CM Properties Bala Station Transit-Oriented Development Proposal
CM PROPERTIES
Bala Station Transit-Oriented Development Proposal
Meng Cao 2013/3/24
1
CM Properties Bala Station Transit-Oriented Development Proposal
Bala Station Transit-Oriented Development Proposal PART ONE. QUALIFICATIONS AND LAND-USE PROPOSAL 1.1 A cover letter: Dear Sir/Madam,
I write to deliver to SEPTA the proposal of a promising Transit-Oriented Development project at Bala Station in Lower Merion Township, PA that you might be interested in. Responding to the local planning goals and real property market, the project is not only highly transit-oriented, but also financially robust. The site is on a 11.26-acre land that lies along the Cynwd Line. It is currently underutilized with two office buildings, seven small industrial buildings, one retail building, surface parking and 2 acres of park and recreational facilities. The redevelopment site has a great potential of being a transit hub and mixed-use residential neighborhood that characterized as multiple functions container, employment center, retail destination, residential hotspot for families, seniors and college students. To capture the value, we, CM Properties, would like to propose the following development agenda.
The project is a three-phase project including the construction of a new office building, one neighborhood retail building, three parking structures, three medium-rise rental apartments, two condo buildings, one up-scale senior housing and one student housing. On the ground floor of the office building and one parking garage adjacent to the train station, commercial use is provided. The target tenants in these properties are professional or high technology companies, local grocery store and service stores, families looking for new apartment/condo in suburb while enjoy convenient access to employment centers, young professionals, wealthy senior residents and students of nearby colleges. Via building these new buildings and reorganizing transportation and public space, we look forward to create a vibrant mixed-use community that brings considerable benefits to the township and surrounding neighborhood. For SEPTA, you can expect more than the benefit from the appreciating property value. A substantial increase in transit ridership is projected. The population in Lower Merion Township has been stable in recent decades. The introduction of establishments and population by offering comforting but efficient spaces with extremely convenient transit access would almost for sure fuel population growth and boosting transit ridership thereafter. Moreover, adding the retail and office uses promotes the mix of various
2
CM Properties Bala Station Transit-Oriented Development Proposal
functions, which could eventually transfer Bala into a regional destination and therefore increase the ridership.
According to our site evaluation, there is little constraint by zoning ordinance but a large number of opportunity factors. Part of the land may need zoning variance to allow for higher density development. This is worthwhile since it can accommodate more tenants, increase tax bases, and promote ridership. On the financing side, SEPTA would need to pay for the construction of parking structures, and contribute the land to the entity equity in exchange for its share. The proposal satisfies the SEPTA requirement of ensuring the present parking capability and also fulfills the extra need from new construction according to the zoning code. SEPTA will get revenue from retail sales, residential rent and proceeds at reversion. You can expect a 9% internal rate of return and a 4.6 million net present value under 3% discount rate. These benefit are pure capital gains. The increasing ridership can bring even more to SEPTA, not to mention the positive externality to the township and the community. What is even better is CM Properties, the developer of the project, can expect to see an 13% internal rate of return. The project we propose is financially productive. Moreover, based on the TOD theory, it helps increase the transit share and create the community with everlasting value. This promising project cannot be realized without your sponsorship. More importantly, SEPTA deserve the harvest of development fulfilled by public transit system. Please contact (215)- 000-0000 for more information. We are looking forward to hearing from you. Best wishes,
CM Properties
3
CM Properties Bala Station Transit-Oriented Development Proposal
1.2 The qualifications of the development team and its experience with similar projects CM Properties Project Manager: Meng Cao, Master of City Planning, Certificate of Real Estate Design and Development, Urban Design Concentration, University of Pennsylvania
Project Experience: Feb. 14 Affordable Housing Project , 46th Fairmount Avenue, Philadelphia, US • Calculated possible score of qualification according to PFA’s criteria, came up with strategies to enhance competitiveness for federal grants • Built a pro forma to prove the project financially robust • Coordinated investors, municipality and developer in a solid ownership structure that ensures the project’s sustainability, suitability and affordability Dec. 13 Financial Feasibility Analysis, 23rd Cherry Street, Philadelphia, PA • Did market analysis for apartment in Center City Philadelphia • Proposed a pro forma with financial feasibility • Identified the risks and ways to mitigate risks for the project
Nov. 13 Site Evaluation and Market Study, 23rd Cherry Street, Philadelphia • Analyzed the constraints of development concerning zoning ordinance, environment and topography • Figured out multiple opportunity factors regarding local market, transportation and public amenities • Conducted primary design with buildable footprint and envelop compatible with zoning ordinance and a 3D rendering model based on sketch-up study • Based on demand study and market area study, proposed students and young professionals as the targeting tenants • Based on competitive analysis, found out appropriate prices for different models that fill the market niche Oct. 13 Land Appraisal, 38th Market Street, Philadelphia, US • Calculated the land value of a vacant land under three scenarios – office, retail and apartment • Wrote a memo recommending residential use to capture the highest land value
Oct.13 Pencil-out Modeling, 23rd Cherry Street, Philadelphia, US • Constructed two possible concepts to develop the vacant land, and penciled out
4
CM Properties Bala Station Transit-Oriented Development Proposal
• •
Created the primary design that satisfy all the requirements of zoning ordinance Correctly estimated the costs (both construction and soft) and collected data from reasonable sources
Design team selection
The design team will be selected from local design firms. We will pick 3 to 5 design firms and request design proposals. We will select the one that create best TOD community environment with financial feasibility. The local firm must have relative experience in designing TOD architectures, focus on place making. Extra preference will be given to the proposal which promotes ridership of public transit and decrease parking spaces.
1.3 A conceptual description of the proposed development of the Property As the Southeast Pennsylvania Transportation Authority (“SEPTA”) is going to build a mixed-use development project around Bala Station at the Lower Merion Township that will increase ridership, enhance the community, generate long-term revenue, integrate the station and development in a manner that will encourage and support transit use. Our proposed development of the property will not only meet SETTA’s requirement, but also extend its expectation. 1.3.1 Background and Preliminary Market Analysis
Lower Merion Township
Bala Station
Cynwyd Line
Philadelphia
Figure 1.1 Location analysis
5
CM Properties Bala Station Transit-Oriented Development Proposal
Bala Station locates at the border of Lower Merion Township, adjacent to the City of Philadelphia. It is one station on Septa Cynwyd regional line which connects 30th station and Cynwyd. It’s 12-minutes train from Bala to 30th Station. In year 2010, the township had a total population of 57,825. Lower Merion has the 5th highest per-capita income and the 12th highest median household income in the country with a population of 50,000 or more (Wikipedia). A TOD development around Bala station is feasible based on following analysis: •
•
Population growth: Even though there’s a population decrease from 2000 (59,850) to 2005 (57,388), the population began to grow after 2005. Based on the ACS 20092011 census data, the total population is 57,957. Senior population growth and new household formation: Lower Merion is the inner suburb of Philadelphia. 70% of the housing are single-unit housing and 65% of workers drive alone to commute. Right now, it is very much auto-depended. But when looking at the age distribution, 28.7% of the population will retire soon or in next 15 years. These people may choose less depended on cars and rely more on public transit. This is a potential market for the wealthy elderly population who want to live in upscale senior housing near the train station. Besides, there’s a large percentage of young people population that may form new household in the near future. They may want to move to center city, but they can also live in this inner suburb when there’s convenient access to Center City and other places. This shows a potential market new smaller apartment or condos.
Figure 1.2 Population age distribution, Lower Merion Township Source: Unite States Census Bureau
•
Opportunity for student housing: Bala station is close to several universities (as shown in the image below). And there is a large proportion of residents in Lower Merion Township that are students. They may want to live near the station since they can walk or bike to college. They can also take the regional train to go to Center City Philadelphia conveniently.
6
CM Properties Bala Station Transit-Oriented Development Proposal
Figure 1.3 Student housing market analysis
•
Other types of housing: when looking at when most of the houses were built in Lower Merion Township, it turns out that nearly 90% of them were built before 1970, which means they are old. This shows an great potential market for new housing. Even though this is suburban area that most houses are detached houses, apartment/condo near Bala station will be attractive to people who want to live in new apartment/condo in suburban area, and to people who work in University City and Center City while live in suburban areas. They can have convenient access to their office using public transit, instead of cars. More housing and higher density will guarantee a higher ridership for Septa.
Figure 1.4 Year house built, Lower Merion Township Source: CityData.com
7
CM Properties Bala Station Transit-Oriented Development Proposal
•
Office and retail mixed-use: mixed-use development is essential to a successful TOD development. With the provision of apartment/condo, student housing and senior housing, there would bring a need for retail and office uses near these residents. And they are also helpful to create a walkable and vibrant community.
1.3.2 Zoning and Regulatory Provisions
A
C
B
Figure 1.5 Zoning map, Lower Merion Township Source: Lowermerion.org
The current zoning for parcel A, B and C are R6A-Residential Districts, C2-Commercial Districts, C1-Commercial Districts, CAD-BCR- City Avenue District - Bala Cynwyd Retail District. There are regulations in terms of allowed uses, building height, density, FAR, parking etc which are categorized as follows: •
R6A o
o
Allow for two-family semidetached dwelling, single-family detached, twofamily semi-detached , apartment house, which shall include a condominium, senior housing, student housing For apartment homes:
8
CM Properties Bala Station Transit-Oriented Development Proposal
•
C2 o o o
o
•
C1
All uses permitted in C1 are permitted in C2 Commercial used for dwelling uses: For apartment homes: Not more than 60% of the area of each lot may be occupied by buildings, excluding balconies A buffer of at least 20 feet should be kept between residential use and commercial districts Maximum floor area of any building shall be 20,000 square feet Height shall not exceed 65 feet Commercial used NOT for dwelling uses: Not more than 70% of the area of each lot may be occupied by buildings, excluding balconies A buffer of at least 20 feet should be kept between residential use and commercial districts Height shall not exceed 65 feet
Allowed uses: banks or financial institutions, hotel, apartment hotel, office, studio, restaurant and tearoom, restaurant drive-in or takeout, retail store and personal service shop, including tailor, barber, beauty salon, shoe repai, dressmaking etc, theater, o Commercial used for dwelling uses: o For apartment homes: A lot area of not less than 1,000 square feet per family shall be provided. Not more than 60% of the area of each lot may be occupied by buildings. Height shall not exceed 65 feet o Commercial used NOT for dwelling uses: Not more than 60% of the area of each lot may be occupied by buildings Height shall not exceed 65 feet CAD-BCR o Residential uses are not permitted on the ground floor of buildings facing City Avenue o
•
Not more than 25% of the area of each lot may be occupied by buildings, excluding balconies The distance between two or more apartment buildings on the same lot shall be a minimum of 35 feet or no less than the height of the taller building, whichever is greater Maximum floor area of any building shall be 20,000 square feet Height shall not exceed 50 feet
9
CM Properties Bala Station Transit-Oriented Development Proposal
The minimum height of any building shall be two stories and no less than 28 feet above grade. The maximum height of any building within the BCR shall be 90 feet Parking o Apartment: at least two parking spaces for each apartment; a garage accessory to an apartment house or apartment hotel shall provide only for the storage of vehicles of the owner, tenants and employees o Retail: at least one parking space for each 200 square feet or fraction thereof of gross sales, storage and office floor area, exclusive of basements if not used for sales or office area. o Office: at least one parking space for each 200 square feet of gross office and storage floor area or fraction thereof, exclusive of basements if not used for office or storage purposes, for the first 100,000 square feet. For additional office and storage floor area beyond 100,000 square feet, one parking space shall be provided for each 300 square feet of gross office and storage floor area or fraction thereof, exclusive of basements if not used for office or storage purposes o Student homes: three parking spaces for each student home occupying a premises o
•
1.3.3 Development Concept
Based on the current conditions of the site and the developing vision, the main development strategies are as below: •
•
•
•
•
Acquire parcel B with the help of Transit Agency to create a more complete transitoriented environment around Bala Station; Create sufficient parking space for retail and commuters, mainly use structure parking, to make commutes more convenient. Provide extra parking space for new development to ensure the compatibility to the zoning code; try to avoid underground parking to cut down the cost and make room for public green space; Fill the site with new retail and office property in combination with medium-rise apartment/condo to promote the mixed land use; also add in open space for the convenience of public activities; work to create a welcoming environment for residents and commuters; Through job creation and retail activation, turn Bala station into an employment destination and increase the tax base; by creating a transportation hub, boost SEPTA rail and bus ridership; Provide reasonable material revenues and other benefits for SEPTA and CM Associates; strengthen the financial safety and ensure robust entitlements.
10
CM Properties Bala Station Transit-Oriented Development Proposal
11
1.3.4 Site Plan and Sketch-up Study The existing buildings on Parcel A and B will be demolished. The proposed housing density would be about 43 unit/ acre. There are 45,000 sqft retail space and 100,000 office space. Considering the condition of the site, the zoning regulations and development potential, the proposed site plan is shown below:
Figure 1.6 Site plan Table 1.1 Building index
Building Parking structure Retail
Number
Floor Stories Area(S.F.)
Average Unit Size
Efficiency
1
6
76,680
1
95%
3
5
102,000
1
95%
1
9,900
2 4 5
4 2
39,600 15,100
1 1 1
95% 95% 95%
CM Properties Bala Station Transit-Oriented Development Proposal
Office
6
1
8
5
7
Market-rate rental housing
9
10 11
Condo
12
Senior housing
Student housing
95%
90,000
1,000
88%
89,500
1,000
6
108,000
5
64,000
2
14
1
100,000
5
13
20,000
5
5
5
1
1,000 1,200
64,000
1,200
80,000
900
62,222
700
The conclusion of the main characteristics of the project can be seen in the following table. Table 1.2 Development summary
Site area(acre) Site area(S.F.)
Floor area(S.F.) FAR
Land Coverage Ratio
Number of condo unit
Number of market-rate rental housing Number of student housing Number of senior housing Retail area(S.F.) Office area(S.F.) Parking space
Open Space(acre) Green space ratio
12
11.26
490,486
1,159,810
2.4
39% 80
253 80 80
45,000
100,000
1,162
4.2
37%
90% 88% 88% 75% 75% 90% 90%
CM Properties Bala Station Transit-Oriented Development Proposal
•
•
•
•
•
In order to reserve enough ground open space, create vibrant environment, and guarantee a financially profitable project, the floor area ratio shall be increased. The proposed FAR is 2.4. The total floor area is 1,159,810 sqft. By doing so, the open space ratio can reach 37%, which provides a total of 4.2 acre open space. The public park in the middle is about 2 acres. Besides the central public park, several community parks are provided.
Based on the market analysis before, the proposed development includes 80 units of condo, 80 units of senior housing and 80 units of student housing. The two condo buildings are adjacent to the central public park which enjoy the great view of green space. The senior housing building is a two-storey “U” shape building on the northwestern corner of the site, which enjoys a relatively quieter environment. The student housing is on Parcel B, which is close to the train station and City Avenue. Three market-rate rental housing buildings are distributed separately on Parcel A, to benefit the short distance from the parking garage, and to provide different options for potential tenants. All of them have convenient access to green space. Mixed-use development is important for place-making. A two-storey retail building is proposed right next to the train station. The office building is next to it, which is also very close to the train station. In order to create an agreeable walking experience when people walk to the train station, the street is designed to be pedestrian friendly, with wide sidewalk. The ground floor of the office building and the garage on Parcel B is also used as retail space. Three parking garages are provided. Number 1 garage (270 parking space) is the one which is mainly for commuters and retail services. Number 2 garage (98 parking space) is mainly for students tenants and commuters. Number 3 garage (250 parking space) is for surrounding rental housing, condo and senior housing. The office building has its own underground parking space (500 parking space). Besides parking garage, 44 surface parking space is provided for retail and apartment.
13
CM Properties Bala Station Transit-Oriented Development Proposal
The massing of buildings are shown below.
Figure 1.7 Massing and building function
1.3.5 Ridership Promotion To promote ridership, one thing is to increase residential density, the other thing is to create convenient connection to the train station. Besides putting the garage close to the train station, a comfortable walking environment is created through green space as shown in the figure below. People can walk through the green space to the train station, with retail space on the ground floor. They can grab their breakfast and a cup of coffee conveniently on their way to the train station. The design also considers connection to bus stations (blue dots). People can walk to bus station or park their car in the nearby garage and take the bus to their office.
14
CM Properties Bala Station Transit-Oriented Development Proposal
Bus Station
Bala Station
Figure 18 Connection analysis
1.3.6 Project Style In terms of project style, the new buildings will show characteristics of suburban architectures, but they will also have urban features with modern design elements. Exemplary building style are shown below: Apartment building:
Condo:
15
CM Properties Bala Station Transit-Oriented Development Proposal
Student housing:
Senior housing:
Retail:
Office:
Parking garage:
PART TWO. QUALIFICATIONS AND LAND-USE PROPOSAL NOTE: PART TWO SUBMISSION REQUIREMENTS MAY BE WAIVED FOR THOSE PARTIES WHOSE OCCUPATION IS LISTED AS “STUDENTS.”
16
CM Properties Bala Station Transit-Oriented Development Proposal
PART THREE. FINANCIAL PROPOSAL 3.1 Financial Assumptions 3.1.1 Phasing The whole development process can be divided into three phases:
In the first phase of around 2 years, development is concentrated around the train station, including a new parking garage, new retail space and office space, two condo buildings and one rental apartment building with 90 units. These development will become anchors and attractions to further development surrounding the train station.
In the second phase of next 1 or 2 years, development happens on Parcel B with a student housing building and new parking garage with ground floor retail space. This will accommodate increasing need for parking space due to transit needs. In addition, a new apartment building and a parking garage will be built at the north of phase I development to increase residential density. The public park is also built in this phase to enhance attractiveness of this area. In phase III of next 1 or 2 years, the senior housing and another apartment building will be built. The phasing agenda will provide flexibility and decrease risk for development since we can build while modify the project based on market trends. For example, the apartment building built in the first phase will act as a test of the local market. By analyzing the composition of tenants, we can identify what kind of units are most popular among them, like unit size, floor plates. We can also concludes whether there’s a strong demand from elderly people, students, young couples, or middle-aged family. Thus, we can modify the design of the building in the later phases.
Phase I
Phase II
Figure 3.1 Phasing
Phase III
17
CM Properties Bala Station Transit-Oriented Development Proposal
3.1.2 Rents and Target Tenants Rent and condo sale price are basically based on Zillow and Showcase.com of Lower Merion Township. But they are adjusted moderately in this pro forma: •
•
http://www.zillow.com/homes/for_sale/Lower-Merion-TownshipPA/398868_rid/days_sort/40.054227,-75.189829,39.979554,75.304499_rect/12_zm/0_mmm/1_fr/ http://www.showcase.com/?MS=true&H=true
Rent level are shown below: Building Type
Average Unite Size(S.F.)
Average Rent
Retail
na
$30/S.F./Year
Condo
1,200
$380,000/unit
Office
Market-rate rental housing Student housing Senior housing
Parking garage
na
$28/S.F./Year
1,000
$2,350/unit/month
900
$1,600/unit/month
700 na
$900/unit/month $6/space/day
The mean sale price for townhouses or other attached units is $345,634 in 2009. For a 2unit structure, the price is $445,047, for 3-to-4 unit structure, the price is $908,620. The estimated sale price for the condo is $380,000, which is conservative estimation. But this provides space for price increase during the sale process. It’s better to increase rather than decrease the price of condos. For apartment building, the rent is $2,350 per month, which is higher than the current median rent. The median household income in Lower Merion Township in 2009 $106,290. The rent level is reasonable since it takes up about 26% of the household income. Rents of senior housing and student housing are all at a moderate level. For target tenants, like analyzed in the first part-- Background and Preliminary Market Analysis, there are demand in student housing, senior housing and new apartment/condo housing.
3.1.3 Equity Requirement The developer, the investor and the SEPTA would form an entity for the venture, preferably in the form of a limited liability company so it will only be taxed on individual level, not on the entity level. This benefits both the developer and the investors. The developer would take out firstly a construction loan from the investor while SEPTA contribute its acquired land and construction loan for the parking garage by taking as a share in the equity. After 2
18
CM Properties Bala Station Transit-Oriented Development Proposal
years when the first phase is done, CM Properties, namely the developer will take out another construction loan from the bank for the Phase II and III construction. Meanwhile, the developer will take out the first permanent loan for its residential, commercial and office buildings in Phase I while the SEPTA gets the permanent loan for structure parking in the first phase with a lower than market interest rate. After another 2 or 3 years when the Phase II and III construction is finished, the SEPTA and the developer would respectively negotiate new permanent loans for its construction is second phase.
In total, the developer would take out $107,936,905 construction loan at 6.7% rate, and $11,010,635 permanent loan for retail buildings at 5.5% rate, $21,922,701 permanent loan for office buildings at 5.5% rate, $82,608,202 permanent loan for rental residential buildings at 5.0% rate. The SEPTA would contribute the land of Parcel A and buy out Parcel B in Phase II, and take out $6,500,000 permanent loan for parking construction at 2% rate free of tax. The stable net operating income collected from retail, apartment, office and the parking charge is $11,584,276 per year.
3.2 Joint Venture Structure 3.2.1 Joint Venture Development and Management The developer, CM Properties, is responsible to the construction of the whole project and day-to-day management. And it will be liable to the limited liability company. The investor and SEPTA will have limited liability to the company. In exchange, they have limited operation powers of the project. This decreases the risk for the investor and SEPTA. 3.2.2 Returns and Profit Splits In terms of distribution and profit splits, the investor as the general partner in the entity would get principal repayment and interest payment, and enjoy the first priority of getting repaid if the project failed. In order to keep a good relationship with SEPTA and request further development land from it, CM Properties is willing to provide 5% of the retail proceeds, 5% of residential rent and 15% of total proceeds at reversion to SEPTA. The SEPTA has the responsibility to ensure the smooth function of its traffic services while CM Properties will continuously provide quality property management services.CM Properties wants to reach a win-win result for itself and SEPTA. If this project is successful, SEPTA may want to cooperate with CM Properties again in the future to build more TOD projects. From year 7, the net operating income will become positive for both the developer and SEPTA. And the positive NPV continues to grow until year 12. At year 11, the IRR for the developer will reach 13%. For SEPTA, the IRR will reach 9%, which is the highest IRR it can get. At this point, it is best to sell the whole property with $18,578,177 NPV for the developer and $4,628,137 NPV for SEPTA.
19
Appendix Page 1: Concept, Assumptions, and Baseline Data Item
Rate
Amount
Concept
Parcel A Land Area (acres)
10
and Program
Parcel B Land Area (acres)
1.26
Retail Building General Retail SQFT
45,000
Efficiency of Retail
95.00%
Total Retail Space
42,750
Office Building Total SQFT
100,000
Efficiency
90.00%
Net rentable
90,000
Housing Condo Average Unit Size
1,200
Number of Units
80
Common Area Ratio
25.00%
Total Development Area
128,000
Market-rate Rental Housing Average Unit Size
1,000
Number of Units
253
Common Area Ratio
12.00%
Total Development Area
287,500
Student Housing Average Unit Size
700
Number of Units
80
Common Area Ratio
10.00%
Total Development Area
62,222
Senior Housing Average Unit Size
900
Number of Units
80
Common Area Ratio
10.00%
Total Development Area
80,000
Parking Retail and Transit Parking (structure)
325
Office Parking (underground)
500
Residential Parking (structure)
293
Surface Parking Land Costs
44
Land Value + Present Structure (Taking)
$1,000,000
â–şTransit Agency Contribution
$1,126,000
Purchase of Parcel B
$126,000 $0
Developer's Land Cost Hard
Site Clearance & Remediation
Costs
Grading Site Development (per SQFT)
$50,000 $100,000 $5
$2,452,428
Retail (per SQFT)
$115
$5,175,000
Office (include parking, per SQFT)
$160
$16,000,000
Condo (per SQFT)
$170
$21,760,000
Construction Costs (per SQFT or space)
Market-rate Rental Housing (per SQFT)
$150
$43,125,000
Student Housing (per SQFT)
$120
$7,466,667
Senior Housing (per SQFT)
$140
$11,200,000
Parking Structure
$20,000
$12,366,000
Surface Parking
$4,000
$174,800
Landscaping
$60,000
Total Hard Costs Soft Costs
as share of Hard Costs
$119,929,895 30%
Total Development Costs
$35,978,968 $155,908,863
Permanent
Retail Building (Private Lender)
Financing
Debt service coverage ratio Rate Amortization term
1.4 5.5% 30
Loan Amount
$11,010,636 $757,591
Annual Debt Service Office Building (Private Lender) Debt service coverage ratio Rate Amortization term
1.4 5.5% 30
Loan Amount Annual Debt Service
$21,922,701 $1,508,400
Rental Residential Building (Private Lender) Debt service coverage ratio Rate Amortization term
1.4 5.0% 30
Loan Amount
$82,608,202
Annual Debt Service
$5,373,782
â–ş Parking Garage (Transit Agency-financed) LtV
53%
Rate
2%
Amortization term
30
Loan Amount
$6,500,000
Annual Debt Service
$290,224
Parking Garage (Self-financed) LtV
47%
Rate
5%
Amortization term
30
Loan Amount
$6,040,800
Annual Debt Service
$392,963
Construction
Total Hard Costs (Private Lender)
Lending
% financed
90%
Interest rate
6.70%
$119,929,895
Term (months)
24
Fees
3%
Drawdown Factor
0.7
Construction Loan Amount
$107,936,905
Construction Fees
$3,238,107
Construction Interest Rents/ Price
General Retail Office Average Condo Sale Price Market-rate Rental Residential
$10,124,482 $30 $28 $380,000 $2,350
Student Housing
$900
Senior Housing
$1,600
Parking (per space per day)
$6
Residential Rent Inflation Factor
3%
Rent
Year 10
25%
Adjustments
Year 20
25%
Vacancy
General Retail
2%
Rates
Office 1st year
10%
Thereafter
6%
Condo (% sold) 1st year
60%
2nd year
40%
Market-rate Rental Residential 1st year
7%
Thereafter
4%
Student Housing 1st year
8%
Thereafter
3%
Senior Housing 1st year
8%
Thereafter Expenses
2%
Retail Expense Ratio
15%
Office Expense Ratio
10%
Residential Expense Ratio
20%
Parking Expense Ratio
8%
Annual Expense Inflation factor
2%
Preleasing Tax Info
$175,000
Depreciable Basis
$98,169,895
Useful Life (years)
31.5
Annual Depreciation Deduc.
$3,116,505
Marginal Tax Rate
35%
Sale and
Sales Cap Rate
7.5%
Reversion
Selling Costs
6%
Info
Capital Gains Tax Rate
15%
Discount Rate
6.5%
â–şRDA/Transit
Parking Garage Loan Income
Agency
Share of Retail Rent
$290,224 5%
Share of Residential Rent
5%
Share of Proceeds at Reversion
15%
Discount Rate
3%
Page 2: Development Accounts Item Land Purchase Price
Year -1
Year 0
$0
Soft Costs
$35,978,968
Construction Loan Fees
$3,238,107
Construction Cash In
$11,992,989
Construction Interest Costs
$10,124,482
Government Grant
$2,000,000
Cash-out at Take-out
$35,405,433
Cash In
$51,210,065
($27,280,951)
Total Cash In
$51,210,065
$23,929,114
Page 3: Owner's Operating Accounts Cash Accounts Gross Possible Income General Retail Office Condo Housing Market-rate Rental Housing Student Housing Senior Housing Parking -Vacancy Adjustment
Year 1
Year 2
Year 26
Year 27
Year 28
Year 29
Year 30
$32,288,850
$26,859,688
$27,016,851
$27,615,751
$28,232,618
$28,867,991
$29,522,425
$1,282,500 $2,520,000 $18,240,000
$1,282,500 $2,520,000 $12,524,800
$2,003,906 $3,937,500
$2,003,906 $3,937,500
$2,003,906 $3,937,500
$2,003,906 $3,937,500
$2,003,906 $3,937,500
$7,134,600 $864,000 $1,536,000 $711,750
$7,348,638 $889,920 $1,582,080 $711,750
$14,938,268 $1,809,024 $3,216,043 $1,112,109
$15,386,416 $1,863,295 $3,312,524 $1,112,109
$15,848,009 $1,919,194 $3,411,900 $1,112,109
$16,323,449 $1,976,770 $3,514,257 $1,112,109
$16,813,152 $2,036,073 $3,619,685 $1,112,109
$969,072
$529,135
$992,450
$1,013,934
$1,036,062
$1,058,854
$1,082,330
General Retail Office Market-rate Rental Residential Student Housing Senior Housing
$25,650 $252,000 $499,422 $69,120 $122,880.00
$25,650 $151,200 $293,946 $26,698 $31,641.60
$40,078 $236,250 $597,531 $54,271 $64,320.86
$40,078 $236,250 $615,457 $55,899 $66,250.48
$40,078 $236,250 $633,920 $57,576 $68,238.00
$40,078 $236,250 $652,938 $59,303 $70,285.14
$40,078 $236,250 $672,526 $61,082 $72,393.69
Total Effective Gross Income
$31,319,778
$26,330,553
$26,024,400
$26,601,817
$27,196,556
$27,809,137
$28,440,095
$2,408,235
$2,456,400
$3,950,965
$4,029,984
$4,110,584
$4,192,795
$4,276,651
$192,375 $252,000 $1,426,920 $172,800 $307,200 $56,940
$196,223 $257,040 $1,455,458 $176,256 $313,344 $58,079
$315,612 $413,433 $2,341,014 $283,497 $503,994 $93,416
$321,924 $421,701 $2,387,834 $289,167 $514,074 $95,284
$328,362 $430,135 $2,435,590 $294,950 $524,356 $97,190
$334,930 $438,738 $2,484,302 $300,849 $534,843 $99,134
$341,628 $447,513 $2,533,988 $306,866 $545,539 $101,117
$10,671,543
$11,349,354
$7,135,167
$7,185,416
$7,237,963
$7,292,892
$7,350,291
$1,064,475 $2,016,000 $18,240,000 $5,208,258 $622,080 $1,105,920 $654,810
$1,060,628 $2,111,760 $12,524,800 $5,599,234 $686,966 $1,237,094 $653,671
$1,648,217 $3,287,817
$1,641,904 $3,279,549
$1,635,466 $3,271,115
$1,628,899 $3,262,512
$1,622,200 $3,253,737
($2,938,544) $1,471,257 $2,647,728 $1,018,693
($3,003,290) $1,518,229 $2,732,200 $1,016,825
($3,069,511) $1,566,668 $2,819,306 $1,014,919
($3,137,240) $1,616,617 $2,909,129 $1,012,975
($3,206,514) $1,668,124 $3,001,751 $1,010,993
-Yearly Debt Service
$8,322,960
$8,322,960
$8,322,960
$8,322,960
$8,322,960
$8,322,960
$8,322,960
Retail Office Rental Housing â–ş Parking (to TA/RDA)
$757,591 $1,508,400 $5,373,782 $290,224
$757,591 $1,508,400 $5,373,782 $290,224
$757,591 $1,508,400 $5,373,782 $290,224
$757,591 $1,508,400 $5,373,782 $290,224
$757,591 $1,508,400 $5,373,782 $290,224
$757,591 $1,508,400 $5,373,782 $290,224
$757,591 $1,508,400 $5,373,782 $290,224
$392,963 $53,224
$392,963 $53,031
$392,963 $82,411
$392,963 $82,095
$392,963 $81,773
$392,963 $81,445
$392,963 $81,110
$53,224
$53,031
$82,411
$82,095
$81,773
$81,445
$81,110
- Expenses General Retail Office Market-rate Rental Residential Student Housing Senior Housing Parking Total Net Operating Income General Retail Office Condo Housing Market-rate Rental Residential Student Housing Senior Housing Parking
Self-financed parking - Misc Payments â–ş Retail Overage (to RDA/TA)
Total BTCF (Cash Throw-off) - Tax Due After Tax Cash Flow
$2,295,359
$2,973,362
($1,270,204)
($1,219,639)
($1,166,770)
($1,111,513)
$333,561
$665,336
$744,919
$876,904
$1,015,521
$1,161,100
($1,053,779) $1,313,986
$1,961,798
$2,308,026
($2,015,123)
($2,096,543)
($2,182,292)
($2,272,613)
($2,367,765)
$2,295,359 $1,949,177 ($3,116,505) ($175,000) $953,031 $333,561
$2,973,362 $2,044,102 ($3,116,505) $0 $1,900,959 $665,336
($1,270,204) $6,515,048 ($3,116,505) $0 $2,128,340 $744,919
($1,219,639) $6,841,584 ($3,116,505) $0 $2,505,440 $876,904
($1,166,770) $7,184,765 ($3,116,505) $0 $2,901,490 $1,015,521
($1,111,513) $7,545,447 ($3,116,505) $0 $3,317,430 $1,161,100
($1,053,779) $7,924,531 ($3,116,505) $0 $3,754,247 $1,313,986
($953,031) $0 ($953,031) $0
($1,900,959) $0 ($1,900,959) $0
($2,128,340) $0 ($2,128,340) $0
($2,505,440) $0 ($2,505,440) $0
($2,901,490) $0 ($2,901,490) $0
($3,317,430) $0 ($3,317,430) $0
($3,754,247) $0 ($3,754,247) $0
$11,010,636 $757,591 $605,585 $152,006 $10,858,629
$10,858,629 $757,591 $597,225 $160,366 $10,698,263
$3,235,129 $757,591 $177,932 $579,659 $2,655,470
$2,655,470 $757,591 $146,051 $611,540 $2,043,930
$2,043,930 $757,591 $112,416 $645,175 $1,398,755
$1,398,755 $757,591 $76,932 $680,660 $718,096
$718,096 $757,591 $39,495 $718,096 ($0)
$21,922,701 $1,508,400 $1,205,749 $302,651 $21,620,050
$21,620,050 $1,508,400 $1,189,103 $319,297 $21,300,753
$6,441,297 $1,508,400 $354,271 $1,154,129 $5,287,168
$5,287,168 $1,508,400 $290,794 $1,217,606 $4,069,563
$4,069,563 $1,508,400 $223,826 $1,284,574 $2,784,989
$2,784,989 $1,508,400 $153,174 $1,355,226 $1,429,763
$1,429,763 $1,508,400 $78,637 $1,429,763 ($0)
$82,608,202 $5,373,782 $4,130,410 $1,243,372 $81,364,830
$81,364,830 $5,373,782 $4,068,241 $1,305,541 $80,059,289
$23,265,664 $5,373,782 $1,163,283 $4,210,499 $19,055,165
$19,055,165 $5,373,782 $952,758 $4,421,024 $14,634,141
$14,634,141 $5,373,782 $731,707 $4,642,075 $9,992,066
$9,992,066 $5,373,782 $499,603 $4,874,179 $5,117,888
$5,117,888 $5,373,782 $255,894 $5,117,888 $0
$6,500,000 $290,224 $130,000 $160,224 $6,339,776
$6,339,776 $290,224 $126,796 $163,429 $6,176,347
$1,367,961 $290,224 $27,359 $262,865 $1,105,096
$1,105,096 $290,224 $22,102 $268,123 $836,974
$836,974 $290,224 $16,739 $273,485 $563,489
$563,489 $290,224 $11,270 $278,955 $284,534
$284,534 $290,224 $5,691 $284,534 ($0)
Taxable Income Accounts Cash Throw-off + Principal Amortization - Depreciation - Pre-leasing Taxable Income Tax Due (Shelter) Adjustments to Taxable Income Current Period Taxable Loss (Income) Carryforward from Previous Period Losses Taken This Year Carryforward Page 3A: Key Operating Schedules Retail Mortg. Amortization Beginning Balance Yearly Debt Service Interest Principle Ending Balance Office Mortg. Amortization Beginning Balance Yearly Debt Service Interest Principle Ending Balance Rental Residential Mortg. Amortization Beginning Balance Yearly Debt Service Interest Principle Ending Balance Parking Loan Amortization Beginning Balance â–ş Yearly Debt Service to RDA/TA Interest Principle Ending Balance
Self-financed Parking Mortg. Amortization Beginning Balance Yearly Debt Service Interest Principle Ending Balance
$6,040,800 $392,963 $302,040 $90,923 $5,949,877
$5,949,877 $392,963 $297,494 $95,469 $5,854,408
$1,701,323 $392,963 $85,066 $307,897 $1,393,426
$1,393,426 $392,963 $69,671 $323,291 $1,070,135
$1,070,135 $392,963 $53,507 $339,456 $730,679
$730,679 $392,963 $36,534 $356,429 $374,250
$374,250 $392,963 $18,713 $374,250 ($0)
$98,169,895 $3,116,505 $3,116,505 $95,053,390
$95,053,390 $3,116,505 $6,233,009 91,936,885
$20,257,280 $3,116,505 $81,029,119 17,140,775
$17,140,775 $3,116,505 $84,145,624 14,024,271
$14,024,271 $3,116,505 $87,262,129 10,907,766
$10,907,766 $3,116,505 $90,378,633 7,791,261
$7,791,261 $3,116,505 $93,495,138 4,674,757
Building Depreciation Beginning Basis Current Depreciation Claimed Cummulative Depreciation Claimed Ending Balance
Page 4: Reversion (Termination) Accounts Cash at Sale (using Cap Rates)
Year 1
Year 2
Year 3
Year 26
Year 27
Year 28
Year 29
Year 30
$10,671,543
$11,349,354
$11,584,276
$7,135,167
$7,185,416
$7,237,963
$7,292,892
$7,350,291
$142,287,240
$151,324,714
$154,457,016
$95,135,566
$95,805,553
$96,506,176
$97,238,564
$98,003,886
$18,240,000
$12,524,800
$8,537,234
$9,079,483
$9,267,421
$5,708,134
$5,748,333
$5,790,371
$5,834,314
$5,880,233
$126,133,162
$124,089,059
$121,945,257
$29,496,327
$22,654,743
$15,469,978
$7,924,531
($0)
$7,616,844
$18,156,172
$23,244,338
$59,931,106
$67,402,477
$75,245,828
$83,479,720
$92,123,652
Total Proceeds - â–şTransit Agency Share of Sale Price
$25,856,844
$30,680,972
$23,244,338
$59,931,106
$67,402,477
$75,245,828
$83,479,720
$92,123,652
$1,142,527
$2,723,426
$3,486,651
$8,989,666
$10,110,372
$11,286,874
$12,521,958
$13,818,548
Before Tax Cash on Sale
$24,714,317
$27,957,546
$19,757,687
$50,941,440
$57,292,106
$63,958,953
$70,957,762
$78,305,105
$5,804,492
$7,546,252
$8,455,382
$10,842,999
$11,404,942
$11,971,206
$12,541,948
$13,117,334
$18,909,825
$20,411,294
$11,302,305
$40,098,441
$45,887,163
$51,987,748
$58,415,814
$65,187,770
NOI Estimated Sales Price Condo Sale - Selling Costs - Mortgage Balance Proceeds at Reversion
- Capital Gains Tax on Sale After Tax Cash on Sale Calculation of Taxable Gain
Year 1
Year 2
Year 3
Year 26
Year 27
Year 28
Year 29
Year 30
$142,287,240
$151,324,714
$154,457,016
$95,135,566
$95,805,553
$96,506,176
$97,238,564
$98,003,886
$8,537,234
$9,079,483
$9,267,421
$5,708,134
$5,748,333
$5,790,371
$5,834,314
$5,880,233
$0
$0
$0
$0
$0
$0
$0
$0
- Remaining Depreciable Basis
$95,053,390
$91,936,885
$88,820,381
$17,140,775
$14,024,271
$10,907,766
$7,791,261
$4,674,757
Taxable Gain
$38,696,616
$50,308,346
$56,369,214
$72,286,657
$76,032,949
$79,808,039
$83,612,989
$87,448,896
$5,804,492
$7,546,252
$8,455,382
$10,842,999
$11,404,942
$11,971,206
$12,541,948
$13,117,334
Project Sale Price - Selling Costs - Land
Tax (Shelter) on Gain
Page 5: Owners' Profitability Summary ATCF Initial Cash-in
Year -1
Year 0
($51,210,065)
$27,280,951
ATCF from Operations AT Cash Return on Cash-in
na
na
Year 1
Year 2
Year 27
Year 28
Year 29
Year 30
$1,961,798
$2,308,026
($2,096,543)
($2,182,292)
($2,272,613)
($2,367,765)
8.20%
9.65%
-8.76%
-9.12%
-9.50%
-9.89%
ATCF at Sale Total AT Proceeds
($51,210,065)
$37,149,825
$32,936,094
$45,887,163
$51,987,748
$58,415,814
$65,187,770
$27,280,951
$39,111,623
$35,244,121
$43,790,620
$49,805,456
$56,143,200
$62,820,005
IRR and NPV Pyramid Year 1
($51,210,065)
$27,280,951
$39,111,623
Year 2
($51,210,065)
$27,280,951
$1,961,798
$35,244,120
Year 3
($51,210,065)
$27,280,951
$1,961,798
$2,308,026
Year 4
($51,210,065)
$27,280,951
$1,961,798
$2,308,026
Year 5
($51,210,065)
$27,280,951
$1,961,798
$2,308,026
Year 6
($51,210,065)
$27,280,951
$1,961,798
$2,308,026
Year 7
($51,210,065)
$27,280,951
$1,961,798
$2,308,026
Year 8
($51,210,065)
$27,280,951
$1,961,798
$2,308,026
Year 9
($51,210,065)
$27,280,951
$1,961,798
$2,308,026
Year 10
($51,210,065)
$27,280,951
$1,961,798
$2,308,026
Year 11
($51,210,065)
$27,280,951
$1,961,798
$2,308,026
Year 12
($51,210,065)
$27,280,951
$1,961,798
$2,308,026
Year 13
($51,210,065)
$27,280,951
$1,961,798
$2,308,026
Year 14
($51,210,065)
$27,280,951
$1,961,798
$2,308,026
Year 15
($51,210,065)
$27,280,951
$1,961,798
$2,308,026
Year 16
($51,210,065)
$27,280,951
$1,961,798
$2,308,026
Year 17
($51,210,065)
$27,280,951
$1,961,798
$2,308,026
Year 18
($51,210,065)
$27,280,951
$1,961,798
$2,308,026
Year 19
($51,210,065)
$27,280,951
$1,961,798
$2,308,026
Year 20
($51,210,065)
$27,280,951
$1,961,798
$2,308,026
Year 21
($51,210,065)
$27,280,951
$1,961,798
$2,308,026
Year 22
($51,210,065)
$27,280,951
$1,961,798
$2,308,026
Year 23
($51,210,065)
$27,280,951
$1,961,798
$2,308,026
Year 24
($51,210,065)
$27,280,951
$1,961,798
$2,308,026
Year 25
($51,210,065)
$27,280,951
$1,961,798
$2,308,026
Year 26
($51,210,065)
$27,280,951
$1,961,798
$2,308,026
Year 27
($51,210,065)
$27,280,951
$1,961,798
$2,308,026
$43,790,620
Year 28
($51,210,065)
$27,280,951
$1,961,798
$2,308,026
($2,096,543)
$49,805,456
Year 29
($51,210,065)
$27,280,951
$1,961,798
$2,308,026
($2,096,543)
($2,182,292)
$56,143,200
Year 30
($51,210,065)
$27,280,951
$1,961,798
$2,308,026
($2,096,543)
($2,182,292)
($2,272,613)
$62,820,005
Page 6: Transit Agency's Profitability Summary Year -1
Year 1
Year 2
Year 27
Year 28
Year 29
Year 30
$290,224
$290,224
$290,224
$290,224
$290,224
$290,224
$53,224
$53,031
$82,095
$81,773
$81,445
$81,110
4.58%
4.58%
4.96%
4.96%
4.96%
4.95%
Proceeds at Sale
$3,878,527
$4,602,146
$10,110,372
$11,286,874
$12,521,958
$13,818,548
Total Proceeds
$4,221,975
$4,945,402
$10,482,691
$11,658,872
$12,893,627
$14,189,882
Land Writedown
Year 0
($1,000,000)
Garage Loan
($6,500,000)
Garage Loan Repayment Cash Flow from Operations Cash Return on Cash-in
IRR and NPV Pyramid
na
na
Based on Cash Flows in Year
Year 1
($1,000,000)
($6,500,000)
$4,221,975
Year 2
($1,000,000)
($6,500,000)
$343,448
$4,945,402
Year 3
($1,000,000)
($6,500,000)
$343,448
$343,256
Year 4
($1,000,000)
($6,500,000)
$343,448
$343,256
Year 5
($1,000,000)
($6,500,000)
$343,448
$343,256
Year 6
($1,000,000)
($6,500,000)
$343,448
$343,256
Year 7
($1,000,000)
($6,500,000)
$343,448
$343,256
Year 8
($1,000,000)
($6,500,000)
$343,448
$343,256
Year 9
($1,000,000)
($6,500,000)
$343,448
$343,256
Year 10
($1,000,000)
($6,500,000)
$343,448
$343,256
Year 11
($1,000,000)
($6,500,000)
$343,448
$343,256
Year 12
($1,000,000)
($6,500,000)
$343,448
$343,256
Year 13
($1,000,000)
($6,500,000)
$343,448
$343,256
Year 14
($1,000,000)
($6,500,000)
$343,448
$343,256
Year 15
($1,000,000)
($6,500,000)
$343,448
$343,256
Year 16
($1,000,000)
($6,500,000)
$343,448
$343,256
Year 17
($1,000,000)
($6,500,000)
$343,448
$343,256
Year 18
($1,000,000)
($6,500,000)
$343,448
$343,256
Year 19
($1,000,000)
($6,500,000)
$343,448
$343,256
Year 20
($1,000,000)
($6,500,000)
$343,448
$343,256
Year 21
($1,000,000)
($6,500,000)
$343,448
$343,256
Year 22
($1,000,000)
($6,500,000)
$343,448
$343,256
Year 23
($1,000,000)
($6,500,000)
$343,448
$343,256
Year 24
($1,000,000)
($6,500,000)
$343,448
$343,256
Year 25
($1,000,000)
($6,500,000)
$343,448
$343,256
Year 26
($1,000,000)
($6,500,000)
$343,448
$343,256
Year 27
($1,000,000)
($6,500,000)
$343,448
$343,256
$10,482,691
Year 28
($1,000,000)
($6,500,000)
$343,448
$343,256
$372,320
$11,658,872
Year 29
($1,000,000)
($6,500,000)
$343,448
$343,256
$372,320
$371,998
$14,189,882
Year 30
($1,000,000)
($6,500,000)
$343,448
$343,256
$372,320
$371,998
$371,669
$14,189,882
Combined Return Summary Year
Private Owner NPV 18% $8,346,458 12% $4,988,077 -6% ($10,593,913) -2% ($8,650,090) 4% ($3,405,625) 6% ($87,956) 8% $3,057,312 9% $6,038,575 10% $8,863,820 11% $11,540,648 13% $18,578,177 #DIV/0! ($19,459,806) #DIV/0! ($18,209,664) #NUM! ($17,060,950) #NUM! ($16,007,637) #NUM! ($15,044,037) #NUM! ($14,164,777) #NUM! ($13,364,788) #NUM! ($12,639,285) #NUM! ($12,171,171) 0% ($8,768,793) 1% ($8,390,796) 2% ($8,058,753) 3% ($7,769,854) 3% ($7,521,442) 3% ($7,311,009) 4% ($7,136,184) 4% ($6,994,730) 4% ($6,884,535) 4% ($6,803,603) IRR
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 Year 21 Year 22 Year 23 Year 24 Year 25 Year 26 Year 27 Year 28 Year 29 Year 30
Transit Agency IRR NPV #NUM! ($3,234,042) -16% ($2,389,518) -16% ($3,174,923) -7% ($2,311,170) -2% ($1,466,787) 1% ($641,101) 3% $166,545 5% $956,789 6% $1,730,255 7% $2,487,550 9% $4,628,137 -8% ($3,864,143) -6% ($3,635,269) -5% ($3,413,213) -4% ($3,197,775) -3% ($2,988,761) -2% ($2,785,983) -2% ($2,589,257) -1% ($2,398,406) 0% ($1,822,335) 3% $71,289 4% $1,080,408 4% $1,173,900 4% $1,713,582 5% $2,246,033 5% $2,771,632 5% $3,290,750 5% $3,803,752 6% $4,829,479 6% $4,812,829