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Fin 4321 Real Estate Analysis Paper
- 1. Supreme Management is pleased to submit our newest business venture, The Oasis, a luxury style student living on the edge of San Marcos, Tx, We have seized a wonderful opportunity of developing on a large 55-acre lot that, at time of purchase, already has over $10 million in infrastructure complete, including zoning, surveying, platted, finished roads, utilities, and underground electric. We are now qualified to say, upon extensive research into the specific land area capabilities, surrounding competitive apartment complexes, area wide demographics, and the funding required for this project, we are confident The Oasis will provide benefits to our target customers and the city of San Marcos. With the location of The Oasis being right outside of the San Marcos city limits, not only will tenants and consumers have easy access to Austin and San Antonio but, the entire piece of land has countless growing opportunities being zoned mixed use, commercial, and multi-family. We strive to present The Oasis as a quiet, luxury, gated student living community. We have chosen the development of The Oasis to be sited at a convenient location giving way to unlimited growth potential from the continued stream of students moving to San Marcos for Texas State University, the 12 million shoppers visiting San Marcos for the Tanger Factory and San Marcos Prime Outlet Malls, and the immeasurably growing amount of commuting workers needing an ideal living spot. Supreme Management has put forth effort into ensuring the city of San Marcos will benefit from The Oasis from the jobs it will provide at the on-site retail shops, gym, and two mile distance from San Marcos business district and in aiding Texas State University with housing the continually growing amount of inbound students each year. Our property will be located in San Marcos, TX and this city has been named the nations fastest growing city for the year 2013 and 2014. According to an article in the Austin Business Journal, San Marcos is the fastest-growing city, by percentage growth, with a population of more than 50,000 in the entire country while Hays County is the fastest-growing county in the region. We believe we have an exceptional location because our property will be located at 2550 North Interstate 35 San Marcos, TX 78666 and is a seven minute drive to the Texas State campus and also a seven minute drive to downtown San Marcos. San Marcos is a city that has a superb future ahead of itself and below is a depiction of data from City-Data.com that goes into detail about who lives and works here: City-Data(SanMarcos)
- 2. The city of San Marcos as a whole is growing however, it doesnt take into account that San Marcos, TX houses one of the biggest universities in Texas, Texas State University. The focus for our development will be targeted as student housing but, it will be open to anyone that is applicable to live in our property. So we will have a niche market with business professionals that work in the Austin and San Antonio areas that want to get away from the hustle of a big city and make a little longer commute to their work destinations. According to Collegeportraits.org there were 36,739 students on campus for the fall 2014 semester at Texas State and only 21% live on campus. Therefore, we will be targeting more than 29 thousand students that live off campus. For the fall 2015 semester there have been 24,000 potential students accepted, about 12,000 have been confirmed, and 12,000 that need supplemental pieces of information for confirmation. If only one third of the admitted students came to Texas State there would still be a surplus of students. Therefore, as an apartment property primarily targeted as student living we would try and work out a contract with the university to relieve housing pressure from the university to compensate for the larger incoming class. In order to affectively reach our target market we understand that we need to take in to account some of the national factors that would impact the demand for our property. First, is the amount of people attending college nationwide is at an all time high which means the demand or student housing will be at an all time high. According to the National Center of Education Statistics, Enrollment in degree-granting institutions increased by 11 percent between 1991 and 2001. Between 2001 and 2011, enrollment increased 32 percent, from 15.9 million to 21.0 million. Second, the amount of college students living off campus is growing at a fast rate because students expect to experience the finer things in college which will also make the demand for our product grow. According to the New York Times, Room and City-Data (San Marcos)City-Data (San Marcos)
- 3. board costs have been soaring partly because students expect a rich experience. As James Kadamus and I point out in Climbing Walls and Climbing Tuitions, what early boomers consider luxuries on todays college campuses are viewed as necessities by their children and grandchildren. The rises of room and board costs are driving students to find housing off campus because it is cheaper and most often nicer. The last thing is taking a look at the trend that gas prices have taken. Since this is an off campus property students will have to commute to school by a vehicle or by campus busing which is already paid for in tuition and this could possibly negatively affect our demand. However, according to International Business Times, Gasoline is cheaper in the U.S. than it has been since 2010, with prices of less than $2 a gallon a reality in some areas of the country for the first time in years. San Marcos holds many service jobs however there is one corporation within a five minute drive of our location and that is McCoy Building Supply. Some of the more service- oriented businesses within a five-minute drive of our location would be the local food favorites such as Spud Ranch and Lolitas Caf辿. There are also national chains such as McDonalds, Wendys, Five Guys Burgers and Fries, Pizza Hut, along with many others. There are many rental properties that are comparable to what we are looking to build and we have researched this past years occupancy for each student housing complex. GasBuddy.com
- 4. After finding this information we felt confident that we could lease a large percentage of our space to residents because we would have many competitive advantages. We plan on utilizing our space to attract our target customers by providing all inclusive packages, top of the line amenities, and shopping centers within the property. After considerable research, Supreme Management, feels confident in proposing the development of the luxurious gated student apartment complex, The Oasis. The city of San Marcos will be benefited from our mixed use residential complex through aiding Texas State University on housing the immense volume of new students moving to San Marcos each year, the service employments provided from the on-site retail shops and gym, ability to provide a desired living spot for commuting workers, and setting a precedent towards the type of living in the northern area of San Marcos. The Oasis has competitive advantages over the other apartment complexes in the area that will attract our target customers including decreased commute time, bus services to Texas State University, easy access to Hwy 35 for other major cities such as Austin and San Antonio, and ability to provide tenants with an all-bills-inclusive, fully furnished apartment. Utilizing the great opportunity we have found in this shovel-ready 55-acre land lot will offer not only the cost savings at time zero towards our development costs and ending NPV but the impending benefits prove to be bountiful for the future tenants, employees, and citizens of San Marcos.
- 5. Appendix A Appendix B Appendix C Appendix D