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Commercial Real Estate 101: Investment Cooperative - Shared screen with speaker view
Naomi Farabee (she/hers)
43:55
I can see it, but it isn't full screen, FYI. :)
Adrian Perryman
44:43
stop the share, start the PowerPoint, and reshare the full view
Erin Heelan
46:55
FYI - The Great Fan’s Building that Renee mentioned is located on 678 Snelling Ave.
Hamline Midway
46:56
Please feel free to post any questions you have in the chat!
Pat Thompson (she/her)
54:42
define feasible
Brad Griffith
55:29
Can someone that wants to open a business participate in a community led development?
Gretchen Nicholls
56:15
There's financial feasibility and political feasibility (something the community supports). How would political feasibility be addressed?
Piere Barnes
57:00
Do we need to live in the neighborhood we want to help build in?
Azad Lassiter
01:00:20
Hello, I do more homeownership real estate development has anyone ever scaled this to residential. Either New construction or remodel.
Maureen Mulvaney
01:01:08
Old Hardware Hank storefront
AJ Jahnig
01:01:32
Do we have a baseline amount in order for a project to be feasible? Obviously site dependent, but is there a target amount of funding for this to become truly viable?
Hamline Midway
01:03:41
For those who haven't taken the survey about this project, please do so! you can find it here: https://docs.google.com/forms/d/e/1FAIpQLSdY2FtaZoLu-5N38a66NcPCwZ5KFcQ3PaW1q-z598G9RnwtnA/viewform
Anna Schmiel (NEON)
01:04:01
What are your thoughts on getting impact investors involved to increase the funds available to purchase buildings?
Pat Thompson (she/her)
01:05:24
Has Beacon housing bought that?
Pat Thompson (she/her)
01:06:54
Is it just one story?
Hamline Midway
01:07:13
It is 2 story. Offices occupy the 2nd story.
marcq sung (he/him/his)
01:11:46
thanks to renee we'll have no restaurants left, lol
Courtney A Overby
01:12:13
yes perhaps we can convince them to be farmers @marcq hehe
Gretchen Nicholls
01:12:41
Restaurants are the major driver of the vitality of local/neighborhood commercial areas.
Gretchen Nicholls
01:13:47
The Northeast Investment Cooperative brought in small food/beverage uses (bakery, brewery). Let's not count out food so quickly.
Courtney A Overby
01:14:07
Agreed - we have a ton of interest from members around the restaurant offerings as well but knowing both market risks and community needs is important.
Courtney A Overby
01:14:32
There is nothing prohibiting us from offering food based occupancy spaces
Courtney A Overby
01:15:00
*sorry the resident survey indicated this interest (not officially the members yet)
marcq sung (he/him/his)
01:18:01
the owners put in a TON of sweat equity
marcq sung (he/him/his)
01:18:16
Cat 2 building if I recall
marcq sung (he/him/his)
01:19:38
All three examples received varying degrees of local government funding support
Gretchen Nicholls
01:22:20
What are the properties that Beacon Housing recently purchased?
Hamline Midway
01:23:45
Beacon Interfaith has a purchase agreement at 545 N Snelling.
Pat Thompson (she/her)
01:24:13
pho pasteur
Matt Privratsky
01:26:31
Rene is that food market like 10x15 feet? What’s the rough scale of those spaces
AJ Jahnig
01:26:38
What about the impending office space bubble? All reports are that 2021 is going to have a glutton of office space given remote/covid?
Matt Privratsky
01:26:47
Sorry you put it on the next slide
Erin Heelan
01:27:38
When Renee is referring to Gene, she talking about Gene Gelgelu, the President & CEO - African Economic Development Solutions. AEDS has a purchase agreement and is looking to redevelop the Great Fans Building.
marcq sung (he/him/his)
01:28:31
could be a good cdbg candidate
Matt Privratsky
01:29:52
For clarity, Rene, I thought AEDS was already buying this, themselves. So this is just an example space we’re using for people to imagine a project, right?
Matt Privratsky
01:32:02
So, the investment coop would put in capital and get a stake, or something roughly like that?
Denise
01:33:57
how much is this project
Mitra Jalali
01:34:17
On this example and all future examples with HMIC it will definitely be critical to center, not just include, BIPOC community stakeholders, and make it clear and transparent how power is shared, how vision is developed together, etc. As we continue to figure this out I am interested in working with the group to set clear standards for and uphold the dynamics and relational practices I believe we're all hoping for and committed to in order to achieve not just equity but actual power-building with folks most at risk of displacement and most historically disinvested/disempowered by racist capitalism. In general our office is very excited about the potential for this work and I really appreciate the chance to hear more today - I have to run to another call now so I am sorry to hop. Me, Matt and Stacy (the whole W4 Council office) are reachable at ward4@ci.stpaul.mn.us. Thanks Hamline-Midway Coalition for your leadership
Pat Thompson (she/her)
01:37:03
Can you clarify… if an organization owns a building, do they pay themselves rent?
marcq sung (he/him/his)
01:38:48
also isolates risk, e.g. a business goes under but the building remains solvent, and vice versa
Pat Thompson (she/her)
01:41:55
what is DCR
marcq sung (he/him/his)
01:41:56
Yay!
marcq sung (he/him/his)
01:41:59
pro forma
marcq sung (he/him/his)
01:42:14
debt coverage ratio
Courtney A Overby
01:42:56
is it true that 1.5 is a pretty average DCR?
Courtney A Overby
01:43:07
or a smart practice/rule of thumb for risks
marcq sung (he/him/his)
01:43:16
common area maintenance - CAM
Gretchen Nicholls
01:43:47
Those lease rates are very reasonable for our market.
Nexus Community Partners CWB
01:45:01
How does decision making work between HMIC and AEDS in your scenario?
Courtney A Overby
01:45:11
yes interesting, contingencies too for cost over runs more directly
Karl Hahn
01:45:15
I was just sitting in today but this project sounds awesome! Have to go now but thank you all for the info!
marcq sung (he/him/his)
01:45:37
don't know what the cap rate is for that area
marcq sung (he/him/his)
01:45:42
capitalization rate - cap rate
Erin Heelan
01:47:28
We have time for a few more questions.
Courtney A Overby
01:49:12
but how much debt you can get is a measure of your investability - based a little bit on those ratio extimates/thresholds. not to push the question but more about the front end risk not the back end reward
Courtney A Overby
01:49:46
oh right gotcha yea thanks that’s a good way to think about it
marcq sung (he/him/his)
01:53:30
sprinklers will kill you every time
Pat Thompson (she/her)
01:53:39
yay no elevator
Adrian Perryman
01:53:47
let us know if you need any experts in zoom :)
Gretchen Nicholls
01:53:52
How would a governance structure be defined?
Deb
01:53:55
If the HMIC is the developer and does not own the building, who takes out the loan?
ben
01:53:58
Great job, Renee!
marcq sung (he/him/his)
01:54:06
great job renee!
Erin Heelan
01:54:21
Thanks, Adrian, we need you.
ben
01:56:05
How quickly do we need to formalize the org to not miss the opportunity at this property?
Erin Heelan
01:56:22
The governance structure will be defined by this implemenation committe.
Gretchen Nicholls
01:56:36
Excellent presentation!! Thanks so much for all your work. Looking forward to the journey!
Nancy St. Germaine
01:58:06
Apologies. I have another meeting to jump on.
Courtney A Overby
01:58:23
thanks everyone! Loved this content lots to discuss
Brad Griffith
02:01:15
Thanks to All!
Naomi Farabee (she/hers)
02:01:25
Thank you!
David J Green
02:01:28
Thank you!
Claudia Ciske
02:01:28
Thank you for the super informative session!
Paul Brooks
02:01:30
Thank you!
Libby Logsden
02:01:31
Thank you!