Planning Document - Bullard House PDF

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Download Planning Document - Bullard House PDF

Description

Planning Document (Seller) Downtown Inc.: •

BATNA – Go with the other offers on the table

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RP – $20M (Wimbledon Properties offer, Gentrification Inc. offers, and Grouse offer substantially are offering in the range of 14.6M-19.5M. So, anything going down on price would be a loss) I cannot do this deal if: 1. The property is used completely for commercial use (which could result tearing down or destroying the property) 2. There is a chance of any bad press (Mallory & Myles reputation should be preserved) 3. The property is not put to a consistent use with its own history of the neighborhood (the Bullard Family has a deep connection with this property)

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Aspirations – 1. Property mortgage payment agreement ($2M principle, 13 years left @ 7% annual interest = $3.8M) and other arrearages along with Absentia becomes the personal guarantors 2. Maximizing sale price 3. Lock the deal with cash and hard assets rather than notes and income rights 4. No further investment into the house or grounds 5. Opportunity for James to buy a condos or brownstones 6. Minimizing Downtown’s stock

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Target – $25M (other offers range from 14.6M – 19.5M, so setting an aggressive target price is feasible)

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Issues – 1. No knowledge of intention of use of the property by Absentia Group. 2. Bad press is out of question (Mallory has active, prominent and respected real estate firm and Myles’s son is likely to announce his candidacy as Mayor so any irresponsible dispose of the property could damage the reputation) 3. Want to preserve the historic style and structure of the Bullard houses and keep the zone residential (to avoid tourist attractions) 4. Age – because of age they don’t want to themselves develop the property 5. Property sewage issue – this could be a deal breaker since the costs to get it done is high and Bullard has no evidence that the tanks leaked 6. Conflicts in interests within the board

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Sources of Power – 1. Need of the buyer – since the property is extremely historic 2. Options – no such historic option for buyer in the town 3. Investment –less investment upon buying the property for buyer since the property doesn’t need to be teared down but just to be upgraded and remodeled

Absentia Group:

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BATNA – But another property

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RP – $23M (they could have a higher RP since they have retained Gotham’s one of the top real estate firm which makes them quite efficient)

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Aspiration – Buy at a lower price value and try to keep their cards closed

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Target – $20M (they must know some of the offers that on the table for Downtown Inc. and would want to keep their target price somewhere near that price range.

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Issues – 1. Securing he property at RP 2. Age of the property 3. How to preserve the historic property without much damage during the construction 4. Property sewage issue – this could lead to high costs of expense

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Sources of Power – 1. Need – Seller wants to sell this property fast and profitable and also the board is full of elderly member who doesn’t want to get into any development of the property 2. Credibility – retained Gotham’s one of the top real estate firm so has a good credibility in the city 3. Investment – have investment capital

Strategy I will first start with some important questions to satisfy my RP points such as how is the property is going to be used? How much tear down or modification will be done in the property? What are the expectations from the Downtown Inc. to take part into the development process? This will give me a quick understanding of some really important information and if it satisfies my RP definitely nos. If the information satisfies my RP than I will go further and start with the numbers. Getting more further into the negotiation I will be following the distributive strategy and try to push some of the aspirations into deal....