TABLE 1 All
Private Development and Occupancy
REQUIRED REVENUES
FOR NEW CONSTRUCTION
Chapel Hill CBD
Office Market Analysis
Unit
of Analysis 10.0%
core factor 1.00 gsf
.90 rsf
Development
Costs
Land
cost (per FAR) (1) 15.00 /gsf
Site
improvements
2.50 /gsf
Base
building construction
65.00 /gsf
Parking
(2) 20.00 /gsf
Interior
fit out 25.00 /gsf
Construction
Cost 112.50 /gsf
Contingency 4% of Construction Cost 4.50 /gsf
Developer
Fee 4% of Development Cost
4.72 /gsf
Soft
Costs (A&E, Financing, Legal, Marketing, Etc) 22.5% of Delivery Cost 30.76 /gsf
Total
Delivery Costs Per Unit 167.48 /gsf
Funding
Requirements
Debt 75% of
Delivery Cost 125.61 total
25 years
@ 8% 11.77 /year
Equity 25% of Delivery Cost 41.87
total
Return @
15% 6.28 /year
Annual
financing costs
18.05 /year /gsf
20.05 /year /rsf
Required
Annual Rent (including parking)
Annual
financing costs
20.05 /rsf
Operating
expenses
5.50 /rsf
Real
estate taxes
3.33 /rsf
Annual
required rent before credit loss 28.88 /rsf
Vacancy/Credit
Loss 5%
1.44 /rsf
Total
required annual rent $30.29 /rsf
Source: Bolan Smart Associates, Inc. (04/01)
Notes:
(1)
Market value of land estimated at $25 per land sf, or $15 per gsf of building
area (0.6 FAR).
(2)
Parking construction costs based on two spaces per 1,000 gsf @ $10,000 per
parking space.
(3)
No provision is made for replacement parking of existing parking spaces.
TABLE 2 Publicly
Development and Occupied No Parking
REQUIRED REVENUES
FOR NEW CONSTRUCTION
Chapel Hill CBD
Office Market Analysis
Unit
of Analysis 8.0%
core factor 1.00 gsf
.92 rsf
Development
Costs
Land
cost (per FAR) (1) 15.00 /gsf
Site
improvements
2.50 /gsf
Base
building construction
70.00 /gsf
Parking
(2) 0.00 /gsf
Interior
fit out 25.00 /gsf
Construction
Cost
97.50 /gsf
Contingency 4% of Construction Cost
3.90 /gsf
Developer
Fee 4% of Development Cost
3.07 /gsf
Soft
Costs (A&E, Financing, Legal, Marketing, Etc) 22.5% of Delivery Cost 23.89 /gsf
Total
Delivery Costs Per Unit 143.37 /gsf
Funding
Requirements
Debt 100% of
Delivery Cost 143.37 total
30 years
@ 6% 10.42 /year
Equity 0% of Delivery Cost 0.00
total
Return @
15% 0.00 /year
Annual
financing costs
10.42 /year /gsf
11.32 /year /rsf
Required
Annual Rent (including parking)
With
100% Taxes W/O County Taxes
Annual
financing costs
11.32 /rsf 11.32 /rsf
Operating
expenses
5.50 /rsf 5.50 /rsf
Real
estate taxes 2.79 /rsf
1.34 /rsf
Annual
required rent before credit loss 19.61 /rsf 18.16 /rsf
Vacancy/Credit
Loss 0%
0.00 /rsf 0.00 /rs
Total
required annual rent $19.61
/rsf $18.16 /rs
Source: Bolan Smart Associates, Inc. (04/01)
Notes:
(1)
Market value of land estimated at $25 per land sf, or $15 per gsf of building
area (0.6 FAR).
(2)
Parking construction costs based on two spaces per 1,000 gsf @ $10,000 per
parking space.
(3) No provision is made for replacement parking of existing parking spaces.
TABLE 3 Publicly
Development and Occupied No Fit Out $
REQUIRED REVENUES
FOR NEW CONSTRUCTION
Chapel Hill CBD
Office Market Analysis
Unit
of Analysis 8.0%
core factor 1.00 gsf
.92 rsf
Development
Costs
Land
cost (per FAR) (1) 15.00 /gsf
Site
improvements
2.50 /gsf
Base
building construction
70.00 /gsf
Parking
(2) 20.00 /gsf
Interior
fit out 0.00 /gsf
Construction
Cost
92.50 /gsf
Contingency 4% of Construction Cost
3.70 /gsf
Developer
Fee 4% of Development Cost
3.34 /gsf
Soft
Costs (A&E, Financing, Legal, Marketing, Etc) 22.5% of Delivery Cost 22.91 /gsf
Total
Delivery Costs Per Unit 137.45 /gsf
Funding
Requirements
Debt 100% of
Delivery Cost 137.45 total
30 years
@ 6% 9.99 /year
Equity 0% of Delivery Cost 0.00
total
Return @
15% 0.00 /year
Annual
financing costs
9.99 /year /gsf
10.85 /year /rsf
Required
Annual Rent (including parking)
With
100% Taxes W/O County Taxes
Annual
financing costs
10.85 /rsf 10.85 /rsf
Operating
expenses
5.50 /rsf 5.50 /rsf
Real
estate taxes 2.67 /rsf 1.28 /rsf
Annual
required rent before credit loss 19.02 /rsf 17.63 /rsf
Vacancy/Credit
Loss 0%
0.00 /rsf 0.00 /rsf
Total
required annual rent $19.02 /rsf $17.63 /rsf
Source: Bolan Smart Associates, Inc. (04/01)
Notes:
(1)
Market value of land estimated at $25 per land sf, or $15 per gsf of building
area (0.6 FAR).
(2)
Parking construction costs based on two spaces per 1,000 gsf @ $10,000 per
parking space.
(3)
No provision is made for replacement parking of existing parking spaces.
TABLE 4 Publicly
Development and Occupied With Parking & Fit Out
REQUIRED REVENUES
FOR NEW CONSTRUCTION
Chapel Hill CBD
Office Market Analysis
Unit
of Analysis 8.0%
core factor 1.00 gsf
.92 rsf
Development
Costs
Land
cost (per FAR) (1) 15.00 /gsf
Site
improvements
2.50 /gsf
Base
building construction
70.00 /gsf
Parking
(2) 20.00 /gsf
Interior
fit out 25.00 /gsf
Construction
Cost 117.50 /gsf
Contingency 4% of Construction Cost
4.70 /gsf
Developer
Fee 4% of Development Cost
3.70 /gsf
Soft
Costs (A&E, Financing, Legal, Marketing, Etc) 22.5% of Delivery Cost 28.18 /gsf
Total
Delivery Costs Per Unit 169.08 /gsf
Funding
Requirements
Debt 100% of
Delivery Cost 169.08 total
30 years
@ 6% 12.28 /year
Equity 0% of Delivery Cost 0.00
total
Return @
15% 0.00 /year
Annual
financing costs 12.28
/year /gsf
13.35 /year /rsf
Required
Annual Rent (including parking)
With
Town Taxes W/O County Taxes
Annual
financing costs
13.35 /rsf 13.35 /rsf
Operating
expenses
5.50 /rsf 5.50 /rsf
Real
estate taxes 3.29 /rsf 1.58 /rsf
Annual
required rent before credit loss 22.14 /rsf 20.43 /rsf
Vacancy/Credit
Loss 0%
0.00 /rsf 0.00 /rsf
Total
required annual rent $22.14 /rsf $20.43 /rsf
Source: Bolan Smart Associates, Inc. (04/01)
Notes:
(1)
Market value of land estimated at $25 per land sf, or $15 per gsf of building
area (0.6 FAR).
(2)
Parking construction costs based on two spaces per 1,000 gsf @ $10,000 per
parking space.
(3) No provision is made for replacement parking of existing parking spaces.
EXHIBIT
D
DEVELOPMENT
PLAN/SCHEDULE
DEVELOPMENT PLAN & SCHEDULE
April 25, 2001
---------------------------------------------------------------------------------------------------------------------
Assumptions:
· The Town, the University, and the Hospital all approve the concept plan under which: (a) Lot 5 is converted to office space (primarily for the University), neighborhood retail, and parking; (b) 440 W. Franklin is converted to employee housing serving the above three institutions; and (c) additional land is obtained on Rosemary Street to be used for a child-care facility and additional housing.
· Pursuant to an agreement among the three institutions, a new nonprofit entity (CHNP) is created by the Town with all three of the institutions represented on its board, but with control remaining with the Town.
· CHNP is provided with a loan from the three institutions totaling $100,000. The loan is repayable from development proceeds.
· CHNP retains attorneys to prepare a tax exemption request and various agreements with lenders, architects, and builders.
· Programs are established for Lot 5, 440 W. Franklin, and additional land on Rosemary Street. The programs are visually depicted through renderings.
· A financial institution is brought in, which will fund all of the remaining seed money.
· Presentations Made to Three Institutions 4/10 5/21/01
· Development Agreement Prepared and Signed by all Institutions 5/21 6/22/01
· Nonprofit Created 6/22/01
· 501(c)(3) Application Prepared and Sent to IRS 6/22 7/10/01
· Architect(s) for Office Building and Housing Selected 6/22 7/20/01
· Program for Lot 5 Office Building, Etc., Developed with University 6/25 8/10/01
· Builder for Office Building and Housing Selected 7/20 8/3001
· Other Land Opportunities Reviewed/Decisions on Procurement Reached 7/15 11/15/01
· Prepare Initial Cost Analysis for Proposed Projects 8/30 9/28/01
· Lender/Investment Banker for Projects Selected; Loan Agreement Signed 6/22 9/28/01
·
Office Building Project goes into Full Design 10/1/01
· Construction of Office Building Begins Mid-year 2002