BEFORE: Mixed Use Income Property
Assessed Value was $415,000/Sold for $1,400,000
AFTER: 36 Residential Units
Finished Fully Absorbed Market Value will be $12,000,000

Knowing your unit yields and variance tolerances is the key to knowing Current “as is” Value and garnering timely approval!

Case Study: 74 William Street, Belleville, New Jersey

Ground up Development / Mixed Use Urban Infill / Land Repurpose

The Seller Consultation…

The Walters Group was engaged to perform a Development Feasibility Valuation (DFV) for ownership of a small 11,200 SF assemblage in Belleville New Jersey. The land had a 2 family home, a 1,000 SF auto repair and a series of small garages. The asset had recently been appraised at $550, 000 and the Assessed Value was $415,000. Performance of the DFV included:
  • A micro analysis of possible within zoning uses
  • Determination of Highest and Best Use (HBU)
  • Elements of a within Zoning Preliminary Application were developed/considered in support of HBU:
    • Informal Site Plan
    • Ground level and underground level parking
    • Footprint and FAR
    • Impervious Surface limitations
    • Net Usable and Gross per floor square footage
    • Unit size and room configuration
    • Retail configuration and location
    • Loading Zone size and placement
    • Height and Set back requirements
    • Amenity location, type and size
    • Three proposed elevations and one showing roof top amenities
      • There were three separate roof top amenities
      • Two larger interior amenities on three levels
        • media/recreation area and a duplex fitness facility
  • Fully supported income/return analysis for HBU
    • Included Affordable obligation
    • Incorporated a 5 yr Tax Abatement solidified by TWG with township
    • Soft and hard Development costs and Income were aged for five years
The result of analysis yielded a “by right” ground up having 33 res units and a 2,500 SF retail. Prior to submitting finding to Seller Client we met with township presenting what was in essence a Preliminary Development Application….and received an informal “sign off” on the project. The full monetization/underwriting resulted in an “as is” Development Value for the land of $1,400,000 and a Pro-Forma Finished Fully Absorbed Value of the to be completed development of over $12,000,000.

The Brokerage…

After a review of our findings ownership, comprised of two second generation real estate attorneys/investors, hired us to broker the asset. We moved to the For Sale presentation stage of the assignment converting primary elements of the informal “by right” or variance free “Preliminary Development Application” to an Offering Memorandum format that included professionally rendered elevations and site plans incorporating all ordinance provisions.

Review Offering Memorandum
Review Offering Memorandum

After completion the OM we distributed to the regional Development Community. Multiple offers were consolidated over a six-week period and we went under contract. The contract provided sought yield constraints for the application. We did not represent the buyer on the acquisition, and they chose to apply for a yield at the very top of the constraint range…contrary to our recommendation.

Buyer Consultation…

After eight months, three formal public application hearings and three application denials … TWG was retained by the Buyer to polish/revise the application. Within three weeks every page of the application was reworked and then informally presented to Mayor Melham and other Members. Subsequent to those informal meetings TWG presented the application Change Summary and all revised sheets to the Planning Board at a formal public meeting and received UNANIMUOS APPROVAL.
Review Change Summary
Review Change Summary

The Outcome…

Our original findings and OM outlined a ground up development of 33 residential units and 2,500 SF of Retail. A variance was granted eliminating the need for the retail availing additional parking increasing the approved yield to 36 units.

Our DFV identified the at that time Current “as is” Development Market Value for the Subject/Land at $1,400,000. The Offering Price was $1,400,000. We closed at $1,435,000

What did Seller, Buyer and Planning think of our Brokerage, Advisory and Transaction Management?

See Client and Board Referrals
See Client and Board Referrals