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Montreal Real Estate Investment/Development Opportunity
Executive Summary
Description of Project
The Cutler Group has under contract an eight story 320,000 square foot concrete building located near downtown Montreal in a highly populated area.
We seek a financial partner to join us and Epic Quebec in the redevelopment of this building from commercial into residential condos, apartments with ground floor retail.
Objective
Our objective, as the managing partner, is to generate substantial profits from the sales of approximately 100 loft style condominiums on the upper three floors and stable annual cash flow from the lower 5 floors. Our rational for a condo sale – apartment rental mix use split, is to limit the number of condominiums available on the market for purposes generating stronger pricing power to the developer. The schedule of condominium sales and delivery is be completed by the summer of 2009. The apartment delivery will be set for delivery in two phases; summer 2009 and summer 2010.
Location
The development property is located next to a major grocer, a block away from a MacDonald’s & Tim Horton’s restaurants & 200 feet from the area’s major public transportation hub which includes a Metro (subway) station, stops for eight bus routes & a stop for commuter train.
Another important influence affecting the location is the construction of a new university campus nearby.
Current Conditions
The building is a free standing detached eight story reinforced concrete structure with one level of underground parking for 75 cars. It has unobstructed views in all direction from the 3rd floor and higher.
Currently the building is about 30% occupied by commercial tenants. Of the few remaining tenants, most leases expire before the fall of 2008. At present the top three floors are entirely vacant and ready for renovations.
Market Study
The average selling price estimate of $220 / square foot is 15% - 25% below the average for this type of condo in the Montreal. A nearby nondescript smaller project was able to sell out in 2006-07 its 4th & 5th floor condos (with limited views) at average near $220/ sf.
At $1.00/ - $1.10 square foot / month for the ground floor to 5th floor is also below the average rate charged for this type of loft style apartment.
Project Financial Summary
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Purchase Price & closing cost ($35/ sf)
Budgeted Renovation – Apartments & Retail: ($55/ sf)
Budgeted Renovation Condos: ($75 / sf)
Budgeted Cost
Project Cost
Less conversion grant
Total Project Cost
Gross Selling Price -Condos ($220 /sf)
Estimated Net Profits- Condos ($80/ sf)
Net Annual Cash Flow – Apartments – Retail
Apartment Retail Value @ 7% cap
Apartment Retail Net Profit on Sale
Total Estimated Profit Potential |
$12,000,000
$11,000,000
$ 9,000,000
$20,800,000
$32,000,000
$ -800,000
$31,200,000
$21,000,000
$ 7,800,000
$ 1,450,000
$20,700,000
$ 2,700,000
$10,500,000 |
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FOR MORE INFORMASTION ON THIS PROJECT OR THE CUTLER GROUP PLEASE CONTACT US OR VISIT WWW.CUTLER-GROUP.COM |
