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Bob Moore Farms_Due Diligence Presentation_6.14.23.pptx

Korey Witalka
Korey Witalka

The document provides an agenda and overview for a 90-day due diligence and feasibility study for a proposed multi-phase, mixed-use development on 237 acres southwest of the intersection of I-35 and W. Main St. in Norman, Oklahoma. Key factors being analyzed include site geology and civil considerations, market demand for residential and commercial space, potential zoning changes, and community impact. The new development approach proposes reconfiguring the site plan based on these factors to maximize developability while minimizing negative impacts.

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BOB MOORE FARMS Due Diligence and Feasibility Analysis June 14, 2023
AGENDA Team Summary Prioritized Variables Site Geology / Civil Site Geometry Zoning Analysis New Approach Dashboard Market Demand Community Impact Development Overview Development Approach Discussion Development Budget 01 02 03 04 05 06 07 08 09 10 11 12 13 14
THE TEAM Project Management Advisors, Inc., Development Management Black Oak Partners, Owner Consultant Hitchcock Landscape Architecture, Architect Humphrys & Partners Architects, Landscape Design/Land Planning Smith Roberts Baldischwiler, LLC, Civil Engineering Engineering Consulting Services, Geotechnical Engineering DBG Construction, General Contractor Rieger Law Group, PLLC, Legal Zonda Advisory, Residential Market Analysis Price Edwards, Retail Market Analysis Avenue 5 Residential, Multifamily Market Analysis
SUMMARY 90-day due diligence and feasibility assignment to assess the viability to begin Phase I of a multi-phase, mixed-use development. [Located on 237 acres southwest of the intersection of I-35 and W. Main St., Norman, Oklahoma.]
Site Geology/Civil Capacity of site relative to soils, stormwater management requirements and topography Market Demand Impact of market demand on development potential Community Input Impact immediate neighbors will have on potential to develop Site Geometry Shape of site and how it impacts development Zoning Potential City of Norman will permit/recommendation PRIORITIZED VARIABLES
INITIAL SITE PLAN Not market responsive Not inclusive of civil considerations Does not address retail problems Traffic circulation concerns Does not maximize greenspace Program density not inclusive of neighborhood tolerance Building types not economically viable 4-story elevator
SITE GEOLOGY/CIVIL TOPOGRAPHY
SITE GEOLOGY/CIVIL SOILS
Design Parameter Column Footing Wall Footing Net Allowable Bearing Pressure 2,000 psf 2,000 psf Bearing Soil Material Natural Soil or Compacted Fill Natural Soil or Compacted Fill Minimum Width 24 inches 18 inches Minimum Footing Embedment Depth (below slab or finished grade) 24 inches 24 inches Estimated Total Settlement Less than 1-inch Less than 1-inch Estimated Differential Settlement Less than 他 inches between columns Less than 他 inches per 30 linear feet SITE GEOLOGY/CIVIL SOILS
1 2 3 1 Exist. D.A.1 to DP#1 DP#1 Exist. Detention Pond #1 2 Exist. D.A.2 to DP#2 DP#2 3 D.A. 3 Bypass TD Total Developed Runoff Exist. Detention Pond #2 SITE GEOLOGY/CIVIL REGIONAL STORMWATER
SITE GEOLOGY/CIVIL ONSITE STORMWATER Regional stormwater flows south along I-35 and into South detention pond Stormwater from the north half of the site flows into detention pond which in turn flows downstream into south detention pond All water from the south detention pond essential sheet drains onto southern half into the Canadian River
SITE GEOLOGY/CIVIL REGIONAL STORMWATER D.A to DP#1 D.A. 3 Bypass 1 DP #1 2 D.A. 2 to DP#2 DP 3S TD Total Developed Runoff Combined Detention Pond
Accommodation of regional drainage Suitable for 100 yr. flood event Consolidated storm retention areas Fits geometry of the land site Maximized developable land Storm Event Q100 Historic (cfs) Q100 Developed (cfs) 2 Year 555 542 5 Year 766 713 10 Year 903 875 25 Year 1,214 1,149 50 Year 1,576 1,396 100 Year 1,893 1,668 SITE GEOLOGY/CIVIL SUMMARY
MARKET DEMAND RESIDENTIAL North Side Rec Actual Garden with Truck Under Garage Garden w detach garage 576 Big House 250 66 Single Family Rental 60 48 TOTAL 610 690 South Side Single Family Rental 140 Garden w tuck under garage 250 Garden w detach garage 300 Big House 250 TOTAL 940 2.60% Projected annual population growth over next 5 years 3.60% Projected annual household growth over next 5 years 2.90% Jobs increase over next 5 years 0 Pipeline of future projects / units 1,550 Zonda recommended total units for entire 237 acres
North Pad Sites Behind an existing development along Maine St. Potential Uses Fitness Physical Therapy Health Care Retail-office Tenants Destination Oriented Retailers South Retail Sites Limited visibility to I-35. Nearby restaurants have not performed well. Not expected for traffic to increase. Potential Uses 1-acre pad site on the SEC of parcel 1-2 retail strip centers (8-10,000 s.f./ea.) Dry Cleaners Urgent Care Tax Preparation Insurance Office Nail Salon MARKET DEMAND COMMERCIAL
Concerns to the local community Traffic impact Additional renters within neighborhood Building Height Reduced greenspace Impact to property values Crime / perception Schools / Civic impact COMMUNITY IMPACT
Benefits to the local community: Downzoning/reduction in intensity relative to current zoning New construction will stabilize/lift property values Parkland, walking trails, ponds Retention of greenspace Farmers market concept COMMUNITY IMPACT Big House Concept
SITE GEOMETRY
PUD 9798-11 (Zero Lot line Single Family) C-2 (Broad Commercial) ZONING CURRENT
ZONING FUTURE Market Factors Impacting Zoning Considerations Key Norman, OK Housing Drivers: University of Oklahoma SEC move and the need for additional dwelling units per intent to increase student body Supply of housing need within Norman - Increasing demand with insufficient rental supply Significant vacant commercial space currently within the Norman market The market currently cannot absorb the intensity of C2 zoning allowable uses PUD Zoning Considerations SDA 1 Multi-family: RM-6 - Highest density MF zoning (Norman) SDA 2 - Big House: RM-6 - Highest density MF zoning (Norman) SDA 3 - SFR: R-1 - Single Family Zoning SDA 4 - Commercial - Generally echoes C-1/C-2 allowable uses
NEW APPROACH NEW SITE PLAN
NEW APPROACH Rethinking the land plan: Creekdale Dr. extension Norman Center Ct. extension Commercial district Reclaimed detention land to max site Living at Norman Landing: Greenbelt and trails Targeted parks and open spaces Cultivated ponds connected to trails Dog park Multiple playgrounds Farmhouse concept/coffee Farmers market Creekdale Dr. Reclaimed Detention Land
Project Description Total Phase I Phase II Phase III Retail Land (Acre) 43 18.60 15.2 4.70 4.70 Land (SF) SF SF SF SF SF % of Total Land 100% 43% 35% 11% 11% Gross SF SF 414,579 SF 268,408 SF 68,640 SF 26,316 SF Net SF SF 355,216 SF 227,821 SF 68,640 SF 25,000 SF Units 690 390 252 48 Parking Spaces 624 403 96 Parking Ratio 1.77 1.60 1.60 2.00 N/A NEW APPROACH PROJECT DESCRIPTION
Site Geology/Civil Civil engineering and site hydrology are principal drivers. Regional storm water drainage not to code per Norman. New impervious cover requires roughly 25% increase in detention/retention. Retention area chosen to create an amenity in lieu of an eyesore Market Demand Market limitation for north and south sites = 1,550 units. Retail/commercial demand is quite limited. Retail district fronting new road will boost potential. Site Geometry Rebalanced site is maximized to accommodate residential development. Development site is maximized Community Input Greenbelt designed to minimize community impact/frustration. Amenities (other than pools) open to the public. Zoning Potential Reducing intensity of potential development and creating a community that neighbors will accept Transition from commercial to residential zoning with a mix of MF zoning and single-family zoning NEW APPROACH INPUTS AND OUTCOMES
DASHBOARD
DEVELOPMENT OVERVIEW PHASE I PHASE II PHASE III Cash on Cash Five-year average 10.0% 10.1% 10.3% Cost to build $/NRSF $202 $209 $222 Starting Rents/SF $1.81 $1.80 $1.70 Total Project Cost $71MM $47MM $15MM NOI at Sale Event $7.6MM $5.1MM $1.6MM CAP Rate at Sale Event 5.00% 5.25% 5.50% Net Sales Proceeds/ Levered Exit Profit $151MM/$108MM $96MM/$61MM $30MM/$20MM
Development Budget Total $ Phase I Phase II Phase III Retail Total Land Costs 6,211,159 $2,863,683 $2,176,641 $636,862 $533,973 Total Hard Costs $120,982,083 $61,633,661 $41,016,633.61 $12,878,396 $5,433,464.31 Total FF&E Cost $500,000 $265,362 $173,608 $44,116 $16,914 Total Soft Costs $10,300,780 $4,987,788 $3,148,367.68 $1,334,832 $829,792.37 Total Financing Costs $3,654,601 $2,021,232 $1,103,555.52 $353,305 $176,498.57 Total Project Costs $139,375,350 $71,771,727 $47,618,805 $15,247,513 $6,990,642 DEVELOPMENT BUDGET
NEXT STEPS
DEVELOPMENT APPROACH CONSIDERATIONS FEE DEVELOPMENT FULLY INTEGRATED PMA JV DEVELOPER Speed to Market Yes but not available at all times 24/7 Strategic Sounding Board. Upfront Learning Curve. Market Knowledge If local developer chosen then yes. But if national or regional not likely. Local Market Presence. National Relationships. Expert in Their Market. Consistent Project Delivery No guarantee. Leadership and Team is Structured for Longevity Across Project Portfolio. Varying Project Teams = Inconsistency. Communication/Reporting Not customized. Designed to suit needs of developer. Transparent model. Proactive. Meaningful Reports. Customized for Bob Moore Farms. Filtered Communication. Scalability Not designed to scale. Typically one-off with no particular relationship focus. Agile Organization. Thoughtfully Structured Teams. Deep Bench. Reliable and Prepared to Respond to Evolving Needs. Difficulty Keeping Up With Immediate Demand. One at a Time. Strategic Business Advisory Interests are not aligned. Not necessarily structured to provide objective advisory services. Deal-Agnostic Strategic Consulting. Holistic Industry and Portfolio-Level Perspective. Narrow Deal-Only Perspective. Common Service Agreement Potential conflicts of interest and complicated agreement that will need to be negotiated. Master Agreement. Added Level of Consistency. Conflict of Business Interest. Complicated JV agreements. Guarantees Excluded Excluded. Cost/Completion Guarantee. Cost Effective Expensive. Typically 3% to 5% of total project costs. May include bonus and/or equity upside. (< 3%) & No Promote Fee. Financial Alignment. (>3%) + Promote Fee. Opportunity for Misalignment.
DISCUSSION

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Bob Moore Farms_Due Diligence Presentation_6.14.23.pptx

  • 1. BOB MOORE FARMS Due Diligence and Feasibility Analysis June 14, 2023
  • 2. AGENDA Team Summary Prioritized Variables Site Geology / Civil Site Geometry Zoning Analysis New Approach Dashboard Market Demand Community Impact Development Overview Development Approach Discussion Development Budget 01 02 03 04 05 06 07 08 09 10 11 12 13 14
  • 3. THE TEAM Project Management Advisors, Inc., Development Management Black Oak Partners, Owner Consultant Hitchcock Landscape Architecture, Architect Humphrys & Partners Architects, Landscape Design/Land Planning Smith Roberts Baldischwiler, LLC, Civil Engineering Engineering Consulting Services, Geotechnical Engineering DBG Construction, General Contractor Rieger Law Group, PLLC, Legal Zonda Advisory, Residential Market Analysis Price Edwards, Retail Market Analysis Avenue 5 Residential, Multifamily Market Analysis
  • 4. SUMMARY 90-day due diligence and feasibility assignment to assess the viability to begin Phase I of a multi-phase, mixed-use development. [Located on 237 acres southwest of the intersection of I-35 and W. Main St., Norman, Oklahoma.]
  • 5. Site Geology/Civil Capacity of site relative to soils, stormwater management requirements and topography Market Demand Impact of market demand on development potential Community Input Impact immediate neighbors will have on potential to develop Site Geometry Shape of site and how it impacts development Zoning Potential City of Norman will permit/recommendation PRIORITIZED VARIABLES
  • 6. INITIAL SITE PLAN Not market responsive Not inclusive of civil considerations Does not address retail problems Traffic circulation concerns Does not maximize greenspace Program density not inclusive of neighborhood tolerance Building types not economically viable 4-story elevator
  • 9. Design Parameter Column Footing Wall Footing Net Allowable Bearing Pressure 2,000 psf 2,000 psf Bearing Soil Material Natural Soil or Compacted Fill Natural Soil or Compacted Fill Minimum Width 24 inches 18 inches Minimum Footing Embedment Depth (below slab or finished grade) 24 inches 24 inches Estimated Total Settlement Less than 1-inch Less than 1-inch Estimated Differential Settlement Less than 他 inches between columns Less than 他 inches per 30 linear feet SITE GEOLOGY/CIVIL SOILS
  • 10. 1 2 3 1 Exist. D.A.1 to DP#1 DP#1 Exist. Detention Pond #1 2 Exist. D.A.2 to DP#2 DP#2 3 D.A. 3 Bypass TD Total Developed Runoff Exist. Detention Pond #2 SITE GEOLOGY/CIVIL REGIONAL STORMWATER
  • 11. SITE GEOLOGY/CIVIL ONSITE STORMWATER Regional stormwater flows south along I-35 and into South detention pond Stormwater from the north half of the site flows into detention pond which in turn flows downstream into south detention pond All water from the south detention pond essential sheet drains onto southern half into the Canadian River
  • 12. SITE GEOLOGY/CIVIL REGIONAL STORMWATER D.A to DP#1 D.A. 3 Bypass 1 DP #1 2 D.A. 2 to DP#2 DP 3S TD Total Developed Runoff Combined Detention Pond
  • 13. Accommodation of regional drainage Suitable for 100 yr. flood event Consolidated storm retention areas Fits geometry of the land site Maximized developable land Storm Event Q100 Historic (cfs) Q100 Developed (cfs) 2 Year 555 542 5 Year 766 713 10 Year 903 875 25 Year 1,214 1,149 50 Year 1,576 1,396 100 Year 1,893 1,668 SITE GEOLOGY/CIVIL SUMMARY
  • 14. MARKET DEMAND RESIDENTIAL North Side Rec Actual Garden with Truck Under Garage Garden w detach garage 576 Big House 250 66 Single Family Rental 60 48 TOTAL 610 690 South Side Single Family Rental 140 Garden w tuck under garage 250 Garden w detach garage 300 Big House 250 TOTAL 940 2.60% Projected annual population growth over next 5 years 3.60% Projected annual household growth over next 5 years 2.90% Jobs increase over next 5 years 0 Pipeline of future projects / units 1,550 Zonda recommended total units for entire 237 acres
  • 15. North Pad Sites Behind an existing development along Maine St. Potential Uses Fitness Physical Therapy Health Care Retail-office Tenants Destination Oriented Retailers South Retail Sites Limited visibility to I-35. Nearby restaurants have not performed well. Not expected for traffic to increase. Potential Uses 1-acre pad site on the SEC of parcel 1-2 retail strip centers (8-10,000 s.f./ea.) Dry Cleaners Urgent Care Tax Preparation Insurance Office Nail Salon MARKET DEMAND COMMERCIAL
  • 16. Concerns to the local community Traffic impact Additional renters within neighborhood Building Height Reduced greenspace Impact to property values Crime / perception Schools / Civic impact COMMUNITY IMPACT
  • 17. Benefits to the local community: Downzoning/reduction in intensity relative to current zoning New construction will stabilize/lift property values Parkland, walking trails, ponds Retention of greenspace Farmers market concept COMMUNITY IMPACT Big House Concept
  • 19. PUD 9798-11 (Zero Lot line Single Family) C-2 (Broad Commercial) ZONING CURRENT
  • 20. ZONING FUTURE Market Factors Impacting Zoning Considerations Key Norman, OK Housing Drivers: University of Oklahoma SEC move and the need for additional dwelling units per intent to increase student body Supply of housing need within Norman - Increasing demand with insufficient rental supply Significant vacant commercial space currently within the Norman market The market currently cannot absorb the intensity of C2 zoning allowable uses PUD Zoning Considerations SDA 1 Multi-family: RM-6 - Highest density MF zoning (Norman) SDA 2 - Big House: RM-6 - Highest density MF zoning (Norman) SDA 3 - SFR: R-1 - Single Family Zoning SDA 4 - Commercial - Generally echoes C-1/C-2 allowable uses
  • 22. NEW APPROACH Rethinking the land plan: Creekdale Dr. extension Norman Center Ct. extension Commercial district Reclaimed detention land to max site Living at Norman Landing: Greenbelt and trails Targeted parks and open spaces Cultivated ponds connected to trails Dog park Multiple playgrounds Farmhouse concept/coffee Farmers market Creekdale Dr. Reclaimed Detention Land
  • 23. Project Description Total Phase I Phase II Phase III Retail Land (Acre) 43 18.60 15.2 4.70 4.70 Land (SF) SF SF SF SF SF % of Total Land 100% 43% 35% 11% 11% Gross SF SF 414,579 SF 268,408 SF 68,640 SF 26,316 SF Net SF SF 355,216 SF 227,821 SF 68,640 SF 25,000 SF Units 690 390 252 48 Parking Spaces 624 403 96 Parking Ratio 1.77 1.60 1.60 2.00 N/A NEW APPROACH PROJECT DESCRIPTION
  • 24. Site Geology/Civil Civil engineering and site hydrology are principal drivers. Regional storm water drainage not to code per Norman. New impervious cover requires roughly 25% increase in detention/retention. Retention area chosen to create an amenity in lieu of an eyesore Market Demand Market limitation for north and south sites = 1,550 units. Retail/commercial demand is quite limited. Retail district fronting new road will boost potential. Site Geometry Rebalanced site is maximized to accommodate residential development. Development site is maximized Community Input Greenbelt designed to minimize community impact/frustration. Amenities (other than pools) open to the public. Zoning Potential Reducing intensity of potential development and creating a community that neighbors will accept Transition from commercial to residential zoning with a mix of MF zoning and single-family zoning NEW APPROACH INPUTS AND OUTCOMES
  • 26. DEVELOPMENT OVERVIEW PHASE I PHASE II PHASE III Cash on Cash Five-year average 10.0% 10.1% 10.3% Cost to build $/NRSF $202 $209 $222 Starting Rents/SF $1.81 $1.80 $1.70 Total Project Cost $71MM $47MM $15MM NOI at Sale Event $7.6MM $5.1MM $1.6MM CAP Rate at Sale Event 5.00% 5.25% 5.50% Net Sales Proceeds/ Levered Exit Profit $151MM/$108MM $96MM/$61MM $30MM/$20MM
  • 27. Development Budget Total $ Phase I Phase II Phase III Retail Total Land Costs 6,211,159 $2,863,683 $2,176,641 $636,862 $533,973 Total Hard Costs $120,982,083 $61,633,661 $41,016,633.61 $12,878,396 $5,433,464.31 Total FF&E Cost $500,000 $265,362 $173,608 $44,116 $16,914 Total Soft Costs $10,300,780 $4,987,788 $3,148,367.68 $1,334,832 $829,792.37 Total Financing Costs $3,654,601 $2,021,232 $1,103,555.52 $353,305 $176,498.57 Total Project Costs $139,375,350 $71,771,727 $47,618,805 $15,247,513 $6,990,642 DEVELOPMENT BUDGET
  • 29. DEVELOPMENT APPROACH CONSIDERATIONS FEE DEVELOPMENT FULLY INTEGRATED PMA JV DEVELOPER Speed to Market Yes but not available at all times 24/7 Strategic Sounding Board. Upfront Learning Curve. Market Knowledge If local developer chosen then yes. But if national or regional not likely. Local Market Presence. National Relationships. Expert in Their Market. Consistent Project Delivery No guarantee. Leadership and Team is Structured for Longevity Across Project Portfolio. Varying Project Teams = Inconsistency. Communication/Reporting Not customized. Designed to suit needs of developer. Transparent model. Proactive. Meaningful Reports. Customized for Bob Moore Farms. Filtered Communication. Scalability Not designed to scale. Typically one-off with no particular relationship focus. Agile Organization. Thoughtfully Structured Teams. Deep Bench. Reliable and Prepared to Respond to Evolving Needs. Difficulty Keeping Up With Immediate Demand. One at a Time. Strategic Business Advisory Interests are not aligned. Not necessarily structured to provide objective advisory services. Deal-Agnostic Strategic Consulting. Holistic Industry and Portfolio-Level Perspective. Narrow Deal-Only Perspective. Common Service Agreement Potential conflicts of interest and complicated agreement that will need to be negotiated. Master Agreement. Added Level of Consistency. Conflict of Business Interest. Complicated JV agreements. Guarantees Excluded Excluded. Cost/Completion Guarantee. Cost Effective Expensive. Typically 3% to 5% of total project costs. May include bonus and/or equity upside. (< 3%) & No Promote Fee. Financial Alignment. (>3%) + Promote Fee. Opportunity for Misalignment.

Editor's Notes

  • #6: Adjust to most important to least SITE GEOLOGY / CIVIL MARKET DEMAND SITE GEOMETRY COMMUNITY INPUT ZONING
  • #8: Add what needs to be overlayed for Phase 1, II and III Phase I Number of Units Construction Start Phase II Number of Units Construction Start Phase III Number of Units Construction Start
  • #9: Add what needs to be overlayed for Phase 1, II and III Phase I Number of Units Construction Start Phase II Number of Units Construction Start Phase III Number of Units Construction Start
  • #10: Split image into two with image and text next to each other Add what needs to be overlayed for Phase 1, II and III Phase I Number of Units Construction Start Phase II Number of Units Construction Start Phase III Number of Units Construction Start
  • #11: Add what needs to be overlayed for Phase 1, II and III Phase I Number of Units Construction Start Phase II Number of Units Construction Start Phase III Number of Units Construction Start
  • #12: Add what needs to be overlayed for Phase 1, II and III Phase I Number of Units Construction Start Phase II Number of Units Construction Start Phase III Number of Units Construction Start
  • #13: Add what needs to be overlayed for Phase 1, II and III Phase I Number of Units Construction Start Phase II Number of Units Construction Start Phase III Number of Units Construction Start
  • #14: Add what needs to be overlayed for Phase 1, II and III Phase I Number of Units Construction Start Phase II Number of Units Construction Start Phase III Number of Units Construction Start
  • #15: Add what needs to be overlayed for Phase 1, II and III Phase I Number of Units Construction Start Phase II Number of Units Construction Start Phase III Number of Units Construction Start
  • #16: Add what needs to be overlayed for Phase 1, II and III Phase I Number of Units Construction Start Phase II Number of Units Construction Start Phase III Number of Units Construction Start
  • #17: Add what needs to be overlayed for Phase 1, II and III Phase I Number of Units Construction Start Phase II Number of Units Construction Start Phase III Number of Units Construction Start
  • #18: Add what needs to be overlayed for Phase 1, II and III Phase I Number of Units Construction Start Phase II Number of Units Construction Start Phase III Number of Units Construction Start
  • #19: Add what needs to be overlayed for Phase 1, II and III Phase I Number of Units Construction Start Phase II Number of Units Construction Start Phase III Number of Units Construction Start
  • #21: Add what needs to be overlayed for Phase 1, II and III Phase I Number of Units Construction Start Phase II Number of Units Construction Start Phase III Number of Units Construction Start
  • #22: Add what needs to be overlayed for Phase 1, II and III Phase I Number of Units Construction Start Phase II Number of Units Construction Start Phase III Number of Units Construction Start
  • #23: Add what needs to be overlayed for Phase 1, II and III Phase I Number of Units Construction Start Phase II Number of Units Construction Start Phase III Number of Units Construction Start
  • #26: It will be a summary of all key variables and maybe even a risk indicator like the way we do our due diligence reports with a red, yellow or green box adjacent. Key items would be: PROJECT: RISKS: Unit Mix/Density Development Unit Mix Pie Chart Political Phased Development Table - Bar or line Graph Market RETURNS: Cash on Cash Returns Leveraged Return IRR FINANCIAL: Rent Growth Chart Cash Flow Sophias various return thresholds relative to the target. We can talk more about that tomorrow. Cost to construct by asset class. Rents per square foot by asset class. Site work cost per square foot. Zoning risk = low (green) Community risk = yellow (moderate) Market risk = TBD We will come up with more, but thats the idea.
  • #31: Add bubble chart from Pg7 here