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Church House 1. Renovation/Reconfiguration · Reconfigure first floor to accommodate all offices · Waterproof basement to provide meeting/classroom space · Increase the current apartment size by renovating the 2nd & 3rd floors to create a three-bedroom apartment to be used for: à Associate minister à Tenant à Outreach project · Concerns à No relief of maintenance burden à Considerable capital required à Accessibility and aesthetics of basement meeting space
2. Demolition and Rebuilding (MUMC to develop the property) · Underlying assumptions (input from Ernie Harris, architect, Richard Mintzer, commercial mortgage loan broker, and Sue Jones, SPR member who researched apartment rents in the area): à Costs for new construction of the type envisioned is minimum $200/sqft à Using only the commercially-zoned portion of the CH lot, a viable building can be no more than three stories tall à Realistic sized building on that lot is 7,000 sqft footprint à Thus, a three story building is 7,000 X 3 = 21,000 sqft à Church would keep for its needs (offices + conference/classrooms) 4,000 sqft, leaving 17,000 sqft of rentable space à Estimated income from the building would be as follows: 17,000/1,200 sqft per apartment = 14 apartments x $2,500/month = $35,000/month
– 15% vacancy factor = $29,750 monthly income Note that the average occupancy could easily be less than 85%, which would lower average monthly income. · Cost of demolition = $60,000-$75,000 · Cost of construction 21,000 sqft x $200 = $4,200,000 Plus 10% overrun 420,000 → Safety factor $4,620,000 Plus interim interest 202,125 → 8.75% x Cost/2 [average loan is half the cost] Total Cost $4,822,125 · Monthly mortgage requirements: $4,822,125 at 30 years at 6.50% = $30,470/mo; greater than approx. income $29,750/mo
$4,822,125 at 25 years at 7.50% = $35,610/mo; greater than approx. income $29,750/mo
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