MainStreet Walton Mill Senior Apartments

88 Pages·2017·4.73 MB·English

Market Feasibility Analysis
MainStreet Walton Mill Senior
Apartments
Monroe, Walton County, Georgia
Preparedfor:
One Street Development, LLC
EffectiveDate: April21,2017
SiteInspection:April20,2017
MainStreetWaltonMill|TableofContents
TABLE OF CONTENTS
1. EXECUTIVESUMMARY...................................................................................................VI
2. INTRODUCTION..............................................................................................................1
A. OverviewofSubject..............................................................................................................................................1
B. PurposeofReport.................................................................................................................................................1
C. FormatofReport..................................................................................................................................................1
D. Client,IntendedUser,andIntendedUse.............................................................................................................1
E. ApplicableRequirements......................................................................................................................................1
F. ScopeofWork......................................................................................................................................................1
G. ReportLimitations................................................................................................................................................2
3. PROJECTDESCRIPTION....................................................................................................3
A. ProjectOverview..................................................................................................................................................3
B. ProjectTypeandTargetMarket...........................................................................................................................3
C. BuildingTypesandPlacement..............................................................................................................................3
D. DetailedProjectDescription.................................................................................................................................4
1. ProjectDescription.......................................................................................................................................4
2. OtherProposedUses...................................................................................................................................5
3. ProposedTimingofDevelopment...............................................................................................................5
4. SITEEVALUATION...........................................................................................................6
A. SiteAnalysis..........................................................................................................................................................6
1. SiteLocation.................................................................................................................................................6
2. ExistingUses.................................................................................................................................................7
3. Size,Shape,andTopography.......................................................................................................................7
4. GeneralDescriptionofLandUsesSurroundingtheSubjectSite.................................................................8
5. LandUsesSurroundingtheSubjectSite......................................................................................................9
B. NeighborhoodAnalysis.......................................................................................................................................10
1. GeneralDescriptionofNeighborhood.......................................................................................................10
2. NeighborhoodPlanningActivities..............................................................................................................10
3. PublicSafety...............................................................................................................................................10
C. SiteVisibilityandAccessibility............................................................................................................................11
1. Visibility......................................................................................................................................................11
2. VehicularAccess.........................................................................................................................................11
3. AvailabilityofPublicTransit.......................................................................................................................12
4. AvailabilityofInter-RegionalTransit..........................................................................................................12
5. AccessibilityImprovementsunderConstructionandPlanned..................................................................12
6. EnvironmentalConcerns............................................................................................................................12
D. ResidentialSupportNetwork..............................................................................................................................12
1. KeyFacilitiesandServicesneartheSubjectSite........................................................................................12
2. EssentialServices.......................................................................................................................................13
3. CommercialGoodsandServices................................................................................................................14
4. LocationofLowIncomeHousing...............................................................................................................14
E. SiteConclusion...................................................................................................................................................14
5. MARKETAREA.............................................................................................................. 15
A. Introduction........................................................................................................................................................15
B. DelineationofMarketArea................................................................................................................................15
6. COMMUNITYDEMOGRAPHICDATA.............................................................................. 17
A. IntroductionandMethodology..........................................................................................................................17
B. TrendsinPopulationandHouseholds................................................................................................................17
1. RecentPastTrends.....................................................................................................................................17
2. ProjectedTrends........................................................................................................................................17
3. BuildingPermitTrends...............................................................................................................................17
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MainStreetWaltonMill|TableofContents
4. TrendsinOlderAdultHouseholds.............................................................................................................19
C. DemographicCharacteristics..............................................................................................................................19
1. AgeDistributionandHouseholdType.......................................................................................................19
2. RenterHouseholdCharacteristics..............................................................................................................21
3. IncomeCharacteristics...............................................................................................................................22
7. EMPLOYMENTTREND................................................................................................... 25
A. Introduction........................................................................................................................................................25
B. LaborForce,ResidentEmployment,andUnemployment..................................................................................25
1. TrendsinCountyLaborForceandResidentEmployment.........................................................................25
2. TrendsinCountyUnemploymentRate......................................................................................................25
C. CommutationPatterns.......................................................................................................................................25
D. At-PlaceEmployment.........................................................................................................................................27
1. TrendsinTotalAt-PlaceEmployment........................................................................................................27
2. At-PlaceEmploymentbyIndustrySector...................................................................................................28
3. MajorEmployers........................................................................................................................................29
4. RecentEconomicExpansionsandContractions........................................................................................30
E. ConclusionsonLocalEconomics.........................................................................................................................30
8. PROJECT-SPECIFICAFFORDABILITY&DEMANDANALYSIS............................................. 31
A. AffordabilityAnalysis..........................................................................................................................................31
1. Methodology..............................................................................................................................................31
2. AffordabilityAnalysis.................................................................................................................................32
3. ConclusionsofAffordability.......................................................................................................................33
B. DemandEstimatesandCaptureRates...............................................................................................................34
1. Methodology..............................................................................................................................................34
2. DemandAnalysis........................................................................................................................................34
3. DCADemandConclusions..........................................................................................................................36
9. COMPETITIVERENTALANALYSIS................................................................................... 37
A. IntroductionandSourcesofInformation...........................................................................................................37
B. OverviewofMarketAreaHousingStock............................................................................................................37
C. SurveyofAge-RestrictedRentalCommunities...................................................................................................39
1. IntroductiontotheAge-RestrictedRentalHousingSurvey.......................................................................39
2. Location......................................................................................................................................................39
3. Age-RestrictedRentalHousingCharacteristics..........................................................................................40
4. VacancyRates............................................................................................................................................40
5. UnitDistribution.........................................................................................................................................40
6. AbsorptionHistory.....................................................................................................................................40
7. EffectiveRents...........................................................................................................................................40
8. PaymentofUtilityCosts.............................................................................................................................41
9. UnitFeatures..............................................................................................................................................41
10. CommunityAmenities................................................................................................................................41
D. SurveyofGeneralOccupancyRentalCommunities...........................................................................................42
1. IntroductiontotheRentalHousingSurvey................................................................................................42
2. VacancyRates............................................................................................................................................43
3. EffectiveRents...........................................................................................................................................43
4. DCAAverageMarketRent.........................................................................................................................43
E. Multi-FamilyPipeline..........................................................................................................................................44
F. HousingAuthorityData......................................................................................................................................44
G. ExistingLowIncomeRentalHousing..................................................................................................................45
H. ImpactofAbandoned,Vacant,orForeclosedHomes........................................................................................46
10. FINDINGSANDCONCLUSIONS................................................................................... 48
A. KeyFindings........................................................................................................................................................48
1. SiteandNeighborhoodAnalysis................................................................................................................48
2. EconomicContext......................................................................................................................................48
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MainStreetWaltonMill|TableofContents
3. PopulationandHouseholdTrends.............................................................................................................48
4. DemographicAnalysis................................................................................................................................49
5. CompetitiveHousingAnalysis....................................................................................................................49
B. ProductEvaluation.............................................................................................................................................50
C. PricePosition......................................................................................................................................................51
11. ABSORPTION&STABILIZATIONRATES....................................................................... 53
A. AbsorptionEstimate...........................................................................................................................................53
B. ImpactonExistingMarket..................................................................................................................................53
12. INTERVIEWS.............................................................................................................. 54
13. CONCLUSIONSANDRECOMMENDATIONS................................................................. 55
14. APPENDIX1 UNDERLYINGASSUMPTIONSANDLIMITINGCONDITIONS..................... 56
15. APPENDIX2 ANALYSTCERTIFICATIONS..................................................................... 58
16. APPENDIX3NCHMACERTIFICATION......................................................................... 59
17. APPENDIX4 ANALYSTRESUMES............................................................................... 60
18. APPENDIX5 DCACHECKLIST..................................................................................... 63
19. APPENDIX6RENTALCOMMUNITYPROFILES............................................................. 68
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MainStreetWaltonMill|TableofContents
TABLES, FIGURES AND MAPS
Table1 DetailedUnitMixandRents,MainStreetWaltonMill....................................................................................5
Table2 UnitFeaturesandCommunityAmenities........................................................................................................5
Table3 KeyFacilitiesandServices..............................................................................................................................13
Table4 PopulationandHouseholdProjections..........................................................................................................18
Table5 PersonsperHousehold,WaltonMillMarketArea........................................................................................18
Table6 BuildingPermitsbyStructureType,WaltonCounty......................................................................................19
Table7 TrendsinSeniorHouseholders,WaltonMillMarketArea............................................................................19
Table8 2017AgeDistribution....................................................................................................................................20
Table92010HouseholdsbyHouseholdType.............................................................................................................20
Table10 HouseholdsbyTenure.................................................................................................................................21
Table11 SeniorHouseholdsbyTenure,Age62+......................................................................................................21
Table12 RenterHouseholdsbyAgeofHouseholder................................................................................................22
Table13RenterHouseholdsbyHouseholdSize.........................................................................................................22
Table142017HouseholdIncome...............................................................................................................................23
Table152017SeniorHouseholdIncome(62+)...........................................................................................................23
Table162017SeniorHouseholdIncomebyTenure(Age62+),WaltonMillMarketArea.........................................24
Table17RentBurdenedandSubstandardHousing,WaltonMillMarketArea..........................................................24
Table18 LaborForceandUnemploymentRates........................................................................................................26
Table19CommutationData,WaltonMillMarketArea..............................................................................................26
Table20 MajorEmployers,WaltonCounty................................................................................................................29
Table21 2019TotalandRenterIncomeDistribution,Households62+.....................................................................31
Table22 LIHTCIncomeandRentLimits,Atlanta-SandySprings-RoswellMSA........................................................32
Table23 2019AffordabilityAnalysis,MainStreetWaltonMill...................................................................................33
Table24HomeownershiptoRentalHousingConversion...........................................................................................35
Table25 OverallDemandEstimates,MainStreetWaltonMill..................................................................................35
Table26 DemandEstimatesbyFloorPlan,MainStreetWaltonMill.........................................................................36
Table27 DwellingUnitsbyStructureandTenure......................................................................................................37
Table28 DwellingUnitsbyYearBuiltandTenure......................................................................................................38
Table29ValueofOwnerOccupiedHousingStock......................................................................................................38
Table30RentalSummary,MarketRateSeniorCommunities....................................................................................40
Table31RentalSummary,DeeplySubsidizedSeniorCommunities...........................................................................41
Table32 UtilityArrangementandUnitFeatures.......................................................................................................41
Table33CommunityAmenities..................................................................................................................................42
Table34RentalSummary,GeneralOccupancyCommunities....................................................................................43
Table35AverageRents,ComparableProperties........................................................................................................44
Table36 AverageMarketRentandRentAdvantageSummary.................................................................................44
Table37 SubsidizedCommunities,WaltonMillMarketArea....................................................................................45
Table38 ForeclosureRate,ZIPCode30655,March2017..........................................................................................47
Table39 RecentForeclosureActivity,ZIPCode30655...............................................................................................47
Figure1SitePlan...........................................................................................................................................................3
Figure2BuildingElevation............................................................................................................................................4
Figure3ViewsofSubjectSite........................................................................................................................................7
Figure4SatelliteImageofSubjectSite.........................................................................................................................8
Figure5ViewsofSurroundingLandUses.....................................................................................................................9
Figure6 At-PlaceEmployment,WaltonCounty.........................................................................................................27
Figure7 TotalEmploymentbySector.........................................................................................................................28
Figure8 EmploymentChangebySector,2011-2016Q3............................................................................................28
Figure9PricePosition.................................................................................................................................................52
Map1 SiteLocation......................................................................................................................................................6
Map2 CrimeIndexMap.............................................................................................................................................11
Map3 LocationofKeyFacilitiesandServices............................................................................................................14
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MainStreetWaltonMill|TableofContents
Map4 WaltonMillMarketArea.................................................................................................................................16
Map5MajorEmployers..............................................................................................................................................30
Map6 SurveyedSeniorRentalCommunities.............................................................................................................39
Map7 SurveyedGeneralOccupancyRentalCommunities........................................................................................42
Map8 SubsidizedRentalCommunities......................................................................................................................46
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MainStreetWaltonMill|ExecutiveSummary
1. EXECUTIVE SUMMARY
One Street Development,LLC has retained Real Property Research Group, Inc. (RPRG) to conduct a
comprehensive market feasibility analysis for MainStreet Walton Mill, a proposed senior-oriented
rental community in Monroe, Walton County, Georgia. MainStreet Walton Mill will be a 74-unit
senior-orientedrentalcommunitythatwillbefinancedinpartwithLowIncomeHousingTaxCredits
(LIHTC), allocated by the Georgia Department of Community Affairs (DCA), and will be restricted to
householdswithhouseholderage62 andolder. Theproposedunitmixincludes61 LIHTCunitsand
13marketrateunits. Thefollowingreport,includingtheexecutivesummary,isbasedonDCA’s2017
marketstudyrequirements.
1. ProjectDescription
• ThesiteforMainStreetWaltonMillisonthenorthwestcorneroftheintersectionof2nd
Street and South Broad Street roughly one-half mile south of downtown Monroe,
Georgia.
• MainStreet Walton Mill will comprise 74 senior-oriented rental units targeting
households with householder age 62 and older. The proposed unit mix comprises 61
LIHTCunitsincluding19unitstargetinghouseholdsearningupto50percentoftheArea
MedianIncome (AMI) and42 units targetinghouseholds earningupto 60 percent AMI.
Thirteenunitswillbemarketratewithoutincomeorrentrestrictions.
• Adetailedsummaryofthesubjectproperty,includingtherentandunitconfiguration,is
showninthetablebelow.
UnitMix/Rents
Income Square Developer Utility Gross
Type Bed Bath Quantity
Target Feet Rent Allowance Rent
MidRise 1 1 50% 8 752 $514 $119 $633
MidRise 1 1 60% 20 752 $640 $119 $759
MidRise 1 1 Market 5 752 $700 $119 $819
MidRise 2 1 50% 11 942 $599 $161 $760
MidRise 2 1 60% 22 942 $751 $161 $912
MidRise 2 1 Market 8 942 $800 $161 $961
Total 74
Rentsincludestrashremoval Source:OneStreetDevelopment,LLC
• The newly constructedunits at the subject propertywill offerkitchens equipped with a
range, a refrigerator, dishwasher, garbage disposal,and microwave. Each unit will also
includewasheranddryerconnections,ceilingfans,entertainmentservicingbar,nine-foot
ceilings,centralheatingandair-conditioning,windowblinds,andgrabbars(notstandard
butwillbeinstalledfornofeeuponrequest). TheproposedunitfeaturesatMainStreet
Walton Mill are extensive but will not be as extensive as those offered at the surveyed
marketrateseniorcommunity(TheCottagesatMonroe)whichincludesattachedgarages
and a full-size washer anddryer ineach unit. The unit features proposed at MainStreet
Walton Mill are appropriate for an affordable senior rental community with rents well
belowthoseatTheCottagesatMonroe.
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MainStreetWaltonMill|ExecutiveSummary
• MainStreetWaltonMillwillofferamenitiesincludingacommunityroom,fitnesscenter,
cardioroom,wellnesscenter,library/computercenter,pavilionwithgrill,privategarden,
and walking path. MainStreet Walton Mill will offer amenities targeted to elderly
households including elevator service. The amenities offered at the subject will be
superiortothoseofferedatthesurveyedmarketrateseniorcommunity(TheCottagesat
Monroe)andwillbewellreceivedbythetargetmarketespeciallygiventhelowproposed
rents.
2. SiteDescription/Evaluation:
Thesubjectsiteisasuitablelocationforseniorrentalhousingasithasaccesstoamenities,services,
andtransportationarteries.
• ThesiteforMainStreetWaltonMillisonthewestsideofSouthBroadStreetroughlyone-half
mile south of downtown Monroe, Georgia. South Broad Street is a major north-south
thoroughfareintheregionconnectingthesitetoInterstate20tothesouthandInterstate85
tothenorth. U.S.Highway78islessthantwomilesnorthofthesitewhichconnectsMonroe
toAthenstothenortheastandAtlantatothewest.
• Monroe is primarily a residential community with commercial uses common along State
Highways 10 and 11 including downtown where the two highways intersect. Land uses
surrounding the site include primarily modest to moderate value single-family detached
homesandduplexestothesouth,WaltonCottonMill(IanHenderson’sAntiqueMall)andan
officebuildingto thewest,anantique storetothesouth, aschoolandtwo churches to the
east,andundevelopedlandtothenorth.
• Community services, a grocery store, pharmacies, banks, convenience stores, shopping,
recreational facilities, and medical facilities are within one mile of the site with a
concentrationneardowntown.
• MainStreetWaltonMillwillhaveexcellentvisibilityfromSouthBroadStreetwhichhassteady
traffic. The subject will be accessible via an entrance on2nd Street and a newly developed
privatestreetthatwillrunalongthewesternborderofthesite.
• The site’scrimerisk iscomparable toallcensustractsinMonroeincludingthe locationofa
majorityofthemostcomparablerentalcommunities.
3. MarketAreaDefinition
• The Walton Mill Market Area includes all census tracts in Walton County including all or
portions of seven municipalities (Monroe, Loganville, Between, Walnut Grove, Good Hope,
Jersey,andSocialCircle). TheareasincludedintheWaltonMillMarketAreaarethosemost
comparable to Monroe and the area surrounding the subject site and seniors living in this
marketareawouldlikelyconsiderthesubjectpropertyasuitableplacetolive. Monroeisthe
most populatedmunicipality in Walton County, which is largely rural in nature. Taking this
intoaccountalongwiththeaccessibilityofthemarketareabyanumberofhighwaysincluding
U.S. Highway 78 (connecting Loganville to Monroe), we believe the subject property would
be able to attract seniors from throughout the county. Given the large size and irregular
shapeofsomecensustracts,themarketareaislargeinsize;however,aprimarymarketarea
including only Monroe would be overly restrictive. While geographically large, the rural
portionsofWaltonCountyintheWaltonMillMarketAreacontainlimiteddevelopmentand
few renter households, thus, demand estimates will not be significantly affected with the
inclusionofthese areas.The boundariesofWaltonMillMarket Areaandtheirapproximate
distance from the subject site are Barrow County (8.3 miles to the north), Oconee County /
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MainStreetWaltonMill|ExecutiveSummary
Morgan County (10.2 miles to the east), Newton County (10.7 miles to the south), and
GwinnettCounty(15.5milestothewest).
4. CommunityDemographicData
• The Walton Mill Market Area had significant senior household growth (62+) from 2010 to
2017andgrowthisexpectedtoremainstrongthrough2019. Seniorhouseholdgrowthinthe
market area has significantly outpaced total household growth on a percentage basis since
2010andisexpectedtocontinuethistrendoverthenexttwoyears.
o TheWaltonMillMarketAreaadded2,308people(3.3percent)and828households(3.3
percent) peryearbetweenthe 2000 and2010Censuscounts. Growthcontinued, albeit
ataslowerpacefrom2010to2017withtheadditionof972people(1.1percent)and288
households(0.9percent)peryeartoreach90,571peopleand31,598householdsin2017.
Annual growth is expected to accelerate to 1,212 people (1.3 percent) and 388
households(1.2percent)peryearfrom2017to2019.
o The Walton Mill Market Area added 255 households with householder age 62+ (3.0
percent)peryearfrom2010to2017andannualgrowthisprojectedat294households
age62+(3.0percent)from2017to2019.
• Seniors(age62andolder)comprise18.4percentoftheWaltonMillMarketArea’spopulation
whileAdults(age35to61)arethemostcommonat36.2percent. Children/Youth(under20
yearsold)accountforasignificantpercentage(27.4percent)oftheWaltonMillMarketArea’s
populationandYoungAdults(age20to34)comprise18.0percentofthepopulation.
• Roughly81percentofallhouseholdsintheWaltonMillMarketAreacontainedatleasttwo
peopleincluding40.7percentwhichcontainedchildren;thevastmajorityofallmulti-person
householdsweremarried. Single-personhouseholdsaccountfor18.7percentofWaltonMill
MarketAreahouseholds.
• The market area’s 2017 renter percentage is 28.0 percent among all households and 23.1
percentamonghouseholdswithhouseholderage62andolder.
• The2017medianincomeofhouseholdsintheWaltonMillMarketAreaisamoderate$55,524
which is similar to the $55,258 median in the Bi-County Market Area. RPRG estimates the
2017 median income for all senior households (age 62 or older) in the Walton Mill Market
Area is $41,842 and the median for senior renter households (62+) is $26,491. Nearly half
(48.0 percent) of senior renters (62+) earn less than$25,000, 29.7 percent earn $25,000 to
$49,999,and13.1percentearn$50,000to$74,999.
• We do not believe foreclosed, abandoned, or vacant single/multi-family homes will impact
thesubjectproperty’sabilitytoleaseitsunitsgivenitssenior-orientednature.
5. EconomicData:
WaltonCountyhasreboundedsincethenationalrecessionwithsignificantjobgrowthoverthepast
sixyearsandanunemploymentratelowerthanbothstateandnationallevels.
• Walton County’s unemployment rate has decreased in each of the past six years to 4.8
percent from a recession-era high of 10.6 percent in 2010. Walton County’s 2016
unemploymentrateof4.8percentisbelowbothstate(5.4percent)andnational(4.9percent)
rates.
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MainStreetWaltonMill|ExecutiveSummary
• Walton County added 2,581 total jobs from 2010 to 2015 with the addition of at least 500
jobs in each of the past three years including 928 new jobs in 2015, the largest single-year
additionofjobssince2006. Thecountyhasaddedjobsatafasterpacethanthenationona
percentage basis in five of the past six years and has recouped all jobs lost during the
recession. Growth has continued with the addition of 1,265 more jobs through the third
quarterof2016.
• Trade-Transportation-UtilitiesandGovernmentarethelargestemploymentsectorsinWalton
County accounting for 40.8 percent of total employment compared to 34.4 percent of jobs
nationally.Thenextlargestsectorsinthecounty(ManufacturingandConstruction)account
forsignificantlylargerproportionsofjobswhencomparedtothenation.
• Eightof11sectorsaddedjobsfrom2011to2016(Q3)withthemostsignificantgainsinthe
Trade-Transportation-Utilities (19.9 percent), Manufacturing (31.2 percent), Construction
(29.6 percent), Professional-Business (27.2 percent), and Leisure-Hospitality (31.9 percent)
sectors.ThemostnotablelosswasintheGovernmentsectorwitha3.2percentdecreasein
jobs.
• SeverallargejobexpansionshaveoccurredrecentlyinWaltonCountyincluding550newjobs
announced in the past several years. The only major contraction identified was Exel’s
announcedlayoffof280jobsinSocialCircle.
• WaltonCounty’seconomyisverystrongasthelaborforceandjobbaseareatall-timehighs
and the unemployment rate has dropped to the lowest level in a decade. Job growth is
acceleratingandtheunemploymentrateislowerthanbothstateandnationalrates.
6. ProjectSpecificAffordabilityandDemandAnalysis:
• MainStreetWaltonMillwillcontain74senior-orientedrentalunitstargetinghouseholderage
62andolder. Theunitmixincludes33one-bedroomunitsand41two-bedroomunits. Sixty-
oneLIHTCunitswilltargethouseholdsearningupto50percentor60percentoftheAMIand
13marketrateunitswillnothaveincomeorrentrestrictions.
• The 50 percent unitswill target senior renter householders (62+) earning between $18,990
and$27,000. The19proposedunitsat50percentAMIwouldneedtocapture4.8percentof
the395income-qualifiedseniorrenterhouseholdsinordertolease-up.
• The 60 percent unitswill target senior renter householders (62+) earning between $22,770
and$32,400. The42proposedunitsat60percentAMIwouldneedtocapture11.1percent
ofthe377income-qualifiedseniorrenterhouseholdsinordertolease-up.
• Themarketrateunitswilltargetmoderateincomeseniorrenterhouseholders(62+)earning
betweenanestimated$24,570and$43,200. The13proposedmarketrateunitswouldneed
tocapture2.4percentofthe545income-qualifiedseniorrenterhouseholdsinordertolease-
up.
• Theoverallaffordabilitycaptureratefortheprojectis8.7percent.
• Based on DCA methodology, total net demand for all 74 proposed units in the Walton Mill
MarketAreais447households,resultinginacapturerateof16.5percent.Captureratesby
income level are 9.1 percent for the 50 percent units, 21.1 percent for the 60 percent AMI
units,19.9percentforallLIHTCunits,and4.5percentforthemarketrateunits. MainStreet
WaltonMill'scaptureratesbyfloorplanrangefrom3.2percentto27.4percent.
• AllcaptureratesarebelowDCAthresholdsandindicatesufficientdemandinthemarketarea
tosupporttheproposedMainStreetWaltonMill.
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