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$250 MILLION HISTORIC MULTI-FAMILY DEVELOPMENT

ROLE

Retained by a leading real estate investment fund to act as development manager for a 500,000-square-foot historic warehouse renovation, creating 339 luxury rental apartments.

OBJECTIVE

To address the challenges of severe shifts in the economy, Madden assessed the value and cost of changing development direction mid-stream from a condominium to a rental. Once the design direction had been altered, Madden advised and assisted the development team in meeting an aggressive design, construction and leasing schedule.

APPROACH

Originally designed for 365 condominiums, a new strategy was required to adapt the project to the new economy. Madden determined, as part of its assessment, that a significant amount of tax credits could be obtained by redesigning the building to preserve its historic integrity and, in turn, listing the building on the National Register of Historic Places. Madden helped secure above-market value for the tax credits and guided the syndication and sale to a third-party investor for more than $48 million. After completing the feasibility study, Madden led an extensive design review so that modifications could be tailored to the newly targeted demographic. After the design was finalized, an effective strategic approach was developed to monitor and coordinate the construction and development team. During construction, Madden evaluated projected budgets, located areas where money could be saved, and efficiently reduced costs. Finally, Madden focused on branding the building and developing a strong marketing campaign required to lure tenants to a newly created market.

RESULT

With Madden’s assistance the project was delivered ahead of schedule and under budget. The project’s marketing campaign was so successful that nearly 50 percent of the building was leased in three months, with rents far and above what was originally projected. Furthermore, the tax credits helped to lower the project basis and allowed the investors to realize a significant incremental return.