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CONCLUSIONS AND RECOMMENDATIONS <br /> area. We expect the project to have strong initial market acceptance and excellent long-term <br /> performance;however,this will not be at the expense of existing affordable facilities in the <br /> PMA. <br /> Projected Absorption <br /> Based on a review of the development concept,an assessment of the Site and location,and <br /> lack of competitive product,we believe that the proposed project will be very successful and <br /> should experience a relatively fast absorption rate. <br /> Because Blackhawk Woods is a townhome concept with buildings ranging from five to eight <br /> units,the project has the potential to be phased as construction is completed. However,for <br /> purposes of our analysis we assume the construction of all units will be completed <br /> simultaneously providing economies of scale for construction costs. <br /> Other affordable cottage-style senior developments in the Twin Cities have absorbed very <br /> quickly. In fact,some of those projects were over 90%leased at the time of occupancy. Many <br /> of these developments were constructed in the early-to-mid 1990s. Based on the <br /> demographic trends,the current rental market situation,and the proposed development <br /> concept,we estimate that 84-units would be 40%pre-leased at'initial occupancy. We project <br /> that the remaining 50 units should lease at a rate of between four to six units per month to <br /> reach stabilized occupancy(95%)within approximately eight to twelve months. <br /> This projected absorption period assumes that a professional marketing campaign is <br /> undertaken and initial occupancy is between spring and summer. Should the project <br /> open in late fall or the winter months,the lease-up period would be extended. <br /> MAXFIELD RESEARCH INC. 57 <br />