Bartell & Co was retained for an assignment that is not uncommon but often tough to reconcile – sets of parents own interests in a piece of property and pass it to their children as an inheritance. Those siblings are left to sort out their next moves for the property given differing objectives often with no knowledge of real estate strategies or market knowledge. How do they define value, and what are the options and consequences of the choices they have and make?
4 Possible Scenarios:
The property was located at third and Columbine in Cherry Creek North, and Bartell and Co were hired by the two Families’ estate trustees at Wells Fargo Wealth Management to consult with the group and provide advice and expertise. The property was a worn-down one-story retail building in the heart of the District. Four scenarios were offered for the Families consideration. Having the Trustee’s confidence was critical:
- Moderately renovate the existing structure focusing on the street-facing façade to improve the retail appeal.
- Fully renovate the entire façade to create a more attractive and compelling retail offering to maximize cash flow at a rational cost.
- Adding two stories for a prestigious family office, retaining improved retail on the first level.
- Creating a single-family, private residence above the first-floor retail, adding one or two stories for move-down buyers looking for an alternative to their suburban homes, or an out-of-town second home user looking for an in-town flat.
Bartell & Co hired architects with multi-use experience, to render the four options. Dan Bartell priced construction and ran financial analyses on each option, outlining risk and returns. He convinced the family to market all four options to see what the market would bear as related to the Families’ common and varied objectives.
Bartell and Co decided that, in addition to the traditional methods of marketing, adding onsite marketing by building on-wall video loop lightboxes on the outside of the property, which showcased the options, would pique local interest. This allowed evening diners and strollers who patronized the District to see the flexibility and value in a relaxed, familiar way.
It worked! The property sold to a Cherry Creek investor, looking for a “legacy” property, who kept the retail on the ground level, minimizing expenses with simple cosmetic improvements. Bartell & Co. created a common ground for the Families, allowing the Trustee to wholeheartedly recommend Bartell’s approach, finally deciding on a sale. The price was well above the then-recent appraisal. The Buyer felt fulfilled as Cherry Creek North has continued to blossom and increase in value.BACK