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RD S A N D I E G O , C A
A N A L Y S I S
F E A S I B I L I T Y
GORDON R. CARRIER FAIA, NCARB
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F E A S I B I L I T Y
I N T R O D U C T I O N
The Opportunity : 90 Urban Apartments
This prospectus describes an unique opportunity to become part of the investor
development team responsible for the creation of 90 urban sophisticated market rate
apartments located in the heart of downtown San Diego, one of the nations strongest
growing urban settings.
The Setting : Location
The projects immediate access to San Diegos beautiful waterfront, the citys primary
entertainment, theater, shopping, and restaurant districts, combined with its proximity
to the city government center, light rail, the freeway system, and international airport, all
serve to make it unique among investment properties and development opportunities. As
they say, location, location, location!
Agency Requirements : Approvals
This site and project is governed by an already approved Planned District Ordinance
(PDO), complete with environmental approvals for immediate development. As a result
the project does not require discretionary approvals (ie: no noticed public hearings)
but rather a straight forward administrative review by the Center City Development
Corporation assuring the project is within the already approved parameters of the PDO.
Market Research : This Study
This market study is focused on describing relevant inuencing characteristics affecting
the successful development of this site as market rate apartments located within the
El Cortez District of Downtown San Diego, California redevelopment area. Efforts were
made to understand the marketplace as to population trends, relevant population growth
projections, current apartment rental vacancy rates, market rent trends, as well as
existing and upcoming competitive project composition.
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The Development Opportunity:
An Urban Market Rate Apartment Project
Data strongly suggests this property has great capacity for development as a market rate apartment
site, with limited, but PDO dened ground oor retail space supplementing as amenity offering to its
tenants (tness, club room, caf etc.) and the pedestrian public.
Approved rights for development are as follows:
THE SITUATION
Site
+ Far 8 @ 25,000 sf of land = 200,000 gsf of building area allowed above grade.
Height limit varies from 85 at the north end of the site to 300at its south end.
Construction Strategy
+ Type 3 Construction under 85 solution (5 stories over 1 story of concrete parking/retail podium)
+ While this proposal does not fully utilize the sites approved FAR of 8, it gains the advantage of a
lesser construction cost on a per square foot basis.
+ Current apartment unit rents of $2.60-2.80/rsf and retail rents of $3.10/rsf support the
potential of a project yield of the following (see following page):
PROJ ECT I NTENTI ON
A STREET
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BEECH STREET
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PROGRAMMED USES PHYSI CAL COMPOSI TI ON OF PROGRAM USES
Apartment Units
90 units @ Market Size of 856 rsf/unit
Apartment Units
Retail/Commercial Space
Total Rentable Square Footage
90 Living Units within this 100,000 available
gsf: However, given site dimensions and setback
requirements this actually translates to a maximum
oor plate size of 18,192 gsf (90,960 gsf over 5
oors).
Assuming 80% unit efciency, this translates to
72,770 sf of rentable apartment space and with the
addition of 6th oor mezzanine space at 4,366 rsf, the
resultant total rentable apartment space area equals
72,770 rsf.
6 suites at 1,333 rsf
Apartment Units = 72,770 rsf
Retail/Commercial = 8,000 rsf
The Mix
Studio (30) at 618 rsf = 18,550 rsf
1 Bedroom (35) at 750 rsf = 26,250 rsf
2 Bedroom (25) at 1,119 rsf = 27,975 rsf
6th level mezzanine space in the top
oor units = 4,366 rsf
Retail/Commercial Space
8,000 rsf retail ground oor (revenue generating) at
ground oor
Parking
Mezzanine : 14,209 sf
B-1 : 26,836 sf
B-2 : 26,836 sf
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I NCOME ASSUMPTI ONS
$2.70/rsf/month
Sub-Total @ 100% Occupancy = $208,148/month
5% Vacancy Assumption less $10,407/month
$3.25/rsf/month
Sub-Total @ 100% Occupancy = $26,000/month
5% Vacancy Assumption less $1,300/month
SUB-TOTAL APARTMENT UNIT RENT = $197,741 / MONTH
SUB-TOTAL UNIT RENT = $24,700 / MONTH
Gross Effective Rent
$222,441/month or $2,669,292 annually
Operating Expenses
35% of Gross Effective Rent =
$77,854/month or $934,252 annually
Valuation @ 4% UPS at Stabilization
5.5% CAP and stabilization
($2,029,757) /.055 (5.5 % CAP) = $36,904,572
Cost Assumptions : Estimated Project Cost of Building
The estimated hard and soft costs of construction for this
project are $25,750,000
Return on Investment (ROI)
Income over cost of $5,800,000 or 22% against build costs
The Mix
Apartment Units
Retail/Commercial
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GRADE LEVEL PLAN FLOORS 2 - 6
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FLOOR B1 FLOOR B2
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Residential Net Rentable Area
Units SF
Level 1 0 0
Level 2 18 14,544
Level 3 18 14,544
Level 4 18 14,544
Level 5 18 14,544
Level 6 18 18,876
Subtotal 90 77,092
Unit Average 856
Retail Gross Area
Units SF
Retail 8,000
Subtotal 8,000
Circ. and Accessory Gross Area
Units SF
Lobby 4,440
Other 12,560
Subtotal 25,000
Building Total Gross 110,658
GROSS AREA SUMMARY
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Studio A Studio B 1 BD A 1 BD B 2 BD A 2 BD B Total
Level 1 0 0 0 0 0 0 0
Level 2 5 1 6 1 4 1 18
Level 3 5 1 6 1 4 1 18
Level 4 5 1 6 1 4 1 18
Level 5 5 1 6 1 4 1 18
Level 6 w/ mezzanine 5 1 6 1 4 1 18
Totals
25 5 30 5 20 5 90
% of Totals
27.78% 5.56% 33.33% 5.56% 22.22% 5.56% 100%
Level 1 Level 2 Level 3 Level 4 Level 5 Level 6 Total Avg SF
Studio 0 3,710 3,710 3,710 3,710 4,934 18,550 659
1 BD 0 5,250 5,250 5,250 5,250 6,983 26,250 799
2 BD 0 5,594 5,594 5,594 5,594 7,440 27,970 1,192
Total SF
0 14,554 14,554 14,554 14,554 19,357 77,092
UNIT MIX
UNIT TYPE AREA
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Parking Total Gross
SF
Level Mez 14,209
Level B1 26,836
Level B2 26,836
Total 67,881
Parking Count
Level Mez 19
Level B1 49
Level B2 53
Total 121
PARKING
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F E A S I B I L I T Y
B A C K G R O U N D + S E T T I N G
This 25,000 sf property address (physical dimensions 100
x 250) is located at1301 Third Avenue in the downtown
PDOs El Cortez District of San Diego. It fronts on A street
to its immediate South (a one way street heading east), and
Third Avenue to its immediate West (a one way street heading
north). Each of these streets are two lane, one way streets,
with parallel metered parking along both sides and Right
Of Way (ROW) dimensions at 80ft. This property is within
the regulatory requirements as described in the El Cortez
Redevelopment Neighborhood of the PDO.
The property has an existing 30,000 gsf three story ofce
building with additional basement space (8,500 gsf).
The building sits on the southern most portion of the site
occupying 10,000 sf of the 25,500 sf site and is a Class C
steel frame building built in the mid 50s. It has 52 surface
parking spaces adjacent and directly north of the building
on the remaining 15,000 sf of land. The building currently
houses an architectural/interior design rm, structural
engineering rm and accountancy practice. The building is
leased on a master reside on the third oor. The building cash
ows approximately $270,000 annually to its owners based
upon this master lease. Assuming a 6.5% CAP rate, this value
is $4,154,000.
LOCATI ON WI THI N THE CI TY OF SAN DI EGO:
AREA CODE 92101
EXI STI NG FACI LI TI ES
SITE
CORTEZ DI STRI CT
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The property is part of what was the Center City
Development Corporations redevelopment district until
its abolishment by Gov. Jerry Brown as a State decit cost
savings measure throughout California implemented March
2012. However, its development rights are still determined by
this prior approved Planned District Ordinance (PDO) setting
forth the detail of the development capacity of the site.
The site has a designation to build a Minimum of FAR 5.0
(125,000 gsf) with a Maximum by right development capacity
of FAR 8.0 (200,000 gsf) and the capacity to bonus the FAR
to 10.0 (250,000 gsf) with the inclusion of bonus incentive
elements in the project such as Urban Open Space,
Affordable Housing, Family Units, Green Roofs etc.
PLANNED DISTRICT ORDINANCE DEVELOPMENT RIGHTS
This calculation is based upon above grade build out and
does not include additional space which might be built below
grade (parking etc.). The site is covered by the PDOs master
EIR, provided the property is developed within its regulations.
The site has a height limit slope contour that requires a
project does not exceed 85 above mean sea level at its north
edge and 300 at its southernmost edge. On site parking
requirements for the site depend upon the ultimate use
dened for the property but are generally calculated at 1car
per unit of residential development
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Adjacent site to the west is vacant (60,000 sf used for surface parking)
This parking may be rented by the hour or the month.
Adjacent buildings on the same 60,000 sf block this site is within:
Our site is located at the Southwest corner of the block
To Our Eastrecently renovated 10,000 sf building used as an ofce
hoteling site
To Our Northeast ..Church of Scientology Ofce building on
15,000 sf of land with a three story building on it. First oor is used
for parking under the building, resulting in a 30,000 gsf building.
To Our North North5,000sf single story historic ofce building
currently housing a small law practice
Existing 1960s City Government Ofce Complex two blocks from
the subject site with plans slated for redevelopment as a new City
Government Ofce District Complex.
SURROUNDI NG PROPERTY I NFLUENCES
Set directly adjacent to the most densely planned downtown core district this site
is in the immediate surround of many of the citys most desirable offerings.
SI TE : VI EW OF THE WEST SI DE ENTRY
ADJ ACENT BLDG, NORTH : LAW FI RM ADJ ACENT BLDG, NORTH : SCI ENTOLOGY ADJ ACENT BLDG, EAST : HOTELI NG OFFI CE FUTURE BLDG: CENTRAL LI BRARY
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The existing San Diego Convention Center and its planned expansion are 11
blocks south of (city blocks in San Diego are 200 x 300) the site (about 4,200
feet or .8 of a mile)
Access to San Diego Bays Waterfront Pedestrian Esplanade is 11 blocks from the
site in both west and south directions. A newly approved waterfront pedestrian
greenway and park is under construction along the west San Diego Bay frontage
which will re-route roads currently against the waters edge and replace them with
a pedestrian friendly greenway, routing the cars upland in the process.
The new San Diego Padre Petco Park baseball eld is 8 blocks south of the site.
New San Diego Central Library is under construction 7 blocks from the site and
will be completed in 2013
Theater amenities in the direct surround of the site offer walking to multiple
performance venues (within 5 blocks in all directions).
The Citys Main Civic Theater used for traveling Broadway productions and concerts
is two blocks from this site. Symphony Hall where the San Diego Symphony and
San Diego Opera perform is 4 blocks from the site. Four concert focused theaters
are 5 blocks from the site. An additional performance in the round theater is 4
blocks away from the site.
The Entertainment District of the main downtown environment is four blocks away
to the south. Restaurant Row along the 5th Avenue Historic Gaslamp District
(within 4 to 7 blocks), Horton Plaza the citys main retail destination 9 block
exterior retail Mall is 4 blocks south.
A new full block city park is planned for the block directly north of the site.
Several churches within four blocks of the site
San Diegos prized Balboa Park is 6 blocks northeast of the site. This historic
park is full of Cultural Buildings including two performance theaters and a host of
Museums (Mengei, Natural History, Science, Photography etc)
The World Famous San Diego Zoo is 10 blocks northeast of the site
NEARBY: CONVENTI ON CENTER NEARBY: SAN DI EGO ZOO NEARBY: PETCO PARK NEARBY: BALBOA PARK
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San Diego Trolley
Metropolitan Transit District Trolley System is accessed two blocks away and
provides easy transport via rail loop to all of the downtown (ie: restaurants,
convention center, waterfront, PetCo Park, Library etc), QualComm Football
Stadium home of the San Diego Chargers, Historic Old Town San Diego, Tijuana
Mexico, and San Diego State University including all of East County. Additional
lines are in the planning stage to extend this service to UCSD and the northern
regions of the city.
Freeway System
Access to I-5 (coastal north/south connector) and Highway 163/I-15 (inland
north/south connector) is ve blocks from the site.
San Diego Lindberg Field
The San Diego Airport International Airport is a 7 minute drive by car from the
site.
Bus Access
Bus stop are available within three blocks of the site.
TRANSPORTATI ON ACCESS
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S A N D I E G O C O U N T Y - W I D E D E M O G R A P H I C S
Source: County of San Diego HHSA, Community Statistics Unit: Year 2009
Total Population
Types of Households By Percentage (2009)
Observation:
1,923,939
Married Couples/Families
50% (961,969)
Other Families
16% (307,830)
People Living Alone
26% (500,224)
Other Non-Family Households
8% (153,915)
34% of the population is not
married or considered a family,
equaling 654,139 people.
additionally some percentage
of the married couple category
representing 961,969 persons are
without children. Assume a 20%
number conservatively this equals
192,393 persons, or 96,196
households.
Types of Housing Units (2009)
Single Unit Structures 61%
Multi-Unit Structures 35%
Mobile Homes 4%
Occupants with a Housing Cost Burden (2009)
(Percent paying 30% or more of
income for housing)
Owners with Mortgage 53%
Average $2,409/month
Owners without mortgage 15%...
Average $442
Renters 56%...Average $1,198
Observation:
Metric for rent assessment equals
56% of the population and
represents an ability to pay on
average $1,198/month
Educational Attainment by Percent for Persons
25 Years or Older (2009)
Graduate or Professional Degree
13%
Bachelors Degree
21%
Associates Degree
8%
Some College, No Degree
23%
High School Diploma or Equivalent
20%
Less than High School Diploma
15%
Observation:
This age group represents 41% of
the population indicating higher
economic capacity per individual
Age Distribution (2009)
65 and over 11%...(211,633)
45-64 24%...(461,745)
Observation:
35% of population exceeds 45
years of age (673,378)
Observation:
40% of the population is between
18 and 24 years of age (769,575)
25-44 29%...(557,942)
18-2411%...(211,633)
Under 1825%...(480,984)
While the property is located in the 92101 Zip code, the greater pool for this opportunity comes from the larger county demographic offered by the following data:
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S A N D I E G O A R E A Z I P C O D E 9 2 1 0 1
D E M O G R A P H I C S Y E A R 2 0 1 0
Source: San Diego Association of Governments
Total Population Population by Age Group : Reference Year 2010
Average # of Persons/Household
Population By Age, And Predicted Growth To
The Year 2020:
Observation:
Observation:
50,117
Predicted 2020:
60,073 (+995 persons/year)
Median Age
41.10
Predicted Age Year 2020
37.9
1.67
18-19 1,842
Predicted Year 2020
1,938 (+.5%/year)
20-24 5,068
Predicted Year 2020
6,060 (+1.96%/year)
25-29 4,244
Predicted Year 2020
5,626 (+3.26%/year)
30-34 3,943
Predicted Year 2020
4,654 (+1.8%/year)
+ 995 persons /year growth for the
next ten years (+2%/year). At 1.67
persons per unit this equates to 596
units need per year. This person
per household calculation would
indicate the need for a total 30,010
units to meet the 2010 population
with an existing housing pool of
24,004 or a predicted net need of
6,006 or average 600 units /year.
Considering a contingency of 15%
applied to this number,predicted net
need may be more conservatively
look like 511units /year.
From 2010 thru 2020 age 20-34 is
predicted to increase in population
by 3,085 persons.if current
known occupancy demographics
hold at 1.67 persons per household
this equates to an additional need
of 184 units per year for the years
2012 thru 2020.
Total Existing Housing Units (as of 2010)
Existing Single Family
Existing Multi Family
Observation:
24,004
Predicted 2020:
30,044 (+2.5%/year)
476 units
Predicted 2020:
375 (-30%)
23,526 units
Predicted 2020:
29,667 (+2.6%/year)
The population is leaning more
toward multi-family versus single
family home living, rendering
greater strength in the need for
multi-family provision in the
marketplace. The #s appear to
indicate a 648 unit/year short fall
based upon a persons/unit metric of
1.67.
Mobile Homes
Multi-Family Unit Vacancy Rate
Observation:
2
4.32% (Source: Market Pointe Realty
Advisors March 22,2012)
5% vacancy rate is considered an
ideal market condition..this would
indicate a more than favorable
demographic for rental multi-family
housing
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( C O N T . ) S A N D I E G O A R E A Z I P C O D E 9 2 1 0 1
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(continued) ...Population By Age, And Predicted
Growth To The Year 2020:
Observation:
35-39 4,090
Predicted Year 2020
4,435 (+.84%/year)
40-44 4,473
Predicted Year 2020
3,841 (-1.41%/year)
45-49 4,400
Predicted Year 2020
3,766 (-1.4%/year)
50-54 3,758
Predicted Year 2020
4,226 (+1.26%/year)
This age group represents a
declining population of -.27%/year,
thus a less likely target market for
future building activity
(continued) ...Population By Age, And Predicted
Growth To The Year 2020:
Observation:
75 + ..3,372
Predicted Year 2020
4,090 (+2.1%/year)
Observation: This would seem a
different category of clientele,
requiring more extensive medical
services given the advanced age
demographic represented. While a
growth sector, the advanced service
requirement to serve this growth age
group must also be considered. This
age category represents a 2.1%/
year growth market for the ten year
period in question (2010-2020)
(continued) ...Population By Age, And Predicted
Growth To The Year 2020:
Observation:
55-59 2,902
Predicted Year 2020
4,182 (+4.4%/year)
60-64 2,238
Predicted Year 2020
3,440 (+5.4%/year)
This group, including ages 55-
74, is an increasing demographic,
representing predicted growth of
53% over 10 years or 5.3%/year.
Using a most conservative case
of 1.67 persons per unit typical for
this advanced age group within the
92101 demographic market, this
represents a potential need for 252
units per year dedicated solely to
this age group. However, it is more
likely this age category would result
in a lower persons per unit ratio
given the greater propensity for
spousal death, and health issues.
This result would create a demand
exceeding 252 units per year but
designed and exclusively dedicated
to seniors. However, to date senior
housing solutions have been
subsidized events. Additionally, the
events of the State of California
via elimination of Redeveloment
Agencies has taken several of the
potential subsidy funding sources
away. (20% Affordable Housing
requirement, Tax Credit Funding,
Housing Commission Funding).
If this property can nd a way
to attract the elite income
categories of the senior population
or the private equity and debt
necessary to allow them to be
built, these subsidies may be less
important.
65-69 1,567
Predicted Year 2020
2,563 (+6.3%/year)
70-74 1,262
Predicted Year 2020
2061 (+6.3%/year)
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Current 92101 Population by Gender and Marital Status
(cont)...Current 92101 Population by Gender and Marital
Status
Observation:
62.97% Male (20,939)
37.03% Female (11,990)
Never married 45.31%
Married 27.36%
This population factor by gender could
dene certain design characteristics worthy of
offering occupants for a development looking
forward, such as entertainment centers with
TV (ie: sports events etc), soft seating, card
room, health facility with weight room, bocce
ball court, etc.
Household Income 92101 Year 2010
Observation:
Average Household Income
$58,007
Income between $35,000 and $200,000 +
in zip code 92101 represents 35.62% of the
population
Assuming 30% of income capable of
being dedicated to housing cost current
median income = rental income capacity of
$15,270/year or an average of $1,450/month
disposable rental income.
Renter Occupied Units In The 92101 Zip Code
81.39% of all occupied units
Of The 4.32% Vacant Housing Units Available In
The 92101 Zip Code
59.38% are rental units
Observation:
This speaks to the strong rental demographics
of the subject project site environment.
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U P C O M I N G M U L T I - F A M I L Y H O U S I N G S U P P L Y C H A I N
Source: Urban Housing Partners
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Source Urban Housing Partners
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Source Urban Housing Partners
( C O N T . ) U P C O M I N G M U L T I - F A M I L Y H O U S I N G S U P P L Y C H A I N
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( C O N T . ) U P C O M I N G M U L T I - F A M I L Y H O U S I N G S U P P L Y C H A I N
Source Urban Housing Partners
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Source Urban Housing Partners
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Merrill Gardens
2537 2nd Ave
84 units
619-752-1099
contact: Jennifer
Westminister Manor
1730 3rd Ave
155 units
619-233-7001
contact: Marasella
Luther Tower
1455 2nd Ave
200 units
619-234-1272
contact: Jonathan
Sanford Hotel
1301 5th Ave
130 units
619-235-7900
contact: David
Coronado Village
299 Prospect
90 units
619-437-1777
contact: Liset
Lions Manor
310 Market Street
125 units
619-235-4433
contact: Gloria
Horton House
333 G Street
150 units
619-239-5171
contact: Bob (female)
Potiker Center
525 14th Street
200 units
619-237-8004
contact: Leslie
Cathedral Arms
3911 Park Blvd
unknown units
619-291-3883
possible bad number
Grace Tower
3955 Park Blvd
unknown units
619-298-4632
possible bad number
Balboa Nursing/Rehab
3520 4th Ave
170 units
619-291-5270
contact: Erika
Green Manor
4041 Ibis Street
150 units
619-297-1601
contact: Gloria
( C O N T . ) U P C O M I N G M U L T I - F A M I L Y H O U S I N G S U P P L Y C H A I N
Source Urban Housing Partners
M A R K E T I N G +
DOMUS@3
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A N A L Y S I S
F E A S I B I L I T Y
( C O N T . ) U P C O M I N G M U L T I - F A M I L Y H O U S I N G S U P P L Y C H A I N
Observation A: Observation B:
Asking rental rates for 2012 among the 5 projects shown accounting for 681
units existing in the market representing a vacancy rate of 3.52%, average
$2.61/sf min to $2.80/sf max.
Units vary in size as follows:
Studio @ 350 sf - 688 sf (519 sf average =
$1,355 - $1,453/month)
One Bedroom @ 493 sf 1,443 sf (968 sf average =
$2,502 - $2,710/month)
Two Bedroom @ 670 sf 1,859 sf (1,264 sf average =
$3,299 - $3,539/month)
Three Bedroom @ 1,225 sf -1,446 sf (1,335 sf average =
$3,484 - $3,738/month)
The current pipeline of 92101 Zip Code multi-family units indicates an
upcoming supply of 40 new units in 2012, 233 units in 2013, 1533 units
in 2014 (100 of which are still in the potential category) and 2,216 units
in 2015 (175 of which are still in the potential category. Absorption rates
for rental units would be required to be 3.33/month in 2012, 19.41/month
in 2013, 127.75/month in 2014, and 184.67/month in 2015.
Market absorption is predicted to be 1,000 units in 2012 and 2013, with
supply during these same years for the 92101 at 273 units. However, these
years are vigorously followed by a supply of 1,433 and 2,041 in the years
2014 and 2015 close to meeting need, but still short by 253 units. This is
an opportunity for our site to see a potential rental play in the marketplace.
This also does not consider the senior demographic offering, not present
in these projects & not appearing to be addressed by existing development
proposals.
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S A N D I E G O 9 2 1 0 1 Z I P C O D E H O U S I N G R E N T A L R A T E S + T R E N D S
Observation:
While this 2010 data supports a lesser rental rate, the
current offering rates for rental on a per square foot basis
indicate a strong leasing market and or a greater amount of
expendable income being spent for housing needs (ie: greater
than 30% of typical earnings). The extent to which a project
can be designed to maintain a lower per month rental metric
(something closer to a $1,141rental rate ) the stronger the
capacity to minimize vacancy in a competitive marketplace
Median Rent
$1,141/month
Average Rent / Month
$1,387/month average
Range of Rents
$750-$999/month
2,841 units17.62%
$1,000- $1,249/month
3,385 units20.99%
Median Household Income for 2011
$62,314
30 % of income predicted as spendable for housing this
equals a median buyer capacity of $1,558/month
2010 SAN DI EGO 92101 ZI P CODE HOUSI NG RENTAL RATES
2011 FOURTH QUARTER SAN DI EGO 92101 ZI P CODE HOUSI NG RENTAL RATE TRENDS
$1,250-$1,499/month
2,000 units12.4%
$1,500-$1,999/month
2,724 units16.69%
DOMUS@3
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F E A S I B I L I T Y A N A L Y S I S
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DOMUS @ 3RD
The following outlines the nancial feasibility of the 90 Unit Domus @ 3rd project to be located in
downtown San Diego, California
Conclusion:
This project is conservatively pro-formad exclusive of the idea that market forces are trending higher
than projected in these assumptions, and if true, our assumptions will simply create an enhanced
nancial outlook. We have not relied on trending rentsthese numbers are based upon our market
research and set at the reasonable range of expectation for this building type and marketplace.
Please enjoy as you view the results for :
Domus @ 3rd
F O R R E N T - A P A R T M E N T S C E N A R I O
DOMUS@3
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FOR RENT-APARTMENT ASSUMPTIONS INCOME
Total Land Area = 25,000 gsf
Apartments - 90 units @ 808 rsf/unit average = 72,770 rsf
6th Floor Mezzanine space at 4,366 rsf = 77,092 rsf
Unit Mix
Studio, 30 : 618 rsf
One Bedroom, 35 : 750 rsf
Two bedroom, 20 : 1,119 rsf
6th Floor Mezzanine Space : 4,366 rsf
Retail /Commercial
Ground Floor : 8,000 rsf
Apartment Rent
@ $2.70/rsf @ 77,092 rsf (with mezzanine) =
Potential Apartment Gross Income of $208,148 /month
Less Vacancy of 5% = $10,407
Total Apartment Project Gross Effective Income = $197,755/
month
Retail Rent
@ $3.25/rsf @ 8,000 rsf = Potential Retail Gross Income of
$26,000/month
Less Vacancy of 5% = $1,300/month
Total Retail Gross Effective Income of $24,700/month
Total Project
Total Apartment and Rental Gross Effective Income =
$222,415/month
Annualized = $2,668,980/year
Less Operating Expenses @ 35% = $934,143/year
F O R R E N T - A P A R T M E N T
Net Operating Income (NOI) =
$1,734,837/year
Total Rentable Square Footage =
85,092 rsf
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PROJECT VALUE @ STABILIZATION PROJECT PROFIT ANALYSIS
@5.50% CAP = $36,882,000
@ 5.25% CAP = $38,639,000
@ 5% CAP = $40,578,000 (researched current assumption)
@ 4.75% CAP= $42,706,000
@ 5.50% CAP
Build Prot = $5,800,000 or 22% on Total Build Costs
@ 5.25% CAP
Build Prot = $7,298,000 or 28% on Total Build Costs
( C O N T . ) F O R R E N T - A P A R T M E N T
4% UPS
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Land
Hard Costs
Soft Costs @ 15% of Hard Cost of Construction/Contingency
Cost @ $200/sf @ 25,000sf = $5,000,000
Land Cost/Residential Unit = $56,000
Above Grade Costs:
Residential @ $106/gsf (Type 3 Construction) @ 88,679 gsf (87%) =
$9,408,000
First Floor Garage/ @ $100/gsf @ 25,000 gsf = $2,500,000
Off Site Costs = $313,000
Below Grade Costs:
Garage @ $92.50/gsf @ 53,672 gsf = $4,964,660
Hard Costs Sub-Total = $17,185,000
5% contingency = $859,250
Architectural and Engineering
Permits and Impact fees
Title Closing
Professional Fees
Inspecting Engineer
FFE Set Up
Operating Decit
Loan Costs
Developer Fee
TI and Retail Leasing Commissions
Contingency

Soft Costs Sub-Total @ 15% of hard costs/contingency = $2,706,750
MARKET RATE RESI DENTI AL CONSTRUCTI ON COST ESTI MATE ASSUMPTI ONS
TOTAL LAND/HARD/SOFT COSTS*: $23,044,000 + 2,706,000 = $25,750,000
( C O N T . ) F O R R E N T - A P A R T M E N T
* Assume land sale @ $5,000,000
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CASH FLOW ANALYSIS (000S)
carry/land
soft ttl $2,728,000
a/e 5%
dev cost 3.5%
other
offsite
totals
construction
income $2.70/sf
4% ups
sale 5.5% cap
0
(35) (35) (35) (35) (5,000)
(636)
(125)
(25)
(205)
(125)
(100)
(69)
(125)
(100)
0
(125)
(100)
0
(136)
(825)
0 (188) (188) 0 0
0 (13,638) (4,547) 0 0
0 0 1,255 1,948 2,025
0
(821)
0
(14,291)
0
(3,809)
0
1,688
36,818
32,882
1 2 3 4
Discounted Cash Flow and IRR
24% @ 5.5% CAP
( C O N T . ) F O R R E N T - A P A R T M E N T
M A R K E T I N G +
DOMUS@3
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A N A L Y S I S
F E A S I B I L I T Y
Conclusion:
Domus @ 3rd provides potential investors an opportunity to be part of a spectacular real
estate play in the strong San Diego market.
Supported by growth demographics of the downtown area, as well as the competitive
nancing rates of our current time, this 90 unit project is packaged neatly for success.
Its size, its simplicity, its location and its available right to build approvals make it
attractive to an investor who desires to minimize risks while participating in a deal which
creates good return. Domus @ 3rd is an attractive opportunity for any savvy investor, and we
welcome your interest.
Best Regards,
Gordon R Carrier FAIA
Managing Member
Domus@3rd LLC