Court Square CenterCourt Square CenterMemphis, TennesseeMemphis, Tennessee
Project BackgroundProject Background
Project StructureProject Structure
Risks & The Back EndRisks & The Back End
Parting Words & A Few TipsParting Words & A Few Tips
Map: Downtown Memphis
The Real EstateThe Real EstateBuilding Type: Columbian Mutual Tower 21-story high-rise
Court Annex 7-story mid-ride Lowenstein 5-story mid-rise
Project Size (NSF):
Building Residential Commercial 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
The Real EstateThe Real EstateCommercial/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
Columbia Mutual Tower
Court Annex
Lowenstein Building
Project FactsProject Facts
Fully leveraged deal – All sources generating NMTCs Fully leveraged deal – All sources generating NMTCs including HTC equity (i.e., twinning)including HTC equity (i.e., twinning)
$40,000,000 NMTC allocation from 2 CDEs$40,000,000 NMTC allocation from 2 CDEs $26,000,000 allocation from ESIC$26,000,000 allocation from ESIC $14,000,000 allocation from NDC$14,000,000 allocation from NDC
5 sources of funds including a permanent loan, Section 5 sources of funds including a permanent loan, Section 108 loan, BEDI grant, HTC equity and NMTC equity108 loan, BEDI grant, HTC equity and NMTC equity
Two investors/lenders providing loans and equityTwo investors/lenders providing loans and equity
Both commercial and residential space to be Both commercial and residential space to be leased/rented with an ~35-65% income split, leased/rented with an ~35-65% income split, respectivelyrespectively
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
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
UsesUses
Example of Fully Leveraged NMTC StructureExample of Fully Leveraged NMTC Structure(Including Twinning of Historic Tax Credits)(Including Twinning of Historic Tax Credits)
HTC EquityLoans Equity
Investment Partnership
CDE
Operating Partnership(Property Owner)
Historic Real Estate
Qualified Equity Investment
Qualified Low-Income Community Investment(Loans or Equity)
Court Square Center – Capital Flow of Funds(Draft)
Draft as of February 1, 2006
Court Square Center LLC Owner / QALICB
$39,310,000
ESIC CDE, 99.00%NDC CDE, 0.99%
CS Associates, 0.01%
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%
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%
Equity ($2,800,000)
B Loan ($8,500,000)
Equity($14,000,000)
A Loan($11,800,000) C Loan
($2,000,000)
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)
$14,000,000 QEI
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%
$26,400,000 QEI
$9,000,000 QEI $5,000,000 QEI
D Loan ($210,000)
RiskRisk
The complexity of the transaction adds The complexity of the transaction adds risk:risk: A mixture of five sources of private and A mixture of five sources of private and
public funds;public funds; Both HTC and NMTC programs have Both HTC and NMTC programs have
recapture rules;recapture rules; NMTC projects by definition are in census NMTC projects by definition are in census
tracts with at least 20% poverty;tracts with at least 20% poverty; Must maintain at least 20% of revenue from Must maintain at least 20% of revenue from
commercial activities. commercial activities.
The Back EndThe Back End
Exit StrategiesExit Strategies
Refinance the project and continue as rentalRefinance the project and continue as rental
Convert the residential units to condos and Convert the residential units to condos and retire debt retire debt