THE OLMSTED Ryan Rattanni, Rattanni Property Group Advisor: Tim Pula Architect: Jack Devilbiss, AIA RDEV Capstone December 19, 2016 PROJECT SUMMARY ▪ One-acre site in Reservoir Hill ▪ 218 units ▪ Mixed income ▪ Partially funded with LIHTC ▪ 18.9% 10-Year IRR GENERAL CONTEXT ▪ Reservoir Hill neighborhood ▪ Proximate Assets ▪ Druid Hill Park ▪ Bolton Hill, Druid Heights, Penn North ARCHITECTURAL CONTEXT SITE DESCRIPTION ▪ 821-825 Druid Park Lake Drive ▪ Rectangular, one-acre site ▪ Relatively flat ▪ South of Druid Hill Park and Druid Lake TRAFFIC & TRANSIT ▪ Proximate highways ▪ I-83 ▪ I-695 ▪ Amtrak ▪ Light Rail ▪ Metro/Subway ▪ Bus Service MARKET ANALYSIS MARKET ANALYSIS DEMOGRAPHICS INCOME REGULATORY CONTEXT REGULATORY CONTEXT R-9 R-10 R-10/PUD Site Size (SF) 42,478 42,478 42,478 Min Lot Size - SF/Unit 550 200 N/A Total Units Permitted 77 212 218 ENTITLEMENTS PROCESS Pre- Development Meeting Standard Reviews Project & Environmental Reviews Public Hearings COMPARABLE PROPERTIES Community Unit Total Studio Rent Studio SF 1 BR Rent 1 BR SF 2 BR Rent 2 BR SF Distance The Chateau 101 N/A N/A 1,052 508 1,135 601 1 block Lakeview Towers 305 984 396 1,113 516 N/A N/A 0.2 miles Remington Row 108 N/A N/A 1,350-1,700 867-890 1,800-1,950 1,015-1,135 0.9 miles Marlborough Apts 227 1,157 490 1,404 703 N/A N/A 1.0 miles The Olmsted 218 910-1,300 500 975-1,425 800 1,171-1,750 1,100 N/A INCOME Affordability Bedrooms Baths Unit Count Rent Monthly Income Annual Income Affordable Studio 1 20 910$ 18,200$ 218,400$ Market Studio 1 20 1,300$ 26,000$ 312,000$ Affordable 1 1 60 975$ 58,500$ 702,000$ Market 1 1 60 1,425$ 85,500$ 1,026,000$ Affordable 2 1 29 1,171$ 33,959$ 407,508$ Market 2 1 29 1,750$ 50,750$ 609,000$ TOTAL 218 272,909$ 3,274,908$ FINANCING SOURCE OF FUNDS Tax-exempt Bonds 6,287,731$ Private Loan 18,999,266$ Rental Housing Program Funds 1,500,000$ Low Income Tax Credit Proceeds 5,521,789$ Deferred Developer's Fee 1,500,000$ Total Sources of Funds 33,808,786$ Sources USE OF FUNDS Construction Costs 24,645,033$ Construction Fees 1,810,989$ Financing Fees 1,849,627$ Acquisition Costs 1,000,000$ Developer's Fee 2,500,000$ Syndication Costs 150,126$ Guarantees and Reserves 1,853,010$ Total Uses of Funds 33,808,786$ Uses SENSITIVITY ANALYSIS – LIHTC EQUITY Total Tax Credit Amount Raise Ratio Total Equity Proceeds Financing Gap $5,258,846 0.65 $3,418,250 ($2,103,539) $5,258,846 0.70 $3,681,192 ($1,840,596) $5,258,846 0.75 $3,944,135 ($1,577,654) $5,258,846 0.80 $4,207,077 ($1,314,712) $5,258,846 0.85 $4,470,019 ($1,051,769) $5,258,846 0.90 $4,732,962 ($788,827) $5,258,846 0.95 $4,995,904 ($525,885) $5,258,846 1.00 $5,258,846 ($262,942) $5,258,846 1.05 $5,521,789 $0 Sensitivity Analysis - LIHTC Pricing PROGRAMMATIC USE Gross SF Net SF Floor Plate 34,315 29,168 Stories 6 6 Total Building Area 205,890 174,400 Residential 171,575 145,839 Other (Parking) 34,315 229,168 DESIGN FLOOR PLAN PARKING SUSTAINABILITY AMENITIES Entitlements Construction Lease Up CONSTRUCTION TIMELINE 18 Months 18 Months 10 Months CONSTRUCTION SCHEDULE Months 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Pre-construction Foundation to Grade Base Building Structure & Systems Building Envelope Finishes Close Out ABSORPTION SCHEDULE Size and Style 1 2 3 4 5 6 7 8 9 10 Studios 8.1 10.8 13.5 16.1 18.8 21.5 24.2 32.3 35.0 37.7 One-Bedrooms 26.1 34.8 43.5 52.2 60.9 69.6 78.2 104.3 113.0 121.7 Two-Bedrooms 11.0 14.6 18.3 21.9 25.6 29.3 32.9 43.9 47.5 51.2 Total 45.1 60.2 75.2 90.3 105.3 120.3 135.4 180.5 195.5 210.6 Monthly Absorption Schedule STABILIZED OPERATIONS Effective Gross Income 3,012,915$ Operating Expenses 1,482,151$ Net Operating Income 1,530,765$ Debt Service 1,327,908$ Total Cash Flow 202,857$ Debt Coverage Ratio 1.15 Stabilized Operations CASH FLOWS RETURNS Return on Equity 11.5% IRR - 10 Years 18.9% Return on Cost 5.2% Equity Multiplier - 10 Years 2.81 COMMUNITY BENEFITS • Affordable housing • Sustainability • Neighborhood revitalization • Jobs (temporary + permanent) • Tax revenue QUESTIONS?