The Osborn Triangle - MITweb.mit.edu/11.303/Snider-III/III-Report.pdf · 2008-05-19 · for outdoor activity such as running, biking, and walking. ... to this type of activity and

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The Osborn Triangle

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Contents

Executive Summary

Development Proposal

Development Vision

Mix of Uses

Greeway

Phasing and Options

Program

Market Overview

Design Approach

Permitting Appraoch

Community Benefits

Financial Proposal

Financial Summary

Deal Structure

Index

Presentation Slides

Financial Details

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Prepared for Real Estate Development II (11.303)

Massachusetts Institute of Technology

Spring, 2008

Under the direction of Professors Dennis M. Frenchman and Peter Roth

Alex Lin, Emily Schwartz, Sarah Snider, Kate Wittels

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Executive Summary The goal of the Osborn Triangle Development is to redevelop and revitalize the 22-acre site into a 24-hr mixed-used community with flexible development options to adapt to the future needs of MIT and the surrounding com-munity.

Program:The program will consist of 2.4 Million Square Feet In a Mix of Uses

Phases:

Phase 1 – 500,000 Square Feet

Phase 2 – 1.3 Million Square Feet



Deal Structure: The deal will take place through a three way partnership between the Developer, MIT, and a private investor.

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Development VisionThis twenty-two acre redevelopment plan seeks to lead the Massachusetts Institute of Technology into the future by re-branding the campus of the world’s leading technical institute into a vibrant, urban educational community. MIT has a tremendous opportunity to reshape the future of the school by unlocking the value of this former industrial zone. Our plan includes an Urban Greenway that will run through the entire twenty-two acre site, adding value to the project as a whole. It will also activate the community by giving them a beautiful and safe environment in which to live, work, and study. The development plan also includes flexible options to allow MIT and the surrounding businesses to grow over time without inundating the market with too much space all at once.

Mix of UsesWe believe that finding the right mix of uses will be the key to creating a vibrant community and re-branding the image of MIT. To that extent, this development plan intro-duces a number of different uses including Lab/R&D, office, hotel, residential, and retail. Our development will be ap-proximately 16% mid-range speculative residential, 11% stu-dent housing, 10% high-end residential, 27% lab/r&d, 17% office, 12% hotel (including extended stay), 1% supporting retail, 4% special use and conference, and 2% garage. This program will activate the previously dormant industrial zone and allow MIT to attract students and faculty looking for an active urban lifestyle.


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GreenwayWe feel the inclusion of the Greenway in this master devel-opment plan will help to invigorate MIT and the surround-ing neighborhood, while at the same time inspiring students, faculty, and other neighbors to utilize the new open space for outdoor activity such as running, biking, and walking. The Greenway provides an open access through the site, connecting the project with the neighboring community. The current landscape of the neighborhood is not conducive to this type of activity and we feel the Greenway will not only add value to the surrounding buildings but further activate the area by encouraging outdoor activities.

Phasing and OptionsOur development plan calls for a phased development in which almost 500,000 square feet in a mix of uses will be delivered in the first phase by 2012, the largest portion of 1.3 million square feet will be built during the second phase delivering around 2015, 220,000 square feet will be constructed during the third phase for delivery in 2018, and the remaining 400,000 square feet will be delivered during the fourth phase, rounding out the development by 2021.

In addition to phasing, our plans call for a number of development options including varied heights and uses. A large portion of our planned buildings can be built to varying heights depending on market demand (including the needs of MIT) without significantly altering the financial feasibility of the development. Likewise, though there are no for sale residential units in our current plans due to the tremendous downturn in the for sale market, many of our apartment units will be built with the thought in mind to convert them in the future to condominiums should the glut of space on the market be absorbed and the for sale market pick up.


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ProgramWith this development vision in mind, we present the fol-lowing program and mix of uses.

Of this proposed program, slightly more than 900,000 square feet will be built specifically for MIT use, with a mix of student housing, lab/R&D, office, conference, and museum space. The remaining uses will be built on a speculative basis.


ProgramType Phase 1 Phase 2 Phase 3 Phase 4 TotalOffice 78,720 108,000 217,440 - 404,160Retail 6,760 9,840 5,340 - 21,940Hotel 78,840 218,940 - - 297,780R&D-Lab 156,177 270,000 109,053 124,740 659,970Residential - - - 398,892 398,892Residential-Lux - 230,640 - - 230,640Special 34,977 63,760 - - 98,737Garage 45,624 - - - 45,624Student 260,950 - - - 260,950Resid-Sale Condos - - - - -Total 662,048 901,180 331,833 523,632 2,418,693

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Market OverviewLab/R&D:

The Cambridge area is driven by biotechnology and pharma-ceutical companies. Many world renowned science companies including Novartis, Shire, and Genzyme choose to locate in Cambridge due in large part to the young talent from MIT and Harvard University. Average rents in the lab/R&D market are about $55 NNN in the East Cambridge/Kendall Square submarket. Space is tight with an overall availability rate of just 8.6%. Despite the currently tight market condi-tions, the Cambridge market is vulnerable to large swings in availability and rents due to its propensity towards large tenants. Should Novartis or another large user decide to relocate out of the area, it would significantly increase vacancy in the market. With that in mind, while our plans include more than 600,000 square feet of lab and R&D space, only about 150,000 square feet will be speculative and the rest will be specifically built for MIT use.

Office:

The Cambridge office market is driven by similar users as the lab market as most of the large biotechnology and pharmaceutical companies are also in need of office space to support their research and development. In addition, technology companies such as Microsoft are also attracted to the area by the youthful and intelligent demographic makeup of Cambridge. Current office rents in the East Cam-

bridge/Kendall Square area average $49.00 per square foot gross, with an overall availability rate of 11%. In addition to the more than 200,000 square feet we plan to deliver for MIT use, our plans also call for an additional speculative office building of just under 100,000 square feet.

Hotel:

While there is not demand for a huge amount of new hotel space in the area, there is a lack of mid-scale, affordable hotel rooms to support the families of MIT students and other visitors to the campus. There is also a need for an extended stay hotel to accommodate visiting professors and the surrounding business community. We plan to deliver one mid-scale hotel with 547 units and one extended stay hotel with 132 units to meet these needs.

Residential:

There is a strong demand for rental apartments in this area from MIT and the surrounding businesses. MIT needs at least 500 student housing rooms, while our plans include 260,000 square feet of student housing, equating to about 600 rooms. Our plans call for an additional 630,000 square feet of speculative housing that will be built over the entire phase, with the largest portion coming in the final phase of the development. Currently, all of the residential units in

our development are apartments for rent. However, with our flexibility options, there is always the possibility to convert some of this to condominiums should the demand for the for-sale market picks up in the future. Included in this 630,000 square feet of space is more than 230,000 square feet of high-end rental units, which we believe there is a strong demand for from the surrounding business com-munity.

Retail:

Due to the limited parking in the area, this market does not present a strong case for destination retail or big box retail. Consumers are hesitant to take public transportation to shopping destinations as they do not wish to return home on public transportation with large shopping packag-es. There is a strong need however, for a good mix of retail to support the other uses and to keep the area active. A mix of restaurants, coffee shops, bars, and a grocery store would be the ideal mix for this development.


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Design ApproachThe Osborn Triangle is defined as a 22 acre site bordered by Massachusetts Avenue, Main Street and Albany Street. The Shire Building (the Kaplan Furniture Building) provides a natural divide the site. As such, we tried to unite the east-ern and western sections of the site by creating a greenway that travels north south through the site connecting Central Square with the main campus of MIT. Our design approach is to orient the buildings along the edges of Massachusetts Avenue and Main Street in order to maintain a strong street presence. In addition, we are committed to maintain-ing street level retail on Massachusetts Avenue to create a pedestrian-friendly environment and to create activity on the street.

The one-hundred percent corner of the site is located at Massachusetts Avenue and Albany Street. At this intercep-tion we place a mixture of uses to create a 24-hour center hub of activity. Included at our one-hundred percent corner are our two hotels, the conference center, the performance arts space, four levels of office space and entrances to the student dorms. Included are retail spaces that will support and cater to the combination of uses located at this corner. We selected this corner as it will be the future home of an Urban Ring station located on the site. The other urban ring station is located at the intersection of Vassar and Massachusetts Avenue, which is also the other location of our convention center as well as the new home of the MIT museum.

In addition to the street level retail along Massachusetts Avenue, moving from Village Street to Vassar Street are residential units, the Zeta Psi Fraternity, student housing, our 100% corner and the conference center and entrance to the MIT museum.

The 600,000 square feet of MIT dedicated Lab and Office space is oriented in the South-Eastern portion of the site with anchored at Main and Albany Street with a dominate modern lab building.

The residential zone along Main Street consists of the ma-jority of our residential units. The residential section of the site was selected to reflect the residential nature of Main Street. The building heights are designed to be pleasing to the residential community located across Main Street.

The buildings along the Greenway are planned to take ad-vantage of the externalities provided by the Greenway. The branches off of the Greenway connect to the main streets, and are designed to be appropriately lit for pedestrians.


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Permitting ApproachWe are proposing a site with a FAR of 3.23, including the Shire Building. Maximum as-of-right FAR assuming all resi-dential is 3.85. Minimum as-of-right FAR assuming no resi-dential is 2.85. Thus, the average as of right FAR is about 3.33. We believe that a mixed use program is best of the community, and not an all-residential development program. We are only proposing that 37% of the development be residential, including student housing. We believe that the FAR of 3.23 is likely to be acceptable to Cambridge.

Community BenefitsConsistent with the vision we have for this community en-hancing development project, we intend to work closely with the community and neighbors to ensure that the project brings benefits to all the stakeholders including the existing and future users.

The proposed development will benefit the public in several ways. First, it would create a 24 hour community environ-ment where people could spend time and enjoy the space that is created. It will provide amenities from addition restaurants to bars, and from convention centers to work-out gyms. The key feature of the development site is to provide a greenway with access through the 22 acre site that connecs the campus with the rest of the Cambridge community. There will also be many open and public green spaces for people to use. This will allow closer integra-tion between the MIT institution as well as its neighbors. We will also retain and preserve historical buildings such as the Shire Building. The redevelopment of the existing site, which is historically used for industrial purposes, will require checks and clean-ups of potential contamination of the land from previous uses. This will further benefit the environment. Lastly, the community and public at large will benefit from having flexible and more environmentally sus-tainable “green” buildings. Additional housing will alleviate pressure on prices, making housing accommodations more affordable for everyone.


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Financial SummaryIn our projections, we made several assumptions on the operating performances (unit rent rates, vacancies, operating expenses, etc…) as well as capital markets conditions (in-flation rates, interest rates, cap rates, discount rates, etc…). For details of our assumption, please refer to Appendix 2.

Based on our estimate of total development cost of $970 million over 12 year period, we project to generate total net cash flow from the entire project of $202 million. With a terminal cap rate and a weighted average cost of capital (WACC) at 6.5% and 7.5%, respectively, the entire project has a net present value $202 million.

Since our valuation is very sensitive to changes in cap rates and WACC, we have prepared a sensitivity analysis, shown to the left.

Financial Proposal

WACC 7.0% 7.5% 8.0% 8.5% 9.0%5.0% 388,320,550 342,119,440 299,496,673 260,176,508 223,905,2375.5% 329,079,499 286,879,594 247,971,070 212,099,952 179,032,5636.0% 279,711,957 240,846,389 205,033,067 172,036,156 141,638,6686.5% 237,939,421 201,895,216 168,700,911 138,136,020 109,997,6807.0% 202,134,390 168,508,496 137559,062 109,078,761 82,879,833

Terminal Cap Rate

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Deal StructureWe propose a deal structure involving three parties: 1) developer (us), 2) MIT endowment, and 3) private investor/capital partner. Under the terms of the deal agreement, we, as the developer, will inject seed capital for the develop-ment project into a newly formed entity or a trust (“ve-hicle”), pending on final negotiation and consultation with our legal counsel. The developer assumes the leadership of the development project and receive development fee for its work, in addition to investment gains. The MIT endowment will contribute the parcels of land in sequence over the four phases of the development. The contribution of land parcels will also be held in the vehicle. In addition, we will invite a private investor/capital partner, which could be pri-vate equity fund or other real estate investor to bridge the remaining equity funding gap. The capital from the private investor will also be injected into the vehicle.

The order of contribution will be as follow: 1) developer, 2) MIT endowment, 3) private investor. However, the proposed payout or proceeds from the project will be in the reverse

order: 1) private investor, 2) MIT endowment, 3) and devel-oper. Thus, for the private investor, the capital flow would be “last in, first out,” while for the developer, it would be “first in, last out.” The private investor will be entitled to a fixed percentage of preferred return on capital contrib-uted per annum, which will be satisfied prior to payments to the other parties. MIT will also be entitled to a similar annual preferred return on capital contributed (appraised value of the land), subordinated to the preferred return to the capital partner. The preferred return will be paid as soon as the development project starts generating cash and any unpaid amount will be accumulated when there’s suf-ficient cash. Any amount of cash in excess of the preferred return (promote) will be distributed to the three parties evenly.

We will also obtain debt financing in the form of construc-tion loan for this project.

Financial Proposal

Development Partnership Contribution Preferred Return PromoteEquity Capital Developer Seed capital Fixed 33% MIT Endowment Land Fixed 33% Private Investor Bridge Equity Fixed 33%Debt Capital Commercial Lender Construction Loan None None

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Index: Presentation Slides

Alex Lin Emily Schwartz Sarah Snider Kate Wittels

Live

Work

Connect

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Executive Summary

Vision:Redeveloping and revitalizing the 22-acre site (Osborn Triangle) into a24-hr mixed-used community with flexible development options toadapt to future needs of MIT and the surrounding community.

Program:The program will consist of 2.4 Million Square Feet In a Mix of Uses

Phases:Phase 1 – 500,000 Square Feet

Phase 2 – 1.3 Million Square Feet



Deal Structure:

Three Way Partnership: Developer, MIT, Private Investor

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Development Vision

“This 22 acre redevelopment plan seeks to leadMIT into the future by re-branding the campus ofthe world’s leading technical institute into a vibrant

and urban educational community.”

Master Plan

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Program

Total Square Feet in Four Phases of Development:2,400,000 (2,670,000, including Shire Building)

Total FAR: 3.23

Total For MIT Use: 1,150,000 SF260,000 SF (Student Dorms & Fraternity – 600 beds)325,000 SF (Office)500,000 SF (Lab/R&D)64,00 SF (Conference/Special Use)

Total Speculative Development: 1,300,000 SF

630,000 SF (Residential – 630 Units)80,000 SF (Office)156,000 SF (Lab/R&D)300,000 SF (Hotel – 679 Units)22,000 SF (Retail)46,000 (Garage)35,000 (Special Use)

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Market

Residential - Rental

Strong Demand From MIT and SurroundingBiotech

MIT Needs At Least 500 Rooms

Residential Condo

NorthPoint to Bring Large Increase in Supply

Apartments With Option to Convert AreGood Choose

Retail

Not a Location for Destination Retail

Mix of Restaurants/Bars/Grocery Will Addto 24-Hour Vibrancy

$35.00 NNN Average Retail Rent

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Market Continued…

Lab/R&D

Driven by Large Biotech Companies andInstitutions

8.6% Availability Rate and $55.00 NNNAverage Rents

Office

Driven by Similar Users as R&D as Well asTechnology Companies

11% Availability Rate and $49.00 GrossAverage Rents

Hotel

Demand From Surrounding Businesses andUniversities

Need for Extended Stay Hotel & Mid-ScaleOptions

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Design Approach

Shire Building Serves as a Natural Divide

Greenway Provides Continuity Through Site

Flexible Options Allow Project to Quickly Respond toMarket Conditions

Design Components

100% Corner – Entertainment Zone

Mass Ave Residential Zone

Main Street Residential Zone

Dedicated Academic Zone

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Entertainment Zone100% Corner

Massachusetts Ave. and Osborn St.

Two hotels

Main entrance to convention center

Key retail elements

Access to performance artist space

24/hour corner

Site of Urban Ring Stop

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Mass AveResidential Zone

Maintain solid street edge

along Mass Ave.

Student Housing

Luxury Housing Complex

Continuous first floor retail

along Mass Ave.

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Main StreetResidential Zone

630 Market RateResidential Units

Heights of ResidentialBuildings in line with AreaStandard

Located residential zoneon Main Street in keepingwith neighborhoodcharacteristics

Re-use of several existingbuildings

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Academic Zone

Mix of R & D and OfficeSpace

Closely integrated withexisting campus facilities

Used Shire Building asNatural Buffer fromResidential Zone

Agglomeration ofacademic uses

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Permitting Approach

Proposal includes 3.23 FAR

Maximum FAR If All Residential = 3.85

Maximum FAR If No Residential = 2.81

Average FAR = 3.33

We are proposing 37% residential (including studenthousing)

Mixed use is in best interest of community

3.23 is likely to be acceptable to Cambridge

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Community & Public Benefits

24-hour community with publicamenities

Greenway and open space amenities

Preservation of historical structure –Shire Building integration

Redevelopment of under-used land,checking and cleaning up potentialcontamination

Promotion of flexible and greenbuilding standards

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Financial Summary

! Total Development Cost

Hard Costs $616.8 Million ($255/SF)

Soft Costs $153.5 Million ($63/SF)

Land Costs $200 Million ($75/SF)

! Total Cash Flow $201.8 Million

! Implied Land Value $200 Million ($75/SF)

WACC 7.5%

Terminal Cap Rate 6.5%

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Sensitivity Analysis

WACC: 7.0% 7.5% 8.0% 8.5% 9.0%

5.0% 388,320,550 342,119,440 299,496,673 260,176,508 223,905,237

5.5% 329,079,499 286,879,594 247,971,070 212,099,952 179,032,563

6.0% 279,711,957 240,846,389 205,033,067 172,036,156 141,638,668

6.5% 237,939,421 201,895,216 168,700,911 138,136,020 109,997,680

7.0% 202,134,390 168,508,496 137,559,062 109,078,761 82,876,833

Terminal CapRate:

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Deal Structure

Special Purpose Vehicle (e.g., Trust or LLC)

Equity Capital Funding – Three-way partnershipDeveloper – “first in, last out”

Developer fee

Promote

MIT Endowment – “second in, second out”Preferred return

Promote

Private Investor – “last in, first out”Preferred return

Promote

Debt Capital Funding: Commercial Lender Development Partnership Contribution Preferred Return Promote

Equity Capital

Developer Seed capital None 33%

MIT Endowment Land Fixed 33%

Private Investor Bridge Equity Fixed 33%

Debt Capital

Commercial Lender Construction Loan None None

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COSTSFINANCIAL ANALYSIS TOOL 11.303J Spring 2008Capital & Financial Cost Assumptions RED2 Greenway

SITE COSTS DEVELOPMENT SOFT COSTSCanal Construction Architecture/Engineering 6.5% of hard costs

New Bulkhead Construction $7,000 per linear foot Legal and other Professional 6.5% of hard costsExcavated Material (for new water area, canals, etc) $2.10 per cubic ft incl. hauling Retail/Office Leasing 17.0% of annual rent rollFixed Pier Construction (wooden) $210.00 per square foot Residential Condo Marketing/Sales Commissions 6.0% of gross salesFloating Dock Construction (steel/hybrid) $175.00 per square foot Taxes During Development Period $1,000,000 per year

Roadways: (incl. lighting, drainage, utilities) Development Period Insurance 0.5% per year2 lane $450.00 per linear foot Development Mitigation Fees to City 1.5% of total development costs4 lane $550.00 per linear foot Development Overhead - Direct Cost 3.0% of total development costs4 lane w/ landscaped median $600.00 per linear foot

Peripheral/Buffer Landscaping (Sod, Shrubs, sprinklers) $12.00 /gsfPublic Open Space

60% Paved $50.00 /gsf20% paved $40.00 /gsf

Semi-Public & Private Open Space60% Paved $40.00 /gsf20% paved $32.00 /gsf

PARKING CONSTRUCTION COSTS TENANT FIT UP (includes mechanical & electrical)

Structured Below Grade (within slurry wall dam): $40,000 /car Office $85.00 /nsfStructured Above Grade: $28,000 /car R&D-Lab $140.00 /nsfAt grade: Retail $70.00 /nsf

Bituminous $1,500 /car Residential $95.00 /nsfConcrete $1,800 /car Hotel (incl FFE) $115.00 /gsfCobblestone $4,500 /car Residential - luxury $120.00 /nsfBrick $3,500 /car Other 1 -$ /nsf

Other 2 -$ /nsf

Other 3 -$ /nsfResidential - condo $95.00 /nsf

BUILDING CONSTRUCTION COSTS DEMOLITION/REHAB/RELOCATION COSTSBase Building (New Construction - includes shell, elevators, stairs and basic Demo entire wood frame building to below grade $10.00 per gsfelectrical, water, sewer, fire protection service; no mechanicals) Demo entire steel/concrete building to below grade $20.00 per gsf

1 story steel bldg - 15% masonry (whse/retail shell) $60.00 /gsf (assumes spread footings) Gut existing wood frame building to structure $8.00 per gsf1 to 4 floor wood/steel stud frame; wood or Dryvit exterior $80.00 /gsf (assumes light piling fndns) Gut existing steel frame building to structure $10.00 per gsf1-4 floor steel/concrete; masonry & glass ext. $115.00 /gsf (assumes piling fndns) Relocation costs $100.00 per gsf4-8 floor steel/concrete; masonry & glass ext. $135.00 /gsf (assumes piling fndns)8+ Steel/Concrete w/ stone veneer & glass $175.00 /gsf (assumes piling fndns)

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FINANCIAL ANALYSIS TOOL 11.303J Spring 2008

Spreadsheet Summary RED2 Greenway

266,788,200 PROGRAM SUMMARY TABLE 323.3796364 Development Name:

SITE & ALLOWABLE BUILDING AREA: VALUATION: Low High INFLATION: Development Team:

Site Area 825,000 gsf 18.94 acres Terminal Cap Rate 5.0% 7.0% Rent Inflation 3.0%

Allowable FAR 3.23 F.A.R. WACC 7.0% 9.0% Expense Inflation 3.0%

Max. Bldg Area 2,667,882 g.s.f.

Ann Gross Rend Annual

USES: % of total Except Resid-Sale Op. Exp. Occupancy BUILDING TYPES & PHASING:

Office 17% 404,160 g.s.f @ 85% efficiency = 343,536 n.s.f. 40.00$ per nsf 9.50$ per nsf 94% Year Phase # of Size of 1 flr 1-4 flr 1-4 flr 1-8 flr 8 + flr

Retail 1% 21,940 g.s.f @ 95% efficiency = 20,843 n.s.f. 35.00$ per nsf 10.50$ per nsf 90% Use: is Built Stories Footprint steel wd frame steel steel steel

Hotel 12% 297,780 g.s.f @ 751 gsf/room 397 rooms 200.00$ Avg Rate 75% of gross 65% Office (Enter "1" in appropriate column)

R&D-Lab 27% 659,970 g.s.f @ 85% efficiency = 560,975 n.s.f. 55.00$ per nsf 12.00$ per nsf 90% Phase 1 19% 78,720 3 8 9,840 - - - 1

Residential 16% 398,892 g.s.f @ 90% efficiency = 359,003 n.s.f. 30.00$ per nsf** 6.75$ per sf 94% Phase 2 27% 108,000 6 12 9,000 - - 1 -

Resid-Lux 10% 230,640 g.s.f @ 85% efficiency = 196,044 n.s.f. 40.00$ per nsf*** 7.50$ per nsf 90% Phase 3 54% 217,440 9 12 18,120 - - - 1 -

Special 4% 98,737 g.s.f @ 80% efficiency = 78,990 n.s.f. -$ per nsf -$ per nsf 90% Phase 4 0% - 12 - - - - - -

Garage 2% 45,624 g.s.f @ 80% efficiency = 36,499 n.s.f. -$ per nsf -$ per nsf 90% 100% 404,160 36,960

Student 11% 260,950 g.s.f @ 90% efficiency = 234,855 n.s.f. 30.00$ per nsf 6.75$ per nsf 90% Retail

Resid-Sale Condos 0% g.s.f @ 80% efficiency = - n.s.f. 700.00$ per nsf**** 100% Phase 1 33% 6,760 3 1 6,760 1 - - -

Total 100% 2,418,693 NOT OK ** @ avg. unit size of 618 n.s.f. this translates to 1,546$ per mo. Phase 2 33% 9,840 6 1 9,840 1 - - -

*** @ avg. unit size of 1000 n.s.f. this translates to 3,333$ per mo. Phase 3 34% 5,340 9 1 5,340 1 - - - -

PARKING: Ratio # spaces **** sale price per square feet Phase 4 0% - 12 - - - - - -

Office 2 per 1000 sf 687 100% 21,940 21,940

Retail 2 per 1000 sf 42 Structured Parking Rent/Expenses: Hotel

Hotel 0.5 per room 198 @ avg gsf/room of 751 Monthly Rent per Space 200$ Phase 1 74% 78,840 3 6 13,140 - 1 - - -

R&D-Lab 1 per 1000 sf 561 Monthly Expenses 35% of gross Phase 2 26% 218,940 6 17 12,879 - - - 1 -

Residential 1 per unit 581 @ avg unit size of 618 sf Phase 3 0% - 9 - - - - - -

Resid-Lux 1 per unit 231 @ avg unit size of 1,000 sf Structured Parking Occupancy: Phase 4 0% - 12 - - - - - -

Special 0 per 1000 sf - 75% 100% 297,780 26,019

Garage 0 per 1000 sf - R&D-Lab

Student 0.5 per room 336 @ avg unit size of 350 sf Phase 2 24% 156,177 6 6 26,030 - - - 1 -

Resid-Sale Condos 1 per 1000 sf - Phase 2 41% 270,000 6 6 45,000 - - - 1 -

Total Parking Spaces Required 2,635 Structured Parking Distribution: Phase 2 17% 109,053 6 6 18,176 - - - 1 -

less Number of Surface Spaces - 100% Underground = 2,453 U.G. spaces Phase 2 19% 124,740 6 6 20,790 - - - 1 -

Total Number Structured Spaces 2,635 0% Above Grade = - A.G. spaces # levels: 2 100% 659,970 109,995

Type of Surface Pkg: Bituminous 100% Brick 0% Cobblestone 0% Concrete 0% Residential

Phase 1 0% - 3 - - - - - -

SITE PROGRAM: Phase 2 0% - 6 - - - - - -

Roadways: Phase 3 0% 9 - - - - - -

1,000 l.f. 2-lane 36 sf total R.O.W./lf = 36,000 g.s.f Phase 4 100% 398,892 12 22 18,131 - - - - 1

2,000 l.f. 4 lane 60 sf total R.O.W./lf = 120,000 g.s.f 100% 398,892 18,131

250 l.f. 4-lane w/ median 68 sf total R.O.W./lf = 17,000 g.s.f Resid-Lux

3,250 Total LF Roads Total Site Area for Roads 173,000 g.s.f. site area Phase 1 0% - 3 - - - - - -

Open Space: Phase 2 100% 230,640 6 8 28,830 - - - - 1

40,000 s.f. public open space 25% 60% paved 75% 20% paved Phase 3 0% - 9 - - - - - -

20,000 s.f. semi-public open space 50% 60% paved 50% 20% paved Phase 4 0% - 12 - - - - - -

10,000 s.f. landscaped buffer 100% 230,640 28,830

70,000 total s.f. open space and buffer Total Area Roads 173,000 Special

Canal Construction: Total Area Surface Pkg - Phase 1 35% 34,977 3 3 11,659 - - 1 - -

- l.f. new bulkhead construction Footprint of A.G. Pkg Struct. - Phase 2 0% 63,760 6 6 10,627 - - 1 - -

- c.f. new fill within bulkhead Total Area Open Space 70,000 Footprint Phase 3 0% - 9 - - - - - -

- s.f. fixed wooden pier construction Total Bldg Footprint 251,654 Check Phase 4 0% - 12 - - - - - -

- s.f. floating dock construction Total Program Footprint 494,654 OK 35% 98,737 22,286

Demolition/Rehab/Relocation: Total Site Area 825,000 sf Garage

- s.f. demolished woodframe Phase 1 0% 45,624 3 11,406 - - - - -

637,000 s.f. demolished steelframe Phase 2 0% - 6 - - - - - -

- s.f. gutted woodframe Phase 3 0% - 9 - - - - - -

- s.f. gutted steelframe Phase 4 0% - 12 - - - - - -

- s.f. personnel relocated 0% 45,624 11,406

Student

PHASING of PARKING: Phase 1 100% 260,950 3 20 13,048 - - - 1

Above Grade Parking: Underground Parking: Surface Parking: Phase 2 0% - 6 - - - - - -

# Spaces Yr Built # Spaces Year Built # Spaces Year Built Phase 3 0% - 9 - - - - - -

Phase 1 100% - 1 Phase 1 100% 2,453 1 Phase 1 100% - 1 Phase 4 0% - 12 - - - - - -

Phase 2 0% - - Phase 2 0% - - Phase 2 0% - - 100% 260,950 13,048

Phase 3 0% - - Phase 3 0% - - Phase 3 0% - - Resid-Sale Condos

Phase 4 0% - - Phase 4 0% - - Phase 4 0% - - Phase 1 0% - 3 - - - - -

100% - 100% 2,453 100% - Phase 2 25% - 6 - - - - -

Phase 3 25% - 9 - - - - -

PHASING of SITEWORK: Phase 4 50% - 12 - - - - -

Demolition/Rehab/Relocation: Canal Construction: Roads/Open Space: 100% - -

Yr Built Year Built Yr Built

Phase 1 100% 1 Phase 1 100% 1 Phase 1 50% 1

Phase 2 0% - Phase 2 0% - Phase 2 50% 5

Phase 3 0% - Phase 3 Phase 3 0% -

Phase 4 0% - Phase 4 Phase 4 0%

100% 100% 100%

Kate Wittels

Greenway

Alex Lin

Emily Schwartz

Sarah Snider

20

FINANCIAL ANALYSIS TOOL 11.303J Spring 2008

Operating Proforma RED2 Greenway

OPERATING PROFORMA:

Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15Rent Inflation 3.0% 1.00 1.03 1.06 1.09 1.13 1.16 1.19 1.23 1.27 1.30 1.34 1.38 1.43 1.47 1.51

Expense Inflation 3.0% 1.00 1.03 1.06 1.09 1.13 1.16 1.19 1.23 1.27 1.30 1.34 1.38 1.43 1.47 1.51

Total Net Rent w/ Infl. 40.00 41.20 42.44 43.71 45.02 46.37 47.76 49.19 50.67 52.19 53.76 55.37 57.03 58.74 60.50

Office Leasable Area Op Exp w/ infl 9.50 9.79 10.08 10.38 10.69 11.01 11.34 11.68 12.03 12.40 12.77 13.15 13.54 13.95 14.37

Phase 1 66,912 - - - - 66,912 66,912 66,912 66,912 66,912 66,912 66,912 66,912 66,912 66,912 66,912

Phase 2 91,800 - - - - - - - 91,800 91,800 91,800 91,800 91,800 91,800 91,800 91,800

Phase 3 184,824 - - - - - - - - - - 184,824 184,824 184,824 184,824 184,824

Phase 4 - - - - - - - - - - - - - - - -

Total Net@ Occup of 94% - - - - 2,159,139 2,223,913 2,290,631 5,596,262 5,764,150 5,937,074 13,236,470 13,633,565 14,042,572 14,463,849 14,897,764


Retail Leasable Area Op Exp w/ infl 10.50 10.82 11.14 11.47 11.82 12.17 12.54 12.91 13.30 13.70 14.11 14.53 14.97 15.42 15.88

Phase 1 6,422 - - - - 6,422 6,422 6,422 6,422 6,422 6,422 6,422 6,422 6,422 6,422 6,422

Phase 2 9,348 - - - - - - - 9,348 9,348 9,348 9,348 9,348 9,348 9,348 9,348

Phase 3 5,073 - - - - - - - - - - 5,073 5,073 5,073 5,073 5,073

Phase 4 - - - - - - - - - - - - - - - -

Total Net@ Occup of 90% - - - - 166,461 171,455 176,599 446,669 460,069 473,872 645,099 664,452 684,386 704,917 726,065


Hotel Leasable Rooms Op Exp w/ infl 150.00 154.50 159.14 163.91 168.83 173.89 179.11 184.48 190.02 195.72 201.59 207.64 213.86 220.28 226.89

Phase 1 105 - - - - 105 105 105 105 105 105 105 105 105 105 105

Phase 2 292 - - - - - - - 292 292 292 292 292 292 292 292

Phase 3 - - - - - - - - - - - - - - - -

Phase 4 - - - - - - - - - - - - - - - -

Total Net @ Occup of 65% - - - - 1,402,191 1,444,257 1,487,584 5,787,190 5,960,805 6,139,630 6,323,818 6,513,533 6,708,939 6,910,207 7,117,513


R&D-Lab Leasable Area Op Exp w/ infl 12.00 12.36 12.73 13.11 13.51 13.91 14.33 14.76 15.20 15.66 16.13 16.61 17.11 17.62 18.15

Phase 1 132,750 - - - - - - - 132,750 132,750 132,750 132,750 132,750 132,750 132,750 132,750

Phase 2 229,500 - - - - - - - 229,500 229,500 229,500 229,500 229,500 229,500 229,500 229,500

Phase 3 92,695 - - - - - - - 92,695 92,695 92,695 92,695 92,695 92,695 92,695 92,695

Phase 4 106,029 - - - - - - - 106,029 106,029 106,029 106,029 106,029 106,029 106,029 106,029

Total Net @ Occup of 90% - - - - - - - 26,700,209 27,501,215 28,326,252 29,176,039 30,051,320 30,952,860 31,881,446 32,837,889


Residential Leasable Area Op Exp w/ infl 6.75 6.95 7.16 7.38 7.60 7.83 8.06 8.30 8.55 8.81 9.07 9.34 9.62 9.91 10.21

Phase 1 - - - - - - - - - - - - - - - -

Phase 2 - - - - - - - - - - - - - - - -

Phase 3 - - - - - - - - - - - - - - - -

Phase 4 359,003 - - - - - - - - - - - - - 359,003 359,003

Total Net @ Occup of 94% - - - - - - - - - - - - - 11,522,125 11,867,788


Resid-Lux Leasable Area Op Exp w/ infl 7.50 - - - - - - - - - - - - - -

Phase 1 - - - - - - - - - - - - - - - -

Phase 2 196,044 - - - - - - - 196,044 196,044 196,044 196,044 196,044 196,044 196,044 196,044

Phase 3 - - - - - - - - - - - - - - -

Phase 4 - - - - - - - - - - - - - - -

Total Net @ Occup of 90% - - - - - - - 8,679,938 8,940,336 9,208,546 9,484,803 9,769,347 10,062,427 10,364,300 10,675,229

Total Net Rent w/ Infl. - - - - - - - - - - - - - - -

Special Leasable Area Op Exp w/ infl - - - - - - - - - - - - - - -

Phase 1 27,982 - - - - 27,982 27,982 27,982 27,982 27,982 27,982 27,982 27,982 27,982 27,982 27,982

Phase 2 51,008 - - - - - - - 51,008 51,008 51,008 51,008 51,008 51,008 51,008 51,008

Phase 3 - - - - - - - - - - - - - - - -

Phase 4 - - - - - - - - - - - - - - - -

Total Net @ Occup of 90% - - - - - - - - - - - - - - -

Total Net Rent w/ Infl. - - - - - - - - - - - - - - -

Garage Leasable Area Op Exp w/ infl - - - - - - - - - - - - - - -

Phase 1 36,499 - - - - 36,499 36,499 36,499 36,499 36,499 36,499 36,499 36,499 36,499 36,499 36,499

Phase 2 - - - - - - - - - - - - - - - -

Phase 3 - - - - - - - - - - - - - - - -

Phase 4 - - - - - - - - - - - - - - - -



Student Leasable Area Op Exp w/ infl 6.75 6.95 7.16 7.38 7.60 7.83 8.06 8.30 8.55 8.81 9.07 9.34 9.62 9.91 10.21

Phase 1 234,855 - - - - 234,855.00 234,855.00 234,855.00 234,855.00 234,855.00 234,855.00 234,855.00 234,855.00 234,855.00 234,855.00 234,855.00

Phase 2 - - - - - - - - - - - - - - - -

Phase 3 - - - - - - - - - - - - - - - -

Phase 4 - - - - - - - - - - - - - - - -

Total Net @ Occup of 90% - - - - 5,531,133.95 5,697,067.97 5,867,980.01 6,044,019.41 6,225,339.99 6,412,100.19 6,604,463.20 6,802,597.09 7,006,675.00 7,216,875.25 7,433,381.51

Total Net Sale w/Infl. 700.00 721.00 742.63 764.91 787.86 811.49 835.84 860.91 886.74 913.34 940.74 968.96 998.03 1,027.97 1,058.81

Resid-Sale Condos Leasable Area Op Exp w/ infl - - - - - - - - - - - - - - -

Phase 1 - - - - - - - - - - - - - - - -

Phase 2 - - - - - - - - - - - - - - - -

Phase 3 - - - - - - - - - - - - - - - -

Phase 4 - - - - - - - - - - - - - - - -


Parking Total Net Rent w/ Infl. 2,400 2,472 2,546 2,623 2,701 2,782 2,866 2,952 3,040 3,131 3,225 3,322 3,422 3,524 3,630

Underground: Number of Spaces Op Exp w/ infl 840 865 891 918 945 974 1,003 1,033 1,064 1,096 1,129 1,163 1,198 1,234 1,271

Phase 1 2,453 - - 2,453 2,453 2,453 2,453 2,453 2,453 2,453 2,453 2,453 2,453 2,453 2,453 2,453

Phase 2 - - - - - - - - - - - - - - - -

Phase 3 - - - - - - - - - - - - - - - -

Phase 4 - - - - - - - - - - - - - - - -

Above Grade:

Phase 1 - - - - - - - - - - - - - - - -

Phase 2 - - - - - - - - - - - - - - - -

Phase 3 - - - - - - - - - - - - - - - -

Phase 4 - - - - - - - - - - - - - - - -

Total Net @ Occup of 75% - - 3,044,501 3,135,836 3,229,911 3,326,808 3,426,613 3,529,411 3,635,293 3,744,352 3,856,683 3,972,383 4,091,555 4,214,301 4,340,730

Total Net Income - - 3,044,501 3,135,836 12,488,836 12,863,501 13,249,406 56,783,698 58,487,209 60,241,825 69,327,376 71,407,197 73,549,413 87,278,020 89,896,360

Copy of RED2FinancialModel - Revised ksw 3.xlsCASHFLOW 5/19/08

21

Year 1 2 3 4 5 6 7 8 9 10

Cost Inflation 3.0% 1.00 1.03 1.06 1.09 1.13 1.16 1.19 1.23 1.27 1.30

Construction: Total Total

Office before inflation with Inflation

Phase 1 16,314,720 17,308,286 - - 17,308,286 - - - - - - -

Phase 2 22,383,000 25,948,032 - - - - - 25,948,032 - - - -

Phase 3 45,064,440 57,086,284 - - - - - - - - 57,086,284 -

Phase 4 - - - - - - - - - - - -

Retail

Phase 1 855,140 907,218 - - 907,218 - - - - - - -

Phase 2 1,244,760 1,443,018 - - - - - 1,443,018 - - - -

Phase 3 675,510 855,716 - - - - - - - - 855,716 -

Phase 4 - - - - - - - - - - - -

Hotel

Phase 1 15,373,800 16,310,064 - - 16,310,064 - - - - - - -

Phase 2 54,735,000 63,452,866 - - - - - 63,452,866 - - - -

Phase 3 -

Phase 4 -

R&D-Lab

Phase 1 39,668,958 45,987,195 - - - - - 45,987,195 - - - -

Phase 2 68,580,000 79,503,016 - - - - - 79,503,016 - - - -

Phase 3 27,699,462 32,111,268 - - - - - 32,111,268 - - - -

Phase 4 31,683,960 36,730,393 - - - - - 36,730,393 - - - -

Residential

Phase 1 - - - - - - - - - - - -

Phase 2 - - - - - - - - - - - -

Phase 3 - - - - - - - - - - - -

Phase 4 103,911,366 - - - - - - - - - - -

Resid-Lux

Phase 1 - - - - - - - - - - - -

Phase 2 63,887,280 74,062,867 - - - - - 74,062,867 - - - -

Phase 3 - - - - - - - - - - - -

Phase 4 - - - - - - - - - - - -

Special

Phase 1 4,022,355 4,267,316 - - 4,267,316 - - - - - - -

Phase 2 7,332,400 8,500,261 - - - - - 8,500,261 - - - -

Phase 3 - - - - - - - - - - - -

Phase 4 - - - - - - - - - - - -

Garage

Phase 1 - - - - - - - - - - - -

Phase 2 - - - - - - - - - - - -

Phase 3 - - - - - - - - - - - -

Phase 4 - - - - - - - - - - - -

Student

Phase 1 35,228,250 37,373,650 - - 37,373,650 - - - - - - -

Phase 2 - - - - - - - - - - - -

Phase 3 - - - - - - - - - - - -

Phase 4 - - - - - - - - - - - -

Resid-Sale Condos

Phase 1 - - - - - - - - - - - -

Phase 2 - - - - - - - - - - - -

Phase 3 - - - - - - - - - - - -

Phase 4 - - - - - - - - - - - -

Roads/Open Space:Phase 1 1,930,010 1,930,010 1,930,010 - - - - - - - - -

Phase 2 1,930,010 2,172,243 - - - - 2,172,243 - - - - -

Phase 3 - - - - - - - - - - - -

Phase 4 - - - - - - - - - - - -

Canal Construction:Phase 1 - - - - - - - - - - - -

Phase 2 - - - - - - - - - - - -

Phase 3 - - - - - - - - - - - -

Phase 4 - - - - - - - - - - - -

Demolition/Rehab/Relocation:Phase 1 12,740,000 12,740,000 12,740,000 - - - - - - - - -

Phase 2 - - - - - - - - - - - -

Phase 3 - - - - - - - - - - - -

Phase 4 - - - - - - - - - - - -

Surface Parking:Phase 1 - - - - - - - - - - - -

Phase 2 - - - - - - - - - - - -

Phase 3 - - - - - - - - - - - -

Phase 4 - - - - - - - - - - - -

Underground Parking:Phase 1 98,110,566 98,110,566 98,110,566 - - - - - - - - -

Phase 2 - - - - - - - - - - - -

Phase 3 - - - - - - - - - - - -

Phase 4 - - - - - - - - - - - -

Above Grade Parking:Phase 1 - - - - - - - - - - - -

Phase 2 - - - - - - - - - - - -

Phase 3 - - - - - - - - - - - -

Phase 4 - - - - - - - - - - - -

Total Construction 653,370,987 616,800,272 112,780,576 - 76,166,536 - 2,172,243 367,738,917 - - 57,942,000 -

Copy of RED2FinancialModel - Revised ksw 3.xlsCASHFLOW 5/19/08

Documents

The Osborn Triangle - MITweb.mit.edu/11.303/Snider-III/III-Report.pdf · 2008-05-19 · for outdoor activity such as running, biking, and walking. ... to this type of activity and