Case Detail

Case Summary

Hemisphere Development LLC: Betting on a Brownfield

Case Number: 5-413-753, Year Published: 2014

HBS Number: KEL799

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Authors: Denise Akason; William Bennett

Key Concepts

Decision Making, Entrepreneurship, Financial Strategy, Negotiation, Private Equity, Project Management, Real Estate, Risk Management

Abstract

The case puts students in the shoes of Todd Davis, founder and CEO of a boutique brownfield redevelopment firm, Hemisphere Development, in 2010. Davis is wrestling with decisions and processes surrounding the potential acquisition and redevelopment of the former Delphi Automotive plant in Columbus, Ohio. When making the investment decision, Davis (and students) must consider various factors: What is Hemisphere's implicit investment strategy, and what are the firm's core competencies? How should the firm finance this transaction to achieve an acceptable return?

In addition to presenting a brownfield and strategy exercise, this case exposes students to concepts and terminologies used in real estate and environmental projects, including brownfields, public-private partnerships, and creative financing. Finally, the case highlights real-life examples of balancing risk and return.

Learning Objectives

After reading and analyzing this case, students will be able to:

  • Practice creatively structuring and financing unique transactions
  • Describe the importance of baseline analysis in dealing with contaminated or potentially contaminated properties, and understand that the timing of baseline analysis can be crucial in determining the viability of a transaction
  • State the importance of each type of constituent in public-private transactions
  • Recognize the benefits of specialized/niche expertise in deal-making

Number of Pages: 9

Extended Case Information

Teaching Areas: Real Estate, Entrepreneurship

Teaching Note Available: Yes

Geographic: Columbus, Ohio, United States

Industry: Real Estate

Organization Name: Hemisphere Development

Organization Size: Small

Decision Maker Position: Founder and CEO

Decision Maker Gender: Male

Year of Case: 2010