Director: Margaret McFarland Advisor: Kristi Adams Architect: Anthony Pins Mentor: Robert Kaufman PRESENTED BY: Shuchun Wang
Design By: Anthony Pins
Ideal Urban Living with Affordability
Outline • Vision & Mission • Site Overview • Opportunity and Activity • Design • Financial Summary • Conclusion
CHARLES VILLAGE
STATION NORTH
DOWNTOWN
INNER HARBOR HOLLINS MARKET
HARBOR EAST
FEDERAL HILL
VISION & MISSION Improve the Quality of Life, the Building and
Natural Environment
Improve Access to Economic Opportunities in the Area
• Transform vacant land • Provide work-life balance for emerging demographic • Develop general-service retail for existing needs • Preserve historical-architectural elements • Bring new energy into the streetscape • More green and open spaces • Capitalize on revitalization efforts brought by anchor institutions • Work with neighborhood policing and foot patrols • Develop resident/business street cleaning teams • Install security system to protect tenants • Use tax credit equity to minimize reliance on debt • Bring other developments
SITE OVERVIEW CHARLES VILLAGE
BioPark
STATION NORTH DOWNTOWN
HOLLINS MARKET
Hollins Market
INNER HARBOR HARBOR EAST FEDERAL HILL
B & O Museum
NEIGHBORHOOD BACKGROUND • Industrial neighborhood housing workers in Southwest Baltimore • Blighted with vacant properties and declined population
• BioPark located in the area in 2000s • Two anchor institutions in two ends of W Baltimore St. • Hollins Market within walking distance Pictures: http://www.southwestpartnershipbaltimore.org/visionplan/
SITE VIEW • 923-1001 W Baltimore St. • Land:45,993SF
• Current Use: • 6 row houses
• An Arch • A dilapidated building
17,772 SF West Site
28,221 SF East Site
Project Overview • Adjacent to BioPark BioPark
• Baltimore St. & Schroeder St.
• Proposed Use: • 2 bldgs: The A + The E •
17,335 1st floor retail • 112 rental apartments
Arch
• TDC: $26.43M •
The A (W. site): $11.01M • The E (E. Site): $15.42M
East site http://www.southwestpartnershipbaltimore.org/visionplan/
SOCIOECONOMIC CONTEXT 65+ Yrs 7%
35-65 Yrs 38%
0-18 Yrs 24%
AGE
$100K to $150K
Less than $10K
$75K to $100K
Vacant 68.70%
$150K to $200K $10K to $15K
HH INCOME $50K to $75K
18-35 Yrs 31%
• 1,675 people /780 households
• 31% young adults vs. 7% seniors
• Appealing to the young
Occupied 31.30%
$35K to $50K
$15K to $25K
HOUSING UNITS
Owners 44.20%
Renters 55.80%
$25K to $35K
• Median household income $38,371 • 60% HH Income ≤$35,000
• Not luxury housing market
• 1,135 housing units • 50% renters spend more than 35% of household income on rent • The median rent of this area is $852 • The median price of homes $170,000
• Rental market
PRIMARY ISSUES • Large number of vacant buildings • Lack of amenities to draw diverse populations • Resident & worker retail needs are not met • Poor lighting, signage & wayfinding features • Lack of regular maintenance • Perception of crime • Lack of pedestrian and bike connectivity http://www.southwestpartnershipbaltimore.org/visionplan/
ANCHOR INSTITUTIONS = ASSETS • Rental Demand & Supply
• Retail Supply & Demand
• 25,000 employees & 4% annual growth
• Lack of basic retail services
• 44% of Baltimore’s total employment in Downtown
• No similar retails in pipeline
• No new development since 2005
• Existing large customer base: Employees + Residents
• Average vacancy rate ≤ 5%
Subject sites University of Maryland
BioPark
Hollins Market
Bon Secours http://www.southwestpartnershipbaltimore.org/visionplan/
MIXED-USE MIXED-INCOME DEVELOPMENT Phase 2 The E (East site)
15,430 SF/Floor, Wood Residential
12,335 SF/Floor, Wood Residential
56 Apts/10% Affordable 7,670 SF Retail 16 Parking Spaces
56 Apts/10% Affordable 9,665 SF Retail 42 Parking Spaces 11 months to lease up
Phase 1 The A (West Site)
22,215 SF/Floor, Podium
16,535 SF, Podium
10 months to lease up
Retail + Parking + Lobby 1/16-2/17 Entitlement 3/17-3/18 Construction 3/18-5/18 Pre-leasing 5/18-12/18 Lease-up
Phase 1: The A Design By: Anthony Pins
Phase 2: The E
11/18-11/19 Construction 12/19-10/20 Lease-up
10/20-10/24 Sale
LEED CERTIFIED BUILDING
http://kirbylittle.com/273/urban-rooftop-terrace-garden-for-modernhouses/wonderfull-paint-style-coco-peat-for-terrace-gardnening/
Historic Arch
Roof Amenities
http://r4architecture.com/blog/wp-content/uploads/2010/02/solar-panels-close-up.jpg
http://www.boulderdowntown.com/_files/images/ streetscape-bayleaf-4.gif
Solar Panel Security System
http://www.gctech.us/assets/shar ed/security_camera_system_1.jpg
Wide Sidewalks + Public Spaces
Design By: Anthony Pins
FINANCIAL SUMMARY
SOURCES AND USES 3.42% Acquisition Dev. Fee 10.00% Financing 0.84% 4.78% Soft Cost 0.48% Reserves
Hard Cost
Uses Acquisition
The A $ 79,589
The E $ 774,861
Total $ 854,450
Land Improvement $ 5,000 $ 45,000 $ 50,000 Construction $ 8,132,739 $11,924,156 $ 20,056,895 Con. Fin. $ 493,047 $ 722,902 $ 1,215,949 Soft Costs $ 1,031,853 $ 230,527 $ 1,262,380 Permanent Fin. $ 54,409 $ 71,959 $ 126,369 Reserves $ 110,667 $ 110,667 $ 221,335 Development Fees $ 1,100,812 $ 1,542,230 $ 2,643,042 TDC (160.23/SF) $11,008,117 $15,422,302 $ 26,430,420
Loan
64.36%
80.49% Sources Sponsor Investors NMTC City Grants 1st Mortgage Total
Uses
$ $ $ $ $ $
The A 79,589 696,782 2,731,470 345,000 7,155,276 11,008,117
$ $ $ $ $ $
The E 774,861 1,899,491 2,478,653 414,000 9,855,298 15,422,302
Total $ 854,450 $ 2,596,273 $ 5,209,123 $ 759,000 $ 17,010,574 $ 26,430,420
2.87%
65% LTV 1.25 DSCR 6.25% Interest 20 years
Equity City Grants
19.71%
NMTC
10.45% 2.60%
Investor
Capital Stack
Sponsor
RETURNS IRR Sensitivity Analysis M
23.00%
25.00%
DEBT SERVICE COVERAGE RATIO 21.84%
$14
1.55 1.51
$12
18.52%
20.00%
17.64%
$10 $8
15.00%
1.35
1.33
$6
1.25
1.28
1.32
$4
10.00%
$2
$-
5.00%
Year 5
Year 6
Year 7
Year 8
Sale Proceed
1.39
1.36
1.43
1.47
DS from Both
DS from the A
Year 9 Year 10 Year 11 Year 12
Investor
Sponsor
2018
2019
2020
2021
2022
2023
2024
2025
2026
• Sale at 2024, year 9, 5 years after stabilization
• Property Value at Sale: $23,693,403
• Preferred Return: 9%
• Cash on Cash:15.37%
• Sponsor Promote: 30%
• Return on Equity:10.75%
• Pari-Passu Split: Sponsor/ Investor: 20%/80%
• Mixed-Income Community
• Sponsor Return :$2,590,247
• Sustainable Development
• Investor Return:$ 4,315,690
• New Jobs & Local Business
2027
2028
Design By: Anthony Pins
Conclusions • Improve the Quality of Life • Meets the retail demand for the neighborhood • Anticipates the live-work-balance of the emerging demographic
• Improve public safety of the area • Preserves the rich history of Hollins Market •
• Bring Economic Opportunities • Revitalizes the major commercial corridor • Proves economically feasible with favorable returns
• Questions?
Design By: Anthony Pins
Subject sites
Back Up slides
Ideal Urban Living with Affordability
BY-RIGHT DEVELOPMENT • Currently zoned B-2-3, Commercial Community Business District • Various storefront business • Residential rental units • FAR may not exceed 5.0
• 20 feet ≤ Building height ≤60 feet • No environmental issues
• Preserve the Arch Baltimore CityView
CASH FLOW OPERATION INCOME EGI OPEX NOI DS Cash Flow SALE PROCEEDS 9% Cap rate $3,500,000
Year 3 Phase 1 $ 763,878 $ 198,179 $ 565,698 $ 418,399 $ 147,299
Year 4 Phase 1& 2 $1,255,588 $ 324,200 $ 931,388 $ 699,634 $ 203,948
$ $ $ $ $
$2,735,153
$2,891,776
$ 3,887,953
EGI
NOI
2020 Year 5 2,493,515 629,361 1,864,154 1,492,021 320,799
Cash Flow Before Tax
DS
$ $ $ $ $
2022 Year 7 2,632,430 667,689 1,964,741 1,492,021 418,201
$ 6,171,870 OPEX
2024 Year 9 2,781,917 708,351 2,073,566 1,492,021 370,981
2027 Year 11 $ 3,024,962 $ 774,035 $ 2,250,928 $ 1,492,021 $ 390,740
$ 8,532,227
$11,665,842
$ $ $ $ $
Cash Flow After Tax
$3,000,000 $2,500,000
$2,000,000 $1,500,000 $1,000,000 $500,000 $Year 3
Year 4
Year 5
Year 7
Year 9
Year 11
Assumptions Gross SF
The A
The E
Total
I&E
Residential
Retail
Lobby
3,040 SF
2,665 SF
5,705 SF
Rent Escalation
3%
4.75% every 3 years
Parking
5,825 SF
25,025 SF
30,850 SF
Expense Escalation
3%
3%
Retail
7,670 SF
9,665 SF
17,335 SF
MGMT Fee
6%
6%
Total
16,535 SF
22,215 SF
Vacancy Rate
5%
10%
Sale
Capital Cost
Residential
Retail
Exit Cap
9%
Emerging Market
TI
Sale year
Yr. 9
Sensitivity Analysis
Reserve
Selling Cost
6%
Loan Terms
DSCR
LTV
Interest Rate
Term
Annual DS
Annual Interest
1.25
65%
6.25% (fixed)
20
$1,492,021
$1,041,450
$175/unit/yr.
0.5/SF 0.35/SF/yr.
Income & Expense
The A
The E
Income
Income Partial Yr.
Period Beginning Date Period Ending Date Income- Residential Potential Rental Income Vacancy & Credit Loss Effective Rental Income Other Income Operating Income- Residential
1st. Full Yr. Period Date Year 1 Year Beginning 0 Period Ending Date Jan-2019 May-2018 IncomeResidential Dec-2019 Dec-2018 Potential $ 693,240 Rental $ Income 1,039,860 5.35% $ Vacancy 37,088 & Credit $ Loss55,633 $Effective 656,152Rental $Income 984,227 Other Income $ 12,567 $ 18,850 $Operating 668,718 Income$ Residential 1,003,077
Income- Non-Residential Potential Rental Income Vacancy & Credit Loss Effective Rental Income Other Income Reimbursable Expenses (T & I) Operating Income- Non-Residential Gross Operating Income
Income- Non-Residential $ Potential 92,040 Rental $ Income 138,060 $ Vacancy & Credit 5.00% $ 4,602 $ Loss 6,903 $ $Effective 87,438Rental $Income 131,157 $ $ Other- Income $ $ Reimbursable Expenses (T & I) $ 7,721 $ 11,582 $ $Operating 95,159 Income$ Non-Residential 142,739 $ Operating$Income $Gross 763,878 1,145,816 $
Expense
$ $ $ $ $
Year 2 Jan-2020 Dec-2020 1,071,056 5.35% 57,301 1,013,754 19,416 1,033,170
The E Income Partial Yr. 1st. Full Yr. PeriodYear Beginning Date 0 Year 1 Period Ending Date Dec-2019 Jan-2020 IncomeResidential Dec-2019 Dec-2020 Rental Income $ Potential 96,701 $ 1,160,412 & Credit $ Loss 62,082 $ Vacancy 5,174 Rental Income $Effective 91,527 $ 1,098,330 $ Other Income 1,725 $ 20,700 Income- Residential $Operating 93,252 $ 1,119,030
138,060 5.00% 6,903 131,157 11,929 143,086 1,176,256
Income- Non-Residential Rental Income $ Potential 16,108 $ 193,300 & Credit $ Loss $ Vacancy 805 9,665 Rental Income $Effective 15,303 $ 183,635 $ Other Income $ (T14,594 & I) $ Reimbursable 1,216 Expenses $ Income- Non-Residential $Operating 16,519 $ 198,229 Operating Income $Gross 109,772 $ 1,317,259
Expense
Expense 79,940 38,126 29,590 58,026 31,378 237,061
Expense- Residential $ Administrative 6,938 $ 83,260 $ Operating 3,085 $ 37,016 $ Maintenance 2,627 $ 31,528 $ Payroll4,695 $ 56,336 Taxes & Insurance $ 2,539 $ 30,464 Expenses$Operating 19,884 $ Residential 238,604
Expense- Non-Residential $ Retail 44,742 $ 67,113 $ Non-Residential $Operating 44,742 Expenses$ 67,113 $ Total Operating Expenses $ 198,179 $ 297,269 $
69,126 69,126 306,187
Expense- Non-Residential $ Retail 7,048 $ 84,570 Expenses$Operating 7,048 $ Non-Residential 84,570 $Total Operating 26,931 Expenses $ 323,174
Net Operating Income (NOI)
Operating Income (NOI) $Net 565,698 $ 848,548
870,069
$Net Operating 82,840 Income $ (NOI) 994,085
Yearly Reserves Residential Non-Residential Total Yearly Reserves Cumulative Reserves
Yearly Reserves Residential $ $ 13,067 19,600 $ Non-Residential 4,045 $ 6,067 Total Yearly Reserves $ 17,112 $ 25,667 $Cumulative 17,112 Reserves $ 42,779
Expense- Residential Administrative Operating Maintenance Payroll Taxes & Insurance Operating Expenses- Residential
Expense- Residential $ Administrative 51,741 $ 77,612 $ Operating 24,677 $ 37,016 $ Maintenance 19,152 $ 28,728 Payroll $ 37,557 $ 56,336 & Insurance $ Taxes 20,309 $ 30,464 Residential $Operating 153,437 Expenses$ 230,156
Expense- Non-Residential Retail Operating Expenses- Non-Residential Total Operating Expenses
$ $ $ $ $ $
$
$ $ $ $
19,600 6,067 25,667 68,446
Yearly Reserves $ Residential 1,633 $ $ Non-Residential 506 $ Reserves $Total Yearly 2,139 $ Cumulative Reserves $ 2,139 $
19,600 6,067 25,667 27,806
5.35%
5.00%
Thousands
CASH FLOW 5500 5000 4500 4000 3500 3000 2500 2000 1500 1000 500 0 -500 -1000 -1500 -2000
Cash Flow
$5,707
$2,914
0
0
Year 1
Year 2
14 Year 3
$161 $43 Year 4
$253
$67
Year 5
$(854) -$697
Investor
Sponsor
$290
$77
Year 6
$330
$88
Year 7
$283
$75
Year 8
Year 9
Tax Credit Subsidy FTC price/ dollar TC
Tax Credit Benefit of Baltimore City $
Appicable Basis-HTC (estimate of TDC) Federal HTC % NMTC % Appicable Basis-NMTC (estimate of TDC)
0.85 95% 20% 39% 43%
TDC of the A Applicable Basis FHTC QEI of FHTC
$ $ $ $
11,008,117 10,457,712 2,150,108 1,827,592
TDC Applicable Basis NMTC QEI of NMTC
$ $ $ $
26,430,420 11,243,761 4,385,067 3,727,307
7.25% $ 2.00% $ $
270,230 74,546 3,382,531
Sub-allocation Fees CDE Committee Fee Net of NMTC
Property Tax Benefit/ year 1-5 Current Assessment Hard Costs Assessment Factor Incremental Assessment Property Tax Rate (BC) Property Tax Benefit New Job Tax Benefits Retail Jobs Temp Residential Job Temp Retail Jobs FT Residential Job FT Average Taxable Salary (Temp) Average Taxable Salary (FT) 75% City Residents City Payroll Tax Rate New Job Tax Benefits
$ $ $ $
$ $ $ $
1,319,366 18,424,740 80% 15,795,285 2.268% 358,237
40 30 40 20 15,000 25,000 1,912,500 3.05% 58,331
SUBSIDY & DEBT FLOW CHART BOA M&T Bank Wells Fargo Enterprise
BOA M&T Bank Wells Fargo Enterprise
Lender (Leverage)
Investor $$$
$$$
$$$
Investment Fund
NMTCs
$$$
NMTC (39%)
Fed HTC Investor
QEI
CDE Total Subsidy Equity
$5,210,123
A Loan
$$$
LLC (Land Owner+ investors)
B Loan
*GP
Fed HTCs (20%)
$$$
Developer 1% GP
99% LP
(*Runs/Manages) 25
Residential
Unit Mix The A
• Affordable units • 10% • Rent: 1b