November 16, 2005

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Jennifer Balkcom, Tim Johnson, Scott Nguyen,

Alison Novak, Arvind Pai

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Agenda

Introduction

Regulatory Processes

Site Capacity & Design Elements

Financial Feasibility

Conclusion

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Introduction

505 Congress St.

T

Multi-Family For-Rent

On-Demand Office

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Regulatory Processes

Governing Zoning– Article 27P: South Boston Interim Overlay Planning District

• Supersedes Article 42E – Harborpark Fort Pointe

Waterfront District

Article 80: BRA Review

Large Project Review– Scoping Determination Will Determine Reports Required

Boston Civic Design Commission

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Large Project Review Timeline

Months

1 2 3 4 5 6 7 8 9 10 11 12

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Regulatory Processes

Challenges:– EPA & HUD standards

– Fee schedule

– Potential off-site

mitigation to offset

high site coverage

ratio

Strategies:– Foster relationships

with relevant BRA staff

and neighborhood

groups

– Look to comparable

projects

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Site Capacity & Design Elements

30,435 SF; FAR=4; Max Ht=150’

Open Space requirement– 50% in zoning code, with built-in flexibility

– 70% reasonable IAW Boston Redevelopment Authority

Considerable flexibility in IPOD zoning:– Development envelope dependent on Large Project Review

Process

– Design guidelines are not set in stone (i.e. parking, façade,

setbacks, buffers)

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Site Capacity & Design Elements

Concessions:– Affordable Housing – 10%

• Included in Financials

– Open Space Requirement – 50%

• Currently at 26% open space, but considering

creating/improving off-site open ‘green’ spaces

• Negotiable

– Street Improvements

• Anticipate improving pedestrian access/experience and

crosswalks to site and vehicular ingress/egress

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Site Capacity & Design ElementsLand use allotment:– Total built area: 121,740 based on FAR of 4.0.

85% efficiency implies Net Rentable Area 103,500 SF

– Floor Plate = 23,400 SF Gross

– Residential = 7 x 14,050 SF Gross

– Uses in Net Square Footage:

• Residential: 83,589 SF (110 units)

• On-Demand Office: 19,190 SF

• Common Facilities: 18,240 SF

• Mechanical: 5,000 SF

• Underground Parking: 23,450 SF

• Open Space: 7,035 SF (on-site)

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Concept

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Floor Plan Design

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Street-Level View

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Financial Feasibility Analysis

Property Assumptions

Development Assumptions

Financial Assumptions

Feasibility Analysis

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PROPERTY ASSUMPTIONSLand Area 30,435 Parking $225/spaceFAR 4Total buildable sf 121,740 Office AssumptionsFootprint 23,400 Efficiency 0.85 Buildable sf 19,890 Lobby 700 Office sf 19,190 Office rent/sf/yr - NNN 22.00$ Office vacancy 12.3%Apartment Assumptions - AllGross apartment area 98,340 Leasable apartment sf 83,589 Apt type 0-BR 1-BR 2-BRApt sf 500 700 950Size breakdown 20% 40% 40%Apt distribution 26 54 54Avg size 760Avg # units total 110 Vacancy - Apartment 5.0%Apartment Assumptions - Market - 90% of unitsApt distribution - market 23 49 49Apartment Assumptions - Affordable - 10% of units

0-BR 1-BR 2-BR# Occupants 1 1.5 22005 Income Limit 28,950$ 31,025$ 33,100$ Projected 2008 Limits 31,634$ 33,902$ 36,169$ Rent 791$ 848$ 904$ Apt distribution - affordable 3 5 5Avg Affordable Rent 859$

Property

Assumptions– Fixed Office,

Affordable

Apartment and

Parking Rents

– Vacancy Rates

from Market

Analysis

Financial Feasibility Analysis

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FEASIBILITY ASSUMPTIONS Cost TotalTotal Buildable Apartment SF 98,340 175$ 17,209,500 Total Buildable Office SF 23,400 200$ 4,680,000 Parking - # spaces 70 20,000$ 1,400,000 Total Construction cost 23,289,500$

Site Acquisition Cost 5,500,000$ Total Soft cost 4,657,900$ Total Development cost 33,447,400$

Feasibility Assumptions– Construction Cost Estimates come from USGBC and a

large commercial contractor

– Includes conservative 10% premium for Green Building

Financial Feasibility Analysis

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Feasibility AnalysisInvestor's Circle KeyBank New Boston Berkshire

Amount 2,000,000$ 4,689,480$ Required Return 9.5% 15%

Debt DB - Perm DB - Perm DB - Conduit KeyBank DB - ForwardLTC Ratio - based on 30-yr am 80% 80% 90% 80%Rate - bps added to 10-yr T 100 150 115 115 22Rate 5.6% 6.1% 5.8% 5.8% NATerm (years) 10 30 10 10 1Permanent Mortgage 26,757,920$ 26,757,920$ 30,102,660$ 26,757,920$ Equity Needed 6,689,480$ 6,689,480$ 3,344,740$ 6,689,480$

Weighted Avg. Cost of Equity 893,422$ 893,422$ 893,422$ 893,422$ Mortgage Constant 0.1308 0.0727 0.1317 0.1317DS 3,500,657$ 1,945,819$ 3,965,215$ 3,524,635$ DSCR 1.25 1.25 1.2 1.2 NOI target reqdNOI for DSCR Requirement 4,375,821$ 2,432,274$ 4,758,258$ 4,229,562$ NOI Check for Equity Coverage 4,394,079$ 2,839,241$ 4,858,637$ 4,418,057$

NOI 4,394,079$ 2,839,241$ 4,858,637$ 4,418,057$

Financial Feasibility Analysis

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Feasibility Analysis (continued)Investor's Circle KeyBank New Boston Berkshire

Amount 2,000,000$ (2,370,252)$ Required Return 9.5% 15%Debt DB - Perm DB - Perm DB - Conduit KeyBank DB - ForwardNOI 4,394,079$ 2,839,241$ 4,858,637$ 4,418,057$ Op Ex 329,957$ 329,957$ 329,957$ 329,957$ EGI 4,724,035$ 3,169,198$ 5,188,593$ 4,748,014$

Parking ($189,000) ($189,000) ($189,000) ($189,000)Rent - Office ($370,252) ($370,252) ($370,252) ($370,252)Rent - Affordable Units ($113,425) ($113,425) ($113,425) ($113,425)

PGI 4,051,359$ 2,496,521$ 4,515,917$ 4,075,337$ Occupancy - Rent 95.0% 95.0% 95.0% 95.0%PGI - Apartments 4,264,588$ 2,627,917$ 4,753,596$ 4,289,829$ Leasable Market Units 99 99 99 99Rent - Apartment 3,590$ 2,212$ 4,002$ 3,611$ Avg Comparable Market Rent TODAY 2,204$ Is Project Feasible? Yes!

Financial Feasibility Analysis

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Conclusion

Timeline & Fees for Permitting

Creative Design Solutions

Green Design Value

Attention to Context Public Support

Next Steps: Detailing Construction Costs, Structuring the Deal, Design & FAR alternatives

505 Congress Street is a viable project

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Questions

November 16, 2005

REcreate

Jennifer Balkcom, Tim Johnson, Scott Nguyen,

Alison Novak, Arvind Pai

RECREATE

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Site Capacity & Design Elements

Design Consideration: Strategy:

Minimal site width (max 100 feet) No set-backs on south front

Vent Building (exhaust at 175’) Limit building height to 100’

Narrow “tips” of site Utilize for egress (1) and stunning courtyard (2)

Maintain views to waterfront Limit building height

Pedestrian-friendly No “blank faces” along pedestrian accessible sides, providing on-site and off-site pedestrian improvements, access to green space

Housing Providing 110 units, incl. 10% affordable

Maintaining open space Preserving on-site open space, as well as pursuing the creation of adjacent green space

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Site Capacity & Design Elements

Site description:– “Football shaped”

– Greatest depth 100’

– Adjacent Central Artery (I-90) tunnel

– Vent Building

– High traffic flow surrounding site

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Site Capacity & Design Elements

Site Inventory:– Necessary utility & sewer infrastructure access on site

– Minimal impact on existing traffic flows

– Excellent access to T

– Minimal pre-construction site preparation

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DEVELOPMENT ASSUMPTIONS % TotalA&E 10% 2,328,950$ FinancingPrepaidsTitle insuranceInterest/constrInsurance/constrRE Taxes/constrUtilities/constrFinancingRent-up, mktgDeveloper's Fee 5% 1,164,475$ Contingency 5% 1,164,475$ Total Development 4,657,900$ Financing10-yr T 4.6%Operating Cost TotalOp Ex/unit 110 3,000$ 329,957$ Parking

Parking - sf/space 335Parking - total sf 23,450 Parking - # spaces 70Parking - rent $225

Development

Assumptions– Construction

Costs are outside

the scope of this

analysis

Financial Feasibility Analysis