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Objectives and Strategies Rico Cheung

Objectives and Strategies Rico Cheung. UNCOVERING OUR CLIENT’S NEEDS. Objectives. Client Centered Orientation

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Objectives and Strategies Rico Cheung

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  1. Objectives and Strategies Rico Cheung

  2. UNCOVERING OUR CLIENT’S NEEDS Objectives • Client Centered Orientation • Focus on identifying issues and providing innovative solutions consistent with Client’s strategic plan. Build in term flexibility, save valuable resources and protect schedule priorities. Your goals are our goals. Focus on Client’s success. • Clear Communication • Committed to identifying and understanding roadblocks and issues early in the process through open and honest communication and make recommendations for Client’s long term success. • Push the Envelope • Set a new standard for quality of service, structure of the transaction, the financial aspects and expectations. Challenge the “traditional way of putting a deal together.” Perform all business at the highest possible level of integrity and level of excellence. • Bring the Market to the Requirement Rather than fitting Client into a specific facility and deal structure, make the structure and buildings fit into Client’s plans.

  3. CLIENT Objectives • Client wants to determine the • Right amount of Real Estate • Right property types • Right location • Right time frame to support its business operations • “Strategic Planning does not deal with future decisions, but rather the future of present decisions”

  4. GVA KIDDER MATHEWS Overview • In business for over 30 years, GVA Kidder Mathews has one of the largest independent brokerage groups on the West Coast • 135 brokers performing • Over 1,000 leases and 350 sales transactions worth over $2.3 billion annually • Since they see more transactions, their clients benefit from superior market knowledge. • The firm also has more brokers with the prestigious SIOR and CCIM designations than any other firm in the Northwest. The brokerage group focuses their expertise in the following specialty groups: Industrial, Office, Retail, Investment, Multi-family, Technology, Life Sciences, and Corporate Services.

  5. GVA WORLDWIDE Offices and Regions of Expertise Atlanta Baltimore Bellevue Boston Burbank Caracas Carlsbad Charlotte Chattanooga Chicago Connecticut Dallas Detroit Inland Empire Jacksonville Los Angeles Panama City Beach Philadelphia Phoenix Pittsburgh Portland Raleigh/Durham Richmond San Diego San Francisco San Gabriel Valley Santa Clarita Valley Leeds Lisbon Liverpool London Manchester Melbourne Milan Moscow Munich New Castle Prague Sofia Sydney Turin Vienna Warsaw Santa Barbara Sao Paulo Seattle South Bay Tacoma Tallahassee Tampa Toronto Vancouver Ventura County Virginia Northern Washington DC Wilmington Athens Belfast Bergamo Berlin Birmingham Bratislava Bristol Brussels Bucharest Budapest Cardiff Copenhagen Dublin Maryland Mexico Minneapolis-St. Paul Montréal New Jersey New York Newport News Norfolk Orange County Orlando Ottawa Edinburgh Frankfurt Geneva Genoa Glasgow Helsinki

  6. STRATEGIC REAL ESTATE PLANNING • GVA Kidder Mathews • Positions your company for success • Protects your investment • Minimizes out-of-pocket costs • Increases leverage during negotiations

  7. STRATEGIC REAL ESTATE PLANNING • What Can Clients Expect? • Access to Life Science friendly capital sources • A structured commitment aligned with Strategic Business Plan • Data from GVA Kidder Mathews’ “Radar Screen” • Less “hands on” time by Executive Team • Expertise with project implementation

  8. STRATEGIC REAL ESTATE PLANNING • GVA Kidder Mathews Delivers: • A structured commitment aligned with the Client’s milestones and growth projections • Best possible project and tenant improvement financing available • An efficient, seamless definition, acquisition, and implementation process • Opportunities only available to GVA Kidder Mathews’ Clients

  9. STRATEGIC REAL ESTATE PLANNING Select Optimal Location & Financial Structure Identify & Evaluate Alternative Locations Review Corporate Goals and Objectives Develop Real Estate Strategy Programming & Conceptual Design Prepare Real Estate Acquisition Strategy Design/ Construction of Improvements Validation of New Facility

  10. STRATEGIC REAL ESTATE PLANNING Project Phase vs. Space Type Phase of Product Development Type of Facility

  11. STRATEGIC REAL ESTATE PLANNING Company Development Life Cycle Research Pre-Clinical Clinical FDA Approval Commercialization Time Frame Costs Sq. Ft.

  12. STRATEGIC REAL ESTATE PLANNING • Assessment of current situation • What are the corporate goals and objectives? • Growth projections • Evaluate/develop space standards • Municipal/hazardous materials requirements • Financing tenant improvements

  13. STRATEGIC REAL ESTATE PLANNING • Issues Which Impact Facilities • Business plan/headcount projections • Current standards/space utilization • Product development milestones/critical time periods • Production capacity planning/modeling • Corporate philosophy, employee demographics, image, amenities • Control/financing strategies

  14. CORPORATE GOALS & OBJECTIVES • Review overall business strategy • Evaluate financial objectives • Address product development programs • Define growth/headcount projections

  15. PRODUCT DEVELOPMENT Programs & Progress • Staffing growth due to development progress • Staffing of different development programs • Support staff/facilities: shared or dedicated • Master plan the project • Will Validation be required?

  16. REAL ESTATE STRATEGY Development • Results of Your Planning Efforts • Documented Real Estate strategy • How much space & when it is needed • How to pay for new space • How to acquire new space • Control strategies

  17. REAL ESTATE STRATEGY Facilities Finance Alternatives • Traditional Sources • Asset-based lenders • Venture leasing/equity financing • Credit-based lenders • Traditional Sources • Real Estate investment trusts (REIT) • Off-balance sheet programs • Biotech developers/investors

  18. REAL ESTATE STRATEGY Development • Financing Tenant Improvements • Asset-based lenders • Venture leasing/equity financing • Credit-based lenders • Real Estate investment trusts • Off-balance sheet program • Government incentives

  19. REAL ESTATE GROWTH ANALYSIS 10,000 NSF Lab/Lab Support 10,000 NSF Office 10,000 NSF Manufacturing 10,000 NSF Warehouse

  20. REAL ESTATE GROWTH ANALYSIS Square Feet in Thousands Clinical 157,500 Research & Pre-Clinical 92,900 Manufacturing 51,300

  21. DEVELOPING THE STRATEGY 10,000 NSF R&D 10,000 NSF Office 10,000 NSF Production 10,000 NSF Storage/Warehouse

  22. REAL ESTATE STRATEGY Acquisition • Increasing Your Leverage in Negotiations • Select optimal occupancy plan • Select optimal capitalization plan • Pre-negotiations • Use your Real Estate strategy to your advantage • Qualify/team approach with landlords/developers

  23. REAL ESTATE STRATEGY Acquisition • Protecting Your Investment • Analyze financial impact of scenarios • Key lease provisions • Landlord waivers • Non-disturbance agreements • Sublease clauses

  24. SITE SELECTION • Identify alternative locations • Assessment of site potential • Match buildings/project to grow plans • Review of existing tenants • Financial analysis of alternatives • Quantify occupancy costs • Initial build-out costs • Cashflow comparisons

  25. SITE SELECTION Analyze Site Potential Square Feet in Thousands 157,500 Second Expansion 92,900 First Expansion 51,300 Initial Building

  26. SITE SELECTION • Site Services & Amenities • Corporate image and quality of life issues • Utility capacity and water quality • Ingress/egress issues

  27. SITE SELECTION • City Permitting Process/Use Restrictions • Schedule – serious vs. parallel • Hazardous materials restrictions – quantities & types • Use permitting and restrictions • Public hearings

  28. FINANCIAL ANALYSIS

  29. TENANT IMPROVEMENT ANALYSIS

  30. CONTROL STRATEGIES • Straight lease • Lease with equity • Joint Venture • Sole ownership • Sale leaseback • Off-balance sheet lease financing

  31. PLANNING & OPERATING MODELS Business Planning Model Business Issues Core Competencies Business Objectives Operating Model Distribution Customer Service Test Assembly R&D Manufacturing Human Resources MIS Finance Real Estate

  32. PROCESS 1 2 5 6 3 4 7 8 Understand current business status & corporate environment Interview business units & Real Estate department Develop Real Estate occupancy strategy Assess Real Estate market conditions Assess current portfolio & facilities Develop financial strategy Evaluate Real Estate site programming Implement Real Estate plan

  33. PEOPLE AND PROCESS COORDINATION Building Owner/ Property Mgr. • RESULTS: • Effectiveness • Saves Money • Maximizes Value • Efficiency • Saves Time Architect/Process Engineer Legal Owner’s Leasing Agent General Contractor Validation Consultant 3rd Party TI Financing City/ Government Equipment Vendors Moving Company

  34. ENGAGEMENT PROCESS Develop & Analyze Alternatives Evaluate the Market Engage the Market Weigh the Options Analyze Needs & Develop Strategy Negotiate & Implement the Decision Negotiate the Terms Document the Agreement Implement the Decision Support Client Post Occupancy

  35. PROCESS, DOCUMENTATION & ANALYSIS

  36. ISSUES FOR CONSIDERATION: TYPICAL • Financial • Cash flow • Tax position • P&L implications • Base rent/sf • Other occupancy costs/sf • Timing • Funding of capital improvements • Security • Tenant improvement allowance • Control Strategies • Standard lease • Lease with equity sharing • Lease/Purchase • Joint Venture • Sole Ownership • Operational • Occupancy date • Process limitations • Growth/scalability • Structural considerations • Column spacing • Floor load capacity • Space efficiencies • Adjacencies • Expansion/contraction needs • Renewal options • Data center (power/technical requirements) • Haz.Mats./Code compliance • Electrical/Emergency Back-Up Power • Technology/communications • HVAC requirements • Ceiling height • Onsite storage needs • Loading docks/overhead doors • Building • Image • Quality of ownership • Building amenities/services • Employee security • Parking • Energy efficiency • Signage • Air quality • Location • Proximity to Airport • Accessibility by employees • Accessibility by clients • Area amenities • Public transportation • Skilled labor force

  37. FOCUS: THOROUGH EXAMINATION Lease Issues HVAC Damage & Destruction Operating Exclusions Maintenance Sublease Rights Alterations Options: - Expansion - First offer - Termination - Renewal Non-Disturbance Restoration Clause Base Building Square footage Work Letter Base Rent (Rent per SF & Operating expenses)

  38. BENEFITS • Strong advocacy & satisfied clients • Superior market intelligence • A team approach to address the increasing complexity and handle the details for Technology and Emerging Company projects. • Superior negotiating results WE DELIVER RESULTS

  39. CASE STUDIES Strategic Initiative AMGEN, INC. 34551 Ardenwood Fremont, CA .

  40. CASE STUDIES Strategic Initiative ABAXIS, INC. 3240 Whipple Road Union City, CA .

  41. CASE STUDIES Delivering Results GENOMIC HEALTH, INC. 301 Penobscot Drive Redwood City, CA .

  42. CASE STUDIES Delivering Results ASCENDENT SYSTEMS 2000 Bridge Pkwy Redwood Shores, CA .

  43. CASE STUDIES Delivering Results LUCID ERA 1510 Fashion Island Blvd San Mateo, CA .

  44. WE ARE YOUR EYES AND EARS B E N E F I T S Invoice Review Payments • Tight control of invoice approval and payment process • Early warning of cost, scope or schedule changes • Innovative contracting procedures that reduce risk • Minimize contractor and vendor disputes: control change order procedure • Identification of value engineering opportunities • Accurate financial and contract compliance auditing • Concise and useful management reports (PTD & budget comparisons) • Increased tax benefits from cost segregation • Minimize Operating Committee involvement in construction process Dispute Claims Commitment Change Orders Delays Approvals Overruns Scope Changes PMO Manpower Contract Rates Change Orders Design Changes

  45. BAY AREA REAL ESTATE: OLD PARADIGM Fortune 500 Stable Revenues/Earnings Emerging, Growth Companies Rapidly Increasing Revenues Pre-Revenue Companies Sales Imminent Biotechnology Pre-Revenue Capital Availability Product Availability

  46. BAY AREA REAL ESTATE: CURRENT PARADIGM Fortune 500 Stable Revenues/Earnings Emerging, Growth Companies Rapidly Increasing Revenues Pre-Revenue Companies Sales Imminent Biotechnology Pre-Revenue Capital Availability Product Availability

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