Why CEDIA is Building New HQ in Fishers, IN: Crunching the Real-Estate Numbers

10-year lease on CEDIA’s Indianapolis headquarters is up: Why the home-technology trade association is building its own HQ in nearby Fishers, Ind., and why the economics work.

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6 Comments
Posted by Tom Doherty on June 13, 2017

hmmm…Stanley spends 15.9 million for 80,000 square feet and media gets 40,000 for 13.7 million—- I think the membership deserves greater detail on the deal….this CEDIA board has a poor record for fiduciary responsibility.  Is there going to be a mortgage? What is the estimated annual overhead costs of owning the building, taxes, insurance, maintenance, etc. How does this benefit the membership?

Posted by Julie Jacobson on June 13, 2017

Tom, They are looking for 15-20 year mortgage. As noted in the story, they don’t expect the new arrangement to affect cash flow (much) vs. the current arrangement. Why not build equity in a building? It’s exactly what integrators are doing today (if they’re smart). Few will be able to sell their businesses, but at least they can sell their property. I assume they’ll provide details to members who request it, right?

Posted by Tom Doherty on June 13, 2017

If I were to guess that the Mortgage is $10M, and thus they spend $3.7M as a downpayment, you are looking at just P&I of nearly $960K per year at an average commercial mortgage of 6%.  Then you have Insurance, Taxes and Maintenance. There is no way that the organizations cash out flow grow substantially. I have no idea on the details, nor if the $13.7 includes furniture, fixtures, new office equipment, etc., etc. Has said before, Executive BOD has a poor record of fiduciary responsibility.  Its not their personal money and they do spend it like it is others peoples money.  They are lavish spenders.

Posted by Greg Pass on June 13, 2017

I agree with Tom.  The current $4M spent on the lease was over 14 years not 10 so the annual cost is closer to $285,000.  Do you really expect any disclosure when they didn’t disclose the purchase price of Expo and hid behind the line that the purchaser was a private company when they are actually owned by a public corporation.

Here is the email I sent to Dennis in response to this poor financial decision.

“Dennis,

At $285K per year ($4M over 17 years) CEDIA could have leased and upgraded the current building for over 40 years for $13.7M.  This seems like an totally unnecessary use of our funds. CEDIA must have received a massive amount of as yet undisclosed money from the sale of the Expo to be able to afford such a huge capital investment.  Considering how many members are feeling about the Vin Bruno departure and lack of transparency, the sale of Expo and lack of transparency, and the growing lack of focus on our original core mission of installing and supporting luxury brands and high end consumers, I find it unlikely that CEDIA will even be in existence 40 years from now.

Additionally I would hope that no CEDIA members are the eventually tenants in the 10,000 square feet of available leasable space.

It is sad that an organization that helped shape our niche in the CE business and that I have been part of since almost the beginning (Amelia Island attendee and every Expo since) seems to have totally ran off the tracks.

Please feel free to share my comments with the board, staff and others.

Sincerely,
Greg Pass”

Posted by Tom Doherty on June 15, 2017

This is way worse than what is being reported Greg Pass….

CEDIA is building in a non-tax exempt property in Fishers…thus they will be paying nearly $140K every year just in Taxes!!!

When the Indianapolis Business Journal asked why CEDIA would choose to build in such an area…the answer they got was “no comment”....When Vin was approached he indicated that he would not build in that location after learning of the Tax Implication….  But Vin is gone and you have a Board that is ignoring their fiduciary responsibility and spending other peoples money….Dear Dennis, please resign immediately!!!

Posted by ritchut on June 18, 2017

Always better to own than rent for the long term. But, what is “the long term”. I used to be a member of NSCA. NSCA gave up their show and became a “pavilion” or maybe it was “NSCA Zone” at InfoComm. That lasted maybe 2 years and now what is NSCA?
I always thought CEDIA was the show and the show defined CEDIA.  With all of the positive things CEDIA has done in the past few years and the things yet to be accomplished, I hope CEDIA hasn’t sold its birthright

6 Comments
Posted by ritchut on June 18, 2017

Always better to own than rent for the long term. But, what is “the long term”. I used to be a member of NSCA. NSCA gave up their show and became a “pavilion” or maybe it was “NSCA Zone” at InfoComm. That lasted maybe 2 years and now what is NSCA?
I always thought CEDIA was the show and the show defined CEDIA.  With all of the positive things CEDIA has done in the past few years and the things yet to be accomplished, I hope CEDIA hasn’t sold its birthright

Posted by Tom Doherty on June 15, 2017

This is way worse than what is being reported Greg Pass….

CEDIA is building in a non-tax exempt property in Fishers…thus they will be paying nearly $140K every year just in Taxes!!!

When the Indianapolis Business Journal asked why CEDIA would choose to build in such an area…the answer they got was “no comment”....When Vin was approached he indicated that he would not build in that location after learning of the Tax Implication….  But Vin is gone and you have a Board that is ignoring their fiduciary responsibility and spending other peoples money….Dear Dennis, please resign immediately!!!

Posted by Greg Pass on June 13, 2017

I agree with Tom.  The current $4M spent on the lease was over 14 years not 10 so the annual cost is closer to $285,000.  Do you really expect any disclosure when they didn’t disclose the purchase price of Expo and hid behind the line that the purchaser was a private company when they are actually owned by a public corporation.

Here is the email I sent to Dennis in response to this poor financial decision.

“Dennis,

At $285K per year ($4M over 17 years) CEDIA could have leased and upgraded the current building for over 40 years for $13.7M.  This seems like an totally unnecessary use of our funds. CEDIA must have received a massive amount of as yet undisclosed money from the sale of the Expo to be able to afford such a huge capital investment.  Considering how many members are feeling about the Vin Bruno departure and lack of transparency, the sale of Expo and lack of transparency, and the growing lack of focus on our original core mission of installing and supporting luxury brands and high end consumers, I find it unlikely that CEDIA will even be in existence 40 years from now.

Additionally I would hope that no CEDIA members are the eventually tenants in the 10,000 square feet of available leasable space.

It is sad that an organization that helped shape our niche in the CE business and that I have been part of since almost the beginning (Amelia Island attendee and every Expo since) seems to have totally ran off the tracks.

Please feel free to share my comments with the board, staff and others.

Sincerely,
Greg Pass”

Posted by Tom Doherty on June 13, 2017

If I were to guess that the Mortgage is $10M, and thus they spend $3.7M as a downpayment, you are looking at just P&I of nearly $960K per year at an average commercial mortgage of 6%.  Then you have Insurance, Taxes and Maintenance. There is no way that the organizations cash out flow grow substantially. I have no idea on the details, nor if the $13.7 includes furniture, fixtures, new office equipment, etc., etc. Has said before, Executive BOD has a poor record of fiduciary responsibility.  Its not their personal money and they do spend it like it is others peoples money.  They are lavish spenders.

Posted by Julie Jacobson on June 13, 2017

Tom, They are looking for 15-20 year mortgage. As noted in the story, they don’t expect the new arrangement to affect cash flow (much) vs. the current arrangement. Why not build equity in a building? It’s exactly what integrators are doing today (if they’re smart). Few will be able to sell their businesses, but at least they can sell their property. I assume they’ll provide details to members who request it, right?

Posted by Tom Doherty on June 13, 2017

hmmm…Stanley spends 15.9 million for 80,000 square feet and media gets 40,000 for 13.7 million—- I think the membership deserves greater detail on the deal….this CEDIA board has a poor record for fiduciary responsibility.  Is there going to be a mortgage? What is the estimated annual overhead costs of owning the building, taxes, insurance, maintenance, etc. How does this benefit the membership?