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Development
Description
Background
Overview
After talking with many owners, property managers, and agents;
the Greater Orlando market has demonstrated that the demand
for office/warehouse, office/showroom, and service center space
for the trades and skilled small business is very tight with
little or no vacancy. A recent study of leasing activity concluded,
"The typical 1,000 square foot to 2,000 square foot spaces
in this market continue to be very difficult to find. Rates
in those spaces are advancing steadily -- $.50 per square foot
per quarter and expansion opportunities are very difficult to
find. There are many small tenant prospects that cannot find
space in the 1,500 to 2,500 square foot range." The survey
goes on to say:
- expansion
is very difficult if not impossible in many centers
- rates
are increasing and tenants have very little negotiating room
- choice
of location is very limited
- tenants
having to lease for longer periods (5 years) to secure space
- spaces
1,000 square foot - 3,000 square foot are most difficult to
find
- landlords
are not willing to make major changes -- tenants must take
space "as-is"
The Greater
Orlando market can absorb over one million square feet
of office/warehouse and office/showroom development. Several
qualified sites have been identified, skilled contractors have
been recognized, and respective construction lenders have been
acknowledged.
Collateral Description
The purpose of this development is to build an office/showroom
and service center for the trades and skilled small business.
This facility will offer affordable space, serve as a business
incubator, and provide employment opportunities. This is a speculative
building; the type and activity of the tenants will include
light manufacturing, warehousing, wholesaling, storage, assembly,
and distribution of goods.
The improvements
will be built in one phase. The ground level improvement will
be a split face concrete block exterior wall with a pre-engineered
metal roof. The roof will be a standing seam metal roof with
a 3 on 12-pitch and 4 foot front overhang and soffit. The eve
height is 16 feet and the ridge is 22 feet. The interior walls
are (1-hour) drywall. The electric service will be individually
metered and the water will be master metered. Three-phase power
will be available.
The development
will have three buildings containing a total of 37,500 square
feet. The 25 individual bays range in size from 1,500 to 4,500
square feet. The building is single side loaded and the exterior
signage will be uniform and aesthetically controlled. The zoning
allows for a 35% FAR but the borrower has elected a 27% FAR
in order to increase parking.
Fire sprinkler
installation is not required as indicated by the fire marshal
because the roof material is non flammable.
Every attempt
will be made to maximize the "buildable" square feet
while at the same time providing an aesthetically pleasing development
that meets the municipality's requirements.
Tenant
Mix
Developments
of this type have attracted a wide variety of professions, occupations,
and vocations. Business avoided include: (1) automotive related
(excluding after market accessories), (2) tenants that use toxins,
pollutants, or contaminants, (3) crafts that create dust, (4)
businesses that make noise, or (4) use machines that vibrate.
Risk
There are
two risks to consider: construction and market. The construction
risk is minimized because of the simplicity of construction,
selection of an experienced contractor, use of concrete block
walls, and pre-engineered roof system. The market risk can be
measured. A comparable office/warehouse was recently completely
leased at market rates and terms within 140 days of completion.
The market is strong.
Feasibility/Marketability
Recently
Business Week reported that the U.S. Census Bureau published
a study called "County Business Patterns." This study
looks at the number of employees per establishment. Based on
the data, about 54% of U.S. workplaces have fewer than five
employees. According to the Seminole County Chamber of Commerce,
90% of the businesses in Seminole County are classified as small
business.
Competition
and Comparables
There is
very little competition in comparison to the demand. I have
spoken to over 100 owners, tenants, lenders, brokers, and investors
in order to establish market rates.
Land
Use And Zoning
The site
of the proposed American Commerce Center is located in Seminole
County. The site is vacant and the present Comprehensive Land
Use Plan and zoning classification permit the development as
proposed and described in this executive summary.
Services
The municipal
utilities, including water and wastewater are provided by a
municipality. The municipality has stated that the site has
access to a gravity fed manhole. No allowance has been made
for a lift station.
Contractor
There are
many qualified and available general contractors. Once the land
is under contract the developer will select three contractors
to submit bids for the complete turnkey construction. The specific
contractor will be selected prior to the closing of the construction
loan.
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