Barnard Ventures provides due diligence services in connection with an acquisition, and specifically on new development projects. We have provided these services on a consulting basis to institutional owners as well as private investors. The buyer/investor has usually been an institutional investor, a private investor, or an owner/user but all seek an independent review of all the necessary documents. We respond quickly, and understand the need to assess distinctions between common and uncommon risks, and manageable versus unmanageable open issues. Areas of investigation usually include the following:
A site visit provides context for the review of all other documents, some which may be outdated. We review the current condition of the property, evidence of past grading or dumping, uses surrounding the property, traffic conditions on adjacent streets, and drainage patterns.
Review of Drawings
Clients request an assessment of whether the plans represent class A product and how complete the plans are in order to validate budget and schedule. Progress on civil engineering is particularly important and seldom meaningfully developed. We work with the buyer to develop rational contingencies for both governmental requirements and unforeseen soil and utility consequences.
Review of Soils Report
The soils report is reviewed to validate whether the project plans, budget and schedule have taken the local soils condition into account. Sellers often provide cost estimates, but leave out the qualifications and exclusions that qualify consequences that the buyer wants to underwrite at the acquisition stage.
Encumbrances on Title and Review of ALTA Survey
The review of title and the survey provides clarity on what items, if any, must be addressed to build the proposed plan. Often there are easements that need to be removed or relocated, perhaps some with actual improvements underlying, and our team is able to confirm if the schedule and budget take these consequences into account.
Review of CEQA Documents, Governmental Approvals and Conditions of Approval
Occasionally an acquisition appears to have entitlements in order, but they may in fact not be perfected, and we are able to validate the standing of the project approvals. The status of governmental approvals does not become evident on title, and many buyers are surprised at the wide gulf that can exist between a zoning designation as evidenced on an ALTA survey and the ability to build. With projects that have conditions of approval, we review each item and verify that they are feasible and have been incorporated in the project budget and schedule.
Review of Project Budget
Barnard Ventures conducts an initial review to ensure that the figures are comprehensive, including those items that the buyer may elect to budget outside of the capital budget. Next we look to verify the level of detail that was used to build the hard costs, including off-sites, site work, and building. Government fees are reviewed to ascertain if all impact fees have been addressed and all costs associated with utility fees, connection charges, and construction are accounted for. Although the remaining soft costs are reviewed, shortfalls are typically in the prior areas as these, along with land costs, comprising 85% of the budget.
Review of Project Schedule
The project schedule is reviewed to determine if it is of realistic duration, particularly with regard to third parties. Appropriate review and response times for city, utility agencies and others can significantly impact the schedule and are accounted for. The type of contracting method the owner intends to use, along with weather impacts, may also impact the overall duration, and we seek to make sure the schedule takes these into account.
Barnard Ventures provides client-oriented development project management. We are flexible and able to provide comprehensive services, or to work with the client’s in-house capabilities and provide complementary oversight. We listen carefully to client needs, and recommend a team of consultants and services that is responsive to those needs. Services commence at the earliest stages of determining project definition and scope. They continue with an implementation sequence, budget, schedule, etc. The general areas of work include the following:
Project Feasibility & Strategic Plan
a) Project Visioning
A client often has competing goals and objectives that we are able to coalesce into one core vision. Sometimes the solution will include supplemental elements that can be adjusted to adapt to the competing demands.
b) Program and Scope
We assist the client in defining the precise requirements. For a speculative investment this will include site and building plans as well as outline specifications. For building user client, it will typically include an inventory of all space requirements including area, adjacency requirements, and finishes. We also address how entitlement, budget, schedule, construction and financing interrelate with certain programmatic decisions
c) Site Evaluation and Market Analysis
We assist in evaluating the strengths and weaknesses of candidate sites and their suitability for a client’s needs. Existing and prospective entitlement, easements, existing surrounding land uses, long-term surrounding land use trends, and likely cost and schedule impacts are all evaluated. A relevant market study from the brokerage team is also incorporated as a sound basis for decisions. This typically includes an inventory of past transactions and the characteristics of inventory proven to be in demand, as well as touring each of the current competitors.
d) Conceptual Budget
Barnard Ventures develops a unique budget for each individual project, and at this conceptual stage the budget is rough and used as a guide to determine the scale of cost sufficient to validate the alternative plans. The subsequent phase will provide for the development of the exhaustive budget covering all details of the project and will be integrated with appropriate accounting reports to track vendors.
e) Conceptual Schedule
At the conceptual stage, we develop an overall project schedule used for setting realistic expectations and measuring the relative duration of alternative plans. In addition, the schedule begins to define the roles and responsibilities of the owner, Barnard Ventures, government agencies, tenants, design professionals, and contractors.
f) Consultant Team
Barnard Ventures advises on the most suitable project team members for the client, including not only the marketing agent, architect, and general contractor, but also legal counsel, civil engineer, soils engineer, landscape architect and others. Each member of the project team is selected with the following considerations in mind:
i) Consultant’s appreciation of and adherence to the client’s values.
ii) Scale of the project relative the consultant’s existing business.
iii) Availability of strong personnel to be assigned to the project, which is particularly critical in the instance of the core team members such as marketing, architectural, civil engineering and general contractor.
iv) Additionally, we look for management to commit to meaningful support for the personnel assigned to the project, without competing for their time.
v) Experience with similar projects.
At the outset of a project, a realistic assessment is made of the cost and duration of governmental approvals, or in some instances, opportunities to enhance asset quality or value thru the use of discretionary approvals.
i) Opportunities and constraints
ii) Likely cost and duration of alternatives
a) Opportunities and Constraints
Where the best solution for a property isn’t possible with the existing general plan or zoning, there are avenues available to modify them. Barnard Ventures has demonstrated a history of identifying the unique characteristics of a property and clearly communicating the justifications for change. We explore both the property solution and the form of entitlement process with city officials to build consensus for both the process and the result.
b) Schedule & Budget
Developing a detailed schedule and budget avoids surprises and enables a comprehensive application to speed the process. Input from both city officials and consultant team members provides all participants with clear lines of responsibility and common expectations.
Depending on the area and nature of the application, a proactive plan to engage concerned stakeholders is critical. While some projects have required community meetings and participation in addressing area wide concerns, most projects simply require neighborly communications.
d) Form of Applications
Barnard Ventures has processed innumerable applications of almost every type, as well as the technical studies that provide the basis for the necessary findings. A willingness to drill into the details is critical to timely completion and avoiding surprises at the public hearings.
a) Site Design
Barnard Ventures’ experience with large phased master planned projects brings critical expertise in the design and coordination of the project site. The inter-related requirements of governmental approvals, construction staging, legal agreements, and financing all must be fully understood by a single party and managed. This hands-on experience provides for a design that can be built, modified and operated in a cost effective manner while providing the client with a facility that presents itself properly to employees/tenants, public and investors.
b) Building Design
In addition to the customary architectural design process, Barnard Ventures promotes taking tours of existing projects that the marketing agents, architect, client or we recommend. These field trips always bring new perspectives on issues and opportunities that had not previously been considered. In addition, we often ask the architect to provide the client with a variety of images of existing projects to consider so that the client’s feedback can provide better direction on the look and feel of the exterior and interior finishes of the building. Samples of the proposed materials are assembled so that the client has the opportunity to fully understand the finished product.
c) Detailed Budget
Comprehensive development project management includes an exhaustive budgeting process to ensure that every cost is identified, even if the exact amount of the line item is still undetermined. The budget will be sufficiently comprehensive that the client’s own operating budget may duplicate certain line items, and this is identified and coordinated. Costs may then be effectively negotiated, managed, forecast, accounted and re-forecast throughout the development process.
d) Detailed Schedule
The development of a comprehensive project schedule is critical to the success of every project. It is developed from both our broad experience and current projects underway as well as exhaustive coordination between the various parties involved in the specific project. This coordination takes place at the beginning of the project, and is periodically updated throughout the life of the development.
The purchasing, implementation and completion of the construction phase of the project should reflect the careful planning and project management efforts of the earlier stages. Properly structured, the project should be competitively priced, and go together in an orderly manner with the team members free to implement changes or additions that the client requires.
In conjunction with the client, a negotiated or hard bid process is developed, a form of contract determined, and the scope is defined. The scope and the exhibits defining this are crafted to allow for adjustments to the scope upon receipt of the pricing. These adjustments might include alternate materials or scope as well as unit prices and the date upon which an election must be made.
b) Bidding and Bid Evaluation
We meet with the general contractor(s) to review the scope and intent of the project, ascertain if the contractor is able to fully commit to the project, conduct a site walk with them, and interview the proposed project manager and superintendent. A complete review of the proposed staffing, schedule, site utilization plan and pricing is studied to affirm that they are prepared to succeed.
c) Construction Administration
The construction administration process includes:
i) Participation in weekly construction meetings
ii) Assurance of quality control procedures
iii) Expedition of shop drawings/submittals
iv) Preparation of mockups
v) Initiation of schedule updates
vi) Process and review of pay applications
vii) Review of all change orders
viii)Obtainment of close-out documents
Barnard Ventures’ approach to property management starts with a clear understanding of the goals and objectives of the client. In order to maximize value, we strive to lower operating costs while maintaining a high level of quality in those areas that make a difference to tenants and ensure long-term value. Our team provides accurate and timely property accounting and reporting, but also seeks to do so in a manner that best suits the needs of the asset, not merely an industry template. We currently manage the day-to-day operations of self-storage facilities, commercial industrial properties and a residential triplex.
It is important to conduct regular property visits to insure that the overall physical condition of the building and common areas are kept to a first class standard. We manage all vendors including landscaper, sweeper, day porter/maintenance, exterminator, plumber, roof maintenance, window cleaners, electrician, HVAC contractor, etc. We also ensure that preventative maintenance contracts are put in place to keep the utilities/equipment performing at its highest potential and to avoid any unnecessary repairs.
Barnard Ventures provides superior customer service to our tenants. By giving them the support they need it allows them to focus on their business. Successful tenants ultimately mean higher rental rates, less turnover, increased cash flow and as a result increased property values.
Barnard Ventures will review, monitor and enforce all tenant lease agreements including rent escalations, lease options, early terminations, collection of gross receipts, insurance requirements, etc. and will enforce the property Rules and Regulations as well as any CC&Rs that may pertain to the property. Upon inception of a new management contract, all leases will be abstracted and reviewed for any potential oversights and any other potential cost savings and/or revenue enhancing changes.
New Leases and Renewals
Barnard Ventures will work with brokers to market vacant space through advertising and networking. We monitor lease expiration’s, negotiate and promote renewals, and conduct applicant credit screening investigations to ensure tenant strength. Our management team will approach existing tenants months before their lease expires to reduce turnover by reaching the tenant before they have a chance to look elsewhere.We prepare new lease and lease renewal amendments and oversee any potential space refurbishment or tenant Improvements.
Accounting and Financial Reporting
Barnard Ventures fully understands the critical importance of accurate and timely reporting. Our accounting services are centralized in our corporate office in Newport Beach, California. We prepare a comprehensive Financial Management Report immediately following the completion of each month’s financial activity for review for ownership. This report includes budget comparison reports, general ledger, rent roll, lease expiration report, vacancy report, delinquency aging report, etc. Whether you need a full range of automated and computerized Real Estate-oriented business and financial services or just a few, they are available. We provide accurate and timely reports and we have the ability to tailor our reporting packages to our client’s specific needs and requirements.
Barnard Ventures develops detailed annual operating expense and capital expense budgets in standardized formats to meet our client needs. The budget becomes a working document for the property manager and owner to use as a guide to operative the property and to insure achievement of the bottom line objectives. Monthly and year to date significant budget variances will be evaluated and reported on a monthly basis.
Vendor Management & Contract Administration
It is very important to negotiate vendor service contracts to ensure the most competitive pricing possible. We evaluate the quality and performance of service; identify contracts to re-bid and timing of the re-bid process. We also ensure that all vendor contracts are current and that each vendor has the required insurance coverage.
Operating Expense Reconciliation
We prepare CAM and operating reconciliations and escalations, operating expense billings and adjustments. We insure collections are met in a timely manner.
24/7 Emergency Response
Barnard Ventures understands the importance of addressing a building or a tenant emergency in a timely manner. Our team lives and works in Orange County and is available to respond to service requests and emergencies. We have an extensive list of vendors who are also set up to respond on weekends and after-hours.