Development Pro-Forma Proposal

Executive Summary

Orange + University Residences, Newark

Development Proposal A high rise community in a city on the brink of a RENAISSANCE

Michael Lawson

O r a n g e + U n i v e r s i t y R e s i d e n c e s | 2 Development Proposal

Table of Contents

Executive Summary ………………………………… 3

Site Analysis ………………………………… 5

Market Analysis ………………………………… 9

Development Concept …………………………… 12

Financial Pro Forma ………………………………… 17

Bibliography ………………………………… 20


Executive Summary

Orange + University Residences, Newark, NJ

The city of Newark, New Jersey is in an interesting place in its long history. The third oldest city

in the United States is on the verge of a renaissance, a redevelopment that will transform New

Jersey’s largest city into a 24/7 urban center for the arts, entertainment, learning, and living.

Even through the downturn in the economy, Newark has seen much progress in terms of

redevelopment plans and infustructure improvements. Newark has just finished a master plan

and has initiatives to improve the Broad Street Station District in the near future. A

redevelopment of the station has already been completed. The city is positioning itself to

become the true “Gateway City” of the region.

Community Designs Architecture is making sure that it is part of Newark’s renaissance by

proposing Orange + University Residences in the Broad Street Station District of Newark. O + U

Residences is a 12 story 52 unit tower located at 110 Orange Street with convenient retail on

the ground floor. Six residential unit types, ranging from studio to three bedroom apartments,

790 square feet to 1350 square feet respectively, allow for customization of the resident, and

the many amenities, such as a fitness center, daycare facility, community rooms, and an

outdoor community park, allow for any resident to feel at home. Spectacular views from each

room can be had of New York City to the east and Downtown Newark to the south.

The amenities do not stop with just the building; its location in Downtown Newark positions it

in great proximity to so many of Newark’s hidden treasures. Within walking distance is

Riverfront Stadium, the Newark Museum, James Street Historic District, Halsey Street Shops,

NJPAC, Prudential Center, the new Passaic Riverfront Park, and many more. Downtown eateries


Table of Contents

and restaurants are just a quick walk away, and the Ironbound Section of Newark is just as easy

to get to. The Newark Light Rail Broad Street Station allows residents to easily connect with the

other parts of the city. The University Heights section, where Rutgers University and New

Jersey Institute of Technology are located, is only a 10 minute walk from O + U Residences. This

development has the opportunity to allow for young and innovative students or alumni to stay

close to their alma mater or school of choice.

O + U Residences is located one block away from Broad Street Station. This connects the

residents with the region, the country, and the world. From Broad Street Station connections

can be made via train to New York City, 20 minutes, Newark Penn Station, 7 minutes, Newark

Liberty International Airport, 20 minutes, Philadelphia, 40 minutes, and western New Jersey.

Also easy access to local roadways including Interstate 280, the Garden State Parkway, and the

New Jersey Turnpike is only a 2 minute drive.

It is Community Designs Architecture’s sincere belief that O + U Residences will be one of

Newark’s first LEED Platinum Standard buildings. Green Design in today’s day and age is

extremely important and allows for all citizens to enjoy the essential things in life, clean air and

water, and a safe place to live. With innovative mechanical, solar, and plumbing systems O + U

Residences will be model for future development.

Orange + University Residences has positioned itself in a city on the rise. This development will

allow for Newark to continue its growth and expansion into the 21st century.


Site Analysis

New Jersey Map

Newark is located in the center of one of the largest metropolitan regions in the world

Newark Map

Orange + University Residences is located in the Central Downtown Business District within Newark’s Central Ward

Orange + University Residences

Source: “Newark Master Plan”, City of Newark

Source: “Newark Master Plan”, City of Newark


Site Analysis

Transportation Map

Newark has a great infustructure system that connects it to the region, country, and world.

Neighborhood Map

Newark is made up of many distinct neighborhoods. The proposed development is within the Broad Street Station neighborhood and is in close proximity to Downtown Newark and to the proposed riverfront park.


Orange + University Residences Orange + University Residences Orange + University

Residences

Source: “Newark Advantage”, City of Newark



Site Analysis

Broad Street Station Master Plan

The master plan for the Broad Street district calls for development like Orange + University Residences on the proposed site.

Broad Street Station Diagram

Within the Broad Street District Orange Street is designated as a retail corridor with mid‐high residential development.

Source: “Broad Street District Exhibits”, City of Newark



Site Analysis

Broad Street Station District Zoning

The original zoning for the site is Residential and Commercial.



Site Plan w/ Context

Source: “Google Maps”, google.com


Market Analysis

Newark has been underprivileged for too long. Even in this grim economy, Newark is on the road to

making itself a destination. Nicknamed “Brick City”, Newark has always been an industrial hub. Today

most industry is located in Port Newark in the East Ward. The city’s downtown was once and still is a

center for the insurance industry, with Prudential Insurance as its anchor. The downtown has seen

roadway improvements and pedestrian oriented street improvements implemented. These projects

have helped to continue the move towards a 24/7 downtown.

“Advantage Newark,” an information publication produced by the City of Newark states that residents

spend up to 38% of retail dollars outside the city limits. Orange + University Residences includes on its

ground floor 25,000 square feet of leasable area. There is a need for retail in the city core and this need

will be fulfilled to the residents of O + U Residences at its ground floor.

Affordable living is a very important part of any residential development. O + U Residences a medium

income housing opportunity. Since O + U Residences is located so close to the business core of Newark

and also to the city’s universities, this project will be marketed to both students and professionals. As

other developments have done in the past, such as Eleven80, O + U Residences will be marketed as an

alternative to living in the suburbs. A community that is close to your workplace or school of choice.

The climate in which this project is being built is an advantage and hardship. The economic slowdown

allows for low construction cost however financing is difficult to achieve. The government of Newark

should be very accepting of a new project being proposed that will stimulate economic growth within

the city. The timing is perfect due to when the economy does reverse the new building will be the first

on the success list.

O r a n g e + U n i v e r s i t y R e s i d e n c e s | 1 0 Development Proposal

Market Analysis



Market Analysis



Development Concept

Site Plan

Typical Floor PlanFirst Floor Plan


Site Analysis Development Concept

Residential

Community Space/ Retail

Daycare Facility

Fitness CenterRetail

Residence Entrance

Outdoor Community Space

Community Space/ Residence Lobby

Residences








Financial Pro Forma

Pragmatics Land Lot Size Land Cost Allowable area to be developed Allowable area expressed in acres Square feet per acre Developable portion expressed in feet Building Building Coverage expressed as percent Buildable coverage expressed in feet Total Building Floor Area (TBFA) Floor Area Ratio (FAR) Allocation for circulation‐service Rentable space exclusion of circulation‐service Proceeds Rental rate per square foot per year

Residential Retail

Total yearly rent Residential Retail

Parking Pavement coverage expressed as percent Pavement coverage expressed in acres Number of cars allocated to 1000 square feet Available parking expressed in number of cars

42,168 sq. ft. $2,500,000.00 70% .68 acres 43,408 sq. ft. 29,517.6 sq. ft. 60% 25,309 sq. ft. 110,623 sq. ft. 2.6 FAR 8% 101,773.16 sq. ft. $83.50 $35.50 $48.00 $3,929,309.68 $2,714,477.68 $1,214,832.00 5% .0475% .75 82.5

Assumptions Based on market analysis and zoning Assumptions Based on zoning Space allocated to public, non‐rentable Assumptions Average for Newark based on rentable space, www.census.gov Assumptions Based on zoning

Downtown Parking Reduction Incentive


Site Analysis Financial Pro Forma

Costs Land & Approvals Cost Land Acquisition Approvals Architect Legal Zoning Board Hard Cost Construction Cost Building Parking General Conditions Bond‐ Completion Overhead and Profit Contingency Construction Manager Fee Total Hard Costs Soft Costs Architect/Engineer/Surveyor Legal Project Title Insurance Permits Construction Community Reinvestment Fee Appraisal/Feasibility Study Legal/Lender Commitment Fee Construction Consultant Builders Risk/ Liability Insurance Environmental Insurance Real Estate Taxes Developers Fee Accounting Marketing Exclusive of Commissions Interest Total Soft Costs Total Project Cost

$2,500,000.00 $75,000.00 $75,000.00 $20,000.00 $10,822,320.00 $9,956,070.00 $866,250.00 $541,116.00 $162,334.80 $432,892.80 $162,334.80 $22,943,318.40 $1,147,165.92 $50,000.00 $54,111.60 $100,000.00 $156,000.00 $5,000.00 $20,000.00 $175,000.00 $25,000.00 $216,446.40 $162,334.80 $120,000.00 $324,669.00 $5,000.00 $75,000.00 $3,304,968.00 $5,940,694.52 $28,884,012.92

Assumptions Estimate Estimate Estimate Estimate ($90 per square foot) ($10,500 per space) (5% of construction costs) (1.5% of construction costs) (4% of construction costs) (1.5% of construction costs) Assumptions (5% of hard costs) Estimate (0.5% of construction costs) Estimate ($3,000 per unit) Estimate Estimate Estimate Estimate (2% of construction costs) (1.5% of construction costs) Estimate (3% of construction costs) Estimate Estimate Based on 2007‐2008 interest


Site Analysis Financial Pro Forma

Income & Financing Income Gross income from rentable spaces Expensed Brokerage Fees Management Fees Interior Maintenance Structural Reserve Net Income Financing 2010 NOI Vacancy NOI after Vacancy Mortgage Constant Maximum Loan Total Project Cost Cash Equity for Financing Permanent Financing Closing Costs Term Mortgage Constant Equity Loan Loan Amount Depreciation Value of Property Land Value Building Value Depreciation Period Yearly Depreciation

$3,612,947.18 $216,776.83 $108,388.42 $108,388.42 $36,129.47 $4,082,630.32 $5,685,008.00 $284,250.40 $5,400,757.60 8.868% $39,795,056.00 $28,884,012.92 $10,911,043.08 $20,000.00 24 months 8.868% $10,911,043.08 $39,795,056.00 $28,884,012.92 $2,500,000.00 $26,384,012.92 24 months $549,666.94

Assumptions (101,773.16 sq. ft. at $35.50) (6% of income) (4% of income) (4% of income) (1% of construction costs) (5% of 2010 NOI) (7.5% over 25 years) (NOI x 100)/cap rate (7%) Estimate Total Project Cost Building Value/ Depreciation Value


Bibliography

"Advantage Newark." City of Newark. 2009. City of Newark. 6 May 2009 <http://www.ci.newark.nj.us/government/city_departments/economic__housing_development/advantage_newark.php>. "Broad Street Station District Exhibit." City of Newark. 2009. City of Newark. 6 May 2009 <http://www.ci.newark.nj.us/downloads/index.php?dlid=48>. "Data Tools." 2010 Census. 2009. US Census Bureau. 6 May 2009 <http://www.census.gov/>. "Eleven80.” Cogswell Realty. 2009. 6 May 2009 <http://www.eleven80rentals.com/home.shtml>. "Newark Master Plan." City of Newark. 2009. City of Newark. 6 May 2009 <http://www.ci.newark.nj.us/government/city_departments/economic__housing_development/newarksmasterplan.php>. "A Walk through Newark." Industrial Revolution. 2008. Thirteen. 6 May 2009 <http://www.thirteen.org/newark/history2.html>.


Semester Bibliography

"Advantage Newark." City of Newark. 2009. City of Newark. 6 May 2009 <http://www.ci.newark.nj.us/government/city_departments/economic__housing_development/advantage_newark.php>. "Broad Street Station District Exhibit." City of Newark. 2009. City of Newark. 6 May 2009 <http://www.ci.newark.nj.us/downloads/index.php?dlid=48>. "Data Tools." 2010 Census. 2009. US Census Bureau. 6 May 2009 <http://www.census.gov/>. "Eleven80.” Cogswell Realty. 2009. 6 May 2009 <http://www.eleven80rentals.com/home.shtml>. Gardiner, Virginia. "Easing into Retirement Housing" Metropolis October 2006 34. 26 Jan 2009

<http://www.metropolismag.com/story/20061011/easing‐into‐retirement‐housing>. "Newark Master Plan." City of Newark. 2009. City of Newark. 6 May 2009 <http://www.ci.newark.nj.us/government/city_departments/economic__housing_development/newarksmasterplan.php>. "The New York Times Building." New York Architecture Images. 9 February 2008. 23 Mar 2009 <http://www.nyc‐

architecture.com/MID/MID125C.htm>. "The New York Times Building." The New York Times Company. 23 Mar 2009 <http://newyorktimesbuilding.com/>. Parks and Recreation Department of New York City. New York City Department of Parks & Recreation: Press Releases. 25

August 2006. 24 February 2009 <http://www.nyc.gov/parks>. Pfeiser, Richard B., with Anne B. Frej. Professional Real Estate Development: The ULI Guide to the Business. Second Edition.

Washington D.C.: ULI‐the Urban Land Institute, 2003. p34‐50. "A Walk through Newark." Industrial Revolution. 2008. Thirteen. 6 May 2009 <http://www.thirteen.org/newark/history2.html>

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Development Pro-Forma Proposal