Helios Apartments (Hartsville)
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Market Feasibility Analysis Helios Apartments South Fifth Street Hartsville, Darlington County, South Carolina 29550 Prepared For Ms. Tonya Haddock Cadence Development, LLC 700 Oak Lantern Court Garner, North Carolina 27529 Effective Date February 28, 2018 Job Reference Number 18-161 JW 155 E. Columbus Street, Suite 220 Pickerington, Ohio 43147 Phone: (614) 833-9300 Bowennational.com Table of Contents A. Primary Market Area Analysis Summary (Exhibit S-2) B. Project Description C. Site Description and Evaluation D. Primary Market Area Delineation E. Market Area Economy F. Community Demographic Data G. Project-Specific Demand Analysis H. Rental Housing Analysis (Supply) I. Interviews J. Recommendations K. Signed Statement Requirement L. Qualifications M. Methodologies, Disclaimers & Sources Addendum A – Field Survey of Conventional Rentals Addendum B – NCHMA Member Certification & Checklist 12/3/17 2018 EXHIBIT S – 2 SCSHFDA PRIMARY MARKET AREA ANALYSIS SUMMARY: Development Name: Helios Apartments Total # Units: 40 Location: S. Fifth St., Hartsville, SC 29550 # LIHTC Units: 40 Darlington County line to the north; Bethlehem Road, Leavenworth Branch River, Black Creek and Center Road to the east; Indian Branch Road, Wesley Chapel Road and Cross Swamp Road to the south; and PMA Boundary: the Darlington County line to the west. Development Type: __X__Family ____Older Persons Farthest Boundary Distance to Subject: 12.6 miles RENTAL HOUSING STOCK (found on page H-1 & 13) Type # Properties Total Units Vacant Units Average Occupancy All Rental Housing 11 607 3 99.5% Market-Rate Housing 1 48 3 93.8% Assisted/Subsidized Housing not to include LIHTC 6 326 0 100.0% LIHTC (All that are stabilized)* 4 233 0 100.0% Stabilized Comps** 2 112 0 100.0% Non-stabilized Comps 0 - - - * Stabilized occupancy of at least 93% (Excludes projects still in initial lease up). ** Comps are those comparable to the subject and those that compete at nearly the same rent levels and tenant profile, such as age, family and income. Subject Development Adjusted Market Rent Highest Unadjusted Comp Rent # # Proposed Per Unit Per SF Advantage Per Unit Per SF Units Bedrooms Baths Size (SF) Tenant Rent 2 One 1.0 750 $419 $840 $1.12 50.11% $895 $1.14 2 One 1.0 750 $523 $840 $1.12 37.74% $895 $1.14 3 Two 2.0 950 $502 $925 $0.97 45.73% $1,125 $1.00 21 Two 2.0 950 $626 $925 $0.97 32.32% $1,125 $1.00 3 Three 2.0 1,162 $577 $1,045 $0.90 44.78% $1,395 $1.09 9 Three 2.0 1,162 $721 $1,045 $0.90 31.00% $1,395 $1.09 Gross Potential Rent Monthly* $24,756 $38,100 35.02% *Market Advantage is calculated using the following formula: (Gross Adjusted Market Rent (minus) Gross Proposed Tenant Rent) (divided by) Gross Adjusted Market Rent. The calculation should be expressed as a percentage and rounded to two decimal points. The Rent Calculation Excel Worksheet must be provided with the Exhibit S-2 form. DEMOGRAPHIC DATA (found on page F-3 & G-5) 2000 2017 2020 Renter Households 3,405 28.7% 3,395 28.8% Income-Qualified Renter HHs (LIHTC) 834 24.5% 779 22.9% Income-Qualified Renter HHs (MR) --- - TARGETED INCOME-QUALIFIED RENTER HOUSEHOLD DEMAND (found on page G-5) Type of Demand 50% 60% Market-rate Other:__ Other:__ Overall Renter Household Growth -9 -70 -55 Existing Households (Overburd + Substand) 245 160 294 Homeowner conversion (Seniors) 0 0 0 Other: 0 0 0 Less Comparable/Competitive Supply 0 0 0 Net Income-qualified Renter HHs 236 90 239 CAPTURE RATES (found on page G-5) Targeted Population 50% 60% Market-rate Other:__ Other:__ Overall Capture Rate 3.4% 35.6% 16.7% ABSORPTION RATE (found on page G-8) Absorption Period: 4 months A-1 2018 S-2 RENT CALCULATION WORKSHEET Proposed Gross Adjusted Gross Tax Credit Bedroom Tenant Proposed Market Adjusted Gross Rent # Units Type Paid Rent Tenant Rent Rent Market Rent Advantage 0 BR $0 $0 0 BR $0 $0 0 BR $0 $0 1 BR $0 $0 2 1 BR $419 $838 $840 $1,680 2 1 BR $523 $1,046 $840 $1,680 2 BR $0 $0 3 2 BR $502 $1,506 $925 $2,775 21 2 BR $626 $13,146 $925 $19,425 3 BR $0 $0 3 3 BR $577 $1,731 $1,045 $3,135 9 3 BR $721 $6,489 $1,045 $9,405 4 BR $0 $0 4 BR $0 $0 4 BR $0 $0 Totals 40 $24,756 $38,100 35.02% A-2 B. Project Description The subject project involves the new construction of Helios Apartments, a 40-unit rental community to be located on an approximate 2.0-acre site on South Fifth Street in Hartsville, South Carolina. The project will offer four (4) one-bedroom, 24 two- bedroom and 12 three-bedroom garden-style units within two (2) three-story, walk- up residential buildings together with a free-standing, 1,519 square-foot community building. Helios Apartments will be developed utilizing funding from the Low- Income Housing Tax Credit (LIHTC) program and will target lower-income family households earning up to 50% and 60% of Area Median Household Income (AMHI). Monthly collected Tax Credit rents will range from $419 to $721, depending on unit size and targeted income level. None of the units within the subject development will receive project-based rental assistance. The proposed project is expected to be complete by May 2020. Additional details of the subject project are as follows: A. PROPERTY LOCATION: South Fifth Street Hartsville, South Carolina 29550 (Darlington County) B. CONSTRUCTION TYPE: New Construction C. OCCUPANCY TYPE: General-Occupancy D. TARGET INCOME GROUP: 50% and 60% AMHI E. SPECIAL NEEDS POPULATION: None F. AND H. TO J. UNIT CONFIGURATION AND RENTS: Proposed Rents Max. Allowable Total Bedroom Square % Collected Utility Gross LIHTC Gross Units Type Baths Style Feet AMHI Rent Allowance Rent Rent 2 One-Br. 1.0 Garden 750 50% $419 $76 $495 $517 2 One-Br. 1.0 Garden 750 60% $523 $76 $599 $621 3 Two-Br. 2.0 Garden 950 50% $502 $97 $599 $621 21 Two-Br. 2.0 Garden 950 60% $626 $97 $723 $745 3 Three-Br. 2.0 Garden 1,162 50% $577 $118 $695 $717 9 Three-Br. 2.0 Garden 1,162 60% $721 $118 $839 $861 40 Total Source: Cadence Development, LLC AMHI – Area Median Household Income (Darlington County, SC HUD Metro FMR Area; 2017) G. NUMBER OF STORIES/BUILDINGS: Garden-style units within two (2) three-story, walk-up residential buildings together with a free- standing community building. B-1 K. PROJECT-BASED RENTAL ASSISTANCE (EXISTING OR PROPOSED): None L. COMMUNITY AMENITIES: The subject property will include the following community features: On-Site Management Business/Computer Center Clubhouse/Community Room Fitness Center Laundry Center Playground Covered Picnic Area Sitting Areas w/Benches M. UNIT AMENITIES: Each unit will include the following amenities: Electric Range Carpet Refrigerator Window Blinds Dishwasher Ceiling Fan Garbage Disposal Washer/Dryer Hookups Microwave Central Air Conditioning N. PARKING: An unassigned surface parking lot with 60 spaces will be available at no additional cost to residents. This is equivalent to 1.5 spaces per unit, which is considered adequate for family housing. O. RENOVATIONS AND CURRENT OCCUPANCY: Not Applicable; New Construction P. UTILITY RESPONSIBILITY: The costs of cold water, sewer and trash collection will be included in the rent, while tenants will be responsible for all other utilities and services, including the following: Electric Cooking Electric Heat Electric Water Heat General Electricity A state map and an area map are on the following pages. B-2 Hartsville, SC H! Site State of South Carolina State of South Carolina H! SITE N 0 10 20 40 60 1:2,600,000 Miles Sources: Esri, HERE, DeLorme, USGS, Intermap, INCREMENT P, NRCan, Esri Japan, METI, Esri China (Hong Kong), Esri Korea, Esri (Thailand), MapmyIndia, NGCC, © OpenStreetMap contributors, and the GIS User Community Site Hartsville, SC H! Surrounding Area H!SITE N 0 0.275 0.55 1.1 1.65 1:75,000 Miles Sources: Esri, HERE, DeLorme, USGS, Intermap, INCREMENT P, NRCan, Esri Japan, METI, Esri China (Hong Kong), Esri Korea, Esri (Thailand), MapmyIndia, NGCC, © OpenStreetMap contributors, and the GIS User Community C. Site Description and Evaluation 1. SITE INSPECTION DATE Bowen National Research personally inspected the subject site during the week of February 19, 2018. The following is a summary of our site evaluation, including an analysis of the site’s proximity to community services. 2. SITE DESCRIPTION AND SURROUNDING LAND USES The subject site consists of approximately 2.0 acres of undeveloped land located on the westside of South 5th Street (U.S. Highway 15 Business), less than 0.1 mile south of West Washington Street in Hartsville, South Carolina. Located within Darlington County, Hartsville is approximately 12.0 miles northwest of Darlington, South Carolina and approximately 23.0 miles northwest of Florence, South Carolina. Following is a description of surrounding land uses: North - Directly north of the site are Huddle House and a light tree line. Continuing north are Fuji Express, the now vacant Prime Time Sports Bar and West Washington Street, a two-lane residential road with light traffic patterns. Rite Aid, Habitat for Humanity and Piggly Wiggly extend beyond. East - U.S. Highway 15 Business (South 5th Street), a four-lane roadway with a center turn lane and moderate traffic patterns, defines the eastern site boundary. Continuing east are Taco Bell, Shoney’s, Walgreens and various other businesses along Westfield Street, a connector roadway to State Route 151.