Mark Goodman & Associates
Mark Goodman & Associates, Inc. (MG&A), a prominent commercial real estate development firm in Chicago, hired us to conduct preliminary market research and perform a feasibility study for a proposed real estate investment trust (REIT). Most REITs have extremely high transaction and operating costs. They are also set up so that the fund managers make money even if the fund performs poorly. MG&A came up with innovative ways to lower transaction and operating costs, and also changed the odds so that fund managers are more closely aligned with investors. MG&A first wanted to determine if their idea was feasible. If the answer was yes, the next step was to understand what obstacles they would they have to overcome to make it happen. The final step was to develop a detailed business plan.
Our primary and secondary market research indicated that MG&A’s ideas were sound and the project was feasible. Part of our work included the design and implementation of an online survey on investor behaviors and attitudes. The results were clear and supported MG&A’s ideas. Once we agreed the project was feasible, we worked closely with the MG&A management team to identify all of the major obstacles they would need to overcome. We then worked closely with MG&A to develop a comprehensive business plan. The plan detailed the strategic drivers and points of differentiation behind the fund’s philosophy and vision. Our work included detailed plans for raising capital in stages, and also covered operational issues such as property acquisitions, management, construction, and property dispositions. We also set up an executive roundtable to review the business plan and provide feedback on the funding strategy. Based on the strength of the business plan, MG&A recently secured a patent for their methodology. MG&A is now pursuing a joint venture with a large international commercial real estate firm and has begun the process of raising the first round of financing for the project.