Strategic Repositioning of Government Assets
PARTNER: JEFFREY STEINBERG
In 2009 Jeffrey Steinberg was brought in as Managing Director of Real Estate for the City and County of Denver. Prior to 2009 this position did not exist at the city. The city had significant new service delivery obligations that required acquisition or development of new building facilities. The population of the city had doubled over a 10-year period causing this need, but financially the city was still coming out of a severe recession and had a short-fall of money available to fulfill these requirements.
Steinberg had a vision where he would run the city’s existing portfolio, consisting of some 270 buildings, more as a REIT, rather than the traditional way city’s treat their real estate holdings. His concept was to leverage a portion of non-essential buildings to raise funds and utilize those dollars to acquire land and/or buildings that were required to service the city’s new service requirements.
Conscientious not to create too much debt, other options to raise money were explored. The city owned a host of industrial and fleet facilities in locations that had evolved to a higher and better use of those properties. Appraisals were done on select properties determined underutilized in particular markets that had evolved. The result was land values had exponentially increased allowing them to be sold, find new replacement properties for their service delivery and leaving excess funds available to address the balance of the city’s capital shortfall.
