What follows is an analysis of the South Henderson Street site that Van Gogh Development Corporation has selected for a mixed-use, artist live/work project (see previous blog). Details are subject to change, but what follows is the current proposal.
Based on a market capture analysis, we project there are 6,878 Based on a market capture analysis, we project there are 6,878 existing renter households with the potential to rent a unit at the subject if it existed today. The rule of thumb used by analysts and market participants is that if a development needs to capture more than 10% of the qualified market, the project carries some additional risk. The capture rate calculated for the subject is less than 1% indicating an adequately sized renter market for the subject.
Because the subject is proposed new construction that is superior to a majority of the existing market it is expected to rent up faster. The rule of thumb used by analysts and market participants is that if a development needs to capture more than 10% of the qualified market, the project carries some additional risk. The capture rate calculated for the subject is less than 1% indicating an adequately sized renter market for the subject.
Because the subject is proposed new construction that is superior to a majority of the existing market, it will achieve greater than its fair share of market demand, with an estimated absorption of about 20 units per month achieving a stabilized lease up in about three months.
Historically, the conventional market rate apartment vacancy within the subject's neighborhood has averaged 2.6% over the past five years, with a 4.1% average over a 10-year period.
At this time, market rate for a studio apartment was $1085/month and $1105 for a one-bedroom apartment. ArtSpace Projects proposed to rent a studio at the subsidized rate of $421 and one-bedroom units for $453/month.
Little new conventional market rate apartment housing has been constructed in the past 30 years. Consequently, the majority of conventional market rate apartment housing is old, physically worn out product. The new construction that has occurred has generally been affordable housing, which takes advantage of affordable housing funder sources creating feasibility. Since the subject is proposed new construction with unit finish and amenities superior to most of the existing inventory, it should be very competitive in the market.
Units are likely to be a minimum of 660sf and include a more open floor plan, 8'ceilings, minimal kitchen size with dishwasher, and laundry units housed in a common laundry area in order to maximize floor space and light in the units.
The site consists of one rectangular tax parcel. The site area is 10,126 sq ft with about 80 feet of frontage along South Henderson Street.
The subject site is zoned NC3P-40’ (Neighborhood Commercial 3 with a 44ft height limit) by the City of Seattle and is located within the Rainier BeachHub Urban Village.
The NC3P-40 zone has the purpose of encouraging “A pedestrian- oriented shopping area composed of small to medium sized businesses providing a full range of household and personal goods and services to a surrounding neighborhood”.
The P designation reinforces the pedestrian aspect of the zoning and also provides for a lower parking requirement for some uses. Because the subject property is located within the transit overlay, there is no parking requirement.
Permitted uses include a wide range of personal and household sales and services, gas stations, minor vehicle repair, professional, dental and veterinarian offices, residential use in mixed use structures, office supply sales, public assembly and entertainment uses, restaurants (with and without drive through lanes) and taverns, light manufacturing, restaurants, offices and business support services, institutional and educational uses, and nursing homes.
Residential uses in mixed use structures are permitted outright. Single- purpose residential use (residential use is the only use within the building) is permitted as an administrative conditional use in the NC3 zone. Live-work units are permitted outright in the zone except where residential uses at street level are prohibited.
Warehousing, mini storage units, wholesale showrooms, and light manufacturing uses are permitted within the NC3 zone, although heavy commercial services, such as construction services and commercial laundries, are not. Sales and service uses are also permitted.
The maximum building height is 40 ft, though an additional 4 ft of height is permitted if the commercial level is at least 13 ft in height and the residential levels are at least 8.5 ft in height, provided views of neighboring sites are not significantly impacted.
A minimum of 80% of a structure’s street front façade at street level shall be occupied by non- residential uses.
Usable open space for residential use must equal at least 20% of the gross floor area. In this development, the roof top garden and patios will qualify as open space.
A title report was not available. It is assumed that standard easements for access and provision of utilities exist. It is also assumed that there are no easements, encroachments, covenants or other restrictions to the use of the site that would affect its utility or use.
The site currently houses a vacant residential property, which will be demolished for new construction. The site is level and contains no known hazards or critical areas. Views of Lake Washington may be possible from the upper floors of the new development.
Washington State is a seismically active region. It is noted that construction will be based on current building codes which recognize the seismic risk of the area. Geotechnical consulting will be provided by GeoTech Consultants.
Topography, zoning, availability of utilities, access and existing encumbrances are similar to other properties in the immediate vicinity and are amenable to full utility of the site under any of its allowed uses. The site size is sufficient and has appropriate access to be developed to the highest density allowed by zoning. There are no unusual site characteristics known that would affect the value or marketability of the site.
Construction Summary:
Occupancy Type - Affordable artist housing
Construction Type - Wood frame over concrete
Year Built - 2015
No. of Floors - 4
Exterior Walls - Low maintenance, durable materials such as
cementitious or metal panel siding
Roof - Flat
Decks/Patios - No private unit decks or patios
Parking - Loading only
Windows - Double Pane Vinyl
Entry Doors/Security Unit Entries - Secure building entry
Hot Water - Individual electric hot water tanks
Unit Heat - Electric baseboard or fan forced
Fire Protection - sprinkler system
Deferred Maintenance - None
Effective Age - New Construction
Remaining Economic Life - Estimated 50 years or more
Laundry - Common laundry unit
Onsite Amenities -
Unit Appliances - Electric oven/range combination with overhead hood/fan, centrally vented to the outside; two-door, frost-free refrigerator/freezer. Units will have dishwashers, but no disposals.
Floor Finish - concrete & carpet
Kitchen & Bath - Average to good quality cabinetry, laminate countertops, and single stainless-steel sinks.
Water - Tenant Paid (RUBS)
Sewer - Tenant Paid (RUBS)
Garbage - Tenant Paid (RUBS)
Hot Water - Tenant Paid
Heat - Tenant Paid
General Electric - Tenant Paid
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