Houston IntermodalHouston IntermodalCenter / Multimodal TerminalCenter / Multimodal Terminal

Pages: 108-120Pages: 108-120

D. Suggested Structure and Assignment of D. Suggested Structure and Assignment of RolesRoles

Table 28Comparison of Relative Capabilities of Participants

E. Estimated Facility Operation E. Estimated Facility Operation Cost/RevenuesCost/Revenues

Purpose:Purpose:To estimate the projected operating expenses, and future To estimate the projected operating expenses, and future revenue from retail establishments in the METRO and revenue from retail establishments in the METRO and National/International terminals.National/International terminals.

Intermodal Center / Multimodal Terminal will consist Intermodal Center / Multimodal Terminal will consist of:of:

Two Terminals:Two Terminals:

-METRO services (primarily) – approx. 80,000 s.f. -METRO services (primarily) – approx. 80,000 s.f. with 3,200 s.f. with 3,200 s.f. interior retail/food vendor spaceinterior retail/food vendor space

-National/International bus carriers – approx. -National/International bus carriers – approx. 48,000 s.f. with no 48,000 s.f. with no retail commercial space retail commercial space

(Terminals physically connected at an upper concourse (Terminals physically connected at an upper concourse level)level)

Obtaining Comparable Statistical of Similar FacilitiesObtaining Comparable Statistical of Similar Facilities

Many resourcesMany resources Researched multiple structuresResearched multiple structures

-American Public Transportation Association-American Public Transportation Association-Federal Transit Administration-Federal Transit Administration-Building owners and Management Association-Building owners and Management Association

Information Varied (each unique)Information Varied (each unique) As program develops income and expenses will become As program develops income and expenses will become

more definedmore defined BOMA Experience Exchange Report was heavily relied upon BOMA Experience Exchange Report was heavily relied upon

for predevelopmentfor predevelopment

Operating ExpensesOperating Expenses

Building type category:Building type category:-Agency Managed (managed by occupying agency)-Agency Managed (managed by occupying agency)

BOMA report classifies this group into two sections:BOMA report classifies this group into two sections:-properties located “All Downtown” -properties located “All Downtown” -properties located “All Suburban”-properties located “All Suburban”

Large sample of data averaged from this for operating expensesLarge sample of data averaged from this for operating expenses Open day and night represents approx. a 37% average increaseOpen day and night represents approx. a 37% average increase ““Agency Run” facilities reported at national level (living factor)Agency Run” facilities reported at national level (living factor)

Operating ExpensesCleaning/Janitorial Repair/MaintenanceUtilitiesRoads/GroundsSecurityAdministrativeTotal Expenses:

$1.56$1.64$2.61$0.21$0.86$0.97$7.85

Lease Income from Retail / Food VendorsLease Income from Retail / Food Vendors

BOMA report was used to retail rental rates in the Houston BOMA report was used to retail rental rates in the Houston areaarea

Obtained large sample size Obtained large sample size -all Downtown and Suburban office buildings in -all Downtown and Suburban office buildings in

Private SectorPrivate Sector

Average Rate: $13.53/s.f. for retail/food vendor space Average Rate: $13.53/s.f. for retail/food vendor space within Intermodal facilitywithin Intermodal facility

Cash Flow ModelCash Flow Model

Lease Rate: $13.53/s.f. as base rent for each tenant at Lease Rate: $13.53/s.f. as base rent for each tenant at 800s.f. of leased area800s.f. of leased area

Triple-net lease was assumed which reimburses owners of Triple-net lease was assumed which reimburses owners of buildings large percentage of operating expensesbuildings large percentage of operating expenses

Assumptions used in financial model:Assumptions used in financial model:- 3% inflation factor- 3% inflation factor-5 year lease renewal-5 year lease renewal-$10.00/s.f. tenant improvements-$10.00/s.f. tenant improvements-4% leasing commissions on new leases and 2% on lease -4% leasing commissions on new leases and 2% on lease

renewalsrenewals-Vacancy rate of 7%-Vacancy rate of 7%-Assume lease will start 18 months after the analysis start, -Assume lease will start 18 months after the analysis start, (operating expenses start at this point) (operating expenses start at this point)

Comparative AnalysisComparative Analysis

Results of incorporating the average Operating Expenses as Results of incorporating the average Operating Expenses as determined by the analysis :determined by the analysis :

Metro Regional TerminalMetro Regional Terminal-annual operating cost - $649,857 or -annual operating cost - $649,857 or

$8.21/s.f.$8.21/s.f. National/International TerminalNational/International Terminal

-annual operating cost - $399,539 or -annual operating cost - $399,539 or $8.53/s.f.$8.53/s.f. Operating Expenses

Cost AnalysisSchedule of Prospective Cash

Flow In Inflation Dollars for Fiscal Year Beginning 1/1/2006

Additional TablesAdditional Tables