Services Offered by NSI Consulting & Development
Excess Property Services
NSI can assist corporations in identifying and disposing of excess properties. Whether a single major property worth tens of millions of dollars or hundreds of widely scattered "cats and dogs" each worth very little, but collectively worth significant amounts.
The real estate professionals of NSI are particularly adept in helping electric
utilities identify and dispose of excess properties. We define excess properties
as those that are non-income producing or not a core asset. Carrying costs for excess properties can cost a
utility anywhere from 10% to 13% of the fair market value of the property each year. Excess properties are a cash drain on the utility and have a negative
effect to the balance sheet.
Our model for success has been tested and proven with a number of electric
utility companies. A quick summary of our approach follows:
Establish an accurate and definitive list of all properties owned
by the client. Establish methodology and criteria for determining when a real property
is not necessary to meet the core needs of the client. Apply methodology
and criteria to determine which properties are not required for the core
business and therefore excess. Create spreadsheet listing all client properties
and their classification as required or excess. Review and confirm property classifications with client. -
Secure the internal approvals for final release (for example, environmental,
mortgage trust indenture, etc.)
Determine what needs to be
done to make the property sellable. Establish a fair market value for
all properties classified as excess. Generate a marketing and disposal
plan for the excess properties. Execute plan to sell all excess properties.
(Typically, within a two-year window from the date property is approved and
fully
released by client
as excess.)
To achieve success, utility real estate department
must obtain a final release on all properties agreed upon as excess. We have
found that internal politics can derail the classification of a property
as excess if one of the operating units refuses to give a final release due
to the “someday we may need this property” syndrome.
For more information, please contact Mike Schira
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