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Court Square Center Memphis, Tennessee. Project Background Project Structure Risks & The Back End Parting Words & A Few Tips. Map: Downtown Memphis. The Real Estate.

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Court Square Center Memphis, Tennessee

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Court square center memphis tennessee

Court Square CenterMemphis, Tennessee


Court square center 0bmemphis 2c tennessee

  • Project Background

  • Project Structure

  • Risks & The Back End

  • Parting Words & A Few Tips


Court square center 0bmemphis 2c tennessee

Map: DowntownMemphis


The real estate

The Real Estate

Building Type: Columbian Mutual Tower 21-story high-rise Court Annex 7-story mid-ride Lowenstein 5-story mid-rise

Project Size (NSF):

BuildingResidentialCommercial Columbian Mutual Tower 41,935 19,429 Court Annex 22,596 9,171 Lowenstein 34,985 8,993

Total 99,516 37,593

Residential Units: 77 Market Rate Rental Units; $1.12 nsf average in rent


The real estate1

The Real Estate

Commercial/Retail Space:

Approximately 40,000 square feet; $15.00 nsf average

Signed Leases:

The Plough Foundation – National Foundation Memphis Justice Center – Local Law Firm Ceriellos New York Deli – Gourmet Deli / Grocery Store

Signed Lease as % of Total Commercial Space: 45%

Parking: 110 Spaces

Project Estimated Cost: $40,600,000

Estimated Construction: March 15, 2006 – December 15, 2007


Court square center 0bmemphis 2c tennessee

Columbia Mutual Tower


Court square center 0bmemphis 2c tennessee

Court Annex


Court square center 0bmemphis 2c tennessee

Lowenstein Building


Project facts

Project Facts

  • Fully leveraged deal – All sources generating NMTCs including HTC equity (i.e., twinning)

  • $40,000,000 NMTC allocation from 2 CDEs

    • $26,000,000 allocation from ESIC

    • $14,000,000 allocation from NDC

  • 5 sources of funds including a permanent loan, Section 108 loan, BEDI grant, HTC equity and NMTC equity

  • Two investors/lenders providing loans and equity

  • Both commercial and residential space to be leased/rented with an ~35-65% income split, respectively


Court square center 0bmemphis 2c tennessee

Sources

A Loan (Permanent Loan) $11,800,000

B Loan (City 108 Loan) 8,500,000

C Loan (City BEDI) 2,000,000

HTC Equity 6,300,000

NMTC Equity 12,000,000

Total $40,600,000


Court square center 0bmemphis 2c tennessee

Uses

Site Acquisition$1,065,000

Construction Costs23,100,000

A & E Costs1,700,000

Financing Costs 3,000,000

Other Soft Costs 10,435,000

CDE Fees / Reserves 1,300,000

Total $40,600,000


Example of fully leveraged nmtc structure including twinning of historic tax credits

Loans

Equity

HTC Equity

Investment Partnership

Qualified Equity Investment

CDE

Qualified Low-Income Community Investment

(Loans or Equity)

Operating Partnership

(Property Owner)

Historic Real Estate

Example of Fully Leveraged NMTC Structure(Including Twinning of Historic Tax Credits)


Court square center 0bmemphis 2c tennessee

Court Square Center – Capital Flow of Funds

(Draft)

Investment Partnership

$40,400,000

$26,400,000 ESIC QEI | $14,000,000 NDC QEI

$27,000 Fees & Reserves

FNMA, 49.995%

USB, 49.995%

ESIC, 0.01%

$14,000,000 QEI

$26,400,000 QEI

$9,000,000 QEI

$5,000,000 QEI

ESIC CDE 2 (Loans)

$12,070,000

($11,800,000 Loan +

$270,000 CDE Fees)

ESIC Master CDE, .01%

FNMA, 49.995%

USB, 49.995%

NDC CDE 2

$5,000,000

(Transfer of funds to

NDC CDE 1)

ESIC CDE 1 (Equity)

$14,300,000

($14,000,000 Equity +

$300,000 CDE Fees)

ESIC Master CDE, .01%

FNMA, 49.995%

USB, 49.995%

NDC CDE 1

$14,000,000

($2,800,000 Equity +

$10,710,000 Loans +

$490,000 CDE Fees)

NDC Master CDE, .01%

FNMA, 49.995%

USB, 49.995%

B Loan

($8,500,000)

A Loan

($11,800,000)

Court Square Center LLC

Owner / QALICB

$39,310,000

ESIC CDE, 99.00%

NDC CDE, 0.99%

CS Associates, 0.01%

C Loan

($2,000,000)

D Loan

($210,000)

Equity

($14,000,000)

Equity

($2,800,000)

Draft as of February 1, 2006


Court square center 0bmemphis 2c tennessee

Risk

  • The complexity of the transaction adds risk:

    • A mixture of five sources of private and public funds;

    • Both HTC and NMTC programs have recapture rules;

    • NMTC projects by definition are in census tracts with at least 20% poverty;

    • Must maintain at least 20% of revenue from commercial activities.


The back end

The Back End

  • Exit Strategies

    • Refinance the project and continue as rental

    • Convert the residential units to condos and retire debt


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