Capstone Columbia MSRED'23

Urja Parmar (udp2002)

TABLE OF CONTENT

Executive Summary Development Concept Project Overview

Neighbourhood Analysis Site Analysis Programmatic interpretation

Architectural Synopsis Site Floor plan Massing Typical floor plans Design concepts Amenities

Location Analysis

Demand Drivers Zoning and Entitlements

Market Analysis Condominium Comps Market Assumptions

Financials

Development Budget Sources and Uses Capitalization Structure Return Summary Development Schedule Sensitivity Analysis Alternate Exit Strategy

ESG Assessment Risk and Mitigation Appendix and Sources

EXECUTIVE SUMMARY UP Developers group is excited to announce their new upcoming luxurious Condominium development proposal nested in the historic heart of the city at 10 West 17 street, Flatiron, New York. The Site is an interior lot on the 17th street west which is just off the cornor of the retail corridor of fifth Avenue and the iconic Flatiron building.

The 17- storey development proposal will be having 24 luxurious condominiums with modern amenities. The 2790 sq ft of amenities space, proximity to facilities, transit hub and the open outdoor patio are the major demand drivers of the proposal. The proposal emphasis more on the efficient utilization of the floor area available which makes the space available for the user more. The units provide a clear ceiling height of 10’ and to make the residents feel connected to the surrounding context every unit has private balcony spaces.

Total Development Cost: $68 Million

Levered IRR: 15.7%

Unlevered IRR: 10.4%

LP Investment: $15M

LP Returns: 13.8%

Valuation: $75.4 Million

UP Developers is expected to purchase the property for $16M and intends to complete the development project within 3 years. The total development budget is around $68 M. The project will be funded by $11 million of Acquisition loan, $40 million construction loan and rest will be funded through equity.

We are seeking an LP equity investment of $15 million in exchange for 90% share in the partnership

The development concept and programming aims to capitalize on the strong residential condominium market of the Flatiron District.

The residents will be epitomized by modern luxury in the apartment , with amenities including a stateof-the-art fitness center, a outdoor seating area, workspace, lounge, package room and a 24-hour concierge. Whether you enjoy entertaining guests in the communal facilities or reveling in the city’s beauty from your own private balcony, this exquisite residence offers a truly unique and lavish lifestyle experience.

The unit mix will range from one bedroom apartment to three bed apartments catering the young and wealthy class of the surrounding neighborhood.

The floor plans are planned in a way to provide full efficiency, spacious, well- lit and ventilated with outdoor balcony space for all the units making them feel connected to the iconic historic neighbourhood of New York. `

DEVELOPMENT CONCEPT

NEIGHBORHOOD OVERVIEW The site is situated uniquely at the intersection of several most desirable neighbourhoods in Manhattan. It is located in proximity to Flatiron District, Chelsea, Union Square and Greenwich Village. The site has a bit of everything all the surrounding neighborhoods. It is amongst one of the most dynamic and diverse neighborhood with something for people of all age groups.

LIFESTYLE

Fast-paced during day and on weekend. Relatively quiet and mellow at night.

REAL ESTATE MARKET

The building are expensive to own and rent but they have comparatively low vacancy rate. Residential properties are luxurious providing brand-new amenities and amazing views.

TRANSPORTATION

Located centrally with a multitude of almost all the subway lines , bus stops and PATH station connecting New York and New Jersey.

SURROUNDING

It is a hub of Retail stores with Fifth avenue in the locality, restaurants, grocery stores, museums, banks, schools, universities- NYU, PRATT, New School, Baruch College, etc. It is also known as the “ Silicon Alley” as it has offices/headquarters of major technology firms like google, amazon, wework, apple, facebook, etc.

LADIES’ MILE HISTORIC DISTRICT

10 West 17th Street is situated in the Ladies’ Mile Historic District of Manhattan, known for fashionable department stores and unique architecture. The area is one of the city’s most vibrant commercial retail centers and was officially designated by the LPC in 1989 to preserve its historic charm.

MEDIAN INCOME $139,343

EDUCATION 78.9%

EMPLOYMENT 70.2%

MEDICAL 2.7%

BUSINESS / ECONOMY 3,678

HOUSEHOLDS 29,222

SITE DESCRIPTION

SWOT ANALYSIS

SITE AND CONTEXTUAL PICTURES

Site- An empty lot in the middle of two buildings

Retail Corridor located in 0.5 mile radius from the site

Iconic Flatiron Building located 0.3 miles away

Street view of the site with construction across the street

PROGRAMMATIC INTERPRETATION Program

50’

Stacking Diagram

125’

175’

15’

3 Bed Condo 1 bed/2 Bed Condo Lobby/ Amenities Cellar/Mechanical

Massing

Garden

FLOOR PLANS

5th Avenue

Site Plan

17th Street 45' 15'

62' 47'

30'

92'

Rear Yard

Workarea/lounge Outdoor seating area

Mailroom

Meeting/ Work lounge

Receptiom

Package/Mail area

Reception

62'

30'

92'

Ground Floor Plan

Entrance

Gym

Gym

Lounge

Lounge

45'

Outdoor Sitting space

TYPICAL FLOOR PLANS

Typical One bed and Two bed apartment Plan

2 bed Apartment: 1370 sq ft

1 bed Apartment: 860 sq ft

Typical Three beds apartment Plan

3 bed Apartment: 2300 sq ft

DESIGN CONCEPT Architectural / Construction Exterior brick facade with glass windows designed and selected in accordance to the landmark preservation standars laid down by the historic district.

Oversized windows to maximize daylight in the apartment.

Personal Balcony space for each unit.

Interior Abundant natural light streams through large windows making the spaces in the aparrtment lit. 10’ high ceiling heights with hardwood light flooring, modern appliances, in- unit laundry, etc.

AMENITIES

The residents will have an exclusize access to modern amenities in the building. They are provided with 2790 sqft of ameneties which are located on the first floor.

Services and facilities will include: Outdoor Seating Deck Gym Workspace

Lounge 24/7 Doorman service Package Room

1 Mile distance

Transit

0.5 Mile Radius

Education Museum Restaurant Grocery Medical Banks Parks

ZONING AND ENTITLEMENTS 10 WEST 17 STREET

Block 818 |Lot 56

C6-4A | R10A

District 8d Lot Area: 4,139 sq ft Lot Size: 92’ x 45’ Allowable FAR: 10 Allowable ZFA: 41,390 Lot Coverage: 70% Min. Rear Yard: 30’ Setback height: 60’-125’ Total height: 185’

LANDMARK PRESERVATION COMMISSION APPROVAL As our site is located in the Ladies’ Mile Historic district and hence it is given landmark status. In this case for the facade of the building we need to get approval from the Landmark Preservation Community Board 5 after we are done with our proposal as we cannot temper with the historical, cultural or the aesthic value of the neighborhood.

LPC issues permits for work to landmark properties. LPC is very particular with the regulations of the building.

Before the approval of the LPC, the proposal is approved by the local Community Board 5. This is proposed in order to strengthen and preserve the area’s built character to ensure that new development are in character with the built context of the surrounding historic district.

Flatiron House

Village Green West

D’Orsay Condo

21W20 16W21

MARKET ANALYSIS Location located in one of the most prominent location surrounded by retails, offices, schools, universities, etc around. The surrounding neighbourhoods- Union Square, Chelsea, Greenwich Village and Flatiron district are amongst the most prestigious residential areas in Manhattan.

Target Audience 10 West 17 Street is located at a prominent location and there is a diverse mix of people in the neighborhood. It consists mainly of people belonging to age group 22 to 40 which included married couples, families and bachelors. The proposal will provide the audience with 24 luxury condominiums units.

Unit Mix The luxury condominiums will have a combination of sizes from 1 bed to 3 bed apartments units. The units are formulated in order to provide maximum efficiency.

Pricing The people in the locality are mostly family and the target is to provide luxury amenities and living standards to the buyers. The units will be price according to their sizes and the price will range from $1.6M to $5.5M depending on the size. There are over 16 units which are under $3M. All the units are priced in accordance to the marker rate.

Amenities The amenities which are provided in all the comps are doorman, concierge, gym/fitness center, laundry, outdoor seating space and storage room. These amenities are all necessary to attract the residents in the neighborhood.

Highest and Best Use Possible Uses in accordance to the market trends is retail, commercial and condominiums. In accordance to the analysis, it is clear that the best use for the site with maximum revenue is provided by development of 100% luxury condominiums.

FINANCIALS Development Budget

FINANCIALS Sources and Uses

CAPITALIZATION STRUCTURE Capital Structure ZATION STRUCTURE ZATION STRUCTURE 23% 16% 16%

%

16% 3%

16%

CAPITALIZATION STRUCTURE 1

11 1

23%

3

2

3%

33

58% 58%

58% 3 44

58%

4

1

2

22 2

16%

3 4 58%

4

FINANCIALS Return Summary

Development Schedule

FINANCIALS Sensitivity Analysis

Alternate Exit Strategy Intially the plan was to sell all the 24 condominium at the decided sale price in 12 months which means that per month there will be a sale of 2 condominiums.

Looking at the current market condition where the sales of condos in 2023 has drastically dropped as in the current scenario the market for the sales is exiting the pandemic boom. Also with the inflation and higher interest rates people are avoiding taking loans for the purchase which has resulted in a decline in the absoption rate of the sales of condo properties.

Considering these factors, the alternate exit strategy would be to sale of all the 24 condos in 24 months which means that per month we are assuming that 1 condominium will be sold. In this way the unlevered and the levered return have reduced but the reduction is not that significant. This can be a good alternative strategy as we will be just stretching on our timeline but not reducing the sale price.

It might even happen that later in year the market would be at a good stage and we can get a chance to increase our sale price which in turn can later on increase our returns.

ESG Environmental Eco-friendly lighting: Being an interior lot there will be spaces with less light penetration and to save on electricity entire building will be having LED lighting in shared spaces and individual apartments that will greatly diminish energy usage.

Natural design principles: Utilizing natural light and air circulation in the rooms during the daytime will help in decreasing

energy use while enhancing indoor air quality and overall comfort during the colder months.

Water-saving fixtures: All the units will be equiped with low-flow toilets, showerheads, and taps that in turn will assist in minimizing water usage and decreasing utility expenses.

Heating and Cooling system: The building will be equiped with modern centralized heating and cooling system which will adjust the temperature of the indoor according to the exterior climate condition.

Trash System: The building will be have a modern trash chute system installed which will make is convenient for the residents to

throw away their trash. Separate trash bins for recycle, biodegradable, non-biodegradble, etc waste.

Social Shared Common Spaces: The apartment in order to promote community gathering amongst the residents there are several

common shared amenities in the building which include outdoor deck, gym, lounge, shared workspace. This will assist a lot in increasing social interactions. .

Governance As the site is located in the historic district so the facade is designed in accordance to the design standards and limitations laid down by the community board.

RISKS AND MITIGATION Construction Cost The construction cost in the development of a luxury condominium is a major factor. The hard costs can be volatile and keep on increasing with the delay in any one step of development process. Depending on the market trends and the supply chain factors for some material it is difficult to estimate the cost accurately. Hence, preparing for complete uncertainity in the cost is the major risk as this will increase the overall development budget and might lead to a chance of getting higher construction loan. This will directly affect our return dynamics for both the LP and GP. MITIGATION: The best way to mitigate the risk of increased hard cost is to underwrite the hard cost assumption much higher than the current market rate. The sensitivity table below presents the risk in the IRR with a change in the hard cost and the sale cost per unit cost.

Condo Market Softening Current market for the sale of condo apartment the market has still not completelly recovered from the pandemic. The average time of sale of a condo unit specially luxury is pretty low. This will in turn increase the time to sell off all the 24 condos. This will reduce our IRR return.

MITIGATION: If the sales of the condos which was earlier predicted as 12 months is protracted by an additional year, we will be still be able to deliver a good return from the development proposal.

Other way will be reducing the cost of the condo according to the market in order to complete the sale in time but this will reduce our IRR and profit.

APPENDIX and SOURCES https://statisticalatlas.com/neighborhood/New-York/New-York/Flatiron-District/Household-Types https://www.niche.com/places-to-live/n/flatiron-district-new-york-city-ny/ https://www.cityrealty.com/nyc/building-indices/new-development-condos/114 https://www.mns.com/manhattan_new_dev_report https://www.homebuilderdigest.com/cost-guide/new-york-cost-guides/how-much-does-it-cost-to-build-a-house-in-new-yorkcity/ https://www.bisnow.com/new-york/news/capital-markets/all-asset-classes-saw-double-digit-average-price-drops-in-manhattan-in-q4-117099 https://millersamuel.com/files/2023/04/Manhattan-Q1_2023-revised.pdf

APPENDIX and SOURCES Elevation

175'

165'

155'

145'

135'

125'

115'

105'

95'

85'

75'

65'

55'

45'

35'

25'

10W17

15'

APPENDIX and SOURCES