[Maillist] "Peer" evaluation of Hale and Brown proposal

[Gayle M. Browne]

Neighbors,
There follows a report I sent to Bill Monroe based on gathering information 
on development.
Jim Browne

Dear Bill,
This is a report on the reasonableness of the proposal from Hale and Brown 
with respect to rules of thumb for profitability. This report is based on 
information from one of Austin's most prominient land developers who I know 
well and trust. The name of the source will be given verbally on request.
1.Rule of Thumb- A development, of this type needs to pay not more than 
about 20% of the expected gross revenue for the project for the land. If 
Hale and Brown have to pay $1,000,000 for the land (all included) then they 
will need to realize a gross revenue of $5,000,000 or so.
2.Comparable Projects- Cambridge Towers is the nearest comparable. The 
original apartments in Cambridge Towers range from about 800 sq. ft. to 
1200 sq. ft. In several cases some of the original smaller apartments have 
been combined into larger apartments. The units at Cambridge Towers, which 
are much older but have features such as a full time concierge, sell for up 
to $200/sq.ft.
3.Cambridge Towers has almost no students but lots of older folks and 
people with associations with the University.
4.Sale of 47 units averaging 1100 sq.ft. at 200 per sq.ft. would yield 
about $5,170,000 in line with general rules of thumb..
5.There is little market now for upscale condos. The market is in the price 
range from $150,000 to $250,000.
6.The idea of restrictive covenants was a good one An age minimum might be 
a reasonable covenant.
7.It was noted that the University and the Alumni Association have been 
promoting a project for an alumni and friends of the University project at 
Lakeway. He suggested that we suggest that Hale and Brown might want to 
contact UT on this topic. The site and the type of condos proposed would be 
attractive to that market.
8.My source did not know Hale or Brown but said he would ask around about 
them.
9.On the basis of the information I was able to give, it was concluded that 
this project was as appropriate to the neighborhood as we were likely to get.
On the basis of this and other information, Gayle and I support working 
with Hale and Brown.

Jim Browne