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SHARK TANK – 9% DEVELOPMENT Presentation harbour north Apartments – Chesapeake, VA

SHARK TANK – 9% DEVELOPMENT Presentation harbour north Apartments – Chesapeake, VA. The Lawson Companies 373 Edwin Drive Virginia Beach, Virginia 23462. Strictly Private and Confidential. Agenda. The Lawson Companies’ Experience Site Location & Photos Property Summary Financing Pro Forma

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SHARK TANK – 9% DEVELOPMENT Presentation harbour north Apartments – Chesapeake, VA

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  1. SHARK TANK – 9% DEVELOPMENT Presentationharbour north Apartments – Chesapeake, VA The Lawson Companies 373 Edwin Drive Virginia Beach, Virginia 23462 Strictly Private and Confidential

  2. Agenda • The Lawson Companies’ Experience • Site Location & Photos • Property Summary • Financing Pro Forma • Issues – The Good, The Bad, & The Hairy Agenda

  3. The Lawson Companies’ Experience • Established in 1972 • Full-service real estate firm • Manages over 5,000 apartments • from Virginia to South Carolina • Developed one of the first LIHTC • communities in the State of Virginia in 1988 • Received allocation of tax credits for 18 communities • In-house Tax Credit Compliance Department Experience

  4. site location & photographs

  5. Arial Photograph Site Location & Photographs

  6. Arial Photograph – Proposed Site Site Location & Photographs

  7. Harbour North Apartments – Pre-rehab Site Location & Photographs

  8. Harbour North Apartments – Pre-rehab Site Location & Photographs

  9. Harbour North Apartments – Pre-rehab Site Location & Photographs

  10. Property summary

  11. Harbour North Apartments Development Proposal • Acquisition/rehab of two 120-unit existing Rural Development communities built in 1978 and 1979 in Chesapeake, Virginia. • Utilize 9% Low-Income Housing Tax Credits • Refinance and re-amortize existing RD debt • Add new VHDA debt • Physical Features • Thirty buildings, two stories in height, eight units in each building • 192 - 1BR apartments • 48 - 2BR apartments • Rental office, laundry room, maintenance shop • Add new community center including a computer learning office • ADA - convert 24 apartments to fully-accessible units with universal design features • EarthCraft • In a Revitalization Area, not a QCT Property Summary

  12. Financing pro Forma

  13. Financial Information Financing Pro Forma • Rents • 40% of AMI • 24 – 1BR (553 SF) - $410 • 50% of AMI • 24 – 1BR (600 SF) - $525 • 96 – 2BR (698 SF) - $645 • 96 – 2BR (745 SF) - $645 • Operating Expenses • $5,000 per unit per annum • Security budget $115,000 (almost 10% of annual OPEX budget) • Insurance – Excess and Surplus Mkt + Flood Insurance • Loans – 25-year amortization • Refinanced RD Debt - $1,985,744 (Rate – 1%) • New SPARC/REACH Loan - $1,000,000 (Rate – 2.95%) • New VHDA Taxable Bond - $3,100,000 (Rate – 6.92%) • Cash Flow After Debt Service - $75,102

  14. Sources and Uses Financing Pro Forma • Total Per Unit • SOURCES OF FUNDS • First Mortgage $3,100,000 $12,917 • SPARC Mortgage $1,000,000 $4,167 • Assume RD Mortgage $1,985,744 $8,274 • Deferred Dev Note $909,410 $3,789 • Return from Sale of Investor Tax Credits $9,091,419$37,881 • TOTAL SOURCES OF FUNDS $16,086,573 $67,027 • USES OF FUNDS • Total Purchase of Land or Building $5,400,000 $22,500 • Total New Construction / Rehabilitation $7,524,000 $31,350 • Total Professional Fees $128,350 $535 • Total Interim Costs $94,050 $392 • Total Financing Fees & Expenses $225,563 $940 • RD Debt Service $153,286 $639 • Total Soft Costs $240,616 $1,003 • Total Developer Fees $1,500,000 $6,250 • Total Reserves $820,708 $3,420 • TOTAL USES OF FUNDS $16,086,573$67,027 • REMAINDER (SHORTAGE) OF FUNDS - -

  15. issues

  16. The Good • Occupancy averages above 98% • Many long-term residents TC eligible • Located on an existing bus line • Adding resident requested computer learning center • EarthCraft design will lower resident utility expenses • Post-rehab rents not substantially higher than pre-rehab rents • The Bad • Aluminum wiring throughout apartments • Located in a flood zone, has flooded to front steps several times • Only 70% RA • Some current residents exceed income limits – incentivize • Adjacent to tough townhouse community • Requesting to close side entrance on Channel Place Issues The Hairy Timing of refinancing of two Rural Development loans to coincide with tax credit timelines Renting accessible units slow without subsidy Cannot afford 24-hour security Development deferral is large (over 12 years) City wants non-residents to be able to use computer learning center

  17. The Rivers Apartments – Post-rehab The Real Project

  18. The Rivers Apartments – Post-rehab The Real Project

  19. The Rivers Apartments – Post-rehab The Real Project

  20. The Rivers Apartments – Post-rehab The Real Project

  21. The Rivers Apartments – Post-rehab The Real Project

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