Agenda - City of Santa Monica

To: Steve Mizokami, City of Santa Monica April 23, 2013
Subject: 1320 2 nd Street: Value Enhancement & Fiscal Impact Analysis Page 11
Financing Costs
The financing costs are estimated as follows:
1. The construction period and absorption period interest costs are estimated at
$1.02 million. These costs are based on the following assumptions:
a. The construction period interest costs are based on a 5.5% interest rate,
an 18-month construction period, and a 60% average outstanding
balance.
b. The absorption period interest costs are based on a three-month
absorption period with a 100% average outstanding balance.
2. The financing fees are set at 2.5 points. This equates to $754,000.
KMA estimates the total financing costs at $1.77 million.
Total Construction Costs
KMA estimates the total construction costs as follows:
Total Direct Costs $11,878,000
Total Indirect Costs 2,454,000
Total Financing Costs 1,773,000
Total Construction Costs $16,105,000
Per SF GBA $346
Estimated Stabilized Net Operating Income (Appendix B - Table 2)
Residential Net Operating Income
1. Rent Income
a. The market rents are estimated as follows:
i. $2,400 per unit for the live/work units;
ii.
iii.
$2,100 per unit for the studio units;
$3,000 per unit for the one-bedroom units; and
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19305.013.001