HomeMy WebLinkAbout09 SELECTION OF A REAL ESTATE BROKER FOR MARKETING AND SOLICITATION SERVICES FOR 150 E. FIRST STREETDocusign Envelope ID: 3EFE5DEg-C71E-480B-80B0-BFC4B657B312
MEETING DATE
TO
FROM
MAY 20, 2025
ALDO E. SCHINDLER, CITY MANAGER
Agenda Item 9
Initial
Reviewed: a`L�
City Manager
Finance Director N/A
BRIAN MONCRIEF, DEPUTY CITY MANAGER — REAL PROPERTY
SUBJECT: SELECTION OF A REAL ESTATE BROKER FOR MARKETING AND
SOLICITATION SERVICES FOR CITY -OWNED REAL PROPERTY
AT 150 E. FIRST STREET
SUMMARY:
Request for selection of a real estate broker to provide marketing and solicitation services
for approximately 0.4 acres of City -owned real property at 150 E. First Street within
Development Area 2 of the Downtown Commercial Core Specific Plan.
RECOMMENDATION:
Authorize the City Manager to negotiate and execute a Listing Agreement with Professional
Real Estate Services, Inc., 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 real estate broker
is paid at close of escrow on a land sale or execution of a ground lease. The City and
Professional Real Estate Services, Inc., have negotiated the following commission:
Sale: 4.0% of gross purchase price
Lease: 4.0% of the total lease payments for Years 1-10
*Commission to be capped at first 10 years of lease payments.
CORRELATION TO THE STRATEGIC PLAN:
Execution of a Listing Agreement for real estate brokerage services contributes to the
fulfillment of the City's Strategic Plan Goal A: Economic and Neighborhood Development.
Specifically, this item implements Strategy 14 which is to develop a strategic plan for
Tustin's development which focuses on in -fill development in the Downtown Commercial
Core and Red Hill Specific Plan areas.
Docusign Envelope ID: 3EFE5DEg-C71E-480B-80B0-BFC4B657B312
City Council Agenda Report
Selection of Real Estate Broker
May 20, 2025
Page 2
BACKGROUND AND DISCUSSION:
On April 1, 2025, the City Council authorized staff to release a competitive offering for 0.4
acres of City -owned real property at 150 E. First Street (Site) within Development Area 2 of
the Downtown Commercial Core Specific Plan (DCCSP) pursuant to the procedures recently
approved by the City Council in Resolution 25-10.
Staff is recommending the use of a real estate 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 real estate 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 Professional Real Estate Services, Inc. (PRES) for the Site. PRES is a
privately held, full service commercial real estate operator based in Irvine, CA. The PRES
team will be led by Bradley Schroth, Principal and Managing Member. Since 1994, Mr.
Schroth has led PRES Companies in successfully managing over $400 million in total real
estate transactions and overseen the purchase of 1.5 million square feet of office, industrial,
retail and hospitality assets.
Following the negotiation and execution of a Listing Agreement, PRES will assist the City as
follows over the next several months before an RFP or offering is issued:
- Identify opportunities and constraints 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,
- 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.
Docusign Envelope ID: 3EFE5DEg-C71E-480B-80B0-BFC4B657B312
City Council Agenda Report
Selection of Real Estate Broker
May 20, 2025
Page 3
Following the RFP or offering release, PRES will assist the City with negotiations, reviewing
proposals and recommending a buyer or lessee for City Council consideration. Staff
anticipates the release of an offering in June/July 2025.
If approved by the City Council, the City would negotiate and execute a Listing Agreement
with PRES. The Listing Agreement with PRES is proposed as a sole -source contract due to
their well -established track record and integrated capabilities in real estate sale, lease,
acquisition, asset management and development tailored to complex properties as well as
small to large investments. PRES offers a unique combination of brokerage expertise and in-
house development insight, extensive relationships with regional property owners, tenants,
investors, as well as knowledge of the local market, which is in strategic alignment with the
City's real estate objectives for the Site.
Signed by:
Brian Moncrief
DeputyeCity Manager — Real Property
FSignby:
KennetM iguee
Real Property Manager
FSigned by:
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Ryan Swiontek
Deputy Director of Real Property