In brief, each student will be assigned a real world in Winnipeg, and will try to imagine that property from the perspective of a real estate developer/investor/entrepreneur. You will undertake

Assignment Task

Introduction

In brief, each student will be assigned a real world in Winnipeg, and will try to imagine that property from the perspective of a real estate developer/investor/entrepreneur. You will undertake a model real estate project feasibility study of the assigned property. The purpose of the model study is to inform a potential business partner or investor about the viability of a potential real estate development project. Most of the study is purely descriptive, with an analysis at the end of the paper. The tone should be as neutral and objective as possible.

The assignment puts the assigned property through a series of analytical tests on the site and its relationships in the city. Understanding the assumptions used in the tests is as important as doing the tests themselves. The conclusion of the assignment is a discussion of the economic feasibility of the project using a simplified model pro forma. Additional materials will be provided for some of the assignment work, but the student is also expected to conduct their own research. See assignment details further below.

Ground Rules  

This is a solo assignment. No teams, groups or partnerships are allowed. Each student will have a different property.

Properties will be initially assigned by the instructor. Students can trade properties if they want, but they need to send an e-mail informing the instructor before 6:00 pm (00:00 UTC) on February 2 ^nd 2022.

For the purposes of this assignment, no property is better or worse than another. They are all different, and all have considerations that are unique to their location and target market.

You must follow all the writing rules that were provided at the beginning of the course.

Links to and/or copies of market information will be provided separately, as will construction cost estimate information and a model pro forma workbook (MS Excel file).

Basic requirements

For each due date, the student will provide the instructor a document that meets the following specifications:

Format

• 8½ by 11 portrait, double spaced text, 1” margins left and right
• Number your pages at the bottom
• All text in 12 point Calibri. Use a scheme of capitalized bold and italic to make
• All paragraphs indented and fully
• You will be required to include images (maps, photos) and tables in your
• Graphic materials should be interspersed with the writing and their relevance should be
• No extraneous white space, especially between paragraphs and images or
• You can provide your paper in MS Word or .pdf format – whichever you
• Neatness and formatting counts for

Basic Required Structure

• Cover page
• Table of Contents
• Material Sections
• References

Assignment sites

You will test a potential real estate development project of your choosing within the limitations inherent in the assigned site. You are not marked on whether the conclusion is a feasible project. You are marked on your effort to undertake the exercise. You cannot use the site from another course or studio for the assignment in CITY 7340. Everyone’s project will be a for-sale, for-profit development, from the following list:

• Townhouse residential
• Single detached residential (many units, not just one house)
• Low-rise apartment
• High-rise apartment
• Live-work studios
• Historic warehouse building conversion to residential

Mixed use is not included in this list because it is too much work for the purposes of the assignment. However, mixed use will be discussed in class.

Assignment content

The following describes the content that need to be included and addressed in your RED assignment. The specifics of what you write will depend on the site you have and the built form that you propose. Use the bold underlined headings below to organize your document.

Site Description and Assessment

SiteThe location and characteristics of the site, its advantages and potential risks for the form of the project (you must include maps and diagrams, as well as words. Photos are encouraged and Google street view screen shots are required. Be sure to consider all immediate sides of the site in your considerations.

Situation What is the surrounding area like? Will the project fit in? What is the access to transportation like? Where will vehicles enter and exit the property? Is there room for parking on site? What aspects of the situation make the site attractive to potential buyers/renters/end- users?

Site Diagram Provide a site diagram with current features and attributes, and dimensional measurements drawn to scale, taking up a full page. The site diagram is used as the foundation for the Site Plan that is required for a later section in the assignment.

Your site plan must take into account any set-back requirements, site coverage, and other limitations for the property established in the zoning. See below.

Planning and Approval Issues

This section discusses the planning and approval issues for the site. Use the following web page as a resource.

• How is the property currently zoned? Is a re-zoning required for the imagined project? How long will it take?
• Does the development require a subdivision? If so, how long will it take?
• What impact does the current zoning have on the property for what you are allowed to build? What restrictions apply (for example, setbacks, density, building footprint…)?
• Are there any secondary plans that affect the project? What do those plans show or say about the site or the land in which it exists?
• Do you need to apply for a rezoning to build an ideal project for the site?
• How much parking is required?
• Are there any other specific issues affecting the property?
• Use diagrams and maps to support this section. Include them among the pages where you write about these issues .

Proposed Project

What are you going to hypothetically try to build on the site? Target market for the project:

• What market is the project trying to serve?
• Who is the customer, how does your project serve them?
• Explain the ways that your project is a suitable fit for the market.
• What are the dimensions of the building, the dimensions of the units (if any) How many stories is the building?
• What setbacks are applied?
• Explain how the project will address planning and approval issues.
• How many units are in your project? What are the sizes of the units?
• How will these units fit into the dimensions of the building? What parking facilities will be provided?
• Where will the entry and egress points be for vehicles? For pedestrians?

Market Analysis

For Residential Properties:

• What are the main competing new projects? Where are they located? What are their key characteristics on:
  • Price (per square foot; per unit)
  • Unit sizes
  • Location
  • Features
• Use tables to provide comparative information and discuss the content of those tables in writing.

Use CMHC tables to discuss conditions in the residential market for your dwelling unit type and tenure type. For ownership, discuss price points, months of supply, absorption rates and starts. For rental, discuss rents and vacancy rates for your market area.

Financial Analysis (Pro Forma)

• Using the supplied Model Pro Forma Template, build a pro forma for your project by filling in all of the cells that are marked in yellow.
• Use the estimates and assumptions provided in class and below to help fill in your pro
• If you have unique assumptions associated with your project, explain what they are and show the side calculations used to produce them. Explain the reasoning for your unique assumptions. If your estimate is a “ballpark” one, explain why this is so and suggest how a more accurate estimate might be produced.

Site Acquisition

• Assume that you have 100% of the money to buy the site, without a

Expenses

• Improvement Costs
  • Demolition – There is no simple and easy method of doing this cost estimate accurately. If you have to demolish a building on your site, use $10.00 per square foot for construction three stories or lower and $20.00 per square foot for construction higher than three stories.
  • Construction – Use the Altus Guide – Discussed in Class
  • Parking and Laneway – Use the Altus Guide – Discussed in Class
  • Landscaping - There is no simple and easy method of doing this cost estimate accurately. For simple turf, use a cost estimate of $20.00 per square For plantings, use a cost estimate of $40.00 per square foot.
• Indirect Costs
  • Municipal Fees and Charges – Use the supplied document from the City of Winnipeg and apply it to your project.
  • Impact Fees/Development Charges – Leave this
  • Site Remediation – Depends on the If your site is likely to require any kind of environmental remediation an arbitrary, site-specific estimate will be established through discussion with the instructor.
• Operating Costs – Operating Expenses – these occur during development and during the post-completion selling period. They are simpler or easier to estimate depending on what kind of project you might The following are estimation categories if you have a completed residential condominium project and are built into the spreadsheet.
• Energy
• Other Utilities
• Strata Fees
• Security,

As an alternative estimating operating expenses during construction and selling/lease- up, use the arbitrary figures of:

• $5 dollar per square foot per year for residential property
• $10 per square foot per year for non-residential
• Operating Costs – Property Taxes – these are the property taxes you pay while you own the property until the date construction is completed and the project is ready for
• Mill Rate – obtain the appropriate mill rate from the supplied

Assessed Value – Look up the property on the City of Winnipeg web site by its street address at

If you have not fully sold all the units in a condominium project, you also pay the usual property taxes based on the value of the completed property until the unit is sold.

Revenue

• You establish the pricing scheme for your The pro forma is set up for residential condominiums but can be used for any model project where units or the entire product is sold.
• For projects that are sold to investors, such as REITs, for rental to tenants, whether or not the property is residential, office, retail or industrial, the price for the property needs to reflect a cap rate that is comparable to those shown for the particular
• For rental properties, the vacancy rate in the market will reflect the time it is likely to take to achieve lease-up.

Financing

• You have enough money for 50% of the Improvement costs and will borrow the rest from a bank or other commercial lender, which is charging 8% annual interest.
• You have enough money for 75% of the Indirect The other 25% comes from a loan from a private investor. This loan has a 10% annualized interest rate.
• Private investors expect a minimum 10% annualized rate of return. You have guaranteed their investment in your project with letters of When the project is done, they get paid before you do.
• Discuss the assumptions and facts about the project, and how they determine the line items in the pro forma.
• Where you do not have adequate information at hand to estimate a cost or a revenue line item, describe key considerations that would have to be taken into account in developing the project.

Market Comparison

• Compare your project to competing projects on the following aspects:
  • Price (per square foot; per unit)
  • Unit sizes
  • Location
  • Features
• How does your project fare? Is it competitive? How could it be made more competitive? For example, could the prices be lowered?

Other Considerations

• All projects have Please briefly describe the most important issues affecting the feasibility of your project. These could include any of the following:
• traffic / road access issues
• unusual building code or fire code issues
• environmental protection issues
• historic preservation issues
• property tax issues / abatements
• environmental assessment and/or site remediation issues
• liability / insurance issues
• architectural or site design issues
• NIMBY
• Site servicing issues
• Zoning / Re-zoning issues
• Are any of these issues crucial to the success of the project? What is the nature of the risk that they present?

Feasibility

• What do the Pro Forma indicators tell you? Is the project financially feasible? Why or Why not?
• What could be done to improve the feasibility?
• If not, what future conditions would make the site more attractive to development?
• What does your study reveal about this site?
• Is the site worth buying at the asking price?
• Are developers likely to compete to buy it?
• What other types of development might work on this site?