Updated over 5 years ago on . Most recent reply
Syndicating CRE to save a landmarm
Hello all,
I’m early into my RE career, transitioning out of a corporate finance and banking background to start my own firm. To keep things somewhat brief, my partner and I plan to eventually start a fund as a REPE, after a few years of building out a diversified “core” HFI portfolio, but don’t plan on investing other people’s capital until we’ve had some experience managing our own mixed asset portfolio for a few years.
However, an incredibly iconic and historic building in our hometown city is currently at risk for being either demolished and redeveloped, or rushed through local legislator to become a government building.
It’s long been a soft goal of ours to someday own this building and restore this landmark as its been vacant for decades, but as previously mentioned we’re very green and are currently only just building out the SMF portion of our proprietary holdings. We’re certainly not in a financial or experiential position to acquire a 400,000sqft mix res and comm property and undertake a multi-million dollar rehab on our own right now. Although, we certainly don’t want to see the opportunity go by the wayside, or the building be redeveloped. This building is important to both myself and my partner and we would be ecstatic at the opportunity to someday restore it and see it (hopefully) flourish.
My question is simultaneously simple and complex:
Is it absurd to even think about undertaking this type of project and fundraising/syndicating this type of property with no experience? And if we are crazy enough to *try*, what are some general things we should think about in our analysis, while compiling marketing materials, and when approaching a behemoth commercial deal?
Considerations:
The building is pre-depression built (1920’s), it is about 400,000sqft across 25 floors, located in a B tier city. To my early stage understanding it needs considerable utilities improvements/rehab (HVAC/electrical/plumbing). It was recently tax-appraised for about 15MM (more than 50% lower than its most recent sale price).