VOLUME 24 NUMBER 2 JANUARY-MARCH 1994 RESIDENTIAL WILDWOOD GABLES ATLANTA, GEORGIA PROJECT TYPE

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1 VOLUME 24 NUMBER 2 JANUARY-MARCH 1994 RESIDENTIAL WILDWOOD GABLES ATLANTA, GEORGIA PROJECT TYPE Wildwood Gables is an example of the creative redevelopment of a 421 unit, Class D garden property that was substantially vacant. The project, which involved renovation, demolition, and new construction, now includes 546 luxury rental and townhouse units. Though the existing units were in need of repair, they were large with good layouts, and the site was underdeveloped, thus offering opportunities for increasing the number of units. Meticulous landscaping and new amenities swimming pools, tennis courts, fitness center, clubhouse, and elegant leasing office were also added. Unit sizes range from 700 square feet to 2,200 square feet, and rents range from $565 to $1,400. SPECIAL FEATURES Luxury rental housing Renovation and redevelopment Rezoning for higher density Extensive exterior remodeling Large units DEVELOPER Trammell Crow Residential Atlanta 2859 Paces Ferry Road, Suite 1400 Atlanta, Georgia ARCHITECT James Harwick and Partners, Inc Rambler Road, Suite 367 Dallas, Texas

2 GENERAL DESCRIPTION Wildwood Gables is an example of the creative redevelopment of a rental townhouse and property that might otherwise have been demolished. It is a renovation of the former Emerald Tree Apartments in suburban Atlanta, which were built in 1972 near the intersection of I-285 and I-75 in Cobb County. The site is close to the Chattahoochee River National Recreation Area, The Galleria employment area, and Cumberland Regional Mall. Adjacent property uses consist of office buildings, business parks, and developments. The site sits atop a ridge, offering outstanding vistas in all directions, and has excellent natural buffers filled with mature trees. When the property was acquired by Trammell Crow Residential Atlanta in 1991, it was a "D" class property with 40 percent occupancy and 421 townhouse and garden units in serious need of repair and renovation. Based on the property's strong fundamentals excellent location, large floor plans, brick construction, and underutilized land Trammell Crow recognized that the property could excel through rehabilitation and redevelopment. The project is now a luxury community consisting of 546 new or renovated garden and townhouse units, with meticulous landscaping, swimming pools, tennis courts, fitness center, clubhouse, and elegant leasing office. The final phase of the project was completed in August 1993, and as of November 1993 the project was 92 percent leased. DEVELOPMENT PROCESS AND APPROVALS The development strategy was to take a Class D property in an A location with strong fundamentals and convert it into a profitable Class A property. If this plan was to work, two of the three sections in the development required rezoning. The developers met with building and zoning officials before buying the property to get their feedback. Since county officials considered the renovation desirable, and since they were made part of the original development team, they were very cooperative regarding many potential development problems. The development concept and product plan called for a combination of new construction and redevelopment. The property was developed in three phases. The first phase was the renovation of an existing 302-unit complex. One building containing 12 units was demolished on this site, and the remaining 290 units were extensively renovated to luxury standards. Phase II was composed of 4.6 acres that formerly contained ball fields, a tennis court, and a leasing office. This site was razed and rezoned. In its place were built 64 new units, a new leasing office, and a new amenity center with tennis court, exercise room, community room, and central laundry. The third phase was a ten-acre site that originally housed 119 units in such bad repair that they were demolished and 192 new garden s were built. The rezoning required the support of adjacent property owners as well as the Cobb County Planning and Zoning Department, Traffic Control, Planning Commission, and Board of Commissioners. The board's unanimous vote in favor of the rezoning reflected its enthusiastic support of the developer's efforts to "recycle" a community that historically had been a drain on the county's resources. PLANNING, DESIGN, AND CONSTRUCTION The design sought to transform the existing barracks-like architecture and site configuration to a plan that emphasized traditional architecture and the individuality of each townhouse unit. Porches were added to the front of every building and at the entrance to every townhouse unit. In addition, gables were added to the roofs at prominent locations. This front porch element on the townhouses was carried over to the new garden s, where first floor units were nestled into the ground with oversized porches and decorative balcony rails. Hips were added to existing rooflines, and all new buildings were designed with hip roofs. All three phases were united with a common architecture, brick, and paint colors. Builders encountered numerous engineering challenges. Stormwater detention on the new construction of Phases II and III was handled by underground vaults to minimize the amount

3 of land lost to open detention ponds. New plumbing was installed in the renovated buildings to minimize maintenance costs associated with faulty older plumbing. In addition, all electric heat was converted to gas to reduce utility bills. Units originally on a master meter were individually metered. Asbestos was removed from the buildings as well. Interiors in the renovated units were very large. Two-bedroom units ranged up to 1,405 square feet, and three-bedroom units reached 2,200 square feet. The older units' interiors were designed with walk-in closets, washer/dryer connections, large bathrooms, and plenty of daylight. Changes made included the removal of wet bars and the addition of a living room wall in 120 of the renovated units. In addition, 88 of the units had large living rooms and windowless dining rooms that could be made to flow together. In these, the developer removed the wall separating the dining room and living room and added decorative columns to formally separate these rooms while still allowing daylight to permeate the entire space. The newly constructed units had the same amenities but not the same floor plans as the older units. The new architecture had a greater emphasis on daylight and included vaulted ceilings on top floors. Other amenities were oversized bathrooms, linen closets, and washer/dryer connections in even the smallest units. To improve the site plan and landscape, a 12-unit building was voluntarily torn down and not replaced, creating more open green space and nicer views. In addition, surplus parking spaces were eliminated and replaced with landscaped islands. Existing trees and plants were preserved in the renovation process, and additional landscaping in constricted areas was incorporated through the use of trellises and climbing vines. The existing 10,000-square-foot pool and deck area was retained, refurbished, and carefully incorporated into the new design. FINANCING AND MARKETING The property was financed through a construction loan from First Union National Bank that was guaranteed by individual partners of the Trammell Crow Residential organization. Equity in the amount of approximately 20 percent of total cost was provided through a joint venture formed between Trammell Crow Residential and a private individual. Ownership is shared equally by partners within Trammell Crow Residential and the equity investor. Coverage of expenses and debt service was achieved at 59 percent occupancy. Stabilized revenue ($700 average effective rent per unit) and expenses have generated a 12.2 percent yield on total costs, a 2.25 debt service coverage ratio, and a 66 percent yield on equity from cash flow alone. Purchase offers currently under consideration are as high as $55,000 per unit, representing over a $10,000 per-unit profit on the owners' investment of $44,520 per unit. The most important aspect of the marketing program was the decision early on to delay lease-up of the renovated units until the new leasing office and 64 units of Phase II were complete. The developers felt they could make a better impression on prospects by greeting them in a state of-the-art, elegant leasing facility rather than a temporary leasing office in one of the units. This strategy was successful: prospects arrived at the new leasing center to see other buildings under construction and were easily assured of the extensive work that had been undertaken in the renovated units to make them compatible with the new units. Another important marketing strategy was to contract for excellent interior design services, which resulted in a sophisticated decor in the new leasing office and in the model units. Rents have been boosted numerous times since the opening of this project in January The first 354 units of the property were completely leased by the end of The third phase, with 192 units, commenced construction in January 1993 and was 92 percent leased as of November EXPERIENCE GAINED To be economically successful the developer needed to focus not only on what wholesale improvements were required, but also on the items that needed to remain in place. After

4 much debate, it decided to retain the original windows, ceramic tile, and cabinets and to add paint, dramatic wallpaper, new flooring, new appliances, and new hardware on the cabinets. It is important for the management company, contractor, and developer to agree on a standard of finish at the outset to ensure that a proper level of quality and consistency prevails. In projects that mix renovated units with new units, ceiling, drywall, and other features in older units must be brought up to the standards of the new construction. The outstanding financial performance of the project proves the value that can be created through the recognition of sound real estate fundamentals, especially those not readily apparent to others in the market. In spite of Emerald Tree's poor reputation and unattractive condition, Trammell Crow saw value hidden behind its shabby exterior. Thanks to careful financial analysis and budget control, an imaginative design concept, and skillful execution by the developer, contractor, and manager, that value has been realized by both the residents and investors of Wildwood Gables.

5 PROJECT DATA LAND USE INFORMATION Site Area: 38 acres Total Dwelling Units Planned: 546 Total Dwelling Units Completed: 546 Gross Density: units per acre Parking Spaces: 1,092 LAND USE PLAN Acres Percent of Site Buildings % Roads/paved area Common open space Total % RESIDENTIAL UNIT INFORMATION Unit Type Floor Area (Square Feet) Units Built Rent 1BR/1BA 1BR/1BA 1BR/1BA 1BR/1BA den 1BR/1BA townhouse 2BR/2BA 2BR/2BA 2BR/2.5BA townhouse 3BR/2BA 3BR/2.5BA townhouse 3BR/2.5BA townhouse $565-$ $620-$ $570-$ $685-$ $600-$625 1, $795-$830 1, $710-$730 1, $825-$870 1, $925-$945 1, $1,005-$1,040 2,200 2 $1,400 DEVELOPMENT COST INFORMATION

6 Site Acquisition Cost $7,540,000 Site Improvement Costs Excavation/grading $397,473 Sewer/water/drainage 384,122 Paving/curbs/sidewalks 329,215 Landscaping/irrigation 424,423 Other 691,970 Total $2,227,203 Construction Costs Superstructure $4,500,176 HVAC 679,202 Electrical 495,157 Plumbing/sprinklers 944,813 Finishes 1,660,160 Graphics/specialties 111,757 Appliances 540,997 Fees/general conditions 3,089,841 Other 88,694 Total $12,110,797 Soft Costs Architecture/engineering $170,000 Project management 465,000 Marketing 140,000 Legal/accounting 145,000 Taxes/insurance 80,000 Title fees 10,000 Construction interest/fees 880,000 Lease-up 540,000 Total $24,308,000 Total Development Cost $24,308,500 Development Cost per Unit: $44,520 Development Cost per Square Foot: $39.22 FINANCING AND OPERATING INFORMATION Financing Wildwood Ltd. (Equity) $3,980,000

7 First Union (Construction Loan) 20,328,500 Annual Operating Expenses (1992) (Phases I and II only-354 units) Taxes $175,000 Insurance 40,000 Services 60,000 Maintenance 42,000 Utilities 125,000 Management 135,000 Miscellaneous 100,000 Payroll 212,000 Marketing 35,000 Total $924,000 DEVELOPMENT SCHEDULE Site Purchased: April 1991 Planning Started: February 1991 Construction Started: May 1991 Leasing Started: January 1992 Project Completed: August 1993 DIRECTIONS Directions from Hartsfield-Atlanta International Airport: Take I-85 North to I-75 North to Windy Hill Road exit. Exit right, and turn right on Windy Hill Road to Powers Ferry Road. Proceed south on Powers Ferry Road, then turn right on Shadowood Parkway. Driving Time: Approximately 40 minutes in nonpeak traffic. The Project Reference File is intended as a resource tool for use by the subscribers in improving the quality of future projects. Data contained herein were made available by the Development team and constitute a report on, not an endorsement of, the project by ULI - The Urban Land Institute. Copyright 1994, 1997, by ULI - the Urban Land Institute 1025 Thomas Jefferson Street, N. W. Ste. 500w, Washington, D. C

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