The Northwood Group

Building Partner Investors

Utah Real Estate


Just Sold – Multi-Family Land

April 17, 2018

The Northwood Group is pleased  to announce the sale of the Layton Pointe East Land consisting of 4 acres of land in Layton, Utah.

Destination Homes purchased this property for the development of high end town home project. More information on the sale is available on request- 801-593-5500 or brandon@northwoodgrp.com.

 

 

 

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North Salt Lake Office Building – Just Sold

April 17, 2018

We are pleased to announce the sale of the 460 East 1000 North Salt Lake Commerical Office Building.  The Northwood Group represented the buyer in the acquisition of this 6,250 square foot, 3 tenant, office building.

Please contact for additional information relating to this sale or other commercial office properties in Utah.

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Just Sold – Clearfield Mobile Home Park

April 11, 2018

We are proud to announce the sale of the Clearfield Mobile Home Park  located at 442 South State Street, Utah, consisting of approximately 15.30 acres. This property sits in the actively redeveloping area of downtown Clearfield.  It is also adjacent to The Freeport Center, one of the largest employment centers in the State of Utah.

Please reach out to 801-593-5500 or Brandon@northwoodgrp.com for additional information regarding the sale.

 

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Worth Magazine – Destinations – Salt Lake City

October 17, 2017

This week I was reading through my most recent issue of Worth Magazine.  I enjoy their take on alternative investments.  As those of you who know me will often hear me say that every commercial real estate investment needs to be assessed in terms of the next best alternative for those investment dollars.

In this issue they highlighted 15 of the Most Dynamic Cities in America and Salt Lake City made the list.  A few of the highlights that caught their eye were:

  • Fastest growing population in the nation
  • Real GDP growth at 3.4% compared to a 1.6% national average last year
  • Strong employment growth
  • Major convention center city
  • Health conscious, sporty, laid-back vibe
  • Close proximity to ski resorts
  • Business friendly environment
  • Low taxes
  • Affordable real estate
  • Next destination for the tech industry

Pretty impressive accolades.  The article went into a detailed interview with Gail Miller and her decision to place the Utah Jazz into a Legacy Trust making a big commitment to her hometown.

Most things I read are from the angle of the impact on commercial real estate investment and as I look at the reasons Salt Lake  City is on their list I note that these are many of the reasons that commercial real estate investors choose in any particular market.

I encourage you to read the article.   Following is the link:

FULL ARTICLE LINK – CLICK HERE

The full text of the article is below but I highly recommend going to the link above.

Salt Lake City – By Michelle Celarier

When Utah Jazz owner Gail Miller decided to place the NBA team in a legacy trust, she was making a commitment to her hometown.

For most of its 170-year history, Salt Lake City was known primarily as the home of the Mormon religion, a conservative Christian sect whose collective industriousness made the desert bloom in a valley surrounded on all sides by breathtaking mountains.

These days Salt Lake is turning into another type of paradise, luring both millennials and retirees from all over the country who appreciate its health-conscious, sporty, laid-back vibe. The metro area, with more than 1 million residents, boasts broad city streets, bright sunshine and a sparkling clean downtown whose center remains Temple Square, home to the 19th-century Salt Lake Temple, the neo-Gothic Assembly Hall and the domed Mormon Tabernacle.

Salt Lake’s proximity to ski destinations in the snowcapped Wasatach Mountains, only 20 minutes away, has made it a sports enthusiasts’ haven. And with Utah’s business-friendly environment, low taxes and affordable real estate, it also looks to be the next destination for the tech industry. Amazon just announced plans to build a $200 million distribution facility there, and tech startups have invaded the mountains from Ogden to Provo, giving the area the nickname “Silicon Slopes.”

The state’s population is the fastest growing in the nation, with its current real GDP growth rate at 3.4 percent, compared with a national average of 1.6 percent last year, according to the Utah Economic Council. Employment grew by 3.6 percent last year. Salt Lake is also fast becoming a major convention-center city, especially for the controversial multilevel marketing industry that has long had close ties to the state. When Worth visited Salt Lake in June, a convention for Young Living, an MLM company that markets essential oils and is headquartered in Lehi, Utah, was drawing 30,000 conference attendees from around the world.

Mormons no longer dominate Salt Lake, making up only around 40 percent of the population. Politically, the state is staunchly Republican with a Western independent streak, leading 21 percent of the state’s voters to cast their ballots for third party candidate Evan McMullin in the last presidential election. Salt Lake City, meanwhile, is a liberal haven that has one of the largest gay populations in the country; the city’s mayor, Democrat Jackie Biskupski, is a gay daughter of Catholics who grew up in Minnesota and decided to move there after a ski trip to the nearby mountains.

As Salt Lake lurches from its sober religious past to its modern future, it does have one unifying obsession: the Utah Jazz, the NBA basketball team that has called the city home since 1979, when it moved from New Orleans. The Jazz have been owned since 1985 by the Larry H. Miller Group of Companies, which paid Sam Battistone $8 million for a half stake in the team, and then a year later paid another $14 million for the second half. The Miller Group owns 80 other businesses including auto dealerships, movie theaters, a minor league baseball team and an auto financier. Its chairman is Gail Miller, who, with an estimated $1.2 billion worth, became the wealthiest person in the state after her husband, Larry, died in 2009. In January, Miller did something with the Jazz without precedent in modern sports: She placed the team in an irrevocable legacy trust.

Why is that important? Well, while other sports teams may be jostled from city to city, the irrevocable nature of the trust ensures that it can’t be dissolved. As a result, the Jazz can never be sold and will remain a fixture in Salt Lake City, where they are an important part of the local economy. Salt Lake City’s Vivint Smart Home Arena, which is home to the Jazz and was also placed into the trust as it undergoes extensive renovations, is expected to generate $4.4 billion in revenues for the area between 2015 and 2041, according to U.S. commercial real estate services firm CBRE. The Jazz alone are valued at $900 million, according to Forbes. And placing both in the trust shields them from creditors and inheritance taxes.

This groundbreaking move is all part of the stewardship that Miller says stems from her Mormon faith. Worth recently talked with Miller at Salt Lake City’s Zions Bank Basketball Center, where the team practices, to discuss her hometown, why the Jazz matter and how they came to be placed in a trust.

Q: You grew up here, then moved away, then came back and helped start a business empire. now there’s this—the legacy trust. Can you walk us through the history a little bit?
A: Larry and I were both born and raised here. We didn’t know each other until we were 12, and we married at 21. We moved to Colorado because he played softball, and an amateur team in Colorado recruited him. He had to get a job, so he interviewed with a Toyota store there and got the job. It was new in the U.S. This was 1970.

What did that lead to?
He built that up from one store to five. We were frugal. We’d grown up poor. We only lived on what we needed, so we put that money away and invested. We knew we’d come back to Salt Lake City. In 1979, we happened to come back for a family vacation and visited a friend who owned a Toyota store. Larry always asked him, “When are you going to sell me your store?” That day, he asked the question again, and the man said, “How about today?” That was how we bought that first Toyota store. We did not intend to build an empire. We thought we’d have one store. It would be enough to keep us secure for a long time.

When did buying the Jazz become a possiblity?
The Jazz moved to Utah the same year we moved back from Colorado. By then we had five children, and we were busy building our company. In 1985, there was danger of the Jazz leaving—the owner had a buyer from Minnesota who was ready to take them. So the general manager called Larry, and Larry said, “I’m interested in keeping the Jazz,” because he understood how important the team was to the community as a business. The GM came down and talked to Larry, and that’s what started our interest in the team.

Salt Lake City is obviously a special place for you. What do you love about it?
It’s a very big city, but it’s small enough that people know each other. The real charm of Salt Lake City is the heritage that came with the pioneers, because they came with a work ethic that they were all in this together, and they were going to build something worthy of their effort. It was a desert when they came. There was one tree in the valley and a river that came out of the mountain that they used to irrigate the fields. The people have carried on that tradition. When I look at the Jazz and the way they unify this city—it’s something that everybody can get behind and feel good about.

So the Jazz are the pride of Salt Lake City?
They are. If the Jazz ever left, Salt Lake is not going to attract another major league team. We have to be really frugal about how we run the team and how we spend the money, and be creative in getting good players and keeping them.

If the Jazz left Salt Lake, what impact would that have on the city’s economy?

It would be devastating. Because they’re an infrastructure for all of the businesses downtown. They promote business. They draw people into the city to buy things, to spend money at dinner, to go to the game, buying products and paying taxes. It’s a big impact. The other thing is that we don’t draw financially from the city, because we built our own arena.

So what made you decide to put the Jazz into a legacy trust?
This came up as a way to not have to worry about passing it on. The best solution we came up with was the legacy trust. The team is going to be there for as long as it can last. There will be enough money in there to take care of the expenses. I don’t have to worry about it. It’s still run by our company, but it’s not owned by me. It’s owned by the trust, which is irrevocable.

So one of your heirs can’t decide, “Well, wait a minute, we want to sell this.”
No. And the kids are fine with it. They believe in it. They know how important the team is to the community and how important it was to their dad and what it cost for us to do it.

The Jazz constitutes a substantial part of your net worth. Does their new status in the trust mean that the team is no longer considered part of your net worth?
Right.

So you’re not the richest person in Utah anymore?
No. Thank goodness.

You didn’t like that?
It’s an awful moniker. We don’t need all the money we have. We just want to be able to make life good for as many as we can.

What about the NBA? Did the league have concerns about the structure?
We worked with them for 18 months. We were blazing new ground. They are very careful about who can see into their world and what might be exposed by what the owners do. One thing they don’t want to have happen is for the trust to be able to transfer to a foundation.

Why not?
A foundation is vulnerable to government scrutiny. The way I want my estate to work is that when it comes to the end of my life, everything will be sold and all of the proceeds will go into our family foundation and be used in perpetuity for charity. We’re not leaving anything to our children. So in order for us to put the Jazz in a trust, we had to assure the NBA that it would not be sold or ever be given to the charity.

Because it’s in a trust, not a charitable foundation, the team is still a for-profit entity, right? So those profits are plowed back into the trust but you don’t have to pay taxes on them.
Right.

Do you feel you’ll be competitive in terms of having money for player salaries and attracting talent?
Probably more so.

What reaction have you gotten from people in Salt Lake?
They are thrilled. The governor said, “That is a great gift to the state. Thank you for doing it.”

What about the players?
I think the players, too, are quite pleased. I don’t know that it impacts them like it would the management, the staff, the coaches, because their jobs are to stay here and make it work and not have to worry about whether the team’s going to go.

Have you found any resistance from players not wanting to live in Salt Lake City?
There are some things that basketball players who like the nightlife talk about. But it’s not sterile here. It’s not just Mormons. In fact, Salt Lake is only around 40 percent Mormon. Our mayor is a gay woman. We have two councilmen who are gay men. It’s really changing and becoming more open and tolerant. The interesting thing about the Jazz players is that they may balk when they get traded to Utah because they don’t understand it, but once they get here, they’re treated as royalty. The fans are fantastic. They are so dedicated. We are a great basketball town, and we raise our own fans, because we have a Jr. Jazz program that has 60,000 kids in it. That teaches them basketball and builds the fan base to continue loving the Jazz.

Your ancestors were some of the original Mormon settlers here?
They were converted and came to Utah [from Denmark and England] in the 1800s.

How has your Mormon faith affected your decisions with regards to the Jazz?
It sounds corny, but we really feel like what we have is our stewardship, that it doesn’t really belong to us. That somebody out there is watching over us and saying, “You are taking care of it in a way I would like it to be done. You’re doing good things with it. I’m going to help you get more.” That’s the way we’ve looked at our life, that the more good we do, the more comes to us, and then, the more responsibility we have and the more good we can do. In fact, before Larry died, he said, “Wouldn’t it be great if everybody in the world would go about doing good until there was too much good in the world?” Now, think about that. If there was too much good in the world, how would that be?

  • Cityscape

    WHERE TO WORK, INVEST AND PLAY IN SALT LAKE CITY

CHURCH & STATE

With its high standard of living, Salt Lake City has drawn a bevy of tech companies in recent years. Church & State is the top incubator in the city and has an innovative, debt-free model designed to nurture startups while ensuring that founders retain control of their companies. 370 S. 300 E., info@cs1893.com, 801.901.0459, cs1893.com

BOOMSTARTUP

Another key player in the city’s startup ecosystem is this accelerator and mentorship network focused on the fields of education, government and space technology. It’s been ranked among the best accelerators in the country by the likes of MIT Sloan School of Management and TechCrunch. Impact Hub, 150 S. State St., shaun@boomstartup.com, 801.633.2004, boomstartup.com

ECONOMIC DEVELOPMENT CORPORATION OF UTAH

Utah’s EDC is the best starting point for executives or investors looking to take advantage of the state’s positive demographic trends and competitive labor market. 201 S. Main St., 800.574.8824, edcutah.org

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Just Sold – Main & Center Office Building

October 17, 2017

We are pleased to announce the sale of the Main & Center Office Building located at 25 South Main Street in Centerville, Utah.  This 15,000 square foot office building was the former home to Ascent Construction and was acquired by a local engineering firm who intends to occupy about half of the building.

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There are No Business Decisions Ever Made, There are Only Personal Decisions Made in a Business Environment

September 20, 2017

Today I read a fascinating article written by Matt Garner of Longboard Public Relations.  It is a fascinating account of how most business decisions are made at an emotional level rather than analytical.  He provides some very interesting examples from the business and sports worlds to justify his point.

I found this interesting because it resonated with me but I also think it is something that we are afraid to admit. I had an amazing gentleman meet with me today that was considering relocating his family to the SLC market and was looking for feedback as to whether or not it was a good business decision. After going through many of the quantitative business reasons for making the move it became apparent that this decision had probably already been made (because it felt like the right decision) and we were now looking to back that decision up.  It makes me wonder how a better understanding of that process might change how we approach decision making to make sure that we’re charting the right course.

The link to the article is directly below.  Please check it out.  I have also included the text below the link for your convenience.  Matt’s contact information can also be found in the link.

 

https://www.linkedin.com/pulse/business-decisions-ever-made-only-personal-matt-garner/

There Are No Business Decisions Ever Made, There Are Only Personal Decisions Made in a Business Environment

That is my theory.

I base this theory on decades of experience being part of “business decisions” made in the military and in private business.

I also base this on some physiology of the human brain.

“Business decisions” are all logic and spreadsheets and course-of-action briefings and course-of-action comparisons and finally after all the sensible pro’s and con’s are reasonably laid out and rationally organized, one person comes along and makes a decision—based entirely on emotion.

Logic and reason and language all reside in the prefrontal cortex portion of the brain and that area loves CPA’s and engineers and spreadsheets and the process-heavy deliberation of the Military Decision Making Process.

The only problem with the prefrontal cortex in relation to decisions is that we actually make decisions in the limbic portion of the brain; which has feelings and emotions, but no ability for language, let alone spreadsheets and courses of action.

Let me give you some examples.

I was at a local chamber of commerce event last year and Steve Starks, president of the Utah Jazz, talked about a decision the Jazz organization had before them. Starks said they ultimately decided not to go that direction because, “It just didn’t feel right.”

Now there may have been spreadsheets and pro’s and con’s but the ultimate decision came down to a feeling. I also believe that the logic and reason and spreadsheets are all used to JUSTIFY the decision AFTER the decision is made.

Let me give you another example from the Utah Jazz. This one is Gordon Hayward’s free-agent departure this summer.

Once the free-agency period opened on July 1st, Hayward met with the Miami Heat, the Boston Celtics and the Utah Jazz.

There is a lot of confusion about how it all went down and the decision to leave Utah but there are two interesting bits that apply to our discussion.

On July 4th Hayward announced his decision via a lengthly article in The Players Tribune. In a later interview talking about the agony of the decision he said he tried to “take some of the emotion out of the decision.”

Great and wonderful. Take the emotion out and make a “business decision.” Again, this is all prefrontal cortex logical stuff right? Take the emotion out, get the reason in, and make a business decision!

But he didn’t. He didn’t make a business decision, he made an emotional decision. Even after trying to convince other people, and perhaps even himself, that it was a business decision it came down to emotion.

What’s the evidence of that? I offer one sentence from Hayward’s own mouth.

When asked about why he left Utah for Boston he said, “There was just something different about Boston and different about being a Celtic.”

Take the emotion out and make a business decision.

Nope!

I understand that both of these examples are sports related but I’ve seen the same thing in the business world. And you will realize that you have too, once you start looking a little more closely into why decisions are made.

Sometimes, you don’t even have to look that hard because it is so obvious that even a naked mole rat, the tunneling hairless rodent that has notoriously poor vision, can see it.

The key to effective communication is that you must focus on how decisions are made. And it’s not logic and reason and it’s not a list of all of your features and benefits.

“No appeal to reason that is not also an appeal to a want can ever be effective. Our chief task, really, is to arouse the more important but slumbering wants into action. In every situation, in short, the human individual is moved by a multitude of wants, of most of which he is not even conscious.” — H. A. Overstreet.

Matt Garner is the founder of Longboard Public Relations and a retired US Army Public Affairs Officer. Longboard PR specializes in helping companies and individuals tell their story through written and spoken words, photos and video. We regularly teach classes on public speaking, as well. Message me or comment for information on our next class or for a specialized course for you and your company.

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Just Sold – Prows Office Buildings

September 11, 2017

We are pleased to announce the sale of the Prows Office Buildings located at 299 North 200 West, Bountiful, Utah. The two buildings have approximately 6,824 square feet total, sitting on 0.72 acres. More information regarding this sale is available upon request.

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Just Sold – South Ogden Office Investment

September 11, 2017

We are proud the announce the sale of the South Ogden Coldwell Banker building located at 6033 Fashion Point Blvd, South Ogden Utah. The property consists of a 13,124 square foot building sitting on 1.61 acres close access to Highway 89. Please contact us for more detailed information or for info on commercial real estate in Utah.

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The Value of the Annual Increase

September 15, 2017

As a commercial real estate investment property broker I have the opportunity to learn what deal points are important to different investors.  One deal point that I think is often overlooked and undervalued by the private individual investor and its property manager is the effect of the tenant’s annual increases.   It is obviously good for rents to go up but what does that do to our return???

Let’s walk through an example.  Let’s say an investor is looking at acquiring a small office building for $1,000,000.  The net operating income is $80,000 so the cap rate is 8%.  Let’s also assume that the investor is going to obtain a 75% loan to value at 4.5% interest amortized over 25 years.  The total amount of the annual debt payments is $50,024 which makes the annual cash flow after debt $29,975.  Because the down payment (or initial cash invested) is $250,000 the cash on cash return is about 12%.   Sounds like a pretty good deal.

Now let’s take a look at what the annual increase will do.  Let’s assume that the average annual increase is 3%.  Upon the first annual increase the net operating income is now $82,400.  If you capitalize that income at the same going in cap rate, the value of the property is now $1,030,000.  Since the loan payments are fixed, your cash flow now is $32,376 and your cash on cash return based on your initial investment is now about 13%.  Depending on the leases this can compound year after year.

There are many factors to consider whenever investing in commercial real estate.  Larger institutional investors have the tools and analytics to take all of these factors into account.  My hope is that this article will help the private individual investor better be able to quantify the importance of this deal point when comparing commercial real estate investment properties.

 

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Just Sold – Riley Court Apartments

September 11, 2017

We are pleased to announce the sale of the Riley Court  Apartments located 517 South 100 East, Bountiful, Utah. The project is a 70 unit independent living project.  More information regarding this industrial building sale is available upon request.

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