03/11/08

Lecture:

1. Refinement of the idea
   
   1. Objectives of stage two
      
   2. Finding the right site
      
      1. Land can represent 10 to 30+% of total project costs
         
      2. Location is crucial
         
      3. Control of the site
         
         1. Option to buy - money is placed to secure the site, and development continues. Money is lost if development does not proceed.
            
      4. Refinement of idea
         
         1. Market research
            
         2. Site selection
            
         3. Negotiation with players
            
         4. Project specifications
            
            1. Prelim. Project design
               
            2. Determine feasibility
               
   3. Urban growth patterns
      
      1. Concentric zone theory
         
         1. E.W. Burgess
            
         2. Axial theory
            
         3. Sector theory
            
            1. Homer Hoyt
               
         4. Multiple Nuclei Model
            
            1. Chauncy Harris and Edward Ullman
               
   4. Factors in site selection (page 279)
      
      1. Zoning
         
      2. Physical features
         
      3. Utilities
         
      4. Transportation
         
      5. Parking
         
      6. Environmental impact
         
      7. Government services
         
      8. Local attitudes
         
      9. Price of the land
         
      10. Demand and supply
          
   5. Discussing the project with other players
      
      1. Contractors
         
      2. Tenants
         
      3. Property managers
         
      4. Lenders
         
      5. Investors
         
      6. Public
         
   6. Market segmentation
      
      1. Defin the market niche and reduce risk
         
      2. Housing
         
      3. Retail/commercial
         
      4. Office
         
      5. industrial
         
   7. Risk control
      
      1. Option agreements
         
   8. Impact of interest rates
      
      1. 108+ million households in the U.S.
         
      2. 68% homeowners - over 70 million
         
      3. Until recently we have been buying/selling 7 million+ homes a year
         
   9. Trends
      
      1. Increasing large share of the housing market
         
      2. More sophisticated renters that are mobile
         
      3. Trend towards larger complexes
         
         1. Maximum efficiency in management and development costs
            
         2. Amenities - swimming pools, tennis courts, recreation room, sauna baths
            
   10. Feasibility
       
   11. Location
       
   12. Site
       
       1. Adequate in size and configuration to accommodate improvements without overcrowding
          
       2. 1 -2 parking spaces
          
   13. Soundproofing
       
   14. Room arrangement
       
       1. Functional with zones of living, utility, and sleeping
          
   15. Apartment sizes
       
       1. Vary depending on local competition
          
       2. One bedroom units 550 to 600+ SF
          
       3. Two bedroom units 750 to 800+ SF
          
       4. Three bedroom units 900+ SF
          
       5. Circulation usually 10%
          
   16. Sources of income
       
       1. Primary
          
          1. Individual tenant rentals
             
       2. Secondary
          
          1. Laundromats
             
          2. Retail and service shops if part of the apartment complex
             
   17. Vacancy
       
       1. In a very favorable market 5% is usually applied to cover continuing turnover vacancy and collection losses
          
       2. 10% - 15% applies to student or seasonal type units
          
   18. Expenses
       
       1. Includes minimal replacement reserves
          
       2. Varies considerably depending on local factors - taxes
          
       3. Base figure of 20% to 25% of adjusted gross income (excluding taxes)
          
       4. Real estate taxes can range from 5% to 30% (15% average)
          
       5. Utilities
          

        
        

    
    

    
    

Notes: