Malden Field Study Report 2014 by Harvard Field Study 2014

dy in Real Estate, Planning & Urban Design

FIELD STUDY IN REAL ESTATE, PLANNING, & URBAN DESIGN UNIVERSITY HARVARDOF UNIVERSITY SCHOOL DESIGN GRADUATE SCHOOL OF DESIGN

Revitilization & Affordable&Housing the City Downtown Revitalization AffordableinHousing in of theMalden City of Malden

MALDEN

I. CONTEXT II. DEMOGRAPHICS III. MARKET ANALYSIS IV. PRECEDENTS V. PROPOSALS TREMONT PARK MALDEN MALL VI. ASIAN CDC PROPOSALS SUMMER STREET PLEASANT STREET

TABLE OF CONTENTS

SECTION FORWARD

FORWARD This report is the result of a semester- long field study at the Harvard Graduate School of Design on two related but distinctly different topics: visions for the future of downtown Malden, and affordable housing to be developed by the Asian Community Development Corporation. The Spring, 2014 class was inspired by Professor Ann Forsyth’s studio for first year planning students at GSD the previous year and the interest of the Asian Community Development Corporation to find a site in Malden for a new affordable housing project. The City of Malden also expressed interest in developing additional visions for the future of downtown Malden. The Asian CDC was looking for a housing site in the downtown vicinity, within walking distance of the Malden transit stop. Consequently, it made sense to combine the two exercises into the Spring Field Study class. The Malden Field Study was the focus of five students working in two teams for the class, GSD 5212: Field Studies in Real Estate, Planning and Urban Design. This course combines planning and urban design visions of the future with real estate market and financial

realities and implementation. The students are challenged to produce visions that are not academic but rather are achievable in the real world – visions that meet the constraints of the market place, local political and stakeholder concerns, and legal and financial realities. The visions of the two teams are presented together in this report, along with site information, demographic and real estate market data, precedent studies, and other common background material that is relevant for downtown Malden and the Asian CDC’s site selection. The two teams focus on different parts of downtown for their visions of future development. Alexander Akel, Alison Crowley, and Greg Demaiter focus on the superblock south of downtown across Centre Street that is currently occupied by the Stop and Shop. They envision a new mixed use development, Tremont Park, anchored by a new urban-style Stop and Shop with office and residential that links downtown to the industrial corridor to the south. Stephanie Torres and Weishun Xu focus on the downtown core and how to activate Exchange Street with new development that

they call Malden Mall. Both projects attempt to create vital urban streets and blocks with open space and strong visual appeal that cater to the Millennials and young professionals who are flocking to Malden. Both teams select sites for housing development by the Asian CDC across the tracks from downtown Malden. The sites are both within an easy walk of the MBTA station and are of a size that will accommodate 30-50 new housing units. Their design visions and financial analyses should contribute to the CDC’s plans for the area. I am grateful to Angie Liou at the Asian CDC and Kevin Duffy and Michelle Romero at the City of Malden for their support of the Field Study and time they so generously gave to the students. I believe the students have produced worthy visions for future development in downtown Malden that will enhance the environment and help to make downtown an even more vibrant place to live and work. Hopefully their visions will be useful to the citizens and leaders of Malden as they plan for the future. Richard Peiser Michael D. Spear Professor of Real Estate Development

DOWNTOWN MALDEN CIRCA 1940

CONTEXT

I. CONTEXT - OVERVIEW

I. CONTEXT History + Present Day Overview History The city of Malden in Boston’s northern suburbs borders Stoneham and Melrose to the north, Revere to the east, Everett to the south, and Medford to the west . Settled by Puritans in 1640 on land originally owned by the Pawtucket Indians, the city was named after the town of Maldon, England, by early landholder Joseph Hills. Malden was the site of a number of significant historical events, including the 1648 compilation of New England’s first printed code of enacted laws and the active resistance to the British colonial government through boycotts, protests, and petitions. Incorporated as a city in 1882, Malden continues to retain regional significance as an emerging lifestyle alternative to the increasingly expensive Somerville and Cambridge suburbs. The Malden Redevelopment Authority (MRA) from 1958 and 1972 through four federally funded and one state funded urban renewal project took over 400 properties within the City through eminent domain. Through the takings, the City was able to completely rebuild its industrial and commercial base as the backbone that exists today.

Present Day Today, the 5.1-square-mile city is closely tied into the Boston region through proximity to major highways, including Route 1, Route 16, Route 99, Route 128, and Interstate 93, as

well as with a stop on the MBTA Orange Line. The city is home to a mix of families living in the residential neighborhoods surrounding the downtown and to a number of singles and childless couples taking residence in the highrise apartment buildings built in proximity to the Malden Center T Station.

Amenities + Attractions Malden is home to thirty parks, including 56 acres of the Middlesex Fells Reservation, a state park that features the Fells Reservoir and Spot Pond. The city also shares a portion of the 107-acre Pine Banks Park with neighboring Melrose. Waitt’s Mountain, a summit located directly north of downtown, features sweeping views of the Boston skyline just a few miles south. Closer to downtown, Malden has become known for its burgeoning restaurant scene, located primarily along Pleasant Street and Exchange Street in the Central Business District. An article published in the April 30, 2014 issue of The Boston Herald highlighted the diverse dining options available to residents, including the critically acclaimed All Seasons Table, an establishment featuring pan-Asian cuisine.

Satellite Image of Malden Relative to Boston

Schools Malden has five public elementary schools, five public middle schools, and one public high school. The five elementary schools, Beebe, Ferryway, Forestdale, Linden, and Salemwood, were all built in the late 1990s to replace outdated facilities. Outside of public education, the city has one charter elementary, middle,

Malden City Boundaries

I. CONTEXT - EXISTING CONDITIONS

I. Traditional CBD The traditional CBD is bounded by Florence Street to the north, Centre Street to the south, Commercial Street to the west, and Main Street to the east. These blocks comprise the primary downtown retail offering in Malden, running east-west down Exchange and Pleasant Streets. The building stock is a diverse mix of two and three-story buildings,

The CBD is anchored on the western end by the Malden Center MBTA station and the existing City Hall, which is slated for demolition and redevelopment as a mixed-use project that will include re-connecting Pleasant Street’s retail corridor to Commercial Street. On the southern side of the traditional CBD between Exchange and Centre Streets, two large municipal parking lots create barriers between

II.

the CBD and areas south. New market-rate residential projects targeting childless singles are quickly filling in remaining pockets in the traditional CBD boundaries, which began with 160 Pleasant Street’s opening in 2006 and has continued with plans for 80 units at 39 Florence Street, 210 units at 18 Jackson Street, and 195 units at 33 Dartmouth Street to be delivered in full by 2016. Significantly, the traditional CBD offers little green, public space for residents and visitors. Existing gaps in the street fabric tend to be filled in with municipally owned surface parking lots rather than pocket parks, and none of the more recent private projects have offered or been required to provide public amenities as a requisite for development.

e Street

Florenc

Pleasant Street

Main Street

Canal Street

III.

Centre Street

Middlesex Street

Exchange Street

reet

The city is loosely characterized by 18 separate and largely residential neighborhoods, of which one—Downtown—will be the focus of this report. For purposes of this report, we will dive

Existing Conditions

largely with retail on the ground floor and office above. Several traditional banks, built in neoRomanesque style with limestone façades, dot the streetscape. Due to an overabundance of general retail offerings, the CBD retail mix currently underperforms relative to its suburban counterparts.

ial S t

Neighborhoods

more deeply into the context of the CBD, which has within it four distinct nodes of activity: the traditional CBD, the T-Zone, the Centre Street Linkage, and the Industrial Zone.

Com merc

and high school, as well as one Catholic prekindergarten through middle school and one Catholic high school. A study conducted by the National Center for Education Statistics in 2013 found that Malden High School was the most diverse public high school in the state of Massachusetts. Though the public high school receives high marks on state assessments, Malden government authorities have stated concerns regarding school overcrowding.

Charles Street

IV. Malden and the Boston T (Orange Line)

Zones within Malden

I. CONTEXT - EXISTING CONDITIONS

II. T-Zone The Malden Center MBTA station on Commercial Street anchors the city’s CBD and naturally pushes residents from the station across Commercial Street to the activated streets in the traditional CBD. However, the land directly to the west of the station, technically situated behind the station as it fronts Commercial, represents an area of future growth opportunity. The triangle lot bounded by the station to the west, Pleasant Street to the north, and Centre Street to the south is home to a Malden fire station with a significant amount of surface parking. This site, directly adjacent to the 214-unit Gateway at Malden Center project, has been proposed for redevelopment as a hotel and could potentially feature a greater mix of uses. The MBTA, which owns underutilized land adjacent to the T in this area, has hired consultants to help determine the highest and best use for the parcel and have expressed interest in redevelopment.

III. Centre Street Linkage The two parcels bounded by Canal Street to the west, Centre Street to the north, Main Street to the east, and Charles Street to the south represent the most significant redevelopment opportunity within a quarter-mile of the T station. The 10-acre site, if developed to its highest and best use, could create a visual and program-oriented link between the traditional CBD to the north and the largely industrial zone to the south, extending the economic reaches of the CBD beyond its current boundaries. Further, the site abuts the proposed Malden Ballpark development, which will draw residents and visitors alike

from the more densely populated residential neighborhoods to the north and, hopefully, from areas outside of Malden altogether. Currently, this site, divided into two parcels by Middlesex Street running north-south between Centre Street and Charles Street, boasts a 70,000 square foot Stop & Shop supermarket, constructed in a suburban format with a sea of surface parking filling the majority of its 9-acre parcel. A small strip retail center facing Centre Street is situated on the northeastern corner of the Stop & Shop parcel, and an Applebee’s restaurant sits on a pad site at the corner of Charles Street and Middlesex Street. On the parcel to the east, bounded by Centre and Charles to the north and south and Middlesex and Main Street to the west and east, a large Walgreen’s dominates an otherwise forgettable retail strip.

New England Coffee

IV. Industrial Zone South of Centre Street and east of the Orange Line Tracks and Commercial Street is the city’s main industrial zone, which transitions from large footprint warehouses along the Malden River to smaller format, office-oriented onestory buildings fronting Charles Street. The area is generally low density with a number of vacancies. The main anchor employer for the area is New England Coffee. Another is Piantedosi Bakery on Commercial Street.

Piantedosi Baking

Industrial Zone (Present Day)

I. CONTEXT - EXISTING CONDITIONS

Malden City Hall

Massachusetts Dept. of Elementary & Secondary Education

Malden High School

Existing Conditions (Civic Use)

Jackson Street Parking Garage

CBD Parking Garage

I. CONTEXT - EXISTING CONDITIONS

View of Pleasant St. from City Hall

Ethnic Cuisine on Exchange Street

Restaurants and Bars in the CBD

Existing Conditions (Businesses & the Downtown)

New England Coffee Company

Stop N Shop Plaza

Walgreens

I. CONTEXT - RECENT DEVELOPMENTS

Recent Developments Residential Boom in the CBD

Building a Ballpark

Malden is evolving. As the cost of living continues to rise in Boston and its closestin suburbs of Cambridge and Somerville, more singles and families are choosing to move further away for the lifestyle they desire. Malden attracts young professionals and students seeking cheaper living close to Boston. Developers such as Raymond Properties, Corcoran Jennison and Combined Properties are leading the residential development wave in Malden. Class A apartment buildings in Malden’s downtown boast impressively low vacancy rates and another 816 new units are expected to come online in the next four years, reflected in the map of the CBD below.

One block away from this project, the City continues to pursue the development of a new 6,000-seat state of the art baseball field in partnership with the non-profit organization Baseball Field of Dreams. When realized, the Malden Ballpark will host a franchise team from the independent Atlantic League of Professional Baseball, as well as local school sports teams, regional events, and community celebrations.

Revitalizing 200 Pleasant Street In February 2014, the City of Malden sold City Hall, located at 200 Pleasant Street directly across the street from the Malden Center MBTA station, to the Jefferson Apartment Group for the purposes of building a new mixed-use project to anchor the gateway to Malden’s CBD. The proposed project, which includes 245 units of new housing and 17,250 square feet of new commercial space, will re-connect Pleasant Street to the T station and reflects the city’s priority of maximizing private investment downtown. As a result of this development, City Hall will be relocated to the pin on the map, the northern fringe of the CBD.

Lack of Open Space Malden compared to cities like Cambridge and Somerville lacks quality open space. Within the CBD, remaining spaces for public space are frequently used as municipal parking lots.

Existing Conditions (Downtown Malden)

I. CONTEXT - RECENT DEVELOPMENTS

Attracting New Businesses Beyond all of the new development activity, the city’s Economic Development office continues to focus on bringing high-quality dining and nightlife options to Pleasant and Exchange Streets, the two main commercial streets in the CBD. These efforts seek to update the aged retail mix that has until recently plagued the CBD, and has gained attention in local news outlets. An article from the Boston Herald highlights Malden’s growing restaurant scene which is being driven by the city’s influx of young individuals and its diverse population. Chefowner, Jason Ladd identified Malden as the “right place at the right time” as the city is “trying to position itself as Greater Boston’s premier up-and-round culinary destination”. Malden is taking notes from areas such as Davis Square. The city’s culinary diversity is exemplified by its Cuban, Ethiopian, MiddleEastern and Asian Cuisine.

Current City Hall: Serves as a Wall Between the T-Stop & the CBD

Addressing Vacancies In 2014, Bank of America vacated 80,000 square feet of Class A office space located at 200 Exchange Street, one of limited Class A options in the CBD. The building is over 300,000 square feet and has the highest assessed value in the city. The city of Malden continues to work closely with the landlord to identify a new long-term tenant who will fill the space with the hopes of keeping the existing building on site for at least twenty years.

Gateway to Malden: Project Rendering for 200 Pleasant Street

I. CONTEXT - RECENT DEVELOPMENTS

Malden Ballpark: View from Centre Street

Existing Conditions: Malden Ballpark Site

Malden Ballpark: New Amenity for the Central Business District

Malden Ballpark Rendering from the Southeast

DIVERSE CITY IN THE COMMONWEALTH

DEMOGRAPHICS

II. DEMOGRAPHICS - MALDEN

II. DEMOGRAPHICS Overall Trends Malden’s population, though increasing, has grown at a slower rate than the state and nation overall. Since 2009, the population has increased 0.51%, compared to Massachusetts’ overall population increase of 1.3% and the national average of 0.91%. The percentage of families has increased at an even slower rate—0.41%—and the number of ownership households has declined by 0.14% , indicating that much of the population growth in Malden is likely attributed toward childless couples and singles moving into the apartment complexes recently built in the city’s Central Business District (CBD). The city is trending toward a more diverse population, with a projected 13% increase in the city’s minority population between 2000-2014. One significant indicator of diversity is language spoken at home; as of 2010, approximately 42% of households in Malden did not speak English as a first language, and one in five residents was not fluent in English.

Population Relative to its neighbors, Malden is a mediumsized city that is larger than nearby Everett and Melrose and nearly the same size as Revere and Medford. Its population is dense at 17.3 people per acre, which is significantly higher than the state’s average (1.3 people per acre), as well as the density found in Revere, Medford, and Melrose. The median age of the city’s residents is 36, which is slightly younger than its MSA, measured at 38.5 years of age.

Ethnicities In 2014, approximately 60% of the city identified as Caucasian, 22% as Asian, 10% as Black, and the rest a mix of ethnicities. Since

2000, this represents a 15% decline in the Caucasian population and a 66% increase in the Asian population , indicating that the city is moving toward greater ethnic diversity and has likely benefited from positive immigration in the last decade. A significant portion of the city’s Asian population resides in the census tract that encompasses the Central Business District, while a higher proportion of Caucasian residents live in the southeastern corner of the city, on the boundary with Revere, MA . Relative to its neighbors, Malden has the largest non-white population, as well as the largest Black and Asian populations, of the close-in northern suburbs.

Income Between 2008-2012, the median annual household income was $54,229, which was slightly lower than Medford and Melrose but higher than Revere and Everett. Relative to the Boston MSA, Malden’s annual household income was $13,646 lower than the MSA median. The city has an overall 11.8% poverty rate and a childhood poverty rate of 16.9%. The unemployment rate in 2009 stood at 8.2%, although this number has likely trended down since the nadir of the recession.

of respective adult populations reaching the same level of education.

Housing Trends

HOUSING TENURE, 2008-2012

The American Community Survey estimates that more than half of Malden residents are renters, which coincides with the recent rental residential developments in the CBD and the continued trends toward rental tenure, evidenced by the pipeline of more than 800 new rental units in the next four years. Both the median monthly costs of ownership and the median gross rent for Malden are higher than the Massachusetts average due to the city’s proximity to Boston. Another significant trend in Malden’s residential patterns relates to when new residents move to the city. In the last four years, 12.4% of the current residents moved to the city; since 2000, an additional 56% of current residents moved into Malden. This population migration into Malden is likely indicative of rising costs in neighboring suburban communities and the city’s amenities, including access to the MBTA, new residential products, and a growing downtown commercial district.

Owners 43%

Renters

Renters 57%

Owners

Housing Tenure, 2008 - 2012

ETHNICITIES REPRESENTED, 2014 8% 22%

Education In an MSA that trends toward high educational attainment, Malden falls in the middle. Based on American Community Survey estimates, 18% of Malden’s population aged 25+ held a Bachelor’s degree, compared to 42% for the Boston MSA overall, and 38% average in the state. Though lower than the MSA, Malden’s educational attainment still ranks higher than Everett and Revere, with 16% and 17%

60%

10%

White

Black

Asian

Other

Ethnicities Represented in Malden, 2014

II. DEMOGRAPHICS - MALDEN

POPULATION BY SUBURB, 2012 70,000 60,374

MEDIAN HOUSING COSTS, RENTERS AND OWNERS, 2008-2012

57,033

60,000

53,179

50,000

Median Selected Monthly Owner Costs

42,567

Median Gross Rent

40,000 30,000

$2,145

Massachusetts

27,435

$1,056

20,000 $2,202

Malden

10,000 0

Malden

Everett

Medford

Melrose

Revere

Population Statistics by Suburb, 2012

$1,211 $0

$500

$1,000

$1,500

$2,000

$2,500

Median Housing Cost by Tenure, 2008-2012

MEDIAN HOUSEHOLD INCOME, 2008-2012 $100,000

$86,264

$90,000 $72,773

$80,000 $70,000 $60,000

$54,229

$50,000

$49,993

$49,702

$40,000 $30,000 $20,000 $10,000 $0

Malden

Everett

Medford

Melrose

Revere

Median Household Income, 2008-2012

Educational Attainment in Malden, 2008-2012

MARKET ANALYSIS

III

III. MARKET ANALYSIS - BOSTON METRO

III. MARKET ANALYSIS

Metro-Area Market Analysis

Boston Office The Creative Industry to Continue to Drive Growth Today, in the City of Boston, the burgeoning Seaport Innovation District is continuing to attract tenants as companies from the suburban markets and Cambridge engage in urban migration. Office rents in Boston have still not completely recovered to the 2007 level $55/ft/yr as they are still shy 15% (Figure 2). Expectations are that this gap will close in 2014. Financial services, insurance and legal operations have supported the downtown Boston market while the suburban office and Cambridge office and lab markets have experienced accelerated activity amongst small to mid-size firms as they drive the demand for creative spaces. Figure 3 displays the actual and projected greatest percentage change in employment growth by industry in the region with the professional, scientific and technical services leading the way at 36.5%. On a similar note, Figure 4 demonstrates

the year-over-year employment growth for the traditional and creative office sectors in Boston, Cambridge and Quincy. Traditional office has struggled to maintain the pace with growth roughly to 20-30 basis points above 0%. In the past three years, creative office employment grew an average of 5%.

and suburban sites. Figure 6 demonstrates a strong retail market in the Boston area. Completions of 6,000 (sf x 1,000) dwarfs the absorption of 1,450. With an availability rate of 8% expected to fall to 7%, and rent inflation forecasted north of 3%, the retail market is displaying strong fundamentals.

Boston Multifamily

Overheating?

Historic Boston Asking Rents vs. Availability 18.00% 16.00% 14.00%

Innovation is also driving the residential market as the increased employment levels 30 have resulted in a need for more housing units within Boston and its suburbs. Figure 20 5 shows the annual units completed, net 10 absorption, vacancy and rent inflation rates for the multifamily market in Boston. With 0 6,500 new units forecasted for 2014 and net absorption of 5,800, Boston will face an oversupply of housing units. This will cause a decrease in values as vacancy rates rise and rent inflation falls. Vacancy rates are predicted to rise to 3.7%, still a healthy number for a large market. In the future, it is predicted that 10% new supply will pull back, helping the market achieve equilibrium. 8%

Boston Retail Attractive Market Fundamentals Strong lease-up and development in the retail sector is predicted for 2014. Retailers, capitalizing on personal income growth, will continue to grow by seizing existing real estate or seeking development opportunities. Developers are focusing their efforts transitoriented mixed-use opportunities on urban

12.00% 10.00% 8.00% 6.00%

Asking Rent Availability

4.00% 2.00% 2006

2007

2008

2009

2010

2011

2012

2013

0.00%

Office Asking Rents & Availability in Boston (CBRE)

Boston Employment, Population and Personal Income Growth

6% 4%

Total Employment

Personal Income

Population

0% 20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 20 14 20 15 20 16 20 17 20 18 20 19

The economy of the Greater Boston area continued to improve over the course of 2013 as the region saw gains in employment, personal income and consumer confidence. Figure 1 displays the growth in employment, population and personal income over the years. Personal income growth sky-rocketed by 5.8% from 2013 to 2014 after a equal drop the year before. Personal income levels are expected to continue to grow at healthy levels at a falling pace over the next five years. Both population and employment growth are low yet positive and will continue to fall over the years.

-2% -4%

Boston Employment, Population & Personal Income Growth (CBRE)

III. MARKET ANALYSIS - BOSTON METRO

Boston Multifamily Market Data 12,000

7.00%

10,000

6.00%

Greatest % change between 2010 (actual) and 2020 (projected) in Employment Growth by Industry in the Boston Region

5.00%

8,000

4.00%

6,000

3.00%

4,000

2.00%

2,000

1.00%

Units Net Absorption Vacancy Rate Rent Inflation

0.00% 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 20 14 20 15 20 16 20 17 20 18

(2,000)

(4,000)

Professional, Scientific & Technical Services Finance & Insurance Social Assistance Health Care Administrative & Support Services Management of Companies & Enterprises Manufacturing

Unit Completions

-1.00% -2.00%

-3.00% Boston Multifamily Market Data (CBRE)

Boston Retail Market Data

8.00%

2000

7.00% 6.00%

12.00% 10.00%

1500

5.00% 4.00%

8.00% 6.00%

1000

3.00% 2.00%

4.00%

500 2004

2005

2006

2007

2008

2009

2010

2011

2012

0.00%

0 20

-2.00%

2013

2.00%

05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 20 14 20 15 20 16 20 17 20 18

1.00% -1.00%

-500

-3.00% Creative Office

19.20% 15.25%

Boston Multifamily Market Data (Northeastern University Dukakis Institute)

Year-over-Year Employment Growth Boston-Cambridge-Quincy

0.00%

36.50% 28.90% 28.80% 25.00% 24.50%

Traditional Office

Creative v. Traditional Office Employment (CBRE)

-1000

-2.00%

Completions (sf x 1000) Net Absorption (sf x 1000) Availability Rate % Rent Inflation

-4.00% -6.00% -8.00%

Boston Retail Market Data (CBRE)

III. MARKET ANALYSIS - SUBMARKET

Sub-market Analysis

Malden falls within the Close-In Suburbs North sub-market, shown in Figure 7. This sub-market is dominated by Malden, Melrose and Revere. Beginning with the office market, the Close-In Suburbs North boasts a rentable area of 4.1 million square feet, vacancy and sublease rates of 11.8% and 2.4% respectively and quarterly net absorption of 16,500 square feet. Asking rents are currently $18.41. Figures 8 and 9 indicate the size of the sub-market and its performance relative to the Metro North, West and South in addition to the overall suburban office market. The Metro North market has underperformed relative to Metro West and South. CBRE rationalizes this phenomenon by pointing to the area’s lower-quality building stock and the region’s poor amenities. Metro West, which is the largest in size, commands the highest rents at $21/ft/yr. However, the Close-InSuburbs is outperforming its umbrella market with higher rents and a lower vacancy rate. This is most likely due to the sub-markets proximity and access to Boston.

Location Analysis Dearth of Class A Space Zooming in on Medford/Malden, the office, residential and retail markets conditions paint different pictures. Of the three, the office market has struggled the most over the years with the highest vacancies, lowest net absorption and oldest inventory. According to Dukakis Institute at Northeastern University,

a study was conducted on the office market in Malden. In Malden, 10% of its office stock is Class A, 40% Class B and 50% Class C. Data obtained from CoStar (Figure 10) shows current market data for Medford/Malden for each office type. Currently, Class B spaces are achieving the highest rents at $20.44/ ft/yr. However, year to date net absorption was -85,000 square feet, primarily due to a major loss of space vacated by Bank of America on 200 Exchange Street in Malden. The City of Malden is close to re-letting this space to a government tenant. Figures 11 and 12 indicate that Medford/Malden’s vacancy rates are hovering at 13% relative to 9.5% while its net absorption as a percentage of inventory is almost at 0%. Based on these findings, the office market in this region is not attractive from an investment or development play. Simultaneously, there is a clear demand for newer, higher quality office spaces in the region.

Multifamily: T-Stop Spurs Multifamily Boom Unlike the office market, the multifamily market in downtown Malden is booming. The downtown’s proximity to the MBTA stop on the Orange Line is seen as engine for the housing boom as Boston is only fifteen minutes. Malden has attracted the young, professional demographic consisting of students from local universities or those employed throughout the Greater Boston area. In the next few years, over eight hundred units are anticipated to hit the market. Figure 13 is a map highlighting the residential pipeline for downtown Malden. Conservations with local brokers in Malden point to an annual net absorption of 200 to

225 units. The supply in the pipeline should face no absorption challenges as Malden continues to experience its housing boom. Retail: Malden’s Next Growth Spurt Retail is typically broken down into four categories: general retail, mail, power center and shopping center. Downtown Malden is concentrated with general retail with rents of $19/ft/yr. With 10,500 square feet in the pipeline, like the office, the majority of the 2.1 million square feet of existing inventory is old stock. However, Medford/Malden’s retail occupancy rates are above 96.5%, much higher than the vacancy rate for the Boston area. Additionally rents are almost $3 higher in Medford/Malden compared to those achieved in the Greater Boston area. A net absorption of 20,000 square feet was posted for 2013. The Medford/Malden retail market appears to be healthy and the population influx and residential boom in downtown Malden will enhance the performance of this sector.

Sub-markets of Boston

Office Vacancy Medford/Malden vs. Boston 16.00% 14.00% 12.00% 10.00% 8.00%

Medford/Malden

6.00%

Greater Boston

4.00% 2.00% 0.00%

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13

Metro North Trails the Pack

Office Vacancy Medford/Malden v. Boston (Co-Star)

III. MARKET ANALYSIS - SUBMARKET

Boston Suburban Office Net Absorption 800 600 400 North South

200

West 0

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

3Q13

4Q13

-‐200 Boston Suburban Office Net Absorption (CBRE)

-‐400

Office Overview Medford/Malden

(As of End 2013)

Existing Inventory Vacancy Rate % Class A 1,252,721 14% Class B 1,272,277 17.20% Class C 823,391 4% Total Office Submarket 3,348,389 12.80%

YTD Net Absorption 47,994 -85,287 -19,455

YTD Completions 17,838 17,838

Pipeline Asking Rents $17.50 $20.44 $15.89 $18.33

Office Overview Malden (Co-Star) Office Net Absorption as % of Inventory

2.00% 1.00% 0.00% -1.00% -2.00%

Medford/Malden

-3.00%

Greater Boston

-4.00%

1Q 09 2Q 09 3Q 09 4Q 09 1Q 10 2Q 10 3Q 10 4Q 10 1Q 11 2Q 11 3Q 11 4Q 11 1Q 12 2Q 12 3Q 12 4Q 12 1Q 13 2Q 13 3Q 13 4Q 13

-5.00%

Office Net Absorption in Medford/Malden v. Boston (Co-Star)

III. MARKET ANALYSIS - SUBMARKET

Retail NNN Rent/SF/Yr Medford/Malden vs. Boston $25.00 $20.00 $15.00 Medford/Malden

$10.00

Greater Boston

4Q13

3Q13

2Q13

1Q13

4Q12

3Q12

2Q12

1Q12

4Q11

3Q11

2Q11

1Q11

4Q10

3Q10

2Q10

1Q10

4Q09

3Q09

2Q09

$0.00

1Q09

$5.00

Retail Rents Medford/Malden v. Boston (Co-Star)

Residential Units in Pipeline

General Retail Mall Power Center Shopping Center Total Retail Submarket

Existing Inventory 2,138,417 177,781 1,753,749 4,069,947

Vacancy Rate % YTD Net AbsorptionYTD Completions 2.90% 14,305 0% 3.60% 5,732 3.10% 20,037 -

Pipeline Asking Rents 10,554 $17.65 $22.23 10,554 $19.28

Retail Overview Medford/Malden (Co-Star)

97.50% 97.00% 96.50% 96.00% 95.50% 95.00% 94.50% 94.00% 93.50% 93.00% 92.50%

Medford/Malden Greater Boston

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13

Retail Overview Medford/Malden

(As of End 2013)

Retail Occupancy Rate Medford/Malden vs. Boston

Retail Occupancy Medford/Malden v. Boston (Co-Star)

DOWNTOWN MALDEN POST URBAN RENEWAL (1970s)

PRECEDENTS

IV. PRECEDENTS - DAVIS SQUARE

Davis Square Somerville, MA Quick Facts

Somerville population: 77,104 Distance from nearest major city: 4 miles Distance from furthest rail station: 0 miles Median household income: $64,603 Davis Square has been a center of commercial activity for Somerville, MA since its designation as a Square in 1883. However, the site fell into decline following World War II, when the persistent flight of residents to outer ring suburbs caused extensive decline in urban centers around the country. In 1980, a planning study completed on Davis Square asserted that the neighborhood suffered from a â&#x20AC;&#x153;lack of competitiveness among merchants, traffic congestion, inadequate parking, and an increasingly deteriorated physical environment.â&#x20AC;? Through the efforts of the Somerville Office of Planning and Community Development and the Davis Square Task Force in the late 1970s, the neighborhood successfully petitioned the MBTA to create a Red Line stop in the heart of Davis Square. The Task Force continued to play a role in the Squareâ&#x20AC;&#x2122;s development, encouraging the City of Somerville to make the Red Line stop the cornerstone of downtown revitalization efforts. The six-point intersection immediately outside of the Square was reconfigured to prioritize pedestrian access, adding crosswalks, curb extensions, and refuge islands to enhance safety and efficient travel. The plaza outside of the stop that today hosts public art, festivals, and other community events was once a poorly defined railroad right-of-way containing surface

parking and debris; this too changed during the extensive planning efforts in the 1980s and into the 1990s. Today, Davis Square is a revitalized hub of commercial and residential activity, commanding some of the highest rents in Somerville and continuing to attract new businesses whenever space becomes available. Davis Square represents what Malden could do with the real estate directly adjacent to its own Orange Line stop by prioritizing pedestrian access across Commercial Street, opening a large public space for gathering at the gateway into the CBD, and activating the street frontage of each of the buildings along Commercial Street. Although Malden has begun this effort through the re-development of the City Hall site, the City still has much opportunity left to capitalize on the foot traffic and activity inherent to their MBTA stop.

IV. PRECEDENTS - BELMAR

Belmar Shopping District Lakewood, Colorado Quick Facts

Lakewood population: 145,516 Distance from nearest major city: 8 miles Distance from furthest rail station: 1 mile Median household income: $55,093 Belmar Shopping District Size: 3.5 million SF Lakewood, Colorado, a town of 150,000 just outside the Denver city limits was once home to the Villa Italia Mall, a 1.4 million square foot enclosed mall surrounded by surface parking on a 104-acre parcel of land. The mall, which opened in 1966, flourished until the early 1980s when it fell into disrepair, like many suburban communities experienced at the time. With the mall becoming an eyesore and inhibiting Lakewoodâ&#x20AC;&#x2122;s development, local officials approached a small development company about purchasing the property and re-developing it into a mixed-use center. The developer, Continuum Partners, purchased the land in 1999 and the mall itself shortly thereafter. In the early 2000s, work began to subdivide the 104 acres into 22 city blocks. From there, Continuum planned a pedestrianfriendly downtown district comprised of 900,000 square feet of retail, 269,000 square

feet of office space, 1,300 new residential units, and extensive new public space.

and visitors to the closest light rail station, located one mile away, for free.

Continuum utilized a variety of tax incentives through the US Environmental Protection Agency to clean up the contaminated site and install a network of 8,370 solar panels atop the districtâ&#x20AC;&#x2122;s three parking garages. The parking meters are also solar powered, and energy for the streetlights comes from wind turbines on top of the light poles.

The Belmar Shopping District represents a successful redevelopment of an outdated urban typology. The efforts by the City of Lakewood to engage a private developer and negotiate the sale of the Villa Italia Mall very much aligns with the plans for Tremont Park, discussed later in the proposal.

To date, the overall project cost $750 million to build and currently generates around $17 million annually in tax revenue for Lakewood. The retail spaces are 95 percent leased and the Class A office space is completely leased. The site also includes a theater complex, public park, and outdoor cafes, all of which see heavy foot traffic during the warmer months. The final 400 new residential units are currently under construction, and the developers have contracted with a local shuttle bus company to transport residents

IV. PRECEDENTS - FOOD INCUBATOR

Rutgers Food Innovation Center Bridgeton, New Jersey Quick Facts

Lakewood population: 25,290 Median household income: $31,044 Size: 25,000 SF The 23,000 square foot Rutgers Food Innovation Center (FIC) in Bridgeton, New Jersey, offers a variety of uses benefiting the areaâ&#x20AC;&#x2122;s local food economy. The Center thrives as a business incubator and economic development accelerator program by providing business and technology expertise to both start-up and established farmers and food companies. The FIC concept combines the success of test kitchens, intended for entrepreneurial chefs hoping to launch a business, with space for commercial-level food processing, marketing and technology assistance for food entrepreneurs, food laboratories, consumer research and focus group meeting spaces, and a variety of training and education space for conferences and meetings. The largest portion of the Innovation Center is a USDA and FDA-approved shared-use processing area, in which a broad range of agricultural and food products, from fresh vegetables and fruits to soups, sauces, seasoning blends, and beverages can be manufactured either directly by a producer or on a contracted basis. Since the Center opened in 2000, more than 1,200 entrepreneurs and businesses have used the facilities to develop new products and manufacture goods at a level commensurate with local distribution needs. The current facility for the FIC opened in 2008, and by 2011 had already helped a

series of entrepreneurs launch 35 new food products. For those who come to the Center hoping to develop an entire strategy for a new business, the FIC runs Food Business Basics Workshops throughout the year that offer technical assistance to aspiring business owners. The Center is a program within Rutgers Universityâ&#x20AC;&#x2122;s New Jersey Agricultural Experiment Station, the research and outreach arm of Rutgers University whose mission is to provide wide-ranging educational programming, including agriculture, food, nutrition, and health, and workforce development, to all residents of New Jersey. With the resources available through Rutgers, the FIC has been able to partner with statewide programs like the New Jersey Farm-toSchool program to bring fresh foods produced at the FIC into school lunch programs around the state. Further, the FIC began to operate a national level in 2002 when it founded the Food Business Incubation Network (FoodBIN), an umbrella organization for similar incubators and centers that hosts annual conferences and provides networking opportunities for entrepreneurs at incubators across the country. Malden can learn much from the Food Innovation Center for the future of its Industrial Zone. With New England Coffee Company anchoring a food-based industrial economy, the City of Malden could incorporate into its zoning, branding, and development strategies for areas south of Charles Street plans for an entire Food Innovation Campus.

PROPOSAL II

PROPOSAL I

PROPOSALS

V 35

V. PROPOSAL I: Tremont Park Alexander Akel, Alison Crowley & Greg Demaiter

V. PROPOSAL I - TREMONT PARK - CONTEXT

Context The development activity in the blocks immediately surrounding the T station and running down Pleasant and Exchange Streets indicate Malden’s growing appeal to both new residents and private developers, but one area of the city’s downtown remains stalwartly suburban in its design and use. The two blocks immediately to the south of Exchange Street and to the east of the Malden Ballpark site, referred to in this report as the Centre Street Linkage, are woefully out of date with current trends in urban infill real estate development, particularly in transit-oriented communities such as this.

Malden, the Centre Street parcels represent the most heavily underutilized infill development opportunity in the city’s CBD. Although the Stop & Shop remains a necessity to Malden’s residents and commuters, we believe the site can be re-developed to maximize density, expand the CBD’s economic reach beyond Exchange Street, create much-needed new public space, and still provide a grocery store for which the residents value the site today.

Centre Street, the site’s northern boundary, serves as a major arterial through Malden to Interstate 93 to the west and Route 1 to the east. The four lane road has a narrow median in the center and few traffic lights, which encourages cars to speed and creates a significant barrier to the pedestrian-oriented CBD directly to the north for anyone hoping to reach the site on foot. The site’s current use is anchored by a 79,229 square foot suburban-format Super Stop & Shop grocery store that has been in the community since 1992 (Parcel A). Other developments include an Applebee’s pad site and a small strip retail center with multiple vacancies and H&R Block, RadioShack, and Bank of America as tenants. On the adjacent block (Parcel B), bounded by Middlesex and Main to the west and east, a large Walgreens anchors another retail strip that features multiple takeout establishments and a nail salon. Overall, with a site so close to the Malden Center MBTA station, next to the proposed Malden Ballpark, across the street from the city’s main restaurant and retail district, and in close proximity to the 800 new units of housing coming to

Existing Conditions Top Left: Stop & Shop (Parcel A) Top Right: Vacant Restaurant Outparcel Site (Parcel A) Bottom Left: Outparcel Site with Radioshack & H&R Block (Parcel A) Bottom Right: Walgreens and Jay’s Restaurant (Parcel B)

V. PROPOSAL I - TREMONT PARK - VISION

Vision Tremont Park capitalizes on the positive developments underway in Malden and creates an entirely new hub of activity featuring residential, office, commercial, entertainment, and recreational uses within a compact, pedestrian-oriented site. Specifically, the master plan calls for the following: 76,210 square foot new urban-oriented Stop & Shop grocery store 510 new mixed-income rental residential units 223,581 square feet of new Class A office space 44,340 square feet of restaurant-oriented retail 19,020 square feet of artist-oriented retail, 10,000 square foot gym An eight-screen, 37,000 square foot movie theater 950 total parking spaces, and Four acre public park and plaza with a central lake around which community events can be organized. The project, named Tremont Park, reflects the site’s historic street grid structure, which featured a Tremont Avenue running through the heart of what today is the surface parking lot serving the Stop & Shop grocery. Our vision for Tremont Park is four-fold:

1) Create a new public space for Malden, a city whose downtown currently lacks any single large assembly point for outdoor activities; 2) Generate economic activity through providing new Class A office space to attract the technology and research-oriented industries that populate the Boston metro area; 3) Bolster the amenities offered to the city’s burgeoning young professional population to ensure long-term economic success and residential retention; and 4) Most importantly, stitch together the economic engines of the CBD to the north and the industrial zone to the south, creating a transition between the two that remains sensitive to both uses while standing independently on its own. With the uses planned for the site, Tremont Park will become a destination in its own right. By creating new physical and program-oriented connections between the CBD and industrial zone, Tremont Park will lessen the disruptive impact of heavy east-west traffic on Centre Street that simply serves to carry people through Malden to somewhere else, and instead better articulate a north-south link drawing disparate parts of the city closer together. The project also proposes a new infrastructural component, a road connecting Canal Street and Middlesex Street that will cut through the center of the project to create a more traditional street grid, emphasizing walkability and pedestrians over the cars and commuters on Centre Street.

projects fronting Centre Street to tie into the young professional-oriented development occurring along Exchange and Pleasant Streets. On the southern half of the site, facing Charles Street and adjacent to the New England Coffee Company office campus, which serves as the introduction to the city’s industrial zone, the project transitions to residential with artist-oriented retail spaces. These retail spaces are intended for use as workshops, galleries, artist-owned businesses, and potentially community group and non-profit office space to better match the building stock and uses to the south of Tremont Park. Malden has expressed a strong desire to generate arts-oriented business and programming for the city, financing artists live/work studio projects and emphasizing the arts in much of their city branding. Our project acknowledges the city’s goals and seeks to include those in a natural transition from the CBD into the industrial.

Phasing Tremont Park will be built in four phases over the span of 10 years. The phases are as follows:

Phase 1:

Building A: New Stop & Shop grocery store with 6,100 sf of inline retail in the eastern parcel bounded by Centre, Main, Charles, and Middlesex Streets. Parking Component: 549 spaces on two-level structured rooftop parking to serve grocery store customers and future Building E office workers.

Phase 2:

Buildings B, C, + D: 242 market-rate and 60 affordable apartment units with 18,000 sf of food and beverage-oriented retail and a 37,000 sf theater with 10,000 sf gym. Parking Component: 243 spaces built into the first floor ground levels of Buildings B and C to serve residents in both buildings, as well as retail users. Infrastructure Component: Four-acre park with lake and new street with on-street parking spaces to be built connecting Canal and Middlesex Streets.

Phase 3:

Buildings E, F, + G: 167 market-rate and 41 affordable apartment units with 2,160 sf of food and beverage-oriented retail and 19,020 sf of artists-oriented retail, 2,000 sf of food and beverage retail, as well as one 102,660 sf Class A office building. Parking Component: 158 spaces built into a partially-submerged platform beneath Buildings F and G, eight feet below grade and four feet above grade. Parking will serve residents in Buildings F and G as well as office workers in the future Building H. Infrastructure Component: A private courtyard serving residents in Buildings F and G to be built above parking platform.

Phase 4:

Building H: A second 120,921 sf Class A office building with 7,257 sf of inline retail, primarily food and beverage.

The site’s programming features grocery, entertainment, office, and mixed-use residential

V. PROPOSAL I - TREMONT PARK - PHASING

Phasing, continued Phase 1 will require the most significant amount of negotiation. The success of Tremont Park hinges on our ability to deliver a new grocery store to replace the existing Stop & Shop that would be demolished. This requires negotiating a sale with the owner of the Stop & Shop parcel, as discussed in our Development Strategy below, and assembling the five individually owned parcels inclusive of the new Phase 1 site. These owners include three trusts, one individual, and one limited partnership. With the city’s support, the project intends to reach an acquisition agreement after two years of negotiation to assemble the property and purchase outright. Project scheduling begins at Year 0, when the developer completes negotiations and obtains site control. At that point, construction can commence on the new build-to-suit Stop & Shop, which will open after a one year construction period. Stabilization for this phase is expected by Year 2. Following Phase 1, the project’s assemblage becomes substantially more straightforward, as the developer will have already reached an agreement with the owner of the Stop & Shop site and must only acquire the last remaining parcel, a subdivided piece of land at the corner of Centre Street and Middlesex Streets where the three-tenant retail strip center currently sits. These acquisition negotiations will take place throughout the entire Phase 1 process, and construction on Phase 2 will commence in Year 3. Phases 2 through 4 each project a two year construction period due to the complex nature of each site. Starting with Phase 2, once construction is completed, Phase 3 will begin construction with this trend repeating

for Phase 4. The project is phased such that no more than 200 residential units come to market at any given time, reflecting an absorption rate of 100 units per year. This absorption rate was reached by considering the current and proposed pipeline of residential projects underway in the CBD, and acknowledging the continued demand for reasonably priced studio, 1, and 2-bedroom units in the Boston metro area. The two office components, introduced in Phases 2 and 4, will be separated by ten years between lease up, offering more than enough time to fill one building without allowing another to sit vacant. Our confidence that there will be a market for Class A office in Malden in fifteen years, when Phase 4 comes to market, is due to the emerging creative office industry and emphasis on health and human sciences in the Boston region. With areas like Kendall Square, the Seaport Innovation District, Assembly Square, and the suburban office parks in Lexington and Concord filling quickly and experiencing rapidly increasing rents, we believe that future office growth will be pushed further from the Boston city center, but remain closely tied to the public transportation system. Malden, then, is well situated to capture the next wave of office development focused on the region’s strengths in biotech, health sciences, and research and technology. From the acquisition of the new grocery store parcel to the sale of the buildings in Phase 3, the project is projected to span seventeen years.

Development Strategy

Retail Strategy

The success of the project is contingent on the developer’s ability to convince Ahold, the Dutch owner of the Stop & Shop brand and the nine acre site in Malden, to sell their interest in the site. The Stop & Shop on Centre Street grosses annual revenues of over $60 million and is one of the strongest performing stores in Ahold’s portfolio. According to Malden’s GIS, the site was purchased by Ahold in 2006 for $21.6 million. The developer will take on the risks to aggregate the five parcels for the new grocery store at $12.5 million. The new 76,000 square foot store will be built to suit for Stop & Shop. Upon the completion of construction, the store and 274 structured parking spaces will be sold to Ahold at a discount to replacement cost or $27 million. By offering Stop & Shop an attractive bid price of $22 million and $3 million for the outparcel on the site, taking on the development risk to acquire the new site and providing a new, updated space that is built-tosuit at a discount to replacement cost, Ahold will receive a completely new store at almost no additional cost or loss of revenue within a growing market. The developer will strata-title sell the grocery store and retain ownership of the 6,000 food and beverage retail and the upper level of parking or 275 spaces. Once the grocery store is built, the old site will be free.

Malden’s Central Business District is primarily composed of restaurants (25%) and healthcare and personal stores (23%) such as salons and spas. The City’s current restaurant boom must not be ignored and the plethora of healthcare and personal stores is not appropriate for the vibrant downtown Malden seeks to establish. Tremont Park will continue to focus on restaurants while also emphasizing bars and lounges and specialty food shops. Both a fitness center and a theater will be incorporated in the development.

Phases 1, 2 and 3 will be sold ten years after completion while phase 4, only five years after. Phase 1 has a long holding period as the parking garage will not reach stabilized occupancy until the office in Phase 2 is completed. Phases 2 and 3 must be held for five years given the affordable housing component. The office and retail, however could be strata-titled off at an earlier stage. Phase 4 will have the shortest holding period of only five years to enhance the investments internal rate of return.

“Fast Casual” and traditional dining options on a local and national scale were identified as the opportunities Malden desires. Local fast casual dinning options such as Cambridge and Somerville favorites: Anna’s Taqueria and Dave’s Fresh Pasta would be attractive to the young transient population in the City. National fast casual chains such as Chipotle, Nando’s Peri Peri and Sweetgreen would also fill this void. Malden has already achieved recognition for its traditional ethnic restaurants. Tremont Park will continue this trend by sourcing both local and national tenants such as Vapiano’s (Italian) or Cambridge’s Orinoco (Venezuelan) and Kaju Soft Tofu (Asian). Tremont Park will also fill another void: the nightlife and entertainment scene. For the theater, iPic and Alamo Drafthouse Cinema are potential tenants. The ideal tenant will embody an affordable yet luxury and private movie viewing experience, the new trend within the industry. Finally cafes such as Peet’s Coffee & Tea and Caribou Coffee would serve the residents, office employees and visitors to Tremont Park.

V. PROPOSAL I - TREMONT PARK - PHASING

Phasing PhasingTimeline Phasing Phase I Acquisition Construction Stabilization

Year 0

Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Year 7

Year 8

Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20

Phase II Acquisition Construction Lease-Up Stabilization Sale Phase III Construction Lease-Up Stabilization Sale Phase IV Construction Lease-Up Stabilization

1 A

Negotiate with existing grocery store to move to newly constructed store proposed on Pod B

Aggregate the parcels in Pod B for $12.5 million

Construct the new grocery store

Strata-title Sale of the Grocery Store and 274 Parking Spaces for $27 million and Purchase Pod A for $25 million

V. PROPOSAL I - TREMONT PARK - DESIGN

Water-Scape

Soft-Scape

Pedestrian Connections

Hard-Scape

Hard-Scape Pedestrian Connections

Major Intersections

Pedestrian Connections Major Intersections

Major Future Intersections

Major Intersections

Major Future Intersections

Major Arterial

Service Road

Grocery Store Circulation

Major Future Intersections

Service Road

Grocery Store Circulation

V. PROPOSAL I - TREMONT PARK - DESIGN

Residential

Office

Food & Beverage

Theatre

Grocery

Other Retail

Municipal Parking Garage

Residential

Food & Beverage

Theatre

Office

Grocery

Food & Beverage

Other Retail

Theatre

Grocery

Structured Parking

Street Parking

PHASE I

PHASE II

PHASE III

PHASE IV

Other Retail

Municipal Parking Garage

Structured Parking

Street Parking

PHASE I

PHASE II

PHASE III

PHASE IV

V. PROPOSAL I - TREMONT PARK - DESIGN

Aerial View Looking East

V. PROPOSAL I - TREMONT PARK - DESIGN

Aerial View Looking Northwest

V. PROPOSAL I - TREMONT PARK - DESIGN

Design Tremont Park is designed to fit into the vernacular of Maldenâ&#x20AC;&#x2122;s architecture with a modern edge. The six story building height reflects the new development occurring within the CBD and will be a natural transition from the older buildings on Pleasant and Exchange Streets to the newer projects south of Centre Street. The site is designed to maximize pedestrian access by creating new north-south links between the traditional CBD and Tremont Park. The main entrance to the Park will be in front of the proposed theater, where a wide plaza will draw pedestrians toward the food and beverage options and into the public space, which anchors the project. Other links created include the cut-outs of Buildings B and C, which provide sight-lines through the project, and the continuation of the proposed Ballpark plaza to the western side of Tremont Park. The cut-outs also serve to break up the block between Canal Street and Middlesex Street. The pedestrian access created adjacent to the theater turns into a street with sidewalk on the southern half of the site, but wide right of ways for pedestrians will ensure that their experience remains a priority. Tremont Park is oriented with retail and public space activity primarily clustered on the eastern half of the site due to fact that the back side of the Ballpark will front Canal Street. The Ballpark wall, while certainly not activating Canal Street, could be enlivened via murals or greenery, but as a result of that edge, the decision was made to focus pedestrian gathering spaces on the opposite side of the project. However, an outdoor covered podium on the western end of the park will provide space for live music or groups to perform, creating

Precedent images capture the intended look and feel of the public spaces within Tremont Park.

V. PROPOSAL I - TREMONT PARK - DESIGN

enough activation to ensure that the entire length of the park is well utilized. We also expect visitors coming from the Malden Center T station to enter the park from the western corner next to Building B, which will draw them immediately toward the lake and into the heart of the project. Parking for the site will be placed primarily in partially-sunken garages rising four feet above grade. The only exception to this will be the new Stop & Shop on the Middlesex Street parcel, which will feature two stories of parking on the roof. This concept was designed for an urban Safeway grocery store in Hyattsville, MD, and reflects a broader trend in reducing or eliminating surface parking for large format stores. The residential parking spaces are designed at a ratio of 0.75 spaces per unit, the office parking is designed at a ratio of 4 spaces per every 1,000 square feet of development, and the retail parking is expected to occur on the allotted on-street spaces and in the municipal garages fronting Centre Street. Materials for the buildings are, in schematic, a mix of glass and paneling. Although the palette of the residential buildings reflects the brick tones of the Pleasant and Exchange Street building typologies, the materials are distinctively modern in an effort to brand Tremont Park as a unique destination within Malden. The theater and office building adjacent are connected by an enclosed atrium, allowing passage between the entertainment use and the retail use on the ground floor of the office. The grocery store will be designed to Stop & Shop’s standards, which will likely incorporate some form of masonry. Pavers on site will be pervious and earth-toned in an effort to keep the space light, especially on the southern

portion of the park, which will be cast in shadow during portions of the day due to Building C’s massing. The residential buildings F and G south of the new Sherman Street both include private, enclosed courtyards for use by the residents. This layout maximizes the quality of the views for all of the units in the building, providing future residents with views of the Boston skyline on the southern side, Building C and the park on the northern side, and the courtyards for the interior units. The decision not to differentiate the heights of the four residential projects was made to maximize density and ensure the highest level of activation throughout the day.

Hyattsville , Maryland: Urban Grocery Store

Ultimately, Tremont Park is designed with the casual user in mind, drawing visitors to the park via tables, benches, and outdoor café spaces following a movie or day at work. With the 24-hour nature of the site’s uses, the hope is that Tremont Park will be busy all day and all year as a new center for activity to complement the traditional CBD and the new Malden Ballpark.

Building typology mix will emphasize Malden’s industrial past with a trend toward more modern materials and facades.

V. PROPOSAL I - TREMONT PARK - PROGRAM

PROGRAM SUMMARY PHASE 1 Apartment - Market 0sf Apartment - Market (Units) 0 units Apartment - Affordable 0sf Apartment - Affordable (Units) 0 units Retail - Grocery 76,210sf Retail - F&B 6,100sf Retail - Theater 0sf Retail - Other 0sf Office 0sf TOTAL 82,310sf FAR 0.93 Parking 549 spaces Parks + Hardscape 0.0 acres Construction Period Hold Period PROJECT RETURNS Internal Rates of Return Primary Use Unlevered SF BY BUILDING Unlevered + Subsidy APT - MARKET Levered APT - AFFORDABLE Levered + Subsidy RETAIL - GROCERY General Partner RETAIL - F&B Limited Partner RETAIL - THEATER GP + Sponsor RETAIL - OTHER Return on Total Assets

OFFICE BUILDING SF PARK/GREEN SPACE ROAD/INFRA OVERALL SHARE PHASE PHASE 1 PHASE 2 PHASE 3 PHASE 4

1 Years 10 Years PHASE 1

PHASE 2 242,520sf 242 units 60,630sf 60 units 0sf 28,823sf 37,090sf 0sf 0sf 369,063sf 1.24 243 spaces 4.0 acres 2 Years 10 Years PHASE 2

PHASE 3 PHASE 4 167,736sf 0sf 167 units 0 units 41,934sf 0sf 41 units 0 units 0sf 0sf 2,160sf 7,257sf 0sf 0sf 19,020sf 0sf 102,660sf 120,921sf 333,510sf 128,178sf 3.22 4.48 158 spaces 0 spaces 0.5 acres 0.0 acres 2 Years 10 Years PHASE 3

2 Years 5 Years PHASE 4

Grocery Apartment Apartment Theater 5.4% 7.8% 9.7% 12.9% A B C D 5.4% 9.1% 10.9% 12.9% 0 124,000 118,520 0 5.2% 10.7% 16.6% 27.5% 0 31,000 29,630 0 5.2% 21.1% 22.8% 27.5% 76,210 0 0 0 6,100 3,510 10,915 14,398 0 0 0 37,090 0 0 0 0 6.0% 7.2% 8.6% 0 0 0 0 82,310 158,510 159,065 51,488 0 0 0 123,685 0 0 0 48,400 9% 1 100% 0% 0% 0%

17% 2 0% 43% 0% 0%

Tremont Park

TOTAL 410,256sf 409 units 102,564sf 101 units 76,210sf 44,340sf 37,090sf 19,020sf 223,581sf 913,061sf 1.76 950 spaces 4.5 acres

6% 2 0% 14% 0% 0%

TOTAL Office Apartment Apartment Office 9.0% E F G H TOTAL 10.2% 0 91,516 76,220 0 410,256 14.0% 0 22,879 19,055 0 102,564 18.21% 0 0 0 0 76,210 17.21% 2,160 0 0 7,257 44,340 17.21% 0 0 0 0 37,090 23.75%0 11,285 7,735 0 19,020 102,660 0 0 120,921 223,581 104,820 125,680 103,010 128,178 913,061 0 0 22,875 0 146,560 0 0 0 0 48,400 11% 3 0% 0% 31% 0%

14% 3 0% 0% 38% 0%

11% 3 0% 0% 31% 0%

Tremont(Park

% 45% 11% 8% 5% 4% 2% 24% 100%

14% 4 0% 0% 0% 100%

V. PROPOSAL I - TREMONT PARK - DEVELOPMENT STRATEGY

Financial Analysis Key Assumptions

Development Cost Assumptions

The proposal calls for the development of market and affordable rental housing, a grocery store, food and beverage retail, an eight screen movie theatre, artists work spaces and office spaces. The key assumptions are broken down into five categories: operating, lease-up, development, finance and sale, and partnership structure.

With a total build-out of over 900,000 square feet on twelve acres, the first consideration is land cost. The Center Street parcel is a little over nine acres in size and is compromise of two sites while the future grocery store site is over approximately three acres spread over four separately owned sites. A land value of $25 million and $12.5 million was determined for both sites based on recent sales of those sites. Second, the hard construction costs for the market and affordable rental units were underwritten at $250/sf and $220/sf. The difference takes into account changes in the fit-outs within the units. Retail hard construction costs for the grocery store, restaurants, theater were lower at $150/sf with the artists spaces $20/sf less. Since the project possesses a large open space component, construction costs of $50/sf were entered for this category. The proposed road cutting through the site will cost $20/sf. The design calls for three types of parking thus three dissimilar construction cost estimates. The structured parking utilized above the grocery store and all of the residential building except F and G will cost $14,000/space. Parking in buildings F and G, through the use of a subterranean podium structure, is anticipated to amount to $20,000/space in comparison to $1,000/ space for the street parking around the development. Third, soft costs such as pre-development, administrative, design services, hard and soft contingencies and developer fees were considered. Pre-development costs of $500,000 for each phase to cover permitting, engineering services and impact fees of each phase were taken into account. Administrative fees of $750,000 for each phase are necessary for legal and account services rendered.

Operating Assumptions Beginning with the apartment units, market rate and affordable rents were penciled in at $3.25/sf/month and $1.17/sf/month. The model also utilizes an efficiency factor of 90% and an annual operating expense of $7,000 per unit. The average unit size is 900 square feet. The anticipated market rate rents are higher than the current rates as the development does not hit the market until five years after the grocery store parcel is acquired. The restaurants, theatre and artists retail spaces will have rents of $35/sf/year, $30/sf/ year and $20/sf/year and the leases will be structured as triple-net. The office will also be a triple-net lease with rents at $33/sf/year. Parking revenue will come from the residential units at $200/space/month and $150/ space/month from the office. Since the 275 parking spaces above the garage will serve the office tenants in building E, these spaces will be leased out at $75/space/month until the office is completed. Commercial and residential real estate taxes of 3.2% and 1.2% were inputed. An annual inflation rate of 3% to construction costs, rents and operating expenses was determined.

Design costs and hard cost contingencies were penciled in at 5.0% of total hard costs. Finally, a developer fee of 2.5% is needed to cover the cost of the developerâ&#x20AC;&#x2122;s overhead and day-today operations.

of the performance of the work spaces and the weakness of the office market, those spaces are anticipated to be 50% leased in the first year.

Finance & Sale Assumptions

Given the size and magnitude of the development opportunity, the developer will utilize outside equity. Of the required equity contribution for each phase, the developer will contribute 10% as a pari passu in the deal. For each phase, a new sponsor entity will be created to oversee the development. Broken into a four tiered waterfall structure, in the first tier, the GP and LP(s) are to be provided with an annual preferred return of 15% and the return of their capital contribution. In the second tier, the GP and LP(s) will share 80% of the cash flows on a pro-rata basis with the remaining 20% to the Sponsor until the investors achieve a 16% internal rate of return. Similar to tier three, the investors will share, also on a pro-rata basis, 70% of the cash flows with the remaining 30% to the Sponsor until the investors obtain a return of 17.50%. Lastly, in tier four, the Sponsor receives a promote as any remaining cash flows are split 60/40 to the investors and the Sponsor.

The construction of each phase will be financed through a construction loan at a 5.50% interest rate. The LTC for each construction loan will be 70%. The thirty-year, 6% interest rate permanent loan, also known as a take-out loan, will be annually amortized. A debt service ratio of 1.20 is a applied in order to calculate the value of the take-out loan at which the NOI supports the debt service. No loan origination fee or points were applied. Regarding the sale of the properties, exit cap rates for each product type were determined. The exit cap rate for market rate and affordable apartments is 6%and 6.5% while the food and beverage, theatre and artists retail spaces are at 6%, 6% and 6.25% respectively. The office exit cap rate is 6.25% as well. The cost of sale is 2% of the sale price to account for legal fees.

Lease-Up Assumptions Based on the conducted market analysis, each use has its own lease-up schedule. Beginning with the residential units, the first year average occupancy for both the market rate and affordable units is 60%. Next, the theatre will be completely occupied in the first year as it will be pre-leased or built-to-suit. Since Malden is already a booming restaurant scene, it is believed the food and beverage spaces will be leased quickly, with over 60% in the first year. On the other hand, given the uncertainty

Partnership Structure

Sources & Uses Tremont Park will be financed through five different sources: investor equity, construction debt, low income housing tax credits, environmental grants from the Community Preservation Act and tax increment bond financing. Regarding LIHTC, the developer will apply for 9% tax credit or 70% subsidy. Tax credits will be

V. PROPOSAL I - TREMONT PARK - FINANCIAL ANALYSIS

Financial Analysis, continued sold at $0.90 for each dollar of credit. A 2.5% investor ownership interest in the property by the purchasers of the tax credits is required. The developer and its consultants recommend that the City of Malden consider utilizing TIF to pay for infrastructure improvements within the central business district (zone I), the baseball field and center street sites (zone II), and the industrial zone (zone IV). TIF is a public financing method that utilizes the future gains in taxes to subsidize current improvements which are utilized to create the conditions for the future gains. Under a TIF, the City would issue bonds and provide developers with the proceeds from their sale. Future development would lead to an increase in tax revenue, or a tax increment which the City would then used to repay the interest and principal of the outstanding bonds. TIFs provide many short-term and long-term benefits such as development incentives that require no tax increases, the creation of jobs and a stronger and broader tax base, attraction of private investment and growth of property values. Lastly, Community Preservation Act financing, a state of Massachusetts program, will be sought after for open space improvements. In Phase 1, the development of the grocery store and parking will be financed 30% by investor equity and 70% construction debt. In Phase 2, the construction debt will also cover 70% of the total costs with 12% and 11% funded by LIHTC and investor equity. The TIF will cover 6% of the total costs, such as open space and roads and infrastructure. CPA financing will cover 1% of the cost for this phase. For Phase 3, 70% of the costs will be financed by a construction loan, 10% from LIHTC and the remaining 20% from investor equity while Phase 4 will be financed com-

pletely by a construction loan and equity from the partnership. The total development will cost approximately $326 million. Phase 1, 2, 3 and 4 will cost approximately $38 million, $139 million, $110 million and $38 million respectively. Figure X displays the sources and uses for Tremont Park.

Return Analysis Unlevered, subsidized unlevered, levered and subsidized levered internal rates of returns in addition to return on total assets were calculated for each phase (Figure x). With no subsidies, Phase 1 has the lowest unlevered and levered returns at 5.4% and 5.2%, indicating negative leverage. The low returns are driven by the fact that the grocery store is sold at a discount to replacement cost. The IRRs are still greater than 0% since the retained parking and food and beverage retail is expected to perform well. In Phase 2, unlevered and levered returns are 7.8% and 9.2% and with LIHTC, TIF and CPA, the returns are bumped up to 10.7% and 21.7%. The return on total assets (ROTA) is 6%. In Phase 3, the returns are also driven by the subsidies as the unlevered and levered IRRs are 9.7% and 16.6% and rise to 10.9% and 22.8% with the introduction of LIHTC. The ROTA is 7.2%. Lastly, Phase 4, which is primarily office, is not subsidized, providing unlevered and levered returns of 12.9% and 27.5% with a ROTA of 8.3%. For the entire project, the unlevered and levered IRRs are 9.0% and 14.0% while the subsidized unlevered and levered returns are 10.2% and 18.40%.

Sensitivity Analysis A sensitivity analysis was conducted with three scenarios: a pessimistic, base and an optimistic one. In the pessimistic scenario, rent is decreased by 5%, construction increased by 5%, interest rates rise 1%, LIHTC subsidy falls by 5% while the cap rate is 1% higher. The growth rate falls from 3% to 1%. The unlevered and levered returns fall to 4.53% and 0.81% while the investor return is 7.15%. The optimistic scenario assumes the exact opposite (rents increase, construction costs decrease, etc). As a result, unlevered and levered returns rise to 13.71% and 26.27% while the investors receive 26.28%.

Waterfall Analysis A waterfall was developed to determine the returns to the general partner and limited partners of Tremont Park. The project will create $326 million in total cash flow. The GP and LP(s) are expected to receive levered returns of 17.21% The sponsor will receive approximately $36 million over the timeframe of the development. The levered IRR to the GP and Sponsor is 23.31%.

Sensitivity Analysis

Pessimistic

Rent Change

PROGRAM SUMMARY PHASE 1 Construction Cost Change Apartment - Market 0sf Interest Rate Change Apartment - Market (Units) 0 units Subsidy -Change Apartment Affordable 0sf Cap Rate- Affordable Change(Units) Apartment 0 units Retail - Grocery 76,210sf Growth Rate Retail - F&B 6,100sf Retail Theater 0sf Internal Rates of Return Retail - Other 0sf Unlevered Office 0sf Unlevered + Subsidy 82,310sf TOTAL Levered FAR 0.93 Levered + Subsidy 549 spaces Parking Parks + Hardscape 0.0 acres General Partner

Limited Partner

Construction Period GP + Sponsor Hold Period

PROJECT RETURNS Internal Rates of Return Unlevered Unlevered + Subsidy Levered Levered + Subsidy General Partner Limited Partner GP + Sponsor Return on Total Assets

1 Years 10 Years PHASE 1 5.4% 5.4% 5.2% 5.2%

-5%

PHASE 2 5% 242,520sf 242 1% units -5% 60,630sf 60 1% units 0sf 1% 28,823sf 37,090sf 0sf 4.53% 0sf 5.75% 369,063sf 0.81% 1.24 2435.47% spaces 4.0 acres 7.15%

7.15% 2 Years 7.15%

10 Years

PHASE 2

Base

Optimistic

PHASE 3 PHASE 4 0% 167,736sf 0sf 167 units 0% 0 units 41,934sf 0% 0sf 41 units 0% 0 units 0sf 3% 0sf 2,160sf 7,257sf 0sf 0sf 19,020sf 0sf 8.97% 102,660sf 120,921sf 10.20% 333,510sf 128,178sf 14.00% 3.22 4.48 18.21%0 spaces 158 spaces 0.5 acres 17.21%0.0 acres

17.21%

TOTAL -5% 410,256sf 409-1% units 5% 102,564sf 101-1% units 76,210sf 5% 44,340sf 37,090sf 19,020sf 13.71% 223,581sf 14.96% 913,061sf 26.27% 1.76 30.18% 950 spaces 4.5 acres 26.28%

26.28%

2 Years 23.75% 2 Years 45.14% 10 Years 5 Years PHASE 3

PHASE 4

7.8% 9.1% 10.7% 21.1%

9.7% 10.9% 16.6% 22.8%

12.9% 12.9% 27.5% 27.5%

6.0%

7.2%

8.6%

TOTAL 9.0% 10.2% 14.0% 18.21% 17.21% 17.21% 23.75%

V. PROPOSAL I - TREMONT PARK - FINANCIAL ANALYSIS

Key KeyAssumptions Assumptions KEY ASSUMPTIONS Current rent/price Efficiency factor Occupancy Other income Parking revenue Parking occupancy OPEX (excluding taxes) Exit cap rate First year avg occupancy

CONSTRUCTION COSTS Apartment - Market Apartment - Affordable Retail - Grocery Retail - F&B Retail - Theater Retail - Other Office Parking - Structured Parking - Podium Parking - Surface Park/green space Roads/infrastructure OTHER COSTS Design Hard contingency Soft contingency Developer fee Environmental

YES NO

Tremont Park APT - MARKET APT - AFFORDABLE $3.25/sf $1.17/sf 90% 90% 95% 100% 0% 0% $200/month $0/month 95% 95% $7,000/unit $7,000/unit 6.00% 6.50% 60% 60%

$250/sf $220/sf $150/sf $150/sf $150/sf $130/sf $215/sf $14,000/space $20,000/space $1,000/space $50/sf $20/sf

5.0% of hard costs 5.0% of hard costs 5.0% of soft costs 2.5% of all costs $0/acre

RETAIL - GROCERY $15/sf NNN 85% 100% 0% $0/day 0% 0% 6.00% 100%

FINANCE Interest rates TIF Construction Permanent DSCR Amortization (yrs) Loan fee

RETAIL - F&B RETAIL - THEATER $35/sf NNN $30/sf NNN 85% 85% 90% 100% 0% 0% $0/day $0/day 0% 0% 0% 0% 6.00% 6.00% 60% 100%

4.00% 5.50% 6.00% 1.20 30 0.00%

Tax credits LIHTC/SHTC applicable % LIHTC/SHTC credit pricing Investor ownership

9% $0.90 2.5%

OTHER Inflation Commercial tax Residential tax Cost of sale

3.0% 3.2% 1.3% 2.0%

RETAIL - OTHER $20/sf NNN 90% 90% 0% $0/day 0% 0% 6.25% 50%

PARKING RATIOS Sf per space - Structure Parking Sf per space - Structured Podium Sf per space - Surface Parking GROCERY STORE PARKING Monthly Parking Revenue Occupancy

OFFICE $33 85% 90% 0% $150/month 95% 0% 6.25% 50%

300 300 250

$75/space 50%

PARTNERSHIP GP LP Annual Preferred Return

10% 90% 15%

Tier II GP/LP Sponsor Until Investor

80% 20% 16%

Tier III GP/LP Sponsor Until Investor

70% 30% 17.50%

Tier IV GP/LP Sponsor

60% 40%

V. PROPOSAL I - TREMONT PARK - FINANCIAL ANALYSIS

Project Absorption Project Absorption ABSORPTION

Tre

TOTAL

Apartment - Market Units Delivered Units Absorbed Cumulative Absorption

409 389

Apartment - Affordable Units Delivered Units Absorbed Cumulative Absorption

101 101

Retail - Grocery Space Delivered Space Absorbed Cumulative Absorption

76,210 76,210

Retail - F&B Space Delivered Space Absorbed Cumulative Absorption

44,340 39,906

Year 1

Year 2

Year 4

Year 5

Year 6

Year 7

Year 8

Year 9

Year 10

Year 11

Year 12

Year 13

Year 14

Year 15

Year 16

Year 17

Year 18

Year 19

Year 20

242 145 145.2

85 230

167 100 330

58 389

389

60 36 36

24 60

41 25 84.6

16 101

101

76,210 76,210 76,210

76,210

6,100 3,660 3,660

1,830 5,490

5,490

28,823 17,294 22,784

8,647 31,431

2,160 1,296 32,727

648 33,375

7,257 4,354 37,729

2,177 39,906

39,906

37,090

37,090 37,090 37,090

37,090

Retail - Other Space Delivered Space Absorbed Cumulative Absorption

19,020 17,118

19,020 9,510 9,510

7,608 17,118

17,118

Office Space Delivered Space Absorbed Cumulative Absorption

223,581 201,223

102,660 51,330 51,330

41,064 92,394

120,921 60,461 152,855

48,368 201,223

201,223

Retail - Theater Space Delivered Space Absorbed Cumulative Absorption

Year 3

V. PROPOSAL I - TREMONT PARK - FINANCIAL ANALYSIS

Sources + Uses SOURCES Construction Debt LIHTC TIF Environmental Credits Partnership TOTAL TOTAL SUBSIDY

PHASE 1 26,610,440 0 0 0 11,404,474 38,014,915 0

% 70% 0% 0% 0% 30% 100% 0%

PHASE 2 97,273,226 16,363,817 8,757,333 0 16,567,376 138,961,752 25,121,150

% 70% 12% 6% 0% 12% 100% 18%

PHASE 3 76,917,718 10,658,393 22,306,343 109,882,454 10,658,393

% 70% 10% 0% 0% 20% 100% 10%

PHASE 4 27,136,929 11,630,112 38,767,042 0

Tremont Â TOTAL %Park 227,938,313 70% 27,022,210 8% 8,757,333 3% 0 0% 61,908,306 19% 325,626,162 100% 35,779,543 11%

% 70% 0% 0% 0% 30% 100% 0%

10%

11%

19% 0% 3%

Construction Debt

Land + Environmental

LIHTC

Buildings

3% 4% Parking

TIF

Parks + Hardscape Environmental Credits Soft Cost + Contingency Partnership

70%

USES Land + Environmental Buildings Parking Parks + Hardscape Soft Cost + Contingency Finance TOTAL

PHASE 1 12,500,000 12,346,500 7,686,000 0 4,004,689 1,477,725 38,014,915

% 33% 32% 20% 0% 11% 4% 100%

Finance

PHASE 2 17,333,593 83,855,550 2,637,000 7,152,250 13,776,952 14,206,406 138,961,752

% 12% 60% 2% 5% 10% 10% 100%

PHASE 3 6,005,184 76,027,980 3,160,000 1,143,750 12,009,601 11,535,939 109,882,454

61%

% 5% 69% 3% 1% 11% 10% 100%

PHASE 4 1,661,222 27,086,565 5,722,302 4,296,952 38,767,042

% 4% 70% 0% 0% 15% 11% 100%

TOTAL 37,500,000 199,316,595 13,483,000 8,296,000 35,513,545 31,517,022 325,626,162

% 12% 61% 4% 3% 11% 10% 100%

V. PROPOSAL I - TREMONT PARK - FINANCIAL ANALYSIS Phase PHASEI:I -Proforma PROFORMA PRO-FORMA - PH1 Land Environmental Hard costs Soft costs TOTAL DEVELOPMENT

Tremont Park TOTAL (12,500,000) 0 (21,665,149) (3,077,013) (37,242,161)

OPERATIONS Gross Potential Rent Vacancy Parking Other Income EFFECTIVE GROSS INCOME

TOTAL 2,207,104 (278,468) 3,767,546 0 5,696,182

Operating Expenses Real Estate Taxes EXPENSES NET OPERATING INCOME SALE PROCEEDS

Acquisition Year 0 (12,500,000) 0 0 (538,125) (13,038,125)

Year 0

Construction Stabilization Year 1 Year 2 0 0 0 0 (21,665,149) 0 (2,538,888) 0 (24,204,036) 0

Year 1

Year 2 192,527 (77,011) 131,286 0 246,802

Hold Year 3

Hold Year 4 0 0 0 0 0

Year 3 198,303 (19,830) 135,225 0 313,697

Hold Year 5 0 0 0 0 0

Year 4 204,252 (20,425) 139,282 0 323,108

Hold Year 6 0 0 0 0 0

Year 5 210,379 (21,038) 143,460 0 332,802

Hold Year 7 0 0 0 0 0

Year 6 216,691 (21,669) 147,764 0 342,786

Hold Year 8 0 0 0 0 0

Year 7 223,191 (22,319) 578,348 0 779,220

Hold Year 9 0 0 0 0 0

Year 8 229,887 (22,989) 595,699 0 802,597

0 0 0 0 0

Year 9 236,784 (23,678) 613,570 0 826,675

Hold Year 10 0 0 0 0 0

Hold Year 11 0 0 0 0 0

Sale Year 12

Year 10 243,887 (24,389) 631,977 0 851,475

Year 11 251,204 (25,120) 650,936 0 877,019

Year 12

0 0 0 0 0

0 0 0

5,696,182

246,802

313,697

323,108

332,802

342,786

779,220

802,597

826,675

851,475

877,019

41,558,515

27,242,161

14,316,354

PROJECT-LEVEL RETURN UNLEVERAGED

IRR 5.38%

TOTAL 10,012,536

Year 0 (13,038,125)

Year 1 Year 2 (24,204,036) 27,488,964

Year 3 313,697

Year 4 323,108

Year 5 332,802

Year 6 342,786

Year 7 779,220

Year 8 802,597

Year 9 826,675

Year 10 851,475

Year 11 877,019

Year 12 14,316,354

PROJECT-LEVEL RETURN UNLEVERAGED/SUBSIDIZED

IRR 5.38%

TOTAL 10,012,536

Year 0 (13,038,125)

Year 1 Year 2 (24,204,036) 27,488,964

Year 3 313,697

Year 4 323,108

Year 5 332,802

Year 6 342,786

Year 7 779,220

Year 8 802,597

Year 9 826,675

Year 10 851,475

Year 11 877,019

Year 12 14,316,354

TOTAL (1,441,691) 0 (36,042) (1,477,733) (38,719,894)

Year 0 (53,336) 0 (1,333) (54,670) (13,092,795)

Year 1 (720,842) 0 (18,021) (738,863) (24,942,899)

Year 2 (667,505) 0 (16,688) (684,193) (684,193)

Year 3

Year 4

Year 5

Year 6

Year 7

Year 8

Year 9

Year 10 0 0 0 0 0

Year 11 0 0 0 0 0

Year 12

Year 2

Year 3

Year 12

CONSTRUCTION FINANCING Construction interest Finance Developer fee Total financing cost TOTAL DEVELOPMENT - LEVERAGED

PERMANENT LOAN Draws Interest Repayments

TOTAL 2,830,995 (1,584,696) (2,830,995)

CASH FLOW AFTER DEBT SERVICE

Year 0 0 0 0

Year 1 2,830,995 0 0

18,566,080

EQUITY PARTNERSHIP

TOTAL 11,615,966

Year 0 11,615,966

LIHTC Contributions Distributions TIF STATE/FED ENVIRONMENTAL TOTAL EQUITY CONTRIBUTIONS

0 0 0 0 11,615,966

CASH FLOW TO PARTNERSHIP

18,566,080

Year 1

0 (169,860) (35,809) 3,010,370

0 0 0 0 0

Year 4

Year 5

Year 6

Year 7

0 (165,434) (40,235)

0 (163,020) (42,649)

0 (160,461) (45,208)

0 (157,748) (47,921)

0 (154,873) (50,796)

0 (151,825) (53,844)

Year 10 0 (148,595) (57,074)

Year 11 0 (145,170) (60,499)

0 0 (2,359,004)

108,029

117,440

127,133

137,117

573,552

596,928

621,006

645,806

671,351

11,957,349

Year 12

Year 10 0

Year 11 0

0 0 0 0 11,615,966

0 0 0 0 0

3,010,370

108,029

117,440

127,133

137,117

573,552

596,928

621,006

645,806

671,351

11,957,349

Year 2 3,010,370

Year 3 108,029

Year 4 117,440

Year 5 127,133

Year 6 137,117

Year 7 573,552

Year 8 596,928

Year 9 621,006

Year 10 645,806

Year 11 671,351

Year 12 11,957,349

Year 2 3,010,370

Year 3 108,029

Year 4 117,440

Year 5 127,133

Year 6 137,117

Year 7 573,552

Year 8 596,928

Year 9 621,006

Year 10 645,806

Year 11 671,351

Year 12 11,957,349

IRR 5.17%

TOTAL 6,950,114

Year 0 (11,615,966)

Year 1

PROJECT-LEVEL LEVERAGED/SUBSIDIZED

IRR 5.17%

TOTAL 6,950,114

Year 0 (11,615,966)

Year 1

Year 4

Year 5

Year 6

Year 7

Year 9

0 0 0 0 0

0 (167,711) (37,958)

Year 3

Year 8

0 0 0 0 0

PROJECT-LEVEL LEVERAGED

Year 2

0 0 0 0 0

Year 8

Year 9

V. PROPOSAL I - TREMONT PARK - FINANCIAL ANALYSIS Phase PHASE II: II -Proforma PROFORMA PRO-FORMA - PH2 Land Environmental Hard costs Soft costs TOTAL DEVELOPMENT

Tremont Park TOTAL (17,333,593) 0 (109,056,281) (10,061,161) (136,451,035)

OPERATIONS Gross Potential Rent Vacancy Parking Other income EFFECTIVE GROSS INCOME

TOTAL 147,275,353 (10,903,375) 3,817,887 0 140,189,865

Operating expenses Real Estate Taxes EXPENSES NET OPERATING INCOME

3.00%

SALE PROCEEDS

Acquisition Year 2 (17,333,593) 0 0 (570,897) (17,904,490)

Year 2

Construction Year 3 0 0 (53,722,306) (4,675,007) (58,397,313)

Year 3

Construction Year 4 0 0 (55,333,975) (4,815,257) (60,149,232)

Year 4

Lease-up Year 5

Lease-up Year 6 0 0 0 0 0

0 0 0 0 0

Stabilization Year 7 0 0 0 0 0

Hold Year 8

Hold Year 9 0 0 0 0 0

Hold Year 10 0 0 0 0 0

Hold Year 11 0 0 0 0 0

Hold Year 12 0 0 0 0 0

Hold Year 13 0 0 0 0 0

Hold Year 14 0 0 0 0 0

Sale Year 15 0 0 0 0 0

0 0 0 0 0

Year 5 12,846,904 (4,700,187) 333,036 0 8,479,753

Year 6 Year 7 13,232,311 13,629,280 (610,604) (628,922) 343,027 353,318 0 0 12,964,734 13,353,676

Year 8 Year 9 14,038,158 14,459,303 (647,790) (667,223) 363,918 374,835 0 0 13,754,287 14,166,915

Year 10 Year 11 Year 12 14,893,082 15,339,875 15,800,071 (687,240) (707,857) (729,093) 386,080 397,663 409,593 0 0 0 14,591,923 15,029,680 15,480,571

Year 13 16,274,073 (750,966) 421,880 0 15,944,988

Year 14 16,762,295 (773,495) 434,537 0 16,423,338

Year 15

(28,094,591) (18,130,901) (46,225,492)

0 0 0

(2,450,705) (1,581,568) (4,032,273)

(2,524,227) (1,629,015) (4,153,241)

(2,599,953) (1,677,885) (4,277,839)

(2,677,952) (1,728,222) (4,406,174)

(2,758,291) (1,780,068) (4,538,359)

(2,841,039) (1,833,470) (4,674,510)

(2,926,270) (3,014,059) (1,888,475) (1,945,129) (4,814,745) (4,959,187)

(3,104,480) (2,003,483) (5,107,963)

(3,197,615) (2,063,587) (5,261,202)

0 0 0

93,964,373

4,447,480

8,811,493

9,075,838

9,348,113

9,628,556

9,917,413

10,214,935

10,521,384

10,837,025

11,162,136

187,588,383

0 0 0 0 0

PROJECT-LEVEL RETURN UNLEVERAGED

IRR TOTAL 7.77% 145,101,720

Year 2 (17,904,490)

Year 3 Year 4 (58,397,313) (60,149,232)

Year 5 4,447,480

Year 6 8,811,493

Year 7 9,075,838

Year 8 9,348,113

Year 9 9,628,556

Year 10 9,917,413

Year 11 10,214,935

Year 12 10,521,384

Year 13 10,837,025

Year 14 11,162,136

Year 15 187,588,383

PROJECT-LEVEL RETURN UNLEVERAGED/SUBSIDIZED

IRR TOTAL 9.15% 155,803,976

Year 2 (17,904,490)

Year 3 Year 4 (40,656,238) (60,149,232)

Year 5 4,336,293

Year 6 8,591,206

Year 7 8,848,942

Year 8 9,114,410

Year 9 9,387,842

Year 10 9,669,478

Year 11 9,959,562

Year 12 10,258,349

Year 13 10,566,099

Year 14 10,883,082

Year 15 182,898,673

Year 3 Year 4 (1,073,832) (3,973,975) 0 0 (26,846) (99,349) (1,100,678) (4,073,325) (59,497,991) (64,222,557)

Year 5 (5,800,286) 0 (145,007) (5,945,293) (5,945,293)

Year 6 (2,937,367) 0 (73,434) (3,010,801) (3,010,801)

CONSTRUCTION FINANCING Construction interest Finance Developer fee Total financing cost TOTAL DEVELOPMENT - LEVERAGED

TOTAL (14,418,272) 0 (360,457) (14,778,729) (151,229,764)

Year 2

PERMANENT LOAN Draws Interest Repayments

TOTAL 104,106,146 (47,472,309) (104,106,146)

Year 2

0 0 0 0 (17,904,490)

Year 10 (74,448) 0 (1,861) (76,309) (76,309)

Year 11 (74,448) 0 (1,861) (76,309) (76,309)

Year 7

Year 8

Year 9

Year 10

Year 11

Year 12 (74,448) 0 (1,861) (76,309) (76,309)

Year 14 (74,448) 0 (1,861) (76,309) (76,309)

Year 13

Year 14

Year 15 (37,224) 0 (931) (38,155) (38,155)

0 0 0

Year 6 104,106,146 0 0

128,620,703

4,447,480

8,811,493

EQUITY PARTNERSHIP

TOTAL 17,961,766

Year 2 17,904,490

Year 3 57,275

Year 5

Year 6

LIHTC Contributions Distributions TIF STATE/FED ENVIRONMENTAL TOTAL EQUITY CONTRIBUTIONS

17,741,074 (3,215,518) 9,494,392 0 45,197,232

0 0 0 0 17,904,490

17,741,074 0 9,494,392 0 27,292,742

0 0 0 0 0

4,336,293

8,591,206

1,474,824

1,740,292

2,013,724

2,295,359

2,585,444

2,884,231

3,191,981

3,508,964

92,782,868

Year 5 4,447,480

Year 6 8,811,493

Year 7 1,512,640

Year 8 1,784,915

Year 9 2,065,358

Year 10 2,354,215

Year 11 2,651,737

Year 12 2,958,185

Year 13 3,273,827

Year 14 3,598,938

Year 15 95,161,916

Year 5 4,336,293

Year 6 8,591,206

Year 7 1,474,824

Year 8 1,740,292

Year 9 2,013,724

Year 10 2,295,359

Year 11 2,585,444

Year 12 2,884,231

Year 13 3,191,981

Year 14 3,508,964

Year 15 92,782,868

Year 4 0

PROJECT-LEVEL LEVERAGED

IRR 10.75%

TOTAL 83,423,471

Year 2 (17,904,490)

Year 3 (27,292,742)

Year 4

PROJECT-LEVEL LEVERAGED/SUBSIDIZED

IRR TOTAL 21.07% 107,443,420

Year 2 (17,904,490)

Year 3 (57,275)

Year 4

0 (111,187) 0 0 0

0 (6,167,359) (1,395,839)

0 (6,083,609) (1,479,590)

0 (5,994,833) (1,568,365)

1,512,640

1,784,915

2,065,358

2,354,215

2,651,737

2,958,185

3,273,827

3,598,938

Year 10

Year 11

Year 12

Year 13

Year 14

0 (220,287) 0 0 0

Year 8 0

0 (37,816) 0 0 0

Year 9 0

0 (44,623) 0 0 0

0 (51,634) 0 0 0

0 (58,855) 0 0 0

0 (66,293) 0 0 0

0 (73,955) 0 0 0

0 (5,695,250) (1,867,948)

Year 15 0 0 (5,583,174) 0 (1,980,025) (91,072,869)

0 (6,246,369) (1,316,829)

Year 7 0

Year 12 0 0 (5,900,731) (5,800,983) (1,662,467) (1,762,215)

Year 13 (74,448) 0 (1,861) (76,309) (76,309)

0 0 0

125,405,185

Year 5

Year 9 (74,448) 0 (1,861) (76,309) (76,309)

0 0 0

CASH FLOW TO PARTNERSHIP

Year 4

Year 8 (74,448) 0 (1,861) (76,309) (76,309)

0 0 0

CASH FLOW AFTER DEBT SERVICE

Year 3

Year 7 (74,448) 0 (1,861) (76,309) (76,309)

0 (81,846) 0 0 0

95,161,916

Year 15 0

0 (89,973) 0 0 0

0 (2,379,048) 0 0 0

V. PROPOSAL I - TREMONT PARK - FINANCIAL ANALYSIS

Phase PHASEIII: III -Proforma PROFORMA

Tremont Park

PRO-FORMA - PH3 Land Environmental Hard costs Soft costs TOTAL DEVELOPMENT

TOTAL (6,005,184) 0 (99,249,559) (9,377,558) (114,632,301)

OPERATIONS Gross Potential Rent Vacancy Parking Other income EFFECTIVE GROSS INCOME

TOTAL 136,812,904 (13,187,509) 4,283,455 0 127,908,850

Operating expenses Real Estate Taxes EXPENSES NET OPERATING INCOME

3.00%

SALE PROCEEDS

Acquisition Year 4 (6,005,184) 0 0 (605,664) (6,610,849)

Year 4

Construction Year 5 0 0 (48,891,408) (4,321,130) (53,212,538)

Year 5

Construction Year 6 0 0 (50,358,151) (4,450,764) (54,808,914)

Year 6

Lease-up Year 7

Lease-up Year 8 0 0 0 0 0

0 0 0 0 0

Stabilization Year 9 0 0 0 0 0

Hold Year 10

Hold Year 11 0 0 0 0 0

Hold Year 12 0 0 0 0 0

Hold Year 13 0 0 0 0 0

Hold Year 14 0 0 0 0 0

Hold Year 15 0 0 0 0 0

Hold Year 16 0 0 0 0 0

Sale Year 17 0 0 0 0 0

0 0 0 0 0

Year 7 11,934,259 (5,169,966) 373,648 0 7,137,941

Year 8 Year 9 12,292,287 12,661,055 (789,198) (812,874) 384,857 396,403 0 0 11,887,946 12,244,585

Year 10 Year 11 Year 12 Year 13 Year 14 13,040,887 13,432,114 13,835,077 14,250,129 14,677,633 (837,260) (862,378) (888,249) (914,896) (942,343) 408,295 420,544 433,160 446,155 459,540 0 0 0 0 0 12,611,922 12,990,280 13,379,988 13,781,388 14,194,830

Year 15 Year 16 15,117,962 15,571,501 (970,614) (999,732) 473,326 487,526 0 0 14,620,675 15,059,295

(20,528,327) (16,632,508) (37,160,835)

0 0 0

(1,790,696) (1,450,862) (3,241,558)

(1,844,417) (1,494,388) (3,338,805)

(1,899,750) (1,539,220) (3,438,969)

(1,956,742) (1,585,396) (3,542,138)

93,134,856

4,104,588

8,763,593

9,026,500

9,297,295

9,576,214

9,863,501

183,285,987

(2,015,445) (2,075,908) (1,632,958) (1,681,947) (3,648,403) (3,757,855)

(2,268,401) (2,336,453) (1,837,909) (1,893,046) (4,106,309) (4,229,499)

0 0 0

10,159,406

10,464,188

10,778,114

11,101,457

183,285,987

Year 14 10,464,188

Year 15 10,778,114

Year 16 11,101,457

Year 17 183,285,987

Year 14 10,202,583

Year 15 10,508,661

Year 16 10,823,921

Year 17 178,703,837

Year 14

Year 15

Year 16

Year 17

IRR TOTAL 9.74% 161,788,542

Year 4 (6,610,849)

Year 5 Year 6 (53,212,538) (54,808,914)

Year 7 4,104,588

Year 8 8,763,593

Year 9 9,026,500

Year 10 9,297,295

Year 11 9,576,214

PROJECT-LEVEL RETURN UNLEVERAGED/SUBSIDIZED

IRR TOTAL 10.88% 167,116,104

Year 4 (6,610,849)

Year 5 Year 6 (40,974,455) (54,808,914)

Year 7 4,001,973

Year 8 8,544,503

Year 9 8,800,838

Year 10 9,064,863

Year 11 9,336,809

Year 12 9,616,913

Year 5 Year 6 (769,813) (3,198,550) 0 0 (19,245) (79,964) (789,058) (3,278,514) (54,001,596) (58,087,428)

Year 7 (4,857,475) 0 (121,437) (4,978,912) (4,978,912)

Year 8 (2,428,737) 0 (60,718) (2,489,456) (2,489,456)

Year 10

Year 11

Year 4

PERMANENT LOAN Draws Interest Repayments

TOTAL 103,540,212 (47,214,243) (103,540,212)

Year 4

0 0 0 0 (6,610,849)

0 0 0 0 0

4,104,588

23,986,083

1,504,417

1,775,212

2,054,131

EQUITY PARTNERSHIP

TOTAL 25,612,389

Year 4 6,610,849

Year 5 19,001,540

Year 10

Year 11

LIHTC Contributions Distributions TIF STATE/FED ENVIRONMENTAL TOTAL EQUITY CONTRIBUTIONS

12,238,084 (3,522,222) 0 0 37,850,472

0 0 0 0 6,610,849

12,238,084 0 0 0 31,239,623

0 0 0 0 0

4,001,973

23,386,431

1,466,806

1,730,831

2,002,777

2,282,882

2,571,389

2,868,552

3,174,629

3,489,889

90,390,497

Year 7 4,104,588

Year 8 23,986,083

Year 9 1,504,417

Year 10 1,775,212

Year 11 2,054,131

Year 12 2,341,417

Year 13 2,637,322

Year 14 2,942,104

Year 15 3,256,030

Year 16 3,579,373

Year 17 92,708,202

Year 7 4,001,973

Year 8 23,386,431

Year 9 1,466,806

Year 10 1,730,831

Year 11 2,002,777

Year 12 2,282,882

Year 13 2,571,389

Year 14 2,868,552

Year 15 3,174,629

Year 16 3,489,889

Year 17 90,390,497

PROJECT-LEVEL LEVERAGED

IRR TOTAL 16.60% 103,038,407

Year 4 (6,610,849)

Year 5 (31,239,623)

Year 6

PROJECT-LEVEL LEVERAGED/SUBSIDIZED

IRR 22.77%

Year 4 (6,610,849)

Year 5 (19,001,540)

Year 6

TOTAL 111,754,268

Year 8

0 (102,615) 0 0 0

Year 9 0

0 (599,652) 0 0 0

0 (37,610) 0 0 0

0 (44,380) 0 0 0

Year 12 0

0 (51,353) 0 0 0

0 (58,535) 0 0 0

Year 14

0 0 0 0 0

140,888,879

2,341,417

Year 13

0 0 0 0 0

0 (6,133,832) (1,388,251)

Year 12 0 0 (6,050,537) (5,962,245) (1,471,546) (1,559,839)

0 0 0 0 0

0 (6,212,413) (1,309,671)

Year 7

Year 11

0 0 0 0 0

Year 8 103,540,212 0 0

Year 10

Year 13 0 0 0 0 0

0 0 0

Year 6

Year 9

Year 12 0 0 0 0 0

0 0 0

137,366,657

Year 7

0 0 0 0 0

0 0 0

CASH FLOW TO PARTNERSHIP

Year 6

0 0 0 0 0

Year 13 9,905,421

0 0 0

CASH FLOW AFTER DEBT SERVICE

Year 5

Year 9

0 0 0 0 0

(2,202,331) (1,784,377) (3,986,708)

PROJECT-LEVEL RETURN UNLEVERAGED

TOTAL (11,254,578) 0 (281,364) (11,535,943) (126,168,244)

Year 17

(2,138,185) (1,732,405) (3,870,590)

0 192,795,411 Year 12 Year 13 9,863,501 10,159,406

CONSTRUCTION FINANCING Construction interest Finance Developer fee Total financing cost TOTAL DEVELOPMENT - LEVERAGED

0 0 0 0 0

Year 15

Year 16 Year 17 0 0 0 (5,664,290) (5,552,823) 0 (1,857,793) (1,969,261) (90,577,786)

0 (5,868,654) (1,653,429)

0 (5,769,448) (1,752,635)

2,637,322

2,942,104

3,256,030

3,579,373

92,708,202

Year 13

Year 14

Year 15

Year 16

Year 17

0 (65,933) 0 0 0

0 (73,553) 0 0 0

0 (81,401) 0 0 0

0 (89,484) 0 0 0

0 (2,317,705) 0 0 0

V. PROPOSAL I - TREMONT PARK - FINANCIAL ANALYSIS

Phase IV: Proforma PHASE IV - PROFORMA PRO-FORMA - PH4 Land Environmental Hard costs Soft costs TOTAL DEVELOPMENT

Tremont Park TOTAL (1,661,222) 0 (35,503,392) (4,448,290) (41,612,904)

OPERATIONS Gross Potential Rent Vacancy Parking Other income EFFECTIVE GROSS INCOME

TOTAL 24,991,531 (4,353,891) 0 0 20,637,640

Operating expenses Real Estate Taxes EXPENSES NET OPERATING INCOME

3.00%

SALE PROCEEDS

Acquisition Year 6 (1,661,222) 0 0 (642,549) (2,303,772)

Year 6

Construction Year 7 0 0 (17,489,356) (1,874,749) (19,364,105)

Year 7

Construction Year 8 0 0 (18,014,036) (1,930,992) (19,945,028)

Year 8

Lease-up Year 9

Lease-up Year 10 0 0 0 0 0

0 0 0 0 0

Stabilization Year 11 0 0 0 0 0

Hold Year 12

Hold Year 13 0 0 0 0 0

Sale Year 14 0 0 0 0 0

0 0 0 0 0

Year 9 4,707,269 (2,325,465) 0 0 2,381,804

Year 10 4,848,487 (484,849) 0 0 4,363,638

Year 11 4,993,942 (499,394) 0 0 4,494,548

Year 12 5,143,760 (514,376) 0 0 4,629,384

Year 13 5,298,073 (529,807) 0 0 4,768,266

Year 14

0 (2,786,336) (2,786,336)

0 0 0

0 (524,819) (524,819)

0 (540,564) (540,564)

0 (556,781) (556,781)

0 (573,484) (573,484)

0 (590,689) (590,689)

17,851,304

1,856,985

3,823,075

3,937,767

4,055,900

4,177,577

67,661,558

0 0 0 0 0 0 0 0

PROJECT-LEVEL RETURN UNLEVERAGED

IRR 12.94%

TOTAL 43,899,957

Year 6 (2,303,772)

Year 7 Year 8 (19,364,105) (19,945,028)

Year 9 1,856,985

Year 10 3,823,075

Year 11 3,937,767

Year 12 4,055,900

Year 13 4,177,577

Year 14 67,661,558

PROJECT-LEVEL RETURN UNLEVERAGED/SUBSIDIZED

IRR 12.94%

TOTAL 43,899,957

Year 6 (2,303,772)

Year 7 Year 8 (19,364,105) (19,945,028)

Year 9 1,856,985

Year 10 3,823,075

Year 11 3,937,767

Year 12 4,055,900

Year 13 4,177,577

Year 14 67,661,558

Year 7 Year 8 (278,639) (1,162,404) 0 0 (6,966) (29,060) (285,605) (1,191,464) (19,649,710) (21,136,492)

Year 9 (1,767,528) 0 (44,188) (1,811,717) (1,811,717)

Year 10 (883,764) 0 (22,094) (905,858) (905,858)

Year 11

Year 12

Year 13

CONSTRUCTION FINANCING Construction interest Finance Developer fee Total financing cost TOTAL DEVELOPMENT - LEVERAGED

TOTAL (4,092,336) 0 (102,308) (4,194,644) (45,807,548)

Year 6

PERMANENT LOAN Draws Interest Repayments

TOTAL 45,168,915 (8,025,507) (45,168,915)

Year 6

0 0 0 0 (2,303,772)

0 0 0

Year 7 0 0 0

Year 8 0 0 0

0 0 0

Year 10 45,168,915 0 0

1,856,985

16,855,109

CASH FLOW AFTER DEBT SERVICE

45,350,474

EQUITY PARTNERSHIP

TOTAL 13,772,957

Year 6 2,303,772

Year 7 11,469,186

LIHTC Contributions Distributions TIF STATE/FED ENVIRONMENTAL TOTAL EQUITY CONTRIBUTIONS

0 0 0 0 13,772,957

0 0 0 0 2,303,772

CASH FLOW TO PARTNERSHIP

45,350,474

Year 9

Year 8

Year 9

Year 10

0 0 0 0 0

Year 11

0 0 0 0 0

Year 12

0 (2,710,135) (571,338) 656,294

Year 11

Year 14 0 0 0 0 0

0 0 0 0 0

Year 13

0 (2,675,855) (605,618) 774,428

Year 12

Year 14 0 0 (2,639,518) 0 (641,955) (43,350,004) 896,105

Year 13

24,311,554

Year 14

0 0 0 0 11,469,186

0 0 0 0 0

1,856,985

16,855,109

656,294

774,428

896,105

24,311,554

Year 9 1,856,985

Year 10 16,855,109

Year 11 656,294

Year 12 774,428

Year 13 896,105

Year 14 24,311,554

Year 9 1,856,985

Year 10 16,855,109

Year 11 656,294

Year 12 774,428

Year 13 896,105

Year 14 24,311,554

PROJECT-LEVEL LEVERAGED

IRR 27.49%

TOTAL 31,577,517

Year 6 (2,303,772)

Year 7 (11,469,186)

Year 8

PROJECT-LEVEL LEVERAGED/SUBSIDIZED

IRR 27.49%

TOTAL 31,577,517

Year 6 (2,303,772)

Year 7 (11,469,186)

Year 8

V. PROPOSAL I - TREMONT PARK - FINANCIAL ANALYSIS PROFORMA - MASTER Master Proforma PRO-FORMA - MASTER Land Environmental Hard costs Soft costs TOTAL DEVELOPMENT

Tremon TOTAL (37,500,000) 0 (258,961,147) (26,964,022) (323,425,169)

OPERATIONS Gross potential rent Vacancy Parking Other income EFFECTIVE GROSS INCOME

TOTAL 311,286,892 (28,723,244) 0 0 282,563,648

Operating expenses Real estate taxes EXPENSES

Year 0 (12,500,000) 0 0 (538,125) (13,038,125)

Year 0

Year 1 0 0 (21,665,149) (2,538,888) (24,204,036)

Year 1

Year 2 (17,333,593) 0 0 (570,897) (17,904,490)

Year 2 192,527 (77,011) 0 0 115,516

Year 3

Year 4 Year 5 0 (6,005,184) 0 0 0 0 (52,345,470) (53,915,834) (47,059,755) (4,675,007) (5,420,922) (4,321,130) (57,020,477) (65,341,940) (51,380,885)

Year 3 198,303 (19,830) 0 0 178,472

Year 6 (1,661,222) 0 (48,471,548) (5,093,313) (55,226,083)

0 0 (17,489,356) (1,874,749) (19,364,105)

0 0 (18,014,036) (1,930,992) (19,945,028)

Year 6 13,449,001 (632,273) 0 0 12,816,729

Year 7 25,786,730 (4,050,426) 0 0 21,736,304

Year 8 26,560,332 (1,095,195) 0 0 25,465,137

Year 9 32,064,411 (1,240,729) 0 0 30,823,682

Year 10 33,026,344 (1,190,907) 0 0 31,835,436

Year 11 34,017,134 (1,226,634) 0 0 32,790,500

Year 12 34,778,908 (1,237,559) 0 0 33,541,349

Year 13 35,822,275 (1,274,686) 0 0 34,547,589

Year 14 31,439,929 (1,280,271) 0 0 30,159,658

Year 15 15,117,962 (521,979) 0 0 14,595,983

Year 16 15,571,501 (537,639) 0 0 15,033,862

(2,450,705) (1,581,568) (4,032,273)

(2,524,227) (1,629,015) (4,153,241)

(4,390,650) (3,128,747) (7,519,397)

(4,522,369) (3,222,610) (7,744,979)

(4,658,040) (3,844,107) (8,502,147)

(4,797,781) (3,959,430) (8,757,212)

(4,941,715) (4,078,213) (9,019,928)

(5,089,966) (4,200,560) (9,290,526)

(5,242,665) (4,326,576) (9,569,242)

(5,399,945) (3,847,965) (9,247,910)

(2,268,401) (1,837,909) (4,106,309)

(2,336,453) (1,893,046) (4,229,499)

0 0 0

Year 4 Year 5 204,252 13,057,283 (20,425) (4,721,225) 0 0 0 0 183,827 8,336,058

Year 7

Year 8

Year 9

Year 10 0 0 0 0 0

Year 11 0 0 0 0 0

Year 12 0 0 0 0 0

Year 13 0 0 0 0 0

Year 14 0 0 0 0 0

Year 15 0 0 0 0 0

Year 16 0 0 0 0 0

Year 17 0 0 0 0 0

0 0 0 0 0

Year 17

0 0 0 0 0

(48,622,918) (37,549,746) (86,172,663)

0 0 0

NET OPERATING INCOME

210,646,715

246,802

313,697

323,108

4,780,281

9,154,279

13,959,646

18,914,303

21,338,717

23,889,258

24,605,936

24,440,784

25,174,008

21,626,324

10,778,114

11,101,457

SALE PROCEEDS

480,094,443

27,242,161

14,316,354

67,661,558

187,588,383

183,285,987

PROJECT-LEVEL RETURN UNLEVERAGED

IRR TOTAL 8.97% 367,315,988

Year 0 (13,038,125)

Year 1 (24,204,036)

Year 2 9,584,474

Year 3 Year 4 Year 5 (56,706,779) (65,018,832) (46,600,604)

Year 6 (46,071,805)

Year 7 (5,404,458)

Year 8 (1,030,725)

Year 9 21,338,717

Year 10 23,889,258

Year 11 24,605,936

Year 12 38,757,138

Year 13 25,174,008

Year 14 89,287,882

Year 15 198,366,496

Year 16 11,101,457

Year 17 183,285,987

PROJECT-LEVEL RETURN UNLEVERAGED/SUBSIDIZED

IRR TOTAL 10.20% 390,557,406 23,241,418

Year 0 (13,038,125)

Year 1 (24,204,036)

Year 2 9,584,474

Year 3 Year 4 Year 5 (38,965,705) (65,018,832) (34,473,707)

Year 6 (46,292,092)

Year 7 (5,544,889)

Year 8 (1,675,000)

Year 9 21,249,472

Year 10 23,786,023

Year 11 24,488,290

Year 12 38,624,648

Year 13 25,026,229

Year 14 89,124,356

Year 15 195,906,048

Year 16 11,011,973

Year 17 180,968,282

Year 0 (53,336) 0 (1,333) (54,670) (13,092,795)

Year 1 (720,842) 0 (18,021) (738,863) (24,942,899)

Year 2 (667,505) 0 (16,688) (684,193) (18,588,683)

Year 3 Year 4 Year 5 (1,073,832) (3,973,975) (6,570,098) 0 0 0 (26,846) (99,349) (164,252) (1,100,678) (4,073,325) (6,734,351) (58,121,155) (69,415,265) (58,115,236)

Year 6 (6,135,917) 0 (153,398) (6,289,315) (61,515,398)

Year 7 (5,210,562) 0 (130,264) (5,340,826) (24,704,931)

Year 8 (3,246,970) 0 (81,174) (3,328,144) (23,273,173)

Year 9 (1,004,739) 0 (25,118) (1,029,858) (1,029,858)

CONSTRUCTION FINANCING Construction interest Finance Developer fee Total financing cost TOTAL DEVELOPMENT - LEVERAGED

TOTAL (29,160,170) 0 (729,004) (29,889,174) (353,314,344)

PERMANENT LOAN Draws Interest Repayments Ending balance

TOTAL 255,646,268 (104,296,755) (255,646,268)

0 0 0 0

Year 1 2,830,995 0 0 2,830,995

333,426,111

TOTAL 68,963,077

Year 0 11,615,966

LIHTC/SHTC Contributions Distributions TIF STATE/FED ENVIRONMENTAL TOTAL EQUITY CONTRIBUTIONS

29,979,158 (6,737,740) 9,494,392 0 108,436,627

CASH FLOW TO PARTNERSHIP

326,688,371

CASH FLOW AFTER DEBT SERVICE

EQUITY PARTNERSHIP

Year 0

Year 2

Year 3

Year 4

0 (169,860) (35,809) 2,795,186

0 (167,711) (37,958) 2,757,229

0 (165,434) (40,235) 2,716,994

3,010,370

108,029

117,440

4,574,612

8,948,610

6,190,779

Year 2 17,904,490

Year 3 57,275

Year 4 6,610,849

Year 5 19,001,540

Year 6 2,303,772

Year 7 11,469,186

0 0 0 0 11,615,966

0 0 0 0 0

17,741,074 0 9,494,392 0 17,904,490

0 0 0 0 27,292,742

12,238,084 (111,187) 0 0 6,610,849

0 (220,287) 0 0 31,239,623

0 (140,431) 0 0 2,303,772

0 (644,275) 0 0 11,469,186

3,010,370

108,029

117,440

4,463,425

8,728,323

6,050,349

10,501,161

Year 2 3,010,370

Year 5 (2,036,237)

Year 6 (22,291,013)

Year 7 3,887,008

Year 2 (14,894,120)

Year 6 6,424,551

Year 7 (5,418,837)

Year 1

PROJECT-LEVEL LEVERAGED

IRR 14.00%

TOTAL 224,989,483

Year 0 (11,615,966)

Year 1

PROJECT-LEVEL LEVERAGED/SUBSIDIZED

IRR 18.21%

TOTAL 257,725,294

Year 0 (11,615,966)

Year 1

Year 3 Year 4 (17,796,462) (27,175,303)

Year 3 50,753

Year 5

Year 6 0 104,106,146 (163,020) (160,461) (42,649) (45,208) 2,674,345 106,735,283

Year 4 Year 5 (6,493,409) (14,538,114)

Year 7 0 (6,404,117) (1,364,750) 105,370,533

Year 10 (502,370) 0 (12,559) (514,929) (514,929)

Year 11

Year 12 0 0 0 0 0

Year 13 0 0 0 0 0

Year 14 (0) 0 (0) (0) (0)

Year 15 (0) 0 (0) (0) (0)

Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 103,540,212 0 45,168,915 0 0 0 0 (6,322,232) (12,447,847) (12,277,260) (14,806,574) (14,439,083) (14,203,422) (11,352,622) (1,446,635) (2,843,104) (3,013,690) (3,765,849) (6,286,676) (4,163,332) (47,082,664) 207,464,110 204,621,006 246,776,231 243,010,381 236,723,705 232,560,373 185,477,709 11,145,436

Year 8

6,047,766

Year 9 0

Year 8 (323,750)

Year 8 10,501,161

35,499,237

Year 10 0

0 (89,244) 0 0 0

6,033,513

Year 11 0

0 (103,236) 0 0 0

18,031,379

Year 12 0

0 (117,647) 0 0 0

6,807,253

Year 13 0

0 (132,490) 0 0 0

30,852,590

Year 14 0

0 (147,779) 0 0 0

Year 16 0 0 0 0 0

Year 15

Year 16

0 (163,526) 0 0 0

(0) 0 (0) (0) (0)

Year 17

0 (5,664,290) (92,930,663) 92,547,046

0 (5,552,823) (1,969,261) 90,577,786

0 0 (90,577,786) 0

99,771,538

3,579,373

92,708,186

Year 15 0

Year 17 (0) 0 (0) (0) (0)

Year 16 0

0 (2,460,449) 0 0 0

Year 17 0

0 (89,484) 0 0 0

0 (2,317,705) 0 0 0

5,958,522

35,396,001

5,915,866

17,898,889

6,659,475

30,689,064

97,311,090

3,489,889

90,390,481

Year 9 6,047,766

Year 10 35,499,237

Year 11 6,033,513

Year 12 18,031,379

Year 13 6,807,253

Year 14 30,852,590

Year 15 99,771,538

Year 16 3,579,373

Year 17 92,708,186

Year 9 5,958,522

Year 10 35,396,001

Year 11 5,915,866

Year 12 17,898,889

Year 13 6,659,475

Year 14 30,689,064

Year 15 97,311,090

Year 16 3,489,889

Year 17 90,390,481

Tremont Park

V. PROPOSAL I - TREMONT PARK - FINANCIAL ANALYSIS Partnership Waterfall PARTNERSHIP WATERFALL WATERFALL Total Cash Flow for Distribution

TOTAL 326,688,371

GP Return Account Beginning Balance GP Equity Drawn 10% Preferred Return Pro Rata Cash Flow Ending Balance GP Cash Flow

(6,896,308) (14,084,456) 20,980,763

Year 1 0

Year 2 3,010,370

Year 3 108,029

Year 4 117,440

Year 5 4,463,425

Year 6 8,728,323

Year 7 6,050,349

Year 8 10,501,161

Year 9 5,958,522

Year 10 35,396,001

Year 11 5,915,866

Year 12 17,898,889

Year 13 6,659,475

Year 14 30,689,064

Year 15 97,311,090

(1,161,597)

(1,161,597) (174,239) (1,335,836)

(1,335,836) (1,790,449) (200,375) 301,037 (3,025,624)

(3,025,624) (5,728) (453,844) 10,803 (3,474,392)

(3,474,392) (661,085) (521,159) 11,744 (4,644,891)

(4,644,891) (1,900,154) (696,734) 446,343 (6,795,437)

(6,795,437) (230,377) (1,019,315) 872,832 (7,172,297)

(7,172,297) (1,146,919) (1,075,845) 605,035 (8,790,025)

(8,790,025) (1,318,504) 1,050,116 (9,058,413)

(9,058,413) (1,358,762) 595,852 (9,821,323)

(9,821,323) (1,473,198) 3,539,600 (7,754,921)

(7,754,921) (1,163,238) 591,587 (8,326,572)

(8,326,572) (1,248,986) 1,789,889 (7,785,669)

(7,785,669) (1,167,850) 665,947 (8,287,572)

(8,287,572) (1,243,136) 3,068,906 (6,461,802)

(6,461,802) (969,270) 7,431,072 -

(649,341)

(1,453,811)

3,068,906

7,431,072

(31,269,526) (5,949,764) (4,690,429) 105,696 (41,804,023)

(41,804,023) (17,101,386) (6,270,603) 4,017,083 (61,158,929)

(61,158,929) (2,073,394) (9,173,839) 7,855,490 (64,550,673)

(64,550,673) (10,322,267) (9,682,601) 5,445,314 (79,110,227)

(79,110,227) (11,866,534) 9,451,045 (81,525,716)

(81,525,716) (12,228,857) 5,362,669 (88,391,904)

(88,391,904) (13,258,786) 31,856,401 (69,794,288)

(69,794,288) (10,469,143) 5,324,280 (74,939,152)

(74,939,152) (11,240,873) 16,109,000 (70,071,025)

(70,071,025) (10,510,654) 5,993,527 (74,588,151)

(74,588,151) (11,188,223) 27,620,158 (58,156,216)

(58,156,216) (8,723,432) 66,879,649 -

(5,844,068)

(13,084,303)

5,782,096

(4,876,953)

9,451,045

5,362,669

31,856,401

5,324,280

16,109,000

5,993,527

27,620,158

66,879,649

23,000,369

3,489,889

90,390,481

1,840,029 16,560,265 4,600,074 -

279,191 2,512,720 697,978 -

499,524 4,495,718 18,078,096 67,317,143

(1,161,597) IRR

LP Return Account Beginning Balance LP Equity Drawn 10% Preferred Return Pro Rata CF Ending Balance LP Cash Flow

Year 0 0

15.00%

(62,066,769) (126,760,100) 188,826,870

(1,161,597)

(10,454,369)

(10,454,369) IRR

15.00%

(10,454,369)

Net Cash Available for Distributions

(1,489,412)

(10,454,369) (1,568,155) (12,022,525) -

(12,022,525) (16,114,041) (1,803,379) 2,709,333 (27,230,612) (13,404,708)

5,075

(27,230,612) (51,548) (4,084,592) 97,226 (31,269,526) 45,678

642,455

(541,884)

1,050,116

595,852

3,539,600

591,587

1,789,889

665,947

Year 16 3,489,889

Tier II: 80%/20% up to 16% Investor IRR GP (8%) LP (72%) Sponsor (20%) Remaining Cash Available

Tier III: 70%/30% up to 17.5% Investor IRR GP (7%) LP (63%) Sponsor (30%) Remaining Cash Available

Tier IV GP (6%) LP (54%) Sponsor (40%)

Distributions GP LP Sponsor Totals Total to GP + Sponsor

IRR IRR

IRR

Year 17 90,390,481

4,712,200 42,409,800 20,195,143 -

17.21% 17.21%

(1,161,597) (10,454,369) (11,615,966)

(1,489,412) (13,404,708) (14,894,120)

5,075 45,678 50,753

(649,341) (5,844,068) (6,493,409)

(1,453,811) (13,084,303) (14,538,114)

642,455 5,782,096 6,424,551

(541,884) (4,876,953) (5,418,837)

1,050,116 9,451,045 10,501,161

595,852 5,362,669 5,958,522

3,539,600 31,856,401 35,396,001

591,587 5,324,280 5,915,866

1,789,889 16,109,000 17,898,889

665,947 5,993,527 6,659,475

3,068,906 27,620,158 30,689,064

9,271,102 83,439,914 4,600,074 97,311,090

279,191 2,512,720 697,978 3,489,889

5,211,724 46,905,517 38,273,239 90,390,481

23.8%

(1,161,597)

(1,489,412)

5,075

(649,341)

(1,453,811)

642,455

(541,884)

1,050,116

595,852

3,539,600

591,587

1,789,889

665,947

3,068,906

13,871,175

977,169

43,484,963

V. PROPOSAL I - INDUSTRIAL ZONE

Existing Conditions

Malden’s Industrial Zone The land to the south of Charles Street and east of the Malden River has long been a center of Malden’s industrial economy. Today, many of the one-story office and light manufacturing warehouses are occupied by the New England Coffee Company, though a number stand vacant. Malden’s proximity to Boston, lower land rents, and availability of space will continue to make this area economically viable, provided the city pursues aggressive branding strategies to attract context-appropriate industries.

cial space on the Campus. Along with zoning rights, the City of Malden should other economic development incentives such as tax abatements or building rehabilitation grants to catalyze the development. The Charles Street Food Innovation Campus will be linked to the rest of the city by the new Malden Ballpark and the proposed development of Tremont Park, providing yet another engine for growth within downtown Malden.

With the New England Coffee Company as its anchor and with the diversity of building stock throughout the industrial zone, Malden could develop the Charles Street Food Innovation Campus, capitalizing on existing strengths and capturing revenue from a growing local agribusiness movement. The Food Innovation Campus would house commercial test kitchens for area food entrepreneurs, production facilities for locally distributed food products, a brewery or distillery for use by a single local craft brewer or a revolving base of start-up brewers, office and meeting space for business development, and public space for farmers markets, tastings, and other outdoor programming. The products launched and food grown on the Campus could benefit Malden directly through distribution to Malden’s burgeoning restaurant scene as well as area public schools. By zoning the area for this use, Malden would incentivize developers interested in becoming involved in the local food movement to re-develop the existing industrial building stock for food and beverage production purposes, as well as build related office and commer-

COMMUNITY TRAIL PRIVATE PARKING / LOADING

V. PROPOSAL I - INDUSTRIAL ZONE

Proposed Conditions

Precedent Images

Mama’s Small Business Kitchen Incubator, Pasadena, CA

The Plant Chicago, industrial re-use for a vertically-integrated farm, food incubator, and business development center.

COMMUNITY TRAIL PRIVATE PARKING / LOADING

The Brewery District, adaptive re-use of industrial complex, Boston, MA

Mark’s Carts food truck courtyard, Ann Arbor, MI

V. PROPOSAL II Malden Mall and Premier Gym (MMPG) Stephanie Torres & Weishun Xu

V. PROPOSAL II - MMPG - CONTEXT

Context The intention behind our proposal is to contribute in fulfilling the Malden Vision. The Malden Vision is a community survey conducted by the Malden Planning Board in 2008 to assess the community’s goals for future development. A question in the survey that is especially relevant to this field study is: Which of the following type of development is needed in Malden? As shown on the chart to the right, the top four answers are: passive recreational parks/ activities, active recreational parks/activities, retail businesses, and restaurants. These answers became the basis for the formation of our proposal to revitalize Downtown Malden-. To ignite a sustainable revitalization of Malden’s downtown area, we believe it is important to begin with the revitalization of the downtown core itself. We identify the downtown core as the area along and within the area bounded by

Pleasant St, Main St, Exchange St, and Commercial St. This core area has a diverse base of services and uses including a church, the Malden Senior Community Center, the Commonwealth of Massachusetts Department of Elementary and Secondary Education, residential units, office space, banks, and various types of retail including restaurants and bars, specialty stores, mom-and-pops, and a supermarket. To capitalize on the high density of retail businesses in the core area and positive retail submarket conditions, our proposal is a venture to reinforce the core area as Malden’s top shopping destination. Additionally, the 800 residential units in the pipeline expected to be delivered within the next four years will create a new wave of demand. This will unlatch a new window of opportunity to redevelop the core’s existing retail scene.

V. PROPOSAL II - MMPG - VISION Pleasant St

MALDEN MALL SITE 3

MALDEN MALL SITE 1

Vision MALDEN MALL SITE 2

Our vision is to create a vibrant and welcoming environment where residents and visitors alike can shop, eat, and be engaged in recreational activities. We propose to develop Malden (mini) Mall which will feature 102 units of retail space. Given the site selection, these retail units are intended to be occupied by existing and new tenants alike. Malden Mall will consist of three structures on three distinct sites as shown on the diagram to the right.

Our goal is to redevelop the core area to create a more energetic and pleasant environment with enough potential to incite further redevelopment outside of the core area.

Pleasant St.

Exchange St.

Ma in S t.

Commerce

St.

PREMIER GYM

Furthermore, to take advantage of the subway station on the west end of Pleasant St., we are also proposing creating over 21,000 square feet of green space along with a gym on the west end of Pleasant St, altogether named Premier Gym. The green space will serve as an ameni-

ty to Maldenâ&#x20AC;&#x2122;s residents and visitors alike, but we also hope it will increase foot traffic along Pleasant St. and Exchange St. as people will be encouraged to walk from the park to the subway station and vice versa. The increase in foot traffic will potentially benefit the retail businesses, including the Malden Mall, along the stretch between the subway station and Premier Gym.

V. PROPOSAL II - MMPG - MALDEN MALL: EXISTING

Part of the Malden Vision we are assessing: â&#x20AC;˘ Retail businesses â&#x20AC;˘ Restaurants Altogether, the 3 mini-mall sites will contribute 102 retail units. The property on Site 1 will create indoor retail space while the properties on Site 2 and Site 3 along with the side of the property on Site 1 along Exchange St. will create a balance of outdoor retail space.

Existing Conditions Site 1 Currently on this site, there is 177,100 square feet of commercial space. The site is composed of 8 different parcels of land and the properties are an agglomeration of buildings with different facades and heights built mostly in the early 1900s. Both along Pleasant St and Exchange St, the buildings contain ground floor retail, which includes a fashion boutique, two banks, discount stores, and a wide array of restaurants most notably All Seasons Table. It should be noted that there is a negative grade change going from Pleasant St. to Exchange St.

Aerial view of Site 1 from Pleasant St.

Aerial view of Site 1 from Exchange St.

V. PROPOSAL II - MMPG - MALDEN MALL: EXISTING

Site 2

Site 3

The second portion of the mall will be located on the Exchange St. facing portion of the ground floor of a six-level garage. Along Exchange St, the garage is fronted with a small green space with benches. This site is adjacent to Site 3. The proposed program will occupy 13,250 square feet of the ground floor of the parking garage reducing the amount of parking spaces in the garage by approximately 25.

The site currently serves as a surface parking lot and contains approximately 4,800 square feet of commercial space. The commercial space and parking late are located on two different parcels of land. Site 3 has a total area of 22,840 square feet.

Aerial view of Site 2 from Exchange St.

Aerial view of Site 3 from Exchange St.

Ground view of Site 2 from Exchange St.

Ground view of Site 3 from Exchange St.

V. PROPOSAL II - MMPG - MALDEN MALL: PROPOSAL

Proposal Site 1

Site 2

The proposed property on Site 1 will contain 84 retail units ranging in size from 1,420 to 2,270 square feet intended to have restaurant, bar, cafĂŠ, fashion boutique, and mom-and-pop tenants amongst other retail uses and services. Due to the grade change between Pleasant St. and Exchange St., the property will be 3 floors high along Pleasant St. and 4 stories high along Exchange St. In terms of circulation, the property will have an interior corridor going from east to west. Additionally, there will be a central, ceiling-high atrium that will provide a connection between Pleasant St. and Exchange St. Due the specific program needs of the property on Site 3 and the irregularity of the existing properties, our development strategy includes demolishing the existing structures. Although, the proposed property will be new, it will be designed such that it naturally integrates into the existing fabric of the built environment in the downtown core area.

The proposed property on site 2 will contain 6 retail units each having an average size of 1,870 square feet. Although the property on Site 1 will be the main mini-mall building, the property on Site 2 is intended to attract pedestrians from Pleasant St. to Exchange St. and improve the aesthetic fabric on Exchange St. Site 2 will make use of the green space fronting it as an amenity for the shoppers.

Site 1 Floor Layout

Site 2 Floor Layout

V. PROPOSAL II - MMPG - MALDEN MALL: PROPOSAL

Site 3 The proposed property on Site 3 will contain 12 retail units averaging 1,760 square feet in size equally distributed throughout the two floors of the property. The purpose behind having two floors on this property is to create a balance between the 6-floor parking garage next door and the 4-floor mini mall across the street. Given the proposed building program, the existing structure on this site will have to be demolished. Like Site 2, Site 3 is intended to draw pedestrian activity from Pleasant St. Altogether, Site 1, Site 2, and Site 3 will create a short retail strip along Exchange St. in hopes of reviving and increasing pedestrian liveliness along Exchange St.

Site 3 Floor Layout

V. PROPOSAL II - MMPG - PREMIER GYM: EXISTING

Part of the Malden Vision we are assessing: â&#x20AC;˘Active recreational parks/activities â&#x20AC;˘ Passive recreational parks/activities Premier Gym consists of two recreational areas one of which is a green space and the other is a full service gym. Premier Gym is intended to provide an amenity to the downtown area but is also set out to create a destination at the end of Pleasant St.

Existing Conditions Currently on the site there exists 32,000 square feet of office and retail space. The whole site is composed of 7 parcels of land, which is occupied by 3 different buildings and a parking lot. The site is situated between Malden High School adjacent to the east and the downtown core on the west. Since the site is located directly in between Malden High School and Pleasant St, to get from the high school to the core area and vice versa, you need to go around the site which corners a highly trafficked intersection

Premier Gym site on the intersection of Main St. and Ferry St.

Current path to go from the downtown core area to the Malden High School Area

Aerial view of Premier Gym Site

V. PROPOSAL II - MMPG - PREMIER GYM: PROPOSAL

Proposal The proposal for this site is to create a 15,520 square foot gym along with 21,860 square feet of green space, altogether named Premier Gym. Aside from being an amenity, the green space is intended to provide a passageway from the downtown core to the high school area. Additionally, the location of the gym at the end of Pleasant St. will increase pedestrian activity along Pleasant St. from the people getting off the subway station to go to the gym and vice versa. Although the Malden YMCA is just a 5-minute walk away, the Premier Gym will be unique in that it will contain over 5,000 square feet of rock climbing walls along with other gym amenities. Given the program of the proposed space, the existing stricture will be demolished to create the gym.

V. PROPOSAL II - MMPG - DEVELOPMENT STRATEGY

Development Strategy The development strategy is divided into five steps which go in accordance with the phasing of the project.

Step 1 • Acquire the 10 parcels of land necessary to construct Malden Mall • Negotiate a property lease with the parking garage owner

Step 2 • Demolish the structures on Site 1 and Site 3 • Allow a one-year development period for the Malden Mall • Acquire the 7 parcels necessary to construct Premier Gym

V. PROPOSAL II - MMPG - DEVELOPMENT STRATEGY

Step 4 • Demolish the structures on the gym parcel • Allow a 6 month development period for Premier Gym

Step 3 • Inaugurate Malden mall • Relocate the retail tenants on the Premier Gym site into Malden Mall

V. PROPOSAL II - MMPG - PHASING, SCHEDULE, AND ABSORPTION

Project Phasing, Schedule, and Absorption The project consists of 2 phases split into the development of Malden Mall followed by the development of Premier Gym. Phase 1, which is the development of Malden Mall, is proposed to begin in 2017 during the time when the last round of residential units in the current pipeline will be delivered. Phase 1 will have a one-year development period followed by a one-year lease up period during which 61 retail units will be leased during the 1st quarter of 2018 followed by 14 units on the 2nd quarter, 14 uints on the 3rd quarter, and finally 13 retail units on the 4th quarter.

PROJECT SCHEDULE

2017 Q1

MALDEN MALL No. of Retail Units Absorbed PREMIER

While Malden Mall reaches a stabilized occupancy, the construction of the Premier Gym will begin during the second quarter of 2018 and is allotted a 6-month development period. The gym is expected to be preleased to a gym operator and thus doesnâ&#x20AC;&#x2122;t require a lease-up period. Both the Premier Gym and Malden Mall are then fully operating by 2019. The exit strategy is then to sell Malden Mall in 2026 and Premier Gym in 2027. From the construction start date of Malden Mall to the disposition of Premier Gym, the project is set to span 10 years.

2018 Q3

Development Period 61

2019 Q3

Lease-Up Period 14 14

2020 Q3

First Stabilized Year

2021

2022

2023

2024

2025

2026

2027

Q4 Hold Period

Sell

Development Period

First Stabilized Year

Hold Period

Sell

V. PROPOSAL II - MMPG - PHASING, SCHEDULE, AND ABSORPTION

Phase I

Phase II

V. PROPOSAL II - MMPG - FINANCIAL ANALYSIS

Financial Analysis The total development costs for the project is approximately $77,000,000; using a 1.2 debt service coverage ratio, the project will be financed through a construction loan followed by permanent loan totaling over $67,000,000. The sole investor in the project will then contribute $10,000,000 of initial equity. Complete details are included in the ‘Assumptions’ sheet. Beginning with the Malden Mall development in 2017 and disposing of the Premier Gym in 2027, the total After-Tax IRR is 15.0%.

RETURN MEASURES Unleveraged IRR Project Cost Net Operating Income Adjusted Sales Price Unleveraged Cash Flow Unleveraged IRR Net Present Value

Time Zero

8% $

Premier Sale

Malden Mall Hold Period 2019

2020

2021

2022

2023

2024

2025

Malden Mall Sale 2026

2027

9.2% 7,372,709

$ (8,386,433) $ (5,615,288) $ (54,512) $ 1,266,800 $ $ (8,386,433) $ (5,669,800) $ 1,266,800 $

952,632 $ 1,110,974 $ 1,274,066 $ 1,442,051 $ 1,615,076 $ 1,793,291 $ 1,976,852 $ 2,165,921 $ 225,867 $ 43,555,070 $ 4,974,534 952,632 $ 1,110,974 $ 1,274,066 $ 1,442,051 $ 1,615,076 $ 1,793,291 $ 1,976,852 $ 45,720,991 $ 5,200,401

$ (8,386,433) $ (5,615,288) $ (54,512) $ 1,266,800 $

818,014 $

882,422 $

$ (8,386,433) $ (5,669,800) $ 1,266,800 $

818,014 $

882,422 $

19.0% 8% $ 17,106,690

After-Tax IRR Equity After-Tax Operating Cash Flow After-Tax Cash Flow from Sale Total After-Tax Cash Flow After-Tax IRR Net Present Value

Premier Hold Period

$ (64,884,500) $ (12,239,407) $ (54,512) $ 3,964,468 $ 5,278,061 $ 5,436,403 $ 5,599,495 $ 5,767,480 $ 5,940,504 $ 6,118,719 $ 6,302,281 $ 6,491,349 $ 6,686,090 $ 95,429,699 $ 10,746,392 $ (64,884,500) $ (12,293,919) $ 3,964,468 $ 5,278,061 $ 5,436,403 $ 5,599,495 $ 5,767,480 $ 5,940,504 $ 6,118,719 $ 6,302,281 $ 101,921,048 $ 17,432,482

Before-Tax IRR Equity Before-Tax Operating Cash Flow Before-Tax Cash Flow from Sale Total Before-Tax Cash Flow Before-Tax IRR Net Present Value

Premier Development Malden Mall Malden Mall Development Lease-Up 2017 2018

8% $

977,278 $ 1,074,624 $ 1,174,518 $ 1,272,429 $ 1,347,788 $ 1,446,869 $ 173,564 $ 31,641,547 $ 4,030,061 977,278 $ 1,074,624 $ 1,174,518 $ 1,272,429 $ 1,347,788 $ 33,088,416 $ 4,203,625

15.0% 9,266,320

V. PROPOSAL II - MMPG - FINANCIAL ANALYSIS

MALDEN REVITALIZATION: ASSUMPTIONS RENT AND VACANCY RENT Malden Mall Site 1 Malden MallSite 2 Malden Mall Site 3 Premier Gym Premier Green Space Total

DEVELOPMENT COSTS Retail / SF Lot Size 86,150 13,215 22,840 11,810 21,860

Gross SF 175,570 13,215 24,860 20,520 21,860 256,025

Efficiency 85% 85% 85% 90% 100%

Net SF 149,235 11,233 21,131 18,468 21,860 221,926

Rent/YR/ GSF $ 27.50 $ 27.50 $ 27.50 $ 30.00 -

$ $ $ $ $

Annual 4,828,175 363,413 683,650 615,600 6,490,838

Annual Revenue Growth VACANCY Vacancy Bad Debt

3% Malden Mall 5.0% 0.5%

Premier 0.0% 0.5%

Total No. of Retail Spaces Malden Mall Site 1 Malden Mall Site 2 Malden Mall Site 3 Premier Gym Premier Green Space Total

No. of Floors Spaces/Floor 3.5 24 1 6 2 6 2 0 0 0

Total 84 6 12 0 0 102

EXPENSES Expense Ratio Annual increase in operating expenses Increase in real estate taxes OPERATING RESERVE Lease-Up Period (months) Average Occupancy During Lease-Up Estimated Rent During Lease-Up Estimated Operating Expenses During Lease-Up NOI During Lease Up Construction Interest During Lease-Up

15% 3% 3% Malden Mall 12 80% $ 4,700,190 $ 881,286 $ 3,818,904 $ 2,719,021

TAXABLE INCOME Income Tax Rate Depreciation Period (years)

Premier

$ $ $ $

0 100% -

35% 39

PROPERTY SALE Purchase Cap Rate Sale Cap Rate Percent of sale price for broker, lawyer, etc. Capital gains tax rate Accumulated depreciation recapture tax rate

Malden Mall 7.0% 6.0% 5% 20% 25%

Premier 7.0% 6.0% 5% 20% 25%

Malden Mall

Premier

CONSTRUCTION COSTS Hard Costs Soft Costs Developer Fee Total Construction Costs

$ 20% $ 2.5% $ $

Contingency

140.00 28.00 4.20 172.20

Gym / SF $ $ $ $

150.00 30.00 3.75 183.75

2.5% of hard costs

ACQUISITION PRICE Malde Mall SITE 1 (as-is value) Gross SF Net SF Rent/YR/NSF Annual Revenue Less Vacancy Less Expenses NOI

$ $ $ $

50.00 10.00 1.25 61.25

Site 1

20% 15%

Malden Mall Site 2

$ 24,579,800 $ 1,850,100 $ 4,915,960 $ 370,020 $ 737,394 $ 55,503 $ 30,233,154 $ 2,275,623 $

85%

Capitalized Value

$ $ $ $ $

614,495 $

15%

Gym

Premier Green Space

$ 3,480,400 $ 3,078,000 $ 696,080 $ 615,600 $ 104,412 $ 76,950 $ 4,280,892 $ 3,770,550

46,253 $

87,010 $

27,325 $

852,033

$ $ $ $ $

177,155 150,582 17.50 2,635,181 527,036 395,277 1,712,867

$ 24,469,534

54,512 99 6%

$ $ $ $ $ $ $

3.65% 115.03

543,502 7,764,311 4,280,892 3,483,419 856,178 2,627,240 95,894

85% $ $ $ $ $

20% 15%

Capitalized Value

32,000 27,200 17.50 476,000 95,200 71,400 309,400

$ 4,420,000 $

Total

$ 1,093,000 $ 34,081,300 $ 218,600 $ 6,816,260 $ 27,325 $ 1,001,584 $ 1,338,925 $ 41,899,144

76,950 $

177,155 150,582 17.50 2,635,181 527,036 395,277 1,712,867

20%

Premier (as-is-value) Gross SF Net SF Rent/YR/NSF Annual Revenue Less Vacancy Less Expenses NOI

Land Value Land Carry (12 months)

Site 3

$ 24,469,534

Malden Mall SITE 2 (lease) Price/YR (% of Annual Revenue) Term (years) Percent of Total Net Square Feet Malden Mall SITE 3 NOI Capitalized Value Construction Costs Residual Land Value Developer Profit Margin Land Land Carry (12 months) Land/sf

Green Space / SF

115.00 /sf 3.65%

54,512

$ $ $ $ $ $ $

543,502 7,764,311 4,280,892 3,483,419 856,178 2,627,240 95,894

$ $ $ $ $

32,000 27,200 17.50 476,000 95,200 71,400 309,400

$ 4,420,000

$ 1,358,150 $ 2,513,900 $ 3,872,050 $ 91,757 $ 91,757

DEBT Interest rates Construction Permanent Amortization (yrs) DCR Construction Period (months) Average Draw

4.5% 5.0% 30 1.2 12 65%

TOTAL DEVELOPMENT COSTS Construction Costs Contingency Acquisiton Total Development Costs before Interest and Operating Reserve Malden Mall Premier

$ 30,233,154 $ 2,275,623 $ 614,495 $ 46,253 $ 24,469,534 $ 54,512 $ 55,317,183 $ 2,376,387

$ 4,280,892 $ 3,770,550 $ 1,338,925 $ 41,899,144 $ 87,010 $ 76,950 $ 27,325 $ 852,033 $ 2,723,135 $ 4,420,000 $ 2,605,657 $ 34,272,838 $ 7,091,037 $ 8,267,500 $ 3,971,907 $ 77,024,015 $ 64,784,607 $ 12,239,407

Estimated Construction Loan Interest First Year Operating Reserve

Malden Mall Premier Gym $ 1,767,364 $ 196,829 $ (1,099,883) $ -

TOTAL DEVELOPMENT COSTS

$ 65,452,088 $ 12,436,236

V. PROPOSAL II - MMPG - FINANCIAL ANALYSIS

DOWNTOWN REVITALIZATION: PRO-FORMA NOI NOI REVENUE Malden Mall Factor Premier Gym Factor Annual Gross Potential Revenue Less: Vacancy 5% 0% Less: Bad Debt 0.5% 0.5% Effective Gross Revenue Malden Mall Premier EXPENSES Annual Expenses Malden Mall Premier

15%

NOI Annual NOI Malden Mall Premier

DEBT CALCULATION Debt Based on DCR Monthly NOI Maximum DCR Maximum Monthly Payment Maximum Loan CASH FLOW AFTER FINANCING NOI Less: Annual Debt Service Less: CapEx Cash Flow After Financing

$ $ $ $

Malden Mall Site 2 363,413 18,170.63 1,817 343,425

724,226

3,838,399

$ $ $ $

Site 1 4,828,175 241,409 24,141 4,562,625

15% $

Premier Gym Open Space 615,600 $ $ 3,078 $ 612,522 $ -

$ $ $ $

Site 3 683,650 34,183 3,418 646,049

$ $ $ $

54,512

102,548

92,340

288,913

543,502

520,182

Total 6,490,838 293,762 32,454 6,164,621 5,552,099 612,522

$ $ $

973,626 881,286 92,340

$ $ $

5,190,996 4,670,814 520,182

$ $

Malden Mall 389,234.48 1.2 324,362 60,422,691

$ $ $ $

4,670,814 3,892,345 28,025 750,444

0.6%

$ $ $ $ $ $

SIMPLE RATIOS Overall Return (NOI/Dev. Cost)

$ $ $

$ $ $ $

7.2%

Premier 43,348.50 1.2 36,124 6,729,191

520,182 433,485 3,121.09 83,576

4.3%

CASH-ON-CASH RETURN NOI Annual Debt Service Cash Throw-Off

$ $ $

4,670,814 3,892,345 778,469

$ $ $

520,182 433,485 86,697

Development Cost Permanent Mortgage Equity

$ $ $

64,784,607 60,422,691 4,361,916

$ $ $

12,239,407 6,729,191 5,510,217

Cash-on-Cash Return

17.8%

1.6%

V. PROPOSAL II - MMPG - FINANCIAL ANALYSIS

DOWNTOWN REVITALIZATION: SOURCES AND USES

Total

Year 0

Year 1

Year 2

Total

USES MALDEN MALL Total Development Costs Construction Loan: Capitalized Interest

$ $

64,884,500 $ 1,925,219 $

27,247,181 $ 34,227,030 124,975 $ 1,800,244

$ $

3,410,290 -

Total Capital Costs

66,809,719 $

27,372,156 $ 36,027,273

Cash Flow from Operations NOI Less: Construction Loan Interest during Operations Cash Flow from Operations after Interest

$ $ $

4,009,850 $ 2,697,668 $ 1,312,181 $

$ $ $

Construction Loan Balance to Be Refinanced

TOTAL USES

65,497,538

PREMIER Total Development Costs Construction Loan: Capitalized Interest

$ $

12,239,407 $ 98,844 $

Total Capital Costs

12,338,252 $

Cash Flow from Operations NOI Less: Construction Loan Interest during Operations Cash Flow from Operations after Interest

$ $ $

Construction Loan Balance to Be Refinanced

TOTAL USES

12,338,252

TOTAL Total Development Costs Construction Loan: Capitalized Interest

$ $

77,123,908 $ 2,024,063 $

$ $

79,147,971 $ $

Cash Flow from Operations NOI Less: Construction Loan Interest during Operations Cash Flow from Operations after Interest

$ $ $

4,009,850 $ 2,697,668 $ 1,312,181 $

$ $ $

Construction Loan Balance to Be Refinanced

TOTAL USES

Total Capital Costs

77,835,790

$ $

$ $ $

27,372,156 $ 36,027,273

Year 2

$ 57,836,027 $

22,217,784

34,227,030 $

1,391,213

Net Accrued Interest Net Construction Loan Funding

$ 2,586,664 $ $ 60,422,691 $

124,975 22,342,759

$ $

1,800,244 $ 36,027,273 $

661,445 2,052,658

4,009,850 2,697,668 1,312,181

Equity Additional Equity Required Permanent Mortgage Refinancing Less: Positive Cash Flow after Interest—Distributed Less: Cash Proceeds from Construction Loan Takeout

$ $ $ $ $

5,029,397 -

$ $

$ 65,497,538

2,098,109

TOTAL SOURCES

7,025,657 7,933

$ $

5,213,750 90,911

PREMIER Construction Loan Funding Net Draws

7,033,591

5,304,661

Net Accrued Interest Net Construction Loan Funding Equity Additional Equity Required Permanent Mortgage Refinancing Less: Positive Cash Flow after Interest—Distributed Less: Cash Proceeds from Construction Loan Takeout

$ $ $ $ $

5,029,397 $ 3,357,037 $ (3,311,586) $ -

$ $ $ $ $

3,357,037 (3,311,586) -

36,027,273 $

2,098,109

27,372,156

6,624,119 $

1,410,369

5,213,750

$ $

98,844 $ 6,722,963 $

7,933 1,418,302

$ $

90,911 5,304,661

5,615,288 -

$ $ $ $ $

5,615,288 -

$ $ $ $ $

$ 12,338,252

7,033,591

5,304,661

TOTAL SOURCES

34,272,838 $ 34,227,030 132,908 $ 1,800,244

$ $

8,624,040 90,911

TOTAL Construction Loan Funding Net Draws

$ 64,460,146 $

23,628,153

34,227,030 $

6,604,963

34,405,747 $ 36,027,273 $ -

$ $

8,714,951 -

Net Accrued Interest Net Construction Loan Funding

$ 2,685,509 $ $ 67,145,654 $

132,908 23,761,061

$ $

1,800,244 $ 36,027,273 $

752,356 7,357,319

$ $ $

4,009,850 2,697,668 1,312,181

Equity Additional Equity Required Permanent Mortgage Refinancing Less: Positive Cash Flow after Interest—Distributed Less: Cash Proceeds from Construction Loan Takeout

$ 10,644,685 $ $ 3,357,037 $ $ $ $ (3,311,586) $ $ $

10,644,685 -

$ $ $ $ $

TOTAL SOURCES

$ 77,835,790

34,405,747

5,615,288 5,615,288

34,405,747 $ 36,027,273

7,402,770

MALDEN MALL Check: Equity for Capital Investment

$ $ $ $ $

3,357,037 (3,311,586) -

36,027,273 $

7,402,770

PREMIER Check: Equity for Capital Investment

Equity Sources + Cash Flow from Operations - Positive Cash Flow After Interests Total Capital Costs - Loan Sources

$ $

Construction Loan Takeout at Stabilization Permanent Mortgage Amount for Income Property Construction Loan Ending Balance for Income Property Cash Proceeds from Construction Loan Takeout

$ $ $

Depreciable Basis Total Development Cost Excluding Interest Interest Accrued During Construction Period Total Capital Costs Land Cost Depreciable Basis

$ $ $ $ $

Annual Depreciation Estimate Depreciation Period (years) Acceleration Factor Annual Depreciation

Year 1

3,410,290

7,033,591

Year 0

SOURCES MALDEN MALL Construction Loan Funding Net Draws

Equity Sources + Cash Flow from Operations - Positive Cash Flow After Interests Total Capital Costs - Loan Sources

$ $

5,615,288 $ 5,615,288 $

60,422,691 60,422,691 -

Construction Loan Takeout at Stabilization Permanent Mortgage Amount for Income Property Construction Loan Ending Balance for Income Property Cash Proceeds from Construction Loan Takeout

$ $ $

6,722,963 6,722,963 -

64,884,500 1,925,219 66,809,719 16,408,956 50,400,764

Depreciable Basis Total Development Cost Excluding Interest Interest Accrued During Construction Period Total Capital Costs Land Cost Depreciable Basis

$ 12,239,407 $ 98,844 $ 12,338,252 $ 3,872,050 $ 8,466,202

5,074,847 $ 5,074,847 $

39 1 1,292,327

5,029,397 $ 5,029,397 $

$ $

45,450 45,450

Annual Depreciation Estimate Depreciation Period (years) Acceleration Factor Annual Depreciation

$ $

39 1 217,082

V. PROPOSAL II - MMPG - FINANCIAL ANALYSIS

DOWNTOWN REVITALIZATION: DEVELOPMENT AND OPERATING PERIOD PRO-FORMA PROJECT COSTS Development Costs Land Cost

Site 1 $ 55,317,183 $ $ 9,909,665 $

Malden Mall Site 2 2,376,387 $ $

FINANCING ASSUMPTIONS Equity Mortage Principal Interest Rate Amortization Annual Debt Service

$ $

DEPRECIATION ASSUMPTIONS Building Basis Life (in years) Acceleration Factor Straight Line MORTGAGE CALCULATION MALDEN MALL Beginning Balance Ending Balance Amortization of Principal Interest/Annual Payment PREMIER Beginning Balance Ending Balance Amortization of Principal Interest/Annual Payment TOTAL Beginning Balance Ending Balance Amortization of Principal Interest/Annual Payment DEPRECIATION CALCULATION MALDEN MALL Beginning Balance Less: Annual Depreciation Ending Balance Cumulative Depreciation Taken Cumulative Straight Line Recapture Remaining Book Value PREMIER Beginning Balance Less: Annual Depreciation Ending Balance Cumulative Depreciation Taken Cumulative Straight Line Recapture Remaining Book Value TOTAL Beginning Balance Less: Annual Depreciation Ending Balance Cumulative Depreciation Taken Cumulative Straight Line Recapture Remaining Book Value

$ Year 0

Premier Site 3

Gym 7,091,037 $ 2,627,240 $

Green Space Total 8,267,500 $ 1,366,250 $ 74,418,357 1,358,150 $ 2,513,900 $ 16,408,956

Malden Mall 4,361,916 $ 60,422,691 $ 5.0% 30 3,892,345 $

Premier 5,510,217 6,729,191 5.0% 30 433,485

Malden Mall 52,247,702 $ 39 1 1,339,685 $

Premier 2,376,387 39 1 60,933

Year 1 DEVELOPMENT PERIOD

Year 2 LEASE-UP PERIOD

$ 60,422,691

5.0% $

Year 3

Year 4

Year 5

$ 60,422,691 $ 59,531,236 $ $ 59,531,236 $ 58,594,172 $ $ 891,455 $ 937,064 $ $ 3,000,889 $ 2,955,281 $

3,892,345

Year 6 INVESTMENT PERIOD 58,594,172 $ 57,609,166 $ 57,609,166 $ 56,573,765 $ 985,006 $ 1,035,401 $ 2,907,339 $ 2,856,944 $

DEVELOPMENT PERIOD $

6,722,963

5.0% $

$ $ $ $

433,084

4,325,429 Year 0

Year 1 DEVELOPMENT PERIOD $ $ $ $ $ $ $

Year 2 LEASE-UP PERIOD 50,400,764 1,292,327 49,108,436 1,292,327 1,292,327 1,292,327 49,108,436

6,722,963 6,722,963 (0) 433,084

$ $ $ $

Year 5

$ 49,108,436 $ 47,816,109 $ $ 1,292,327 $ 1,292,327 $ $ 47,816,109 $ 46,523,782 $ $ 2,584,655 $ 3,876,982 $ $ 2,584,655 $ 3,876,982 $ $ 2,584,655 $ 3,876,982 $ $ 47,816,109 $ 46,523,782 $

Year 6 INVESTMENT PERIOD 46,523,782 $ 45,231,455 $ 1,292,327 $ 1,292,327 $ 45,231,455 $ 43,939,127 $ 5,169,309 $ 6,461,636 $ 5,169,309 $ 6,461,636 $ 5,169,309 $ 6,461,636 $ 45,231,455 $ 43,939,127 $

8,466,202 217,082 8,249,120 217,082 217,082 217,082 8,249,120

$ $ $ $ $ $ $

8,249,120 217,082 8,032,037 434,164 434,164 434,164 8,032,037

$ $ $ $ $ $ $

8,032,037 217,082 7,814,955 651,246 651,246 651,246 7,814,955

$ 57,574,638 $ 56,065,229 $ 54,555,819 $ 1,509,409 $ 1,509,409 $ 1,509,409 $ 56,065,229 $ 54,555,819 $ 53,046,410 $ 2,801,737 $ 4,311,146 $ 5,820,555 $ 2,801,737 $ 4,311,146 $ 5,820,555 $ 2,801,737 $ 4,311,146 $ 5,820,555 $ 56,065,229 $ 54,555,819 $ 53,046,410

$ $ $ $

Year 7 43,939,127 1,292,327 42,646,800 7,753,964 7,753,964 7,753,964 42,646,800

$ $ $ $

Year 8

6,173,612 6,046,318 127,294 305,790

$ $ $ $

Year 9

$ 42,646,800 $ 41,354,473 $ $ 1,292,327 $ 1,292,327 $ $ 41,354,473 $ 40,062,146 $ $ 9,046,291 $ 10,338,618 $ $ 9,046,291 $ 10,338,618 $ $ 9,046,291 $ 10,338,618 $ $ 41,354,473 $ 40,062,146 $

6,046,318 5,912,511 133,807 299,277

Year 12

$ 51,874,629 $ 50,545,838 $ 1,328,791 $ 2,563,554

$ $ $ $

SALE 5,912,511 5,771,859 140,653 292,431

Year 10 SALE 40,062,146 1,292,327 38,769,818 11,630,945 11,630,945 11,630,945 38,769,818

Year 11 $ $ $ $ $ $ $

38,769,818 1,292,327 37,477,491 12,923,273 12,923,273 12,923,273 37,477,491

Year 12

7,163,709 217,082 6,946,627 1,519,575 1,519,575 1,519,575 6,946,627

$ $ $ $ $ $ $

6,946,627 217,082 6,729,545 1,736,657 1,736,657 1,736,657 6,729,545

$ $ $ $ $ $ $

SALE 6,729,545 217,082 6,512,463 1,953,739 1,953,739 1,953,739 6,512,463

$ $ $ $ $ $ $

6,512,463 217,082 6,295,381 2,170,821 2,170,821 2,170,821 6,295,381

$ 53,046,410 $ 51,537,001 $ 50,027,591 $ 48,518,182 $ 1,509,409 $ 1,509,409 $ 1,509,409 $ 1,509,409 $ 51,537,001 $ 50,027,591 $ 48,518,182 $ 47,008,772 $ 7,329,965 $ 8,839,374 $ 10,348,783 $ 11,858,193 $ 7,329,965 $ 8,839,374 $ 10,348,783 $ 11,858,193 $ 7,329,965 $ 8,839,374 $ 10,348,783 $ 11,858,193 $ 51,537,001 $ 50,027,591 $ 48,518,182 $ 47,008,772

$ $ $ $ $ $ $

47,008,772 1,509,409 45,499,363 13,367,602 13,367,602 13,367,602 45,499,363

$ $ $ $ $ $ $

45,499,363 1,509,409 43,989,954 14,877,012 14,877,012 14,877,012 43,989,954

$ $ $ $ $ $ $

6,512,463 217,082 6,295,381 2,170,821 2,170,821 2,170,821 6,295,381

$ $ $ $ $ $ $

INVESTMENT PERIOD 7,814,955 $ 7,597,873 217,082 $ 217,082 7,597,873 $ 7,380,791 868,328 $ 1,085,410 868,328 $ 1,085,410 868,328 $ 1,085,410 7,597,873 $ 7,380,791

6,294,711 6,173,612 121,099 311,985

Year 11

5,771,859 5,624,010 147,849 285,235

$ $ $ $ $ $ $

50,400,764 1,292,327 49,108,436 1,292,327 1,292,327 1,292,327 49,108,436

$ 55,485,391 $ 54,341,334 $ $ 54,341,334 $ 53,138,745 $ $ 1,144,057 $ 1,202,589 $ $ 2,748,288 $ 2,689,756 $

Year 10 SALE 53,138,745 51,874,629 1,264,116 2,628,229

$ 67,145,654 $ 66,254,199 $ 65,217,947 $ 64,128,678 $ 62,983,680 $ 61,780,102 $ 60,514,946 $ 59,185,063 $ 57,787,140 $ $ 66,254,199 $ 65,217,947 $ 64,128,678 $ 62,983,680 $ 61,780,102 $ 60,514,946 $ 59,185,063 $ 57,787,140 $ 56,317,697 $ $ 891,455 $ 1,036,252 $ 1,089,269 $ 1,144,998 $ 1,203,578 $ 1,265,156 $ 1,329,883 $ 1,397,923 $ 1,469,443 $ $ 3,433,973 $ 3,289,176 $ 3,236,160 $ 3,180,431 $ 3,121,850 $ 3,060,273 $ 2,995,545 $ 2,927,506 $ 2,855,986 $

DEVELOPMENT PERIOD

$ $ $ $ $ $ $

INVESTMENT PERIOD 6,519,512 $ 6,409,915 6,409,915 $ 6,294,711 109,597 $ 115,204 323,487 $ 317,879

Year 9

5,771,859 5,624,010 147,849 285,235

Year 4

6,623,775 6,519,512 104,263 328,821

56,573,765 55,485,391 1,088,374 2,803,971

Year 8

$ $ $ $

Year 3

6,722,963 6,623,775 99,188 333,896

Year 7

$ $ $ $ $ $ $

7,380,791 217,082 7,163,709 1,302,493 1,302,493 1,302,493 7,163,709

$ $ $ $ $ $ $

V. PROPOSAL II - MMPG - FINANCIAL ANALYSIS

ANNUAL CASH FLOWS MALDEN MALL Gross Potential Revenue Less: Vacancy Vacancy Rate Less: Bad Debt Effective Gross Revenue Total Operating Expenses Less: Site 2 Land Lease

Year 0 3.0% 5.0% 0.5%

3.0% 15.0%

Year 1 DEVELOPMENT PERIOD $ $ 70.0% $ $ -

$ $ $ $

Year 2 LEASE-UP PERIOD 5,875,238 (954,726) 16.3% (29,376.2) 4,891,135.2

Year 3 $ $

6,051,495 (302,575) 5.0% $ (30,257.5) $ 5,718,662.4

$ $

$ (54,512) $

Net Operating Income Less: Construction Loan Interest During Operating Period Less: Annual Debt Service Add: Operating Reserve Funded by Construction Loan

$ $

(54,512) $ $

Before-Tax Operating Cash Flow

(54,512) $

1,266,800 $

Taxes

After-Tax Operating Cash Flow

(54,512) $

Year 4

(881,286) $ (45,381) $

Year 5

$ $

6,233,039 (311,652) 5.0% $ (31,165.2) $ 5,890,222.3

(907,724) $ (53,059) $

$ $ $ $

(934,956) $ (54,651) $

Year 6 Year 7 INVESTMENT PERIOD 6,420,031 $ 6,612,632 $ 6,811,011 (321,002) $ (330,632) $ (340,551) 5.0% 5.0% 5.0% (32,100.2) $ (33,063.2) $ (34,055.1) 6,066,929.0 $ 6,248,936.8 $ 6,436,404.9 (963,005) $ (56,290) $

Year 8 $ $

7,015,341 (350,767) 5.0% $ (35,076.7) $ 6,629,497.1

Year 9 $ $

7,225,801 (361,290) 5.0% $ (36,129.0) $ 6,828,382.0

$ $ $ $

Year 11

Year 12

$ $

7,665,852 (383,293) 5.0% $ (38,329.3) $ 7,244,230.5

(991,895) $ (1,021,652) $ (1,052,301) $ (1,083,870) $ (1,116,386) $ (1,149,878) (57,979) $ (59,719) $ (61,510) $ (63,355) $ (65,256) $ (67,214)

3,964,468 $ 4,757,879 $ 4,900,615 $ 5,047,634 $ 5,199,063 $ 5,355,035 $ 5,515,686 $ 5,681,156 $ 5,851,591 $ 6,027,139 (2,697,668) $ (3,892,345) $ (3,892,345) $ (3,892,345) $ (3,892,345) $ (3,892,345) $ (3,892,345) $ (3,892,345) $ (3,892,345) $ (3,892,345) 865,534 $ 1,008,271 $ 1,155,289 $ 1,306,718 $ 1,462,690 $ 1,623,341 $ 1,788,812 $ 440,558 $

134,618 $

228,553 $

296,789 $

367,427 $

594,676 $

675,862

1,266,800 $

730,916 $

779,718 $

858,500 $

939,291 $ 1,022,132 $ 1,107,066 $ 1,194,136 $

1,283,384

634,068 (3,170) 630,898

653,090 (3,265) 649,825

3.0% 0.0% 0.5%

DEVELOPMENT PERIOD $ $ $ $ -

$ $ $ $

615,600 (3,078) 612,522

Total Operating Expenses

3.0%

(92,340) $

(95,110) $

(97,964) $

(100,902) $

(103,929) $

(107,047) $

(110,259) $

Net Operating Income Less: Construction Loan Interest During Operating Period Less: Annual Debt Service Add: Operating Reserve Funded by Construction Loan

$ $ $ $

520,182 $

535,787 $

551,861 $

568,417 $

585,469 $

603,034 $

(433,084) $

Before-Tax Operating Cash Flow

87,098 $

102,704 $

118,777 $

135,333 $

152,386 $

Taxes

After-Tax Operating Cash Flow

87,098 $

TOTAL Gross Potential Revenue Less: Vacancy Less: Bad Debt Effective Gross Revenue

$ $ $ $

Total Operating Expenses

Net Operating Income

(54,512) $

3,964,468 $

Before-Tax Operating Cash Flow

(54,512) $

1,266,800 $

Taxes

After-Tax Operating Cash Flow

(54,512) $

5,875,238 (954,726) (29,376) 4,891,135

6,667,095 (302,575) (33,335) 6,331,184

$ $ $ $

102,704 $

$ $ $ $

118,777 $

$ $ $ $

135,333 $

$ $ $ $

803,218 (4,016) 799,202

(113,567) $

(116,974) $

(120,483)

621,125 $

639,758 $

658,951 $

678,720

(433,084) $

(433,084)

169,950 $

188,041 $

206,674 $

225,867

4,587 $

34,388 $

43,190 $

52,303

152,386 $

165,363 $

153,652 $

163,485 $

173,564

5,767,480 $

$ $ $ $

757,110 (3,786) 753,325

8,199,685 (372,129) (40,998) 7,786,558

$ $ $ $

8,445,676 (383,293) (42,228) 8,020,155

6,491,349 $

6,686,090 $

952,632 $ 1,110,974 $ 1,274,066 $ 1,442,051 $ 1,615,076 $ 1,793,291 $ 1,976,852 $

2,165,921 $

225,867

440,558 $

6,118,719 $

7,960,860 (361,290) (39,804) 7,559,765

$ $ $ $

6,302,281 $

367,427 $

5,940,504 $

7,728,990 (350,767) (38,645) 7,339,578

735,059 (3,675) 731,383

SALE 779,824 (3,899) 775,925

$ $ $ $

7,503,874 (340,551) (37,519) 7,125,804

$ $ $ $

(120,483)

5,599,495 $

7,285,314 (330,632) (36,427) 6,918,256

713,649 (3,568) 710,081

(881,286) $ (1,000,064) $ (1,030,066) $ (1,060,968) $ (1,092,797) $ (1,125,581) $ (1,159,348) $ (1,194,129) $ (1,229,953) $ (1,266,851) $ 5,436,403 $

7,073,121 (321,002) (35,366) 6,716,754

$ $ $ $

803,218 (4,016) 799,202

5,278,061 $

6,867,107 (311,652) (34,336) 6,521,120

$ $ $ $

INVESTMENT PERIOD 672,683 $ 692,863 - $ (3,363) $ (3,464) 669,319 $ 689,399

516,275 $

1,959,246

PREMIER Gross Potential Revenue Less: Vacancy Less: Bad Debt Effective Gross Revenue

Year 10 SALE 7,442,575 (372,129) 5.0% (37,212.9) 7,033,233.5

134,618 $

228,553 $

296,789 $

520,862 $

629,064 $

719,052 $

52,303

1,266,800 $

818,014 $

882,422 $

977,278 $ 1,074,624 $ 1,174,518 $ 1,272,429 $ 1,347,788 $

1,446,869 $

173,564

678,720

Development and Operating ProForma Page 2/4

V. PROPOSAL II - MMPG - FINANCIAL ANALYSIS

INCOME TAX CALCULATION MALDEN MALL Net Operating Income Deduct: Interest Deduct: Depreciation Taxable Income/(Loss) Passive Loss Offset

Year 0

Taxable Income Passive Loss Carryforward Annual Income Taxes

35%

PREMIER Net Operating Income Deduct: Interest Deduct: Depreciation Taxable Income/(Loss) Passive Loss Offset Taxable Income Passive Loss Carryforward Annual Income Taxes SALE CALCULATION (INCLUDING TAX) Cash Flow from Sale Sale Price (cap rate applied to following year NOI) Less: Commission Adjusted Sales Price Less: Remaining Mortgage Balance Before-Tax Cash Flow from Sale

35%

Year 1 DEVELOPMENT PERIOD $ (54,512) $ $ $ (54,512) $ -

$ $ $ $ $

Year 2 LEASE-UP PERIOD 3,964,468 (2,697,668) (1,292,327) (25,527) -

Year 3 $ $ $ $ $

4,757,879 (3,000,889) (1,292,327) 464,662 (80,039.05)

Year 4

Year 5

$ 4,900,615 $ $ (2,955,281) $ $ (1,292,327) $ $ 653,007 $ $ $

Year 6 INVESTMENT PERIOD 5,047,634 $ 5,199,063 $ (2,907,339) $ (2,856,944) $ (1,292,327) $ (1,292,327) $ 847,968 $ 1,049,792 $ $ $

Year 7 5,355,035 (2,803,971) (1,292,327) 1,258,737 -

Year 8 $ $ $ $ $

5,515,686 (2,748,288) (1,292,327) 1,475,071 -

Year 9 $ $ $ $ $

5,681,156 (2,689,756) (1,292,327) 1,699,074 -

$ $ $ $ $

Year 10 SALE 5,851,591 (2,628,229) (1,292,327) 1,931,035 1,931,035 -

$ $

$ (54,511.88) $

$ (80,039.05) $

384,623 $ $

653,007 $ $

847,968 $ 1,049,792 $ 1,258,737 $ 1,475,071 $ 1,699,074 $ $ $ $ $ $

134,618 $

228,553 $

296,789 $

$ $ $ $ $ $ $ $ $ $

520,182 (433,084) (217,082) (129,984) (129,984) -

535,787 (333,896) (217,082) (15,190) (145,174) -

551,861 (328,821) (217,082) 5,958 (5,958) (139,216) -

DEVELOPMENT PERIOD $ $ $ $ $ $ $ $ $ $ -

$ $ $ $ $ $ $ $ $ $

367,427 $

440,558 $

INVESTMENT PERIOD 568,417 $ 585,469 (323,487) $ (317,879) (217,082) $ (217,082) 27,848 $ 50,508 (27,848) $ (50,508) $ $ (111,368) $ (60,860) $ $ -

$ $ $ $ $ $ $ $ $ $

516,275 $

594,676 $

675,862

603,034 (311,985) (217,082) 73,966 (60,860) 13,106 4,587

621,125 (305,790) (217,082) 98,253 98,253 34,388

639,758 (299,277) (217,082) 123,399 123,399 43,190

$ $ $ $ $ $ $ $ $ $

Year 11

$ $ $ $ $ $ $ $ $ $

SALE 658,951 (292,431) (217,082) 149,438 149,438 52,303

MALDEN MALL SALEPREMIER SALE $ $ $ $ $

11,311,992 565,600 10,746,392 5,771,859 4,974,534

Total Tax at Sale

$ 11,913,523 $

944,473

After-Tax Cash Flow from Sale

$ 31,641,547 $ 4,030,061

Tax Calculation from Sale Adjusted Sales Price Remaining Book Value Total Taxable Gain Passive Loss Carryforward Total Net Taxable Gain

$ $ $ $ $

6.00% 5%

$ 100,452,315 $ 5,022,616 $ 95,429,699 $ 51,874,629 $ 43,555,070

95,429,699 38,769,818 56,659,881 56,659,881

$ $ $ $ $

10,746,392 6,512,463 4,233,930 4,233,930

Total Depreciation Taken Recapture Tax

25%

$ 11,630,945 $ 1,953,739 $ 2,907,736 $ 488,435

Capital Gain Tax on Capital Gain

20%

$ 45,028,935 $ 2,280,191 $ 9,005,787 $ 456,038

Total Tax at Sale

Year 12

$ 11,913,523 $

944,473

Development and Operating ProForma Page 3/4

V. PROPOSAL II - MMPG - FINANCIAL ANALYSIS

RETURN MEASURES Unleveraged IRR Project Cost Net Operating Income Adjusted Sales Price Unleveraged Cash Flow Unleveraged IRR Net Present Value

Year 0

8% $

Year 3

Year 4

Year 5

Year 6

Year 7

Year 8

Year 9

6,302,281 $ 6,491,349 $ 6,686,090 $ 95,429,699 $ 10,746,392 6,302,281 $ 101,921,048 $ 17,432,482

$ (64,884,500) $ $

(12,239,407) (54,512) $

3,964,468 $

5,278,061 $

5,436,403 $

5,599,495 $

5,767,480 $

5,940,504 $

6,118,719 $

$ (64,884,500) $

(12,293,919) $

3,964,468 $

5,278,061 $

5,436,403 $

5,599,495 $

5,767,480 $

5,940,504 $

6,118,719 $

$ (8,386,433) $ $

(5,615,288) (54,512) $

1,266,800 $

952,632 $

1,110,974 $

1,274,066 $

1,442,051 $

1,615,076 $

1,793,291 $

$ (8,386,433) $

(5,669,800) $

1,266,800 $

952,632 $

1,110,974 $

1,274,066 $

1,442,051 $

1,615,076 $

1,793,291 $

$ (8,386,433) $ $

(5,615,288) (54,512) $

1,266,800 $

818,014 $

882,422 $

977,278 $

1,074,624 $

1,174,518 $

1,272,429 $

$ (8,386,433) $

(5,669,800) $

1,266,800 $

818,014 $

882,422 $

977,278 $

1,074,624 $

1,174,518 $

1,272,429 $

Year 10

Year 11

1,976,852 $ 2,165,921 $ $ 43,555,070 $ 1,976,852 $ 45,720,991 $

225,867 4,974,534 5,200,401

1,347,788 $ 1,446,869 $ $ 31,641,547 $ 1,347,788 $ 33,088,416 $

173,564 4,030,061 4,203,625

19.0% 8% $ 17,106,690

After-Tax IRR Equity After-Tax Operating Cash Flow After-Tax Cash Flow from Sale Total After-Tax Cash Flow After-Tax IRR Net Present Value

Year 2

9.2% 7,372,709

Before-Tax IRR Equity Before-Tax Operating Cash Flow Before-Tax Cash Flow from Sale Total Before-Tax Cash Flow Before-Tax IRR Net Present Value

Year 1

8% $

15.0% 9,266,320

Development and Operating ProForma Page 4/4

V. PROPOSAL II - MMPG - FINANCIAL ANALYSIS

DOWNTOWN REVITALIZATION: DEVELOPMENT PERIOD CASH FLOWS DEVELOPMENT COSTS MALDEN MALL Acquisition Land Carry Site 2 Land Lease Hard Costs Soft Costs Contingency Developer Fee Total Development Costs, Excl. Constr. Loan Interest and Operating Reserve

Data

Total

Time Zero

Year 1 Total

45,381 2,991,030 373,879 3,410,290

$ 27,151,287 $ 27,151,287 $ 27,151,287 $ 95,894 $ 95,894 $ 95,894 15% $ 54,512 $ 99,893 $ $ 29,910,300 $ 29,910,300 $ $ 5,982,060 $ 5,982,060 $ $ 747,758 $ 747,758 $ $ 897,309 $ 897,309 $ $ 64,839,119 $ 64,884,500 $ 27,247,181

Total Development Costs, Excl. Constr. Loan Interest and Operating Reserve

$ 6,933,900 $ 91,757 $ 4,171,000 $ 834,200 $ 104,275 $ 104,275 $ 12,239,407

6,933,900 91,757 7,025,657

$ $ $ $ $ $ $

4,171,000 834,200 104,275 104,275 5,213,750

TOTAL Acquisition Land Carry Site 2 Land Lease Hard Costs Soft Costs Contingency Developer Fee Total Development Costs, Excl. Constr. Loan Interest and Operating Reserve

$ 34,085,187 $ 34,085,187 $ 34,085,187 $ 187,652 $ 187,652 $ 187,652 $ 54,512 $ 99,893 $ $ 34,081,300 $ 34,081,300 $ $ 6,816,260 $ 6,816,260 $ $ 852,033 $ 852,033 $ $ 1,001,584 $ 1,001,584 $ $ 77,078,527 $ 77,123,908 $ 34,272,838

$ $ $ $ $ 54,512 $ $ 29,910,300 $ $ 2,991,030 $ $ 373,879 $ $ 897,309 $ $ 34,227,030 $

45,381 4,171,000 3,825,230 478,154 104,275 8,624,040

PREMIER Acquisition Land Carry Hard Costs Soft Costs Contingency Developer Fee

$ 6,933,900 $ 91,757 $ 4,171,000 $ 834,200 $ 104,275 $ 104,275 $ 12,239,407

Quarter 3

Quarter 4

Quarter 5

Quarter 6

$ $ $ $ $ $ $

$ $ $ $ $ $

13,628 7,477,575 747,758 93,470 224,327 8,556,757

$ $ $ $ $ $

13,628 7,477,575 747,758 93,470 224,327 8,556,757

$ $ $ $ $ $

13,628 7,477,575 747,758 93,470 224,327 8,556,757

102

5% 3% $

1,468,809 $ $ 0.5% $ $ 15% $ $

5,875,238 (954,726) (29,376) 4,891,135 (881,286) 4,009,850

$ $ $ $ $ $

61.2 61.2 70.0% 0.0% 70.0% -

$ $ $ $ $ $

$ (60,874,651) $ (27,247,181) $ (34,227,030) $

40.8 102 15.0% 5.0% 16.3% 5,875,238 (954,726) (29,376) 4,891,135 (881,286) 4,009,850

Quarter 7

$ $ $ $ $ $

13,628 7,477,575 747,758 93,470 224,327 8,556,757

$ $ $ $ $ $

13,628 7,477,575 747,758 93,470 224,327 8,556,757

$ $ $ $ $ $

13,628 7,477,575 747,758 93,470 224,327 8,556,757

Quarter 9

Quarter 10

$ $ $ $ $ $

13,628 7,477,575 747,758 93,470 224,327 8,556,757

9,017.17 $

10,834 $

12,651 $

$ $

747,758 $ 93,470 $

747,758 93,470

850,244 $

852,061 $

853,878 $

854,106 $

$ $ $ $ $ $

9,017 747,758 93,470 850,244

$ $ $ $ $ $

10,834 747,758 93,470 852,061

$ $ $ $ $ $ $ $

12,878 $

$ $ $ $ $ $

599,560 $ (8,556,757) $ (8,556,757) $ (8,556,757) $ (8,556,757) $

13.6 74.8 33.3% 0.0% 33.3% 1,468,809 (489,603) (7,344) 971,862 (220,321) 751,541

$ $ $ $ $ $

(98,704) $

13.6 88.4 20.0% 0.0% 20.0% 1,468,809 (293,762) (7,344) 1,167,703 (220,321) 947,382

$ $ $ $ $ $

95,321 $

3% $ $

$ $ $ $ $ $

Net Cash Flow Before Debt During First Two Years

$ (12,239,407) $ (7,025,657)

TOTAL Gross Potential Revenue Vacancy Loss Bad Debt Effective Gross Revenue Operating Expenses NOI

$ $ $ $ $ $

Net Cash Flow Before Debt During First Three Years

$ (73,114,058) $ (34,272,838) $ (34,227,030) $ (4,614,190) $ (8,556,757) $ (8,556,757) $ (8,556,757) $ (8,556,757) $

5,875,238 (954,726) (29,376) 4,891,135 (881,286) 4,009,850

$ (5,213,750)

$ $ $ $ $ $

5,875,238 (954,726) (29,376) 4,891,135 (881,286) 4,009,850

$ $ $ $ $ $

1,468,809 (489,603) (7,344) 971,862 (220,321) 751,541

$ $ $ $ $ $

(98,704) $

1,468,809 (293,762) (7,344) 1,167,703 (220,321) 947,382

13,265 $

53,059

13,265 $

53,059

DEVELOPMENT PERIOD $ $ 2,085,500 $ 2,085,500 417,100 $ 417,100 52,138 $ 52,138 52,138 $ 52,138 2,606,875 $ 2,606,875

12,651 2,085,500 1,164,858 145,607 52,138 3,460,753

$ $ $ $ $ $ $ $

FIRST STABILIZED YEAR

12,878 $ 2,085,500 1,164,858 145,607 52,138 3,460,981 $

13,265 $

53,059

13,265 $

53,059

FIRST STABILIZED YEAR

13.6 102 6.7% 0.0% 6.7% 1,468,809 (97,921) (7,344) 1,363,545 (220,321) 1,143,223

$ $ $ $ $ $

289,345 $

0 102 0.0% 5.0% 5.0% 1,468,809 (73,440) (7,344) 1,388,025 (220,321) 1,167,703

$ $ $ $ $ $

313,598 $

0 102 0.0% 5.0% 5.0% 1,512,874 (75,644) (7,564) 1,429,666 (226,931) 1,202,735

$ $ $ $ $ $

1,189,470 $

$ $ $ $ $ $

(2,606,875) $ (2,606,875) $

$ $ $ $ $ $

1,468,809 (97,921) (7,344) 1,363,545 (220,321) 1,143,223

$ $ $ $ $ $

0 102 0.0% 5.0% 5.0% 1,512,874 (75,644) (7,564) 1,429,666 (226,931) 1,202,735

$ $ $ $ $ $

1,189,470 $

0 102 0.0% 5.0% 5.0% 1,512,874 (75,644) (7,564) 1,429,666 (226,931) 1,202,735

$ $ $ $ $ $

1,189,470 $

0 102 0.0% 5.0% 5.0% 1,512,874 (75,644) (7,564) 1,429,666 (226,931) 1,202,735

$ $ $ $ $ $

0 102 0.0% 5.0% 5.0% 6,051,495 (302,575) (30,257) 5,718,662 (907,724) 4,810,938

1,189,470 $

4,757,879

FIRST STABILIZED YEAR

95,321 $

Year 3 Total

13,265 $

DEVELOPMENT PERIOD 100% 153,900 $ $ 0.5% $ $ 15% $ $

Quarter 12

13,265 $

LEASE-UP PERIOD

61.2 61.2 70.0% 0.0% 70.0%

Quarter 11

FIRST STABILIZED YEAR

$ $ $ $ $ $ $

$ $ $ $ $ $

Quarter 8

LEASE-UP PERIOD

DEVELOPMENT PERIOD 60% 12 102

Net Cash Flow Before Debt During First Three Years PREMIER Initial Occupancy Upon Opening Gross Potential Revenue Vacancy Loss Bad Debt Effective Gross Revenue Operating Expenses NOI

Quarter 2

DEVELOPMENT PERIOD $ $ $ $ $ 54,512 $ $ 29,910,300 $ $ 2,991,030 $ $ 373,879 $ $ 897,309 $ $ 34,227,030 $

OPERATING INCOME/ (LOSS) DURING LEASE UP MALDEN MALL Initial Occupancy Upon Opening Months to Reach Stabilized Occupancy Spaces Leased per Quarter Cumulative No. Of Spaces Leased Vacancy Due to Lease Up (% of Gross Potential) Stablized Vacancy (% of Gross Potential) Overall Vacancy Rate Gross Potential Revenue Vacancy Loss Bad Debt Effective Gross Revenue Operating Expenses NOI

Quarter 1

Year 2 Total

1,468,809 (73,440) (7,344) 1,388,025 (220,321) 1,167,703

$ $ $ $ $ $

(2,317,530) $ (2,293,277) $

153,900 (770) 153,131 (23,085) 130,046

$ $ $ $ $ $

130,046 $

1,666,774 (75,644) (8,334) 1,582,796 (250,016) 1,332,780

$ $ $ $ $ $

1,319,515 $

153,900 (770) 153,131 (23,085) 130,046

$ $ $ $ $ $

130,046 $

1,666,774 (75,644) (8,334) 1,582,796 (250,016) 1,332,780

$ $ $ $ $ $

1,319,515 $

153,900 (770) 153,131 (23,085) 130,046

$ $ $ $ $ $

130,046 $

1,666,774 (75,644) (8,334) 1,582,796 (250,016) 1,332,780

$ $ $ $ $ $

1,319,515 $

153,900 (770) 153,131 (23,085) 130,046

$ $ $ $ $ $

615,600 (3,078) 612,522 (92,340) 520,182

130,046 $

520,182

1,666,774 (75,644) (8,334) 1,582,796 (250,016) 1,332,780

$ 6,667,095 $ (302,575) $ (33,335) $ 6,331,184 $ (1,000,064) $ 5,331,120

1,319,515 $

5,278,061

Continued on next page

V. PROPOSAL II - MMPG - FINANCIAL ANALYSIS

CONSTRUCTION LOAN BALANCE AND INTERESTS CALCULATION MALDEN MALL Total Development Costs Maximum Loan Balance Equity Required Equity Account Ending Balance

$ 65,452,088 $ 60,422,691 $ 5,029,397 $ $

PREMIER Total Development Costs Maximum Loan Balance Equity Required Equity Account Ending Balance

$ 12,344,479 $ 6,729,191 $ 5,615,288 $ 5,615,288 $ $ 11,230,577 $

TOTAL Total Development Costs Maximum Loan Balance Equity Required Equity Account Ending Balance

$ 77,796,567 $ 67,151,882 $ 10,644,685 $ 10,644,685 $ 10,644,685 $ $ 16,259,973 $ 10,644,685 $

CONSTRUCTION LOAN ACCOUNT MALDEN MALL Beginning Balance Loan Draws Construction Draw (Initial Request) Operating Deficit Trial Balance Additional Equity Required Net Construction Draw Ending Balance Before Interest Average Loan Balance Before Interest Total Construction Loan Interest Interest Accrued During Construction Period Interest Accrued During Operating Period Interest Paid from Operations Trial Ending Balance Additional Equity Required Net Interests Accrued Ending Balance

DEVELOPMENT PERIOD

5,029,397 $ 5,029,397 $

$ 5,029,397 $

LEASE-UP PERIOD

$ 5,029,397 $

5,029,397

DEVELOPMENT PERIOD

5,615,288 5,615,288

$ $ 11,230,577

$ $

$ $ 5,029,397 $ 16,259,973 $

$ 5,029,397 $

$ 5,615,288 $

FIRST STABILIZED YEAR

5,615,288

$ 10,644,685 $ 10,644,685

DEVELOPMENT PERIOD LEASE-UP PERIOD $ 22,342,759 $ 31,199,004 $ 40,154,882 $ 49,211,514 $ 58,370,033 $ 59,881,722 $ 60,422,691 $ 60,422,691

4.5%

$ 59,855,104 $ $ 141,262,852 $ (2,019,077) $ 57,836,027 $ 140,408,746 $ 125,021,476 $ 4,622,887 $ 1,925,219 $ 2,697,668 $ (698,263) $ 141,501,640 $ (1,337,960) $ 2,586,664 $ 60,422,691

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $

22,217,784 22,217,784 22,217,784 22,217,784 11,108,892 124,975 124,975 22,342,759 124,975 22,342,759

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $

34,227,030 57,768,271 34,227,030 57,768,271 53,489,893 1,800,244 1,800,244 58,370,033 1,800,244 58,370,033

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $

3,410,290 61,276,797 (2,019,077) 1,391,213 60,422,691 60,422,691 2,697,668 2,697,668 (698,263) 60,788,848 (1,337,960) 661,445 60,422,691

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $

8,556,757 30,899,516 8,556,757 30,899,516 26,621,138 299,488 299,488 31,199,004 299,488 31,199,004

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $

8,556,757 39,755,762 8,556,757 39,755,762 35,477,383 399,121 399,121 40,154,882 399,121 40,154,882

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $

8,556,757 48,711,640 8,556,757 48,711,640 44,433,261 499,874 499,874 49,211,514 499,874 49,211,514

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $

8,556,757 57,768,271 8,556,757 57,768,271 53,489,893 601,761 601,761 58,370,033 601,761 58,370,033

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $

Total Additional Equity Required

$ (3,357,037) $

Net Cash Flow After Debt

PREMIER Beginning Balance Loan Draws Construction Draw (Initial Request) Operating Deficit Trial Balance Additional Equity Required Net Construction Draw Ending Balance Before Interest Average Loan Balance Before Interest Total Construction Loan Interest Interest Accrued During Construction Period Interest Accrued During Operating Period Interest Paid from Operations Trial Ending Balance Additional Equity Required Net Interests Accrued Ending Balance

$ 5,029,397 $

FIRST STABILIZED YEAR

3,311,586

850,244 59,220,277 850,244 59,220,277 58,795,155 661,445 661,445 59,881,722 661,445 59,881,722 751,541

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $

852,061 60,733,784 (311,092.8) 540,969 60,422,691 60,152,207 676,712 676,712 (95,321) 61,004,083 (581,392) (0) 60,422,691

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $

(892,485) $

852,061

4.5%

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $

6,624,119 6,662,672 6,624,119 6,662,672 2,372,836 98,844 98,844 6,722,963 98,844 6,722,963

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $

1,410,369 1,410,369 1,410,369 1,410,369 705,185 7,933 7,933 1,418,302 7,933 1,418,302

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $

5,213,750 6,662,672 5,213,750 6,662,672 4,040,487 90,911 90,911 6,722,963 90,911 6,722,963

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $

853,878 61,276,569 (853,878) 60,422,691 60,422,691 679,755 679,755 (289,345) 60,813,101 (390,410) (0) 60,422,691

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $

854,106 61,276,797 (854,106) 60,422,691 60,422,691 679,755 679,755 (313,598) 60,788,848 (366,157) (0) 60,422,691

(1,244,289) $ (1,220,263) 853,878

854,106

DEVELOPMENT PERIOD 1,418,302 $ 4,055,797 2,606,875 4,025,177 2,606,875 4,025,177 2,721,740 30,620 30,620 4,055,797 30,620 4,055,797

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $

Net Cash Flow After Debt

$ 66,479,223 $ $ 147,925,524 $ (2,019,077) $ 64,460,146 $ 147,071,418 $ 127,394,311 $ 4,721,732 $ 2,024,063 $ 2,697,668 $ (698,263) $ 148,224,603 $ (1,337,960) $ 2,685,509 $ 67,145,654

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $

23,628,153 23,628,153 23,628,153 23,628,153 11,814,077 132,908 132,908 23,761,061 132,908 23,761,061

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $

34,227,030 57,768,271 34,227,030 57,768,271 53,489,893 1,800,244 1,800,244 58,370,033 1,800,244 58,370,033

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $

8,624,040 67,939,469 (2,019,077) 6,604,963 67,085,363 64,463,178 2,788,579 90,911 2,697,668 (698,263) 67,511,812 (1,337,960) 752,356 67,145,654

$ 22,342,759 $ 31,199,004 $ 40,154,882 $ 49,211,514 $ 58,370,033 $ 59,881,722 $

61,840,993 $ 64,478,488

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $

3,460,753 65,301,747 (853,878) 2,606,875 64,447,868 63,144,431 710,375 30,620 679,755 (289,345) 64,868,898 (390,410) 30,620 64,478,488

8,556,757 30,899,516 8,556,757 30,899,516 26,621,138 299,488 299,488 31,199,004 299,488 31,199,004

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $

8,556,757 39,755,762 8,556,757 39,755,762 35,477,383 399,121 399,121 40,154,882 399,121 40,154,882

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $

8,556,757 48,711,640 8,556,757 48,711,640 44,433,261 499,874 499,874 49,211,514 499,874 49,211,514

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $

8,556,757 57,768,271 8,556,757 57,768,271 53,489,893 601,761 601,761 58,370,033 601,761 58,370,033

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $

850,244 59,220,277 850,244 59,220,277 58,795,155 661,445 661,445 59,881,722 661,445 59,881,722

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $

852,061 60,733,784 (311,093) 540,969 60,422,691 60,152,207 676,712 676,712 (95,321) 61,004,083 (581,392) (0) 60,422,691

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $

Total Additional Equity Required

$ (3,357,037) $

(892,485) $

Net Cash Flow After Debt

$ 3,311,586 $

751,541 $

852,061 $

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $

3,460,981 67,939,469 (854,106) 2,606,875 67,085,363 65,781,925 740,047 60,291 679,755 (313,598) 67,511,812 (366,157) 60,291 67,145,654

(1,244,289) $ (1,220,263) 853,878 $

FIRST STABILIZED YEAR

2,606,875 6,662,672 2,606,875 6,662,672 5,359,234 60,291 60,291 6,722,963 60,291 6,722,963

Total Additional Equity Required

TOTAL Beginning Balance Loan Draws Construction Draw (Initial Request) Operating Deficit Trial Balance Additional Equity Required Net Construction Draw Ending Balance Before Interest Average Loan Balance Before Interest Total Construction Loan Interest Interest Accrued During Construction Period Interest Accrued During Operating Period Interest Paid from Operations Trial Ending Balance Additional Equity Required Net Interests Accrued Ending Balance

FIRST STABILIZED YEAR

854,106

ASIAN CDC PROPOSALS

VI 89

VI. Asian Community Development Corporation

Mission The Asian Community Development Corporation is a non-profit organization founded with the objective of serving the Asian American community of Greater Boston. Asian CDC focuses on sustaining the culture and revitalizing Boston’s Chinatown by developing affordable housing, fostering economic development, stimulating leadership development, and advocating on behalf of Greater Boston’s Asian American community.

History Asian CDC was founded 27 years ago to mitigate the rising needs of the Chinatown community specifically attributed to the lack of affordable housing. Asian CDC’s community

based efforts than expanded to attend the whole Greater Boston Asian American community as an increasing number of Asian immigrants and low income families had to leave Chinatown in response to the shortage of affordable housing. Currently, Asian CDC is in charge of programs such as the Comprehensive Housing Opportunities Program, the Community Organizing and Planning program, the Chinatown Heritage Project and specifically relevant to this field study, the real estate development program. Asian CDC’s effort to provide affordable housing to the Asian American community continues as Chinatown is undergoing a process of gentrification.

Recent development of luxury apartment buildings in the Chinatown area is causing property values to rise beyond the affordability of many longtime residents. Asian CDC’s real estate development program is then focused on developing high-quality affordable communities that are welcoming for residents, neighbors, and visitors alike.

Real Estate Portfolio Asian CDC revolves around transit-oriented, large-scale, mixed-use and mixed-income development projects. Since 1995, the organization has successfully completed four development projects with the recent groundbreaking of the fourth project on May 6th, 2014. Asian CDC has created over $100 million of mixed-income developments that house over 800 residents. The following is a brief overview of each of the projects:

OAK TERRACE Asian CDC’s first development project is Oak Terrace, which was completed in 1995. Oak Terrace is located in Chinatown and was at its time of completion, the first new development in Chinatown in over 20 years. Additionally, it is one of the earlier developments to make use of the Low Income Housing Tax Credit (LIHTC) program. Oak Terrace Limited Partnership owns the property in partnership with Oak Terrace Corporation, which is the general partner with a 1% ownership. Oak terrace Corporation is a subsidiary managed by Asian CDC.

Asian CDC Executive Board

Oak Terrace contains 88 units of which 16% are one-bedroom units, 36% are two-bedroom units, 38% are three-bedroom units and 10% are 4-bedroom units. Approximately one-third of the units are low-income units, one-third are moderate-income units, and one-third are market rate units and provides housing to over 300 residents. Additionally, Oak Terrace provides community and 4 ground-floor commercial spaces, which partake an area of approximately 2,775 square feet.

THE METROPOLITAN The Metropolitan, located in Downtown Boston, is the second development project Asian CDC was involved with and was completed in 2004. Asian CDC developed this $89 million, 23-story-high-rise project in partnership with for-profit developer Edward A. Fish Associates. The Metropolitan contains a total of 133 rental units and 118 for-sale condominiums of which 46% are affordable to low and moderate income families. 61% of the rental units are affordable to low and moderate income families and 29% of the condominiums are sold at affordable prices ranging from 80% to 120% of area median income. The Metropolitan also provides community space for community-based social services organizations, retail and commercial space, and 283 underground parking spaces.

6 FORT STREET 6 Fort Street, located in Quincy, MA, is Asian CDC’s first development project outside of Downtown Boston. The property was completed in 2012 and is an adaptive reuse of a church which was converted to office space, representing a sustainable approach

VI. ASIAN CDC - REAL ESTATE PORTFOLIO

Oak Terrace Oak Terrace

to affordable housing. The building contains 34 units, which encompass approximately 42,000 square feet of space, 64 parking spaces and approximately 1,000 square feet of community space. Of the 34 units, 100% of them are affordable. 23% of the units are onebedroom, 65% are two-bedroom, and 12% are three bedroom.

ONE GREENWAY The latest development venture Asian CDC has been involved with is One Greenway, a 2-building project located in Boston. The first building is set to open in 2015 while the second building is set to be completed in 2016. Asian CDC developed One Greenway in joint venture with New Boston Fund, Inc. Upon completion, the property will contain 362 residential units, 5,000 square feet of community space, 3,000 square feet of commercial space, and 13,000 square feet of central open space. The residential units are a mix of 312 rental and 50 condominium units. 30% of the rental units and 100% of the condominiums will be offered at affordable prices.

Asian CDC in Malden The rising housing prices in Chinatown have forced many residents to look elsewhere in the Greater Boston area for more affordable housing. Along with Quincy, Malden is becoming home to an increasing number of Asian residents. According to the US Census Bureau, in 1990 just 5.2% of Malden’s population was Asian. As of 2012, Asians now represent over 20.1% of the city’s population. Relative to it’s nearest neighbors of Everett, Medford, and Revere, Malden boasts the

MetropolisMetropolis

One Greenway One Greenway

highest percentage of Asian population. Following the increase in Asian population, there has been a surge of Asian-owned businesses in Malden including restaurants. What makes Malden especially attractive to the Asian community is the Malden Center Station, which is serviced by the Orange Subway Line, providing a direct connection to Chinatown. Due to its unique characteristics, it’s no surprise then that Asian CDC is looking to fulfill some of the housing needs the Asian community in Malden is facing. Asian CDC is interested in a ground-up or adaptive re-use opportunity to develop a minimum of 30 affordable residential rental units in Malden. Like 6 Fort Street in Quincy, Asian CDC wants this project to be more family oriented by providing mostly two to three bedroom units. Depending on the site characteristics, the property can be an allaffordable, 30-unit (approximate) development such as 6 Fort Street or it can be a 60 to 80-unit mixed-income development project in which at least 30 of the units are affordable. Additionally, to capitalize on the direct subway link between Malden and Chinatown, ideally the property site will be a 10-minute walk from the subway station. Using these basic characteristics of what Asian CDC envisions the affordable housing developing project to be, each team was tasked to select a site and implement a development scheme.

BOSTON - CHINATOWN

QUINCY

Asian CDC’s existing project portfolio.

6 Fort Street6 Fort Street

VI. ASIAN CDC PROPOSAL I - SUMMER STREET

VI. Asian CDC PROPOSAL I SUMMER STREET Alexander Akel, Alison Crowley & Greg Demaiter Overview Selection Criteria Based on our conversations with the Asian Community Development Corporation (Asian CDC) throughout site visits to their Quincy and Chinatown project locations, we sought to identify a site for the Asian CDC that would meet the following criteria: 1) Capable of fitting at least 30 units, the majority family sized, on site. There is an increasingly dire need for more family housing in the transit-oriented section of Malden. Current new residential projects emphasize studios and one-bedroom units to attract young professional commuters, and we hope that this project can help combat that effect by providing less-common two and three-bedroom units. 2) New construction or adaptive re-use of a vacant building. Our initial site selection process included multiple existing buildings that we felt were ideal for rehabilitation and reuse as affordable apartment buildings. However, in considering the acquisition of existing residential projects, we risked displacing those residents during the rehabilitation construction process. It was our understanding that Asian CDC’s goal is to increase the number of affordable units in the city rather than simply take ownership of an existing affordable project, and we did not want to displace any current residents, be they market or affordable. This narrowed our sites to those either currently vacant or with a vacant structure suitable to re-use.

3) Located within a 0.5-mile walk shed to the Malden Center MBTA Station. Because the residents of this building may rely on public transportation to get to their jobs in other parts of the Boston metro region, we wanted to ensure that the project remained within a half-mile walk to the Malden Center MBTA Station, which would take approximately 10 minutes to reach. Because some of our residents may be older and have difficulty walking far distances, we wanted the access to the T to be as direct and safe as possible. 4) Large enough site area to provide at least one parking space per every three residential units. Although Malden typically requires more stringent parking requirements, we believe the project would be eligible for parking relief due to its proximity to the MBTA station and due to the affordability restrictions placed on the units. Fewer households in lower income brackets own cars, and having to incorporate more parking spaces than what are currently proposed would severely limit the number of new affordable units we could build. 5) Straightforward acquisition potential. Arranging financing for a 100% affordable project will be complex no matter how experienced a developer is in this type of development. As such, we wanted to eliminate further complications by avoiding sites that could be difficult to acquire. This includes subdivided sites with multiple owners requiring assemblage, sites that were recently acquired, and sites with investor owners unlikely to be open to negotiation.

Site Selection Ultimately, we selected a site located at the intersection of Mountain Avenue and Summer Street just northeast of the CBD. The site meets our criteria in the following ways: 1) The land area is 12,955 SF, allowing enough space to build 42 units of primarily two and three-bedroom units in a six story building, the maximum allowed in the CBD. 2) The site has no structure on it, enabling a straightforward ground-up project that won’t displace any current residents.

STOP T O T & CBD

0.297 AC

3) The site is 0.3 miles from the pedestrian entrance to the Malden Center train station and 0.2 miles from the future connection of Pleasant Street to Commercial Street when the City Hall site is re-developed. 4) With 70% of the site’s land area utilized for the building footprint, the remaining 30% of the site can hold 16 parking spaces, a parking ratio of 0.38. 5) Perhaps most significantly, the site’s current use is as a municipal parking lot with approximately forty spaces serving the courthouse located across the street. Although public parking options continue to be a concern for Malden authorities, the site has a city-owned parking garage directly across the street that would remain in operation throughout construction and project completion. On a weekday visit during normal business hours, the parking garage was less than half-full, indicating that for the buildings it serves, the spaces provided are sufficient. Furthermore,

though the primary user for the parking lot and garage is the Malden City Courthouse, Malden government authorities have indicated that the site will likely be re-developed in the near term future as a community arts center. If this occurs, there will likely be an even further reduced need for parking, as arts centers employ fewer workers than courthouses and generally have less daytime traffic. Because the City of Malden owns the parking lot, we believe Asian CDC can negotiate with the City to obtain the parking lot at little or no cost, cutting out the profit incentives inherent to a private market transaction.

Proposed site for the Asian CDC.

VI. ASIAN CDC - PROPOSAL I - SUMMER STREET

Malden MBTA Station

Malden CBD

Site Plan showing Ground Level Retail, Parking , Building Outline Above

Municipal Garage

District Courthouse

Asian CDC Site

VI. ASIAN CDC PROPOSAL I - SUMMER STREET

Program Program Residential Retail TOTAL Parking - surface Park/Green space Roads/Infrastructure

Units 51,911 2,500 54,411 16 0 0

Building Calculation Total Land Area % building footprint Total Built Footprint Number of stories Total GSF

12,955 70% 9,069 6 54,411

Total Parking Footprint # Parking spaces total # Parking for retail # Parking for resi Parking resi ratio/unit

3,887 16 4 12 0.27

Unit Mix

By utilizing 70% of the site area for the building footprint, the remaining 30% of the site can hold 16 parking spaces at 250 SF per

Unit Count 1 BR 2 BR 3 BR

TOTAL Average Rent/SF

Efficiency Floor 1 Floors 2-6 TOTAL SF Residential Efficiency Avg Unit Size (Weighted)

Similar to Asian CDCâ&#x20AC;&#x2122;s Oak Terrace apartments, we propose a small 2,500 SF ground floor commercial component that will provide additional cash flow month to month. The site is separated from a retail corridor to its south by two small residential projects. As such, the nature of the site likely lends itself to neighborhood-serving retail or small office space, similar to the dental office at Oak Terrace. The remaining ground floor space is reserved for common areas and core. This programming is, of course, flexible; because there is no outdoor common area component to the project, Asian CDC may elect instead to fully utilize the ground floor space for resident amenities. Although this would impact their stabilized NOI, the project could still move forward with that alternative plan.

Avg SF 42 933 0 2,500 42

LIHTC Rent 9 $957 27 $1,148 6 $1,326 42 $1.24

Total Monthly Rent $8,610 $30,983 $7,954 $47,547

Unit SF Monthly Rent/SF 750 $1.28 850 $1.35 1200 $1.10 933

space. Malden requires two spaces per every 1,000 square feet of retail, so four spaces are set aside for retail. This leaves 12 remaining spaces for a parking ratio of 0.27 spaces per unit. Asian CDC could have the option of requesting that the retail parking be moved to the parking garage across the street, thus reserving all 16 spaces for residents. Although this is a relatively low parking ratio by Malden standards, it is on par with ratios associated with transit-oriented projects located this close to a train station. The unit mix reflects Asian CDCâ&#x20AC;&#x2122;s desire to better serve families in Malden, reserving 79% of the total units for two bedrooms or larger. This will contrast directly with the projects coming to market in Malden over the next four years, the majority of which will emphasize studios and one bedroom units over family sized. Through the Summer Street site, Asian CDC can reach a critically under-served population.

Total SF 6,750 22,950 7,200 36,900

Gross SF Retail Amenity + Core SF Net Residential SF 9,069 2,500 6,569 45,343 8,443 54,411 2,500 15,011

36,900 36,900 81% 879

VI. ASIAN CDC PROPOSAL I - SUMMER STREET

Existing site

Proposed six-story masonry design

VI. ASIAN CDC PROPOSAL I - SUMMER STREET - FINANCIAL ANALYSIS

Financial Analysis funds, which provide up to $750,000 per project or $50,000 per unit. Finally, we would intend to apply for HOME funding through the HOME dollars allocated to the area North Suburban Consortium (NSC), which allocates HOME funding to eight area suburban communities, including Malden. The FY 2014 allotment for the NSC was $1,518,879. Our project will request $500,000 in project funds from this allocation, recognizing the positive impact of the Asian Community Development Corporation’s involvement in Malden and the urgent need for family-size affordable housing as rents continue to rise in the entire region.

Sources As a 100% affordable project, we intend to finance the project through state-level soft debt resources, federal and state-level LIHTC, and a construction loan at 15% loan-to-cost.

Soft Debt Our state subsidy sources include a total request of $2.25 million from three separate sources. The largest subsidy would come from the Affordable Housing Trust Fund (AHTF), which is administered by MassHousing and prioritizes affordable housing for families at 80% AMI or lower. The AHTF will not fund in excess of $1 million per project or $50,000 per unit; our project will seek to obtain the full $1,000,000 maximum allotment. We will also pursue debt funding through the Commercial Area Transit Node Housing Program (CATNHP), a 30-year deferred payment loan at 0% interest that provides financing to projects complying with the state’s definition of “transit-oriented.” Our proximity to the Malden Center MBTA station will render the project eligible for these

LIHTC Equity By setting all of our units at 60% AMI and lower, we can apply for both federal and state LIHTC for the entire project, acquiring through compliance with the program’s restrictions a total equity raise of $12,820,500. We assume $0.90 credit pricing in order to remain within conservative estimates. In order to receive federal LIHTC, we will set aside 10% of the units to families earning 30% AMI or lower, which we reflect in our stabilized NOI. In compliance with 4%

6% SOURCES Construction Debt Fed LIHTC State LIHTC AHTF CATNHP HOME TOTAL TOTAL SUBSIDY

the Massachusetts Qualified Allocation Plan for FY 2014, our project meets the 4th funding priority for tax credit projects, known as family housing production in neighborhoods and communities providing access to jobs, transportation, education and public amenities. To meet this requirement and to achieve the maximum $250,000 per unit tax credit cap for large unit projects within the Boston metro area, we have provided at least 65% of our units as two-bedrooms and 10% as three-bedrooms.

Construction Loan The remaining costs necessary to fund the project will be financed through a construction loan with 4.5 percent interest rate and a fee of one percent. The loan totals $2,478,653 at 15% loan-to-cost.

Uses The 42-unit project has total development costs (TDC) of $16,700,325, of which 96% of costs are attributable to the rental portion of the project at a rate of $382,875 per unit. In developing the project’s financing fundamen-

14%

tals, we made two major assumptions: 1) No Acquisition Cost. Asian CDC will be able to negotiate with the City of Malden to acquire the municipal parking lot at no cost, eliminating the hurdle of a high acquisition cost. We believe the value of having the Asian Community Development Corporation working in Malden far exceeds the current value of the site as a surface parking lot with approximately forty spaces, discussed in our Site Selection Criteria section above. 2) No Developer Equity. Asian CDC will not put any of their own equity into the project and will not defer their developer’s fee, equal to 2.5% of all costs. The project is modeled without any outside private investors due to the restricted nature of the stabilized NOI. Although we know that Asian CDC has a relationship with investors from its previous projects in Chinatown, due to the scale of this project we chose not to make the assumption that we could obtain private equity financing.

5% USES Land + Environmental Buildings Parking Parks + Hardscape Soft Cost + Contingency Finance TOTAL TOTAL UNLEVERAGED

% 2,478,653 11,056,500 1,764,000 1,000,000 750,000 500,000 17,549,153 14,570,500

14% 63% 10% 6% 4% 3% 100% 83%

18%

Construction Debt

10%

Fed LIHTC State LIHTC AHTF

Buildings Parking

0.4%

Soft Cost + Contingency

CATNHP HOME

Finance

% 0 13,477,750 77,730 0 3,144,845 848,828 17,549,153 16,700,325

0% 77% 0.4% 0% 18% 5% 100%

77%

63%

VI. ASIAN CDC PROPOSAL I - SUMMER STREET - FINANCIAL ANALYSIS

Budget Cost Land $0 Environmental $0 Hard Costs Apt - Affordable $12,977,750 Retail $500,000 Parking - surface $77,730 Contigency $677,774 Soft Costs Pre-development $500,000 Design $711,663 Administrative $750,000 Contigency $98,083 Developer Fee $407,325 Total Budget $16,700,325 Residential % 96% Retail % 4%

Financing - Federal LIHTC Eligible Basis 130% Boost? Eligible Basis after Boost Percent of Low Income Units Qualified Basis Applicable Tax Percentage Maximum Annual TC Amount Syndication Rate Est. Syndication Yield Availab Net Yield Per Unit Per Unit Tax Credit Cap Number of Units

Applicable tax percentage Boost basis

Financing - State AHTF Maximum allowed/unit Maximum allowed total Total Units Basis per unit Total allowed (lesser of) Financing - State CATNHP Maximum allowed/unit Maximum allowed total Total Units Basis per unit Total allowed (lesser of) Financing - HOME Total HOME juris. allocation Pro rata Malden share HOME loan request Per unit request

Per Unit Debt Subsidy Per Unit Equity Subsidy Total Per Unit Subsidy

$50,000 $1,000,000 42 $2,100,000 $1,000,000

$50,000 $750,000 42 $2,100,000 $750,000

$1,518,589 $189,824 $500,000 $11,905

$53,571 $305,250 $358,821

Syndication Rate Max over 10 years MAXIMUM LIHTC Investor Ownership Financing - State LIHTC # Units Basis/Unit Max Basis Allowed Eligible Basis Applicable rate TC % Annual tax credit Multiplier (years) TC price EQUITY RAISE Investor Ownership

$16,093,170 No $16,093,170 100% $16,093,170 9% $1,448,385 $0.90 $13,035,468 $310,368 $250,000 42 $10,500,000 9.00% 130% $1,228,500 $0.90 10 $11,056,500 3%

42 $14,955,119 $250,000 $10,500,000 4.80% $504,000 5 $0.70 $1,764,000.00 3%

Federal Syndication Proceeds Pay-In: Closing 25% Construction Complete 50% Construction Complete 75% Construction Complete Construction Completion Permanent (Stabilization) Total State Syndication Proceeds Pay-In: Closing 25% Construction Complete 50% Construction Complete 75% Construction Complete Construction Completion Permanent (Stabilization) Total KEY ASSUMPTIONS Current rent/price Efficiency factor Occupancy Other income Parking revenue Parking occupancy OpEx (excluding taxes) Exit cap rate First year avg occupancy

11,056,500 3,869,775 3,869,775 3,316,950 11,056,500

35% 0% 35% 0% 30% 0% 100%

1,764,000 617,400 617,400 529,200 1,764,000

35% 0% 35% 0% 30% 0% 100%

Financing - Construction Loan Unleveraged TDC $16,700,325 TDC + Financing Cost $17,549,153 LTC 14% Use? YES Loan amount $2,478,653 Interest rate 4.50% Points 1% Loan fee 24,787 Financing - Permanent Debt DSCR 1.15 Stabilized NOI $315,606 Interest rate 5.00% Amortization (yrs) 30 Use? YES Loan amount $4,218,821

APT - AFFORDABLE RETAIL $1.24 $22 85% 95% 100% 90% 0% 0% $0/month $0/day 95% 0% $5,500 0% 6.75% 7.00% 90% 75%

CONSTRUCTION COSTS Apt - Affordable Retail Parking - surface Park/green space Roads/infrastructure

$250.00 $200.00 $5,000.00 $80.00 $20.00

/sf /sf /space /sf /sf

OTHER COSTS Design Hard contingency Soft contingency Developer fee Environmental

5.00% 5.00% 5.00% 2.50% $300,000

of hard costs of hard costs of soft costs of all costs /acre

FINANCE Interest rates Construction Permanent DSCR Amortization (yrs) Loan fee

4.50% 5.00% 1.15 30 1.00%

Tax credits LIHTC/SHTC applicable% LIHTC/SHTC credit pricing Investor ownership

9% $0.90 3%

OTHER Inflation Commercial tax Residential tax Cost of sale

3.00% 3.20% 1.30% 2.00%

VI. ASIAN CDC PROPOSAL I - SUMMER STREET - FINANCIAL ANALYSIS

Pro-Forma - Affordable Rental Apartment Building

Acquisition

Construction

Lease-Up

Stabilization

Hold

Holy

Hold

Sale

TOTAL

Land

Environmental

(13,567,589)

(6,683,541)

(6,884,047)

(522,725)

(257,500)

(265,225)

Parking - Surface

(81,263)

(40,031)

(41,232)

Park/green space

Roads/infrastructure

Residential Retail

Contingency

(349,054)

(359,525)

(13,493,803)

(7,330,126)

(7,550,030)

Pre-development

(500,000)

Design

(744,008)

(366,506)

(377,501)

Administrative

(784,088)

(386,250)

(397,838)

Contingency

(101,405)

(25,000)

(37,638)

(38,767)

Developer Fee

(425,241)

(13,125)

(203,013)

(209,103)

(2,554,741)

(538,125)

(993,407)

(1,023,209)

(16,048,544)

(538,125)

(8,323,533)

(8,573,239)

9,214,546

719,448

741,032

763,263

786,161

809,745

834,038

859,059

884,831

911,376

938,717

966,878

689,284

53,818

55,432

57,095

58,808

60,572

62,389

64,261

66,189

68,174

70,220

72,326

773,266

Residential

(71,945)

Retail

(13,454)

(5,543)

(5,709)

(5,881)

(6,057)

(6,239)

(6,426)

(6,619)

(6,817)

(7,022)

(7,233)

(85,399)

(5,543)

(5,709)

(5,881)

(6,057)

(6,239)

(6,426)

(6,619)

(6,817)

(7,022)

(7,233)

9,754,884

687,867

790,921

814,648

839,088

864,260

890,188

916,894

944,400

972,732

Hard costs

Soft costs TOTAL DEVELOPMENT Operations Residential Retail Parking Gross potential rent

677,774

TOTAL

0 9,903,830

Parking Vacancy EFFECTIVE GROSS INCOME Residential

(148,946)

0 796,464

0 820,358

0 844,968

0 870,317

0 896,427

0 923,320

0 951,019

0 979,550

0 1,008,936

1,001,914

0 1,039,205

1,031,972

(3,232,943)

(252,420)

(259,993)

(267,792)

(275,826)

(284,101)

(292,624)

(301,403)

(310,445)

(319,758)

(329,351)

(339,231)

Retail

Parking

Operating expenses

(3,232,943)

(252,420)

(259,993)

(267,792)

(275,826)

(284,101)

(292,624)

(301,403)

(310,445)

(319,758)

(329,351)

(339,231)

Residential

(2,677,470)

(209,050)

(215,322)

(221,781)

(228,435)

(235,288)

(242,346)

(249,617)

(257,105)

(264,818)

(272,763)

(280,946)

Real estate taxes

(2,677,470)

(209,050)

(215,322)

(221,781)

(228,435)

(235,288)

(242,346)

(249,617)

(257,105)

(264,818)

(272,763)

(280,946)

EXPENSES

(5,910,413)

(461,470)

(475,314)

(489,574)

(504,261)

(519,389)

(534,970)

(551,019)

(567,550)

(584,576)

(602,114)

(620,177)

Residential

3,232,188

186,033

265,718

273,689

281,900

290,357

299,068

308,040

317,281

326,799

336,603

346,701

612,283

40,363

49,889

51,385

52,927

54,515

56,150

57,835

59,570

61,357

63,198

65,094

Retail

Retail Parking

0 226,397

(538,125)

(8,323,533)

(8,573,239)

226,397

315,606

325,075

334,827

344,872

355,218

365,874

376,851

388,156

399,801

411,795

6,123,246

(2,477,089)

219,605

306,138

315,322

324,782

334,526

344,561

354,898

365,545

376,511

387,807

399,441

5,939,548

399,801

388,156

6,123,246

376,851

SALE PROCEEDS

365,874

355,218

344,872

334,827

3,844,471

325,075

NET OPERATING INCOME

315,606

411,795 0

6,123,246

PROJECT-LEVEL RETURN UNLEVERAGED

(7,467,181) -5%

PROJECT-LEVEL RETURN UNLEVERAGED/SUBSIDIZED

7,191,596 17%

VI. ASIAN CDC PROPOSAL I - SUMMER STREET - FINANCIAL ANALYSIS

Pro-Forma - Affordable Rental Apartment Building

Acquisition

Construction

Lease-Up

Stabilization

Hold

Holy

Hold

Sale

TOTAL

0 TOTAL 0

(13,567,589)

(6,683,541) 0 (257,500) 0 (40,031) 0 0 0 (349,054) 0 (7,330,126) 0

(6,884,047) 0 (265,225) 2,477,089 (41,232) 0 2,477,089 1,238,544 (359,525) (55,735) (7,550,030) 0

0 2,477,089 0 0

0 0 0 0

677,774 (111,469) (13,493,803) 0

0 0 0 0 0 0 0 0 0 0 0 0 0 0

(2,477,089) 0 0 0 1,238,544 0 (55,735) 0 0

0 0 0 0 0 0 0 0 0

(2,787) (500,000) (114,256) (744,008) (17,549,153) (784,088)

0 (500,000) 0 0 (538,125) 0

0 0 0 (366,506) (8,323,533) (386,250)

(1,393) 0 (57,128) (377,501) (8,630,367) (397,838)

(1,393) 0 (57,128) 0 (57,128) 0

0 0 0 0 0 0

(101,405) TOTAL (425,241)

(25,000)

(37,638)

(38,767)

(13,125) 0 (538,125) 0 (538,125) 0

(203,013) 0 (993,407) 0 (8,323,533) 0

(209,103) 0 (1,023,209) 0 (8,573,239) 0

0 0 0 4,218,821 0 0

0 4,218,821 0 0 0 (210,941)

0 4,155,322 0 0 0 (207,766)

0 4,088,648 0 0 0 (204,432)

0 4,018,640 0 0 0 (200,932)

0 3,945,131 0 0 0 (197,257)

0 3,867,948 0 0 0 (193,397)

0 3,786,905 0 0 0 (189,345)

0 3,701,809 0 0 0 (185,090)

0 3,612,460 0 0 0 (180,623)

(63,499)

(66,674)

(70,008)

(73,508)

(77,184)

(81,043)

(85,095)

(89,350)

9,214,546

0 0

4,218,821 719,448

4,155,322 741,032

4,088,648 763,263

4,018,640 786,161

3,945,131 809,745

3,867,948 834,038

3,786,905 859,059

3,701,809 884,831

3,612,460 911,376

Retail CASH FLOW AFTER DEBT SERVICE Parking

689,284 5,544,911 0

0 0 0

53,818 1,968,129 0

Gross potential rent EQUITY

9,903,830 TOTAL

773,266

0 538,125 0 0

0 7,201,425 0 0

0 3,316,950 0 0

Land CONSTRUCTION FINANCING Environmental CONSTRUCTION LOAN Residential Beginning balance Retail Draws Parking - Surface Repayments Park/green space Ending balance Roads/infrastructure Average balance Contingency Construction interest Hard costs Finance Developer fee Pre-development Total financing cost Design TOTAL DEVELOPMENT - LEVERAGED Administrative

Contingency PERMANENT LOAN Developer Fee Beginning balance Soft costs Draws TOTAL DEVELOPMENT Interest Repayments Operations Ending balance Residential

LIHTC - Federal Residential Contributions Retail Distributions Parking

(522,725) 2,477,089 (81,263) (2,477,089) -

(2,554,741) 4,218,821 (16,048,544) (1,945,716) (4,218,821) TOTAL

11,056,500 (166,347)

Vacancy LIHTC - State EFFECTIVE GROSS INCOME Contributions

9,754,884 1,764,000

Distributions Residential

(166,347) (3,232,943)

Retail AHTF Parking CATNHP Operating expenses HOME

0 1,000,000 0 750,000 (3,232,943) 500,000

0 1,000,000 0 750,000 0 500,000

TOTAL EQUITY CONTRIBUTIONS Residential

14,957,808 (2,677,470)

538,125 0

8,323,533 0

6,096,150 0

Retail CASH FLOW TO PARTNERSHIP Real estate taxes

0 5,212,216 (2,677,470)

EXPENSES PROJECT-LEVEL RETURN LEVERAGED Residential

Retail

(148,946)

0 1,122,108

0 529,200

0 0

(71,945) (13,454) (59,044) 0 (85,399)

55,432 41,166 0 796,464 0 (5,543) (1,235) 0 (5,543)

57,095 50,634 0 820,358 0 (5,709) (1,519) 0 (5,709)

58,808 60,386 0 844,968 0 (5,881) (1,812) 0 (5,881)

60,572 70,431 0 870,317 0 (6,057) (2,113) 0 (6,057)

62,389 80,777 0 896,427 0 (6,239) (2,423) 0 (6,239)

64,261 91,434 0 923,320 0 (6,426) (2,743) 0 (6,426)

66,189 102,410 0

68,174 113,716 0

951,019

979,550

0 (6,619) (3,072) 0 (6,619)

0 (6,817) (3,411) 0 (6,817)

3,518,642

70,220 125,360 0 1,008,936 0 (7,022) (3,761) 0 (7,022) 1,001,914 -

72,326 137,354 0

0 (7,233) (4,121) 0

916,894 -

944,400 -

972,732 -

(59,044) (252,420)

(1,235) (259,993)

(1,519) (267,792)

(1,812) (275,826)

(2,113) (284,101)

(2,423) (292,624)

(2,743) (301,403)

(3,072) (310,445)

(3,411) (319,758)

(3,761) (329,351)

(4,121) (339,231)

(252,420)

(259,993)

(267,792)

(275,826)

(284,101)

(292,624)

(301,403)

(310,445)

(319,758)

(329,351)

(339,231)

(209,050)

(215,322)

(221,781)

(228,435)

(235,288)

(242,346)

(249,617)

(257,105)

(264,818)

(272,763)

(280,946)

0 38,696 (215,322)

0 47,596 (221,781)

0 56,763 (228,435)

0 66,205 (235,288)

0 75,931 (242,346)

0 85,948 (249,617)

0 96,266 (257,105)

0 106,893 (264,818)

0 117,839 (272,763)

0 129,113 (280,946)

1,031,972 -

(475,314)

(489,574)

(504,261)

(519,389)

(534,970)

(551,019)

(567,550)

(584,576)

(602,114)

(620,177)

(5,910,413)

(461,470)

(9,412,897) 3,232,188 -10% 612,283

(538,125) 0

(8,323,533) 0

(6,096,150) 0

1,968,129 186,033

41,166 265,718

50,634 273,689

60,386 281,900

70,431 290,357

80,777 299,068

91,434 308,040

102,410 317,281

113,716 326,799

125,360 336,603

137,354 346,701

40,363

49,889

51,385

52,927

54,515

56,150

57,835

59,570

61,357

63,198

65,094

3,844,471 5,212,216

SALE PROCEEDS

6,123,246

226,397 1,850,041 0

315,606 38,696 0

325,075 47,596 0

334,827 56,763 0

344,872 66,205 0

355,218 75,931 0

0 365,874 85,948 0

0 376,851 96,266 0

0 388,156 106,893 0

0 399,801 117,839 0

2,703,112

(81,093)

(7,233)

890,188 -

3,420,134

1,039,205

864,260 -

839,088 -

0 0

3,420,134 966,878

814,648 -

0 0

3,518,642 938,717

790,921 -

(3,420,134)

687,867 -

(98,508)

Parking PROJECT LEVEL RETURN NET OPERATING INCOME LEVERAGED/SUBSIDIZED

(93,817)

0 0 0 (175,932)

0 1,850,041 (209,050)

(81,093)

2,540,925

2,703,112

0 411,795 129,113 0

2,540,925

6,123,246

(538,125)

(8,323,533)

(8,573,239)

226,397

315,606

325,075

334,827

344,872

355,218

365,874

376,851

388,156

399,801

411,795

6,123,246

(2,477,089)

219,605

306,138

315,322

324,782

334,526

344,561

354,898

365,545

376,511

387,807

399,441

5,939,548

PROJECT-LEVEL RETURN UNLEVERAGED

(7,467,181) -5%

PROJECT-LEVEL RETURN UNLEVERAGED/SUBSIDIZED

7,191,596 17%

VI. Asian CDC PROPOSAL II: 299 Pleasant St. Stephanie Torres & Weishun Xu Selection Criteria The selection of an appropriate site and the development strategy to building affordable units in Malden was founded on the guidelines the Asian Community Development Corporation gave us during our meetings: 1| The project is a transit-oriented development. The site is located within a 3-minute walk to the Malden Center Station. Additionally, it is a 5-minute walk from the downtown core, and a 10-minute walk from Stop & Shop. 2| The project will provide at least 30 affordable units of which the majority of the units are family oriented. The proposed project will supply 42 affordable units. 15% of the units are 1-bedroom units, 70% are 2-bedroom units, and 15% are 3 bedroom units. 3| The project will provide parking for the residents. With 42 units, the project will provide 21 parking spaces, that is, 1 parking space per 2 units. Although this ratio is below the Malden standard parking ratio, we believe this is a feasible proposal given the projectâ&#x20AC;&#x2122;s proximity to the subway station. The lower parking ratio also allows the project to have surface parking, which is more economical to build than a parking structure. 4| The project will be a new construction. The proposed project will be a ground up construction development. Although the project requires demolishing the two existing structures on the site, neither of these structures contain residential units, thus no one will be displaced.

100

VI. ASIAN CDC - PROPOSAL II - 299 PLEASANT ST - SITE SELECTION AND EXISTING

Site Selection and Existing Conditions The site is located just 0.1 miles east of the Malden Center Station along Pleasant St. When we began the process of looking for a suitable site, we didnâ&#x20AC;&#x2122;t just see it as selecting a site to build a building on, but rather we looked for a site where such development would benefit and contribute to the downtown revitalization endeavor. With the relocation of the City Hall, Pleasant St. will reconnect into one continuous street that stretches past the subway station

and past the proposed site. We anticipate that the unity of Pleasant St. will initiate an effort to redevelop east of the core downtown area. Therefore aside from already benefiting from the proximity to the subway station and core downtown area, the site has a potential to be in the center of a redevelopment scheme. The site is composed of two parcels of land currently occupied by 2,785 square feet of retail

Aerial view of proposed site

space and an auto shop. Immediately east of the site there is a luxury residential high rise, to the north and west of the site are a set of duplexes, and south of the site, across Pleasant St. is the City of Malden Fire Department along with a surface parking lot. The site is currently a Neighborhood Business District, so a rezoning proposal will need to be made. The site has a total area of 27,680 square feet.

Ground view of proposed site

101

VI. ASIAN CDC - PROPOSAL II - 299 PLEASANT ST. -

Proposal Given the site characteristics, we propose the development of a 42 unit residential project that will provide 21 parking spaces. Additionally, included in the building program is 1,500 gross square feet of community space. As the city permits, the residential complex will be 6 stories high. A complete summary of the building program is show on the diagram to the right. The building occupies 90% of the site with the remaining 10% left for surface parking.

BUILDING PROGRAM RESIDENTIAL UNITS Net Sf / Unit 1 Bedroom 650 2 Bedroom 900 3 Bedroom 1,250 Total

Efficiency Gross SF / Unit No. of Units 85% 747.5 6 85% 1035 30 85% 1437.5 6 42

PARKING Spaces/Unit Total No. of Spaces

Total Net SF 4,485 31,050 8,625 44,160

0.5 21

COMMUNITY SPACE Community Space

Efficiency 90%

Gross SF 1,500

Net SF 1,350

102

VI. ASIAN CDC - PROPOSAL II - 299 PLEASANT ST. - FINANCIAL ANALYSIS

Financial Analysis 299 Pleasant St. will provide 100% affordable units, as such, the project will be funded through federal and state LIHTC, state soft debt, and a 24.4% loan-to-cost construction loan. Given the rents were set at a maximum 60% AMI, the project qualifies for federal and state LIHTC funding. 10% of the units are designated for families earning less than 30% AMI to comply with the federal LIHTC regulation. On average the monthly per-square-foot rent was calculated to be $1.24. Additionally, given the unit mix is family oriented, the project also qualifies as a 4th funding priority tax credit project as noted by the Massachusetts Qualified Allocation Plan for FY 2014. The project will also receive funding from the Affordable Housing Trust (AHTF) and the Commercial Area Transit Node Housing Program (CATNHP). The remaining costs of the project will be funded through a 24.4% loan-tocost fixed rate construction loan.

299 PLEASANT ST: SOURCES AND USES

Total

Year 0

USES Total Development Costs Construction Loan: Capitalized Interest Total Capital Costs

$ $ $

19,606,735 17,244 19,623,979

$ $ $

Cash Flow from Operations NOI Less: Construction Loan Interest during Operations Cash Flow from Operations after Interest

$ $ $

810,891 180,182 630,709

$ $ $

TOTAL USES

18,993,270

SOURCES Construction Loan Funding Net Draws Net Accrued Interest Net Construction Loan Funding

$ $ $

4,786,235 197,426 4,983,661

$ $ $

Equity Federal LIHTC State LIHTC Affordable Housing Trust CATNHP Additional Equity Required Permanent Mortgage Refinancing Less: Positive Cash Flow after Interestâ&#x20AC;&#x201D;Distributed Less: Cash Proceeds from Construction Loan Takeout

$ $ $ $ $ $ $ $ $

14,820,500 11,056,500 1,764,000 1,000,000 1,000,000 (810,891) -

$ $ $ $ $ $

18,993,270

Construction Loan Takeout at Stabilization Permanent Mortgage Amount for Income Property Construction Loan Ending Balance for Income Property Cash Proceeds from Construction Loan Takeout

$ $ $

4,983,661 4,983,661 -

Depreciable Basis Total Development Cost Excluding Interest Interest Accrued During Construction Period Total Capital Costs Land Cost Depreciable Basis

$ $ $ $ $

19,606,735 17,244 19,623,979 487,735 19,136,244

Year 1

487,735 487,735

Year 2

$ 17,398,290 $ 17,244 $ 17,415,534

$ $ $

1,720,710 1,720,710

$ $ $

810,891 180,182 630,709

$ 17,415,534

1,090,001

$ $ $

3,065,525 17,244 3,082,769

$ $ $

1,720,710 180,182 1,900,892

$ 14,332,765 $ 10,568,765 $ 1,764,000 $ 1,000,000 $ 1,000,000 $ -

$ $ $ $ $ $ $ $ $

Construction Loan Balance to Be Refinanced

TOTAL SOURCES

Annual Depreciation Estimate Depreciation Period (years) Acceleration Factor Annual Depreciation

487,735

487,735 487,735 -

487,735

$ 17,415,534

(810,891) 1,090,001

27.5 1 695,863

103

VI. ASIAN CDC - PROPOSAL II - 299 PLEASANT ST. - FINANCIAL ANALYSIS

299 PLEASANT ST: ASSUMPTIONS RENT AND VACANCY Lot Size

27,680

RESIDENTIAL UNITS 1 Bedroom 2 Bedroom 3 Bedroom Total

Net Sf / Unit 650 900 1,250

Efficiency Gross SF / Unit 85% 747.5 85% 1035 85% 1437.5

No. of Units

Total Net SF 4,485 31,050 8,625 44,160

6 30 6 42

PARKING SF per Space Required Spaces / Unit Total No. of Spaces Required

250 0.5 21

RENT Residential Community Space Parking Total

Gross SF 44,160 1,500 5,250 50,910

Efficiency 85% 90%

Net SF Rent/Mo 37,536 $ 1.24 1,350 $ $ 38,886

Annual Revenue $ 657,101 $ $ $ 657,101

Annual Revenue Growth

VACANCY Vacancy Bad Debt EXPENSES OPEX / Unit Annual increase in operating expenses Increase in real estate taxes OPERATING RESERVE Lease-Up Period (months) Average Occupancy During Lease-Up Estimated Rent During Lease-Up Estimated Operating Expenses During Lease-Up NOI During Lease Up Construction Interest During Lease-Up

0% 0.5%

$ $ $ $

5,500 3% 3%

12 100% 657,101 231,000 426,101 256,835

DEVELOPMENT COSTS CONSTRUCTION COSTS Hard Costs Soft Costs Developer Fee Total Construction Costs

Residential/SF $ 220.00 $ 44.00 $ 6.60 $ 270.60

20% 2.5%

Contingency

2.5% of hard costs

ACQUISITION PRICE Price per SF Lot Size (SF) Land Purchase Price Land Carry (12 months)

Total Residential $ 10,045,200 $ 2,009,040 $ 251,130.00 $ 12,305,370 $

$ $ $ $

Parking/SF 1,000.00 200.00 25.00 1,225

251,130

$ $ $ $ $

Total Parking 5,250,000 1,050,000 131,250 6,431,250

Total $ 15,295,200 $ 3,059,040 $ 382,380 $ 18,736,620

131,250 $

382,380

17.00 27,680 470,560 17,175

$ $

3.65%

TOTAL DEVELOPMENT COSTS Construction Costs Contingency Land Total Development Costs before Interest and Operating Reserve

$ 18,736,620 $ 382,380 $ 487,735 $ 19,606,735

Estimated Construction Loan Interest First Year Operating Reserve

$ $

TOTAL DEVELOPMENT COSTS

$ 19,604,412

FINANCING Interest rates Construction Permanent Amortization (yrs) DCR Construction Period (months) Average Draw

166,943 (169,266)

4.5% 5.0% 30 1.2 12 65%

EQUITY SOURCES Maximum / Unit $50,000 $50,000

Affordable Housing Trust CATNHP

Units 42 $ 42 $

Total Units Maximum Allowed Subsidy Amount 2,100,000 $ 1,000,000 $ 1,000,000 2,100,000 $ 1,000,000 $ 1,000,000

LIHTC TAXABLE INCOME Income Tax Rate Depreciation Period (years) PROPERTY SALE Purchase Cap Rate Sale Cap Rate Percent of sale price for broker, lawyer, etc. Capital gains tax rate Accumulated depreciation recapture tax rate

35% 27.5

7.00% 6.75% 3% 20% 25%

Total eligible development cost DDA basis boostb@ 130% Eligible basis Applicable fraction Total qualified basis Applicable tax credit percentage Annual allowable tax credit DHCD annual tax credit limit per unit Total Credit limit Term (years) Credit Amount Syndication rate Syndicated value Ownership percentage

FEDERAL $ 12,305,370 NO $ 12,305,370 100% $ 12,305,370 9.0% $ 1,107,483 $ 250,000 $ 10,500,000 10 $ 1,228,500 $ 0.90 $ 11,056,500 3%

$ $ $ $ $ $ $ $ $

STATE 12,305,370 NO 12,305,370 100% 12,305,370 4.8% 590,658 250,000 10,500,000 5 504,000 0.70 1,764,000 3%

Syndication Schedule Time Zero 25% Dev. Period 50% Dev. Period 75% Dev. Period 100% Dev. Period Lease-Up Period Operational Period

35% 0% 35% 0% 30% 0% 0%

$ $ $ $ $ $ $

FEDERAL 3,869,775 3,869,775 3,316,950 -

$ $ $ $ $ $ $

STATE 617,400 617,400 529,200 -

104

VI. ASIAN CDC - PROPOSAL II - 299 PLEASANT ST. - FINANCIAL ANALYSIS

299 PLEASANT ST: PRO-FORMA NOI Factor REVENUE Annual Gross Potential Revenue Less: Vacancy Less: Bad Debt Effective Gross Revenue EXPENSES Annual Expenses

Total

0% 0.5%

5,500 /unit

NOI Annual NOI

DEBT CALCULATION Total Development Costs Subsidy Sources Federal LIHTC State LIHTC Affordable Housing Trust CATNHP Loan Needed Debt Based on DCR Monthly NOI Maximum DCR Maximum Monthly Payment Maximum Loan CASH FLOW AFTER FINANCING NOI Less: Annual Debt Service Less: CapEx Cash Flow After Financing

0.6%

$ $ $ $

657,101 (3,285.50) 653,815

231,000

422,815

19,606,735

$ $ $ $ $

11,056,500 1,764,000 1,000,000 1,000,000 4,786,235

$ $ $

35,235 1.15 30,639 5,707,443

$ $ $ $

422,815 367,665 2,537 52,613

SIMPLE RATIOS Overall Return (NOI/Dev. Cost)

2.2%

CASH-ON-CASH RETURN NOI Annual Debt Service Cash Throw-Off

$ $ $

422,815 367,665 55,150

Development Cost Permanent Mortgage Equity

$ $ $

19,606,735 4,786,235 14,820,500

Cash-on-Cash Return

0.4%

105

VI. ASIAN CDC - PROPOSAL II - 299 PLEASANT ST. - FINANCIAL ANALYSIS

299 PLEASANT ST: DEVELOPMENT PERIOD CASH FLOWS

Data

DEVELOPMENT COSTS Land Land Carry Hard Costs Soft Costs Contingency Developer Fee Total Development Costs, Excl. Constr. Loan Interest and Operating Reserve OPERATING INCOME/ (LOSS) DURING LEASE UP Initial Occupancy Upon Opening Months to Reach Stabilized Occupancy Spaces Leased per Quarter Cumulative No. Of Spaces Leased Vacancy Due to Lease Up (% of Gross Potential) Stablized Vacancy (% of Gross Potential) Overall Vacancy Rate Gross Potential Revenue Vacancy Loss Bad Debt Effective Gross Revenue Operating Expenses NOI

Total

$ 470,560 $ 470,560 $ 17,175 $ 17,175 $ 15,295,200 $ 15,295,200 $ 3,059,040 $ 3,059,040 $ 382,380 $ 382,380 $ 382,380 $ 382,380 $ 19,606,735 $ 19,606,735

$ $ $ $ $ $ $

Year 1 Total

470,560 17,175 487,735

70% 12 42

3% $

164,275 $ $ 0.5% $ $ 57,750 $ $

EQUITY ACCOUNT BALANCE Total Development Costs Maximum Loan Balance Equity Required Equity Available Federal LIHTC State LIHTC Affordable Housing Trust CATNHP Equity Account Ending Balance

$ $ $ $ $ $ $ $

19,606,735 4,786,235 14,820,500 14,820,500 11,056,500 1,764,000 1,000,000 1,000,000

657,101 (73,924) (3,286) 579,891 231,000 810,891

$ $ $ $ $ $

29.4 29.4 65.0% 0.0% 65.0% -

$ $ $ $ $ $

(487,735) $ (17,398,290) $

$ $ $ $ $ $ $

487,735 $ 14,332,765 $ 487,735 $ 14,332,765 $ 487,735 $ 10,568,765 $ $ 1,764,000 $ $ 1,000,000 $ $ 1,000,000 $ 487,735 $ 14,820,500 $ 14,820,500

4,786,235 4,930,612 4,786,235 4,930,612 2,768,405 197,426 17,244 180,182 4,983,661 197,426 4,983,661

3,065,525 3,065,525 3,065,525 3,065,525 1,532,763 17,244 17,244 3,082,769 17,244 3,082,769

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $

3,823,800 382,380 47,798 95,595 4,349,573

$ 3,823,800 $ 3,823,800 $ 382,380 $ 382,380 $ 47,798 $ 47,798 $ 95,595 $ 95,595 $ 4,349,573 $ 4,349,573

$ $ $ $ $

3,823,800 382,380 $ 47,798 $ 95,595 4,349,573 $

29.4 29.4 65.0% 0.0% 65.0% $ $ $ $ $ $

(909,819) $ (4,349,573) $ (4,349,573) $ (4,349,573) $ (4,349,573) $

1,720,710 4,930,612 1,720,710 4,930,612 4,004,047 180,182 180,182 4,983,661 180,182 4,983,661

$ $ $ $ $ $ $

4,349,573 4,349,573 1,732,173 617,400 1,000,000 1,000,000 4,837,308

$ 4,349,573 $ 4,349,573 $ $ 4,349,573 $ 4,349,573 $ $ 3,732,173 $ 3,820,373 $ $ 617,400 $ 529,200 $

LEASE-UP PERIOD Quarter 6 Quarter 7

Quarter 5

1,284,047 $ 1,284,047 1,284,047 -

Quarter 8

382,380 $ 47,798 $

382,380 47,798

430,178 $

4.2 33.6 25.0% 0.0% 25.0% 164,275 (41,069) (821) 122,385 57,750 180,135

4.2 37.8 15.0% 0.0% 15.0% 164,275 (24,641) (821) 138,813 57,750 196,563

4.2 42 5.0% 0.0% 5.0% 164,275 (8,214) (821) 155,240 57,750 212,990

0 42 0.0% 0.0% 0.0% 164,275 (821) 163,454 57,750 221,204

$ $ $ $ $ $

(250,042) $

(233,615) $

(217,187) $

(208,974) $

FIRST STABILIZED YEAR Quarter 10 Quarter 11

Quarter 9

382,380 $ 47,798 $

0 42 0.0% 0.0% 0.0% 169,203 (846) 168,357 59,483 227,840

$ $ $ $ $ $

0 42 0.0% 0.0% 0.0% 169,203 (846) 168,357 59,483 227,840

227,840 $

$ $ $ $ $ $

0 42 0.0% 0.0% 0.0% 169,203 (846) 168,357 59,483 227,840

227,840 $

Quarter 12

$ $ $ $ $ $

0 42 0.0% 0.0% 0.0% 169,203 (846) 168,357 59,483 227,840

227,840 $

Year 3 Total

$ $ $ $ $ $

0 42 0.0% 0.0% 0.0% 676,814 (3,384) 673,430 237,930 911,360

227,840 $

911,360

$ 9,186,880 $ 13,536,453 $ 14,820,500 $ 14,820,500 $ 14,820,500 $ 14,820,500 $ 14,820,500

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $

3,065,525 3,065,525 3,065,525 3,065,525 1,532,763 17,244 17,244 3,082,769 17,244 3,082,769

$ 3,082,769 $ 3,550,047 $ 4,022,583 $

4,500,434

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $

430,178 4,930,612 430,178 4,930,612 4,715,523 53,050 53,050 4,983,661 53,050 4,983,661

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $

Total Additional Equity Required

Net Cash Flow After Debt

810,891 $

180,135 $

4.5%

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $

$ $ $

$ $ $ $ $

Quarter 4

12.6 42 11.3% 0.0% 11.3% 657,101 (73,924) (3,286) 579,891 231,000 810,891

$ (18,795,844) $

14,820,500 14,820,500 11,056,500 1,764,000 1,000,000 1,000,000 14,820,500

DEVELOPMENT PERIOD Quarter 2 Quarter 3

Quarter 1

Year 2 Total

$ $ $ $ $ 15,295,200 $ $ 1,529,520 $ 1,529,520 $ 191,190 $ 191,190 $ 382,380 $ $ 17,398,290 $ 1,720,710

Net Cash Flow Before Debt During First Three Years

CONSTRUCTION LOAN ACCOUNT Beginning Balance Loan Draws Construction Draw (Initial Request) Operating Deficit Trial Balance Additional Equity Required Net Construction Draw Ending Balance Before Interest Average Loan Balance Before Interest Total Construction Loan Interest Interest Accrued During Construction Period Interest Accrued During Operating Period Interest Paid from Operations Trial Ending Balance Additional Equity Required Net Interests Accrued Ending Balance

Time Zero

430,178 3,512,947 430,178 3,512,947 3,297,858 37,101 37,101 3,550,047 37,101 3,550,047

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

430,178 3,980,225 430,178 3,980,225 3,765,136 42,358 42,358 4,022,583 42,358 4,022,583 -

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

196,563 $

430,178 4,452,760 430,178 4,452,760 4,237,671 47,674 47,674 4,500,434 47,674 4,500,434 -

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

212,990 $

221,204

106

VI. ASIAN CDC - PROPOSAL II - 299 PLEASANT ST. - FINANCIAL ANALYSIS

299 PLEASANT ST: DEVELOPMENT AND OPERATIONAL PERIOD PROJECT COSTS Development Costs Land Cost FINANCING ASSUMPTIONS Equity Mortage Principal Interest Rate Amortization Annual Debt Service DEPRECIATION ASSUMPTIONS Building Basis Life (in years) Acceleration Factor Straight Line

MORTGAGE CALCULATION Beginning Balance Ending Balance Amortization of Principal Interest/Annual Payment

$ $

Total 19,119,000 487,735

14,820,500 4,786,235 5.0% 30 years 308,323

18,631,265 27.5 1 677,501

4,983,661

5.0% $

DEPRECIATION CALCULATION Beginning Balance Less: Annual Depreciation Ending Balance Cumulative Depreciation Taken Cumulative Straight Line Recapture Remaining Book Value ANNUAL CASH FLOWS Gross Potential Revenue Less: Vacancy Vacancy Rate Less: Bad Debt Effective Gross Revenue

DEVELOPMENT PERIOD Year 1 Year 2

Year 0

321,040 Year 0

Year 1 $ $ $ $ $ $ $

Year 0

Year 1

Year 2 657,101 (73,924) 11.3% (3,285.5) 579,891

Year 3 676,814 0.0% (3,384.1) 673,430

Year 4 17,744,517 695,863 17,048,653 2,087,590 2,087,590 2,087,590 17,048,653 Year 4 697,118 0.0% (3,485.6) 693,633

Year 5 17,048,653 695,863 16,352,790 2,783,454 2,783,454 2,783,454 16,352,790

231,000 $

Net Operating Income Less: Construction Loan Interest During Operating Period Less: Annual Debt Service Add: Operating Reserve Funded by Construction Loan Cash Flow After Debt Service Less: LICTH Ownership Distributions Federal State Before-Tax Operating Cash Flow

$ $

673,430 $ (180,182) $ (321,040) $

693,633 $ (180,182) $ (321,040) $

$ $

348,891 $ (180,182) $ $ 168,709 $

172,207 $

$ $ $

(5,061) $ (5,061) $ 158,587 $

Taxes

After-Tax Operating Cash Flow

158,587 $

INCOME TAX CALCULATION Net Operating Income Deduct: Interest Deduct: Depreciation Taxable Income/(Loss) Passive Loss Offset

Year 0

Taxable Income Passive Loss Carryforward 35%

Year 1 $ $ $ $ $

$ $ $ $ $

$ $

Year 2 348,891 (180,182) (695,863) (527,154) -

$ $

$ $ $ $ $

$ (527,154.06) $ -

$ $

$ $ $ $ $ $ $

3.0%

$ $

$ $ $ $ $ $ $

$ $

0.0% 0.5%

$ $

Year 3 18,440,380 695,863 17,744,517 1,391,727 1,391,727 1,391,727 17,744,517

$ $ $ $

Year 5 4,832,845 4,751,602 81,243 239,797

$ $

Annual Income Taxes

$ $

$ $ $ $ $ $ $

$ $ $ $

Year 4 4,910,134 4,832,845 77,289 243,751

65.0% -

Total Operating Expenses

3.0%

Year 2 19,136,244 695,863 18,440,380 695,863 695,863 695,863 18,440,380

$ $ $ $

Year 3 4,983,661 4,910,134 73,527 247,513

$ $ $

$ $

$ $ $ $

Year 9 4,482,071 4,382,882 99,190 221,851

$ $ $ $

Year 10 4,382,882 4,278,617 104,264 216,776

$ $ $ $

$ $ $ $ $ $ $

Year 6 16,352,790 695,863 15,656,927 3,479,317 3,479,317 3,479,317 15,656,927

$ $ $ $ $ $ $

Year 8 14,961,063 695,863 14,265,200 4,871,044 4,871,044 4,871,044 14,265,200

$ $ $ $ $ $ $

Year 9 14,265,200 695,863 13,569,336 5,566,907 5,566,907 5,566,907 13,569,336

$ $ $ $ $ $ $

Year 10 13,569,336 695,863 12,873,473 6,262,771 6,262,771 6,262,771 12,873,473

Year 11 $ 12,873,473 $ 695,863 $ 12,177,610 $ 6,958,634 $ 6,958,634 $ 6,958,634 $ 12,177,610

Year 10 832,396 0.0% (4,162.0) 828,234

Year 11 857,368 0.0% $ (4,286.8) $ 853,081

$ $ $ $

$ $

Year 7 761,760 0.0% (3,808.8) 757,951

$ $ $ $

Year 8 784,613 0.0% (3,923.1) 780,690

$ $ $ $

Year 9 808,151 0.0% (4,040.8) 804,110

$ $ $ $

$ $

57,750 $

59,483

714,442 $ (180,182) $ (321,040) $

735,875 $ (180,182) $ (321,040) $

700,201 $ (180,182) $ (321,040) $

722,940 $ (180,182) $ (321,040) $

746,360 $ (180,182) $ (321,040) $

770,484 $ (180,182) $ (321,040) $

793,598 (180,182) (321,040)

192,410 $

213,219 $

234,652 $

198,979 $

221,717 $

245,138 $

269,261 $

292,376

(5,166) $ (5,166) $ 161,875 $

(5,772) $ (5,772) $ 180,865 $

(6,397) $ (6,397) $ 200,426 $

(7,040) $ (7,040) $ 220,573 $

(5,969) $ (5,969) $ 187,040 $

(6,652) $ (6,652) $ 208,414 $

(7,354) $ (7,354) $ 230,430 $

(8,078) (8,078) 253,105

Year 3 673,430 (67,331) (695,863) (89,765) -

$ $ $ $ $

$ (616,918.83) $ -

Year 4 693,633 (63,569) (695,863) (65,800) -

$ $ $ $ $

$ (682,718.92) $ -

200,426 $ Year 5 714,442 (59,615) (695,863) (41,037) -

$ $ $ $ $

$ (723,755.77) $ -

$ $

Year 7 15,656,927 695,863 14,961,063 4,175,180 4,175,180 4,175,180 14,961,063

57,750 $

180,865 $

Year 6 739,573 0.0% (3,697.9) 735,875

$ $ $ $ $ $ $

Year 11 4,278,617 4,169,019 109,599 211,442

57,750 $

Year 8 4,576,433 4,482,071 94,362 226,679

57,750 $

161,875 $

Year 5 718,032 0.0% (3,590.2) 714,442

$ $ $ $

$ $

$ $ $ $

INVESTMENT PERIOD Year 6 Year 7 4,751,602 $ 4,666,202 4,666,202 $ 4,576,433 85,400 $ 89,769 235,641 $ 231,271

220,573 $ Year 6 735,875 (55,459) (695,863) (15,447) -

$ $ $ $ $

$ (739,202.82) $ -

187,040 $ Year 7 700,201 (51,089) (695,863) (46,752) -

$ $ $ $ $

$ (785,954.40) $ -

208,414 $ Year 8 722,940 (46,497) (695,863) (19,420) -

$ $ $ $ $

$ (805,374.70) $ -

230,430 $ Year 9 746,360 (41,669) (695,863) 8,828 (8,828.12)

253,105

$ $ $ $ $

Year 10 770,484 (36,594) (695,863) 38,026 (38,026.16)

$ (796,546.57) $

(758,520.42)

Year 11

107

VI. ASIAN CDC - PROPOSAL II - 299 PLEASANT ST. - FINANCIAL ANALYSIS

SALE CALCULATION (INCLUDING TAX) Cash Flow from Sale Sale Price (cap rate applied to following year NOI) Less: Commission Adjusted Sales Price Less: Remaining Mortgage Balance Before-Tax Cash Flow from Sale

SALE 6.75% 3%

$ $ $ $ $

11,757,010 293,925 11,463,085 4,278,617 7,184,467

Total Tax at Sale

182,765

After-Tax Cash Flow from Sale

7,001,702

Tax Calculation from Sale Adjusted Sales Price Remaining Book Value Total Taxable Gain Passive Loss Carryforward Total Net Taxable Gain

$ $ $ $ $

11,463,085 12,873,473 (1,410,388) (758,520) (651,868)

Total Depreciation Taken Recapture Tax

25%

$ $

6,262,771 1,565,693

Capital Gain Tax on Capital Gain

20%

$ $

(6,914,639) (1,382,928)

182,765

Total Tax at Sale RETURN MEASURES Unleveraged IRR Project Cost Subsidies Net Operating Income Adjusted Sales Price Unleveraged Cash Flow Unleveraged IRR Net Present Value

Year 0 $ $

8% $

Year 4

Year 5

Year 6

Year 7

Year 8

(487,735) $ 487,735 $ $

(17,398,290) $ 14,332,765 $ - $

(1,720,710) 348,891 $

673,430 $

693,633 $

714,442 $

735,875 $

700,201 $

722,940 $

(3,065,525) $

(1,371,819) $

673,430 $

693,633 $

714,442 $

735,875 $

700,201 $

722,940 $

$ $

(487,735) $ 487,735 $ $

(17,415,534) $ 14,332,765 - $

158,587 $

161,875 $

180,865 $

200,426 $

220,573 $

187,040 $

208,414 $

(3,082,769) $

(1,562,123) $

161,875 $

180,865 $

200,426 $

220,573 $

187,040 $

208,414 $

$ $

(487,735) $ 487,735 $ $

(17,415,534) $ 14,332,765 - $

158,587 $

161,875 $

180,865 $

200,426 $

220,573 $

187,040 $

208,414 $

(3,082,769) $

(1,562,123) $

161,875 $

180,865 $

200,426 $

220,573 $

187,040 $

208,414 $

8% $

Year 3

Year 9

Year 10

746,360 $ $ 746,360 $

770,484 11,463,085 12,233,568

230,430 $ $ 230,430 $

253,105 7,184,467 7,437,573

230,430 $ $ 230,430 $

253,105 7,001,702 7,254,808

(1,720,710)

8.4% 125,206

After-Tax IRR Capital Costs Subsidies After-Tax Operating Cash Flow After-Tax Cash Flow from Sale Total After-Tax Cash Flow After-Tax IRR Net Present Value

Year 2

21.2% 4,818,849

Before-Tax IRR Capital Costs Subsidies Before-Tax Operating Cash Flow Before-Tax Cash Flow from Sale Total Before-Tax Cash Flow Before-Tax IRR Net Present Value

Year 1

(1,720,710)

8.1% 40,551

108

HARVARD UNIVERSITY GRADUATE SCHOOL OF DESIGN GSD 5212 Field Study in Real Estate, Planning, and Urban Design: Malden, MA Downtown Revitalization and Affordable Housing in the City of Malden A Field Study Research Report of the Harvard Graduate School of Design Richard Peiser, Michael D. Spear Professor of Real Estate Development Authors Alexander Akel, MDes REBE - Master in Design Studies - Real Estate and the Built Environment Alison Crowley, MCP/MSRED - Master in City Planning / Master of Science in Real Estate Development Greg Demaiter, MDes REBE - Master in Design Studies - Real Estate and the Built Environment Stephanie Torres, MDes REBE - Master in Design Studies - Real Estate and the Built Environment Weishun Xu, M.Arch I - Master in Architecture I Image Credits Unless otherwise noted, photographs were taken by students and all images and graphs related to the research were found on the world wide web. The Harvard University Graduate School of Design is a leading center for education, information, and technical expertise on the built environment. Its departments of Architecture, Landscape Architecture, and Urban Planning and Design offer masters and doctoral degree programs and also provide the foundation for Advanced Studies and Executive Education programs. Copyright 2014, The President and Fellows of Harvard College All rights are reserved.

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