3B Public Hearing 2012 0521 - Laserfiche WebLink

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To: Cynthia Battenberg Subject: Village Marketplace May 1, 2012 Page 4 ■ Financing costs, consisting of loan fees and interest during construction, are estimated to be $307,000 or 6.57% of direct costs, including off site improvement costs. The estimated construction loan is $5.5 million. Net Operating Income Table 2 presents the estimate of stabilized net operating income (NOI) estimated by the Developer. KMA reviewed the revenue projection and compared it to other similar projects with which we are familiar. The NOI projection of approximately $704,280 reflects the following inputs provided by the Developer, which have been reviewed for reasonableness by KMA: ■ The specialty grocery store will ground lease a pad on a long term basis. ■ Rents for built space are projected to range from $33 to $42 per square foot. ■ Rent including ground lease revenue is approximately $735,190 per year. ■ Allowance for vacancy and for operating expenses not recovered from the tenants is approximately $30,910 per year. This estimate is 6% of rents from the in -line shops, excluding the anchor space. The projected annual net operating income (NOI) is approximately $704,280. Reuse Value /Residual Land Value The reuse land value supported by the Project can be estimated as the residual land value, which is the difference between the private investment supported and total development costs (exclusive of land acquisition) and Developer's profit. The residual land value for the Village Marketplace is estimated at $2,170,000, as shown below: ■ The private investment supported by the projected rents is approximately $9,500,000. This is based on Net Operating Income (NOI) of approximately $704,280 capitalized at 7.5 percent. ■ Development costs, excluding land cost, are estimated at approximately $6,378,000. This includes off -site improvements, direct and indirect costs and financing costs. See Table 1. ■ Developer profit is estimated at approximately $855,000, which is the equivalent of 10% of total development costs including land costs. 001 -002; jf 19096.040