Fort Walton Beach Council agenda — 03-23-2010 Special-Soundside Develp. Project — reading text

79_  Sound Side Apartments Market Supply and Demand Analysis With all units marketed toward moderate to high income households, management began leasing in May 2009 following the completion of Phase I construction. As of January 2010, the property is 24% pre - leased. This represents a lease -up rate of approximately 9 units per month. Although Alexan Henderson Beach provides a good indication of absorption trends in the area, a slightly higher rate was used for the subject due to its income orientation. At completion, the subject will offer 50 project -based Section 8 units to low incorne households. According to the Fort Walton Beach Housing Authority, these units will be replacing low income housing. As such, these units will be rapidly occupied with an expected wait list. If all 50 units are distributed among the eight residential buildings, this would generate an additional six units per building. Adding this to the absorption trends observed at Alexan Henderson Beach, will result in the absorption of about 14 to 18 units per month. A slightly lower rate is anticipated toward the end of the absorption period when there are fewer units to select from by potential tenants. Therefore, the absorption for the subject: is estimated as follows: Sound Side Apartments Total Units 200 Stabilized) Occupancy 95. 0% Stabilized Units 190. 0 Month Move Ins Occ. Units Occupancy Month 1 - Construction Begins 0. 0 0. 0 0. 0% Month 9 - First C/ O Issued 18. 0 18. 0 9.0% Month 10 18. 0 36. 0 18. 0% Month 11 18. 0 54.0 27.0% Month 12 18. 0 72. 0 36. 0% Month 13 16. 0 88. 0 44.0% Month 14 16. 0 104. 0 52. 0% Month 15 16. 0 120. 0 60.0% Month 16- Construction Complete 16. 0 136. 0 68. 0% Month 17- Pre Cost Certification 14. 0 150. 0 75. 0% Month 18- Pre Cost Certification 14. 0 164. 0 82. 0% Month 19 14. 0 178. 0 89.0% Month 20- Stabilized Occupancy 12. 0 190.0 95. 0% Total 190. 0 190. 0 95. 0% Average Monthly Absorption 15. 8 109. 2 54. 6% The subject will be comprised of eight, 2 -3 story building that will enter the market independently. As indicated, the subject is expected to reach stabilized occupancy of 95% based on a projection of about 15 to 16 units per month. Value Tech Realty Services, Inc. www.gotovalue.com Page 65 80-  Sound Side Apartments Conclusion Conclusion Fort Walton Beach has a diversified economy that includes tourism, military and residential support A strong tourism and second home market provides sufficient households to support a vast services. amount of retail and commercial services; all providing jobs for the local permanent resident base. Fort Walton Beach' s economy generates a variety of employment opportunities. The commonality among them is that the wage levels are generally moderate in nature. As a result, the high -end condominiums and luxury apartments are beyond the reach of most households. There is one affordable apartment community that has historically operated at capacity levels. The subject will provide replacement housing ( project -based Section 8) for public housing ( tenant - protected Section 8 vouchers) that was removed by the city of Fort Walton Beach. Further, the subject will provide housing for qualified tenants at 60% or below AMI and 80% or below AMI ( maximum for project -based vouchers). The community is well designed and will provide a modern product that is equal to, or exceeds, the quality offered throughout the region. A review of the economic and demographic profile in the market indicates strong demand. With the continued expansion of the region and Eglin AFB in specific, there will continue to be sufficient rental households to support the proposed project. Based on our demand analysis, there is market support for the subject as proposed. Value Tech Realty Services, Inc. www.gotovalue. com Page 66 81-  ADDENDUM A SUBJECT PHOTOGRAPHS 82_ Pending Insurance Quote LIMITED SELF -CONTAINED APPRAISAL OF. Elevator Maintenance Contract,, Expense projections include Property Taxes Value Tech Realty Services, Inc. Sound Side Apartments A Proposed, 200 -Unit Affordable Apartment Community Located at 20 Carson Drive, Fort Walton Beach, Florida 32548 PREPARED FOR: Ms. Susan Hall Berkadia Commercial Mortgage LLC 33 Inverness Center Parkway, Suite 140 Birmingham, Alabama 35242 And Ms. Gail Sansbury Executive Director Fort Walton Beach Housing Authority 27 Robinhood Drive SW Fort Walton Beach, Florida 32548 PREPARED BY. Value Tech Realty Services, Inc. 240 Crystal Grove Boulevard Lutz, Florida 33548 LIMITED APPRAISAL DATE: January 6, 2010 240 Crystal Grove Blvd. Lutz, FL 33548 813- 948 -0545 DATE OF REPOR T. www.gotovalue.com January 8, 2010 VAL UE TECH REAL TY SER VICES, INC. FILE NUMBER: 2009 -228 83-  Value Tech Realty Services, Inc. January 8, 2010 Ms. Susan Hall Berkadia Commercial Mortgage LLC 33 Inverness Center Parkway, Suite 140 Birmingham, Alabama 35242 And Ms. Gail Sansbury Executive Director Fort Walton Beach Housing Authority 27 Robinhood Drive SW Fort Walton Beach, Florida 32548 RE: Limited Self Contained - Appraisal of Sound Side Apartments; a proposed, 200 -unit affordable apartment community located at 20 Carson Drive, Fort Walton Beach, Florida. The Limited Self - Contained Appraisal falls under a HUD Section 221( d) ( 4) application. Dear Ms. Hall and Ms. Sansbury: At your request, we have performed a Limited Appraisal for the above referenced property. The subject property is further described and identified by legal and narrative descriptions within the text of the following report. A Market Study was conducted by Value Tech Realty Services, Inc. and is an integral part of this Limited Appraisal. The Market Study must be read in conjunction with this Limited Appraisal. Accompanying this letter is a Limited Appraisal that contains detailed income and expense estimates. The income and expense information is provided for the subject operating as a market -rate property. Rental rate and expense conclusions are based on market parameters. The term " Limited" is utilized to conform with the instructions in the MAP Guide 7. 4.A2 and should not be assumed by the reader to have the meaning prescribed by obsolete provisions of older USPAP regulations. This Limited Appraisal is supportive and consistent with the attached forms: Form -HUD -92273, Estimates of Market Rents by Comparison, Form- HUD -92274 and Operating Expense Analysis Worksheet. Please refer to our market conclusions, the special assumptions inherent in these conclusions, and definitions of important terms that are incorporated in our market study that was conducted simultaneously with this document. The Market Study is an integral part of this Limited Appraisal. Our analyses and forecasts resulted in the value conclusions below, which are based upon assumptions, limiting conditions, and definitions presented in this report. 240 Crystal Grove Blvd., Lutz, Florida 33548 - Phone 813- 948 -0545 • Fax 813- 909 -9338 - www.gotovalue. com 84- Sound Side Apartments Certificate of Limited Appraisal Certificate ofLimited Appraisal The statements of fact contained in this report are true and correct. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions and is our personal, unbiased professional analyses, opinions, and conclusions. We have no present or prospective interest in the property that is the subject of this report, and we have no personal interest or bias with respect to the parties involved. Our compensation is not contingent upon the reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value estimate, the attainment of a stipulated result, or the occurrence of a subsequent event. Our analyses, opinions, and conclusions were developed and this report prepared in conformity with the Uniform Standards of Professional Appraisal Practice of the Appraisal Foundation. This report has been prepared in compliance with the Office of Thrift Supervision of the Department of Treasury' s Regulation 12 CFR Part 564, the Uniform Standards of Professional Appraisal Practice and the Office of the Comptroller of Currency ( OCC) Regulation Pas 12 CFR, 34. 44, written appraisal guidelines. This Appraisal conforms to the Standards required by 12 U. S. C. Part 34. 4 etc. issued pursuant to Title XI of the Financial Institutions Reform Recovery and Enforcement Act of 1989 ( FIRREA). Kay Kauchick, MAI, and Anthony Marasco conducted a physical inspection of the subject, market and the comparables indicated. Anthony Marasco also provided significant professional assistance in the preparation of this report. We certify that, to the best of our knowledge and beliefs, the