SEATTLE is a 24 hour City with exciting opportunities in Transit Oriented Development (TOD). I have been specializing in TOD’s since rapid transportation came to Seattle. Investment returns on TOD properties are above market compared to similar non-transit properties for obvious reasons.
Low vacancies, flexible zoning, no parking requirements, increased rent rolls from small footprint dwelling designs, low cap rates, and high appreciation are just a few.
Most of my long-term real estate investment performas are based upon buy, develop and lease for 10 years and sell on the 11th. Normally in today’s market, I would use down payment at 25% (equity), financing at 4.5% interest/20 yr. amortization as base plug-in values. 5% fixed vacancy is assumed even though Seattle multifamily has been below 3% for recent past years. Most high-density areas have a waiting list in Seattle prime.
Revenues are generated from leasing residential Small Efficiency Dwelling Units (SEDU’s) and commercial storefront retail units.
This deal is an investors delight mainly due to high volume rent rolls, low vacancy, utility pass-through charges and probable approval for increased Floor Area Ratio (FAR), building height and 12-year property tax exemption.
We will be reviewing the financial reports for this mixed-use building in coming blog posts shortly.
In truth, this one of many great sample projects I have lined up for us to study.
Mixed-use investments have residential and commerical components to consider when deploying an investment strategy.
Lets us not forget simple construction logistics also plays a tremendous factor in a winning deal.
Share some of your insights and/or reflections regarding Financial Measures report above.
How good are you at naming that tune?