University Place
A Solid Economic, Environmental &
Educational Case for Sustainability
310 SW Lincoln
Portland, Oregon
PSU – Center for Real Estate
BOMA Workshop - Spring 2007
Location
Univ. District / S. Waterfront
Centrally Located
–PSU Campus
–South Waterfront
–Riverplace
–OHSU’s 2 campuses
5 Minutes From Main Campus
2 Blocks from Streetcar
Future Light Rail Corridor
PSU – Center for Real Estate
BOMA Workshop - Spring 2007
Location
4.03 acre UP site (PSU)
–Hotel
–Conference facilities
–Restaurant/Lounge
–Parking
0.46-acre parcel (Mr. Wyse)
–19,000 SF / 4,600 SF retail
–Underutilized retail corner
PSU – Center for Real Estate
BOMA Workshop - Spring 2007
Existing Conditions
Hotel
235 Rooms
Large 300 SF Rooms
$75 – $100/Night
$12 overnight parking
Parking
239 Surface Spaces
$125 Monthly Rate
Conference/Restaurant
11,000 Gross SF / 8,000 Net SF
Max 400 People (Theater Style)
Max 340 People (Banquet Style)
4,600 SF Restaurant/Lounge
LV’s Uptown Jazz Club
PSU – Center for Real Estate
BOMA Workshop - Spring 2007
Financial Snapshot
 PDC Friendly Condemnation (2004)
 Avg. Occ. 29% from 4/1/06 – 3/31/07
 Transient ADR $75
 Up to 78 Hotel Rooms as Student Housing
 1st year of meeting DS of 1.5MM
 Conference bookings improving
 Significant site potential
 Significant hotel upside
PSU – Center for Real Estate
BOMA Workshop - Spring 2007
PSU Needs

Recognize PSU’s 50 year long-term perspective
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Plan for continued student body growth
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Address PSU’s current housing shortage
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Oregon’s Largest University
Est. 5% annual enrollment growth
25,000 students now - 35,000 by 2015
2000 unit shortage despite Epler/Broadway
Create additional multi-use
conference/educational space
PSU – Center for Real Estate
BOMA Workshop - Spring 2007
Challenges & Constraints
 DDA Constraints (February 2004):
–“…mixed-use development…to include housing for students, faculty and staff,
conference facilities, academic uses, retail and parking.”
–“…a vibrant and dense mixed-use learning-living village.”
 Financial Constraints:
Bond Issue of 23.5MM - Matures in FY 2033-34
Bond issue cannot be prepaid
DS 1.5MM – Approx. Rate 4.6%
1.25 DSCR for new infrastructure projects
Development must cash flow within 1-year
 Other Challenges:
20MM hotel in center of site
Hotel demo not economically feasible given PSU financial constraints
PSU – Center for Real Estate
BOMA Workshop - Spring 2007
Development Program Assumptions
1.
PSU should acquire 0.43-acre corner lot
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2.
PSU retains and expands hotel and
conference functions
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3.
Acquisition price 2MM
Multi-Use Conf./Educational Space
PSU supports low parking ratios
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Site location
Mass transit
4,000 existing PSU parking spaces
PSU – Center for Real Estate
BOMA Workshop - Spring 2007
Development Program - Overview
14,500 SF RETAIL
(SMALL FORMAT
GROCER)
1200 STUDENT
HOUSING UNITS
HOTEL
RENOVATION
10,000 SF ATRIUM
(BISTRO &
PERFORMANCE VENUE)
CONFERENCE
RENOVATION
359 PARKING
SPACES
FLEXIBLE MULTI-USE EDUCATIONAL SPACE
XXX SF of mid-tech+ multi-use space for
conferences, classrooms, and performances
PSU – Center for Real Estate
BOMA Workshop - Spring 2007
Shipping Containers
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Creative Option – Low Cost Housing
Trade Deficit Yields Surplus Containers
Low cost in Pacific NW
Ultimate in sustainability
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Fewer materials & labor
Less embodied energy compared to
new construction
Seismically stable welded steel modules
Stacked 10 high - interlocked for stable shipping
Hold over 67,000 pounds
Bear loads over 210 lbs/SF
PSU – Center for Real Estate
BOMA Workshop - Spring 2007
Shipping Containers As Housing
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It’s been done…
Keetwonen Student Housing Complex
1,000 student housing units - Amsterdam
Standard 40’ Units 320 SF / 53’ units 424 SF
PSU – Center for Real Estate
BOMA Workshop - Spring 2007
Shipping Containers Construction
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Low Cost – less than $4/SF ($600 to $2000/unit)
Standardized Unit Construction (warehouse)
Easy Transport to Site
Abbreviated Onsite Construction vs. Standard
Construction Methods
Shorter Construction Timeline – Reduced Costs
PSU – Center for Real Estate
BOMA Workshop - Spring 2007
Unit Interiors
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PSU – Center for Real Estate
Single Wet Core
Pre-Fab Molded Fiberglass Bath/Kitchenette Unit
Translucent Double Screened Acrylic Wall & Entry Door
Sliding Doors to Private Balconies
Efficient Individual Heat Pumps
Submetered Water & Electricity
Finished Interiors
BOMA Workshop - Spring 2007
Shipping Containers Summary
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<$50K per Container Unit vs. $77K per Epler Unit
Units Larger than Existing PSU Housing Units
Supports $100,000 of debt load per unit.
Quickest Route to Revenue Stream
Available, Inexpensive to Build, Faster to Construct
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PSU – Center for Real Estate
Makes Economic & Environmental
Sense
Container Housing Provides
Immediate Revenue Stream
BOMA Workshop - Spring 2007
SW Perimeter Student Housing
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Initial Construction Phase
432 Units - 5 Clusters
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PSU – Center for Real Estate
Units Elevated to Preserve Parking
40 FT and 53 FT Cantilevered Units
Private Balconies
BOMA Workshop - Spring 2007
SW Perimeter Student Housing
Existing 4TH
Street OffRamp
PSU – Center for Real Estate
4th Street OffRamp After
Student Housing
Constructed
BOMA Workshop - Spring 2007
Atrium Strategy
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Begins 2nd Phase – Incl. Atrium/Conference/Hotel Renovation
Open Courtyard to Atrium Conversion
Creates 10,000 SF Multi-use Space
Double the size of Hoffman Hall
Proposed Atrium
Existing Courtyard
PSU – Center for Real Estate
View to NW
BOMA Workshop - Spring 2007
Atrium Strategy
Existing Courtyard
Performance Venue
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Low Cost Conversion – glass/steel roof
Daylit Atrium - 4-Season Use
PSU – Center for Real Estate
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Scaleable Performance Venue
Flex-Rooms/Skyboxes
BOMA Workshop - Spring 2007
Atrium Strategy
Montgomery Park Atrium
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Maximize Uses – Maximize Revenues
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Conferences
Banquets
Lectures
PSU theater
Recitals
Jazz club (LV’s)
Concerts
Town hall meetings
Exhibits
Cafe dining
Bistro
More SF than Montgomery Park Atrium
Accommodate 600+ for Banquets
Accommodate 1,000 for Special Events
PSU – Center for Real Estate
BOMA Workshop - Spring 2007
Atrium Summary
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PSU – Center for Real Estate
10,000 SF flexible space
Enhances all development elements
Creates a hub/nexus of activity
Provides clear sense of place for Univ. Place
Facilitates low cost conversion of old restaurant
space to conference space
BOMA Workshop - Spring 2007
Conference Expansion
Breakout
Conference
First Floor
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Convert Rest/Bar Space to Conf.
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Convert Offices to Breakout Rooms
Breakout-Conf.
Kitchen
Atrium
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Create 5 Hotel Flex-Rooms
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Transform Atrium to Banquet/Conf.
Breakout/Flex
-Rooms
Additional Conference
Space in Blue
PSU – Center for Real Estate
BOMA Workshop - Spring 2007
Conference Expansion
Additional Conference
Space in Blue
Second Floor
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Enclose 2nd story unfinished roof space
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10,000+ SF Room
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Reconfigure with open floorplan
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Create 10 2nd story hotel flex-rooms
PSU – Center for Real Estate
Conference
BOMA Workshop - Spring 2007
Conference Summary
Summary
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Over 21,000 SF Total Conference Space
2nd Floor Conf. Room 10,000+ SF
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700 Banquet Style / 1000 Theater Style
Additional 4,500 SF of Flex-Room Breakout Space
Atrium provides 10,000 SF overflow space
Equip. Conf. Rooms as Technology Classrooms
Relieves Shattuck, Lincoln & PCAT closures
PSU – Center for Real Estate
BOMA Workshop - Spring 2007
Hotel Renovation
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Part of overall Phase 2 Construction
Renovate 181 rooms for extended stay
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Kitchenettes/Upgrades
Construct Grand Lobby
B-wing units - Inception of Residential College (FOCUS)
New Hotel Entrance
Existing Hotel
PSU – Center for Real Estate
BOMA Workshop - Spring 2007
Hotel Renovation
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Multi-Use Flex-rooms
– 15 Rooms
– Breakout
– Hospitality
– Board Rooms
– Atrium “Skyboxes”
– Adaptable space
– No loss of Guest
Rooms
Multi-Use = Max Revenue
PSU – Center for Real Estate
BOMA Workshop - Spring 2007
Hotel Renovation
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Showcase Dynamic Urban Univ.
Display PSU’s Creativity
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PSU – Center for Real Estate
Hallway Galleries (1,100 linear ft)
Student Projects / Workshops / Art
Accessible Rooftop Gardens
Stormwater Capture / Re-use
BOMA Workshop - Spring 2007
NE Quad - Student Housing
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Phase 3 Construction
384 units - 2 clusters
Split-level parking structure
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PSU – Center for Real Estate
Rooftop PV’s
Rooftop Wind Turbines
Rainwater capture/re-use
BOMA Workshop - Spring 2007
NE Quad - Student Housing
GET PICTURE FROM
INTERSECTION OF 4th &
LINCOLN FOR COMPARISON
SW Lincoln Street
PSU – Center for Real Estate
SW Lincoln After Student
Housing Constructed
BOMA Workshop - Spring 2007
Pinwheel Tower
Pinwheel (Plan View)
View to SE from
Unitus Building
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PSU – Center for Real Estate
Phase 4 Construction
Efficient Pinwheel design
350 units
10 stories high
Above 15’ high concrete podium
BOMA Workshop - Spring 2007
Pinwheel Tower
Cross-Section
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Ground floor retail
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(14,500 SF)
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Central Atrium
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Rainwater capture/re-use
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Artistic Atrium Water Feature
Ground Floor Retail
PSU – Center for Real Estate
BOMA Workshop - Spring 2007
Pinwheel Tower
Existing
Lincoln
Street
Existing NW Corner
PSU – Center for Real Estate
NW Corner after Pinwheel
Tower Constructed
BOMA Workshop - Spring 2007
5 Year Trends
Within 3 Miles
Retail Market Analysis
Age Within 3 miles
HH Income Within 3 miles
PSU – Center for Real Estate
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Retail Grocery
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>15K college grads - 1 mile radius
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Bistro - Within 3 miles…
– 125,000 population
– 50,000 college graduates
– 50% > $50,000 income
– > 30,000 on PSU campus
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Income growth
– Above National & State Avg.
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Known PSU Housing Demand
BOMA Workshop - Spring 2007
Our Market Niche
Affordable Hotel - Niche Market
-Educational conferees
-Visiting professors
-Student families
-OHSU patient families
-Prospective students
-Guest speakers
-Alumni
-Visiting performers
-Extended-stay research
Bistro & Atrium
-Green themed bistro “greenhouse”
-4-season, multi-functional space
-Music/theatrical performances
-Activated public space (increasing revenues)
-Banquets, weddings, conferences, town hall meetings
PSU – Center for Real Estate
Educational Conferences
-Programmed Continually
-Sustainability Focus
-Aspen Institute Model
-Technology Classrooms
Student Housing
-Satisfy Known Demand
-Creative - economical housing
-Graduate Students
-Inter-collegiate students
-FOCUS Participants
-International Students
Grocery
-Niche Smaller format grocer
-Tesco & Trader Joes
BOMA Workshop - Spring 2007
Parking Strategy
 359 Total shared parking spaces
– Maintain 239 spaces
– Add 120 spaces (split-level structure)
– Transit Oriented Development
– Location & student housing facilitate
low parking ratios…
– Flexcar & Beyond….
PSU – Center for Real Estate
BOMA Workshop - Spring 2007
3rd Avenue
Relocate Hotel
Entrance
Existing 3rd Avenue
Hotel Entrance
PSU – Center for Real Estate
New 3rd Avenue
Hotel Entrance
BOMA Workshop - Spring 2007
2nd Avenue
Existing 2nd Avenue
PSU – Center for Real Estate
New 2nd Avenue Entrance (Split Parking)
BOMA Workshop - Spring 2007
Development Structure
•Initial Purchase of Wyse Corner Parcel
•PSU to Manage:
•Retail Component
•Parking
•Student Housing
•Create Single Purpose Entity to Manage:
•Hotel, Bistro, Conference Space
•SPE Subsidiary to PSU Foundation
•Focus on Actively Marketing the space
•Development Phases
•Exceed DCR minimum of 1.25 (blended DCR as proposed 1.36)
•Finance through tax exempt bonds
PSU – Center for Real Estate
BOMA Workshop - Spring 2007
Development Structure
Project Components (by share Gross SF)
Retail Grocer
Bistro
Conference Center (ECC)
Converted Student Housing
2.6%
18.4%
ECC Hotel
Container Student Housing
Parking
2.1%
11.1%
1.2%
4.0%
60.6%
PSU – Center for Real Estate
BOMA Workshop - Spring 2007
Development Structure
Project Components (by share Hard Cost)
Retail Grocer
Bistro
Conference Center (ECC)
Converted Student Housing
9.7%
ECC Hotel
Container Student Housing
Parking
1.5%
4.4%
4.5%
7.9%
1.2%
70.8%
PSU – Center for Real Estate
BOMA Workshop - Spring 2007
Development Structure
Project Components (by share of Yr 1 NOI)
Retail Grocer
Bistro
Conference Center (ECC)
Converted Student Housing
1.3%
5.9%
3.2%
ECC Hotel
Container Student Housing
Parking
2.4%
6.5%
0.6%
80.1%
PSU – Center for Real Estate
BOMA Workshop - Spring 2007
The Economics Work
•New Bond Debt
$93.9 MM
•Hard Costs: $69.0 MM
•Soft Costs: $24.9 MM
•Old Bond Debt
$21.0 MM
•-Corner Lot Acq.
$ 2.0 MM
•Total Development Cost: $116.9 MM
•Net Operating Income Yr 1: $9.8 MM
•Total Debt Service
$7.2 MM
•Net Cash Flow
$2.6 MM
•Development Value
•Equity Value Added
•Return on Costs Yr. 1
PSU – Center for Real Estate
$146.9 MM
$30.0 MM
8.36%
BOMA Workshop - Spring 2007
Guiding Principles
PSU’s Stated Sustainability Goals = Framework for our Development Program
“ACTION #1 Infuse
sustainability into all colleges,
schools and programs.”
“ACTION #3 Make Portland
State University a demonstration
model of sustainable processes
and practices.”
“ACTION #2 Develop a
sustainable physical campus
that is an example to other
institutions.”
“ACTION #4 Develop core
multi-disciplinary research
competencies in key
sustainability areas related to
pressing real world problems.”
Federated Oregon College of Urban Sustainability (FOCUS):
Inter-collegiate / Inter-disciplinary
PSU – Center for Real Estate
BOMA Workshop - Spring 2007
Putting Sustainability Center Stage
 Innovative Demo Project that
Exemplifies Sustainability
 Economically
 Generates > $2.6 MM net cash flow after DS
 Creates Approx. $30MM Equity Dev. Value
 Educationally
 FOCUS
 Inter-Collegiate – PSU, OHSU, UO, OSU
 Inter-Disciplinary – A&E, Plan/Dev., Bus., Health
 Environmentally
 Green Building Demonstration Project
PSU – Center for Real Estate
BOMA Workshop - Spring 2007
Justification
• Maximizes PSU Investment
• Generates $2.6 MM net cash flow after debt service
• Creates positive cash flow in year one
• Meets PSU’s Stated housing, conference & hotel needs
Economic
Educational
Environmental
• Generates housing value double its cost
• Low risk / hotel easily converted to housing & classrooms
• Improves upon prior container housing project
• Utilize PSU’s unique market & scale advantages
• Provides international recognition for innovation
• Funds FOCUS – ensures ongoing innovation
PSU – Center for Real Estate
BOMA Workshop - Spring 2007
Thank You
PSU – Center for Real Estate
BOMA Workshop - Spring 2007