HomeMy WebLinkAbout13 SELECTION OF A COMMERCIAL REAL ESTATE BROKER FOR MARKETING AND SOLICITATION SERVICES FOR PLANNINGDocusign Envelope ID: 0430F470-9D70-4B51-AB19-8337C321903E
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AGENDA REPORT
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MEETING DATE
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FROM
MARCH 18, 2025
ALDO E. SCHINDLER, CITY MANAGER
Agenda Item 13
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Reviewed: a`V�
City Manager
Finance Director
BRIAN MONCRIEF, DEPUTY CITY MANAGER — REAL PROPERTY
SUBJECT: SELECTION OF A COMMERCIAL REAL ESTATE BROKER FOR
MARKETING AND SOLICITATION SERVICES FOR PLANNING
AREA 10 OF THE PACIFIC CENTER EAST SPECIFIC PLAN
SUMMARY:
Request for selection of a commercial real estate broker to provide marketing and
solicitation services for Planning Area 10 of the Pacific Center East Specific Plan comprised
of approximately 11 acres of City -owned real property.
RECOMMENDATION:
Authorize the City Manager to negotiate and execute a Listing Agreement with Jones Lang
LaSalle IP, Inc. (JLL), subject to non -substantive additions or modifications as may be
deemed necessary and/or recommended by the City Attorney.
FISCAL IMPACT:
There will be no impact to the General Fund given that commission to a commercial real
estate broker is paid by the buyer or lessee at close of escrow on a land sale or execution
of a ground lease. However, the following tiered commission structure has been negotiated
with the recommended broker, JLL, which is consistent with industry standards.
Land Sale: 3.0% of gross purchase price up to the first $10,000,000.00
2.0% of gross purchase price between $10,000,000.00 to $20,000,000.00
1.0% of gross purchase price exceeding $20,000,000.00
Ground Lease: 4.0% of the total lease payments for Years 1-5
2.0% of the total lease payments for Years 6-10
*Commission to be capped at first 10 years of ground lease payments.
CORRELATION TO THE STRATEGIC PLAN:
Execution of a Listing Agreement for commercial real estate brokerage services contributes
to the fulfillment of the City's Strategic Plan Goal A: Economic and Neighborhood
Docusign Envelope ID: 0430F470-9D70-4B51-AB19-8337C321903E
City Council Agenda Report
Selection of Commercial Real Estate Broker
March 18, 2025
Page 2
Development. Specifically, this item implements Strategy 4, which is to develop a
disposition and entitlement strategy for City -owned property in Pacific Center East.
BACKGROUND AND DISCUSSION:
On March 4, 2025, the City Council authorized staff to release a competitive offering for
Planning Area 10 of the Pacific Center East (PCE) Specific Plan comprised of 11 acres of
City -owned real property (Site) pursuant to the procedures recently approved by the City
Council in Resolution 25-10.
Staff is in the process of compiling information for potential developers for the Site and is
recommending the use of a commercial brokerage firm to assist in finalizing the marketing
and solicitation for a future Request for Proposals (RFP) or offering for the Site. Staff has
found the use of commercial brokerage firms to be useful in market research, drafting of
offering documents, targeting and interviewing potential developers, managing the offering
process, and assisting in recommending developers and/or prospective buyers to the City
Council for consideration.
Staff is recommending that the City Council authorize the City Manager to enter into a Listing
Agreement with JLL for the Site. JLL is a Fortune 500 company with annual revenue of $19.4
billion, operations in over 80 countries and a global workforce of more than 102,000. JLL has
a local office in Irvine and is a leading professional services firm that specializes in real estate
and investment management. The JLL team will be led by Rob McRitchie, Senior Director,
and Jeff Adkison, Managing Director. JLL has extensive experience in assisting with the
brokering and development of a variety of asset classes including commercial, retail,
residential, hotel, office and industrial as may be desired by the City for the proposed RFP
or offering.
Following the negotiation and execution of a Listing Agreement, JLL will assist the City as
follows over the next several months before an RFP or offering is issued-
- Identify strengths and weaknesses of the property;
- Research and recommendations on buyers, developers and/or tenants to pursue;
- Develop selection criteria for the developer selection process;
- Prepare sample underwriting, graphics, market research with comparable analysis on
the subject property/City/region market for inclusion in the RFP or offering and prepare
a Broker's Opinion of Value;
- Evaluate project feasibility and suggest potential solutions to achieve desired
transaction and development goals of the City;
- Provide appropriate software to enable initial developer document disclosure,
execution, developer submittals, and developer questions; and,
Docusign Envelope ID: 0430F470-9D70-4B51-AB19-8337C321903E
City Council Agenda Report
Selection of Commercial Real Estate Broker
March 18, 2025
Page 3
- Prepare, distribute, and administer the RFP or offering for the subject property in
accordance with the City's vision and City standard terms and conditions.
Following the RFP release, JLL will assist the City by reviewing proposals and assisting with
recommending a buyer or lessee for City Council consideration. Staff estimates that the RFP
for the Site will be released in the second quarter of 2025, with a developer recommendation
to the City Council likely to occur in the fourth quarter of 2025.
If approved by the City Council, the City would negotiate and execute a Listing Agreement
with JLL. The Listing Agreement with JLL is proposed as a sole -source contract due to their
specialized expertise and proven success in sale and ground lease real estate transactions
and knowledge of the local market. Further, JLL's established advisory and brokerage
expertise across multiple land uses, including commercial, residential, hospitality, office, and
industrial as well as transactional market data and extensive relationships enable them to
deliver immediate value and speed to market. JLL's unique qualifications ensure efficiency,
continuity, and the highest standard of service in advancing the City's real estate objectives.
Signed by:
Brian oncnef
Deputy City Manager — Real Property
Signed bye:
/�PAPAVILPiS IL �2ALLCPi
Kenne Iguee
Real Property Manager
Signed by:
Ryanw o tek
Deputy Director of Real Property