Grosvenor Park free essay sample

Dubin has done very well for himself in the past, developing over 4,000 units in Maryland. His most recent development, Grosvenor Tower, a luxury high rise, was a massive success. He was able to garner a 98% occupancy rate since opening. The building caters to young professional couples and singles looking to live somewhere nice with commuter access to the metro into downtown Washington. Many of these tenants indicated to Dubin that they enjoyed the area and would one day like to own homes there. This is where Dubin’s newest development comes into play, a 189 unit community called Grosvenor Park that would serve as single-family bridge homes for young professionals like the ones in Grosvenor Tower. This community would take the young professional demographic from apartment and span the time gaining equity for their â€Å"dream home†. There are many risks associated with this project. First and foremost is the long list of Planning Department requirements, . We will write a custom essay sample on Grosvenor Park or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page 6 million in total including $1 million worth of road improvements. There is also a requirement that 15% of units must be set aside for moderate price dwelling units. These units are built comparable to market, but sold at a fraction of the price. Mortgage interest rates were also relatively high during the time of construction due to a number of economic factors. Dubin is afraid that this financial requirement will drive his prices above market rate, and out of range of his potential buyers. To mitigate these risks, Dubin has come up with the plan of developing in chunks, only building as many homes as could sell in a timely fashion before further development. He also offers a high level of customization in these homes. Purchasers have a chance to have a home that fits their wants at a relatively low cost in what Dubin believes to be a prime location. Dubin also plans to develop the more affordable units after he has established a financial base with the market rate units. After assessing Dubin’s situation, I would recommend that he try to reason with the Planning Department to see if there is any way to reduce the fiscal requirements of the project. It is crucial for Dubin to keep his prices low enough for the units to be sold at a rate fast enough for him to make money. As the deal stands, Dubin can have his loans paid off in just over two years and realize a profit in around the same time frame. These figures do not include the extra PD demands, so I think Dubin should try to figure out another strategy for satisfying the PD before proceeding with the project. The demands of the Planning Department seem to be a bit excessive, especially seeing as Dubin and his team seem to have found viable alternatives to the proposed requirements. The sound barrier seems fairly reasonable, and also something that could potentially benefit Dubin’s development a well. The new sewage system, however, seems to be unneeded. Dubin’s team inspected the sewage of the development upstream and concluded the mismanagement fears of the PD were unfounded. Dubin also believes that the PD’s concern about the community bringing in too many new students is completely unfounded. Dubin has a great amount of faith that the potential tenants will wait until after they leave the development to start a family. If I were in Dubin’s shoes, I would put off construction until a better agreement with the PD was found. I would further research the issues, and provide concrete evidence that the sewage in the abutting neighborhood is being managed properly, as well as conducting studies to show that the development would not bring a significant influx of new children into the community. If a better agreement cannot be reached, I would recommend that Dubin continue with the project at the proposed rate of a few units at a time. This will help to not overextend the project and it will keep occupancy rates high as well as helping to test the waters. As someone who values the flexibility of a single family home with parking over an apartment complex, I would love to have an option like this as a young adult. Assuming I had a job in the city, living in a community like this with other individuals my age would provide adult living with social opportunities as well. If I were to get married and settle down, this would be the perfect place to start my life and save up for my â€Å"dream home†. As an investment vehicle, I would wait to see how the community develops before concluding anything as a purchaser. Dubin has a reputation for high quality and knowing what his tenants want, both are very good attributes. I would like more evidence to show that these tenants that occupy Grosvenor Towers would even be compelled to leave a residence like that before acquiring their â€Å"dream house†. The 10% annual appreciation rate for residential properties at the time is definitely a nice figure to consider as well. The development of single-family homes is much different than multi-family. They are marketed to very different socio-economic demographics. Multi-family developments (excluding luxury apartments) usually range from low to market income housing, while single-family units can run a wide spectrum. The space and land resources for single-family developments are much more demanding than multi-family. The turnover rate for single-family homes is lower than apartments because the purchase commitment is a much bigger move than a rental as well. This presents a higher risk of lower occupancy and is more sensitive to market fluctuations, which could prove costly to the developer.