Company offers developers projects suitable for re-purposing and troubled timeshare resorts and their HOAs an exit strategy. NRC Realty & Capital Advisors, a Chicago-based structured real estate specialist with an extensive track record and national scope, is entering the vacation ownership industry with two purposes. Together with jv partner Gildersleeve Partners, NRC will identify select residential and commercial real estate properties such as condominiums, apartments, and hotels that may be suitable to time-sharing.
After a thorough underwriting of each asset, the properties will be offered to timeshare developers. In addition, NRC will be selling existing resort properties via its national sealed bidding process. “There are a significant number of timeshare resorts in the United States that came to market 25-30 years ago and many are reaching the end of their initially anticipated physical life,” offered Gildersleeve Partners founder and principle Larry Gildersleeve. “Where appropriate, NRC will assist management companies and the HOA’s they represent in working through title issues to enable a sale of the entire property free of all timeshare interests and a distribution of the net proceeds to the individual timeshare owners. NRC is unaware of any other entity offering such a service, especially one with NRC’s expertise and 25-year track record of success in marketing other real estate properties in this manner.”
NRC and the sealed bid process
“Since the company’s inception in 1989, NRC Realty & Capital Advisors, LLC has become the national leader in the structured sale of commercial & residential real estate, and has assisted its clients in realizing their financial goals in the sale of over 10,000 properties throughout North America,” NRC’s website www.nrc.com states. “In early 2004, NRC expanded its range of multi-asset type divestiture services to address the diverse needs of today’s retail real estate sectors….” As a result of this expanded platform, NRC is able to provide “cradle to grave” real estate and financial advisory services to target industries in single source, one-stop shopping. “NRC’s vast expertise,proprietary programs and buyer resources allow us to deliver the highest price in the shortest amount of time for our clients selling commercial real estate.” “We are a 25 year-old firm,” explained NRC Realty & Capital Advisors vp David Levy. “We are known for selling commercial real estate through sealed bid sales nationwide. Our clients include Fortune 500 companies, lenders, developers, and more. In our history, we have sold close to one of everything.” Bankrupt properties are sold through an auction process. “Sealed bidding is our specialty but sometimes we do a structured sale, too, where we modify what we do to fit the circumstances and have more of a custom approach,” Levy offered. Sealed bidding is a type of competitive bidding process in they feel the potential of the property is, and assigning a value to it.”
Levy emphasized that NRC’s scope, infrastructure, and experience differentiate it from the crowd. “We are a national company built around all the things that you need to run a successful sealed bid sale. We have an in-house marketing group. When you hire a firm like ours, you want as many people as possible know about this sales opportunity. We develop a custom plan for every property we are selling. We do print and online advertising. We conduct email marketing. We make effective use of public relations to get the news out about our auctions. We’ve even used signage. We use all the tools at our disposable. We reach out to other real estate brokers who have clients that might be interested in one of the properties we are selling. We have a very strong technology platform. We are able to keep a record of all of the relevant data about a property. NRC’s scope, infrastructure, and experience differentiate it from the crowd. which all bidders simultaneously submit sealed bids, so that no bidder knows how much the other participants have bid. The highest bidder is declared the winner of the bidding process. Levy said that NRC founder and executive managing director Evan Gladstone pioneered the process. “What Evan likes about the sealed bidding process is that it forces people to come with their best offer. It is particularly useful in situations like troubled timeshare resorts because it really gets down to each individual bidder sizing up what Our database is comprehensive. As we start marketing, we capture the list of all potentially interested parties who come to NRC.com, where we have a dedicated sales page. We are able to generate precise reports about the level of interest in a given property. Our technology platform helps ensure a very orderly sales process. As people start to download information and register for our sales, we have a group of professionals who work with the bidders. We also have a closing department. So we are well equipped to handle the entire process.” Gildersleeve underscored NRC’s national reach. “NRC brings national scope in terms of the ability to deliver. We’ve been looking at adaptive reuse opportunities for timeshare developers from San Diego to New York City. The old real state adage ‘All real estate is local’ typically applies but not to what NRC does. NRC has a truly national reach.”
The same is true for legacy timeshare resorts looking to sell. Prior to NRC getting involved, timeshare resorts on an inescapable path toward insolvency have sold locally, according to research Gildersleeve Partners has conducted. “If a resort in New Hampshire sells after a narrow local marketing effort the price paid will be under what NRC can deliver because of the company’s experience, resources, and national scope,” Gildersleeve asserted. NRC, Levy added, is well positioned to handle complex situations. “We have substantial experience getting involved in distress situations. We come into the situation and assemble the team (attorneys, property managers, financial advisers, etc.) necessary to understand the cross functional issues at play. We lay out all the issues confronting this property and we become the central point of command and control to work through all these issues with an eye towards what needs to be done to get the property ready to be sold to the highest bidder. This comes up a lot in bankruptcy situations. A trustee hired us to sell 21 properties of all shapes and sizes across five states. We simultaneously had to run all these marketing plans to different buyers.” “We wrap our arms around what information is available. We involve the professionals that can help obtain the information that’s not available. And we run the process to a successful completion.” NRC’s business proposal to clients is “we will get the highest possible prices on the properties we sell in the shortest amount of time with complete transparency,” Levy stated.
NRC and the timeshare business
To reiterate, NRC has two areas of focus in the timeshare business: redevelopment and divestiture. Redevelopment, or adaptive reuse, is selling properties suitable for time-sharing to developers. Divestiture is organizing and overseeing the sale of troubled timeshare resorts. Gildersleeve explained his role in adaptive reuse. “I am in direct communication with executives in the development and acquisition department at every major timeshare company still in active sales. I remain current with what their acquisition profile is. I know what the major developers are looking for, where, the type of transactions they are looking for, the size, etc. If David called me and said, ‘We know of an adaptive reuse opportunity in Waikiki,’ I could tell David within 60 seconds which timeshare developers would be interested.” Levy focused on NRC’s ability to come to the aid of financially burdened timeshare resorts. “We bring a unique approach that is going to bring some finality and closure to properties that had been left in limbo for many years. We’ll be able to come in and work with the property managers and the HOA leadership, understand what their challenges are, and develop a team of professionals around them that can help them sell or unwind the property as opposed to having an asset that lingers and continues to lose value.” He continued: “It takes a multi-disciplined team of professionals. We will assemble the necessary group of professionals that bring forth the answers to the questions at hand and develop a project plan that ultimately is going to lead to the property’s successful sale. We have a proven track record of marketing a wide array of real estate and selling it to the highest bidder. That’s appealing to troubled timeshare resorts.”
Neither Levy nor Gildersleeve imagine redevelopment and divestiture as easy tasks. “We are not under the illusion with either of our initiatives that this is going to be a simple and easy process,” Gildersleeve said. “In looking for adaptive reuse properties our focus is properties that are off-market and finding people who are actually empowered by the property owner to solicit purchase and sales opportunities. That is a very small needle to thread. With respect to the sale of timeshare legacy resorts the complications are enormous. The hurdles are significant.” “In both of these instances, finding the right solution is extremely complex. This is why I am not aware of anyone else doing either one.”
NRC has two areas of focus in the timeshare business: redevelopment and divestiture. Redevelopment, or adaptive re-use, is selling properties suitable for time-sharing to developers. Divestiture is organizing and overseeing the sale of troubled timeshare resorts.
The rest of 2014 and moving forward
NRC’s initiatives are brand new. “We just went live,” Levy observed. “So we don’t have a track record yet, but neither does anyone else because this is all completely new! We have spoken to a wide range of professionals in the vacation ownership industry. We’ve identified several opportunities. The process is just getting started.” What does NRC hope to achieve in the vacation ownership industry? “I look forward to beginning to help insolvent timeshare properties through to a successful resolution (sale) and resolve a situation that in many cases has been lingering for years,” Levy responded. “I look forward to identifying properties ideal for timeshare use and giving timeshare developers the opportunity to acquire them through our sealed bid process.” To which Gildersleeve added: “Industry-wide awareness of the initiative. The idea that there is a solution out there. Awareness among timeshare professionals who can correctly impact on these legacy resorts: exchange companies, timeshare attorneys, management companies, companies focused on financing and collecting timeshare receivables, and so on. Any professional in the timeshare industry that touches this problem will be aware of NRC and what they do.”