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Real Estate Asset Management Strategy

Fort Monroe Federal Area Development Authority

March 19, 2009

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Today’s AgendaToday’s Agenda

Current work summary

Role of Fort Monroe/Old Point Comfort Real Estate Asset Management Strategy

Real estate goals and objectives

Interim leasing concepts

• Residential

• Commercial

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BAE Scope of Work BAE Scope of Work

Updated financial analysis

Real Estate Asset Management Strategy

Economic Development Conveyance

Property manager/developer solicitations

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Asset Management Strategy is Key Driver Asset Management Strategy is Key Driver

The Fort Monroe/Old Fort Comfort

Real Estate Asset Management Strategy:

• Sets goals and objectives

• Identifies key challenges

• Formulates strategies to realize goals and objectives

• Provides a direction and road map for FMFADA staffing & leasing activities

Real Estate Asset Management Strategy RFQs/RFPs

FMFADA Real Estate Staffing

EDC Application

Lease/Contract Terms

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Goals and Objectives Goals and Objectives

Clearly articulate FMFADA’s goals and objectives

• Focused on real estate dimension only

• FMFADA management consultant to focus on other dimensions (e.g., institutional management, cultural, interpretive, and recreational)

Five areas to focus on today:

• Summary of Overall Goals and Objectives

• Financial

• Historic Preservation

• Operational

• Economic Development

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Overall Goals and Objectives

Generate a stable stream of revenue to preserve and protect Fort Monroe’s rich historical, cultural, and natural resources

Enhance the economic development of the City of Hampton and entire Hampton Roads Region

Optimize results and control costs by establishing an efficient, highly flexible, and responsive FMFADA organization

Support and complement public uses of Fort Monroe

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FinancialFinancial

Generate near-term revenues

Optimize long-term value

Achieve long-term financial self-sustainability

Minimize upfront Commonwealth investment

Achieve market-rate rates of return

Enhance value with Fort Monroe/Old Point Comfort “brand”

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Financial Financial (continued)(continued)

Explore residential leasehold program to generate capital

Establish an interim leasing program prior to transfer

Generate fiscal benefits to City of Hampton to cover costs of municipal services

Maximize the use of state and federal investment tax credits

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Historic Preservation Historic Preservation

Preserve historic buildings through interim leasing

Facilitate long-term rehabilitation and adaptive reuse of historic structures

Facilitate maintenance of cultural landscapes

Ensure compliance with Fort Monroe Historic Preservation Design Standards

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OperationalOperational

Build a responsive and flexible FMFADA real estate organization using best practices

Control operating costs by minimizing permanent staffing requirements

Provide an efficient permitting process

Ensure “owner’s rep” project support

Establish interim leasing program with contracted broker and property management firm

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Operational (continued)

Privatize major rehabilitation and new development

Capacity to enforce Programmatic Agreement for historic preservation

Operate real estate programs to complement Long Range Interpretive Master Plan

Ensure Army remediation meets standards set by Fort Monroe Reuse Plan

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Economic Development

Strengthen local and regional competitiveness

Collaborate with state & local ED officials to secure “anchor” tenant

Promote “green-tech” or “clean-tech” industry

Promote IT, aerospace, military, and NASA related commercial tenants

Improve the region’s quality of life by making Fort Monroe the “front door” of the Hampton Roads Region

Support the on-going revitalization of Phoebus as “Fort Monroe’s neighborhood shopping district.”

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Interim Leasing

Challenge:

Balance need for early revenue and historic preservation with protection of Fort Monroe/Old Point Comfort image

Lessons Learned:

Presidio of San Francisco commercial leasing program

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Interim Leasing Concepts - Residential

Proposed concept:

Fort Monroe Residential Rental Program

Target market segments:

• Military families renting “on the economy”

• Foreign families assigned to NATO HQ

• Visiting faculty & graduate students at area colleges & universities

• Local public safety agency employee households

Seeking credit-worthy, short-term tenancies to give FMFADA flexibility to implement long term rehabilitation and residential leasehold program

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Interim Leasing – Residential (continued)

Required improvements:

• Limit to units requiring only cosmetic Improvements – “paint and patch”

• Improve landscaping at Wherry Housing

Implementation:

• RFP for residential property manager

• Master lease with Army pending transfer

• Start mid- to late 2010

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Interim Leasing Concepts - Commercial

Identify buildings that are ADA compliant and require minimal investment for occupancy, including:

• 11 recently constructed “butler” buildings with flexible floor plans

• Building 100

Target existing office tenants in local market

Target technology and clean-tech firms needing shop and storage space

Lay marketing and “proof of concept” ground work for identification of anchor tenant