PRODUCE PORTLAND
A R C H I T E C TS U R E
produce portland produce
L. Beal
B.Nemecek
D. Phillips
V. Scalia
K. Wallace
the renewal of downtown portland.
the retail core district.
A development aiming to revitalize downtown Portland by bringing families into a new downtown. A sustainable approach to city planning.
PORTLANDIA
sabin boise alameda
eliot
forest park
hillside
grant park
sullivans gulch
lloyd district
pearl district
nw district
irvington
laurelhurst
old town chinatown
kerns
goose hollow
arlington heights
buckman
sylvan highlands
sunnyside
downtown hosford abernethy
richmond
sw hills
homestead
bridlemile
brooklyn
south portland
reed
hillsdale hayhurst
T H E
H O O D S
3300
2100
13000
6000
6500
2000
1200
3900
650
13800 +
1200
4500
6800
3500
4000
4000
5400
8500
7500
7400
6300 5200
4600
11600
2000
3500
5400
7500
6650 H O W
M A N Y
3350
P E O P L E
L I V E
H E R E
PIONEER SQUARE D I R E C T O R S PA R K PUBLIC LIBRARY LINCOLN HIGH SCHOOL P O R T L A N D S TAT E U N I V E R S I T Y GROCERY STORE R E TA I L C O R E PORTLAND ART MUSEUM PIONEER PLACE P O R T L A N D FA R M E R S M A R K E T
N T H I N G S
A R O U N D
TRANSIT LINES
PEDESTRIAN PATHS
W H A T S
RETAIL CORE
H A P P E N I N G
H E R E
After the market crashed in 2008, Portland’s market quickly transitioned from a renter’s market to a seller’s market. It abruptly flipped back to a renter’s market in early 2011. Portland’s market reached a level market in early 2012 and has remained a seller’s market since then. Taking this into consideration we have decided to keep management of our complex in house.
UNITS SOLD
P O RT L A N D A B S O R P T I O N A N D S U P P LY T R E N D S 3500 3000 2500 2000 1500 1000 500 0
09
10
11
12
13
14
15
16
17
Q U A R T E R LY / Y E A R
T H E
M A R K E T
HOUSEHOLD SIZES
NATIONAL
OREGON Although there are many apartments available in the central city area of Portland, the availability of larger family oriented units is bleak. Specifically, within the city center there are very few 3 and 4 bedroom units.
2.65 PORTLAND
2.5
2.3
TOTAL NUMBER OF APARTMENTS
2 BEDROOM APARTMENTS
3 BEDROOM APARTMENTS
4+ BEDROOM APARTMENTS
2,514 UNITS
785 UNITS
112 UNITS
4 UNITS
S U P P LY
&
D E M A N D
COMPETITIVE ANALYSIS Factor Lowest Price Highest Price Quality Reliability Sustainability Experience Offers
ARCHITECTSURE $ $
Indigo at 12 West Park 19 1,790.00 $ 1,575.00 $ 2,174.00 4,230.00 $ 5,995.00 $ 3,706.00 10 8 7 10 8.4 7.6 10 7 4 since 1987 since 2000s since 1990s (Studio-1BR-2BR-3BR-4BR) (1BR-2BR and 3BR) (Studio-1BR-2BR) source:indigo12west.com
source:livepark19
The Wyatt $ 1,450.00 $ 3,575.00 9 7 3 (Studio-1BR-2BR) source:thewyatt.com
source:ratings from Google reviews
$7,000.00 $6,000.00
$7,000.00
Reliability
Quality
6
8
$5,000.00
$6,000.00
$4,000.00
$5,000.00
4
$3,000.00
$4,000.00
$2,000.00
$3,000.00
3
$1,000.00
$2,000.00
$-
$1,000.00 $-
Sustainability
ARCHITECTSURE
Indigo at 12 West Lowest Price
ARCHITECTSURE
Indigo at 12 West Lowest Price
4
3
Park 19
Highest Price
The Wyatt
Highest Price
The Wyatt Sustainability
2 19 Park
Reliability
1 0
Quality
2
4
C O M P E T I T I V E
10
M A R K E T
12
NOI
ADS
BTCF
$31,590,000
$7,016,000
$20,529,000
VALUE
DEBT
EQUITY
$163,306,000
$122,480,000
$40,826,000
CAP RATE
4%
MORTGAGE CONSTANT
5.7%
P R E L I M I N A R Y
RETURN ON EQUITY
50%
F I N A N C I A L
A N A LY $ I $
L A N D A Q U I S I T I O N $20,000,000 CONSTRUCTION COSTS/SF OFFICE $170.80/SF RESIDENTIAL $227.45/SF RETAIL $138.30/SF PARKING $55.60/SF INDUSTRIAL $160/SF DEVELOPMENT COSTS HARD COSTS $129,809,576 SITE GRADING/PREP CONSTRUCTION PARKING CONSTRUCTION SITE AMMENITY & LANDSCAPE SOFT COSTS $13,497,617 AE PROJECT MGMT LEGAL FINANCE FEES
TOTAL DEVELOPMENT COST $163,307,193
D E V E L O P M E N T / C O N S T R U C T I O N
C O $ T
NOI 10 9 8
VACANCY RATE REPLACEMENT COST
4% $118,800 ($300/UNIT)
NOI YEAR 1 CASH FLOW AFTER
$27,055,000 $13,290,000
7 6 5
4
IN
3
10 YEARS THE PROPERTY WILL BE WORTH
2 1 $-
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
$1,014,194,144... THATS A BILLION DOLLARS
IF SOLD IN IDEAL MARKET, THE SALE WOULD GAIN $835,560,769
10
NET CASH FROM SALE $741,333,772
9 8 7
CAPITAL GAINS TAX LIABILITY $125,334,115
6
5
NPV; UNLEVERAGED/LEVERAGED $105,575,101
4 3 2
IRR; UNLEVERAGED/LEVERAGED 23%
1
0.00%
10.00%
20.00%
30.00%
After Tax Return on Equity (ROE) REFER TO APPENDIX FOR COMPLETE DCF ANALYSIS
40.00%
50.00%
60.00%
Return On Total Assets (ROTA)
D I S C O U N T E D
C A S H
F L O W
A N A LY $ I $
-10%
CONSTRUCTION COST VARIANCES
10%
TDC
$161,673,930
$163,307,000
$164,940,070
ROTA
$161,673,930
$163,307,000
$164,940,070
2%
VACANCY VARIANCES 4%
10%
TDC
$32,248,000
$31,590,000
$29,615,000
ROTA
19.74%
19.34%
18.13%
ROE
51%
50%
46.88%
W H E N
T H I N G S
C H A N G E
PRODUCE
E D U C AT E
LIVE
S U S TA I N
H E R E
I S
W H A T
W E
A R E
G O I N G
T O
D O
T H I S
I S
W H A T
I T
L O O K S
L I K E
RESIDENTIAL
FARMS
NEIGHBORHOODS
LABS: Office
MARKET: Retail
PORTLAND MADE: Retail
Z O N E D
MUSEUM: Retail
PROMENADE
L I K E
T H I S
SITE A. RESIDENTIAL BLOCK
SITE B. VERTICAL FARMS
SITE C. PORTLAND MADE
3 BR
1 BR
2 BR
2 BR
1 BR
4 X 1 BEDROOM 2 X 2 BEDROOM 4 X 3 BEDROOM 1 X 4 B E D R O O M = 11 UNITS P E R F L O O R
3 BR
11 UNITS X 32 FLOORS = 352 UNITS T O TA L
24 BEDROOMS / FLOOR = 768 BEDROOMS ~ 1 , 0 0 0 O C C U PA N T S
3 BR
1 BR 3 BR
1 BR
T Y P I C A L
4 BR
F L O O R
P L A N
R E S I D E N T I A L
3 BR
3 BR
2 X 3 B E D R O O M = 2 UNITS P E R F L O O R 2 U N I T S X 4 F L O O R S = 8 PENTHOUSE UNITS T O TA L
6 BEDROOMS / FLOOR = 24 BEDROOMS ~ 2 8 O C C U PA N T S
P E N T H O U S E
F L O O R
P L A N
R E S I D E N T I A L
T Y P I C A L
N E I G H B O R H O O D
R E S I D E N T I A L
BLOCK A. RESIDENTIAL
BLOCK B. FARMS
BLOCK C. PORTLAND MADE
GROW
PLANT
HARVEST
C O N C E P T
F A R M S
H O W
I T
W O R K S
A N A E R O B I C
D I G E S T I O N
BLOCK A. RESIDENTIAL
BLOCK B. FARMS
BLOCK C. PORTLAND MADE
M A K E
P O R T L A N D
M A D E
S E L L
P O R T L A N D
M A D E
E D U C A T E
P O R T L A N D
M A D E
P E O P L E
L I K E
T H I S
P O R T L A N D
M A D E
CONCLUSIONS
C O N C L U S I O N
HAPPY HOLIDAZE
A P P E N D I X
PROJECT 2 - PROPOSED LAND USE / DEVELOPMENT MIX
101,641
Land Area (SF)
Income Property Equity $
For-Sale Property Equity $ Total Equity $
55,586,490
55,586,490 28%
Inc. Prop. Const. Costs For Sale Prop. Const. Costs SubTotal (Const. Costs) Inc. Prop. Dev. Costs For-Sale Prop. Dev. Costs Subtotal (Dev. Costs) Inc. Property Dev. Costs
$ $ $ $ $ $ $
For Sale Prop. Dev. Costs TOTAL DEVELOPMENT COSTS
$ $
Construction Cost 9,375,700 135,340,800 5,363,600 14,808,200 20,400,000 185,288,300 185,288,300 185,288,300 10,816,570 10,816,570 196,104,870 196,104,870
6 5 4 7 2 3 1
$ $ $ $ $
$
1,840,230 1,876,800 13,011,768
13,011,768
$ $ $ $ $ $ $ $ $ $
Value 11,303,532 158,542,222 8,522,783 42,304,138 29,790,476 250,463,152
DC % 6% 6% 8% 8% 8% 6% 8% 4% 4% 6%
$ $ $ $ $ $ $ $ $ $
Dev. Cost 562,542 8,120,448 429,088 888,492 816,000 10,816,570
For Sale Margin (Profit) $ -
Total Development Value $ 250,463,152 Land Cost (% of RLV) 37.50%
OPTIMAL LAND USE ANALYSIS USE Office/Cultural Market Rate Residential High-End Residential Affordable Residential For-Sale Residential Retail/Cultural Hotel PROPOSED MIX
Net Operating Income $ 772,031 $ 8,133,216 $ 389,491 $ -
$
TOTAL VALUE $194,905,918 $266,589,524 $370,895,310 $0 $0 $335,315,577 $0 250,463,152
RESIDUAL LAND VALUE $22,658,018 $24,959,324 $114,160,110 $0 $0 $200,427,377 $0 $ 54,358,282
Per Use TDC 9,938,242 143,461,248 5,792,688 15,696,692 21,216,000 196,104,870
Residual Land Value $ 1,365,290 $ 15,080,974 $ 2,730,095 $ $ $ 26,607,446 $ $ $ 8,574,476 $ 54,358,282
ROTA (NOI/TDC) 6.64% Margin on Gross Rev. #DIV/0!
ROE (BTCF/Equity) 10.11% Margin on TDC #DIV/0!
$ $ $ $ $ $ $ $ $ $
TDC 196,104,870
$
Transactional Expenses PROFIT Land Cost/SF Land Land Cost/GSF
RLV/ $ $ $ #DIV #DIV $ #DIV #DIV $ $
Residual Land Value $ 54,358,282 (20,384,356) $ (30,055,578) $ 3,918,348 $ 201 $ 19
RESIDUAL LAND VALUE SITE ACQUISITION ($8,496,757) ($9,359,746) ($42,810,041) $0 $0 ($75,160,267) $0 ($20,384,356)
$250,000,000
Office/Cultural
$200,000,000
Market Rate Residential
$150,000,000
High-End Residential
Affordable Residential
$100,000,000
For-Sale Residential
$50,000,000 $0
Retail/Cultural PRO PO…
360 0.00%
$ $ $ $ $ $ $ $ $ $
Hote l
800
Eff % 75% 70% 70% 50% 70% 90% 70% 95% 95% 78%
ForSal…
352 8 -
Office/Cultural Market Rate Residential High-End Residential Affordable Residential For-Sale Residential Retail/Cultural Hotel Above Ground Parking Under Ground Parking
Reta il/…
Units
Affor da…
TOTAL: PKG. FAR:
Net Leasable Area 45,750 425,600 16,100 114,300 228,000 829,750 Residential Units Affordable Units %
High -…
> >
Gross Area 61,000 608,000 23,000 127,000 240,000 1,059,000 819,000 8.06
Mar ket…
> > > > > >
Offic e/…
6 5 4 7 2 3 1
Hotel
PROPOSED MIX
NET OPERATING INCOME (NOI)
INTEGRATION Net Area Office/Cultural Industrial Retail Market Res. High End Res.
Units
C. R (k%)
61,072 23,049 127,402 308,992 21,268
Parking
Gross
5.83% 6.25% 4.35% 4.00% 4.00%
240000 781,783
800
% Efficiency
73200 25000 142690 609000 23268
6.00%
Income Gross Rent 83% 92% 89%
$ $ $ $ $
Construction Cost 12,502,560 4,000,000 19,734,027 70,280,230 4,837,407
Parking
$
13,344,000
$166,400 $
Total
$
124,698,224 $
5,035,769 $
$ $ $ $ $
NOI 1,041,278 440,144 2,415,542 882,110 90,295
$ $ $ $ $
Value 17,860,679 7,042,299 55,529,699 22,052,759 2,257,386
Dev. Cost $ $ $ $ $
Downtown Dev.
Net Area 23,049
5%
Per Year (x12) $28.00 sf/yr
less vacancy less operating expense
$645,372 $11,617 $193,612 $440,144
1.8% 30.0%
NOI (Industrial) Income Gross Rent
$ $ $ $ $
4,357,914 2,722,299 34,216,950 (53,849,890) (3,160,510)
2,773,333 $
1,601,280 $
(12,171,947)
Income
107,516,156 $
10,703,114 $
(27,885,182)
Gross Rent
$/sf $
$1,526,800 $27,482 $458,040 $1,041,278
1.8% 30.0%
Income Gross Rent
RLV 1,000,205 320,000 1,578,722 5,622,418 580,489
$25.00 sf/yr
NOI (Office/Cultural)
51% 91%
240000
Per Year (x12)
less vacancy less operating expense
1113158 873158
Office Industrial Retail Market Res. High End Res. Affordable Res.
Net Area 61,072
Net Area 127,402 less vacancy less operating expense
$3,822,060 $68,797 $1,337,721 $2,415,542
1.8% 35.0%
NOI (Retail) Net Area
Per Year (x12)
308,992
$3.90 sf/yr
less vacancy less operating expense
(232.38)
Land Area (SF)
Per Year (x12) $30.00 sf/yr
120,000.00
$1,205,069 1.8% 25.0%
$21,691 $301,267 $882,110
NOI (Market Residential) High End
Office $
Residential 170.80 $
Retail 227.45 $
Parking 138.30 $
Industrial 55.60 $
160.00
Income Gross Rent
Net Area 21,268
Per Year (x12) $5.80 sf/yr
less vacancy less operating expense
$123,354 $2,220 $30,839 $90,295
1.8% 25.0%
NOI (High End Res.) Income Gross Rent
Income Gross Rent
Net Area
Per Year (x12) 0
$1.50 sf/yr
less vacancy less operating expense
NOI (Affordable)
$0 $0 $0 $0
1.8% 25.0%
NOI (Affordable) Income Gross Rent
Income Gross Rent
Net Area 800 240,000 less vacancy less operating expense
NOI (Parking)
OE
Per Year (x12) $250.00 unit 1.8% 15.0%
$200,000 $3,600 $30,000 $166,400
NOI
$5,035,769
NOI (Parking)
OE
$2,351,478
HOUSING
Total Construction Cost
TOTAL DEVELOPMENT COSTS (TDC) Market Rate Rental Residential Gross Area Net Leasable Floor Area (Sq Ft) Subtotal CM/Other Contingency Residential Cost
$ $ $ $
$ $ $ $
485,117.44 308,992 70,280,230 2,108,407 2,108,407 74,497,044
$ $ $ $
33,390.76 21,268 4,837,407 145,122 145,122 5,127,651
Soft Costs Development Land Option Contingency
$
79,624,695
$ $ $ $ $
1,592,494 6,369,976 3,184,988 1,592,494 92,364,646
$ 25% $ $
9,014,116 2,704,235 11,718,351
$
104,082,998
2% 8% 4% 2%
Total Development Cost: Financing Required TDC: Equity
High-End Residential Gross Area Net Leasable Floor Area (Sq Ft) Subtotal CM/Other Contingency Residential Cost
$ $ $ $ Affordable Residential
Gross Area Net Leasable Floor Area (Sq Ft) Subtotal CM/Other Contingency Residential Cost
$ $ $ $
$ $ $ $
-
Parking (Underground) Net Leasable Floor Area Gross Floor Area Subtotal CM/Other Contingency Parking Cost
$ $ $ $
$ $ $ $
-
COMPARABLE RESEARCH Typical Apartments Nearby: Harbor $1,258/mo
1,213sf
1bed/1bath
$
12.00 sf/yr
$3,170/mo
1,811sf
2bed/2bath
$
21.00 sf/yr
Indigo at Twelve West $2,300/mo $4,795/mo $3.40/sf
663sf 1,790sf
1bed/1bath 2bed/2bath
$
45.00 sf/yr
360sf $4,795/mo
1bed/1bath 1,790sf
$ 24.00 sf/yr 2bed/2bath $ 36.00 sf/yr $ 36.00 sf/yr
Chelsea Court Apartments $895/mo
CONSTRUCTION COSTS OVERVIEW BY USES
Low End Average High End
Residential $ 191.80 $ 218.20 $ 227.45 pg 82
Parking $ $ $ pg 137
50.40 53.10 55.60
NET OPERATING INCOME (NOI) Income Gross Rent (Market Rate Rental Residential)
Net Area 308,992
DISTRIBUTION OF LAND BY USES. Per Year (x12) $35.00 $10,814,720
$3.90 sf/yr
less vacancy less operating expense
4.5% 25.0%
NOI (Market Rate Rental Residential) Income Gross Rent (High End Residential)
Net Area 21,268 less vacancy less operating expense
Per Year (x12) $69.60 $1,480,253 4.4% $65,131 25.0% $370,063 $1,045,058
$5.80 sf/yr
NOI (High End Residential) Income Gross Rent (Affordable Residential)
Net Area 0
$1.50 sf/yr
$18.00 4.5% 25.0%
NOI (Affordable Residential) Net Area 240,000 less vacancy less operating expense
High End Res. Affordable Res.
Parking
Market Res. High End Res. Affordable Res.
Parking
C. R (k%)
$200.00 unit
$10,273,743
NOI
Gross
$0 $0 $0 $0
4.00%
609000
21,268
4.00%
23268
6.00%
240000 632,268
1200
240000 570,260 Construction $ 70,280,230 $ $ 4,837,407 $
$ 13,344,000 $
NOI
$47,309,436
SQFT
775 865 843 589 1114 1041 534 854 497 1413
Average 1BR
$ $ $ $ $ $ $ $ $ $ $
51% 91% 95%
Dev. Cost 8,433,628 $ 580,489 $
RLV 111,895,582 20,708,567
486,662 $ 65,131 $
Value 190,609,440 $ 26,126,462 $
38,640,000 $
644,000,000 $
1,601,280 $
629,054,720
$
9,014,116 $
132,604,148
Land Area
1BR-1BT 2BR-1BT 2BR-1BT 1BR-1BT 3BR-3BT 3BR-2BT 1BR-1BT 3BR-2BT 1BR-1BT 4BR-2BT
% Efficiency
308,992
$/sf $
Per Year (x12) $48,000,000 4.5% $2,160,000 15.0% $7,200,000 $38,640,000
NOI (Parking)
OE
Market Res.
Units
Per Year (x12)
less vacancy less operating expense
Income Gross Rent
$486,662 $2,703,680 $7,624,378
Net Area
RENT
2,325 2,595 2,529 1,767 3,342 3,123 1,602 2,562 1,491 4,239 1,796
3,315.10 40,000.00
DISTRIBUTION Market Res.
High End Res.
Affordable Res.
NET OPERATING INCOME (NOI)
MUSEUM
Income Gross Rent
Net Area 1,672
TOTAL DEVELOPMENT COSTS (TDC)
Per Year (x12) $41,800
$25.00 sf/yr
less vacancy less operating expense
1.8% 30.0%
NOI (Office/Cultural)
Office/Cultural Use Gross Area Net Leasable Floor Area Subtotal
$
$
3,009.60 1,672 285,578
CM/Other
$
$
8,567
Contingency Office Cost
$ $
$ $
8,567 302,712
Income
Net Area
Gross Rent
59,452.00 less vacancy less operating expense
$752 $12,540 $28,508
Per Year (x12) $30.00 sf/yr
$1,783,560 2.0% 35%
$35,671 $624,246 $1,123,643
T. NOI=
$1,152,150.40
NOI (Retail)
Retail Gross Area Net Leasable Floor Area Subtotal CM/Other Contingency Retail Cost
$ $ $ $
Total Construction Cost Soft Costs Development Land Option Contingency
2% 8% 4% 2%
$ $ $ $
107,014 59,452 8,222,212 246,666 246,666 8,715,544
$
9,018,257
$ $ $ $ $
180,365 721,461 360,730 180,365 10,461,178
$ 25% $ $
850,779 255,234 1,106,013
$
11,567,190
Total Development Cost: Financing Required TDC: Equity
OE
$636,786
DISTRIBUTION OF LAND BY USES. Net Area Office/Cultural Retail Total
C. R (k%)
$/sf
1,672
5.83% $
170.80
59,452 61,124
4.35% $
138.30
Construction Cost
NOI
Value
Dev. Cost
RLV
Office Retail
$ $
285,578 $ 8,222,212 $
28,508 $ 1,123,643 $
488,981 $ 25,830,869 $
28,558 $ 822,221 $
174,846 16,786,436
Total
$
8,507,790 $
1,152,150 $
26,319,850 $
850,779 $
16,961,282
$/sf $ Downtown Dev.
424.03 40,000.00
Land Area (SF) Retail
Industrial
Office
RLV
Dev. Cost
Value
NOI
Construction Cost $-
High End
Office $
$2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000
Residential 170.80 $
Retail 227.45 $
Parking 138.30 $
Industrial 55.60 $
160.00
NET OPERATING INCOME (NOI)
GROCERY / FARM
Income Gross Rent
TOTAL DEVELOPMENT COSTS (TDC)
Net Area 38,200
Per Year (x12) $25.00 sf/yr
less vacancy less operating expense
Office/Cultural Use
$955,000 1.8% 30.0%
$17,190 $286,500 $651,310
NOI (Office/Cultural)
Gross Area Net Leasable Floor Area Subtotal
$
$
67,996 38,200 6,524,560
CM/Other
$
$
195,737
Contingency Office Cost
$ $
$ $
195,737 6,916,034
Income
Net Area
Gross Rent
19,331 less vacancy less operating expense
Per Year (x12) $30.00 sf/yr
$579,930 2.0% 35%
$11,599 $202,976 $365,356
T. NOI=
$1,016,665.90
NOI (Retail) Retail Gross Area Net Leasable Floor Area Subtotal CM/Other Contingency Retail Cost
$ $ $ $
Total Construction Cost Soft Costs Development Land Option Contingency
2% 8% 4% 2%
$ $ $ $
34,409 19,331 2,673,477 80,204 80,204 2,833,886
$
9,749,920
$ $ $ $ $
194,998 779,994 389,997 194,998 11,309,907
$ 25% $ $
919,804 275,941 1,195,745
$
12,505,652
Total Development Cost: Financing Required TDC: Equity
DISTRIBUTION OF LAND BY USES. Net Area
C. R (k%)
$/sf
Office/Cultural
38,200
5.83% $
170.80
Retail Total
19,331 57,531
4.35% $
138.30
Office Retail
Construction Cost $ 6,524,560 $ $ 2,673,477 $
Total
$
Dev. Cost Value 11,171,698 $ 8,398,986 $
NOI 651,310 $ 365,356 $
9,198,038 $
1,016,666 $
19,570,684 $
RLV 652,456 $ 267,348 $
3,994,682 5,458,161
919,804 $
9,452,843
$/sf $ Downtown Dev. Retail
472.64 20,000.00
Land Area (SF) Industrial
Office
RLV
Dev. Cost
Value
NOI
Construction Cost $-
High End
$2,000,000
Office $
$4,000,000
Residential 170.80 $
$6,000,000
Retail 227.45 $
$8,000,000
Parking 138.30 $
$10,000,000
55.60
$12,000,000
NET OPERATING INCOME (NOI)
PORTLAND MADE
Income Gross Rent
Net Area 21,200
TOTAL DEVELOPMENT COSTS (TDC)
$530,000 1.8% 30.0%
$9,540 $159,000 $361,460
NOI (Office/Cultural)
Gross Area Net Leasable Floor Area $ $ $ $
$25.00 sf/yr
less vacancy less operating expense
Office/Cultural Use
Subtotal CM/Other Contingency Office Cost
Per Year (x12)
$ $ $ $
25,016 21,200 3,620,960 108,629 108,629 3,838,218
Income Gross Rent
Net Area 23,049
Per Year (x12) $28.00 sf/yr
less vacancy less operating expense
$645,372 $12,907 $193,612 $438,853
2.0% 30.0%
NOI (Industrial)
Industrial Gross Area Net Leasable Floor Area Subtotal CM/Other Contingency Industrial Cost
$ $ $ $
$ $ $ $
40,335.75 23,049 6,723,731 201,712 201,712 7,127,155
Income Gross Rent
Net Area 48,617 less vacancy less operating expense
Gross Area Net Leasable Floor Area Subtotal CM/Other Contingency Retail Cost
Total Construction Cost Soft Costs Development Land Option Contingency
$ $ $ $
$ $ $ $
87,511 48,617 48,617 1,459 1,459 51,534
2% 8% 4% 2%
$ $ $ $ $ $
11,016,907 220,338 881,353 440,676 220,338 12,779,612
$ 25% $ $
1,403,253 420,976 1,824,229
$
14,603,841
Total Development Cost: Financing Required TDC: Equity
$30.00 sf/yr 2.0% 35%
$1,458,510 $29,170 $510,479 $918,861
T. NOI=
$1,719,174.26
NOI (Retail) OE
Retail
Per Year (x12)
$863,090
DISTRIBUTION OF LAND BY USES. Net Area Office/Cultural
21,200
Industrial Retail Total
23,049 48,617 92,866
Office Industrial Retail Total
Construction Cost 3,620,960 3,687,840 6,723,731 14,032,532
$ $ $ $
C. R (k%) 5.83% $
$/sf 170.80
6.25% $ 4.35% $
NOI $ $ $ $
361,460 438,853 438,853 1,239,166
$ $ $ $
160.00 138.30
Value 6,200,000 7,021,647 10,088,574 23,310,221
Dev. Cost $ 362,096 $ 368,784 $ 672,373 $ 1,403,253
RLV $ $ $ $
$/sf $ Downtown Dev. Retail
196.86 40,000.00
Land Area (SF) Industrial
2,216,944 2,965,023 2,692,470 7,874,437
Office
RLV Dev. Cost Value NOI
Construction Cost $-
High End
Office $
$2,000,000
$4,000,000
Residential 170.80 $
$6,000,000
Retail 227.45 $
$8,000,000
Parking 138.30 $
$10,000,000
Industrial 55.60 $
$12,000,000
160.00
CASH FLOW ANALYSIS
Economic Districtic Development in Downtown Portland Economic Districtic Development in Downtown Portland TABLE 1: CAPITAL BUDGET Land Acquisition Land Cost Parcel "A"
Assumptions
Total Land Acquisition Development Costs Hard Costs Site Grading & Preparation Construction Parking Construction Site Amenity & Landscape Subtotal Contingency Total Hard Costs (Excluding Land Acquisition)
1 873100 800 1
Unit SF Unit Unit
$0 $139 $1,800 $400,000
/Unit /SF /Unit /Unit
5%
Total Hard Costs (Including Land Acquisition) Soft Costs AE, Project Management, Legal Finance Fees (Const. Loan Interest/Origination) Subtotal Contingency Total Soft Costs Total Development Costs (TDC)
10% of Hard Costs 12 Months 2%
$
129,809,576 Hard Costs $21,000 /Month
$
Total 20,000,000
$
20,000,000
$ $ $ $ $ $ $
121,788,168 1,440,000 400,000 123,628,168 6,181,408 129,809,576
$
149,809,576
$ $ $ $ $
12,980,958 252,000 13,232,958 264,659 13,497,617
$
163,307,193
TABLE 2: FINANCING REQUIRED Total Development Costs Less Equity Invested Total Debt
25% *Calculate Separately, Should be determined by LTV or DSCR.
$ $ $
(i.e. LTV 75%, DSCR 1.25)
163,307,193 40,826,798 122,480,395
TABLE 3: YEAR 1 OPERATING PRO-FORMA Income Gross Rent (Office) Gross Rent (Retail) Gross Rent (Industrial) Gross Rent (Parking) Gross Rent (Housing) Rent Subtotal Less Vacancy
Assumptions 61,000 SF 127,000 SF 23,000 SF 800 608,000
Per Unit Rent $25 $35 $28 $3,000 $39.00
/sqft /sqft /sqft /Unit
$ $ $ $ $ $ $ $ $
4%
Effective Gross Income Expenses Operating Expenses Real Estate Taxes Replacement Reserves Total Operating Expenses
Per Unit Cost NOI $
5,035,769 781,783 781,783
47% Of NOI $2.00 /SF $300.00 Unit
Free & Clear Cash Flow (NOI)
Total 1,525,000 4,445,000 644,000 2,400,000 23,712,000 32,726,000 (1,145,410) 31,580,590
$ $ $ $
Total 2,351,478.40 1,563,566 118,800 4,033,844
$
27,546,746
$
(7,016,881)
(Less)
Annual Debt Service (Level Payment, 30-Year Amortization, 4.0% Interest Rate)
(Equals)
Cash Flow After Financing (CFAF) or Cash Flow Before Taxes (CFBT)
$
20,529,864
(Less)
Tax Payment (See off-sheet calculation).
$
(6,930,090)
(Equals)
Cash Flow After Taxes (CFAT)
$
13,599,774
Simple Return Measures: Return on Total Assets (ROTA): After Tax Return on Equity (Cash on Cash):
F&C (NOI)/TDC CFAT/Equity
Calculated in cell >
16.87% 33.31%
*Figures below represent initial investment (at time period 0 and stabilized operation (does not include protracted development phase) TABLE 4: PROJECTED SETUP, YEARS 1-10 Year 1 Year 2 Annual Escalator Income: Gross Rent (Office) 5.81% $ 1,525,000 $ 1,613,603 Gross Rent Retail) 4.35% $ 4,445,000 $ 4,638,358 Gross Rent (Industrial) 6.25% $ 644,000 $ 684,250.00 Gross Rent(Parking) 6.00% $ 2,400,000 $ 2,544,000.00 Gross Rent (Residential) 4.00% $ 23,712,000 $ 24,660,480.00 Gross Rent Subtotal $ 32,726,000 $ 34,140,690 Less: Vacancy 5% $ (1,636,300) $ (1,707,035) Effective Gross Income $ 31,089,700 $ 32,433,656 Expenses: Operating Expenses Real Estate Taxes Replacement Reserves Total Operating Expenses NOI Debt Service (From off-sheet loan calculation) CFAF Tax Payment CFAT
Year 3
Year 4
Year 5
Year 7
Year 6
$ $ $ $ $ $ $ $
1,707,353 4,840,126 727,016 2,696,640.00 25,646,899.20 35,618,034 (1,780,902) 33,837,132
$ $ $ $ $ $ $ $
1,806,550 5,050,672 772,454 2,858,438.40 26,672,775.17 37,160,889 (1,858,044) 35,302,845
$ $ $ $ $ $ $ $
1,911,511 5,270,376 820,732 3,029,944.70 27,739,686.17 38,772,250 (1,938,612) 36,833,637
Year 8
$ 2,022,569 $ 5,499,637 $ 872,028 $ 3,211,741.39 $ 28,849,273.62 $ 40,455,250 $ (2,022,762) $ 38,432,487
$ $ $ $ $ $ $ $
2,140,081 5,738,871 926,530 3,404,445.87 30,003,244.57 42,213,172 (2,110,659) 40,102,514
Year 9
Year 10
$ 2,264,419 $ 5,988,512 $ 984,438 $ 3,608,712.62 $ 31,203,374.35 $ 44,049,457 $ (2,202,473) $ 41,846,984
$ $ $ $ $ $ $ $
2,395,982 6,249,012 1,045,966 3,825,235.38 32,451,509.32 45,967,705 (2,298,385) 43,669,320
$ $ $ $ $ $ $ $
2,535,189 6,520,845 1,111,338 4,054,749.50 33,749,569.70 47,971,691 (2,398,585) 45,573,106
(2,810,234) (2,040,099) (155,007) (5,005,340)
2.00% $ 3.00% $ 3.00% $ $
(2,351,478) (1,563,566) (118,800) (4,033,844)
$ $ $ $
(2,398,508) (1,610,473) (122,364) (4,131,345)
$ $ $ $
(2,446,478) (1,658,787) (126,035) (4,231,300)
$ $ $ $
(2,495,408) (1,708,551) (129,816) (4,333,774)
$ $ $ $
(2,545,316) (1,759,807) (133,710) (4,438,834)
$ $ $ $
(2,596,222) (1,812,602) (137,722) (4,546,545)
$ $ $ $
(2,648,147) (1,866,980) (141,853) (4,656,980)
$ $ $ $
(2,701,110) (1,922,989) (146,109) (4,770,208)
$ $ $ $
(2,755,132) (1,980,679) (150,492) (4,886,303)
$ $ $ $
$ $ $ $ $
27,055,856 (7,016,881) 20,038,974 (6,748,461) 13,290,514
$ $ $ $ $
28,302,311 (7,016,881) 21,285,429 (7,394,647) 13,890,782
$ $ $ $ $
29,605,832 (7,016,881) 22,588,950 (7,912,260) 14,676,690
$ $ $ $ $
30,969,070 (7,016,881) 23,952,189 (8,453,392) 15,498,797
$ $ $ $ $
32,394,804 (7,016,881) 25,377,922 (9,019,129) 16,358,793
$ $ $ $ $
33,885,942 (7,016,881) 26,869,060 (9,610,607) 17,258,453
$ $ $ $ $
35,445,534 (7,016,881) 28,428,653 (10,229,017) 18,199,635
$ $ $ $ $
37,076,776 (7,016,881) 30,059,895 (10,875,607) 19,184,288
$ $ $ $ $
38,783,017 (7,016,881) 31,766,136 (11,551,681) 20,214,454
$ $ $ $ $
Return On Total Assets (ROTA)F&C (NOI)/TDC After Tax Return on Equity (ROE) CFAT/Equity
16.57% 32.55%
17.33% 34.02%
18.13% 35.95%
18.96% 37.96%
19.84% 40.07%
20.75% 42.27%
21.70% 44.58%
22.70% 46.99%
23.75% 49.51%
40,567,766 (7,016,881) *From Belo 33,550,884 (12,258,611) *From Belo 21,292,274 24.84% 52.15%
TABLE 5: OFF SHEET CALCULATIONS Debt-Service Calculations Beginning Balance Outstanding Balance (PV of Future PMT's) 4% Interest ADS: Annual Debt Service (Level Payment, 30-Year Amortization, 6.0% Interest Rate) Less: Principal Amortized Interest Paid Annually
$ $ $ $ $
122,480,395 120,724,543 (7,016,881) 1,755,852 (5,261,029)
$ $ $ $ $
120,724,543 118,472,260 (7,016,881) 2,252,283 (4,764,598)
$ $ $ $ $
118,472,260 116,128,215 (7,016,881) 2,344,045 (4,672,836)
$ $ $ $ $
116,128,215 113,688,670 (7,016,881) 2,439,545 (4,577,336)
$ $ $ $ $
113,688,670 111,149,734 (7,016,881) 2,538,936 (4,477,946)
$ $ $ $ $
111,149,734 108,507,358 (7,016,881) 2,642,376 (4,374,505)
$ $ $ $ $
108,507,358 105,757,328 (7,016,881) 2,750,030 (4,266,851)
$ $ $ $ $
105,757,328 102,895,257 (7,016,881) 2,862,071 (4,154,811)
$ $ $ $ $
102,895,257 99,916,581 (7,016,881) 2,978,676 (4,038,205)
$ $ $ $ $
99,916,581 96,816,549 (7,016,881) 3,100,032 (3,916,849)
Calculation of Tax Payment CFAF Add: Replacement Reserves Add: Mortgage Amortization Less: Depreciation Taxable Income
$ $ $ $ $
20,038,974 118,800 1,755,852 (3,674,543) 18,239,083
$ $ $ $ $
21,285,429 122,364 2,252,283 (3,674,543) 19,985,533
$ $ $ $ $
22,588,950 126,035 2,344,045 (3,674,543) 21,384,487
$ $ $ $ $
23,952,189 129,816 2,439,545 (3,674,543) 22,847,006
$ $ $ $ $
25,377,922 133,710 2,538,936 (3,674,543) 24,376,025
$ $ $ $ $
26,869,060 137,722 2,642,376 (3,674,543) 25,974,615
$ $ $ $ $
28,428,653 141,853 2,750,030 (3,674,543) 27,645,993
$ $ $ $ $
30,059,895 146,109 2,862,071 (3,674,543) 29,393,531
$ $ $ $ $
31,766,136 150,492 2,978,676 (3,674,543) 31,220,760
$ $ $ $ $
33,550,884 155,007 3,100,032 (3,674,543) 33,131,380
$
37% (6,748,461) $
37% (11,551,681) $
37% (12,258,611)
Tax Rate: Tax Payment:
39 Years
37% (7,394,647) $
37% (7,912,260) $
37% (8,453,392) $
37% (9,019,129) $
37% (9,610,607) $
37% (10,229,017) $
37% (10,875,607) $
TABLE 6: NET CASH FROM SALE NOI (Year of Sale) Cap Rate: Capitalized Value
$ $
40,567,766 4% 1,014,194,144
Calculation of Book Value Total Development Cost (TDC) Add: Capital Improvements (Capital Reserves: All Years) Less: Accumulated Depreciation Net Book Value
$ $ $ $
163,307,193 1,361,909 (36,745,434) 127,923,668
Calculation of Gain on Sale Selling Price Less: Broker's Commision & Legal Fees Net Selling Price Less: Net Book Value Gain on Sale
$ $ $ $ $
1,014,194,144 (50,709,707) 963,484,437 (127,923,668) 835,560,769
$
5% of Selling Price
Calculation of Tax Payment Gain on Sell Capital Gains Tax Rate: Capital Gains Tax Liability:
$
835,560,769 15% (125,334,115)
Calculation of Net Cash to Seller: Net Sale Price Less: Mortgage Loan Balance Less: Capital Gain Tax Liability Net Cash from Sale
$ $ $ $
963,484,437 (96,816,549) (125,334,115) 741,333,772
TABLE 8: UNLEVERAGED DCF ANALYSIS Equity (100%) = Total Development Costs Unleveraged Cash Flow After Taxes: Net Cash from Sale Total Annual Cash Flows Discount Factor Present Value of Each Cash Flow
$
Time 0 (163,307,193)
Year 1 $
$
(163,307,193) $
15% $
NPV of All Future Cash Flows Less Equity Invested Unleveraged NPV
$ $ $
Unleveraged IRR
NPV of All Future Cash Flows Less Equity Invested Leveraged NPV Leveraged IRR
$
15,641,652 $ 1 0.8696 13,601,436 $
16,425,600
Year 3 $
16,425,600 $ 2 0.7561 12,420,113 $
17,245,460
Year 4 $
17,245,460 $ 3 0.6575 11,339,170 $
18,102,901
Year 5 $
18,102,901 $ 4 0.5718 10,350,393 $
18,999,672
Year 6 $
18,999,672 $ 5 0.4972 9,446,195 $
Year 7
Year 8
19,937,605
$
20,918,620
19,937,605 6 0.4323 8,619,577
$
20,918,620 $ 7 0.3759 7,864,084 $
$
$
21,944,728
Year 9 $
21,944,728 $ 8 0.3269 7,173,770 $
23,018,037
Year 10 $ $ $
23,018,037 9 0.2843 6,543,163 $
*Equity = 24,140,759 *CFAT D 710,226,654 *Net Cas 734,367,413 10 0.2472 181,524,393 These ar
268,882,295 (163,307,193) 105,575,101 23%
TABLE 9: LEVERAGED DCF ANALYSIS Equity Cash Flow After Taxes: Net Cash from Sale Total Annual Cash Flows Discount Factor Present Value of Each Cash Flow
15,641,652
Year 2
$
Time 0 (40,826,798)
Year 1 $
$
(40,826,798) $
15% $ $ $ $
13,290,514
Year 2 $
13,290,514 $ 1 0.8696 11,556,968 $
13,890,782
Year 3 $
13,890,782 $ 2 0.7561 10,503,427 $
14,676,690
Year 4 $
14,676,690 $ 3 0.6575 9,650,162 $
15,498,797
Year 5 $
15,498,797 $ 4 0.5718 8,861,487 $
16,358,793
Year 7
Year 6 $
16,358,793 $ 5 0.4972 8,133,211 $
Year 8
17,258,453
$
18,199,635
17,258,453 6 0.4323 7,461,306
$
18,199,635 $ 7 0.3759 6,841,917 $
$
$
19,184,288
Year 9 $
19,184,288 $ 8 0.3269 6,271,378 $
20,214,454
Year 10 $ $ $
20,214,454 9 0.2843 5,746,210 $
21,292,274 741,333,772 762,626,046 10 0.2472 188,509,495 These ar
263,535,561 (40,826,798) 222,708,763 51%
Off-Sheet Calculations:
Loan Calculation Beginning Balance Payment Interest Principal Amortized Outstanding Balance
$ $ $ $ $
122,480,395 (7,016,881) (5,261,029) (1,755,852) 120,724,543
CFAF Replacement Reserves Mortgage Amortization Depreciation Taxable Income
$ $ $
20,529,864 118,800 1,755,852 ($3,674,543) (TDC-Land Cost)/39* $18,729,973 *39 for commercial. *27.5 for residential.
Tax Calculation Add: Add: Less:
Tax Rate: Tax:
37% $6,930,090