Day 43: A Setback Of Sorts

It has been awhile since I have posted here and that is largely because there has been little to say. Mostly our team has been occupied getting the bid packages ready for distribution to our select list of general contractors which we are still trying to select.

Huh?

Actually, we currently have a list of about seven general contractors which includes Conlan Construction, Glen Arm Construction, Kinsley Construction, Atlantic Builders Group, and DPR Construction. The objective is to winnow this list down to five who will actually receive the bid packages.

In the meantime, General Growth Properties sent out a Request For Proposals (RFP) for Parcel E-1 in Emerson Corporate Commons which is a 5.2 acre site adjacent to ours. This parcel could accommodate a 60,000 to 65,000 square foot office building. The RFP called for bids to be in by August 25th.

Our development team was very interested in acquiring this land. We envisioned it a natural extension of our project and we had even given it the working title of "E2." The challenge for us was that the floor to area ratio (FAR) was not as good as Emerson One. This made it difficult for us to justify paying the same amount (or more) as we did for the Emerson One site. At the end of the day the cost of the building and land dictate what rent you need to achieve in order to generate a return that justifies the risks.

In other words, one year later we ended up bidding less for the site next to us which was not exactly what GGP was looking for.

We just found out yesterday that we did not win the bid. Apparently our bid "was significantly under" the winning bid.

Needless to say, we are disappointed. We are also anxious about who and what will be building next to us. GGP won't disclose the winning bidder until they have finalized a purchase contract with them.

Stay tuned.