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About NMH
REPORT TO THE NORTHFIELD ADVISORS ON
MARKETING THE NORTHFIELD CAMPUS
January 14, 2006
Dennis Bidwell, Bidwell Advisors and Dick Perkins, LandVest
Conclusions from the initial feasibility study
Analysis by Bidwell Advisors and LandVest in the summer and fall of 2004 led to these major conclusions:
• The greatest economic value for the campus can likely be realized by sale (or possibly lease or joint venture) to a single residential educational user, or possibly to a group of related educational users.
• Over time it might make sense to explore other uses supported by philanthropic dollars as well, e.g. an institute of international relations, or a cluster of regional arts organizations.
• There could be limited market support for some other uses (office, retirement housing, tourism-hospitality, retail) but it would take a carefully-conceived mix of such uses, possibly including a school use, to support the costs of owning and operating the entire campus.
• Marketing should initially focus on the core campus, with other properties marketed later to the extent they are not desired by core campus users.
• Patience will likely be required in the marketing process, as undeniable challenges exist: the sheer size of the property; perceptions of geographic remoteness; economic realities of reuse of old buildings; and concerns about the condition of some of the School’s infrastructure. Over the last decade, Northeast campuses that sold had been on the market from two to four years.
Initial marketing campaign
These conclusions, and the related Reuse Criteria approved by the Board of Trustees in November, 2004, shaped a marketing program launched in the spring of 2005, with these main components:
• Personal outreach by LandVest and Bidwell Advisors, as well as by administration, trustees and friends of the School, to identify possible users and networks that might lead to possible users.
• In April, 2005 active marketing was launched when a 6-page color brochure was mailed to about 1250 parties, targeted through a research effort aimed at identifying networks of likely prospects. This outreach focused on New England and New York colleges and secondary schools. Also included: private, for-profit educational entities; a wide range of national educational associations; selected alums and School parents active in real estate, media/communications, education, philanthropy; variety of religious schools and institutions; wide range of real estate brokers, consultants, investment bankers, institutional and foundation officials.
• Continuing interaction with public officials and economic development groups regarding the availability of the campus.
• Development of an updated Property Profile to be shared with interested parties
• Recommendation that the School implement a carefully coordinated communications plan designed to raise general awareness of NMH, the region, and the availability of the campus.
Initial market response
In the months that followed, numerous inquiries were received and pursued. Many were from brokers, consultants and developers with general interest in an involvement in the process. Some 74 serious inquiries/prospects have been tracked, with this regional pattern:
• Over 30% of the inquiries have been from outside the Northeast (including inquiries from other countries) suggesting that the marketing effort, though emphasizing New England and New York, had national and international reach.
• All of the inquiries that have shown prospects of viability, however, have been from the New England states and New York.
The serious inquiries, involving one or more visits to the campus and extensive followup, have broken into three groups:
• Single educational user prospects. One prospect seemed especially well-suited to moving to the Northfield campus, and the possibility was intensively explored by the institution’s administration. In the end, their board of trustees decided to stay on their existing campus. Other single educational user prospects continue to be pursued. There is probably more than one “needle in the haystack.”
• Start-up schools. The greatest level of activity at present is in the area of proposed start-up educational ventures. Though these prospects necessarily involve a different type of risk analysis, several are definitely worthy of continued pursuit.
• Prospects that could fit in a multi-user educational scenario. Many inquiries have come from colleges and schools not in position to take on a 600,000 square foot campus, but which might be interested in being part of an “educational park” hosting several entities.
Some of these prospects have requested and received specific guidance on the content and form of purchase proposals that would be entertained by the School.
Second brochure mailing
A second mailing, using the same brochure, was sent to approximately 1300 parties in December, 2005. Research produced a mailing targeted to deans of graduate schools of education and education department heads at schools and universities across the country. It also went to commissioners/secretaries of education in every state, to presidents/chancellors of selected universities and colleges throughout the country, to independent school networks nationally, and to various other parties suggested by staff and trustees.
At this writing, it is too early to gauge the response of this mailing, as it arrived in the middle of the holiday rush and holiday vacations.
Other conclusions
The marketing experience so far has also yielded other conclusions:
• The campus continues to “show” well, despite most buildings being vacated. The well-kept condition of the grounds and buildings continues to be impressive to all who visit.
• Conversations with hundreds of brokers, real estate professionals and prospective users has confirmed our initial conclusion that there simply is not adequate market support for large-scale use of the campus for corporate R&D or training or office functions, for housing, or for retail or tourism-related activities. The market might very well support small components of these uses if part of a carefully-conceived multi-use plan with a school as a possible part of the mix.
• A focus on the core campus – as opposed to marketing outlying parcels – has proven to be sound, inasmuch as some prospects are considering the core campus only if it can be combined with outlying properties (faculty residences, water company, etc.) as part of a “package.”
• Some prospects that had been idling have re-engaged since the Trustees authorized discussion of a specific asking price with qualified prospects.
Next steps
We are recommending these next steps in marketing the Northfield campus:
• Aggressive followup with all interested parties, encouraging the development of specific proposals to buy or lease the property.
• NMH agreement on a plan to target a wide range of religious institutions, including those drawn to the Moody legacy.
• Going forward, emphasis should be placed on development of multi-user scenarios as well as start-up proposals. A more pro-active approach would include the careful facilitating of meetings on the campus of different interested parties who would appear to be programmatically compatible, drawing on the work of the architects at ARC who developed several multi-user conceptual schemes.
• A more aggressive communications and public relations must be undertaken in parallel with marketing efforts. Paid advertising should be considered.
• Additional information will need to be compiled for prospects regarding: infrastructure condition, update on condition of Sage Chapel, a range of possible approvals and permitting matters, details on the School’s “mothballing” program, and assessments of environmental conditions on the campus.
All involved need to continue to recognize that the challenges facing this property reuse effort are very substantial, and patience will continue to be required if we are to find a new user or users compatible with the needs and desires of the School and the Town of Northfield. The marketing effort has been underway for only nine months at this point.
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