SHANGRI-LA INDUSTRIES
City of Fremont
Request for Information (RFI) & Request for Proposal (RFP)
SUBMITTED BY
Shangri-La Industries, LLC
660 S. Figueroa Street
Suite 1888
Los Angeles, CA 90017
(213) 797-4240
CITY OF FREMONT
Exhibit A
“In a matter of months, not years,
Shangri-La and Step Up gave some
of the most vulnerable Californians
the dignity of a key, a lock, a door,
a place to call home. This is an
example of the kind of innovation we
need to take this crisis on. Only by
scaling bold solutions will we be able
to tackle the issue of homelessness
and housing in California. ”
GOVERNOR NEWSOM REGARDING
HOMEKEY SAN BERNARDINO
SUBMITTED BY
Shangri-La Industries, LLC
660 S Figueroa Street
Suite 1888
Los Angeles, CA 90017
(213) 797-4240
CONTENTS
Cover Letter ...............................................................................5 Exhibit A ......................................................................................7
1. Qualifications .............................................................................11 Applicant and Development Team Qualifications ...........13 Service Provider Experience and Track Record ..............17 Similar Affordable Rental Housing Experience ...............21 Affordable Housing for the Homeless Experience .......25
2. Proposed Properties ..............................................................33
SUBMITTED BY SHANGRI-LA INDUSTRIES
PAGE 4
SUBMITTED BY SHANGRI-LA INDUSTRIES
SUBMITTED BY
Shangri-La Industries, LLC
660 S Figueroa Street
Suite 1888
Los Angeles, CA 90017
(213) 797-4240
Thank you for providing Shangri-La Industries, LLC (SLI) the opportunity to submit our response for the City of Fremont’s RFI and RFP for developers/ owners interested in acquiring and operating existing hotels and motels or developing interim housing for the formerly homeless and working with the City to jointly submit an application for state project homekey funding. We are confident that with our trusted property manager/service provider, Step Up on Second Street, Inc. (Step Up), we are the best-matched team to collaborate with the City to deliver your goals.
We will be fully integrated into your program as a true partner with aligned objectives. When we say aligned objectives -- we mean it. When SLI was established in 2008, we set a precedent to continuously hold ourselves to a higher moral standard than the competition. When it comes to housing “atrisk” populations, we have built a reputation for ourselves that goes beyond traditional development; we are at the forefront of change.
When working with SLI you receive award-wining differentiators:
Holistic Teaming. A successful supportive housing facility is measured by the positive impacts on the occupants, not simply the financing, four walls, and a window. To complement our ability to quickly and creatively develop costconscious properties, we have formed a long-standing partnership with Step Up who delivers our property management and supportive services to help the at-risk recover, stabilize, and integrate into the community. Step up is a wellknown local provider with 1,000+ permanent supportive housing developments/ scattered sites with over a 97% retention rate for 1st-year tenants. This unique partnership ensures we share in and consider all aspects of what makes a development project successful.
Supportive Housing Experience. Since we were founded over a decade ago, we have been financing, developing, building, and renovating affordable housing structures. We strive to see cities, communities, and individuals flourish.
This approach is set to yield over 5,000 new units to house at-risk individuals, the chronically homeless, and low-income veterans in the region over the next few years. Further, our team is fortunate to have hotel/motel conversion expertise, including those within the Homekey program. SLI and Step Up have partnered to convert the Good Nite Inn Hotel in Salinas and the All Star Lodge Hotel in San Bernardino into permanent supportive housing for those hardest to house and most in need of wrap-around services. Notably, these projects are in the top 10% most cost-effective Homekey projects in California, they did not require capital for closing from either County, and they were completed in less than 12 months from acquisition. Our experience executing Homekey transactions provides us with structural and legal templates for other municipalities to execute quickly.
Employing Various Funding Sources. As an experienced developer within the public and private sectors, we understand the complexities of financing affordable housing. Experience and strong financial backing, provide a platform for leveraging private financing, corporate guarantees, and private capital to close escrow within 45 days. In short, SLI places individuals in units faster than the traditional affordable housing financing methods of tax-exempt bonds and Low-Income Housing Tax Credits. SLI provides all financing guarantees required for lending partners and capital comes from SLI, not 3rd party partners. By design, we carry the most significant risk of execution on the project.
“ Amidst a
pandemic,
Shangri-La
mobilized and
made progress on
these Homekey
projects to bring
units online
quickly and
efficiently. This
partnership is a
true commitment
to tackle
systemic racism,
homelessness
and address social
inequities such as
lack of access to
housing systems.
We must replicate
this kind of work. ”
MONTERREY COUNTY
SUPERVISOR LUIS ALEJO
SUBMITTED BY SHANGRI-LA INDUSTRIES
Readiness and Capacity. Our team is appropriately staffed and fully prepared to act immediately. Our flexible financing, and our ability to maintain ownership of the project, and the subsidiaries that provide the services ensures financing, consistency, and speed - it provides security in knowing that success is guaranteed.
Compliance and Good Standing. SLI’s dedicated compliance department assures requirements are met. In addition to the immense skill of our highly trained compliance team, we have invested in industry-leading tools, including LCP Tracker, to collect, verify, and certify payrolls and labor compliance documents. This technology simplifies our process and promotes transparency, accuracy, and provides full-featured data collection and accessibility.
Unique Advantages. Beyond our strong financial capacity, SLI acts as the developer, capital partner, designer, and general contractor. As such, we provide advantages that other developers don’t. This includes speed to market, transparency, streamlined communication, and access to our prequalified trade partners specializing in this specific sector and the reduced cost they offer because of our long-standing relationships and the low-risk environment we provide.
When like-minded and reputable companies come together with a shared vision, great things happen. By partnering we illustrate our commitment to tackling homelessness and social inequities through the immediate delivery of new housing opportunities.
Sincerely,
Andy Meyers
Chief Executive Officer
Shangri-La Industries, LLC
(310) 701-7574
[email protected]
SUBMITTED BY
Shangri-La Industries, LLC
660 S Figueroa Street
Suite 1888
Los Angeles, CA 90017
(213) 797-4240
SUBMITTED BY SHANGRI-LA INDUSTRIES
PAGE 7
EXHIBIT A: SUBMITTAL ADDENDUM AND CERTIFICATION - SLI
SUBMITTED BY SHANGRI-LA INDUSTRIES
PAGE 8
SUBMITTED BY SHANGRI-LA INDUSTRIES
PAGE 9
EXHIBIT A: SUBMITTAL ADDENDUM AND CERTIFICATION - STEP UP
SUBMITTED BY SHANGRI-LA INDUSTRIES
PAGE 10
1. QUALIFICATIONS
1. QUALIFICATIONS
PICTURED: THE KAUFMANN APARTMENTS AT STEP UP ON COLORADO • SANTA MONICA, CA PICTURED: THE KAUFMANN APARTMENTS AT STEP UP ON COLORADO • SANTA MONICA, CA I. TECHNICAL PROPOSAL
APPLICANT AND DEVELOPMENT
TEAM QUALIFICATIONS
SUBMITTED BY SHANGRI-LA INDUSTRIES
PAGE 14
SUBMITTED BY SHANGRI-LA INDUSTRIES
PAGE 15
AT A GLANCE
COMPANY TYPE
Limited Liability Company
YEARS IN BUSINESS
14 Y ears
HEADQUARTERS
660 S Figueroa Street, Suite 1888
Los Angeles, CA 90017
NUMBER OF EMPLOYEES
150
SERVICES
» SLI: Management/Ownership
Interest In SLD, SLC, and Subtrades;
Financial Support; and Investments
» SLD: Site Acquisition, Entitlements,
Financing/Funding and Financial
Modeling, Architectural Design,
Construction Oversight,
Compliance, and Asset
Management
» SLC: Preconstruction, Construction,
Design-Build, Virtual Building, and
Sustainability/Wellness Consulting
EXPERIENCE
» Developer of 12 PSH Properties
» 1,000+ PSH Units
» 2 Homekey Projects
POINT OF CONTACT
Cody Holmes
Chief Financial Officer
660 S Figueroa Street, Suite 1888
Los Angeles, CA 90017
T. (818) 421-4376
E. [email protected]
SHANGRI-LA INDUSTRIES, LLC
APPLICANT/DEVELOPER
Shangri-La Industries (SLI) was formed 14 years ago by principals with considerable experience in the ownership and operation of real estate to address the typical shortcomings experienced in the industry. Today it is a privately-held, vertically integrated group of firms focused on excellence in multi-family housing and hospitality facilities. As the parent corporation of two leading businesses in the California real estate industry, Shangri-La Development, LLC (SLD) and Shangri-La Construction, LP (SLC), SLI delivers across a spectrum of real estate specialties efficiently and cost-effectively.
SHANGRI-LA DEVELOPMENT
SLD is SLI’s real estate and financing arm specializing in the development and ownership of multi-family housing, focusing on permanent supportive housing (PSH) for the most at-risk populations. SLD’s services include site acquisition, entitlements, financing/funding and financial modeling, architectural design, construction oversight, compliance, and asset management.
SHANGRI-LA CONSTRUCTION
SLC is a commercial general contractor servicing SLI/SLD and other developers alike. SLC offers a broad spectrum of capabilities ranging from tenant improvements and renovations to ground-up construction across various market sectors. SLC’s services include preconstruction, construction, design- build, virtual building, and sustainability/wellness consulting.
Our vertically integrated organization ensures we oversee and streamline all facets of our projects from start to finish. SLI is a known financial powerhouse with a bonding capacity of over $450 million and more than $300 million in private capital committed to sheltering, rehabilitating, and improving the lives of the underserved. SLD is skilled at securing challenging entitlements and permit submittals and engaging local municipalities to ensure favorable outcomes within the community. SLC has built it all – ground-up high-rises, complex historic renovations, and fast-track tenant in-place renovations.
Coupled with in-house designers, compliance teams, and select sub-trades, the SLI umbrella of companies can execute with assurance across the board.
Under this model, the SLI team has provided 1000+ PSH units, including two developments under the Homekey Program - a testament to our capacity to expand affordable housing opportunities and improving the quality of life for underserved communities. Please see the following two sections for SLI’s list of applicable projects.
NORMANDIE SUPPORTIVE HOUSING • LOS ANGELES, CA
SUBMITTED BY SHANGRI-LA INDUSTRIES
PAGE 16
SERVICE PROVIDER EXPERIENCE
AND TRACK RECORD
SUBMITTED BY SHANGRI-LA INDUSTRIES
PAGE 18
SUBMITTED BY SHANGRI-LA INDUSTRIES
PAGE 19
STEP UP ON COLORADO • SANTA MONICA, CA
AT A GLANCE
COMPANY TYPE
Nonprofit Public Benefit Corporation
YEARS IN BUSINESS
35 Y ears
HEADQUARTERS
1328 Second Street
Santa Monica, CA 90401
NUMBER OF EMPLOYEES
348
SERVICES
» Development/Ownership
» Housing Placement
» Property Management
» Individualized Supportive Services
» Workforce Development
» Programs for Transitional-Age Y outh
EXPERIENCE
» Developer of 20 PSH Properties
» Property Manager of 16 PSH
Properties
» Service Provider for 21 PSH
Properties
POINT OF CONTACT
Aaron Criswell
Chief Housing Development Officer
1328 Second Street
Santa Monica, CA 90401
T. (310) 394-6889
E. [email protected]
STEP UP ON SECOND STREET, INC
PROPERTY MANAGER/SERVICE PROVIDER
Step Up was first established 35 years ago as a drop-in center offering a safe space for individuals who needed a compassionate environment with recovery- oriented activities such as art therapy, employment training, coping skills, and service coordination. As Step Up’s program grew, its staff observed that many Step Up members were also unhoused, complicating and exacerbating their existing needs. To address a shortage of affordable housing, in 1994, Step Up, along with a development partner, built its first units of permanent supportive housing (PSH) at Step Up on Second - some of the original tenants are still living in their units today.
Today, Step Up provides permanent supportive housing opportunities, workforce development, and individualized supportive services for people experiencing serious mental health issues, the chronically homeless, transition-age youth, and Veterans under the Housing First model using local Coordinated Entry Systems. These functional areas are overseen by Senior Executives, regional Vice Presidents, and corresponding Directors, Program Managers, and direct service staff. Nation-wide, Step Up has 348 employees with physical offices in Los Angeles and San Bernardino Counties and Atlanta, Georgia, servicing California and the southeast region of the United States.
To date, Step Up has had a hand in developing 20 PSH properties - many of which they manage and provide services for, and houses hundreds of individuals in scattered sites where landlords accept housing vouchers. That said, Step Up’s quantifiable outcomes are focused on the goal of housing retention. Individuals in Step Up housing and support programs remain stably housed at a 97% retention rate after 12 months.
Recently, SLI and Step Up partnered to convert the Good Nite Inn Hotel in Salinas and the All Star Lodge Hotel in San Bernardino into PSH under the Homekey Program. Notably, these projects are in the top 10% most cost- effective Homekey projects in California, did not require capital for closing, and were completed in less than 12 months from acquisition.
Please see the following two sections for Step Up’s list of applicable projects.
SUBMITTED BY SHANGRI-LA INDUSTRIES
PAGE 20
SIMILAR AFFORDABLE RENTAL
HOUSING EXPERIENCE
SUBMITTED BY SHANGRI-LA INDUSTRIES
PAGE 22
SUBMITTED BY SHANGRI-LA INDUSTRIES
PAGE 23
EXPERIENCE IN COMPLETING AFFORDABLE RENTAL HOUSING PROJECTS OF SIMILAR SIZE AND COMPLEXITY AS
THE PROPOSED PROJECT
SLI/SLC/Step Up Shared Experience
PROJECT # OF UNITS
TYPE OF
UNITS PROJECT TYPE LAST 10 YEARS FINANCING SOURCE DEVELOPER
PROPERTY
MANAGEMENT SERVICE PROVIDER
GENERAL
CONTRACTOR
ON TIME/
BUDGET
Step Up in San Bernardino (Homekey) •
San Bernardino, CA 76 PSH Motel Conversion Partially Occupied Private Capital SLI/Step Up Step Up Step Up SLC Ye s Step Up in Salinas (Homekey) • Salinas, CA 103 PSH Motel Conversion Partially Occupied Private Capital SLI/Step Up Step Up Step Up SLC Ye s Step Up on Second • Santa Monica, CA 36 PSH Rehabilitation Complete LIHTC SLI/Step Up Step Up Step Up SLC Ye s Step Up on Vine • Hollywood, CA 34 PSH Motel Conversion Complete LIHTC SLI/Step Up N/A Step Up SLC Ye s Step Up on Colorado • Santa Monica, CA 32 PSH Ground-Up Complete LIHTC SLI/Step Up N/A Step Up SLC Ye s Building 209 • Los Angeles, CA 55 PSH Rehabilitation Complete LIHTC SLI/Step Up Step Up Step Up SLC Ye s Step Up on Western • Los Angeles, CA 33 PSH Motel Conversion In-Progress LIHTC SLI/Step Up Step Up Step Up SLC Ye s Step Up on West Third • Los Angeles, CA 137 PSH Motel Conversion In-Progress LIHTC SLI/Step Up Step Up Step Up N/A Ye s Step Up on Broadway • Los Angeles, CA 35 PSH Motel Conversion In-Progress LIHTC SLI/Step Up Step Up Step Up N/A Ye s Building 205 • Los Angeles, CA 68 PSH Rehabilitation In-Progress LIHTC SLI/Step Up Step Up Step Up SLC Ye s Building 208 • Los Angeles, CA 54 PSH Rehabilitation In-Progress LIHTC SLI/Step Up Step Up Step Up SLC Ye s Step Up on Normandie • Los Angeles, CA 74 PSH Ground-Up In-Progress Private Capital SLI/Step Up Step Up Step Up SLC Ye s Step Up on Fifth • Santa Monica, CA 46 PSH Ground-Up Complete LIHTC Step Up N/A Step Up N/A Ye s Warley Park • Sandord, FL 81 PSH Ground-Up Complete LIHTC Step Up (Co-Developer) N/A Step Up N/A Ye s STEP UP ON WESTERN STEP UP ON VINE STEP UP ON WEST THIRD STEP UP ON WESTERN BUILDING 209
SUBMITTED BY SHANGRI-LA INDUSTRIES
PAGE 24
AFFORDABLE HOUSING FOR THE
HOMELESS EXPERIENCE
SUBMITTED BY SHANGRI-LA INDUSTRIES
PAGE 26
SUBMITTED BY SHANGRI-LA INDUSTRIES
PAGE 27
APPLICANT’S TRACK RECORD OF SUCCESSFULLY DEVELOPING AFFORDABLE HOUSING FOR THE HOMELESS
POPULATION ON TIME AND WITHIN BUDGET
SLI/SLC/Step Up Shared Experience SLI/SLC/Step Up Homekey Experience Featured on Following Pages PROJECT # OF UNITS
TYPE OF
UNITS PROJECT TYPE LAST 10 YEARS FINANCING SOURCE DEVELOPER
PROPERTY
MANAGEMENT SERVICE PROVIDER
GENERAL
CONTRACTOR
ON TIME/
BUDGET
Step Up in San Bernardino (Homekey) •
San Bernardino, CA 76 PSH Motel Conversion Partially Occupied Private Capital SLI/Step Up Step Up Step Up SLC Ye s Step Up in Salinas (Homekey) • Salinas, CA 103 PSH Motel Conversion Partially Occupied Private Capital SLI/Step Up Step Up Step Up SLC Ye s Step Up on Second • Santa Monica, CA 36 PSH Rehabilitation Complete LIHTC SLI/Step Up Step Up Step Up SLC Ye s Step Up on Vine • Hollywood, CA 34 PSH Motel Conversion Complete LIHTC SLI/Step Up N/A Step Up SLC Ye s Step Up on Colorado • Santa Monica, CA 32 PSH Ground-Up Complete LIHTC SLI/Step Up N/A Step Up SLC Ye s Building 209 • Los Angeles, CA 55 PSH Rehabilitation Complete LIHTC SLI/Step Up Step Up Step Up SLC Ye s Step Up on Western • Los Angeles, CA 33 PSH Motel Conversion In-Progress LIHTC SLI/Step Up Step Up Step Up SLC Ye s Step Up on West Third • Los Angeles, CA 137 PSH Motel Conversion In-Progress LIHTC SLI/Step Up Step Up Step Up N/A Ye s Step Up on Broadway • Los Angeles, CA 35 PSH Motel Conversion In-Progress LIHTC SLI/Step Up Step Up Step Up N/A Ye s Building 205 • Los Angeles, CA 68 PSH Rehabilitation In-Progress LIHTC SLI/Step Up Step Up Step Up SLC Ye s Building 208 • Los Angeles, CA 54 PSH Rehabilitation In-Progress LIHTC SLI/Step Up Step Up Step Up SLC Ye s Step Up on Normandie • Los Angeles, CA 74 PSH Ground-Up In-Progress Private Capital SLI/Step Up Step Up Step Up SLC Ye s Step Up on Fifth • Santa Monica, CA 46 PSH Ground-Up Complete LIHTC Step Up N/A Step Up N/A Ye s Daniel’s Village • Santa Monica, CA 8 PSH Motel Conversion Complete Private Capital Step Up Step Up Step Up N/A Ye s The Tammy • Los Angeles, CA 10 PSH Rehabilitation Complete Private Capital Step Up Step Up Step Up N/A Ye s Michael’s Village • Santa Monica, CA 32 PSH Motel Conversion Complete Private Capital Step Up Step Up Step Up N/A Ye s Step Up on 26th • Santa Monica, CA 12 PSH Rehabilitation Complete Private Capital Step Up Step Up Step Up SLC Ye s Golden Apartments • San Bernardino, CA 38 PSH Motel Conversion Complete LIHTC N/A Step Up N/A N/A Ye s Warley Park • Sandord, FL 81 PSH Ground-Up Complete LIHTC Step Up (Co-Developer) N/A Step Up N/A Ye s Heroes Landing • Santa Ana, CA 74 PSH Ground-Up Complete LIHTC Step Up (Co-Developer) N/A Step Up N/A Ye s Desert Haven • Victorville, CA 32 PSH Motel Conversion In-Progress LIHTC N/A Step Up N/A N/A Ye s Plaza Ortiz • El Monte, CA 28 PSH Ground-Up In-Progress LIHTC Step Up (Co-Developer) N/A Step Up N/A Ye s Jamboree San Ysidro PSH • San Diego, CA 65 PSH Ground-Up In-Progress LIHTC N/A N/A Step Up N/A Ye s
SUBMITTED BY SHANGRI-LA INDUSTRIES
PAGE 28
SUBMITTED BY SHANGRI-LA INDUSTRIES
PAGE 29
545 WORK ST, SALINAS, CA 93901
STEP UP IN SALINAS (HOMEKEY)
TYPE UNITS PSH UNITS
Conversion/
Rehabilitation
103 101
DESCRIPTION
As Co-Developer, alongside Step Up, SLI’s development and general contracting team converted and rehabilitated the former Good Nite Inn into permanent supportive housing for the chronically ill homeless. The hotel was purchased with financing from SLI and was made possible in part with a grant from the state’s Project Homekey program. It is in the top 10% of most cost effective Homekey projects throughout California. Step Up provides property management and support services for the tenants.
The development spans 48,000 square feet throughout three levels. It includes 101, 250-square-foot efficiency-style units including 11 ADA units on the first floor - all dedicated to individuals earning 30% or less of average median income.
It includes two manager units. The parking area includes 111 parking spaces of which 5 are ADA, 90 standard, and 16 are truck. The development includes structural upgrades, ADA compliance, fire/life/safety upgrades, removal of the pool, sitework, securing the site, paint, and improvements to the units including new kitchenettes and flooring. The project was selected as the Public-Private Partnership of the Y ear by the Monterey Bay Economic Partnership.
TARGET POPULATION
Chronic Homeless and Person(s) impacted by or at risk of COVID-19
ROLE IN THE PROJECT
Developer, General Contractor, Property Manager, Service Provide
FINANCING SOURCE
Private Capital
TEAM MEMBERS:
Developer
Shangri-La Industries/Step
Up
Architect
Leeger Architecture
Contractor
Shangri-La Construction
Property Manager
Step Up
Service Provider
Step Up
TOTAL DEVELOPMENT
COST AND COST PER
UNIT:
Total Cost
$19,750,752
Cost Per Unit
$191,755
LENGTH OF TIME
TO COMPLETE AND
COMPLETION DATE:
Length of Time to
Complete
Anticipated 12 Months
Completion Date
In Progress (Partially
Occupiedas of 12/2020)
DAVIS BACON/
PREVAILING WAGE: Ye s
SUBMITTED BY SHANGRI-LA INDUSTRIES
PAGE 30
450 N G ST, SAN BERNARDINO, CA 92410
STEP UP IN SAN BERNARDINO
(HOMEKEY)
TYPE UNITS PSH UNITS
Conversion/
Rehabilitation
76 75
DESCRIPTION
As Co-Developer, alongside Step Up, SLI’s development and general contracting team converted and rehabilitated the former All Star Lodgento permanent supportive housing for the chronically ill homeless. The hotel was purchased with financing from SLI and was made possible in part with a grant from the state’s Project Homekey program. It is in the top 10% of most cost effective Homekey projects throughout California. Step Up provides property management and support services for the tenants.
The development spans 35,820 square feet throughout three levels. It includes 75, 250-square-foot efficiency-style units and one manager unit. Eight of the units are for mobility impaired tenants and three are for aural or visually impaired occupants. One manager unit is on site. All units are dedicated to individuals earning 30% or less of average median income. The development includes structural upgrades, ADA compliance, fire/life/safety upgrades, removal of the pool, sitework, securing the site, paint, and improvements to the units including new kitchenettes and flooring.
TARGET POPULATION
Chronic Homeless and Person(s) impacted by or at risk of COVID-19
ROLE IN THE PROJECT
Developer, General Contractor, Property Manager, Service Provide
FINANCING SOURCE
Private Capital
TEAM MEMBERS:
Developer
Shangri-La Industries/Step
Up
Architect
Leeger Architecture
Contractor
Shangri-La Construction
Property Manager
Step Up
Service Provider
Step Up
TOTAL DEVELOPMENT
COST AND COST PER
UNIT:
Total Cost
$14,407,089
Cost Per Unit
$189,566
LENGTH OF TIME
TO COMPLETE AND
COMPLETION DATE:
Length of Time to
Complete
Anticipated 12 Months
Completion Date
In Progress (Partially
Occupied as of 12/2020)
DAVIS BACON/
PREVAILING WAGE: No
SUBMITTED BY SHANGRI-LA INDUSTRIES
PAGE 31
SLI/STEP UP CLIENT REFERENCES
STEP UP IN SAN
BERNARDINO
Human Services – Office of
Homeless Services
TOM HERNANDEZ
Chief of Homeless Services
215 N. D Street, Suite 301
San Bernardino, CA 92415-0044
T: (909) 501-0611
F: (909) 501-0622
E: [email protected]
STEP UP IN SALINAS
Community Development
Department, City of Salinas
MEGAN HUNTER
Director
65 W. Alisal Street, 2nd Floor
Salinas, CA 93901-2639
T: (831) 758-7387
F: (831) 775-4258
E: [email protected]
STEP UP ON WESTERN,
BROADWAY, & WEST
THIRD
Friendship for Affordable Housing
ARI MAJER
Development Manager
5967 West 3rd Street, Suite 102
Los Angeles, CA 90036
T: (323) 839-9135
E: [email protected]
SUBMITTED BY SHANGRI-LA INDUSTRIES
PAGE 32
2. PROPOSED PROPERTIES
2. PROPOSED PROPERTIES
PICTURED: BUILDING 209 WEST LA VA CAMPUS • LOS ANGELES, CA PICTURED: BUILDING 209 WEST LA VA CAMPUS • LOS ANGELES, CA
2. PROPOSED PROPERTIES
SUBMITTED BY SHANGRI-LA INDUSTRIES
PAGE 35
POTENTIAL HOTEL/MOTEL CONVERSION
HAMPTON INN - FREMONT LOCATION
Address:
46500 Landing Pkwy.
Fremont, CA 94538
Cross Street: W. Warren
Ave
Intersection: Landing
Pkwy./ W. Warren Ave
ACQUISITION
Date of Availability:
Currently Available
Proposed Sale Price:
$30,000,000
Status: Available Off-
Market
Current Preliminary
Title Report: Will be
ordered upon city’s
approval of property
Current Appraisal: Will
be ordered upon opening
escrow
BUILDING OWNER
Building or Site
Owner Name: Hamcor
Investments, LLC
Owner’s
Acknowledgment of
Potential Offering:
Owner acknowledges/
provided information
# Years Under the
Current Ownership: 21
ADA
Status of ADA
Compliance Including
CASP Report Where
Available for Existing
Hotels/Motels: ADA
Compliant
BUILDING DESCRIPTION
Three-story, double loaded interior corridor, sprinklered, elevator, pool, and gym.
STATISTICS
Size (SF): 40,625
Site Size: 2.5 Acres
Exclusive Parking Spaces: 118
Number of Rooms: 100
Type of Rooms: Double Queen,
King, and Suites
Availability of Kitchenettes: None/
Rooms are Large Enough to Add
Capacity Under Code: 100
Building Age: 1999/22 Y ears
Construction Type/Class: Type V
Current Zoning: I-T
QUALITY OF BUILDING DESIGN, INCLUDING ITEMS
SUCH AS AESTHETICS, ARCHITECTURE, ENERGY
CONSERVATION AND OTHER CONSIDERATIONS
Good quality.
EXISTING OR PLANNED SECURITY SYSTEM
Existing building has controlled access and security cameras. The planned security will consist of controlled access, gating the entire property and adding more cameras, throughout.
IS THE LOCATION PART OF THE CITY’S POLICE
DEPARTMENT’S CURRENT PATROL ROUTE?
Y es.
SUBMITTED BY SHANGRI-LA INDUSTRIES
PAGE 36
Shangri-La Industries, LLC
Affordable Housing Bridge to Tax Credit Worksheet
DESCRIPTION WATERFALL
INVESTMENT DESCRIPTION Shangri-La Industries, LLC
Name Hampton Inn County 0
Address 46500 Landing Pkwy State CA
City Fremont Zip Code 94538
FAR 4.00 Units 100 units
INVESTMENT CASH FLOWS
USES START END METHOD /Rentable SF /UNIT AMOUNT
ACQUISITION COST
Purchase Price Month 0 Month 0 Straight-Line 948.32 300,000 30,000,000 Total Acquisition Costs Month 0 Month 0 948.32 300,000 30,000,000 Hard Costs
Trade Costs Month 3 Month 12 Straight-Line 143.09 45,267 4,526,700 Total Hard Costs Month 3 Month 12 143.09 45,267 4,526,700 Soft Costs
Architecture & Engineering Month 0 Month 6 Straight-Line 4.17 1,321 132,058 Property Tax/Insurance Month 3 Month 12 Straight-Line 18.78 5,940 594,000 Permitting Month 3 Month 12 Straight-Line 7.77 2,458 245,800 Security Month 3 Month 12 Straight-Line 5.88 1,859 185,928 Utilities Month 3 Month 12 Straight-Line 7.36 2,328 232,800 Misc Month 3 Month 12 Straight-Line 31.61 10,000 1,000,000 Closing Cost Month 0 Month 6 Straight-Line 18.97 6,000 600,000 Developer Overhead Month 0 Month 12 Straight-Line 31.61 10,000 1,000,000 GP Fee 0.0% Month 3 Month 6 Straight-Line - - - Total Soft Costs Month 0 Month 12 126.14 39,906 3,990,586 Total Project Cost (Without Financing) Month 0 Month 12 1,217.55 385,173 38,517,286 Acquisition Points 1.00% Month 0 Month 0 Straight-Line 6.67 2,111 211,125 Construction Interest Month 1 Month 18 58.06 18,367 1,836,676 Total Financing Costs Month 0 Month 18 64.73 20,478 2,047,801 Total Project Cost (With Financing) Month 0 Month 12 1,282.29 405,651 40,565,087
SOURCES AND USES
USES /UNIT /UNIT AMOUNT
Acquisition Cost 948.32 300,000 30,000,000 Hard Costs 143.09 45,267 4,526,700
Soft Costs 126.14 39,906 3,990,586
Financing Cost 64.73 20,478 2,047,801 Total Uses 1,282.29 405,651 40,565,087
CASH FLOW OF SOURCES
EQUITY Funding Order Share of Equity /UNIT /UNIT AMOUNT GP Equity 4 FALSE 5.2% 28.60 9,048 904,800 Homekey Grant 1 94.8% 521.57 165,000 16,500,000 Total Equity 100.0% 550.18 174,048 17,404,800 DEBT Funding Order LT Purch. Price LT Cons. Cost LTC /UNIT /UNIT AMOUNT Acquisition Loan 2 54.8% 0.0% 40.5% 519.80 164,439 16,443,905 Construction Loan 3 0.0% 54.8% 11.5% 147.58 46,686 4,668,581 Interest Reserve 0.0% 0.0% 0.0% 64.73 20,478 2,047,801 Total Debt 54.8% 54.81% 57.1% 732.11 231,603 23,160,287 Total Sources 1,282.29 405,651 40,565,087
FINANCING ASSUMPTIONS
INITIAL FINANCING
Loan Terms Interest Reserve Funded Upfront Term IO Amort Rate Rate Type Acquisition Loan 18 Months 18 Months 360 Months 6.50% Fixed Rate Construction Loan 18 Months 18 Months 360 Months 6.50% Fixed Rate Loan Cash Flows Funding Amt Payoff Amt Funding Payoff
Acquisition Loan 16,443,905 16,443,905 Month 0 Month 18 Construction Loan 4,668,581 4,668,581 Month 0 Month 18 Interest Reserve 2,047,801 2,047,801 Month 0 Month 18 Total Initial Financing 23,160,287 23,160,287
INVESTMENT UNDERWRITING HAMPTON INN3.99% Levered IRR 1.44X Levered EMX
OPERATING CF REVERSION CFINVESTMENT CF PROPERTY RETURNS Yes No
SUBMITTED BY SHANGRI-LA INDUSTRIES
PAGE 37
Bridge To Tax Credit Underwriting
Filename: Hampton Inn - Fremont.xlsm
Worksheet: 6. Proforma
Shangri-La Industries, LLC
Affordable Housing Bridge to Tax Credit Worksheet
20-Year Proforma
Property: Hampton Inn 100 Total units, including 1 non-revenue unit(s) Operating Cash Flow Projection Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Cash Flow Projection
Market Rents 3.00% 0 0 0 0 0 0 0 0 0 0 0 0
Other AMI-Based Rents 3.00% 1,913,809 1,971,223 2,030,360 2,091,270 2,154,008 2,218,629 2,285,188 2,353,743 2,424,355 2,497,086 2,571,999 2,649,159 Total Gross Potential Rent (Proposed Unit Mix/Rents) 1,913,809 1,971,223 2,030,360 2,091,270 2,154,008 2,218,629 2,285,188 2,353,743 2,424,355 2,497,086 2,571,999 2,649,159 Allowance for Multifamily Rent Loss 5.00% (95,690) (98,561) (101,518) (104,564) (107,700) (110,931) (114,259) (117,687) (121,218) (124,854) (128,600) (132,458) Allowance for Multifamily Bad Debt 0.00% 0 0 0 0 0 0 0 0 0 0 0 0 Other Income 3.00% 36,000 37,080 38,192 39,338 40,518 41,734 42,986 44,275 45,604 46,972 48,381 49,832 Effective Gross Income $1,854,119 $1,909,742 $1,967,034 $2,026,044 $2,086,826 $2,149,432 $2,213,915 $2,280,331 $2,348,741 $2,419,204 $2,491,780 $2,566,533 Operating Expenses 3.00% (645,600) (664,968) (684,917) (705,465) (726,628) (748,427) (770,880) (794,007) (817,827) (842,362) (867,632) (893,661) Proposed Reserve Deposit $25,000 (25,750) (26,523) (27,318) (28,138) (28,982) (29,851) (30,747) (31,669) (32,619) (33,598) (34,606) (35,644) Net Operating Income $25,000 $1,182,769 $1,218,252 $1,254,799 $1,292,442 $1,331,216 $1,371,153 $1,412,288 $1,454,656 $1,498,295 $1,543,244 $1,589,542 $1,637,228 Total Mortgages P&I (1,008,500) 1,008,500 1,008,500 1,008,500 1,008,500 1,008,500 1,008,500 1,008,500 1,008,500 1,008,500 1,008,500 1,008,500 1,008,500 Operating Cash Flow $174,269 $209,752 $246,299 $283,942 $322,716 $362,653 $403,788 $446,156 $489,795 $534,744 $581,042 $628,728 Debt Service Coverage 1.17 1.21 1.24 1.28 1.32 1.36 1.40 1.44 1.49 1.53 1.58 1.62
1.17 minimum DSCR yrs 1-20
Operating Expense Cushion 27.0% 31.5% 36.0% 40.2% 44.4% 48.5% 52.4% 56.2% 59.9% 63.5% 67.0% 70.4%
27.0% minimum Cushion yrs 1-20
Cash Distribution Projection
Operating Cash Flow $174,269 $209,752 $246,299 $283,942 $322,716 $362,653 $403,788 $446,156 $489,795 $534,744 $581,042 $628,728 $0 Priority Cash Flow Dollars $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
0.0% Priority Cash Flow (Percentage) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Projected Distributable $174,269 $209,752 $246,299 $283,942 $322,716 $362,653 $403,788 $446,156 $489,795 $534,744 $581,042 $628,728
0.0% Tax Credit Equity $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 100.0% GP $174,269 $209,752 $246,299 $283,942 $322,716 $362,653 $403,788 $446,156 $489,795 $534,744 $581,042 $628,728 Bold, Green Highlight Cells Denote USER INPUT
Bold, Yellow Highlight Cells Denote USER INPUT OVERRIDES White Cells Denote CALCULATED RESULTS
Assumptions /
Trends
SUBMITTED BY SHANGRI-LA INDUSTRIES
PAGE 38
Bridge To Tax Credit Underwriting
Filename: Hampton Inn - Fremont.xlsm
Worksheet: 6. Proforma
Shangri-La Industries, LLC
Affordable Housing Bridge to Tax Credit Worksheet
20-Year Proforma
Property: Hampton Inn 100
Operating Cash Flow Projection
Cash Flow Projection
Market Rents 3.00%
Other AMI-Based Rents 3.00%
Total Gross Potential Rent (Proposed Unit Mix/Rents)
Allowance for Multifamily Rent Loss 5.00%
Allowance for Multifamily Bad Debt 0.00%
Other Income 3.00%
Effective Gross Income
Operating Expenses 3.00%
Proposed Reserve Deposit $25,000
Net Operating Income $25,000
Total Mortgages P&I (1,008,500)
Operating Cash Flow
Debt Service Coverage
1.17 minimum DSCR yrs 1-20
Operating Expense Cushion
27.0% minimum Cushion yrs 1-20
Cash Distribution Projection
Operating Cash Flow
$0 Priority Cash Flow Dollars
0.0% Priority Cash Flow (Percentage)
Projected Distributable
0.0% Tax Credit Equity
100.0% GP
Assumptions /
Trends
Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 2032 2033 2034 2035 2036 2037 2038 2039
0 0 0 0 0 0 0 0
2,728,633 2,810,492 2,894,807 2,981,651 3,071,101 3,163,234 3,258,131 3,355,875 2,728,633 2,810,492 2,894,807 2,981,651 3,071,101 3,163,234 3,258,131 3,355,875 (136,432) (140,525) (144,740) (149,083) (153,555) (158,162) (162,907) (167,794) 0 0 0 0 0 0 0 0
51,327 52,867 54,453 56,087 57,769 59,503 61,288 63,126 $2,643,528 $2,722,834 $2,804,520 $2,888,655 $2,975,315 $3,064,575 $3,156,512 $3,251,207 (920,471) (948,085) (976,528) (1,005,824) (1,035,998) (1,067,078) (1,099,091) (1,132,064) (36,713) (37,815) (38,949) (40,118) (41,321) (42,561) (43,838) (45,153) $1,686,344 $1,736,934 $1,789,043 $1,842,713 $1,897,996 $1,954,935 $2,013,583 $2,073,991 1,008,500 1,008,500 1,008,500 1,008,500 1,008,500 1,008,500 1,008,500 1,008,500 $677,844 $728,434 $780,543 $834,213 $889,496 $946,435 $1,005,083 $1,065,491
1.67 1.72 1.77 1.83 1.88 1.94 2.00 2.06
73.6% 76.8% 79.9% 82.9% 85.9% 88.7% 91.4% 94.1%
$677,844 $728,434 $780,543 $834,213 $889,496 $946,435 $1,005,083 $1,065,491 $0 $0 $0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0 $0 $0
$677,844 $728,434 $780,543 $834,213 $889,496 $946,435 $1,005,083 $1,065,491 $0 $0 $0 $0 $0 $0 $0 $0
$677,844 $728,434 $780,543 $834,213 $889,496 $946,435 $1,005,083 $1,065,491
SUBMITTED BY SHANGRI-LA INDUSTRIES
PAGE 39
POTENTIAL HOTEL/MOTEL CONVERSION
DAYS INN - FREMONT LOCATION
Address:
46101 Warm Springs Blvd.
Fremont, CA 94539
Cross Street: Brown Rd.
Intersection: Warm
Springs Blvd./Mission Blvd.
ACQUISITION
Date of Availability:
Currently Available
Proposed Sale Price:
$15,000,000
Status: Available Off-
Market
Current Preliminary
Title Report: Will be
ordered upon city’s
approval of property
Current Appraisal: Will
be ordered upon opening
escrow
BUILDING OWNER
Building or Site Owner
Name: K B & Son, Inc.
Owner’s
Acknowledgment of
Potential Offering:
Owner acknowledges/
provided information
# Years Under the
Current Ownership: 17
ADA
Status of ADA
Compliance Including
CASP Report Where
Available for Existing
Hotels/Motels: ADA
Compliant
BUILDING DESCRIPTION
Three-story, double loaded interior corridor, sprinklered, and elevator.
STATISTICS
Size (SF): 20,583
Site Size: .74 Acres
Exclusive Parking Spaces: 50
Number of Rooms: 49
Type of Rooms: 18 Double Queen
and 31 King
Availability of Kitchenettes: None/
Rooms are Large Enough to Add
Capacity Under Code: 49
Building Age: 1992/29 Y ears
Construction Type/Class: Type V
Current Zoning: G-1
QUALITY OF BUILDING DESIGN, INCLUDING ITEMS
SUCH AS AESTHETICS, ARCHITECTURE, ENERGY
CONSERVATION AND OTHER CONSIDERATIONS
Fair quality.
EXISTING OR PLANNED SECURITY SYSTEM
Existing building has controlled access and security cameras. The planned security will consist of controlled access, gating the entire property and adding more cameras, throughout.
IS THE LOCATION PART OF THE CITY’S POLICE
DEPARTMENT’S CURRENT PATROL ROUTE?
Y es.
SUBMITTED BY SHANGRI-LA INDUSTRIES
PAGE 40
Shangri-La Industries, LLC
Affordable Housing Bridge to Tax Credit Worksheet
DESCRIPTION WATERFALL
INVESTMENT DESCRIPTION Shangri-La Industries, LLC
Name Days Inn County 0
Address 46101 Warm Springs Blvd State CA
City Fremont Zip Code 94539
FAR 4.00 Units 49 units
INVESTMENT CASH FLOWS
USES START END METHOD /Rentable SF /UNIT AMOUNT
ACQUISITION COST
Purchase Price Month 0 Month 0 Straight-Line 963.39 306,122 15,000,000 Total Acquisition Costs Month 0 Month 0 963.39 306,122 15,000,000 Hard Costs
Trade Costs Month 3 Month 12 Straight-Line 142.46 45,267 2,218,083 Total Hard Costs Month 3 Month 12 142.46 45,267 2,218,083 Soft Costs
Architecture & Engineering Month 0 Month 6 Straight-Line 8.48 2,695 132,058 Property Tax/Insurance Month 3 Month 12 Straight-Line 18.89 6,001 294,060 Permitting Month 3 Month 12 Straight-Line 7.74 2,458 120,442 Security Month 3 Month 12 Straight-Line 11.94 3,794 185,928 Utilities Month 3 Month 12 Straight-Line 7.33 2,328 114,072 Misc Month 3 Month 12 Straight-Line 31.47 10,000 490,000 Closing Cost Month 0 Month 6 Straight-Line 19.27 6,122 300,000 Developer Overhead Month 0 Month 12 Straight-Line 31.47 10,000 490,000 GP Fee 0.0% Month 3 Month 6 Straight-Line - - - Total Soft Costs Month 0 Month 12 136.58 43,399 2,126,560 Total Project Cost (Without Financing) Month 0 Month 12 1,242.43 394,789 19,344,643 Acquisition Points 1.00% Month 0 Month 0 Straight-Line 6.95 2,207 108,163 Construction Interest Month 1 Month 18 60.48 19,218 941,668 Total Financing Costs Month 0 Month 18 67.43 21,425 1,049,831 Total Project Cost (With Financing) Month 0 Month 12 1,309.86 416,214 20,394,474
SOURCES AND USES
USES /UNIT /UNIT AMOUNT
Acquisition Cost 963.39 306,122 15,000,000 Hard Costs 142.46 45,267 2,218,083
Soft Costs 136.58 43,399 2,126,560
Financing Cost 67.43 21,425 1,049,831 Total Uses 1,309.86 416,214 20,394,474
CASH FLOW OF SOURCES
EQUITY Funding Order Share of Equity /UNIT /UNIT AMOUNT GP Equity 4 FALSE 5.2% 28.47 9,048 443,352 Homekey Grant 1 94.8% 519.27 165,000 8,085,000 Total Equity 100.0% 547.74 174,048 8,528,352 DEBT Funding Order LT Purch. Price LT Cons. Cost LTC /UNIT /UNIT AMOUNT Acquisition Loan 2 55.9% 0.0% 41.1% 538.67 171,164 8,387,044 Construction Loan 3 0.0% 55.9% 11.9% 156.02 49,576 2,429,247 Interest Reserve 0.0% 0.0% 0.0% 67.43 21,425 1,049,831 Total Debt 55.9% 55.91% 58.2% 762.11 242,166 11,866,122 Total Sources 1,309.86 416,214 20,394,474
FINANCING ASSUMPTIONS
INITIAL FINANCING
Loan Terms Interest Reserve Funded Upfront Term IO Amort Rate Rate Type Acquisition Loan 18 Months 18 Months 360 Months 6.50% Fixed Rate Construction Loan 18 Months 18 Months 360 Months 6.50% Fixed Rate Loan Cash Flows Funding Amt Payoff Amt Funding Payoff
Acquisition Loan 8,387,044 8,387,044 Month 0 Month 18 Construction Loan 2,429,247 2,429,247 Month 0 Month 18 Interest Reserve 1,049,831 1,049,831 Month 0 Month 18 Total Initial Financing 11,866,122 11,866,122
INVESTMENT UNDERWRITING DAYS INN2.77% Levered IRR 1.29X Levered EMX
OPERATING CF REVERSION CFINVESTMENT CF PROPERTY RETURNS Yes No
Shangri-La Industries, LLC
Affordable Housing Bridge to Tax Credit Worksheet
DESCRIPTION WATERFALL
INVESTMENT DESCRIPTION Shangri-La Industries, LLC
Name Days Inn County 0
Address 46101 Warm Springs Blvd State CA
City Fremont Zip Code 94539
FAR 4.00 Units 49 units
INVESTMENT CASH FLOWS
USES START END METHOD /Rentable SF /UNIT AMOUNT
ACQUISITION COST
Purchase Price Month 0 Month 0 Straight-Line 963.39 306,122 15,000,000 Total Acquisition Costs Month 0 Month 0 963.39 306,122 15,000,000 Hard Costs
Trade Costs Month 3 Month 12 Straight-Line 142.46 45,267 2,218,083 Total Hard Costs Month 3 Month 12 142.46 45,267 2,218,083 Soft Costs
Architecture & Engineering Month 0 Month 6 Straight-Line 8.48 2,695 132,058 Property Tax/Insurance Month 3 Month 12 Straight-Line 18.89 6,001 294,060 Permitting Month 3 Month 12 Straight-Line 7.74 2,458 120,442 Security Month 3 Month 12 Straight-Line 11.94 3,794 185,928 Utilities Month 3 Month 12 Straight-Line 7.33 2,328 114,072 Misc Month 3 Month 12 Straight-Line 31.47 10,000 490,000 Closing Cost Month 0 Month 6 Straight-Line 19.27 6,122 300,000 Developer Overhead Month 0 Month 12 Straight-Line 31.47 10,000 490,000 GP Fee 0.0% Month 3 Month 6 Straight-Line - - - Total Soft Costs Month 0 Month 12 136.58 43,399 2,126,560 Total Project Cost (Without Financing) Month 0 Month 12 1,242.43 394,789 19,344,643 Acquisition Points 1.00% Month 0 Month 0 Straight-Line 6.95 2,207 108,163 Construction Interest Month 1 Month 18 60.48 19,218 941,668 Total Financing Costs Month 0 Month 18 67.43 21,425 1,049,831 Total Project Cost (With Financing) Month 0 Month 12 1,309.86 416,214 20,394,474
SOURCES AND USES
USES /UNIT /UNIT AMOUNT
Acquisition Cost 963.39 306,122 15,000,000 Hard Costs 142.46 45,267 2,218,083
Soft Costs 136.58 43,399 2,126,560
Financing Cost 67.43 21,425 1,049,831 Total Uses 1,309.86 416,214 20,394,474
CASH FLOW OF SOURCES
EQUITY Funding Order Share of Equity /UNIT /UNIT AMOUNT GP Equity 4 FALSE 5.2% 28.47 9,048 443,352 Homekey Grant 1 94.8% 519.27 165,000 8,085,000 Total Equity 100.0% 547.74 174,048 8,528,352 DEBT Funding Order LT Purch. Price LT Cons. Cost LTC /UNIT /UNIT AMOUNT Acquisition Loan 2 55.9% 0.0% 41.1% 538.67 171,164 8,387,044 Construction Loan 3 0.0% 55.9% 11.9% 156.02 49,576 2,429,247 Interest Reserve 0.0% 0.0% 0.0% 67.43 21,425 1,049,831 Total Debt 55.9% 55.91% 58.2% 762.11 242,166 11,866,122 Total Sources 1,309.86 416,214 20,394,474
FINANCING ASSUMPTIONS
INITIAL FINANCING
Loan Terms Interest Reserve Funded Upfront Term IO Amort Rate Rate Type Acquisition Loan 18 Months 18 Months 360 Months 6.50% Fixed Rate Construction Loan 18 Months 18 Months 360 Months 6.50% Fixed Rate Loan Cash Flows Funding Amt Payoff Amt Funding Payoff
Acquisition Loan 8,387,044 8,387,044 Month 0 Month 18 Construction Loan 2,429,247 2,429,247 Month 0 Month 18 Interest Reserve 1,049,831 1,049,831 Month 0 Month 18 Total Initial Financing 11,866,122 11,866,122
INVESTMENT UNDERWRITING DAYS INN2.77% Levered IRR 1.29X Levered EMX
OPERATING CF REVERSION CFINVESTMENT CF PROPERTY RETURNS Yes No
SUBMITTED BY SHANGRI-LA INDUSTRIES
PAGE 41
Bridge To Tax Credit Underwriting
Filename: Days Inn - Fremont.xlsm
Worksheet: 6. Proforma
Shangri-La Industries, LLC
Affordable Housing Bridge to Tax Credit Worksheet
20-Year Proforma
Property: Days Inn 49 Total units, including 1 non-revenue unit(s) Operating Cash Flow Projection Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Cash Flow Projection
Market Rents 3.00% 0 0 0 0 0 0 0 0 0 0 0 0
Other AMI-Based Rents 3.00% 927,907 955,744 984,417 1,013,949 1,044,368 1,075,699 1,107,970 1,141,209 1,175,445 1,210,708 1,247,030 1,284,441 Total Gross Potential Rent (Proposed Unit Mix/Rents) 927,907 955,744 984,417 1,013,949 1,044,368 1,075,699 1,107,970 1,141,209 1,175,445 1,210,708 1,247,030 1,284,441 Allowance for Multifamily Rent Loss 5.00% (46,395) (47,787) (49,221) (50,697) (52,218) (53,785) (55,399) (57,060) (58,772) (60,535) (62,352) (64,222) Allowance for Multifamily Bad Debt 0.00% 0 0 0 0 0 0 0 0 0 0 0 0 Other Income 3.00% 17,640 18,169 18,714 19,276 19,854 20,450 21,063 21,695 22,346 23,016 23,707 24,418 Effective Gross Income $899,152 $926,126 $953,910 $982,528 $1,012,004 $1,042,364 $1,073,634 $1,105,844 $1,139,019 $1,173,189 $1,208,385 $1,244,637 Operating Expenses 3.00% (316,344) (325,834) (335,609) (345,678) (356,048) (366,729) (377,731) (389,063) (400,735) (412,757) (425,140) (437,894) Proposed Reserve Deposit $12,250 (12,618) (12,996) (13,386) (13,787) (14,201) (14,627) (15,066) (15,518) (15,983) (16,463) (16,957) (17,466) Net Operating Income $12,250 $570,191 $587,296 $604,915 $623,063 $641,755 $661,007 $680,837 $701,263 $722,300 $743,969 $766,288 $789,277 Total Mortgages P&I (516,700) 516,700 516,700 516,700 516,700 516,700 516,700 516,700 516,700 516,700 516,700 516,700 516,700 Operating Cash Flow $53,491 $70,596 $88,215 $106,363 $125,055 $144,307 $164,137 $184,563 $205,600 $227,269 $249,588 $272,577 Debt Service Coverage 1.10 1.14 1.17 1.21 1.24 1.28 1.32 1.36 1.40 1.44 1.48 1.53
1.10 minimum DSCR yrs 1-20
Operating Expense Cushion 16.9% 21.7% 26.3% 30.8% 35.1% 39.3% 43.5% 47.4% 51.3% 55.1% 58.7% 62.2%
16.9% minimum Cushion yrs 1-20
Cash Distribution Projection
Operating Cash Flow $53,491 $70,596 $88,215 $106,363 $125,055 $144,307 $164,137 $184,563 $205,600 $227,269 $249,588 $272,577 $0 Priority Cash Flow Dollars $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
0.0% Priority Cash Flow (Percentage) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Projected Distributable $53,491 $70,596 $88,215 $106,363 $125,055 $144,307 $164,137 $184,563 $205,600 $227,269 $249,588 $272,577
0.0% Tax Credit Equity $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 100.0% GP $53,491 $70,596 $88,215 $106,363 $125,055 $144,307 $164,137 $184,563 $205,600 $227,269 $249,588 $272,577 Bold, Green Highlight Cells Denote USER INPUT
Bold, Yellow Highlight Cells Denote USER INPUT OVERRIDES White Cells Denote CALCULATED RESULTS
Assumptions /
Trends
SUBMITTED BY SHANGRI-LA INDUSTRIES
PAGE 42
Bridge To Tax Credit Underwriting
Filename: Days Inn - Fremont.xlsm
Worksheet: 6. Proforma
Shangri-La Industries, LLC
Affordable Housing Bridge to Tax Credit Worksheet
20-Year Proforma
Property: Days Inn 49
Operating Cash Flow Projection
Cash Flow Projection
Market Rents 3.00%
Other AMI-Based Rents 3.00%
Total Gross Potential Rent (Proposed Unit Mix/Rents)
Allowance for Multifamily Rent Loss 5.00%
Allowance for Multifamily Bad Debt 0.00%
Other Income 3.00%
Effective Gross Income
Operating Expenses 3.00%
Proposed Reserve Deposit $12,250
Net Operating Income $12,250
Total Mortgages P&I (516,700)
Operating Cash Flow
Debt Service Coverage
1.10 minimum DSCR yrs 1-20
Operating Expense Cushion
16.9% minimum Cushion yrs 1-20
Cash Distribution Projection
Operating Cash Flow
$0 Priority Cash Flow Dollars
0.0% Priority Cash Flow (Percentage)
Projected Distributable
0.0% Tax Credit Equity
100.0% GP
Assumptions /
Trends
Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 2032 2033 2034 2035 2036 2037 2038 2039
0 0 0 0 0 0 0 0
1,322,974 1,362,663 1,403,543 1,445,649 1,489,019 1,533,689 1,579,700 1,627,091 1,322,974 1,362,663 1,403,543 1,445,649 1,489,019 1,533,689 1,579,700 1,627,091 (66,149) (68,133) (70,177) (72,282) (74,451) (76,684) (78,985) (81,355) 0 0 0 0 0 0 0 0
25,150 25,905 26,682 27,483 28,307 29,156 30,031 30,932 $1,281,975 $1,320,435 $1,360,048 $1,400,850 $1,442,875 $1,486,161 $1,530,746 $1,576,668 (451,031) (464,562) (478,499) (492,854) (507,639) (522,868) (538,554) (554,711) (17,990) (18,529) (19,085) (19,658) (20,247) (20,855) (21,480) (22,125) $812,955 $837,344 $862,464 $888,338 $914,988 $942,438 $970,711 $999,832 516,700 516,700 516,700 516,700 516,700 516,700 516,700 516,700 $296,255 $320,644 $345,764 $371,638 $398,288 $425,738 $454,011 $483,132
1.57 1.62 1.67 1.72 1.77 1.82 1.88 1.94
65.7% 69.0% 72.3% 75.4% 78.5% 81.4% 84.3% 87.1%
$296,255 $320,644 $345,764 $371,638 $398,288 $425,738 $454,011 $483,132 $0 $0 $0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0 $0 $0
$296,255 $320,644 $345,764 $371,638 $398,288 $425,738 $454,011 $483,132 $0 $0 $0 $0 $0 $0 $0 $0
$296,255 $320,644 $345,764 $371,638 $398,288 $425,738 $454,011 $483,132
SUBMITTED BY SHANGRI-LA INDUSTRIES
PAGE 43
POTENTIAL HOTEL/MOTEL CONVERSION
GOOD NITE INN - FREMONT LOCATION
Address:
4135 Cushing Pkwy.
Fremont, CA 94538
Cross Street: Fremont
Blvd.
Intersection: Cushing
Pkwy./Fremont Blvd.
ACQUISITION
Date of Availability:
Currently Available
Proposed Sale Price:
$30,000,000
Status: Available Off-
Market
Current Preliminary
Title Report: Will be
ordered upon city’s
approval of property
Current Appraisal: Will
be ordered upon opening
escrow
BUILDING OWNER
Building or Site Owner
Name: Good Nite Inn
Fremont Inc
Owner’s
Acknowledgment of
Potential Offering:
Owner acknowledges/
provided information
# Years Under the
Current Ownership: 24
ADA
Status of ADA
Compliance Including
CASP Report Where
Available for Existing
Hotels/Motels: ADA
Compliant
BUILDING DESCRIPTION
Three-story, exterior corridors, fully sprinklered, elevator, and pool.
STATISTICS
Size (SF): 49,187
Site Size: 2.10 Acres
Exclusive Parking Spaces: 110
Number of Rooms: 121
Type of Rooms: Double Queen and
King
Availability of Kitchenettes: None/
Rooms are Large Enough to Add
Capacity Under Code: 121
Building Age: 1991/30 Y ears
Construction Type/Class: Type V
Current Zoning: C2
QUALITY OF BUILDING DESIGN, INCLUDING ITEMS
SUCH AS AESTHETICS, ARCHITECTURE, ENERGY
CONSERVATION AND OTHER CONSIDERATIONS
Fair quality.
EXISTING OR PLANNED SECURITY SYSTEM
Existing building has controlled access and security cameras. The planned security will consist of controlled access, gating the entire property and adding more cameras, throughout.
IS THE LOCATION PART OF THE CITY’S POLICE
DEPARTMENT’S CURRENT PATROL ROUTE?
Y es.
SUBMITTED BY SHANGRI-LA INDUSTRIES
PAGE 44
Shangri-La Industries, LLC
Affordable Housing Bridge to Tax Credit Worksheet
DESCRIPTION WATERFALL
INVESTMENT DESCRIPTION Shangri-La Industries, LLC
Name Days Inn County 0
Address 46101 Warm Springs Blvd State CA
City Fremont Zip Code 94539
FAR 4.00 Units 49 units
INVESTMENT CASH FLOWS
USES START END METHOD /Rentable SF /UNIT AMOUNT
ACQUISITION COST
Purchase Price Month 0 Month 0 Straight-Line 963.39 306,122 15,000,000 Total Acquisition Costs Month 0 Month 0 963.39 306,122 15,000,000 Hard Costs
Trade Costs Month 3 Month 12 Straight-Line 142.46 45,267 2,218,083 Total Hard Costs Month 3 Month 12 142.46 45,267 2,218,083 Soft Costs
Architecture & Engineering Month 0 Month 6 Straight-Line 8.48 2,695 132,058 Property Tax/Insurance Month 3 Month 12 Straight-Line 18.89 6,001 294,060 Permitting Month 3 Month 12 Straight-Line 7.74 2,458 120,442 Security Month 3 Month 12 Straight-Line 11.94 3,794 185,928 Utilities Month 3 Month 12 Straight-Line 7.33 2,328 114,072 Misc Month 3 Month 12 Straight-Line 31.47 10,000 490,000 Closing Cost Month 0 Month 6 Straight-Line 19.27 6,122 300,000 Developer Overhead Month 0 Month 12 Straight-Line 31.47 10,000 490,000 GP Fee 0.0% Month 3 Month 6 Straight-Line - - - Total Soft Costs Month 0 Month 12 136.58 43,399 2,126,560 Total Project Cost (Without Financing) Month 0 Month 12 1,242.43 394,789 19,344,643 Acquisition Points 1.00% Month 0 Month 0 Straight-Line 6.95 2,207 108,163 Construction Interest Month 1 Month 18 60.48 19,218 941,668 Total Financing Costs Month 0 Month 18 67.43 21,425 1,049,831 Total Project Cost (With Financing) Month 0 Month 12 1,309.86 416,214 20,394,474
SOURCES AND USES
USES /UNIT /UNIT AMOUNT
Acquisition Cost 963.39 306,122 15,000,000 Hard Costs 142.46 45,267 2,218,083
Soft Costs 136.58 43,399 2,126,560
Financing Cost 67.43 21,425 1,049,831 Total Uses 1,309.86 416,214 20,394,474
CASH FLOW OF SOURCES
EQUITY Funding Order Share of Equity /UNIT /UNIT AMOUNT GP Equity 4 FALSE 5.2% 28.47 9,048 443,352 Homekey Grant 1 94.8% 519.27 165,000 8,085,000 Total Equity 100.0% 547.74 174,048 8,528,352 DEBT Funding Order LT Purch. Price LT Cons. Cost LTC /UNIT /UNIT AMOUNT Acquisition Loan 2 55.9% 0.0% 41.1% 538.67 171,164 8,387,044 Construction Loan 3 0.0% 55.9% 11.9% 156.02 49,576 2,429,247 Interest Reserve 0.0% 0.0% 0.0% 67.43 21,425 1,049,831 Total Debt 55.9% 55.91% 58.2% 762.11 242,166 11,866,122 Total Sources 1,309.86 416,214 20,394,474
FINANCING ASSUMPTIONS
INITIAL FINANCING
Loan Terms Interest Reserve Funded Upfront Term IO Amort Rate Rate Type Acquisition Loan 18 Months 18 Months 360 Months 6.50% Fixed Rate Construction Loan 18 Months 18 Months 360 Months 6.50% Fixed Rate Loan Cash Flows Funding Amt Payoff Amt Funding Payoff
Acquisition Loan 8,387,044 8,387,044 Month 0 Month 18 Construction Loan 2,429,247 2,429,247 Month 0 Month 18 Interest Reserve 1,049,831 1,049,831 Month 0 Month 18 Total Initial Financing 11,866,122 11,866,122
INVESTMENT UNDERWRITING DAYS INN2.77% Levered IRR 1.29X Levered EMX
OPERATING CF REVERSION CFINVESTMENT CF PROPERTY RETURNS Yes No
Shangri-La Industries, LLC
Affordable Housing Bridge to Tax Credit Worksheet
DESCRIPTION WATERFALL
INVESTMENT DESCRIPTION Shangri-La Industries, LLC
Name Good Night Inn County 0
Address 4135 Cushing Pkwy State CA
City Fremont Zip Code 94539
FAR 4.00 Units 121 units
INVESTMENT CASH FLOWS
USES START END METHOD /Rentable SF /UNIT AMOUNT
ACQUISITION COST
Purchase Price Month 0 Month 0 Straight-Line 784.31 247,934 30,000,000 Total Acquisition Costs Month 0 Month 0 784.31 247,934 30,000,000 Hard Costs
Trade Costs Month 3 Month 12 Straight-Line 143.20 45,267 5,477,307 Total Hard Costs Month 3 Month 12 143.20 45,267 5,477,307 Soft Costs
Architecture & Engineering Month 0 Month 6 Straight-Line 3.45 1,091 132,058 Property Tax/Insurance Month 3 Month 12 Straight-Line 17.14 5,419 655,740 Permitting Month 3 Month 12 Straight-Line 7.78 2,458 297,418 Security Month 3 Month 12 Straight-Line 4.86 1,537 185,928 Utilities Month 3 Month 12 Straight-Line 7.36 2,328 281,688 Misc Month 3 Month 12 Straight-Line 31.63 10,000 1,210,000 Closing Cost Month 0 Month 6 Straight-Line 15.69 4,959 600,000 Developer Overhead Month 0 Month 12 Straight-Line 31.63 10,000 1,210,000 GP Fee 0.0% Month 3 Month 6 Straight-Line - - - Total Soft Costs Month 0 Month 12 119.55 37,792 4,572,832 Total Project Cost (Without Financing) Month 0 Month 12 1,047.06 330,993 40,050,139 Acquisition Points 1.00% Month 0 Month 0 Straight-Line 4.96 1,569 189,903 Construction Interest Month 1 Month 18 41.53 13,128 1,588,511 Total Financing Costs Month 0 Month 18 46.49 14,698 1,778,415 Total Project Cost (With Financing) Month 0 Month 12 1,093.56 345,691 41,828,554
SOURCES AND USES
USES /UNIT /UNIT AMOUNT
Acquisition Cost 784.31 247,934 30,000,000 Hard Costs 143.20 45,267 5,477,307
Soft Costs 119.55 37,792 4,572,832
Financing Cost 46.49 14,698 1,778,415 Total Uses 1,093.56 345,691 41,828,554
CASH FLOW OF SOURCES
EQUITY Funding Order Share of Equity /UNIT /UNIT AMOUNT GP Equity 4 FALSE 5.2% 28.62 9,048 1,094,808 Homekey Grant 1 94.8% 521.96 165,000 19,965,000 Total Equity 100.0% 550.58 174,048 21,059,808 DEBT Funding Order LT Purch. Price LT Cons. Cost LTC /UNIT /UNIT AMOUNT Acquisition Loan 2 47.4% 0.0% 34.0% 371.89 117,561 14,224,918 Construction Loan 3 0.0% 47.4% 11.4% 124.59 39,384 4,765,413 Interest Reserve 0.0% 0.0% 0.0% 46.49 14,698 1,778,415 Total Debt 47.4% 47.42% 49.7% 542.97 171,643 20,768,746 Total Sources 1,093.56 345,691 41,828,554
FINANCING ASSUMPTIONS
INITIAL FINANCING
Loan Terms Interest Reserve Funded Upfront Term IO Amort Rate Rate Type Acquisition Loan 18 Months 18 Months 360 Months 6.50% Fixed Rate Construction Loan 18 Months 18 Months 360 Months 6.50% Fixed Rate Loan Cash Flows Funding Amt Payoff Amt Funding Payoff
Acquisition Loan 14,224,918 14,224,918 Month 0 Month 18 Construction Loan 4,765,413 4,765,413 Month 0 Month 18 Interest Reserve 1,778,415 1,778,415 Month 0 Month 18 Total Initial Financing 20,768,746 20,768,746
INVESTMENT UNDERWRITING GOOD NIGHT INN7.91% Levered IRR 1.84X Levered EMX
OPERATING CF REVERSION CFINVESTMENT CF PROPERTY RETURNS Yes No
SUBMITTED BY SHANGRI-LA INDUSTRIES
PAGE 45
Bridge To Tax Credit Underwriting
Filename: Good Night Inn - Fremont.xlsm
Worksheet: 6. Proforma
Shangri-La Industries, LLC
Affordable Housing Bridge to Tax Credit Worksheet
20-Year Proforma
Property: Good Night Inn 121 Total units, including 1 non-revenue unit(s) Operating Cash Flow Projection Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Cash Flow Projection
Market Rents 3.00% 0 0 0 0 0 0 0 0 0 0 0 0
Other AMI-Based Rents 3.00% 2,319,768 2,389,361 2,461,042 2,534,873 2,610,919 2,689,247 2,769,924 2,853,022 2,938,613 3,026,771 3,117,574 3,211,101 Total Gross Potential Rent (Proposed Unit Mix/Rents) 2,319,768 2,389,361 2,461,042 2,534,873 2,610,919 2,689,247 2,769,924 2,853,022 2,938,613 3,026,771 3,117,574 3,211,101 Allowance for Multifamily Rent Loss 5.00% (115,988) (119,468) (123,052) (126,744) (130,546) (134,462) (138,496) (142,651) (146,931) (151,339) (155,879) (160,555) Allowance for Multifamily Bad Debt 0.00% 0 0 0 0 0 0 0 0 0 0 0 0 Other Income 3.00% 43,560 44,867 46,213 47,599 49,027 50,498 52,013 53,573 55,181 56,836 58,541 60,297 Effective Gross Income $2,247,340 $2,314,760 $2,384,203 $2,455,728 $2,529,400 $2,605,283 $2,683,441 $2,763,944 $2,846,863 $2,932,268 $3,020,236 $3,110,843 Operating Expenses 3.00% (781,176) (804,611) (828,750) (853,612) (879,220) (905,597) (932,765) (960,748) (989,570) (1,019,257) (1,049,835) (1,081,330) Proposed Reserve Deposit $30,250 (31,158) (32,092) (33,055) (34,047) (35,068) (36,120) (37,204) (38,320) (39,469) (40,653) (41,873) (43,129) Net Operating Income $30,250 $1,435,007 $1,478,056 $1,522,398 $1,568,069 $1,615,112 $1,663,566 $1,713,472 $1,764,877 $1,817,823 $1,872,357 $1,928,528 $1,986,384 Total Mortgages P&I (904,400) 904,400 904,400 904,400 904,400 904,400 904,400 904,400 904,400 904,400 904,400 904,400 904,400 Operating Cash Flow $530,607 $573,656 $617,998 $663,669 $710,712 $759,166 $809,072 $860,477 $913,423 $967,957 $1,024,128 $1,081,984 Debt Service Coverage 1.59 1.63 1.68 1.73 1.79 1.84 1.89 1.95 2.01 2.07 2.13 2.20
1.59 minimum DSCR yrs 1-20
Operating Expense Cushion 67.9% 71.3% 74.6% 77.7% 80.8% 83.8% 86.7% 89.6% 92.3% 95.0% 97.6% 100.1%
67.9% minimum Cushion yrs 1-20
Cash Distribution Projection
Operating Cash Flow $530,607 $573,656 $617,998 $663,669 $710,712 $759,166 $809,072 $860,477 $913,423 $967,957 $1,024,128 $1,081,984 $0 Priority Cash Flow Dollars $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
0.0% Priority Cash Flow (Percentage) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Projected Distributable $530,607 $573,656 $617,998 $663,669 $710,712 $759,166 $809,072 $860,477 $913,423 $967,957 $1,024,128 $1,081,984
0.0% Tax Credit Equity $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 100.0% GP $530,607 $573,656 $617,998 $663,669 $710,712 $759,166 $809,072 $860,477 $913,423 $967,957 $1,024,128 $1,081,984 Bold, Green Highlight Cells Denote USER INPUT
Bold, Yellow Highlight Cells Denote USER INPUT OVERRIDES White Cells Denote CALCULATED RESULTS
Assumptions /
Trends
SUBMITTED BY SHANGRI-LA INDUSTRIES
PAGE 46
Bridge To Tax Credit Underwriting
Filename: Good Night Inn - Fremont.xlsm
Worksheet: 6. Proforma
Shangri-La Industries, LLC
Affordable Housing Bridge to Tax Credit Worksheet
20-Year Proforma
Property: Good Night Inn 121
Operating Cash Flow Projection
Cash Flow Projection
Market Rents 3.00%
Other AMI-Based Rents 3.00%
Total Gross Potential Rent (Proposed Unit Mix/Rents)
Allowance for Multifamily Rent Loss 5.00%
Allowance for Multifamily Bad Debt 0.00%
Other Income 3.00%
Effective Gross Income
Operating Expenses 3.00%
Proposed Reserve Deposit $30,250
Net Operating Income $30,250
Total Mortgages P&I (904,400)
Operating Cash Flow
Debt Service Coverage
1.59 minimum DSCR yrs 1-20
Operating Expense Cushion
67.9% minimum Cushion yrs 1-20
Cash Distribution Projection
Operating Cash Flow
$0 Priority Cash Flow Dollars
0.0% Priority Cash Flow (Percentage)
Projected Distributable
0.0% Tax Credit Equity
100.0% GP
Assumptions /
Trends
Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 2032 2033 2034 2035 2036 2037 2038 2039
0 0 0 0 0 0 0 0
3,307,434 3,406,658 3,508,857 3,614,123 3,722,547 3,834,223 3,949,250 4,067,727 3,307,434 3,406,658 3,508,857 3,614,123 3,722,547 3,834,223 3,949,250 4,067,727 (165,372) (170,333) (175,443) (180,706) (186,127) (191,711) (197,463) (203,386) 0 0 0 0 0 0 0 0
62,106 63,969 65,888 67,865 69,901 71,998 74,158 76,383 $3,204,168 $3,300,294 $3,399,302 $3,501,282 $3,606,321 $3,714,510 $3,825,945 $3,940,724 (1,113,770) (1,147,183) (1,181,599) (1,217,047) (1,253,558) (1,291,165) (1,329,900) (1,369,797) (44,423) (45,756) (47,129) (48,542) (49,999) (51,499) (53,044) (54,635) $2,045,975 $2,107,355 $2,170,575 $2,235,693 $2,302,764 $2,371,847 $2,443,002 $2,516,292 904,400 904,400 904,400 904,400 904,400 904,400 904,400 904,400 $1,141,575 $1,202,955 $1,266,175 $1,331,293 $1,398,364 $1,467,447 $1,538,602 $1,611,892
2.26 2.33 2.40 2.47 2.55 2.62 2.70 2.78
102.5% 104.9% 107.2% 109.4% 111.6% 113.7% 115.7% 117.7% $1,141,575 $1,202,955 $1,266,175 $1,331,293 $1,398,364 $1,467,447 $1,538,602 $1,611,892 $0 $0 $0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0 $0 $0
$1,141,575 $1,202,955 $1,266,175 $1,331,293 $1,398,364 $1,467,447 $1,538,602 $1,611,892 $0 $0 $0 $0 $0 $0 $0 $0
$1,141,575 $1,202,955 $1,266,175 $1,331,293 $1,398,364 $1,467,447 $1,538,602 $1,611,892
SUBMITTED BY SHANGRI-LA INDUSTRIES
PAGE 47
POTENTIAL HOTEL/MOTEL CONVERSION
MOTEL 6 - FREMONT LOCATION
Address:
46101 Research Ave.
Fremont, CA, 94539
Cross Street: Mission
Blvd.
Intersection: Research
Ave./Brown Rd.
ACQUISITION
Date of Availability:
Currently Available
Proposed Sale Price:
$20,000,000
Status: Available Off-
Market
Current Preliminary
Title Report: Will be
ordered upon city’s
approval of property
Current Appraisal: Will
be ordered upon opening
escrow
BUILDING OWNER
Building or Site Owner
Name: Fremca Hospitality,
LLC.
Owner’s
Acknowledgment of
Potential Offering:
Owner acknowledges/
provided information
# Years Under the
Current Ownership: 9
ADA
Status of ADA
Compliance Including
CASP Report Where
Available for Existing
Hotels/Motels: ADA
Compliant
BUILDING DESCRIPTION
Two-story garden style, exterior corridors with pool. Non-sprinklered.
STATISTICS
Size (SF): 40,432
Site Size: 2.49 Acres
Exclusive Parking Spaces: 50
Number of Rooms: 159
Type of Rooms: Single, Double
Queen, Smoking and Non-Smoking
Availability of Kitchenettes: None/
Rooms are Large Enough to Add
Capacity Under Code: 159
Building Age: 1988/33 Y ears
Construction Type/Class: Type V
Current Zoning: I-T
QUALITY OF BUILDING DESIGN, INCLUDING ITEMS
SUCH AS AESTHETICS, ARCHITECTURE, ENERGY
CONSERVATION AND OTHER CONSIDERATIONS
Fair quality.
EXISTING OR PLANNED SECURITY SYSTEM
Existing building has controlled access and security cameras. The planned security will consist of controlled access, gating the entire property and adding more cameras, throughout.
IS THE LOCATION PART OF THE CITY’S POLICE
DEPARTMENT’S CURRENT PATROL ROUTE?
Y es.
SUBMITTED BY SHANGRI-LA INDUSTRIES
PAGE 48
Shangri-La Industries, LLC
Affordable Housing Bridge to Tax Credit Worksheet
DESCRIPTION WATERFALL
INVESTMENT DESCRIPTION Shangri-La Industries, LLC
Name Days Inn County 0
Address 46101 Warm Springs Blvd State CA
City Fremont Zip Code 94539
FAR 4.00 Units 49 units
INVESTMENT CASH FLOWS
USES START END METHOD /Rentable SF /UNIT AMOUNT
ACQUISITION COST
Purchase Price Month 0 Month 0 Straight-Line 963.39 306,122 15,000,000 Total Acquisition Costs Month 0 Month 0 963.39 306,122 15,000,000 Hard Costs
Trade Costs Month 3 Month 12 Straight-Line 142.46 45,267 2,218,083 Total Hard Costs Month 3 Month 12 142.46 45,267 2,218,083 Soft Costs
Architecture & Engineering Month 0 Month 6 Straight-Line 8.48 2,695 132,058 Property Tax/Insurance Month 3 Month 12 Straight-Line 18.89 6,001 294,060 Permitting Month 3 Month 12 Straight-Line 7.74 2,458 120,442 Security Month 3 Month 12 Straight-Line 11.94 3,794 185,928 Utilities Month 3 Month 12 Straight-Line 7.33 2,328 114,072 Misc Month 3 Month 12 Straight-Line 31.47 10,000 490,000 Closing Cost Month 0 Month 6 Straight-Line 19.27 6,122 300,000 Developer Overhead Month 0 Month 12 Straight-Line 31.47 10,000 490,000 GP Fee 0.0% Month 3 Month 6 Straight-Line - - - Total Soft Costs Month 0 Month 12 136.58 43,399 2,126,560 Total Project Cost (Without Financing) Month 0 Month 12 1,242.43 394,789 19,344,643 Acquisition Points 1.00% Month 0 Month 0 Straight-Line 6.95 2,207 108,163 Construction Interest Month 1 Month 18 60.48 19,218 941,668 Total Financing Costs Month 0 Month 18 67.43 21,425 1,049,831 Total Project Cost (With Financing) Month 0 Month 12 1,309.86 416,214 20,394,474
SOURCES AND USES
USES /UNIT /UNIT AMOUNT
Acquisition Cost 963.39 306,122 15,000,000 Hard Costs 142.46 45,267 2,218,083
Soft Costs 136.58 43,399 2,126,560
Financing Cost 67.43 21,425 1,049,831 Total Uses 1,309.86 416,214 20,394,474
CASH FLOW OF SOURCES
EQUITY Funding Order Share of Equity /UNIT /UNIT AMOUNT GP Equity 4 FALSE 5.2% 28.47 9,048 443,352 Homekey Grant 1 94.8% 519.27 165,000 8,085,000 Total Equity 100.0% 547.74 174,048 8,528,352 DEBT Funding Order LT Purch. Price LT Cons. Cost LTC /UNIT /UNIT AMOUNT Acquisition Loan 2 55.9% 0.0% 41.1% 538.67 171,164 8,387,044 Construction Loan 3 0.0% 55.9% 11.9% 156.02 49,576 2,429,247 Interest Reserve 0.0% 0.0% 0.0% 67.43 21,425 1,049,831 Total Debt 55.9% 55.91% 58.2% 762.11 242,166 11,866,122 Total Sources 1,309.86 416,214 20,394,474
FINANCING ASSUMPTIONS
INITIAL FINANCING
Loan Terms Interest Reserve Funded Upfront Term IO Amort Rate Rate Type Acquisition Loan 18 Months 18 Months 360 Months 6.50% Fixed Rate Construction Loan 18 Months 18 Months 360 Months 6.50% Fixed Rate Loan Cash Flows Funding Amt Payoff Amt Funding Payoff
Acquisition Loan 8,387,044 8,387,044 Month 0 Month 18 Construction Loan 2,429,247 2,429,247 Month 0 Month 18 Interest Reserve 1,049,831 1,049,831 Month 0 Month 18 Total Initial Financing 11,866,122 11,866,122
INVESTMENT UNDERWRITING DAYS INN2.77% Levered IRR 1.29X Levered EMX
OPERATING CF REVERSION CFINVESTMENT CF PROPERTY RETURNS Yes No
Shangri-La Industries, LLC
Affordable Housing Bridge to Tax Credit Worksheet
DESCRIPTION WATERFALL
INVESTMENT DESCRIPTION Shangri-La Industries, LLC
Name Motel 6 County 0
Address 46101 Research Ave State CA
City Fremont Zip Code 94539
FAR 4.00 Units 159 units
INVESTMENT CASH FLOWS
USES START END METHOD /Rentable SF /UNIT AMOUNT
ACQUISITION COST
Purchase Price Month 0 Month 0 Straight-Line 398.25 125,786 20,000,000 Total Acquisition Costs Month 0 Month 0 398.25 125,786 20,000,000 Hard Costs
Trade Costs Month 3 Month 12 Straight-Line 143.32 45,267 7,197,453 Total Hard Costs Month 3 Month 12 143.32 45,267 7,197,453 Soft Costs
Architecture & Engineering Month 0 Month 6 Straight-Line 2.63 831 132,058 Property Tax/Insurance Month 3 Month 12 Straight-Line 13.29 4,198 667,460 Permitting Month 3 Month 12 Straight-Line 7.78 2,458 390,822 Security Month 3 Month 12 Straight-Line 3.70 1,169 185,928 Utilities Month 3 Month 12 Straight-Line 7.37 2,328 370,152 Misc Month 3 Month 12 Straight-Line 31.66 10,000 1,590,000 Closing Cost Month 0 Month 6 Straight-Line 7.96 2,516 400,000 Developer Overhead Month 0 Month 12 Straight-Line 31.66 10,000 1,590,000 GP Fee 0.0% Month 3 Month 6 Straight-Line - - - Total Soft Costs Month 0 Month 12 106.06 33,499 5,326,420 Total Project Cost (Without Financing) Month 0 Month 12 647.63 204,553 32,523,873 Acquisition Points 1.00% Month 0 Month 0 Straight-Line 2.33 735 116,872 Construction Interest Month 1 Month 18 15.55 4,910 780,672 Total Financing Costs Month 0 Month 18 17.87 5,645 897,544 Total Project Cost (With Financing) Month 0 Month 12 665.50 210,198 33,421,417
SOURCES AND USES
USES /UNIT /UNIT AMOUNT
Acquisition Cost 398.25 125,786 20,000,000 Hard Costs 143.32 45,267 7,197,453
Soft Costs 106.06 33,499 5,326,420
Financing Cost 17.87 5,645 897,544 Total Uses 665.50 210,198 33,421,417
CASH FLOW OF SOURCES
EQUITY Funding Order Share of Equity /UNIT /UNIT AMOUNT GP Equity 4 FALSE 4.6% 19.15 6,048 961,632 Homekey Grant 1 95.4% 395.76 125,000 19,875,000 Total Equity 100.0% 414.91 131,048 20,836,632 DEBT Funding Order LT Purch. Price LT Cons. Cost LTC /UNIT /UNIT AMOUNT Acquisition Loan 2 35.9% 0.0% 21.5% 143.11 45,200 7,186,869 Construction Loan 3 0.0% 35.9% 13.5% 89.61 28,304 4,500,372 Interest Reserve 0.0% 0.0% 0.0% 17.87 5,645 897,544 Total Debt 35.9% 35.93% 37.7% 250.59 79,150 12,584,785 Total Sources 665.50 210,198 33,421,417
FINANCING ASSUMPTIONS
INITIAL FINANCING
Loan Terms Interest Reserve Funded Upfront Term IO Amort Rate Rate Type Acquisition Loan 18 Months 18 Months 360 Months 6.50% Fixed Rate Construction Loan 18 Months 18 Months 360 Months 6.50% Fixed Rate Loan Cash Flows Funding Amt Payoff Amt Funding Payoff
Acquisition Loan 7,186,869 7,186,869 Month 0 Month 18 Construction Loan 4,500,372 4,500,372 Month 0 Month 18 Interest Reserve 897,544 897,544 Month 0 Month 18 Total Initial Financing 12,584,785 12,584,785
INVESTMENT UNDERWRITING MOTEL 626.20% Levered IRR 3.17X Levered EMX
OPERATING CF REVERSION CFINVESTMENT CF PROPERTY RETURNS Yes No
SUBMITTED BY SHANGRI-LA INDUSTRIES
PAGE 49
Bridge To Tax Credit Underwriting
Filename: Motel 6 - Fremont.xlsm
Worksheet: 6. Proforma
Shangri-La Industries, LLC
Affordable Housing Bridge to Tax Credit Worksheet
20-Year Proforma
Property: Motel 6 159 Total units, including 1 non-revenue unit(s) Operating Cash Flow Projection Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Cash Flow Projection
Market Rents 3.00% 0 0 0 0 0 0 0 0 0 0 0 0
Other AMI-Based Rents 3.00% 3,054,361 3,145,992 3,240,372 3,337,583 3,437,710 3,540,842 3,647,067 3,756,479 3,869,173 3,985,249 4,104,806 4,227,950 Total Gross Potential Rent (Proposed Unit Mix/Rents) 3,054,361 3,145,992 3,240,372 3,337,583 3,437,710 3,540,842 3,647,067 3,756,479 3,869,173 3,985,249 4,104,806 4,227,950 Allowance for Multifamily Rent Loss 5.00% (152,718) (157,300) (162,019) (166,879) (171,886) (177,042) (182,353) (187,824) (193,459) (199,262) (205,240) (211,398) Allowance for Multifamily Bad Debt 0.00% 0 0 0 0 0 0 0 0 0 0 0 0 Other Income 3.00% 57,240 58,957 60,726 62,548 64,424 66,357 68,348 70,398 72,510 74,685 76,926 79,234 Effective Gross Income $2,958,883 $3,047,649 $3,139,079 $3,233,252 $3,330,248 $3,430,157 $3,533,062 $3,639,053 $3,748,224 $3,860,672 $3,976,492 $4,095,786 Operating Expenses 3.00% (1,598,904) (1,646,871) (1,696,277) (1,747,166) (1,799,581) (1,853,568) (1,909,175) (1,966,450) (2,025,444) (2,086,207) (2,148,793) (2,213,257) Proposed Reserve Deposit $39,750 (40,943) (42,171) (43,436) (44,739) (46,081) (47,464) (48,887) (50,354) (51,865) (53,421) (55,023) (56,674) Net Operating Income $39,750 $1,319,037 $1,358,607 $1,399,366 $1,441,347 $1,484,586 $1,529,125 $1,574,999 $1,622,249 $1,670,915 $1,721,044 $1,772,675 $1,825,854 Total Mortgages P&I (548,000) 548,000 548,000 548,000 548,000 548,000 548,000 548,000 548,000 548,000 548,000 548,000 548,000 Operating Cash Flow $771,037 $810,607 $851,366 $893,347 $936,586 $981,125 $1,026,999 $1,074,249 $1,122,915 $1,173,044 $1,224,675 $1,277,854 Debt Service Coverage 2.41 2.48 2.55 2.63 2.71 2.79 2.87 2.96 3.05 3.14 3.23 3.33
2.41 minimum DSCR yrs 1-20
Operating Expense Cushion 48.2% 49.2% 50.2% 51.1% 52.0% 52.9% 53.8% 54.6% 55.4% 56.2% 57.0% 57.7%
48.2% minimum Cushion yrs 1-20
Cash Distribution Projection
Operating Cash Flow $771,037 $810,607 $851,366 $893,347 $936,586 $981,125 $1,026,999 $1,074,249 $1,122,915 $1,173,044 $1,224,675 $1,277,854 $0 Priority Cash Flow Dollars $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
0.0% Priority Cash Flow (Percentage) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Projected Distributable $771,037 $810,607 $851,366 $893,347 $936,586 $981,125 $1,026,999 $1,074,249 $1,122,915 $1,173,044 $1,224,675 $1,277,854
0.0% Tax Credit Equity $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 100.0% GP $771,037 $810,607 $851,366 $893,347 $936,586 $981,125 $1,026,999 $1,074,249 $1,122,915 $1,173,044 $1,224,675 $1,277,854 Bold, Green Highlight Cells Denote USER INPUT
Bold, Yellow Highlight Cells Denote USER INPUT OVERRIDES White Cells Denote CALCULATED RESULTS
Assumptions /
Trends
SUBMITTED BY SHANGRI-LA INDUSTRIES
PAGE 50
Bridge To Tax Credit Underwriting
Filename: Motel 6 - Fremont.xlsm
Worksheet: 6. Proforma
Shangri-La Industries, LLC
Affordable Housing Bridge to Tax Credit Worksheet
20-Year Proforma
Property: Motel 6 159
Operating Cash Flow Projection
Cash Flow Projection
Market Rents 3.00%
Other AMI-Based Rents 3.00%
Total Gross Potential Rent (Proposed Unit Mix/Rents)
Allowance for Multifamily Rent Loss 5.00%
Allowance for Multifamily Bad Debt 0.00%
Other Income 3.00%
Effective Gross Income
Operating Expenses 3.00%
Proposed Reserve Deposit $39,750
Net Operating Income $39,750
Total Mortgages P&I (548,000)
Operating Cash Flow
Debt Service Coverage
2.41 minimum DSCR yrs 1-20
Operating Expense Cushion
48.2% minimum Cushion yrs 1-20
Cash Distribution Projection
Operating Cash Flow
$0 Priority Cash Flow Dollars
0.0% Priority Cash Flow (Percentage)
Projected Distributable
0.0% Tax Credit Equity
100.0% GP
Assumptions /
Trends
Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 2032 2033 2034 2035 2036 2037 2038 2039
0 0 0 0 0 0 0 0
4,354,789 4,485,432 4,619,995 4,758,595 4,901,353 5,048,394 5,199,845 5,355,841 4,354,789 4,485,432 4,619,995 4,758,595 4,901,353 5,048,394 5,199,845 5,355,841 (217,739) (224,272) (231,000) (237,930) (245,068) (252,420) (259,992) (267,792) 0 0 0 0 0 0 0 0
81,611 84,059 86,581 89,178 91,853 94,609 97,447 100,371 $4,218,661 $4,345,219 $4,475,576 $4,609,843 $4,748,138 $4,890,583 $5,037,300 $5,188,420 (2,279,655) (2,348,044) (2,418,486) (2,491,040) (2,565,772) (2,642,745) (2,722,027) (2,803,688) (58,374) (60,125) (61,929) (63,787) (65,701) (67,672) (69,702) (71,793) $1,880,632 $1,937,049 $1,995,161 $2,055,016 $2,116,666 $2,180,167 $2,245,571 $2,312,939 548,000 548,000 548,000 548,000 548,000 548,000 548,000 548,000 $1,332,632 $1,389,049 $1,447,161 $1,507,016 $1,568,666 $1,632,167 $1,697,571 $1,764,939
3.43 3.53 3.64 3.75 3.86 3.98 4.10 4.22
58.5% 59.2% 59.8% 60.5% 61.1% 61.8% 62.4% 63.0%
$1,332,632 $1,389,049 $1,447,161 $1,507,016 $1,568,666 $1,632,167 $1,697,571 $1,764,939 $0 $0 $0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0 $0 $0
$1,332,632 $1,389,049 $1,447,161 $1,507,016 $1,568,666 $1,632,167 $1,697,571 $1,764,939 $0 $0 $0 $0 $0 $0 $0 $0
$1,332,632 $1,389,049 $1,447,161 $1,507,016 $1,568,666 $1,632,167 $1,697,571 $1,764,939 “Chronic homelessness was a
challenge before COVID-19 and the
need for shelter and services has
increased during the pandemic.
Transitioning from applying for
funds to opening the doors within
four months is a huge success for
the community and would not have
happened without our community
partners collectively prioritizing this
initiative. ”
MEGAN HUNTER, CITY OF SALINAS COMMUNITY
DEVELOPMENT DIRECTOR
SHANGRI-LA INDUSTRIES