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Alex Lin Emily Schwartz Sarah Snider Kate Wittels
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LiveLive
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WorkWork
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ConnectConnect
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Executive SummaryExecutive SummaryVision:
Redeveloping and revitalizing the 22-acre site (Osborn Triangle) into a 24-hr mixed-used community with flexible development options to adapt to future needs of MIT and the surrounding community.
Program:The program will consist of 2.4 Million Square Feet In a Mix of Uses
Phases:Phase 1 – 500,000 Square FeetPhase 2 – 1.3 Million Square FeetPhase 3 – 200,000 Square FeetPhase 4 – 400,000 Square Feet
Deal Structure: Three Way Partnership: Developer, MIT, Private Investor
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Development VisionDevelopment Vision
“This 22 acre redevelopment plan seeks to lead MIT into the future by re-branding the campus of the
world’s leading technical institute into a vibrant and urban
educational community.”
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Master PlanMaster Plan
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ProgramProgram
Total Square Feet in Four Phases of Development: 2,400,000 (2,670,000, including Shire
Building)
Total FAR: 3.23
Total For MIT Use: 1,150,000 SF260,000 SF (Student Dorms & Fraternity –
600 beds)325,000 SF (Office)500,000 SF (Lab/R&D)64,00 SF (Conference/Special Use)
Total Speculative Development: 1,300,000 SF
630,000 SF (Residential – 630 Units)80,000 SF (Office)156,000 SF (Lab/R&D)300,000 SF (Hotel – 679 Units)22,000 SF (Retail)46,000 (Garage)35,000 (Special Use)
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MarketMarketResidential - Rental
Strong Demand From MIT and Surrounding Biotech
MIT Needs At Least 500 RoomsResidential Condo
NorthPoint to Bring Large Increase in Supply
Apartments With Option to Convert Are Good Choose
RetailNot a Location for Destination
RetailMix of Restaurants/Bars/Grocery
Will Add to 24-Hour Vibrancy$35.00 NNN Average Retail Rent
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Market Continued…Market Continued…Lab/R&D
Driven by Large Biotech Companies and Institutions
8.6% Availability Rate and $55.00 NNN Average Rents
OfficeDriven by Similar Users as R&D as
Well as Technology Companies11% Availability Rate and $49.00
Gross Average RentsHotel
Demand From Surrounding Businesses and Universities
Need for Extended Stay Hotel & Mid-Scale Options
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Design ApproachDesign Approach
Shire Building Serves as a Natural DivideGreenway Provides Continuity Through SiteFlexible Options Allow Project to Quickly
Respond to Market Conditions
Design Components100% Corner – Entertainment ZoneMass Ave Residential ZoneMain Street Residential ZoneDedicated Academic Zone
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Entertainment Zone100% Corner
Entertainment Zone100% Corner
Massachusetts Ave. and Osborn St.
Two hotels
Main entrance to convention center
Key retail elements
Access to performance artist space
24/hour corner
Site of Urban Ring Stop
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Mass Ave Residential Zone
Mass Ave Residential Zone
Maintain solid street edge along Mass Ave.
Student Housing
Luxury Housing Complex
Continuous first floor retail along Mass Ave.
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Main StreetResidential Zone
Main StreetResidential Zone
630 Market Rate Residential Units
Heights of Residential Buildings in line with Area Standard
Located residential zone on Main Street in keeping with neighborhood characteristics
Re-use of several existing buildings
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Academic ZoneAcademic Zone
Mix of R & D and Office Space
Closely integrated with existing campus facilities
Used Shire Building as Natural Buffer from Residential Zone
Agglomeration of academic uses
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Permitting ApproachPermitting Approach
Proposal includes 3.23 FARMaximum FAR If All Residential = 3.85Maximum FAR If No Residential = 2.81 Average FAR = 3.33
We are proposing 37% residential (including student housing)
Mixed use is in best interest of community3.23 is likely to be acceptable to Cambridge
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Community & Public Benefits
Community & Public Benefits
24-hour community with public amenities
Greenway and open space amenities
Preservation of historical structure – Shire Building integration
Redevelopment of under-used land, checking and cleaning up potential contamination
Promotion of flexible and green building standards
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Financial SummaryFinancial Summary
Total Development CostHard Costs $616.8 Million ($255/SF)Soft Costs $153.5 Million ($63/SF)Land Costs $200 Million ($75/SF)
Total Cash Flow $201.8 Million
Implied Land Value $200 Million ($75/SF)WACC 7.5%Terminal Cap Rate 6.5%
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Sensitivity AnalysisSensitivity Analysis
WACC: 7.0% 7.5% 8.0% 8.5% 9.0%
5.0%
388,320,550
342,119,440
299,496,673
260,176,508
223,905,237
5.5%
329,079,499
286,879,594
247,971,070
212,099,952
179,032,563
6.0%
279,711,957
240,846,389
205,033,067
172,036,156
141,638,668
6.5%
237,939,421
201,895,216
168,700,911
138,136,020
109,997,680
7.0%
202,134,390
168,508,496
137,559,062
109,078,761
82,876,833
Terminal Cap Rate:
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Deal StructureDeal StructureSpecial Purpose Vehicle (e.g., Trust or LLC) Equity Capital Funding – Three-way partnership
Developer – “first in, last out”Developer feePromote
MIT Endowment – “second in, second out”Preferred returnPromote
Private Investor – “last in, first out”Preferred returnPromote
Debt Capital Funding: Commercial Lender Development Partnership Contribution Preferred Return PromoteEquity Capital
Developer Seed capital None 33%MIT Endowment Land Fixed 33%Private Investor Bridge Equity Fixed 33%
Debt CapitalCommercial Lender Construction Loan None None