Solicitation for a Feasibility Study for Cherry Creek Apartments LLC
150 points, Due end of Week #4
In this case study, you will create a feasibility and constructability document to present tothe stakeholders of the Cherry Creek LLC group. This group is a consortium of Real Estateinvestors who have decided to build a project in South-Western Florida, approximately 5miles north of the city of Naples Florida.
The Cherry Creek partnership is a sophisticated group of investors who construct apartment luxury homes across the country in prime locations adjacent to “up andcoming” clean cities, with a stable and growing professional base. The group has built 9complexes over the last 12 years and has been able to fund 80% of all deals from withinthe group account, using bank financing for the remaining 20%. These projects are wellplanned, gated rental communities with pool; club house; tennis courts; tot lots andbasketball court. The use of green belts is a required feature along with landscaping to buffer on visual lines from the 2 streets that border the parcel. The city has also stipulatedthat there shall be a parking space for each unit, plus 20 spares for visitors.
Cherry Creek constructs these complexes using outside architects, outside generalcontractors and outside construction management consultants. The only “in-house” employees are the President of the company, VP of Finance and Real Estate, VP ofdevelopment; and 10 other professionals involved with the management of this Real Estate Limited partnership.
Below are some financial statistics of the company.
Assets:
Long term:……….. $190 million (Existing developed Real Estate) Short Term ……….$30 million in cash and short term treasuries Debt:
Long term: ………$25 million 20-year permanent financing with JP Morgan Chase 5.69%
Short term…………$5 million prior construction loan on a $100 million credit loan facility with JP Morgan Chase. 6.76%
Note: No income statement was provided by the stakeholders
Scope of Study
The stakeholder association (Cherry Creek LLC) has asked you to come up with a feasibility study for the construction of 80 unit luxury apartment homes in the Naples, Florida area. They request the basic building architecture to be 8 units per building. Thecompany has purchased 22 acres from WCI Communities back in 2009 before WCI wentbankrupt for $200,250 an acre. The land was paid off last month, and is free and clear to be developed.
Cherry Creek has spent 2 years getting this parcel re-zoned for multifamily use, but to thisdate, has only acquired the Zoning approval and the Environmental wetlands & land usepermit
which is on file with the county and State.
In the solicitation, Cherry Creek states that they are still in need of the following:
• Impact fee assessment
• Legal studies of Florida covenant association rule changes
• Full Geotech Engineering bores and sample wells
• Agreement with a utility company for power
• Lease consumer Demand studies
• Risk Analysis of the project
• Constructability analysis
• Insurance coverage to build the project
• Financial pro forma
• Architectural drawings and specifications
What has been described in the solicitation, by Cherry Creek to you, the developer is given here:
Land description
• The parcel is mostly all green meadow land with natural rolling small hills and acreek in the center
• Natural stands of trees remain and are in good health, furthermore the parcel has been “scrubbed of all exotic vegetation” and the spread of these wild plants are contained.
• A natural drainage system is/has been developed by nature over the years and 2 small lagoons are located across the property.
• The elevation of the property is 20 ft above mean sea level, which is 4 feet higherthan most of Naples
• This parcel is bordered by another meadow on the north side separated by trees
• On the east and west side of the parcel, are asphalt roads used by the neighboring subdivisions for communal travel.
• The south side is a 15 acre parcel “up for sale” but no contract yet, and has been listed
for over a year.
• Preliminary topographic studies performed show that a net import of fill will beneeded to balance the site after clear and grub operations are complete. It isestimated that
5,000 CY of clean sand/fill will need to be brought in at $9.00/yd. in-place
• It is also estimated that 1500 CY of topsoil will need to be imported at $15.00 CY
• Preliminary soil bearing capacity is 2200 PSF
• Hydro-studies show a water table at 10 feet, with 10 gpm well head flow rate on a 2 inch pipe.
• The top 2 feet of soil is comprised of sand and loamy sand with native vegetation
• The next 6 to 8 feet down is calcified coral known as lime rock
• Under that lies the water table
• The lagoons have capacity to accept more water , but a retention pond may be needed.
The Buildings
In the solicitation, Cherry Creek has stipulated that 80 units are to be built in a tenbuilding configuration around/ adjacent to the 2 lagoons on the 22 acre site. Each building shall have 4 single bedrooms; 4 double bedrooms, and finally 2 three bedroomunits per building.
They request that the building conform to the 2002 Florida Building Code which wasamended after many hurricanes damaged Florida buildings throughout the State.
Exterior design intent
The partnership has requested the use of reinforced CMU block wall, or (C-I-P walls) as amore costly alternative if a “case can be made” by the developer. Light-gauge steel trussesare to be used on the roof ILO of wood trusses. Brick wainscoting or synthetic stone maybe used as an appearance enhancer on the exterior. The roof composition is to have 3 tab,Class A fire, dimensional asphalt shingles, or to substitute, the more costly light-weightconcrete barrel shaped tile roof system. (No clay tile). Minimize the use of wood for fire and wind rating.
Building must meet Dade County 90MPH wind rating.
Interior design intent
Each unit will consist of a kitchen with bar-top; dishwasher; range/oven and microwave. The unit will also have ample closet space, utility closet and entry closet. The unit will havea general apartment design layout, with bedrooms and family room, but will include akitchenette for dining, a laundry room closet for “two side by side” washer dryers, and abalcony on each unit. Extra storage is provided in a weatherproof closet on the balcony.
The 2 and 3 units will have fireplaces and are located on the first and second level. Eachunit has A/C and a small mechanical room with water heater and air handler. The units arefully carpeted with tile flooring in the bathroom and stone floor in the kitchen. The counter-tops are Corian brand and are colored to match the units. The single bedroom hasone bath, the double bedroom has 2 baths and the three bedroom has 2 baths and apowder room.
No other special design requirements have been given to the developer since the “LLCpartnership” wants to see what the developer can come up with, given the requirements inthe solicitation…
Required Deliverables
• Abstract section in the paper describing the needs of the stakeholder.
• Introduction section describing the building area and components.
• Demand analysis giving Metro Area statistics showing occupancy rates, and leasecosts per s.f.
• Building layout with site plan
• Rough order of magnitude (ROM) estimate on the total soft and hard costs (Directand indirect) to construct the project.
• Architectural narrative including constructability analysis
• Risk Analysis
• Schedule
This paper should be approximately 8 pages long and have a cover sheet; table of contents, and appendices if necessary. Students are free to use some “artistic license”, andmake assumptions on the perceived needs of the LLC based on market conditions.
This is a feasibility paper and nothing is standardized, except for the given requirements. Feel free to expand on this design and create a nice well planned community. No dollar value cap has been given by Cherry Creek LLC, and the developer is free to use anystrategy it feels is appropriate to get the units leased up within a one year period.
RFI’ s
RFI’s are welcome to be placed in the “Ask questions section” and I will respond for all to view. Let’s keep the RFI’s short and to the point.
Remember, you have freedom to create this project and sell it to the LLC. Some of you may
include many extras, or choose to go the streamlined efficient approach. Either is acceptable. Good luck and please include all deliverable set forth in the solicitation.
Sample Solution
