Crystal Brooke LLC Development Proposal

Transcription

1 Crystal Brooke LLC Development Proposal 9/19/18 Executive Summary: The property known as Crystal Brooke Subdivision is proposed to be developed into a single-family residential subdivision which will comprise of 26 homes sites. The lots will range in size from 8,000 to 11,340 square feet, with an average of 8,556 square feet. The developer will construct the horizontal infrastructure, which is expected to be complete by March of Upon the completion a related entity (G.J. Gardner Homes) will improve the lots with single family homes at base prices ranging from about $335,000 to $400,000. The developer is seeking a private investor to fund the horizontal construction and will remain in a first lien position. Overview: Grand Junction is located in west-central Colorado and received its name due to the confluence of the Colorado and Gunnison Rivers. The city extends along Interstate 70, the primary east/westbound route through Colorado. Grand Junction is the largest municipality extending along Interstate 70 between metro-denver to the east and Salt Lake City to the west. From Grand Junction, Denver is located approximately 270 miles to the east. Grand Junction is surrounded on three sides by mesas and mountains reaching heights of 9,000 to 10,500 feet. To the east of Grand Junction is Grand Mesa, the largest flattop mountain in the world that is also home to the Powderhorn Ski Resort. To the west lies the Colorado National Monument, a 20,453-acre national park that resembles the Canyonlands areas of Utah. All data regarding real-estate trends point towards continued healthy and sustainable growth that is pushed by a wide variety of drivers: Grand Junction is a medical hub with 4 hospitals (one of which is VA) and the only Regional Medical Center between Salt Lake City and Denver. Colorado Mesa University has an enrollment of approximately 10,000 and is growing by leaps and bounds. The Grand Junction Regional Airport with 8 direct flight destinations provides ease of access for work and play. Our quickly growing tourism industry for everything from outdoor activities (hunting, fishing, skiing, hiking, mountain biking, etc...) to wine tasting events at a dozen different award-winning wineries. 1

2 Site Overview: The Crystal Brooke development consists of three unimproved parcels that will accommodate 26 single family residential lots, with the sizes of those homes sites commensurate with similar product in the local market. The parcel is zoned R-4 by the City of Grand Junction and consist of 26 lots. The project has final plat approval for 4 of the 26 lots, Lot 1 of Block 1 and Lot 1 of Block 3 have been deeded to the original land owner and are not a part of this proposal. The infrastructure for the 4 lots is about 80 percent complete and the engineering for the remaining 22 lots is expected to be completed and submitted to the City of Grand Junction for final plat approval in September It s anticipated that final plat approval will be completed by the end of October Property Location: The property is located Southwest of B 1/2 Road & Crystal Brook Way located in the southeastern portions of the city of Grand Junction in an area known as Orchard Mesa. The site consists of three adjoining parcels of unimproved land that combined for 6.8 acres. 2

3 3 Plat Map

4 Investment Opportunity: The developer is seeking a capital investment of $662, to complete the infrastructure for the Crystal Brooke Subdivision as illustrated in the Project Summary Exhibit A. The developer purchased the property for $475, and has invested $219, for offsite improvements and a portion of the infrastructure for filing one which consist of four lots, as illustrated in Project Summary - Exhibit B. The investor will be in first lien position and earn 10% interest on their investment, it is estimated that $69, would be paid in interest as illustrated in - Exhibit C. This Investment opportunity is based on the debt being retired with the closing of the first 18 lots, with a lot release price of $37, Market Status: Real Estate activity in the second quarter of 2018 indicates a continued robust year, finishing with high double- digit gains in both volume and dollars. Through the first eight months of 2018, 3,408 real estate transactions with a collective $927 million were reported in Mesa County. Compared to the same span last year, transactions rose 11.1% and dollar volume climbed 27.5%. Low Inventories and the resulting lack of choices for homebuyers have contributed to higher prices in the Grand Junction area market. Economists in the Western Slope have stated New Home Construction continues to increase, but not yet enough to keep pace with demand. Market Trend: There were 940 active listings for residential home for sale in Mesa County at the end of July, which is the lowest number since The median price of homes sold thru the first seven months of 2018 increased 9.3% to an average sales price of $255,000. New Home Construction increased for July, with 62 single family building permits issued in Mesa County, up 17 % from the same month a year ago. Though the first seven months of 2018, 490 single family building permits were issues, up 32% from the same span in

5 Market Trend: 5

6 Project Cost: Improvement Cost to Complete: $662, Improvements Completed by Developer $219, Exhibit A Exhibit B Development Cost Cost Estimate Cost Per Lot A. Sanitary Sewer $47, $1, B. Domestic Water $55, $2, C. Streets $250, $10, D. Earthwork Grading & Drainage $105, $4, E. Landscaping & Irrigation $19, $ F1. Surveying & Staking $9, $ F2. Inspection Cost $4, $ F4. Quality Control Testing $9, $ F6. City Inspection Fees $2, $ F7. Asbuilt $ $29.17 Impact Fees $5, $ Dry Utilities $43, $1, Letter of Credit $109, $4, Total Improvements Cost $662, $27, Land Land Cost Cost Per Lot Engineering $ Land Cost $475, $19, Total Land & Engineering Cost $475, $19, Total Completed Cost $1,075, $44, Development Cost Cost Estimate Cost Per Lot A. Sanitary Sewer $35, $ B. Domestic Water $25, $1, C. Streets $ $25.00 D. Earthwork Grading & Drainage $67, $ E. Landscaping & Irrigation $40, , F1. Surveying & Staking $1, $70.71 F2. Inspection Cost $3, $ F4. Quality Control Testing $1, $70.71 F6. City Inspection Fees $2, $ F7. Asbuilt $1, $70.71 Impact Fees $3, $ Dry Utilities $ Letter of Credit $0.00 $0.00 Total Improvements Cost $183, $7, Land Land Cost Cost Per Lot Engineering $36, $1, Land Cost Total Land & Engineering Cost 36, $1, Total Completed Cost $219, $9,

7 Time Line: The Investors monies will be placed in Escrow and interest will be accrued upon deposit. The following will be the distribution schedule: A Letter of Credit of approximately $109,000 or cash will need to be posted with the City of Grand Junction upon the recording of the plat as a security deposit to cover the one-year warranty period. The one-year warranty period will start once the improvements have been accepted by the City s engineer. Draw 1 - $138, disbursed for completed construction - November - December 2018 Draw 2 - $138, disbursed for completed construction - December - January 2018 Draw 3 - $138, disbursed for completed construction - January - February 2019 Draw 4 - $138, disbursed for completed construction - February - March 2019 Exhibit C Summary: In summary, this investment opportunity has been structured to be as safe as possible (1st lienholder) while yielding a high return (10%) on a 24- month investment. This proforma outlines a very conservative, but realistic, timeline for this project with an expectation of 1.5 lots per month. The goal would be to create a win/win investment and development opportunity that may pave the way for similar ventures in the future. Prepared By Lawrence Balerio 7