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Market. The Seller engaged Maxfield Research, Inc., Minneapolis, Minnesota to
<br /> produce the Market Feasibility Study, dated June 2001, for the Project. This Market
<br /> Feasibility Study provided, in part,the following findings:
<br /> • Calculated demand for independent senior housing in the area of 263 units,
<br /> expected to increase to 315 units in the year 2005.
<br /> • The location of the proposed project site is a good location for an
<br /> independent senior rental development.
<br /> • The existing market area senior independent living and assisted living
<br /> projects are 99.2 percent occupied.
<br /> A summary of the Market Study is attached hereto as Appendix D. A copy of the full
<br /> Market Feasibility Study is available from the Underwriter, Miller Johnson Steichen
<br /> Kinnard,Inc.,5500 Wayzata Boulevard,Suite 1450,Minneapolis,Minnesota 55416,during
<br /> the term of the offering of the Series 2001 Bonds.
<br /> Competition. According to the Market Study,the following properties,as described
<br /> in the table below, are considered competitive with the Project Facilities.
<br /> Name No. of Occupancy (as of June Unit Style Unit Size(SF) Monthly Rent
<br /> Units 2001)
<br /> Cornerstone 77 100% 1 BR 779 $640
<br /> Cooperative, 2 BR 1,083 to 1,368 $930 to $1,155
<br /> Plymouth, MN 3 BR 1,561 $1,350
<br /> Gramercy 56 100% 1 BR 840 $694
<br /> Cooperative, 1 BR+den 1,075 $920
<br /> Plymouth, MN 2 BR 992 to 1,237 $872 to $1,028
<br /> West Ridge, 65 100% 1 BR 721 to 744 $735 to $812
<br /> Minnetonka, MN 2 BR 867 to 1,092 $1,054 to $1,380
<br /> 3 BR 1,168 $1,483
<br /> Ridgepointe, 274 98.5% 1 BR 590 to 800 $880 to $1,280
<br /> Minnetonka, MN 1 BR+den 778 to 788 $1,120 to$1,270
<br /> 2 BR 806 to 1,375 $1,125 to$2,700
<br /> TOTAL 472 99.2%
<br /> Appraisal Value
<br /> Harvey Swenson,MAI,of Commercial Appraisal&Consulting Group,of Roseville,
<br /> Minnesota,has prepared an appraisal of the market value of the Project as of completion and
<br /> stabilized occupancy(the"Appraisal"). The appraiser reconciled the values from the income,
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