### Regarding Portland and Trammell Crow

I decided to run Jim's numbers and they look OK to me. I did, however, find this. These are the summary minutes from the July 12, 2005 Portland Planning Commission. It states that the actual size of the 'affordable' unit is 514 square feet. After looking at other Alexan properties built by Trammell Crow across the country, I found that these may be the first 'affordable' units built into an Alexan community. On the other hand, they are significantly smaller than the smallest unit in other Alexan Communities. Additionally, they are among the most expensive smallest units in Alexan Communities.

OK, I got a little off topic, back to the math. Jim's point number one is just fine. Point 2 for the 'affordable' unit becomes $850 ÷ 514 sqft = $1.65 per sqft. This gives a difference of $.2593 between 'affordable' and penthouse.

Point 3 for the 'affordable' unit becomes $3037 ÷ 514 sqft = $5.91 per sqft, still more than three times the penthouse.

The 'lost rent' from point 4 for the 'affordable units' nearly doubles to $76770 per year. But how significant is that $76K to the entire project. If you listen to Trammell Crow in the PT article, every penny counts (as I laugh to myself and think that Trammell Crow wouldn't be pitching affordable if they couldn't make money doing it).

The above cited council minutes give us some clues. It tells us that

15,000 square feet of ground floor commercial spacewill be included in the design. If we assume a square building all the way up, we know that there will be roughly 15,000 sqft per floor in this 22 story building. If we remove that square footage and that of the 'affordable units' we know there is just over 290K sqft left. Amazingly enough 13 penthouses will fit nearly perfectly in that 15K sqft.

So lets assume that only the top floor has penthouse. That leaves us with 275,378 sqft of space for the remaining 255 apartments, which is 1080 sqft per unit. I decided to pick an average rent of $1800 a month for those units (roughly equal to the $ per sqft cost of the 'affordable' units). With these numbers we can calculate yearly rents for the residential portion of the building.

48 affordable units x $850 per month = $40,800 per month = $489,600 per year

13 penthouse units x $2,200 per month = $28,600 per month = $343,200 per year

255 other units x $1,800 per month = $459,000 per month = $5,508,000 per year

Total yearly residential rent = $6,340,800 per year

At that rate, it would take Trammell Crow well past the 10 year abatement to begin to make a profit after taxes are figured in.

**BUT I FORGOT SOMETHING DIDN'T I?!?**There's that 15K sqft retail space. But it can't make that big of a difference, can it?

This is a study prepared by Economics Research Associates for the Portland Development Commission and Association for Portland Progress back in 2002. Among its findings, it states

Rents range from $12 to $20 NNN in the older buildings to $40 to $45 NNN in a few of the new well-located buildings.Since this will, no doubt, be a "new well-located" community, I will assume the price per square foot for that 15K space to be $40 per sqft (again conservative due to taking the lower end and the fact this study is three years old).

So, 15K square feet x $40 per square foot = $600,000 per month = $7,200,000 per year

Add that to the $6,340,800 per year from residential space and we see that Trammell Crow will get

**$13,540,800**a year from this building.

Pretty sweet deal to me...

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