CALL FOR BEST & FINAL OFFERS
558 Grand Concourse, Bronx, NY 10451-9997
To: Offerors
From: John Reinertsen and Michael Lee
Subject: Sale of 558 Grand Concourse, Bronx, NY 10451-9997
Date: February 26, 2014
CALL FOR BEST & FINAL OFFERS
The United States Postal Service (“Postal Service” or “USPS”) and CBRE invite you to participate in this BEST & FINAL round of bidding for the sale of the Bronx General Post Office located at 558 Grand Concourse, Bronx, NY 10451-9997. Proposals for the initial Call for Offers ended January 15, 2014
All BEST & FINAL OFFERS will be due by 5:00 PM EST on Wednesday, March 12, 2014. All offerors are requested to respond to BOTH of the following two transaction structures: Option I - an outright purchase of the property, which is the structure presented in the initial Call-for-Offers; and, Option II - a purchase that includes a long-term USPS lease.
Both options are explained in more detail below.
The Process and Evaluation of Offers
BEST & FINAL OFFFERS should be emailed to BOTH John Reinertsen at [email protected] and Michael Lee at [email protected] no later than 5:00 PM EST on Wednesday, March 12, 2014.
All offers received will be evaluated by the Postal Service, including but not limited to, the following list of criteria: a) Proposed Purchase Price for Options I and II b) Earnest Money Deposit c) Requested Due Diligence Period d) Closing Time Frame e) Revisions to the boilerplate PSA and Lease, and any Exhibits or Riders thereto f) Offeror’s history of development in the area g) Offeror’s plans for the property and how they relate to current zoning and required due diligence time frames, as well as compatibility with a USPS retail operation, which may remain in the building as outlined below in Option II.
A template Purchase and Sale Agreement is attached as Exhibit C for use in responding to this CALL FOR BEST & FINAL OFFERS. The highlighted portions should be completed by the Offeror. Please note – Offeror may make additions/changes to the document by way of redline, however the content of any revisions may factor into the evaluation and final selection of the successful Offeror. Upon receipt of the BEST & FINAL OFFER, the Postal Service will consider the PSA to have been reviewed by the Offeror and any requested substantive alterations noted.
Further discussions and clarifications shall occur as necessary for the USPS evaluation process and may continue until the Postal Service identifies one Offeror whose terms and conditions offer the maximum benefits to the USPS. The Postal Service reserves the right to negotiate the final terms and conditions of an Offer prior to Acceptance of an Offer. The Postal Service reserves the right to reject all offers for the Property. OPTION I – Outright Purchase
In the event the Postal Service makes the decision to relocate its retail operation, 558 Grand Concourse will be sold outright on a fee simple basis. The Postal Service and Buyer shall execute an Agreement of Purchase and Sale (Exhibit C), and a Temporary Lease (Exhibit J), if necessary. The Protective Covenant (Exhibit E) shall be recorded with the Transfer of Title. The Mural Loan Agreement (Exhibit F) shall be executed as a separate agreement. If the Closing occurs prior to the date that the Postal Service completes its lease acquisition of, and relocation to, its new location, the Postal Service will require a temporary leaseback of the entire building for a period of up to 12 months while its replacement facility is completed. The Temporary Lease will contain, at a minimum, the following terms and conditions:
1) USPS shall pay rent of one dollar ($1.00) for the temporary lease-back period; 2) USPS shall maintain the property in its “as-is” condition at the time of Closing ( limited to normal repairs and maintenance and not the replacement of any building systems or any capital improvements); 3) USPS shall be responsible for all utility costs and operating expenses, including real estate taxes; 4) USPS and Buyer shall execute a separate USPS Lease Agreement for the temporary leaseback period; 5) The Buyer/Landlord shall have access to the Property (with the exception of secured Postal Service areas) provided such access does not interfere with Postal Service operations; 6) The Buyer/Landlord shall have access to secured Postal Service areas with advance notice to and approval by the Postal Service manager on site.
OPTION II – Purchase with a Long Term USPS Leaseback
In the event the Postal Service makes the decision to retain its retail operation at 558 Grand Concourse, then the Postal Service shall sell 558 Grand Concourse subject to a leasehold interest for a retail Post Office. Postal Service and Buyer shall execute an Agreement of Purchase and Sale (Exhibit C), a Temporary Lease (Exhibit J), if necessary; and a Long Term Lease (Exhibit D). The Protective Covenant (Exhibit E) shall be recorded with the Transfer of Title. The Mural Loan Agreement (Exhibit F) shall be executed as a separate agreement.
The Postal Service has developed plans for a reconfigured Postal Service retail operation to remain in the building (please see Exhibits A – First Floor Plan and B – Basement Plan). The delineated areas represent approximately 8,597 SF on the first floor and 2,947 SF in the basement, for a total rentable area of 11,544 SF (to be verified by USPS architect prior to Lease execution). The Postal Service will install an elevator as shown on the plans to provide for its mail delivery requirements, and shall have exclusive use of the re-designed loading area located in the Basement.
Temporary Lease
Similar to Option I, the Postal Service may require a Temporary Lease period of approximately six (6) to twelve (12) months if the Closing occurs prior to completion of planned Postal Service tenant improvements. During this period the Postal Service would, at its own expense, downsize and reconfigure its current retail operation as depicted on Exhibits A and B. The terms and conditions for the Temporary Lease shall be the same as set forth in Option I above.
Long Term USPS Lease
Upon completion of construction, the Postal Service would relocate into its new space and deliver possession of the balance of the property to Buyer, at which point the Temporary Lease would terminate and the new Long Term Lease would commence. The Postal Service Long Term Lease will require terms and conditions as follows:
1. 10-year fixed lease term with two (2) five (5) year renewal options at market rents, which will be determined in accordance with the USPS Renewal Option Rider (Market Value), attached as part of Exhibit D – Sample Long Term USPS Lease Agreement); 2. USPS will pay $30.00/SF (blended rate for the first floor and the basement level) on a NNN basis for the years 1-5, and $34.50/SF NNN for years 6-10 ; 3. USPS will require up to six (6) free reserved parking spaces in the basement; 4. USPS shall be responsible for utilities and services, maintenance, and reimbursement of real estate taxes in accordance with the terms of Riders attached to the Lease.
Brokerage
Offerors will be responsible for any fees/commissions due to their representatives/brokers. By submitting a proposal, each Offeror shall indemnify and hold the Postal Service and CBRE, Inc. harmless from all claims, liabilities, and costs arising from any claim for brokerage commissions, finder’s fees, or other remuneration relating to the transaction contemplated herein.
Attachments
Exhibit A – USPS First Floor Plan Exhibit B – USPS Basement Plan Exhibit C – USPS Agreement of Purchase and Sale (to be completed by Offeror) Exhibit D – Sample USPS Long Term Lease Agreement Exhibit E – Protective Covenants - FINAL Exhibit F – Mural Loan Agreement Exhibit G – Building Floor Plans (existing condition) Exhibit H – Title Commitment (Effective Date 9/15/2012) Exhibit I – Environmental Review (Dated 12/14/2012) Exhibit J – Sample USPS Temporary Lease Agreement Exhibit K – Mural Locations
For questions and to schedule additional tours of the property please contact:
John Reinertsen Michael Lee Senior Vice President CBRE, Inc. CBRE, Inc. 47-09 Center Boulevard 47-09 Center Boulevard Long Island City, NY 11109 Long Island City, NY 11109 Phone: (718) 289-7703 Phone: (718) 289-7720 Email: [email protected] Email: [email protected]
Previously Supplied Building Information:
558 Grand Concourse was constructed in 1935 and has been landmarked on the National Register of Historic Places and has been designated a New York City landmark by the New York City Landmarks Preservation Commission (NYC LPC). The NYC LPC is also considering the lobby for designation as a New York City Interior Landmark. In 1938 the U.S. Treasury Department commissioned artists Ben Shahn and Bernarda Bryson to paint 13 large egg tempura murals entitled Resources of America.
This 170,560 GSF special purpose facility was originally designed to house both a retail/services operation as well as a carrier/distribution operation. The basement level contains approximately 54,879 GSF and is designed primarily for parking. The 1st floor contains approximately 41,302 GSF and houses the historic lobby, main customer area, a mail sorting area, and various offices. The 40,757 GSF 2nd floor was used primarily for mail sorting. The 33,622 GSF 3rd floor houses primarily administrative offices and a cafeteria/lunch room.
The building is served by 4 traction elevators (3 freight, 1 passenger), 8 dock-high loading doors, 23 interior loading docks and 2 drive-in doors which also provide ingress and egress for the basement parking area.