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Allen Wilson Phase III, Decatur, GA; Market Study
Absorption
Date # of Units Per Absorption
Property Rent Structure Opened Units Month Absorbed Pace
Allen Wilson Phase I LIHTC/PBRA 2011 40 40 1 month
Retreat at Edgewood LIHTC 2011 100 20 5 months
The two newest properties in the market are Allen Wilson Phase I, the Subject’s sister
property, and Retreat at Edgewood. Like the Subject, Allen Wilson Phase I offers
LIHTC units that operate with an additional project based subsidy. According to
management, all 40 units were leased within two weeks. The Decatur Housing Authority
has a 2,500 household waiting list, and all households are pre-qualified to live at the
Subject. Retreat at Edgewood offers 100 LIHTC units that operate without an additional
subsidy. Management reported that the property was fully leased within five months, for
an absorption pace of 20 units per month. We have conservatively estimated that the
Subject will lease approximately 25 units per month. At this pace the Subject will reach
a stabilized occupancy of 93 percent within two months.
� LIHTC vacancy in the market is low at 2.5 percent. Of the LIHTC properties, Robins
Landing has the highest vacancy rate at 5.9 percent. Management indicated that the
current vacancy rate is only slightly higher than the property average of five percent.
This property was built in 1980 and renovated with tax credits in 1999. As new
construction, the Subject will be superior to this property in terms of age and condition
and the Subject will also have a superior location.
All of the Subject’s units will have a public housing subsidy and all tenants will pay 30
percent of their income towards rent. Allen Wilson Phase I, Auburn, Glenn, and Villages
of East Lake I and II offer subsidized units. Allen Wilson Phase I does not have any
vacant units and management at Auburn Glenn and Villages of East Lake I and II
indicated that all of their vacancies are in the unsubsidized units. The current waiting list
for the subsidized units at Village of East Lake I and II is five years. The Decatur
Housing Authority (DHA) owns and operates Allen Wilson Phase I. There is currently a
central waiting list with over 2,500 pre-qualified applicants. The Subject is existing
public housing that will be demolished and rebuilt. Of the units that will be demolished
to build the Subject, none are vacant. Tenants currently living in the units that will be
demolished will be temporarily relocated to other public housing developments or given
Section 8 vouchers while construction takes place. Because the Subject will maintain its
subsidy, we expect the majority of the current tenants to return to the Subject following
construction. Given the low LIHTC and subsidized vacancy rates in the local market, we
believe that the Subject will maintain a stabilized vacancy rate of five percent or less
following construction.
� Seven of the nine comparables have waiting lists. The Decatur Housing Authority
maintains a centralized list for all of its units. Currently, there are 2,500 applicants on the
waiting list for subsidized units, and all of these tenants are pre-qualified to live at the
Subject.
Novogradac & Company, LLP 107