EMC Retail & Residential Market Study by Meaghan Markiewicz

Residential Feasibility Study

Project Description The enclosed report outlines the proposed residential development plans for Detroit Wholesale Produce located in the Eastern Market District, Detroit, MI. Lawrence Technological University completed this project in close collaboration with Eastern Market Corporation (EMC), the non-profit organization that manages the market and serves as the economic development organization for the Eastern Market District. This project aligns with one of EMCâ&#x20AC;&#x2122;s missions to develop a section of the district into mixed-use neighborhoods. The Eastern Market District is building momentum as not only a major food hub in southeast Michigan, but also a hub where art mixes with industry, and food entrepreneurship is thriving. The districtâ&#x20AC;&#x2122;s limited residential living opportunities are in high demand as many millennials desire to live in one of Detroitâ&#x20AC;&#x2122;s cornerstone communities. With many amenities in the area and a unique cultural atmosphere not found many places around the country, the Eastern Market District is poised to explode with development over the next decade. EMC recognizes this trend and is actively working with property owners in the district to carefully blend mixed-use structures without displacing the job-producing food business that anchor Eastern Market. Detroit Wholesale Produce is well-positioned to join the trend of adding residential living space to the district. Currently, only the first floor of the building is occupied with the second floor being used as storage. The enclosed report is a full feasibility study of redeveloping the second story and beyond into residential living spaces. Included is a site context analysis, architectural and engineering design documents, financial analysis, and market analysis. The goal of this study is to provide the building owner with a direction for future development that will benefit him, the district, and future residents.

Introduction project overview Project Description | 3 Project Team | 7 Project Partners | 8-9

ANALYSIS atmosphere analysis Understanding Atmosphere | 11-12 Art | 13 Industry | 14 The Residential Market | 15

cost + revenue Two vs. three story option Summary | 37 Two Story Option | 38-41 Three Story Option | 42-45

references Sources | 46

project team: myles hamby

joongsub kim, ph.d

Project Advisor Food Access Coordinator Eastern Market Corporation

Faculty Advisor Professor Director of the Masters of Urban Design Program + Director of The Detroit Studio Lawrence Technological University

Meaghan markiewicz

Mike paciero

Project Manager Graduate Student Masters of Architecture Lawrence Technological University

Project Engineer Graduate Student Masters of Architectural Engineering Lawrence Technological University

Brandon Olsen

Mena bebawy, ph.d

Project Designer Graduate Student Masters of Fine Arts in Graphic Design Rhode Island School of Design Bachelors of Science in Architecture Lawrence Technological University

Structural Advisor Assistant Professor Department of Civil and Architectural Engineering Lawrence Technological University

Project overview

the attraction and legacy of the Eastern Market and build a dynamic, diverse, and unique urban district by strengthening the identity of the Eastern Market as a food-related district. This is being achieved by enhancing the operations of the existing public market and by developing business opportunities for specialty food retailers, food wholesale operations, restaurants, food distributors, and food processors. Located in a prime location to access in the city, Eastern Market Corporation’s next step includes developing sections of the District into a mixeduse neighborhood that improves the business atmosphere and enlivens streets and public spaces by carefully blending in a variety of residential forms. The ultimate goal is to ensure these new uses support, respect, and integrate into the existing food industries and food related uses of the district.

3 Lawrence Tech university

2 3

Lawrence Technological University is one of Michigan’s premier private universities, and is recognized as a leader in sustainability education, research and practice. Each of the four Colleges reflect the encompassing focus of the University. A multi-disciplinary team of Lawrence Technological University students and faculty from these colleges worked within the project scope outlined in this proposal. A collective report, consisting of the components discussed in the project proposal and at past meetings have been produced for EMC to convey EMC’s goal of revitalizing the market to include multi-use facilities. Detroit Wholesale Produce has been identified by EMC as prime candidates to develop existing space into mixed-use developments. The feasibility study includes architectural concepts, projected costs, and marketability potential. The completion of this report provides a basis for EMC’s future master plan development in correlation with it’s economic development.

project partners:

lawrence tech Center for Design + technology

Eastern market corporation

Detroit wholesale produce

1 Detroit Wholesale Produce A Mixed-Use Future Detroit Wholesale Produce, located at 2614 Riopelle, Detroit, MI 48207, is a food wholesaler in Detroitâ&#x20AC;&#x2122;s Eastern Market district. The business services restaurants with large orders in early mornings, and individual patrons throughout the rest of the day. The existing retail space is located in the left corner of the building on the first floor. Most of the rest of the building is used for storage. The business owners, Greg and Tom, are looking to rehabilitate the second floor into residential space, as well as expand their produce business throughout the first floor. The building is located in a prime location, directly across from Eastern Marketâ&#x20AC;&#x2122;s newly renovated Shed 3, giving it a high level of visibility during the market. The owner, Greg, has worked

extensively with the project team on his ideas for redevelopment, even showing the team some of his own drawings. He already completed some renovation of the existing retail space to further enhance the shopping experience and provide living space. The goal of this study is to provide him with a direction for future development that will benefit him, the district, and future residents.

2 eastern Market Corporation The mission of the Eastern Market Corporation (EMC) is to mobilize leadership and resources to achieve the vision of stakeholders for the Eastern Market District. Itâ&#x20AC;&#x2122;s goal is also to become the undisputed center for fresh and nutritious food in southeast Michigan. EMC

Understanding atmosphere: The Historic Eastern Market District The Eastern Market Historic District is located approximately one mile northeast of downtown Detroit. Originally located Downtown in Cadillac Square, it was moved and was renamed in 1891; market sheds were built to accommodate the growing farmer’s market. Today, the Eastern Market Historic District was added to the National Registry of Historic Places in 1978 and more than 45,000 people visit the market on Saturdays year round.

of the area. The sights, sounds, smells, people, movement, activity, and energy all make up the feel of an area. Understanding atmosphere is vital in understanding what makes an area unique from neighboring communities, and is important in fostering beneficial growth within the area.

Throughout the mid-twentieth century, an increase of food processors and wholesalers moved into the area, making EM an important food hub to the region. The 4.3 acre market district is centered around a six-block public market space where the sheds are located. The surrounding area is home to over eighty food oriented businesses including restaurants, food processors, wholesalers and retail. Today Eastern Market is the largest open-air flowerbed market in the United States and the largest historic public market district in the United States. More than 150 food and specialty businesses are still located within the market district selling all types of goods including produce, meat, spices, jams, flowers, poultry, etc.

“I love the hustle and bustle of the district.” -Bob, an Eastern Market Resident Art, Industry, and the Market The atmosphere of a district can be difficult to describe. If you were to ask someone to talk about atmosphere they might start by listing off adjectives relating to the physical area around them, but they also may gesture with their hands to convey movement and energy, some might recall a story that recounts interaction, or they might even mimic familiar sounds and noises of the area. People have to rely on more than words to describe how the neighborhood’s atmosphere affects their feelings. Atmosphere is the feel

The Eastern Market District has a very unique atmosphere. Street art covers walls of buildings on every block, while forklifts and semi trucks zoom in and out of loading docks within the tightly packed space. These back roads are full of unloading and processing of many different kinds of foods. A couple blocks away, Russell Street provides the main pedestrian artery through the sheds where visitors have access to the many vendors during the weekly markets. This diversity of activity between customers, industry, and retail is classic Detroit. For decades, the atmosphere and resources of the district has attracted people from all corners of Metro Detroit. Now, as Detroit redevelops, Eastern Market is prime for an additional typology, residential housing. All of these qualities are attracting a resident that has a craving for industrial and historical buildings, a love for art, music, culture, and food. They know that they won’t find a sleek, contemporary, newly constructed place to live here as they may find in Downtown or Midtown; and that excites them. A day in Eastern Market is never the same and in the near future the residential real estate of the district won’t be either.

Atmosphere analysis

2 art

1 2

1 The Historic Eastern Farmer’s Market Mural Originally painted in 1972 and recently restored, the Eastern Farmers Market painting is the largest mural in the district, taking up about 6,500 square feet of space on the exterior wall.

2 The Weird The German/Austrian artist collective has left their mark on the Market District. Their odd, character driven murals are easily recognizable and adorn the sides of multiple buildings in Eastern Market.

3 OmniCorpDetroit The mural on the outside of the building is a good representation of what takes place on the inside. OmniCorpDetroit is a collection of makers, designers, artist, and others that come together to learn, share, and create together. 4 4 The Cow at Eastern Market Cold Storage One of the largest pieces of art in the district is painted on one of the tallest buildings. A cow made up of various vegetables looks down on the markets below. 5 5 Red Bull House of ArtThis is an artist incubator that functions as a gallery and curator to house local artists’ work. A creative space that breaks down barriers between artists and financial burdens, the Red Bull House of Art is a one of a kind artists institution that provides the tools and space for visiting artists to unleash their creativity. 6 6 The Shark Mural at Kap’s Wholesale Los Angeles based contemporary artist, Shark Toof, adds to Eastern Market’s eclectic nature by painting a shark into Detroit’s urban context. This mural embraces the sense of wonder that occupies Eastern Market and keeps visitors on their toes as they look around the next corner.

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key # Featured ART # Featured industry # Featured Residential

4 Residential 1 FD Lofts A converted Fire Station Size of Units: 600 sq. ft. - 1500 sq. ft. Monthly Rents: $1050 - $1500 Price per Square Foot: $1.00 to $1.75

1 2

2 E&B Brewery Lofts Tallest residential building in Eastern Market Number of Units: 50 Lofts Size of Units: 745 sq. ft. - 3300 sq. ft. Monthly Rents: $750 - $3850 Price per Square Foot: $1.01 - $1.17

3 Rocky ApartmentsThe First legal lofts in Detroit Number of Units: 12 Size of Units: 1200 sq. ft. Monthly Rents: $750, $800, $900 Price per Square Foot: $0.63 - $0.75

4 1345 DivisionNumber of Units: 12 Size of Units: 1000 sq. ft. Monthly Rents: $625 Price per Square Foot: $0.63 3

3 Industry

1 Grobbel’s Corned Beef

2 Eastern Cold Storage & International Border Meat Inspection

3 Kaps Wholesale Foods & Detroit Wholesale Produce

4 Wolverine Packing Co.

5 Bert’s 6 Supino, Mootown, Russell Street Deli, & Zeff ’s

7 Eastern Market Corp. Shed

9 Germack

8 Farmer’s Restaurant

10 Capital Poultry

existing condition:

1. Detroit wholesale produce existing condition The current structure is a green, masonry building built in 1955. Itâ&#x20AC;&#x2122;s total gross square footage is 10,370 square feet with 105 feet of store frontage on Riopelle Street facing Eastern Market Shed 3. Detroit Wholesale Produce operates out of the first floor on the left corner. It is a small retail space that was built out by the building owner when it was acquired several years ago. The right side of the first floor is cold storage, as well as the space behind the retail. There is a small cashier counter and office also located on the first floor. Upstairs is a wide open space with blocked up window openings to be utilized as a more effective storage space in the future. The second story is the space that will be redesigned into residential units. There is also the potential to add third story residential units. This building is in a prime location for residential development on the edge of the Eastern Market sheds. In addition, having a produce market on the first floor will be an amenity to residents.

Several updates to the second floor space are necessary to make the building habitable. A complete build out of the second story space will be needed including partition walls, fire rated stairs, new HVAC, plumbing, lighting, electrical, insulation, exterior finishes and windows. In addition, the aging brick facade needs repair in several places. The existing main entry to the building will be reconfigured to allow for customers and residents to enter the building at separate locations. The heavy industrial traffic in front of and around the corner from the building will be addressed and redesigned to create a more pedestrian friendly street scape. Lastly, updates to the existing retail space will be proposed per the owners request as they look to expand the retail space to the entire first floor. In addition, the owners would like to consider the option of adding a third story with residential on the second and third floors.

site/building analysis

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MEAT INSPECTION BUILDING

EASTERN COLD STORAGE BUILDING

2 site analysis 1 Detroit Wholesale Produce Address: 2614 Riopelle, Detroit, MI. Produce wholesaler looking to expand. 2 Neighboring Buildings To the south is Eastern Cold Storage, that houses many regional food inspections that requires a lot of truck traffic and busy loading docks. To the north is the bright red building of Kaps Wholesale which is a similar business to Detroit Wholesale produce. 3 Truck Traffic There is heavy truck traffic around the building. Eastern Cold Storage to the south has two buildings and a total of five loading docks. The trucks get very close to the Detroit Wholesale Produce building when backing into the loading docks making the area a hazard for pedestrians. 4 Parking Parking is available right in front of the building, across the street in one of the shedâ&#x20AC;&#x2122;s parking lot, or 1 block northeast in the parking garage. There is always plenty of parking on non-market days. Residents would most likely park in the garage.

4 Eastern Market Sheds Eastern Market Shed 2 and Shed 3 are both visible from Detroit Wholesale Produce and the other sheds are not much farther off. This close proximity to the sheds will be an attractive feature to future residents. 5 Alley There is a gated alley between Kaps Wholesale and Detroit Wholesale Produce. Functional and aesthetic improvements to the alley are suggested as part of the project to make the area more attractive for residents. 6 Storefront/Pedestrian Access The current main customer entrance is also the main forklift and loading and unloading zone. This makes a less than desirable access point for pedestrians and this conflict will need to be reconciled in the design. 7 Rooftop Vantage Point of Market While just a normal, black membrane rooftop now, Detroit Wholesale Produce has a rooftop overlooking Eastern Market that is ideal for a rooftop space for residents and events.

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Storage 4,760 sq ft

3 Existing second floor Key Aspects of Layout: • Window openings have been blocked off with concrete masonry units (CMU). • A rolling overhead door is located in the northwest corner. • Four different, industrial style structural materials are present; wood (roof joists), Steel (roof beams & columns), Brick (walls), and concrete (floor). • 14’-3” ceiling height at south end of building and 10’-3” at the low end. • Two stairways allow access to the second floor. 1

Design Challenges • Integrating four to seven apartments of varying sizes into the space. • Designing effective circulation based on existing conditions to maximize efficiency of rent-able space. • Creating designs that highlight the diverse structural material to maintain the industrial feel while integrating efficient insulation, heating, and cooling systems.

Toilet

69 sq ft

mech. 97 sq ft

Shaft haaaff

Office Toilet

150 sq ft

50 sq ft

forklift traffic 388 sq ft

Cold storage 2406 sq ft

Retail

87 sq ft

Cashier

1393 sq ft

3 Existing first floor plan Key Aspects of Layout: • The left half is the retail business. • The right half is extra cold storage. • The trapezoidal space is where heavy Forklift and pallet-jack traffic currently flow. • The back Space is also owned by Detroit Wholesale Produce and is used for more cold storage for produce. • The main entry includes the three overhead rolling doors that open to the street, making for an open, outdoor retail space during nice weather. 1

Design Challenges • Designing a resident main entrance that is pedestrian friendly, can accommodate a main stair and elevator, but also integrates with the existing infrastructure. • Diverting the current forklift traffic to provide a safer and more accessible circulation path for residents and customers. • Eliminating the dusty air flow created from the constant open doors and forklift traffic. • The owner wants to expand the retail component of the business by adding storefront windows to replace overhead doors.

7 Top column connection shows mild signs of rust

Wall with questionable structural capacity and apparent water leak 13

Signs of water damage in the roof 14

8 Another top column connection with signs of rust

9 Diagonal cracks in the wall under the beam supporting the roof

10 Propagation of the wall crack relative to the beam

11 Diagonal crack in the wall and signs of water leak at the top of the wall

12 Wall locations that may need further assessment and rehabilitation

Signs of water damage in the roof 15

Water damage in old lumber 16

Widespread water damage in the roof 17

Areas of water damage 18

5 Structural Analysis Concrete floor (Figure 1 through Figure 5) • The concrete in the floor appears to be structurally sound. Rebound hammer test at multiple locations through the floor shows an average concrete strength of 6,330 psi. • There are multiple cracks in the floor. Some of these cracks are structural cracks developed due to negative moment action in the floor system. However, the cracks seem stable and not propagating. • To evaluate crack propagation, certain lengths of cracks were cleaned with a pneumatic air gun and filled with non-shrink concrete epoxy polymer. Pictures were taken at the time of filling the cracks and three weeks after. There were no signs of any crack propagation or separation in the filled cracks. • Overall, the floor is in good structural condition. There are no spots of concrete damage that need to be addressed or rehabilitated. Steel columns (Figure 6 through Figure 8) • Signs of mild rust were noticed at the floor and roof connections and through the length of the columns. Nevertheless, the rust appears to be only superficial and has not been propagated through the thickness of the steel. • If additional floor is to be added, the columns need be analyzed by a structural engineer to ensure the safety of the building and their ability to resist the additional dead and live loads from the new floor. Column strengthening may be necessary if the current cross section of the columns is proven insufficient. Brick walls (Figure 9 through Figure 13) • Several cracks, water damage, and spalling of the brick walls were noticed especially near the roof. Before any structural upgrade or story addition, the walls need to be rehabilitated properly. Diagonal cracks in the walls appear next to the beams supporting the roof. This indicates differential settlement in the walls due to the weight of the roof. The cracks appear to be stable in the meantime. However, future upgrade in the building such as addition of a new floor system may lead to crack propagation and/or additional cracking in the walls. If the walls are used to support an additional floor system, the load shall be distributed evenly over the length of the walls. Roof system (Figure 14 through Figure 17) • Water damage appears at multiple locations in the roof. Old lumber has been replaced with newer lumber at a few locations. However, signs of water damage appear also on new lumber. Rigorous measurements need to be taken to treat the roof system and water proof it. The steel beams supporting the roof need to be checked for structural adequacy if an additional floor is to be added.

Concrete cracks in the floor

Filling the cracks with non-shrink epoxy matrix

A crack filled with epoxy matrix

3-week old filled crack shows no signs of separation

No crack separation after three weeks

Signs of rust at the base of the steel columns

Design:

1 Three-Story Option

2 Two-Story Option

1 building overview At the request of the building owners, this section includes two design options: (1) A 2 story rehabilitation that converts the second floor to residential living spaces and (2) a 3 story option that requires new construction of a 3rd floor for additional apartments in addition to a 2nd story rehabilitation. The design team suggests that a different floor plan is used on each floor to allow for a variety of unit options for residents. In addition, a proposed first floor plan design is presented based on discussions with the owner and the need for a resident entrance. Aside from the new floor plans presented on the following pages, two exterior renderings are presented above to provide a visual aid for what

the building could look like from the street. A new cement fiber board material facade is proposed on the residential levels. This material choice was an aesthetic and functional decision which is further explained in this section. Although a new facade was added to the upper stories, the original facade was preserved on the first floor to maintain the urban rustic appearance of the original and surrounding buildings in the district. In addition, three new openings were added on the right side of the building symmetrical to the original three on the first floor. These openings are no longer overhead doors and brick, but storefront windows that allow visibility into the retail spaces. Lastly, updated signage is located just above the main retail space on the left side of the building. It is located lower on the building to better imply the location of the main entrance to the retail space on the first floor.

residential/retail design

private bath-

69 sq ft

mech 97 sq ft

public bathroom

office

forklift traffic

207 sq ft

388 sq ft

50 sq 50 sq ftt bike storage

retail

2219 sq ft

retail resident lobby

1003 sq ft

390 sq ft

mailboxes resident entrance

retail entrance

3 first floor Redesign Resident Entrance • Placed at front left corner of the building after several design iterations and discussions with owner. • This location is most accessible, visible, safe and furthest from major truck traffic. • Integrates into owner’s plans to expand retail area, by consuming just enough floor space in the existing retail for an elevator and main stairway but keeping the the retail square footage to a maximum on the first floor of the building. Additional Updates • Addition of a residential, fire rated, emergency stair • Slight adjustment to the office space due to the removal of one stair and a new entrance to the public bathroom • Removal of cashier stand and new customer entry into the cold storage space from the dry goods section • Addition of storefront windows in place of the existing front rolling doors with symmetrical to the storefront windows installed on the opposite side of the building. • Elimination of forklift traffic from the main building entry and moved to the loading dock space off of Adeliade Street to the south. Detroit Wholesale Produce will then bring all their product to the shelves from the back of the building instead of the front.

RESIDENTAL EXIT

PERMEABLE SURFACE ALLEY 7

RESIDENTAL ENTRANCE

RETAIL

STOREFRONT WINDOWS

EXISTING FIRE HYDRANT

RETAIL 2 ENTRANCE

PEDESTRAIN SIDEWALK

OUTDOOR PRODUCE PLANTERS BENCHES

RETAIL PARKING 4 FORKLIFT TRAFFIC

FORKLIFT TRAFFIC

2 site plan 1 Detroit Wholesale Produce Address: 2614 Riopelle, Detroit, MI. Retail space was expanded and residential was added to upper floors.

5 Residential Entrance The resident entrance and lobby is at the front left corner of the building as shown in the site plan. Located here will be main circulation to the apartments, mailboxes, and bike storage.

2 Retail Entrance The main retail entrance will be through one sliding glass door, replacing the existing overhead doors. This will aid retail circulation and security for the store as well as keep the retail space cleaner by keeping out dirt.

6 Permeable Surface Alley The alley is re-done to be a green, permeable surface alley to aid in the districtâ&#x20AC;&#x2122;s water management plan. Water from the roof will be collected and responsibly diverted into the alley.

3 Forklift Traffic Forklift traffic was diverted from the front of the building by moving the main loading location to Adelaide street. The only exception is using the forklift to set up displays and produce on the sidewalk outside the building during market days.

7 Improved Storefront/Pedestrian Access The sidewalk outside of Detroit Wholesale Produce was improved through new pavement and the addition of benches, planters, and outdoor produce displays. Elimination of forklift traffic was key to this design element.

4 Retail Parking New diagonal parking is proposed in front of the building to allow for customers to easily park and shop in the produce market. This will also deter trucks from resting in front of the building and disturbing residents.

8 Rooftop The rooftop is now a space open to the residents for leisure purposes. The space proposed includes a rooftop deck surrounded by vegetation from the green roof that will help with heating and cooling loads and storm water management.

two bedroom

810 sq ft

two bedroom

792 sq ft w/d

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Studio 520 sq ft

one bedroom

586 sq ft

591 sq ft

605 sq ft

4 third floor living space Apartment Overview • (6) Total Units • (1) 520 SF Studio Unit • (3) 600 SF One Bedroom, One Bath Units • (2) 800 SF Two Bedroom, Two Bath Units • Floor plan nearly identical to 2nd floor except for two bedrooms units on backside instead of studios for variety. 3rd Floor Construction Logistics • Unlike the second floor, all windows, walls, floors, stairs, and roof will be new construction. • Adds considerable more cost since the current roof will need to be removed, the beams leveled, new floor installed, and new exterior walls and roof on top of the existing masonry walls. All new construction would be wood framed. • Construction calculations and return on investment analysis are found in the following pages. Projected Rental Rates • Studio Apartments: $1.42/SF • One bedrooms for $1.32/SF • Two bedrooms for $1.22/SF

Studio

448 sq ft

491 sq ft

457 sq ft

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One bedroom

520 sq ft

586 sq ft

591 sq ft

606 sq ft

3 Second floor living space Apartment Overview â&#x20AC;˘ (7) Total Units â&#x20AC;˘ (4) 450-520 SF Studio Units â&#x20AC;˘ (3) 600 SF One Bedroom, One Bath Units â&#x20AC;˘ Units on front utilize previous window openings overlooking the market. â&#x20AC;˘ Units in back require new window openings to be cut in existing facade overlooking industrial Eastern Market.

Circulation Plan Details â&#x20AC;˘ Stair on east side of building completely removed â&#x20AC;˘ U-shaped stairs maximized the square footage of the units. â&#x20AC;˘ The existing northeast stair will remain to save on the cost of a new stair. The owner requested keeping the existing stairway in lieu of a u-shaped stair in the middle of the future cold storage shopping area. The proposed configuration saves money, provides an emergency exit and also creates a unique southeast corner studio with a proposed lofted space over the exit stairs.

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5 Exploded view

Enclosure planters Resident patio space 2 Rooftop view of eastern Market

Greenroof vegetation

3 roof redesign Rooftop gathering and living spaces are extremely common in major urban cities such as New York and Chicago. These spaces enhance the living experience of residents, provide spectacular views of the city, and make buildings more functional. Detroit Wholesale Produce has the opportunity create this atmosphere in the Eastern Market District of Detroit. Currently, the roof is one large open space sloped towards the alley. Regardless if the two story or three story development option is selected, the rooftop space can be transformed into a vibrant, usable space for the residents, building owner and public during large gatherings. The proposed plan above consists of the installation of an outdoor patio surrounded by green roof vegetation. The vegetation will keep the roof cooler for patrons utilizing the roof space. The vegetation will also aid with storm water runoff from the building. There are many impermeable spaces in Eastern Market and the district is under pressure to better manage their storm water runoff. Detroit Wholesale produce can be a pilot project for solving this issue in the district. The concept is of course expandable per the building ownerâ&#x20AC;&#x2122;s desire. If used on the 2 story development plan, the patio will likely need to be elevated off the roof to create a flat surface for people to stand and sit. However, if the three story development plan is used, the new roof that is put on will be a flat roof and raising the patio will not be necessary.

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existing roof experience

roof experience inspiration

1 South Elevation

2 West Elevation

3 East Elevation

8 Exterior Improvements Wall System and Exterior Finishes Insulation is necessary for the comfort level and efficiency of the apartment. It is common for insulation to be found in the wall cavity. However, the design calls for insulation to be added to the exterior of the building, with the cement fiber board exterior finish added on top of that. A detail of this strategy is shown in the figure on the right. Details about this strategy are below: • Exposed brick was desired on the interior of the apartments, adding insulation to the interior would have eliminated this option. • Updates to the building exterior finish were wanted in the design, fiber cement board over insulation fulfilled this design component • It is generally best to insulate existing masonry buildings on the exterior. Condensation problems can occur between the brick and an interior insulated wall since the exterior brick will change temperature quicker than inside. • The extra wall thickness on the upper floors creates a natural, protective overhang for the sidewalk below.

Exterior Cladding Attachment Diagram Cement fiber board cladding 1x4 wood furring attached through rigid insulation to 2x4 wood furring.

2x4 wood furring mechanically attached to masonry. Rigid Insulation Fluid-applied water control layer and air control layer Masonry Wall

6 interior material inspiration 1 Exposed Brick It is common to find exposed brick in many rehabilitated, industrial, Detroit buildings. and The brick in Detroit Wholesale Produce would need some touch up to make this happen but the exterior walls of the units are prime for utilizing this natural interior finish.

2 Wood Finish Reclaimed wood is a hot commodity for interior furnishings. Especially in Detroit where many materials are harvested from houses that have been taken down. Butcher-block counter tops made from reclaimed wood are a trending material found in many restaurants, bars, and residences. In addition, cabinets, furniture, wall finishes, and floors can all be created from wood, particularly reclaimed wood. These interior finishes are highly recommended for use in Detroit Wholesale Produce. 3 Polished ConcreteLike exposed brick, Concrete also speaks to the industrial building atmosphere. Detroit Wholesale Produce already has concrete floors in the second story. Using the existing concrete as a floor finish would be an economical and sustainable option.

7 Exterior material inspiration 4

4 Cement Fiber BoardA new exterior finish is needed due to the decision to add insulation to the exterior of the building on the upper floors. Therefore, a modern material is needed to maintain an exterior appearance that integrates with the surrounding buildings, but also differentiates Detroit Wholesale Produce as an updated building in the district. Cement fiber board is a very viable solution because it is easy to adhere to any surface, and forms a pattern much like brick only at a larger scale. 5 Exposed Exterior Brick As with the exposed interior brick, it is important to maintain some of the buildingâ&#x20AC;&#x2122;s original appearance. The first floor is a great location to keep the original brick, although it will likely be painted a different color. to better match the cement fiber board color selection.

Exhaust Air Exchanges Heat with Outside Air EA

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Cool Water from Floor

HW To Fixtures

CW In

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Valve Gas Line

Radiant Heating and Cooling Coils in Floor

Valve Gas Burner or Solar Hot Water Heat Exchanger In Future Heat Exchanger

CW to Storage Tank

Warm Water from Floor

Heat Dissipated to Cold Storage

40° F - 50° F Cold Storage

4 Advanced Option • Heating: Same as option 3 • Ventilation: Same as option 3 • Air Conditioning: This cooling option utilizes a radiant cooling system in conjunction with the radiant heating system. To use this system, a cooling plant is needed. Rather than install an expensive, small chilled water system, this system proposes to use the cold air in the large cold storage spaces of Detroit Wholesale Produce below many of the apartments to chill water. Water would be pumped through the apartment floor and then into a heat exchanger located in the cold storage spaces, chilling the water. This chilled water would then be stored in a cold storage tank in the apartment. • Hot Water: Same as option 3 • Notes: Highest upfront cost but lowest operating cost. Most sustainable as it requires least amount of combustion.

Solar Thermal Example 6 The benefit to using hot water for space heating (options 2-4) is that it can easily be adapted to operate on renewable solar hot water in the future. A different type of hot water tank would be paired with solar thermal panels or evacuated tubes mounted on the roof of Detroit Wholesale Produce as inspired by the pictured above.

6 Heating, Ventialation, And Cooling (Hvac) design Options 1 Basic Option • Heating: Utilizes a typical residential gas fired forced air furnace. • Ventilation: Provided through an outdoor air intake that enters the furnace. • Air Conditioning: Utilizes a typical direct expansion (DX) cooling coil w/ condensing unit on roof • Hot Water: Utilizes a typical residential gas fired hot water tank routed to water fixtures. • Notes: This option will have low up front cost and high operating cost and is least environmentally friendly.

Condensing Unit on Roof

HW To Fixtures

CW In

Furnace

RA SA

OA HW Tank

Cooling Coil Gas Line

2 Intermediate Option • Heating: Utilizes a forced air hydronic furnace. Instead of gas combustion, it provides heat by passing air over coils of hot water provided by the hot water tank. • Ventilation: Provided through an outdoor air intake that enters the furnace but first passes through an energy recovery ventilator (ERV) that tempers the outdoor air prior to entering the furnace, thus saving energy. • Air Conditioning: Same as basic option • Hot Water: Same as basic option, however hot water is routed to the furnace as well as water fixtures. • Notes: This option will have mid-range upfront cost and lower operating cost than the basic option, it also is more environmentally friendly since it uses half the combustion of the basic option and pre-treats the ventilation air through the ERV.

Gas Line Gas Burner

Gas Burner

Condensing Unit on Roof Exhaust Air Exchanges Heat with Outside Air EA OA

HW to Fixtures

ERV CW in

HW to Furnace

Water from Furnace

HW Tank

SA Cooling Coil Hot Water Coil

Gas Line Hydronic Furnace

Gas Burner or Solar Hot Water Heat Exchanger In Future

Exhaust Air Exchanges Heat with Outside Air

Hot Air In Mini-Split AC Unit

ERV

Cool Air Out

CW in

HW to Fixtures

HW Tank

Water from Floor

Gas Line

HW to Floor

Condensing Unit on Roof

Gas Burner or Solar Hot Water Heat Exchanger In Future

3 Intermediate Option • Heating: Utilizes a radiant heat system in the concrete floor. Hot water provided by the hot water tank flows through the slab and heats the space. A more efficient transfer of heat occurs between the water and slab than water/gas and air in the furnace option. • Ventilation: Same as option 2, however outdoor air no longer passes through a furnace. Only required air for ventilation purposes is needed which is less air than the furnace option, thus saving energy because it takes more energy to heat air than water. • Air Conditioning: Instead of an integrated DX cooling system, a high efficiency mini DX split system or heat pump system can be mounted on the wall thus saving space by eliminating space needed for a furnace. • Hot Water: Same as basic and intermediate option, however hot water is routed to the radiant floor as well as well as water fixtures. • Notes: Slightly higher operating costs, and lower operating costs than option 2, also will save more energy since air is not the main cooling medium and mini split system AC units are highly efficient.

SUMMARY:

2 story development finances

3 story development finances

Total SF: 5,185 SF Cost per SF (hard costs): $127.05 Total Cost: $1,105,060 Total Cost after incentives: $668,036 Annual Rent Profit: $60,888 Year 1 R.O.I: 9.51%

Total SF: 10,370 SF Cost per SF (hard costs): $138.48 Total Cost: $2,510,957 Total Cost after incentives: $1,236,174 Annual Rent Profit: $121,344 Year 1 R.O.I: 17.39%

Key Ratios Floor GSF 5,185 Floors 2 Building GSF 10,370 Residential NSF 3,700 Retail NSF 3,309 Building NSF 7,009 Residential Efficiency Retail Efficiency Building Efficiency Op. Expense Inflation

71.36% 63.82% 67.59% 3%

Key Ratios

Financing Assumptions Total Cost CRP Grant EMC Façade Grant 20% Historic Tax Credit Total After Incentives

$ 1,105,060 (191,012) (10,000) (236,012) $ 668,036

Debt Equity Total

83.46% 16.54% 100.00%

$557,530 $110,506 $668,036

Interest Rate Amort Period Debt Service

Annual 5.00% 30 $35,915

Monthly 0.42% 360 $2,993

Floor GSF 5,185 Floors 3 Building GSF 15,555 Residential NSF 7,600 Retail NSF 3,309 Building NSF 10,909 Residential Efficiency Retail Efficiency Building Efficiency

146.58% 63.82% 70.13%

Op. Expense Inflation

Financing Assumptions Total Cost CRP Grant EMC Façade Grant 20% Historic Tax Credit Total After Incentives

$ 2,051,957 (380,391) (10,000) (425,391) $ 1,236,174

Debt Equity Total

90.00% 10.00% 100.00%

$1,112,557 $123,617 $1,236,174

Interest Rate Amort Period Debt Service

Annual 5.00% 30 $71,669

Monthly 0.42% 360 $5,972

6 unit option rent Assumption Average unit SF: 650 SF Total Annual Rent Revenue: $60,456 P/NSF/mo: $1.29

7 unit option rent Assumption Average unit SF: 529 SF Total Annual Rent Revenue: $60,888 P/NSF/mo: $1.37

1 cost + revenue Conclusions Recommendation to building owner: •

• • • • • • •

Our recommendation is to renovate the existing second floor and build out a third story with new construction for residential units. The 3 story option is recommended for long term investment Average quality wood frame construction Mid-range finishes and kitchen A variety of unit types and square footage sizes First floor existing exterior facade remains and is repaired Second and third story exterior facade is new construction First floor retail space upgraded to enhance the shopping experience and market appeal for residents and shoppers

Explanation for recommendations: Taking into account hard building costs, soft costs, financial incentives and rent assumptions, it is estimated the building owner will make back the initial investment on the building renovations over a ten year period. This does not take into account residential vacancy, operating costs or interest on finance options. For a more detailed explanation of this see the operating revenues and programs sections for the two story and three story options.

Costs + Revenue

3 2 story program & rent assumptions Residential (2nd Floor) # of Unit Type Units Size (NSF) Studio 1 450 Studio 1 500 Studio 1 450 Studio 1 500 1 BD 1 BA 1 600 1 BD 1 BA 1 BD 1 BA 1 600 1 BD 1 BA 1 BD 1 BA 1 600 1 BD 1 BA Average 1 529 Totals 7 3700

Monthly Rent/Unit (Y1) $ 639 $ $ 710 $ $ 639 $ $ 710 $ $ 792 $ $ 792 $ $ $ 792 $ 725 $ 5,074

Annual Rent (Y1) $ 7,668 $ $ 8,520 $ $ 7,668 $ $ 8,520 $ $ 9,504 $ $ 9,504 $ $ $ 9,504 $ 8,698 $ 60,888

P/NSF/mo $ 1.42 $ 1.42 $ 1.42 $ $ 1.42 $ $ 1.32 $ $ 1.32 $ $ $ 1.32 $ 1.37 $ 1.37

450 sf

500 sf

w/d

600 sf

500 sf

600 sf

second floor units

rent assumptions

4 Acquisition & Development Costs Item

Budget

P/GSF

P/Unit

Acquisition Land/Buildings/Parking Lot Total Acquisition Costs

$ Ͳ $ Ͳ

Uses of Capital Land/Building/Parking Lot Hard Cost Soft Cost Total

Hard Costs (Construction) Renovation Construction Building Permits Security Contingency (10%) Builders Risk Insurance Construction Manager Fee (10% of Const)

$ 658,754 $ 8,234 $ 10,000 $ 65,875 $ 6,588 $ 65,875

$ 63.53 $ 0.79 $ 0.96 $ 11.28 $ 0.64 $ 6.35

$ 94,108 $ 1,176 $ 1,429 $ 9,411 $ 941 $ 9,411

Sources of Capital Equity First Mortgage CRP Historic Tax Credits Eastern Market Façade Grant Total

$ 815,327

$ 83.55 $ 116,475

$ 44,078 $ 6,500 $ 5,000 $ 15,000 $ 15,000 $ 6,984 $ 10,000 $ 22,170 $ 15,000 $ 150,000

$ 4.25 $ 0.63 $ 0.48 $ 1.45 $ 1.45 $ 0.67 $ 0.96 $ 2.14 $ 1.45 $ 14.46

$ 289,733

$ 27.94 $ 41,390.38 #REF! $ 106.56 $ 92,088

Total Hard Costs Soft Costs Architectural & Engingeering Services Survey Utilities Environmental Assessments Legal Ͳ Land Use/Lease/Acquisition Property Taxes During Construction Soft Cost Contingency Financing Fees (2% of loan) Historic Tax Credit Transaction Costs Developer's Fee (8% of Total Cost) Total Soft Costs Total Costs

$ 1,105,060

Total % 0% 74% 26% 100.00%

Total $ $ Ͳ $ 815,327 $ 289,733 $ 1,105,060

10% 50% 17% 21% 1% 100%

$ 110,506 $ 557,530 $ 191,012 $ 236,012 $ 10,000 $ 1,105,060

$ 6,297 $ 929 $ 714 $ 2,143 $ 2,143 $ 998 $ 1,429 $ 3,167 $ 2,143 $ 21,429

two-Story option: 1 Two-Story Construction Cost summary Square Foot Cost Estimate Report Detroit Wholesale Produce Apartment Renovation

EsĆ&#x;mate Name:

Building Type: LocaĆ&#x;on: Story Count: Story Height (L.F.): Floor Area (S.F.): Labor Type: Basement Included: Cost Per Square Foot: Building Cost:

2614 Riopelle St , Detroit , Michigan , 48207 Apartment, 2 Story with Brick Veneer/Wood Frame/Cement Board Exterior DETROIT, MI 1 Resident Levels, 1 Retail Level 14 5,185 STD No $127.05 $658,754.25

*Costs are derived from a building model with basic components. *Scope diÄŤerences and market condĹ?Ć&#x;Ĺ˝ns can cause costs to vary signiÄŽcantly.

** EsĆ&#x;mate includes renovaĆ&#x;on to exisĆ&#x;ng 2nd Ĺ&#x2021;oor space for apartment units

2 Operating revenues & programs Operating Revenues Potential Gross Income: Residential Potential Gross Income: Retail Potential Gross Income (PGI) Stabilized Residential Vacancy Stabilized Retail Vacancy Total Vacancy Effective Gross Income (EGI) Operating Expenses Marketing and Advertising Security Utilities (water, trash, common) Maintenance and Repairs Yard/Exterior Maintenance Miscellaneous Management fee Insurance Property Taxes Total Operating Expenses Total Operating Expenses/Unit Net Operating Income (NOI) Replacement Reserves Return on Cost (NOI/Total Cost after Incentives) Less Debt Service Debt Service Coverage Ratio Before Tax Cash Flow (BTCF) BTCF Return on Equity (BTCF/Equity) Capitalized value at: Remaining Mortgage:

$/GSF $/NSF Projected Rate per Yr per Mo Monthly Year 1 3.0% $16.46 $1.37 $5,074 $60,888 3.0% $12.00 $3,309 $39,708 $8,383 $100,596 $9.70 7.00% $1.15 $355 $4,262 7.00% $0.84 $232 $2,780 $587 $7,042 $18.71 $7,796 $93,554 % of PGI 1.00% $0.10 $84 $1,006 2.00% $0.19 $168 $2,012 3.00% $0.29 $251 $3,018 6.00% $0.58 $503 $6,036 1.00% $0.10 $84 $1,006 1.00% 5.00% 6.00% 77.4 mills 31.94%

$0.10 $0.49 $0.58 $0.67 $3.10

$84 $419 $503 $582 $2,677.79

14.91%

$5.92 $1.45

$5,118 $1,250

$3.46

$2,993

$1.01

$875

10.00% $59.23

Year 2 $62,715 $40,899 $103,614 $4,390 $2,863 $7,253 $96,361

Year 3 $64,596 $42,126 $106,722 $4,522 $2,949 $7,471 $99,252

$1,067 $2,134 $3,202 $6,403 $1,067

$1,099 $2,198 $3,298 $6,595 $1,099

$1,006 $1,067 $1,099 $5,030 $5,336 $5,496 $6,036 $6,403 $6,595 $6,984 $7,194 $7,410 $32,133 $33,875 $34,891 $4,590.50 $4,839.23 $4,984.41 $61,421 $62,486 $64,361 $15,000 $15,450 $15,914 9.19% $35,915 1.71 $10,505 9.51%

9.35% $35,915 1.74 $11,121 10.06%

9.63% $35,915 1.79 $12,532 11.34%

$614,208 $521,615

$624,863 $485,699

$643,609 $449,784

Year 4 Year 5 $66,534 $68,530 $43,390 $44,692 $109,924 $113,222 $4,657 $4,797 $3,037 $3,128 $7,695 $7,926 $102,229 $105,296 $1,132 $2,264 $3,397 $6,793 $1,132

$1,166 $2,332 $3,499 $6,997 $1,166

$1,132 $1,166 $5,661 $5,831 $6,793 $6,997 $7,632 $7,861 $35,938 $37,016 $5,133.94 ######## $66,292 $68,280 $16,391 $16,883 9.92% $35,915 1.85 $13,986 12.66%

10.22% $35,915 1.90 $15,483 14.01%

$662,917 $682,805 $413,869 $377,953

50% Elevators and Lifts Hydraulic passenger elevator, 3500 lb., 3 Ňoors, 10' story height, 125 FPM D2010 Plumbing Fixtures Kitchen sink w/trim, countertop, PE on CI, 24" x 21", single bowl Laundry sink w/trim, PE on CI, black iron frame, 24" x 20", single compt Service sink w/trim, PE on CI, corner Ňoor, 28" x 28", w/rim guard Bathroom, lavatory & water closet, 2 wall plumbing, stand alone Bathroom, three Įxture, 2 wall plumbing, lavatory, water closet & D2020 Domestic Water Distribution Gas Įred water heater, residenƟĂů, 100< F rise, 30 gal tank, 32 GPH D2040 Rain Water Drainage Roof drain, DWV PVC, 4" diam, diam, 10' high Roof drain, DWV PVC, 4" diam, for each addiƟonal foot add D3010 Energy Supply Apartment building heaƟng system, Įn tube radiaƟon, forced hot water, D3030 Cooling Generating Systems Packaged chiller, air cooled, with fan coil unit, medical centers, 20,000 SF, D4010 Sprinklers Wet pipe sprinkler systems, steel, light hazard, 1 Ňoor, 5000 SF Wet pipe sprinkler systems, steel, light hazard, each addiƟonal Ňoor, 5000 D5010 Electrical Service/Distribution Overhead service installaƟon, includes breakers, metering, 20' conduit & Feeder installaƟon 600 V, including RGS conduit and XHHW wire, 600 A Switchgear installaƟon, incl switchboard, panels & circuit breaker, D5020 Lighting and Branch Wiring Receptacles incl plate, box, conduit, wire, 10 per 1000 SF, 1.2 waƩs per SF Wall switches, 2.5 per 1000 SF Miscellaneous power, 2 waƩs Central air condiƟoning power, 3 waƩs Motor installaƟon, three phase, 200 V, 15 HP motor size Incandescent Įxtures recess mounted, type A, 1 waƩ per SF, 8 FC, 6 D5030 Communications and Security CommunicaƟon and alarm systems, Įre detecƟon, addressable, 25 Fire alarm command center, addressable without voice, excl. wire & Internet wiring, 2 data/voice outlets per 1000 S.F. D5090 Other Electrical Systems Generator sets, w/baƩery, charger, muŋer and transfer switch, 3% E Equipment & Furnishings E1090 Appliances 7 Refrigerators @800 ea 7 Stoves @600 ea. 7 Dishwashers @550 ea. 7 Washer/Dryer Stacked @1,300 ea

63.43 4.69 4.69 15.14 2.23 0.38 0.64 3.4 8.49 4.92 4.92 0.53 0.31 0.21 9.3 9.3 9.92 9.92 3.76 1.7 2.06 4.87 1.01 2.5 1.37 7.9 3.17 0.65 0.57 0.47 0.36 2.68 2.2 0.97 0.61 0.62 0.2 0.2 4.38 4.38 1.08 0.81 0.73 1.76

328,884.55 24,317.65 24,317.65 78,500.90 11,562.55 1,970.30 3,318.40 17,629.00 44,020.65 25,510.20 25,510.20 2,748.05 1,607.35 1,088.85 48,220.50 48,220.50 51,435.20 51,435.20 19,495.60 8,814.50 10,681.10 25,250.95 5,236.85 12,962.50 7,103.45 40,961.50 16,436.45 3,370.25 2,955.45 2,436.95 1,866.60 13,895.80 11,407.00 5,029.45 3,162.85 3,214.70 1,037.00 1,037.00 22,710.30 22,710.30 5,599.80 4,199.85 3,785.05 9,125.60

100%

$127.05 $127.05

$658,754.25 $658,754.25

D Services D1010

SubTotal Total Building Cost **** Indicates Assemblies or Components have been customized.

5 construction Costs B Shell B1020 B2010 B2020 B2030 B3010

C Interiors C1010

C1020

C1030 C2010 C3010

C3020

C3030

% of Total Cost Per S.F. 19% 24.01 Roof Repair/Construction 1.7 1.7 Wood roof, truss, 4/12 slope, 24" O.C., 30' to 43' span Exterior Walls 14.43 14.43 Brick veneer wall repair, insulaƟon & cement board Exterior Windows 6.01 6.01 Windows, aluminum, sliding, standard glass, 5' x 3' Exterior Doors 0.36 0.36 Door, steel 18 gauge, hollow metal, 1 door with frame, no label, 3'-6" x 7'Roof Coverings 1.51 1.34 Asphalt rooĮng, strip shingles, inorganic, Class C, 4" slope, 235-240 lbs/SQ 0.17 Flashing, aluminum, no backing sides, .019" 28% 35.23 Partitions 10.36 6.81 Wood parƟƟon, 5/8" Įre rated gypsum board face, 1/4"sound deadening 3.55 1/2" Įre rated gypsum board, taped & Įnished, painted on metal furring Interior Doors 7.35 1.23 Door, single leaf, wood frame, 3'-0" x 7'-0" x 1-3/8", birch, solid core 6.12 Door, single leaf, wood frame, 3'-0" x 7'-0" x 1-3/8", birch, hollow core Fittings 3.38 3.38 Cabinets, residenƟĂů, wall, two doors x 48" wide Stair Construction 0.76 0.76 Stairs, wood, prefab box type, oak treads, wood rails 3'-6" wide, 14 risers Wall Finishes 2.87 1.18 PainƟng, interior on plaster and drywall, walls & ceilings, roller work, 0.98 Vinyl wall covering, fabric back, medium weight 0.71 Ceramic Ɵůe, thin set, 4-1/4" x 4-1/4" Floor Finishes 5.74 1.36 Carpet Ɵůe, nylon, fusion bonded, 18" x 18" or 24" x 24", 24 oz 1.55 Carpet Ɵůe, nylon, fusion bonded, 18" x 18" or 24" x 24", 35 oz 0.36 Carpet, padding, add to above, 2.7 density 0.43 Carpet, padding, add to above, 13.0 density 0.37 Vinyl, composiƟon Ɵůe, minimum 0.43 Vinyl, composiƟon Ɵůe, maximum 1.23 Tile, ceramic natural clay Ceiling Finishes 4.77 4.77 Gypsum board ceilings, 1/2" Įre rated gypsum board, painted and

Cost 124,491.85 8,814.50 8,814.50 74,819.55 74,819.55 31,161.85 31,161.85 1,866.60 1,866.60 7,829.35 6,947.90 881.45 182,667.55 53,716.60 35,309.85 18,406.75 38,109.75 6,377.55 31,732.20 17,525.30 17,525.30 3,940.60 3,940.60 14,880.95 6,118.30 5,081.30 3,681.35 29,761.90 7,051.60 8,036.75 1,866.60 2,229.55 1,918.45 2,229.55 6,377.55 24,732.45 24,732.45

3 3 story program & rent assumptions Residential (2nd & 3rd Floor) # of Unit Type Units Size (NSF) Studio 1 450 Studio 1 500 Studio 1 450 Studio 1 500 1 BD 1 BA 1 600 1 BD 1 BA 1 600 1 BD 1 BA 1 600 2 BD 2 BA 1 800 2 BD 2 BA 2 BD 2 BA 1 800 2 BD 2 BA Studio 1 500 1 BD 1 BA 1 600 1 BD 1 BA 1 BD 1 BA 1 600 1 BD 1 BA 1 BD 1 BA 1 1 BD 1 BA 600 Averages 1 585 Totals 13 7600

Monthly Rent/Unit (Y1) $ 639 $ 710 $ 639 $ 710 $ 792 $ 792 $ 792 $ $ 976 $ 976 $ $ $ 710 $ 792 $ $ $ 792 $ $ 792 $ 778 $ 10,112

Annual Rent (Y1) $ 7,668 $ 8,520 $ 7,668 $ 8,520 $ 9,504 $ 9,504 $ 9,504 $ $ 11,712 $ 11,712 $ $ , $ 8,520 $ 9,504 $ $ $ 9,504 $ $ 9,504 $ 9,334 $ 121,344

P/NSF/mo $ 1.42 $ 1.42 $ 1.42 $ 1.42 $ 1.32 $ 1.32 $ 1.32 $ 1.22 $ $ 1.22 $ $ $ 1.42 $ 1.32 $ $ $ 1.32 $ 1.32 $ 1.33 $ 1.33

800 sf

450 sf

w/d

800 sf

600 sf

third floor units

Rent assumptions

4 Acquisition & Development Costs Item

Budget

Acquisition Land/Buildings/Parking Lot Total Acquisition Costs

$ Ͳ $ Ͳ

Hard Costs (Construction) Renovation Construction Building Permits Security Contingency (10%) Builders Risk Insurance Construction Manager Fee (10% of Const)

$ 1,393,638 $ 17,420 $ 10,000 $ 139,364 $ 13,936 $ 139,364

$ 89.59 $ 1.12 $ 0.64 $ 11.28 $ 0.90 $ 8.96

$ 107,203 $ 1,340 $ 769 $ 10,720 $ 1,072 $ 10,720

$ 1,713,722

$ 112.49 $ 131,825

$ 92,580 $ 6,500 $ 5,000 $ 15,000 $ 15,000 $ 6,984 $ 10,000 $ 22,170 $ 15,000 $ 150,000

$ 5.95 $ 0.42 $ 0.32 $ 0.96 $ 0.96 $ 0.45 $ 0.64 $ 1.43 $ 0.96 $ 9.64

$ 338,235

$ 21.74 $ 26,018.07 #REF! $ 131.92 $ 170,996

$ 2,051,957

P/GSF

P/Unit

Uses of Capital Land/Building/Parking Lot Hard Cost Soft Cost Total Sources of Capital Owners Equity First Mortgage CRP Historic Tax Credits Eastern Market Façade Grant Total

Total % 0.00% 83.52% 16.48% 100.00%

Total $ $ Ͳ $ 1,713,722 $ 338,235 $ 2,051,957

6% 54% 19% 21% 0% 100%

$ 123,617 $ 1,112,557 $ 380,391 $ 425,391 $ 10,000 $ 2,051,957

$ 7,122 $ 500 $ 385 $ 1,154 $ 1,154 $ 537 $ 769 $ 1,705 $ 1,154 $ 11,538

Three-Story option: 1 Three-Story Construction Cost summary Square Foot Cost Estimate Report Detroit Wholesale Produce Apartment Renovation & Addition

EsƟmate Name:

Building Type: LocaƟŽn: Story Count: Story Height (L.F.): Floor Area (S.F.): Labor Type: Basement Included: Cost Per Square Foot: Building Cost:

2614 Riopelle St , Detroit , Michigan , 48207 Apartment, 3 Story with Brick Veneer/Wood Frame/Cement Board Exterior DETROIT, MI 2 Resident Levels, 1 Retail Level 14 10,370 STD No $138.48 $1,436,037.60

*Costs are derived from a building model with basic components. *Scope diīĞrences and market condiƟons can cause costs to vary signŝĮcantly.

** EsƟmate includes renovaƟŽn to exisƟng 2nd ŇŽŽƌ space for apartment units, and addiƟŽn of a 3rd story for apartment units.

Rate 3.0% 3.0% 7.00% 7.00%

Projected Year 1 $121,344 $48,000 $169,344 $8,494 $3,360 $11,854 $157,490

Year 2 $124,984 $49,440 $174,424 $8,749 $3,461 $12,210 $162,215

Year 3 $128,734 $50,923 $179,657 $9,011 $3,565 $12,576 $167,081

Year 4 $132,596 $52,451 $185,047 $9,282 $3,672 $12,953 $172,093

Year 5 $136,574 $54,024 $190,598 $9,560 $3,782 $13,342 $177,256

$/GSF per Mo $2.02

Operating Expenses Marketing and Advertising Security Utilities (water, trash, common) Maintenance and Repairs Yard/Exterior Maintenance

% of PGI 1.00% 2.00% 3.00% 6.00% 1.00%

$0.11 $0.22 $0.33 $0.65 $0.11

$141 $282 $423 $847 $141

$1,693 $3,387 $5,080 $10,161 $1,693

$1,797 $3,593 $5,390 $10,779 $1,797

$1,850 $3,701 $5,551 $11,103 $1,850

$1,906 $3,812 $5,718 $11,436 $1,906

$1,963 $3,926 $5,889 $11,779 $1,963

Miscellaneous Management fee Insurance Property Taxes

1.00% 5.00% 6.00% 77.4 mills 29.12%

$0.11 $0.54 $0.65 $0.45 $3.17

$141 $706 $847 $582 $4,110.04

8.86%

$6.95 $0.96

$9,014 $1,250

$1,693 $8,467 $10,161 $6,984 $49,320 $3,288 $108,169 $15,000

$1,797 $8,983 $10,779 $7,194 $52,108 $3,474 $110,106 $15,450

$1,850 $9,252 $11,103 $7,410 $53,672 $3,578 $113,410 $15,914

$1,906 $9,530 $11,436 $7,632 $55,282 $3,685 $116,812 $16,391

$1,963 $9,816 $11,779 $7,861 $56,940 $3,796 $120,316 $16,883

$4.61

$5,972

8.75% $71,669 1.51

8.91% $71,669 1.54

9.17% $71,669 1.58

9.45% $71,669 1.63

9.73% $71,669 1.68

$1.38

$1,792

$21,500 17.39%

$22,987 18.60%

$25,827 20.89%

$28,752 23.26%

$31,764 25.70%

$1,081,694 $1,040,887

$1,101,063 $969,218

$1,134,095 $897,549

$1,168,118 $825,879

$1,203,162 $754,210

Total Operating Expenses Total Operating Expenses/Unit Net Operating Income (NOI) Replacement Reserves Return on Cost (NOI/Total Cost after Incentives) Less Debt Service Debt Service Coverage Ratio Before Tax Cash Flow (BTCF) BTCF Return on Equity (BTCF/Equity) Capitalized value at: Remaining Mortgage:

$31.50

Monthly $10,112 $4,000 $14,112 $708 $280 $988 $13,124

$/GSF per Yr $24.27 $12.00 $10.89 $1.12 $1.02

10.00%

$69.54

100%

$127.05 $127.05

$658,754.25 $658,754.25

D Services D1010

SubTotal Total Building Cost **** Indicates Assemblies or Components have been customized.

5 construction Costs B Shell B1010

B1020 B2010 B2020 B2030 B3010

C Interiors C1010

C1020

C1030 C2010 C3010

C3020

C3030

% of Total Cost Per S.F. 25.79% 35.72 Floor Construction 6.53 2.47 Steel column, W8, 150 KIPS, 10' unsupported height, 35 PLF 2.63 Floor, wood joist, 2 x 12 @12" O.C., 1/2" CDX subŇŽŽr 1.43 FireprooĮng, gypsum board, Įƌe rated, 3 layer, 1.5" thick, 8" steel column, Roof Construction 3.41 3.41 Wood roof, truss, 4/12 slope, 24" O.C., 30' to 43' span Exterior Walls 17.9 17.9 Brick veneer wall repair, 2x6 studs @ 16", insulaƟŽn & cement board Exterior Windows 6.01 6.01 Windows, aluminum, sliding, standard glass, 5' x 3' Exterior Doors 0.36 0.36 Door, steel 18 gauge, hollow metal, 1 door with frame, no label, 3'-6" x 7'Roof Coverings 1.51 1.34 Asphalt rooĮng, strip shingles, inorganic, Class C, 4" slope, 235-240 lbs/SQ 0.17 Flashing, aluminum, no backing sides, .019" 25.45% 35.24 Partitions 10.36 6.81 Wood parƟƟŽn, 5/8" Įƌe rated gypsum board face, 1/4"sound deadening 3.55 1/2" Įƌe rated gypsum board, taped & Įnished, painted on metal furring Interior Doors 7.35 1.23 Door, single leaf, wood frame, 3'-0" x 7'-0" x 1-3/8", birch, solid core 6.12 Door, single leaf, wood frame, 3'-0" x 7'-0" x 1-3/8", birch, hollow core Fittings 3.38 3.38 Cabinets, residenƟal, wall, two doors x 48" wide Stair Construction 0.76 0.76 Stairs, wood, prefab box type, oak treads, wood rails 3'-6" wide, 14 risers Wall Finishes 2.87 1.18 PainƟng, interior on plaster and drywall, walls & ceilings, roller work, 0.98 Vinyl wall covering, fabric back, medium weight 0.71 Ceramic Ɵůe, thin set, 4-1/4" x 4-1/4" Floor Finishes 5.74 1.36 Carpet Ɵůe, nylon, fusion bonded, 18" x 18" or 24" x 24", 24 oz 1.55 Carpet Ɵůe, nylon, fusion bonded, 18" x 18" or 24" x 24", 35 oz 0.36 Carpet, padding, add to above, 2.7 density 0.43 Carpet, padding, add to above, 13.0 density 0.37 Vinyl, composiƟŽn Ɵůe, minimum 0.43 Vinyl, composiƟŽn Ɵůe, maximum 1.23 Tile, ceramic natural clay Ceiling Finishes 4.77 4.77 Gypsum board ceilings, 1/2" Įƌe rated gypsum board, painted and

Cost 370,384.11 67,755.46 25,653.31 27,227.99 14,874.16 35,328.10 35,328.10 185,605.13 185,605.13 62,280.85 62,280.85 3,730.29 3,730.29 15,684.28 13,934.80 1,749.48 365,480.13 107,479.83 70,633.99 36,845.84 76,220.82 12,786.83 63,433.99 35,101.82 35,101.82 7,887.99 7,887.99 29,796.33 12,284.16 10,131.90 7,380.27 59,485.30 14,145.47 16,084.93 3,682.86 4,477.72 3,876.49 4,480.59 12,737.24 49,508.04 49,508.04

sources: 1. “Recover Green Roofs.” Recover Green Roofs. N.p., 2015. Web. 07 Aug. 2015. <http://recovergreenroofs.com/?projects=watermark-residences-greenroof>. 2. “Eastern Market.” Eastern Market. N.p., 2015. Web. 07 Aug. 2015. <http://www.easternmarket. com/>. 3. “Detroit Historical Society | Where the past Is Present.” Detroit Historical Society | Where the past Is Present. N.p., 2015. Web. 07 Aug. 2015. <http://detroithistorical.org/>. 4. “Building Science Corporation.” Building Science Corporation. N.p., 2015. Web. 07 Aug. 2015. <http://buildingscience.com/>. 5. ”Google Maps.” Google Maps. N.p., 2015. Web. 09 Aug. 2015. <http://www.google.com/maps>. 6. “Collectors & Evacuated Tubes.” Solar Collectors and Evacuated Tubes Mississauga. N.p., 2015. Web. 09 Aug. 2015. <http://www.solkraft.ca/mississauga-collectors-evacuated-tubes.php>.