The Project Description

 

Redevelopment of 10 North Carroll Street in downtown Frederick, Maryland. The site is located near a future hotel in the heart of the city, which has seen a surge in population growth.

 

The Feasibility Study/Report

 

The project entails students acting in the role of Development Director for the project. The role will simulate a multifamily residential project from conception to preparing a final presentation that typically would be submitted to the investment committee of a bank.

 

Each group is required to produce 4 chapters of a feasibility study produced in sections over the course of the term. Your Final Report/Feasibility Study, if it appropriately addresses all of the sections, will run 30 pages double-spaced using a 12-point font.

 

Each development proposal shall include the following four sections [not necessarily in this order]:

 

• Growth analysis of the metropolitan area: Analyze patterns of population, employment, and income growth at the county and/or MSA level. Considerations should include analysis of economic base [location quotients, shift share analysis, economic dependency]. Additionally, your report should include a psychographic study of the subject

 

• Macroeconomic analysis: How is residential real estate performing in this area? Are supply and demand of residential real estate in balance? Considerations should include analysis of the following residential real estate data points: net effective rents, vacancy, completions, inventory, construction to absorption ratio, cap rates, and net

 

• Microeconomic analysis: What are the competitive advantages of the site? Considerations should include the analysis of the following locational attributes: size and shape, topography and geology, roads and public utilities, legal limitations on use [zoning], and the calculation of the allowed buildable square footage [building envelope].

 

• Feasibility analysis: Draft a pro forma for financing [what you could take to the bank] including a project cost summary, and a front door or back door financial feasibility analysis and sensitivity analysis. Consideration should be also given to environmental feasibility in terms of prior uses of the site [i.e., Sanborn Maps]. The assumptions supporting the analysis should be

 

• Bonus section: Background and history of the site and community, planning context for the site, stakeholders, etc. Traffic and pedestrian flow should also be considered along with architectural

 

 

Evaluation Criteria

 

All work written for the course shall be at a level appropriate for graduate students. Grammar and spelling matter in this course. Written work is expected to be well-organized and readable. All assignments must be typed, double-spaced, and in 12-point Arial or Calibri font. Use standard spacing and margins.

 

Objectives

 

• Are the issues addressed by the study clearly articulated and explained?

 

Analysis Elements

 

• Are the peculiarities of the real estate market being studied clearly acknowledged and appropriately taken into account?
• Are the most important market-related determinants of project profitability—both at the macro and micro level—given due consideration?

 

Methodologies and Data

 

• Are the data used—primary and/or secondary—reliable? Are the data sourced? Are the methods of data collection clearly explained and listed?
• Are the data incorporated in the analysis in a coherent and integral fashion or is the study full of “boilerplate” information?

 

Conclusions

 

• Are the conclusions of the study inherently linked to its objectives and the analysis outcomes?
• Are conclusions based on subjective evaluation, intuition, or gut feeling clearly distinguished from those that are derived from careful analysis?
• Are the results of sensitivity analysis regarding the performance of the project under alternative assumptions integrated in the recommendations of the study?