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Court Square Center Memphis, Tennessee

Court Square Center Memphis, Tennessee. Project Background Project Structure Risks & The Back End Parting Words & A Few Tips. Map: Downtown Memphis. The Real Estate.

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Court Square Center Memphis, Tennessee

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  1. Court Square CenterMemphis, Tennessee

  2. Project Background • Project Structure • Risks & The Back End • Parting Words & A Few Tips

  3. Map: DowntownMemphis

  4. The Real Estate Building Type: Columbian Mutual Tower 21-story high-rise Court Annex 7-story mid-ride Lowenstein 5-story mid-rise Project Size (NSF): BuildingResidentialCommercial Columbian Mutual Tower 41,935 19,429 Court Annex 22,596 9,171 Lowenstein 34,985 8,993 Total 99,516 37,593 Residential Units: 77 Market Rate Rental Units; $1.12 nsf average in rent

  5. The Real Estate Commercial/Retail Space: Approximately 40,000 square feet; $15.00 nsf average Signed Leases: The Plough Foundation – National Foundation Memphis Justice Center – Local Law Firm Ceriellos New York Deli – Gourmet Deli / Grocery Store Signed Lease as % of Total Commercial Space: 45% Parking: 110 Spaces Project Estimated Cost: $40,600,000 Estimated Construction: March 15, 2006 – December 15, 2007

  6. Columbia Mutual Tower

  7. Court Annex

  8. Lowenstein Building

  9. Project Facts • Fully leveraged deal – All sources generating NMTCs including HTC equity (i.e., twinning) • $40,000,000 NMTC allocation from 2 CDEs • $26,000,000 allocation from ESIC • $14,000,000 allocation from NDC • 5 sources of funds including a permanent loan, Section 108 loan, BEDI grant, HTC equity and NMTC equity • Two investors/lenders providing loans and equity • Both commercial and residential space to be leased/rented with an ~35-65% income split, respectively

  10. Sources A Loan (Permanent Loan) $11,800,000 B Loan (City 108 Loan) 8,500,000 C Loan (City BEDI) 2,000,000 HTC Equity 6,300,000 NMTC Equity 12,000,000 Total $40,600,000

  11. Uses Site Acquisition $1,065,000 Construction Costs 23,100,000 A & E Costs 1,700,000 Financing Costs 3,000,000 Other Soft Costs 10,435,000 CDE Fees / Reserves 1,300,000 Total $40,600,000

  12. Loans Equity HTC Equity Investment Partnership Qualified Equity Investment CDE Qualified Low-Income Community Investment (Loans or Equity) Operating Partnership (Property Owner) Historic Real Estate Example of Fully Leveraged NMTC Structure(Including Twinning of Historic Tax Credits)

  13. Court Square Center – Capital Flow of Funds (Draft) Investment Partnership $40,400,000 $26,400,000 ESIC QEI | $14,000,000 NDC QEI $27,000 Fees & Reserves FNMA, 49.995% USB, 49.995% ESIC, 0.01% $14,000,000 QEI $26,400,000 QEI $9,000,000 QEI $5,000,000 QEI ESIC CDE 2 (Loans) $12,070,000 ($11,800,000 Loan + $270,000 CDE Fees) ESIC Master CDE, .01% FNMA, 49.995% USB, 49.995% NDC CDE 2 $5,000,000 (Transfer of funds to NDC CDE 1) ESIC CDE 1 (Equity) $14,300,000 ($14,000,000 Equity + $300,000 CDE Fees) ESIC Master CDE, .01% FNMA, 49.995% USB, 49.995% NDC CDE 1 $14,000,000 ($2,800,000 Equity + $10,710,000 Loans + $490,000 CDE Fees) NDC Master CDE, .01% FNMA, 49.995% USB, 49.995% B Loan ($8,500,000) A Loan ($11,800,000) Court Square Center LLC Owner / QALICB $39,310,000 ESIC CDE, 99.00% NDC CDE, 0.99% CS Associates, 0.01% C Loan ($2,000,000) D Loan ($210,000) Equity ($14,000,000) Equity ($2,800,000) Draft as of February 1, 2006

  14. Risk • The complexity of the transaction adds risk: • A mixture of five sources of private and public funds; • Both HTC and NMTC programs have recapture rules; • NMTC projects by definition are in census tracts with at least 20% poverty; • Must maintain at least 20% of revenue from commercial activities.

  15. The Back End • Exit Strategies • Refinance the project and continue as rental • Convert the residential units to condos and retire debt

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