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Page 8 <br />Prepared for: City of Eugene <br />Prepared by: PNW Economics, LLC <br />Market & Financial Analysis of Gordon Lofts MUPTE Program Application <br />Apartment Market Analysis: “Amenity Based Income” & Rents <br />Amenity Based Income Defined <br />In the Gordon Lofts MUPTE application, the Applicant assumes that in addition to income from <br />apartment rents, it will also earn “Amenity Based Income” defined on application page 36 as: <br />This includes premiums added to select floorplans for items such as; [sic] top floor views, <br />corner apartments, decks, skylights, etc. <br />In other words, the Applicant expects to charge rents higher than documented in different units based <br />on different unit amenities in the definition. <br /> <br />On page 40 of the MUPTE application, the Year 1 Summary of apartment performance, and on page <br />42, the 10-year pro formas for the project, the Applicant assumes that Gordon Lofts will earn an <br />additional $563,211 annually in the first year from rent premiums for different units. Table 4 displays <br />this combined unit rent premium, its context with the whole project apartment component, and how <br />that translates into higher effective average per-unit rent. <br />• $563,211 in annual Amenity Based Income a 26% rent premium over the documented <br />$2,159,796 Potential Gross Annual (Rent) Income the project expects to earn in Year 1 as found <br />on page 40 Year 1 summary and page 42 10-year pro formas. <br />• When translated into a monthly rent premium rather than annually, Amenity Based Income <br />amounts to $369.56 additional rent on average for every apartment unit, or $0.65 per square <br />foot on average for every apartment unit. <br /> <br />Table 4 – Gordon Lofts Apartments Amenity Based Income Rent Analysis <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br />Annual <br />Project- Project-Average Per Average Per <br />Wide 1/Wide Unit Square Foot 2/ <br />Amentity-Based Income $563,211 $46,934 $369.56 $0.65 <br />1/ Obie Companies/Gordon Lofts, LLC MUPTE Application page 40. <br />2/ Project-wide Monthly "Amenity-Based Income" divided by total gross leaseable apartment area for all units combined. <br />Monthly <br />October 17, 2018, Work Session – Item 2