PREMIUM PROPERTY TRUST ACQUIRES SEVEN PROPERTIES FOR $24.7 MILLION

(As reported in the Birmingham Business Journal…)

Birmingham-based Premium Property Trust acquired seven properties in a package deal from its founder and various joint partners.

Premium Property added 63,000 square feet of combined office, retail and medical space as part of the $24.7 million deal, it said. The assets were previously jointly owned by founder Chris Reebals and various investment partners.

“While Reebals founded Premium Property and is still its chairman, the company is now made up of independent investors,” said CEO Burke Cox. The plan right now is to use these in-service properties to launch an investment fund and eventually elect as a real estate investment trust. “Longer term, the company would seek a public offering,” Cox said.

“It is an exciting time for us as we have spent over two years raising capital and negotiating this deal with several partners across the properties,” Cox said.

The properties the company acquired as part of the deal were:

• 2601 Highland Ave., Birmingham: 13,190 square feet
• 3040 Independence Drive, Birmingham: 5,000 square feet
• 2913 Linden Ave., Homewood: 7,500 square feet
• 2915 Linden Ave., Homewood: 1,300 square feet
• 324 Commons Drive, Birmingham: 15,030 square feet
• 2081 Columbiana Road, Vestavia Hills: 14,130 square feet
• 4213 Dolly Ridge Road, Vestavia Hills: 2,800 square feet

Premium Property also consolidated a refinancing deal for one of its existing properties, the 5,000-square-foot 1920 Huntington Road, as part of the transaction.

“Premium Property is also in the midst of a 60,000-square-foot mixed-use development project on Morris Avenue called the Armour Building,” Cox said.

Burke Cox is the Chief Executive Officer of Premium Property Trust, a real estate investment trust (REIT) focused on the development of premium mixed-use properties that contribute to a new urbanism planning and development approach. He leads a growing team of real estate and finance professionals that enable individual investors to acquire ownership in premium revenue generating real estate. He has a proven track record of successful leadership in rapid-growth organizations that have created over $100 million in ownership equity. 

WHY I BELIEVE IN NEW URBANISM

Over the past several years, I have read extensively regarding the concept of “New Urbanism” – an over thirty-year old approach to rethinking how we live, work, and play.  Simply put, up until the 1950s we built communities where people could easily walk to needed destinations (the store, the theatre, school) right out their front door.  Following that, a trend towards sub-urbanism emerged, where people sought lower housing prices by moving out of town into newly developing communities. 

Eventually, enough people move into these sub-urban communities that various retail stores begin to emerge (sometimes as a part of a thoughtful plan, sometimes not). These often evolve into “power centers,” which I’m sure you’ve seen: a grocery store and drug store combination, some national chains like Panera Bread, Starbucks, and Taco Bell. Surely there will be a Michaels, Wal-Mart, and Home Depot nearby. Maybe an IHOP for the weekend family pancake stuff-yourself-a-thon. 

Regardless, there will be one inescapable feature: asphalt, and lots of it.  You will find yourself driving to one destination (“Best Buy”) to pick up a new case for your iPhone, then reenter your car to drive less than a mile to fight the parking lot struggle again…this time for a brief stop into a trendy sports store (“REI”) to get some new hiking shoes.  You’ll need them, but not for scenic walks. Rather, for regular treks across pavement as you drive between unremarkably designed storefronts every weekend. 

These power centers differ little from town to town and have homogenized our lives into a shared experience that many find unsatisfying.  Enter the concept of “New Urbanism.” Like any transformational idea, New Urbanism attracts cult-like apostles, rabid naysayers, and about everything in between. 

Given the limits of space in this article, I cannot begin to address all of the positive aspects and negative criticisms of the New Urbanism movement.  Some good starting points on that are in the book, “Community by Design” by Hall & Porterfield and many resources at the Congress for New Urbanism website (www.cnu.org). But for me, creating town centers with parking on the periphery, walkable streets, and mixed-use commercial centers can accomplish many admirable goals:

  • It invites the inclusion of green spaces and gathering places in the center of town.
  • It prioritizes interesting architecture that gives a community its own sense of being.
  • It “feeds itself” as retail and commercial spaces co-mingle with residential spaces, providing a ready consumer market.
  • It promotes smaller, locally-owned businesses that become an integral part of emerging, dynamic communities.
  • It increases market values (especially compared to traditional development) and maintains valuations over time.

Recently, I observed the purchase of an older commercial complex with the announcement, “Dollar General and Sally Beauty to Anchor New Commercial Development.” I am not trying to belittle either of those businesses, but the mental picture of what this development would look like was crystal clear long before opening the article. I think we can do better with just a little extra effort and that is core to my belief in New Urbanism.  It is also the mission of our company, Premium Property Trust, as we find ways to use good design and New Urbanism principles to positively affect the lives of communities.

Burke Cox is the Chief Executive Officer of Premium Property Trust, a real estate investment trust (REIT) focused on the development of premium mixed-use properties that contribute to a new urbanism planning and development approach. He leads a growing team of real estate and finance professionals that enable individual investors to acquire ownership in premium revenue generating real estate. He has a proven track record of successful leadership in rapid-growth organizations that have created over $100 million in ownership equity. 

INVEST IN THE BEST – 5 REASONS WHY “GOOD DESIGN IS GOOD BUSINESS”

While not unique to architecture (and often credited to IBM’s Thomas Watson), the phrase “Good Design is Good Business” is relevant enough to our market that the American Institute of Architects adopted it as their trademark slogan. McKinsey & Company identified the business value of design in 2018 and released their “McKinsey Design Index (MDI)” to describe the impact of financial performance on firms with excellence in design.  Companies with top-quartile MDI scores outperformed their industry benchmarks by as much as two to one. 

The McKinsey study focused on over 300 companies across multiple countries and industries. But what about our business – commercial real estate – reflects the importance and impact of design on long term business value? 

Lower Maintenance Costs. With good architectural design, we emphasize the use of sustainable, lasting materials. Over time, these materials require significantly less upkeep than their cheaper, commercial-grade counterparts. Also, our strategy for applying good design to “premium” properties means that our target audience is a tenant community more likely to take care of the properties they select. 

More Reliable TenantsSpeaking of tenants, good design in the premium market attracts tenants that have deeper financial resources than their peers. While not 100% foolproof, our history has shown that these tenants can survive financial downturns more effectively than their less capitalized peers. UBS reports that since the last recession, net worth is down for all but the top 10% of earners, and in the past decade the number of billionaires in the United States has more than doubled. These tenants can afford to continue making lease payments long after their more leveraged competitors cannot. 

Market BuzzGood design actually helps find those reliable tenants in the first place. When a premium property comes to market, communities and local media take notice and assist in informing the public. Media groups report on the positive news that a new development is emerging, reiterate the innovative design, and applaud the impact on the community. Good design engenders positive market buzz and its integration with growing communities and environment sustainability. This market impact improves the ability to reach new tenants who seek premium spaces. 

Better Long-Term Property ValueAny real estate proforma must consider an ongoing cash flow statement. But real estate also provides for an ongoing “real” asset that may appreciate over time. Of course, real estate at the higher (premium) end of the market is more likely to increase in value over a long period. This increase in value produces additional return for investors, as that property either sees a favorable refinancing, increased rent rates, or a high sale price. In any case, a premium property is much more likely to outperform its status quo peers over the course of its lifetime. 

Impact to CommunityAn overlooked aspect of real estate is its potential impact on community. Famed Italian architect Renzo Piano summarized this impact by stating, “You can put down a bad book; you can avoid listening to bad music; but you cannot miss the ugly tower block opposite your house.” With good design, we can have the opposite – positive – effect. Our developments can improve the walkability of neighborhoods, add green space, and integrate with the surrounding landscapes to create a positive, visceral connection with the people nearby. Premium properties attract valuable businesses and add beauty as well as prosperity to surrounding communities. 

We believe in Good Design. We believe it provides a powerful way to improve the environments where we work, live, and play. We believe it responsibly integrates with the natural environment and builds a lasting legacy for future generations. And we believe it provides a good foundation for thriving real estate investments. It’s Good Business, through and through. 

Burke Cox is the Chief Executive Officer of Premium Property Trust, a real estate investment trust (REIT) focused on the development of premium mixed-use properties that contribute to a new urbanism planning and development approach. He leads a growing team of real estate and finance professionals that enable individual investors to acquire ownership in premium revenue generating real estate. He has a proven track record of successful leadership in rapid-growth organizations that have created over $100 million in ownership equity. 

HOMEWOOD MEDICAL PROPERTY SELLS FOR $1.3M

Our fund just acquired a new property located adjacent to another property we are bringing into the REIT. We are hopeful to help develop this area into a walkable mixed-use center; working alongside some residential developments planned nearby. Thanks to the hard work of our Premium Property Trust team to get this done…Michael Hang in particular!

https://www.bizjournals.com/birmingham/news/2020/02/12/homewood-medical-property-sells-for-1-3m.html