The Big Question of Feasibility Benjamin Burkhart BKB Properties 2008 Southeastern Self Storage Convention.

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Presentation transcript:

The Big Question of Feasibility Benjamin Burkhart BKB Properties 2008 Southeastern Self Storage Convention

2008 Myrtle Beach, SC Three Areas of Feasibility Site Selection Market Dynamics Financial Performance Opportunities/Risks

2008 Myrtle Beach, SC Measuring Risks Supply & Demand Lease-Up/Absorption Development Budget Financial Performance Site Quality Local Horizon Objectivity!!!

2008 Myrtle Beach, SC Critical Piece of the Puzzle Investor Package Loan Request Design Team Management Team Promotion Initiatives Exit Strategy

2008 Myrtle Beach, SC Site Selection Rifle Approach Get A BIG road map Get a Zoning map Identify traffic patterns Plot Competitors Find Holes Go There!!!

2008 Myrtle Beach, SC Site Research Zoning Environmental Long-Term Growth Plans Setbacks Utilities

2008 Myrtle Beach, SC Site Planning Drive Aisles Access Visibility Signage Code Issues Turning Radius Site Features Traffic

2008 Myrtle Beach, SC Demographic Analysis Primary Market Population Households % of Renters Household Income Other population statistics

2008 Myrtle Beach, SC Competitor Analysis Competitor Strength MANAGER!!!!!!!!!!! Age & Appearance Location Management Style Features & Benefits Rates Size & Occupancy

2008 Myrtle Beach, SC Competitor Analysis

2008 Myrtle Beach, SC Competition

2008 Myrtle Beach, SC Competitor Data

2008 Myrtle Beach, SC Construction Goals Let’s Be Realistic Market Demands Type of Construction Hurdles Approvals Process & Red Tape Phasing

2008 Myrtle Beach, SC Financial Feasibility Capital Requirements Development Costs Cash Flow Deficit Interest Expense Operating Expenses Pro-forma Lease-Up Sensitivity Analysis Exit Strategy

2008 Myrtle Beach, SC Development Budget Design Costs Soft Costs Hard Construction Start-Up Construction Interest Cash Flow Deficit Contingency

2008 Myrtle Beach, SC Condensed Budget

2008 Myrtle Beach, SC Unit Mix Analysis

2008 Myrtle Beach, SC Operating Expenses

2008 Myrtle Beach, SC Cash Flow Analysis Cost of Operations Real Estate Taxes Interest/Debt Repay Seasonal Fluctuations Lease Up Monthly Rentals Rate Structure Discounts

2008 Myrtle Beach, SC Cash Flow Analysis

2008 Myrtle Beach, SC Sensitivity Analysis What If Rents Decline? What about Discounts? Interest Expense Local Economy Slower Lease-Up Cost of Operations

2008 Myrtle Beach, SC Sensitivity Analysis

2008 Myrtle Beach, SC Interpreting Data How it all fits together Red Flags Site, Market, Financials Identifying and Mitigating Risks SWOT- Internal/External

2008 Myrtle Beach, SC Execution Team Building Design GC/Project Management Bidding Scheduling Financing Managing Promoting Marketing

2008 Myrtle Beach, SC Exit Strategy Best & Worst Case Scenarios Refinancing--- Timing & Structure When to Sell/If to Sell External Influences Things Forever Change

2008 Myrtle Beach, SC Biggest Mistake/Biggest Opportunity Who’s driving your ship? You get what you pay for. Train your managers.

2008 Myrtle Beach, SC BKB Properties Benjamin K. Burkhart