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Chapter 160: The Unsuccessful Negotiation
"I don't have much money. Part of it needs to be used for the preliminary construction of the apartment..."
Hart didn't lie or exaggerate his current situation. Whether good or bad, he simply told the truth: he had no money, and that was indeed the case.
"But the land you have is very important to me," he said sincerely, so sincerely that he didn't seem like a businessman, let alone a real estate developer. After all, those kinds of people rarely spoke so honestly.
When they were negotiating business, they would often show an indifferent attitude, as if they didn't care whether they got the deal or not, and sometimes they weren't very reasonable.
Hart maintained eye contact with Lynch, not avoiding his gaze, as if to prove his current situation.
"I've prepared two proposals. I wonder if you’d be interested in hearing them?"
Lynch nodded, "Of course, otherwise why would I be here?"
Hart seemed relieved by Lynch's response and began to explain his proposal.
"The first proposal, I can pay you about..." he paused, "about six hundred thousand in cash. The rest can be converted into a stake in this project. We'll have a detailed evaluation meeting later to assess the total investment, and you'll get shares based on the proportion."
This was a fairly common method of cooperation, akin to technical equity investment. When others couldn't ignore the essential conditions he held, they could incorporate this into the total investment to occupy a certain proportion of investment. This method was quite common and widespread.
Lynch didn't say yes or no after listening. After leaving some time for him to think, Hart started to explain the second proposal.
"The second proposal is simpler. I can exchange equivalent shares of my company for the land you hold..."
This was also a common practice, especially among large company mergers. The larger the company, the tighter the cash flow pressure, but they also had this demand, such as acquiring other companies. This method could effectively solve the financial pressure.
Hart's second proposal was similar to that. He offered Lynch part of his company's shares in exchange for the land, and he believed this was a good proposal.
With the start of this project, the value of his company would significantly increase. Lynch would essentially make money twice with his land.
After proudly introducing his company, Hart looked expectantly at Lynch, thinking Lynch would choose the second proposal. It was obvious. After all, he had successfully used this proposal to attract more supporters and investors.
Lynch, however, didn't answer immediately but asked a question, "Is my land really that important to you and your company?" He seemed thoughtful, "You could choose some more remote land; the price would be lower, and your development costs would be smaller."
Hart was taken aback for a moment. He didn't expect Lynch to ask such an unrelated question. He realized that the two proposals he had prepared might not be among Lynch's choices.
Based on the principle of sincerity, he explained the advantages of Lynch's land.
"That land is next to the city center. If we calculate the distance in a straight line, we could say it's practically in the city center."
Both Hart, Lynch, and Joegleman couldn't help but chuckle. Developers loved using the term "Straight-line Distance," which could give the impression that two points were close together. However, the actual distance one might have to travel could be quite substantial. Imagine two banks of a river: the straight-line distance might only be a few meters. However, without a bridge, one could find themselves having to travel tens of kilometers to reach the other side.
"Around it are commercial and residential areas. This area better meets people's living needs compared to other places. I know land outside the city is cheap, but people would rather live in the park than go outside the city."
"The living environment, the surrounding environment, these affect the occupancy rate of these apartments and whether they can be easily sold after the project ends. The closer to the city center, the easier it is to solve these issues, and the higher the financial subsidies."
Hart seemed to hide nothing, directly stating the core reasons. Joegleman nodded frequently after hearing this, and Lynch also agreed.
If the project was built on undeveloped land outside the city, the town hall could give them free land use rights, but who would want to live outside the city, and if these houses couldn't be sold, they might lose money.
The real profit from this project was in the final step: selling all the apartments at once after the project ended. Any reasonably minded person would understand that apartments near the city center would be much more desirable and valuable than those in the suburbs.
It seemed there were no major problems. Lynch pondered for a while and looked at Joegleman's house. His movements were noticeable, and Hart kept observing him.
Joegleman dutifully remained neutral, not interfering with either side’s judgment, quietly sipping his drink.
After a while, Lynch shifted his gaze back to Hart, calmly suggesting another proposal, "I'm not interested in investing in real estate at the moment, but I'm very interested in houses."
"You know, I'm just an ordinary person, and ordinary people have an almost obsessive love for houses. I really like the houses here, maybe we can use these houses to offset the price."
He then looked at Joegleman, "Mr. Manager, how much do you think these villas are worth now?"
Joegleman was surprised by Lynch's suggestion. He also personally favored the second proposal more. Thinking for a moment, he gave a fair price, as both sides were his friends, "About seventy to a hundred thousand, there are several specifications."
Hart also nodded. That was roughly the price, but he had a different thought, "Joegleman, Lynch, you overlooked something. These already-built villas will appreciate after the economic downturn."
"Four years ago, any house here was priced over two hundred thousand, even the smallest one. And..." he paused, "I got some news from the city hall that this area is likely to be designated as one of the city's drinking water sources, which means no more large-scale projects can be built nearby in the future."
Currently, Sabin City's drinking water didn't come from this lake but from a more distant artificial lake. With the growing population, the burden on drinking water also began to increase. The city hall had had such a plan for a long time, but so far, no concrete steps had been taken to implement it. It was just a plan, an intention. However, making it happen wasn't actually difficult; this was precisely what capitalists excelled at.
Lynch interrupted him without hesitation, "My land will also appreciate. We all know Sabin City is close to a million people, and the urban area will inevitably expand. By then, that land won’t just be ‘near the city center’, it will be the city center."
What Lynch said wasn't wrong. However, Hart was somewhat disappointed by his answer, "Mr. Lynch, I can't accept your terms. We all know this place looks a bit shabby now, but it will eventually get better, just like the problems our society is facing."
"Maybe five years, ten years later, each house here will sell for at least three to four hundred thousand, or even more. I can't accept your proposal."
Lynch didn’t show much dissatisfaction, merely smiling and nodding, "Understandable, Mr. Hart. Business is like this, only when both sides reach a consensus can the deal proceed."
Hart found it hard to accept. This was different from what he had envisioned before coming, "Don’t you want to reconsider?"
Lynch shook his head, "If you pay attention to recent trends, you’d know my company was just valued at seventy million, with investors lining up to give me money. If it weren’t for my friendship with Mr. Joegleman, I wouldn’t have considered selling this land."
"I agree with parts of your statement. The economy won’t stay depressed forever. Three years, five years, everything will improve. The foundation of the Federation is better than other countries, and we’ll recover faster."
"You may think that land is worth one and a half to two million now, but I guarantee that ten years later, even adding a zero, you wouldn’t be able to buy one-tenth of it."
Lynch stood up, extending his hand, "Although we didn’t reach a deal, it was nice to meet you, Mr. Hart."
He showed a desire to end the conversation, and Hart couldn't persuade him otherwise. At this moment, persuading him would be like handing a knife to the other party and lying down on the chopping block. It seemed like they had to wait for the next time.
"Likewise, Mr. Lynch."
After exchanging a few more pleasantries, Lynch bid farewell to Joegleman and left.
Hart was still a bit puzzled after Lynch left. He couldn't help asking, "What’s valued at seventy million?"
Joegleman sighed, feeling a mix of emotions, "His Interstellar Trading Company, the one that deals with second-hand goods and auctions."
Hart was shocked and then confused, "Such a company... valued that high?"
Joegleman knew he felt a bit lost. He patted his shoulder and said, "He knows better how to seize opportunities."
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