Saturday, 12June2010


Dr. Forgey describes the structure of the Studio. The class will consist of a potential commercial real estate development project. The idea is to locate a improved property that can work as a redevelopment site or a undeveloped site. The development must be located within the Fort Worth TIF district near the hospital district or the 7th Street redevelopment. The redevelopment must fit the criteria of having role up doors, a total project price cap of $500,000, and must be suitable for retail/multi-family use. The new development must be similarly able to sustain a development with the subsequent criteria. The students must locate a potential project, obtain financing, work with the city, and maneuver potential issues
Dr. Forgey then outlined his ideal property. The ideal property is an industrial building shell. It will have large role up glass doors to provide a industrial feel while having a new clean look and providing natural light to the interior of the property. The exterior will possibly be landscaped slightly to provide a more urban natural feel or a place to congregate outside. Possibly used as an area to provide a venue for local entertainment. The build-out will be minimal. Potential use of modular bathrooms/kitchen areas are an option, exposed air ducts etcetera to provide almost an industrial loft feel. All to be done as economic as possible while providing a certain industrial/modern feel for the tenants. The ideal property would consists of four units and be interchangeable as multi-family or retail. The retail would potentially be something tenants would be attracted to live near.
After the discussion and obtaining an idea of what Dr. Forgey’s vision was for the project, the class drove to three potential redevelopment sites originally located by Dr. Forgey. The sites were mainly older auto repair shops. Someone suggested the possible environmental issues with redeveloping a former auto repair shop in retail/multi-family. I agree that it would be difficult, but considering the area the city might be open to a redevelopment of such public eye sores. I believe Dr. Forgey’s vision is in line with the cities for the area and because of this, they may be more will to work with us. Of course this is subject to a certain Phase I environmental that possibly could come back so negative no one would ever be allowed to reside at the location legally.
Dr. Forgey then took us to some sites around the hospital district to help us understand the character of the area and to help better our vision of the project. We went to some shops that specialized in selling antique home parts and furniture. It really added to the idea of the area. Then we had coffee at the Paris Coffee Shop, a local favorite in the middle of this revitalized area that is always packed with customers.
After our small trip to these properties, the class reconvened back at the class room. There my group and I discussed ideas on obtaining financing and site selection. Both of which are challenges. It appears that the only present solutions to financially securing commercial property today are cash, SBA, HUD, a considerable down payment, or some joint venture using the present property as collateral. Our options are limited because of the current economic climate. I don’t believe cash is an option and SBA does not apply. I am personally interested in the HUD financing because of the opportunity to obtain extremely favorable terms. The downside is getting a property owner to agree to lockup the right to own a property for a one year while maneuvering through the bureaucracy of obtaining government backed financing. The payoff seems to be tremendous if this can be accomplished. Mark(A Group Partner) and I have scheduled a meeting with a HUD representative to discuss this option. Because of the timing of the class and the timing goal of the project, this option does not appear to be extremely feasible. Though I still remain interested in this option and curious about its potential.
Our group decided to choose a redevelopment project. Our belief was that it would be a little more exciting and financing would possibly be more available. We then took off from the classroom again to pin down a potential redevelopment site.
Initially we toyed with the idea of redeveloping the old Anderson’s Furniture store. We all felt this was a great potential redevelopment and just a neat building in general. We were able to view the interior and came to the conclusion that while a great building, the present condition of the property carries huge redevelopment risks we are not willing to make. The building was also to large of a project and did not have the role up doors Dr. Forgey wanted.
Next we found a property off of Main Street we all felt was prime for redevelopment. The buildings bones were still in great shape. It would need to be completely gutted but we all agreed that if the property could be obtained at a suitable price to support our risk, that it would be a suitable project. As great of a redevelopment project this might be we had to pass on it because the property did not have role up doors to fit the scope of the project.

After that, we located a property on West Vickery. I loved the idea of using this property as a redevelopment project. The property looked vacant and had no signs of present use. It has beautiful older industrial look to it and a area to its side that not only could be used for parking but a multitude of possibilities. The issues were the size of the buildings depth. It seems too large for multi-family units. We played with the idea of using the extra space as storage in order to maximize the square footage. Which is a great idea but begins to make the project more complex. Ultimately we ended up passing on this building because the building was too large a project, the bay depth was too long, and we were not sure how available the property truly was.
Lastly, we were considering a property off of Magnolia which had been an old Auto Repair Shop. It was one of Dr. Forgey’s suggestions and fit the criteria very well. Role Up doors and a proper size project.

With are potential sites in hand we headed back to the class room to present them to the class. Main Street was at the time the groups number one pick, but was shot down immediately by not fitting the role up door criteria. The Vickery property showed some promise, so it was presented to the class as our project.
We then left again to examine each groups sites. Each group showed their sites and presented their development ideas. Our site at the time was the Vickery property, which previously stated was a no go upon closer examination. This brought us to go with Dr. Forgey’s suggestion of the Magnolia property. We then went back again to better understand the feasibility of the Magnolia Street site. The property seemed to fit the criteria quite well. We exchanged ideas on how the property would be split up and ideas for exterior beautification that were excellent. So now we had our property and our ideas and we were on our way to a redevelopment.


Monday 14June2010


Disaster!!! I contacted the broker of 1311 Magnolia and her response is below.

Hi Jerod,
It is for lease only and we have leases out that we expect to execute this week. I'll let you know if that changes.

This one brief two sentence email has destroyed our hope to develop this property and sent us back to square one.
After receiving this email, I made a plan to go back through the area. I needed to take make grandfather to the Doctor in the area and while he was at his appointment I had time to look for more possible options. After going through almost every street in the desired areas I had one possibility on Carroll Street just across from the redeveloped Target. It was a little farther out than I believe Dr. Forgey ideally wanted but seemed to meet all the necessary criteria. It was a shell of a building that could easily be converted to multi-family or retail. I think it would have been a neat project, the current issue is that the owners believe the land value has sky rocketed due to the surrounding developments. The current asking price is $750,000.00. This is far above are target price range. The property is vacant and it might be worth a call to see how negotiable the owner is.