CBRE has provided the Consolidated Rail Corporation (Conrail) real estate valuations services in several counties in New Jersey to supplement Conrail’s internal real estate office and their selected legal counsel. The scope of services has included:
- Determining just compensation for utility easements; both parties involved in litigation
Background on opportunity:
Conrail anticipated the need for specialist real estate services and forecast the following challenges and opportunities:
- The economic revitalization of the freight rail industry has increased transactional volume
- Renewed interest in passenger rail services
- Legacy assets are being replaced or upgraded and leases are expiring
- New construction of infrastructure threatens to impact assets located in a very space constrained market
In order to investigate possible solutions, Conrail has engaged CBRE to support their real estate and legal departments on an ad hoc basis.
Reason for engaging CBRE:
- Supplement Conrail staff in the face of an increasing workload
- The need for customized and specialized valuations on complicated and unique property types
- Gain access to international transactional data
- Leverage private sector market knowledge, relationships, and best practices in lease renewal transactions and valuation metrics
The objectives were tied to reducing the current staff’s over-workload as well as testify as an expert witness in any related legal dispute.
CBRE was able to adhere to strict and selective criteria that few competitors could match. In addition to CBRE’s high level of qualification and compliance, CBRE offered a pricing model that suited Conrail.
- Savings Results in Year 1: CBRE successfully presented business rationale that enabled the client to realize a third party lease rate increase in excess of +1400% the previous agreement.
- Accurate & Timely Valuations: CBRE produced reports that both parties considered the best reflection of value; these were conveyed in a timely manner.
- Customer Satisfaction: Overall customer satisfaction has been high. Conrail views CBRE services as successful and is continuing to work on a range of assignments.