assPorE

revised Oct 12 2000

Babson College
FW Olin Graduate School of Business REAL ESTATE PROJECT MANAGEMENT

Case: Portland Eldercare

Eldercare represents one of the potentially most promising markets in our "mature" economy -- but it is not easy to serve with usual real estate products. This case is about an experienced real estate developer – Pam Gleichman -- who is considering expanding into the eldercare segment of her local market. She has developed information on a number of alternatives, and must now decide which -- if any -- to pursue. Please consider these issues as you decide what Gleichman should do:

What is the relevant market for this project? How is it best measured? How large is it? Does it depend on which type of development Gleichman builds?
What are the key steps in developing a property of this type? Are they any different than the process for other housing or commercial properties?
What are the key financial analyses that must be made for this project? Are they different than for other projects?
What must the developer do well to achieve desired share in this market? What factors will affect success? Is this market different?
Should Gleichman go ahead with one or another of the alternatives she is considering? Or some variation on it? How? Why? How well will she do?

In this class we will seek to resolve these issues and we will also discuss a variety of other issues related to the broader role of the developer in the community -- particularly as it concerns issues of providing needed -- but not necessarily popular -- facilities to serve various segments of the community. We will focus on such issues as:

What is the responsibility of the Developer? The Community? The Neighborhood? The Individual?
How should decisions be made about where to place popular and unpopular facilities?
How does one reconcile "property rights" with these other issues?

ASSIGNMENT: Please prepare and submit your pro-forma for the life care facility. In this regard, you may find it useful to start with the spreadsheet that will be posted to e-campus. Please be aware that -- as usual -- there may be errors in it. You can build on it, adjusting it to take into account anything on which your view is different than Gleichman's. Please note your changes as differences on your spreadsheet and make them visible with color.

Also, please prepare a brief memo -- one double-spaced page maximum -- telling Gleichman what to do about this project, and calling attention to your revisions. A draft -- ungraded -- is due before class. A final version of this exercise may be prepared -- based on additionasl information supplied in class -- after the class and submitted later as assigned.