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

replacement for housing ( 50 tenant - protected Section 8 vouchers) that was removed by the city of Fort Walton Beach. Further, the subject will provide 70 units for qualified tenants at 60% or below AMI and 80 units for qualified tenants at 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. Overall, the multifamily market in Fort Walton Beach has been relatively stable despite a prolonged economic recession. Occupancy levels are in the low 90% range. In lieu of the current economic environment and additional competition from the " market created by rental houses and shadow" condominiums, property managers have had to implement more aggressive measures with respect to attracting and retaining tenants than in years past. This has been primarily achieved through offering rent specials and concessions. Alternatively, there are significant barriers to entry for new apartment 240 Crystal Grove Blvd., Lutz, Florida 33548 - Phone 813- 948 -0545 - Fax 813- 909 -9338 - www.gotovalue. com 14- Ms. Susan Hall Page 2 Berkadia Commercial Mortgage LLC January 8, 2010 Ms. Gail Sansbury Fort Walton Beach Housing Authority development. A lack of vacant land combined with the lack of properly zoned land is restricting the ability to add new apartment communities to the area. There is only one affordable apartment community in Fort Walton Beach. This property is reporting an occupancy level of 95 %. The leasing agent indicated that occupancy has been near capacity levels for over a year. As a proposed project, the reported construction period will occur over an 18 -month period. Thus, the timing of the subject' s opening should correspond with the continuance of stable occupancies in the subject market area. An analysis of demand indicates there is an under supply of affordable apartments in the subject' s market area. Discussions with the local planning department for the City of Fort Walton Beach reported that there is no new apartment construction or any future proposed rental community in the subject market. There is one LIHTC project approved for development in Defuniak Springs but this is outside the market and will not be competitive. Based on our market analysis, there is market support for the subject as an affordable rental community. This Market Study is supportive and consistent with the attached Form- HUD- 9227' ), Estimates of Market Rents by Comparison. We appreciate this opportunity to provide Market Study services to Berkadia Commercial Mortgage LLC and the Fort Walton Beach Housing Authority. Respectfully submitted, VALUE TECH REALTY SERVICES, INC. Kay C. Kauchick, MAI President KCK: ggw 2009 -228 15-  Table of Contents Tableof Contents ........................................................................................................... ............................... 1 Certificateof Market Study ........................................................................................... ............................... 2 4 ExecutiveSummary ....................................................................................................... ............................... Definitions...................................................................................................................... .............................. 7 BackgroundInformation ................................................... ............................... .......... ............................... 9 Assumptions and Limiting Conditions ........................................................................ ............................... I 1 ImprovementDescription ............................................................................................ ............................... 19 23 Okaloosa County Area Analysis .................................................................................. ............................... Fort Walton Beach Neighborhood Analysis ................................................................ ...............................37 43 Market Supply and Demand Analysis ........................................................................... ............................. Conclusion....................,............................................................................................... ............................... 66 ADDENDA SUBJECT PHOTOGRAPHS ......................................... ............................... ....................... ADDENDUM A SUBJECT INFORMATION ................................................................. ............................... ADDENDUM B COMPARABLES................................................................................. ............................... ADDENDUM C RENTGRIDS ................................................................ ............................... ....................... ADDENDUM D QUALIFICATIONS/ LICENSE ............................................................ ............................... ADDENDUM E ENGAGEMENT LETTER ............................................. ............................... ....................... ADDENDUM F Value Tech Realty Services, Inc. www.gotovalue.com Page 1 16-  Sound Side Apartments Certificate of Market Study Certificate ofMarket Study 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 result that favors the cause of the client, the attainment of a stipulated result, or the occurrence of a subsequent event. Kay Kauchick, MAI and Anthony Marasco conducted a physical inspection of the market and the comparables indicated. VALUE TECH REALTY SERVICES, INC. Kay C. Kauchick, MAI President Value Tech Realty Services, Inc. www.gotovalue.com Page 2 17-  Sound Side Apartments Certificate of Market Stutly MARKET ANALYST CERTIFICATION FOR HUD SOUND, SIDE APARTMENTS, FORT WALTON BEACH, FLORIDA I understand that my Market Study will be used by Berkadia Commercial Mortgage LLC and the Fort Walton Beach Housing Authority to document to the U. S. Department of Housing and Urban Development and that the MAP Lender' s application for FHA multifamily mortgage insurance was prepared and reviewed in accordance with HUD requirements. I certify that my review was in accordance with the HUD requirerrients applicable on the date of my review and that I have no financial interest or family relationship with the officers, directors, stockholders, or partners of the Borrower, the general contractor, any subcontractors, the buyer or seller of the proposed property, or engage in any business that might present a conflict of interest. I am employed under contract for this specific assignment, and I have no other side arrangements, agreements, or financial considerations with MAP Lender or others in connection with this transaction. Signature Warning: Title 18 U. S. C. 1001 provides in part that whoever knowingly and willfully makes or uses a document containing any false, fictitious, or fraudulent statement or entry, in any manner in the jurisdiction of any department of agency of the United States, shall be fined not more than $ 10, 000 or imprisoned for not more; than five years, or both. Value Tech Realty Services, Inc. www.gotovalue. com Page 3 18- Sound Side Apartments Executive Summa Executive Summary Property Name Sound Side Apartments Property Identification - Street Address: 20 Carson Drive Municipality: Fort Walton Beach County: Okaloosa State: Florida Zip: 32548 Congressional District FL -1 Census Tract - State Code: 12 MSA Code: 23020 County Code: 091 Tract /BNA Code: 0226. 00 Purpose of the Market Study: To determine if market support exists for the subject as proposed. Pertinent Dates - Market Research January 6, 2010 Report Date: January 8, 2010 Market Analyst Analyst Kay Kauchick, MAI Analyst Anthony Marasco Site Summary - Site Size ( Acres): 13. 50 Site Size: ( Square Feet) 13. 50 Shape: 588, 060 Zoning: Rectangular Zoning Compliance: Planned