Executive Summary
Orange + University Residences, Newark
Development Proposal A high rise community in a city on the brink of a RENAISSANCE
Michael Lawson
Table of Contents
Executive Summary ………………………………… 3 Site Analysis
………………………………… 5
Market Analysis
………………………………… 9
Development Concept …………………………… 12 Financial Pro Forma ………………………………… 17 Bibliography
………………………………… 20
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Executive Summary
Orange + University Residences, Newark, NJ The city of Newark, New Jersey is in an interesting place in its long history. The third oldest city in the United States is on the verge of a renaissance, a redevelopment that will transform New Jersey’s largest city into a 24/7 urban center for the arts, entertainment, learning, and living. Even through the downturn in the economy, Newark has seen much progress in terms of redevelopment plans and infustructure improvements. Newark has just finished a master plan and has initiatives to improve the Broad Street Station District in the near future. A redevelopment of the station has already been completed. The city is positioning itself to become the true “Gateway City” of the region. Community Designs Architecture is making sure that it is part of Newark’s renaissance by proposing Orange + University Residences in the Broad Street Station District of Newark. O + U Residences is a 12 story 52 unit tower located at 110 Orange Street with convenient retail on the ground floor. Six residential unit types, ranging from studio to three bedroom apartments, 790 square feet to 1350 square feet respectively, allow for customization of the resident, and the many amenities, such as a fitness center, daycare facility, community rooms, and an outdoor community park, allow for any resident to feel at home. Spectacular views from each room can be had of New York City to the east and Downtown Newark to the south. The amenities do not stop with just the building; its location in Downtown Newark positions it in great proximity to so many of Newark’s hidden treasures. Within walking distance is Riverfront Stadium, the Newark Museum, James Street Historic District, Halsey Street Shops, NJPAC, Prudential Center, the new Passaic Riverfront Park, and many more. Downtown eateries
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Table of Contents
and restaurants are just a quick walk away, and the Ironbound Section of Newark is just as easy to get to. The Newark Light Rail Broad Street Station allows residents to easily connect with the other parts of the city. The University Heights section, where Rutgers University and New Jersey Institute of Technology are located, is only a 10 minute walk from O + U Residences. This development has the opportunity to allow for young and innovative students or alumni to stay close to their alma mater or school of choice. O + U Residences is located one block away from Broad Street Station. This connects the residents with the region, the country, and the world. From Broad Street Station connections can be made via train to New York City, 20 minutes, Newark Penn Station, 7 minutes, Newark Liberty International Airport, 20 minutes, Philadelphia, 40 minutes, and western New Jersey. Also easy access to local roadways including Interstate 280, the Garden State Parkway, and the New Jersey Turnpike is only a 2 minute drive. It is Community Designs Architecture’s sincere belief that O + U Residences will be one of Newark’s first LEED Platinum Standard buildings. Green Design in today’s day and age is extremely important and allows for all citizens to enjoy the essential things in life, clean air and water, and a safe place to live. With innovative mechanical, solar, and plumbing systems O + U Residences will be model for future development. Orange + University Residences has positioned itself in a city on the rise. This development will allow for Newark to continue its growth and expansion into the 21st century.
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Site Analysis
New Jersey Map Newark is located in the center of one of the largest metropolitan regions in the world Source: “Newark Master Plan”, City of Newark
Orange + University Residences
Newark Map Orange + University Residences is located in the Central Downtown Business District within Newark’s Central Ward
Source: “Newark Master Plan”, City of Newark
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Site Analysis
Orange + University Residences
Source: “Newark Advantage”, City of Newark
Transportation Map Newark has a great infustructure system that connects it to the region, country, and world.
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Orange + University Residences
Orange + University Residences
Source: “Newark Advantage”, City of Newark
Neighborhood Map
Newark is made up of many distinct neighborhoods. The proposed development is within the Broad Street Station neighborhood and is in close proximity to Downtown Newark and to the proposed riverfront park.
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Site Analysis
Source: “Broad Street District Exhibits”, City of Newark
Broad Street Station Diagram
Within the Broad Street District Orange Street is designated as a retail corridor with mid‐high residential development.
Source: “Broad Street District Exhibits”, City of Newark
Broad Street Station Master Plan
The master plan for the Broad Street district calls for development like Orange + University Residences on the proposed site. Orange + University Residences| 7 Development Proposal
Site Analysis
Source: “Broad Street District Exhibits”, City of Newark
Broad Street Station District Zoning
The original zoning for the site is Residential and Commercial.
Orange + University Residences
Source: “Google Maps”, google.com
Site Plan w/ Context
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Market Analysis
Newark has been underprivileged for too long. Even in this grim economy, Newark is on the road to making itself a destination. Nicknamed “Brick City”, Newark has always been an industrial hub. Today most industry is located in Port Newark in the East Ward. The city’s downtown was once and still is a center for the insurance industry, with Prudential Insurance as its anchor. The downtown has seen roadway improvements and pedestrian oriented street improvements implemented. These projects have helped to continue the move towards a 24/7 downtown. “Advantage Newark,” an information publication produced by the City of Newark states that residents spend up to 38% of retail dollars outside the city limits. Orange + University Residences includes on its ground floor 25,000 square feet of leasable area. There is a need for retail in the city core and this need will be fulfilled to the residents of O + U Residences at its ground floor. Affordable living is a very important part of any residential development. O + U Residences a medium income housing opportunity. Since O + U Residences is located so close to the business core of Newark and also to the city’s universities, this project will be marketed to both students and professionals. As other developments have done in the past, such as Eleven80, O + U Residences will be marketed as an alternative to living in the suburbs. A community that is close to your workplace or school of choice. The climate in which this project is being built is an advantage and hardship. The economic slowdown allows for low construction cost however financing is difficult to achieve. The government of Newark should be very accepting of a new project being proposed that will stimulate economic growth within the city. The timing is perfect due to when the economy does reverse the new building will be the first on the success list.
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Market Analysis
Orange + University Residences
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Market Analysis
Source: “Newark Advantage”, City of Newark
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Development Concept
Site Plan
First Floor Plan
Typical Floor Plan
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Development Concept Site Analysis
Residential Community Space/ Retail
Daycare Facility Residence Entrance
Fitness Center
Retail
Outdoor Community Space
Community Space/ Residence Lobby
Residences
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Development Concept Site Analysis
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Development Concept Site Analysis
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Development Concept Site Analysis
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Financial Pro Forma
Pragmatics
Land
Assumptions
Lot Size
42,168 sq. ft.
Based on market analysis
Land Cost
$2,500,000.00
and zoning
Allowable area to be developed
70%
Allowable area expressed in acres
.68 acres
Square feet per acre
43,408 sq. ft.
Developable portion expressed in
29,517.6 sq. ft.
feet
Building
Assumptions
Building Coverage expressed as
60%
Based on zoning
percent
Buildable coverage expressed in feet
25,309 sq. ft.
Total Building Floor Area (TBFA)
110,623 sq. ft.
Floor Area Ratio (FAR)
2.6 FAR
Allocation for circulation‐service
8%
Space allocated to public,
Rentable space exclusion of
101,773.16 sq. ft.
non‐rentable
circulation‐service
Proceeds
Assumptions
Rental rate per square foot per year
$83.50
Average for Newark based
Residential
$35.50
on rentable space,
Retail
$48.00
www.census.gov
$3,929,309.68
Residential
$2,714,477.68
Retail
$1,214,832.00
Parking
Assumptions
Pavement coverage expressed as
5%
Based on zoning
percent
Pavement coverage expressed in
.0475%
acres
Number of cars allocated to 1000
.75
square feet
Available parking expressed in
82.5
number of cars
Total yearly rent
Downtown Parking Reduction Incentive
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Financial Pro Forma Site Analysis
Costs Land & Approvals Cost Land Acquisition Approvals Architect Legal Zoning Board Hard Cost Construction Cost Building Parking General Conditions Bond‐ Completion Overhead and Profit Contingency Construction Manager Fee Total Hard Costs Soft Costs Architect/Engineer/Surveyor Legal Project Title Insurance Permits Construction Community Reinvestment Fee Appraisal/Feasibility Study Legal/Lender Commitment Fee Construction Consultant Builders Risk/ Liability Insurance Environmental Insurance Real Estate Taxes Developers Fee Accounting Marketing Exclusive of Commissions Interest Total Soft Costs Total Project Cost
$2,500,000.00 $75,000.00 $75,000.00 $20,000.00 $10,822,320.00 $9,956,070.00 $866,250.00 $541,116.00 $162,334.80 $432,892.80 $162,334.80 $22,943,318.40 $1,147,165.92 $50,000.00 $54,111.60 $100,000.00 $156,000.00 $5,000.00 $20,000.00 $175,000.00 $25,000.00 $216,446.40 $162,334.80 $120,000.00 $324,669.00 $5,000.00 $75,000.00 $3,304,968.00 $5,940,694.52 $28,884,012.92
Assumptions Estimate Estimate Estimate Estimate ($90 per square foot) ($10,500 per space) (5% of construction costs) (1.5% of construction costs) (4% of construction costs) (1.5% of construction costs) Assumptions (5% of hard costs) Estimate (0.5% of construction costs) Estimate ($3,000 per unit) Estimate Estimate Estimate Estimate (2% of construction costs) (1.5% of construction costs) Estimate (3% of construction costs) Estimate Estimate Based on 2007‐2008 interest
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Financial Pro Forma Site Analysis
Income & Financing Income Gross income from rentable spaces Expensed Brokerage Fees Management Fees Interior Maintenance Structural Reserve Net Income Financing 2010 NOI Vacancy NOI after Vacancy Mortgage Constant Maximum Loan Total Project Cost Cash Equity for Financing Permanent Financing Closing Costs Term Mortgage Constant Equity Loan Loan Amount Depreciation Value of Property Land Value Building Value Depreciation Period Yearly Depreciation
$3,612,947.18 $216,776.83 $108,388.42 $108,388.42 $36,129.47 $4,082,630.32 $5,685,008.00 $284,250.40 $5,400,757.60 8.868% $39,795,056.00 $28,884,012.92 $10,911,043.08 $20,000.00 24 months 8.868% $10,911,043.08 $39,795,056.00 $28,884,012.92 $2,500,000.00 $26,384,012.92 24 months $549,666.94
Assumptions (101,773.16 sq. ft. at $35.50) (6% of income) (4% of income) (4% of income) (1% of construction costs) (5% of 2010 NOI) (7.5% over 25 years) (NOI x 100)/cap rate (7%) Estimate Total Project Cost Building Value/ Depreciation Value
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Bibliography
"Advantage Newark." City of Newark. 2009. City of Newark. 6 May 2009 <http://www.ci.newark.nj.us/government/city_departments/economic__housing_development/advantage_newark.php>. "Broad Street Station District Exhibit." City of Newark. 2009. City of Newark. 6 May 2009 <http://www.ci.newark.nj.us/downloads/index.php?dlid=48>. "Data Tools." 2010 Census. 2009. US Census Bureau. 6 May 2009 <http://www.census.gov/>. "Eleven80.” Cogswell Realty. 2009. 6 May 2009 <http://www.eleven80rentals.com/home.shtml>. "Newark Master Plan." City of Newark. 2009. City of Newark. 6 May 2009 <http://www.ci.newark.nj.us/government/city_departments/economic__housing_development/newarksmasterplan.php>. "A Walk through Newark." Industrial Revolution. 2008. Thirteen. 6 May 2009 <http://www.thirteen.org/newark/history2.html>.
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Semester Bibliography
"Advantage Newark." City of Newark. 2009. City of Newark. 6 May 2009 <http://www.ci.newark.nj.us/government/city_departments/economic__housing_development/advantage_newark.php>. "Broad Street Station District Exhibit." City of Newark. 2009. City of Newark. 6 May 2009 <http://www.ci.newark.nj.us/downloads/index.php?dlid=48>. "Data Tools." 2010 Census. 2009. US Census Bureau. 6 May 2009 <http://www.census.gov/>. "Eleven80.” Cogswell Realty. 2009. 6 May 2009 <http://www.eleven80rentals.com/home.shtml>. Gardiner, Virginia. "Easing into Retirement Housing" Metropolis October 2006 34. 26 Jan 2009 <http://www.metropolismag.com/story/20061011/easing‐into‐retirement‐housing>. "Newark Master Plan." City of Newark. 2009. City of Newark. 6 May 2009 <http://www.ci.newark.nj.us/government/city_departments/economic__housing_development/newarksmasterplan.php>. "The New York Times Building." New York Architecture Images. 9 February 2008. 23 Mar 2009 <http://www.nyc‐ architecture.com/MID/MID125C.htm>. "The New York Times Building." The New York Times Company. 23 Mar 2009 <http://newyorktimesbuilding.com/>. Parks and Recreation Department of New York City. New York City Department of Parks & Recreation: Press Releases. 25 August 2006. 24 February 2009 <http://www.nyc.gov/parks>. Pfeiser, Richard B., with Anne B. Frej. Professional Real Estate Development: The ULI Guide to the Business. Second Edition. Washington D.C.: ULI‐the Urban Land Institute, 2003. p34‐50. "A Walk through Newark." Industrial Revolution. 2008. Thirteen. 6 May 2009 <http://www.thirteen.org/newark/history2.html>
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