited to the architect, civil engineer, geotechnical engineer, and environmental engineer to prepare and submit a preliminary planning application consistent with the local planning process. We would finalize this planning application to achieve a “deemed complete” status and begin the planning review process.
Environmental Review: work with the land use attorney, various design consultants, and a CEQA consultant to draft the requisite environmental document for purposes of satisfying the environmental review process required by the State of California under the California Environmental Quality Act, such that the document is certified by the local jurisdiction. Tony’s career began in environmental consulting, and he has worked on many CEQA documents, including those for brownfield sites.
Site Contamination Analysis and Remedial Protocol Approval: work with the relevant consultants and public agencies to determine the presence of any contamination onsite. If environmental site assessment reveals the presence of contamination, we would work with environmental consultants to develop the work plan and remedial protocols necessary to remediate the site, and process the required documents to achieve the appropriate clearance letter from the relevant agency allowing the desired uses onsite from a public health standpoint.
Project Design: work with various design consultants, land use attorney, and general contractor (GC) to develop architectural drawings (i.e., schematic design, design development, construction drawings) in order to obtain necessary building approvals, maintain accurate budget estimates, allow proper bidding to commence construction, and facilitate construction administration during the building process.
Neighborhood Outreach: assess any political exposure from neighborhood groups and community stakeholders in order to create a political outreach strategy. We would attend neighborhood meetings and engage with City Staff, appointed and elected decision-makers, and community stakeholders to the extent necessary to achieve required entitlements.
Entitlements: work with various consultants, land use attorney, City Staff and decision makers, and neighborhood stakeholders to process discretionary and ministerial approvals: (1) Discretionary approvals: may include Design Review, General Plan Amendment, Rezone, Planned Development Permit or Planned Unit Development, and Development Agreement; (2) Ministerial approvals: work with the various design consultants and a general contractor to process building permits that may include a demolition and grading permit, a site development permit, a parking structure building permit, and a superstructure building permit. Building approvals may be required by other service agencies such as the local water, sewer, power and fire department.
6. PROJECT MANAGEMENT/ ASSET MANAGEMENT SERVICES:
We provide project management services for your ground-up project if the project legal, political outreach and design teams selection and contracting is determined, and is in progress or completed, respectively:
Leadership: lead the project team through the entitlement, design, and permitting process
Monthly Draw Processing: prepare and submit a draw request on a monthly basis for your accounting staff to pay project invoices due, or to approve advance requests to project capital account
Monthly Reporting: prepare a project report, including an updated project budget, costs incurred to-date, projected costs for the next 90 days, key issues memo and a project development schedule
HOW DO YOU SELECT A GENERAL CONTRACTOR?
- How do determine whether a General Contractor will be a good fit for your project?
- How do you make sure that your general contractor is performing to budget, schedule, quality and safety in alignment with your business plan?
7. OWNER REPRESENTATION SERVICES:
We provide guidance through the life cycle of your project to safeguard the owner’s best interests, particularly during Construction Administration:
General Contractor selection: facilitate selection of the General Contractor (GC) for pre-construction services beginning at initiation of Design Development (DD) drawings through 100% Construction Documents, including supervising the GC’s bidding to the major trades (including concrete, framing, MEPs and Fire Sprinkler)
Contract Negotiation: (1) lock-in the hard cost budget as soon as possible unless the market trends relative to hard costs (or the Client’s goals) disagree; (2) oversee construction from ground-breaking to the termination of the warranty period as negotiated with the project architect and the GC, including the supervision and management of third party construction consultants providing material testing and various typical inspections as part of the building process; (3) advise during the GC selection process for pre-construction purposes, as well as negotiation of a Guaranteed Maximum Price (GMP) contract with the selected GC
Project Contact: serve as the single point of contact between contractors and designers
Schedule Monitoring: weekly reports on the progress of the project, with an eye for critical path items, and items that may affect the schedule in the future
Budget Management: weekly review of project expenses for contracted work; evaluation potential future expenses per budget constraints; assistance in evaluating contractor payment requests. Monthly Budget reporting
Quality Control: develop and audit quality assurance procedures
Mediation: facilitate conflict resolution within the project team
Sales: assist in the selection of a third party sales team to market and sell your residential asset, as well as manage retail brokers to lease-up the retail and/or commercial space
- Lease-up: assist in the selection of a third party property management company to lease-up and stabilize the asset, as well as manage retail brokers to lease-up the retail and/or commercial space
SHOULD YOU RECAPITALIZE OR DISPOSE OF YOUR ASSET?
8. RECAPITALIZATION AND DISPOSITION SERVICES:
We provide a short list of prospective investors, non-local developers, or buyers seeking local market positions to discretely market your asset for recapitalization, or disposition purposes and produce the desired capital event. Additionally, we advise you on how to respond to an unsolicited interested party inquiry to best position your business plan in the current market cycle. We offer this service based on our long-time relationships with the region’s largest and most active real estate development and investment entities, as well as with legal professionals expert in real estate transactions, and based on our experience in development and capitalizing various ground-up investment opportunities.