Market Feasibility Study
Low-Income Housing Tax Credit Properties (LIHTC)
Federal tax credits are key incentives for the construction and
redevelopment of low-income, rent-restricted housing. Because of
our knowledgeable backgrounds and expertise Cambridge Partners is
one of the premier firms nationally in terms of its experience in
the appraising low-income, rent restricted housing. We are able
to provide special insight in these highly technical valuations.
New Project Feasibility and Proposed Redevelopments
Cambridge Partners & Associates provides clients with market feasibility and
impact studies in order to determine the feasibility of a proposed new
project or the redevelopment of an existing property. Many
clients and their investors/lenders seek a third party analysis to
independently ascertain if there exists sufficient demand and revenue potential
for a specific type of property or project.
Analyzing Market Demand
Many state housing authorities have established a Qualified Allocation
Plan, or QAP. These QAP’s are an integral part of the tax
credit application process. Most QAP’s explain the housing
authorities application and review process, including scoring and
the underwriting process. Cambridge Partners is familiar with many
of the nation’s Qualified Allocation Plans and prepares market
feasibility studies to conform with these requirements.
We understand that the results of our market studies are typically
used by our clients to report rent and occupancy characteristics
of the primary market area where their project will be located,
therefore, we report our estimate of income qualified renter demand
for the same area. In addition, other information we include in
our market feasibility studies includes:
- Delineating the market area from which the property will most
likely draw its tenants. We describe the property’s location
relative to nearby employment centers, educational and medical
facilities, recreational facilities and municipal transportation
links within the market area.
- Reporting local and regional economic demand generators and
their influence on household incomes in the market area.
- Calculating the number of income-qualified renter households
for the predetermined year in the market area using census data
and other demographic services. We also estimate projections of
income qualified household growth in the market area using census
data and other demographic analysis.
- Reporting demand for public housing for based on conversations
with public housing authorities in the market area.
- Reporting on the potential supply of new (competing) units over
the next year.
- Describing the demand for housing based on existing and potential
household growth within the market area. This will be compared
to the supply of apartments within the market area. We will then
calculate demand rates and absorption rates for the subject property.
- Analyzing and report occupancy rates of comparable properties
similar to the subject property.
- Reporting, and contrasting the rent and amenity packages of
the comparable properties to the planned property.
- Describing the impact of the planned property on the existing
affordable housing properties in the market area.
If you would like additional assistance or would like to discuss a potential real
estate market/feasibility study, please contact Cambridge
Partners & Associates for an initial evaluation consultation.
To date, Cambridge Partners has undertaken Market Studies and/or tax-credit valuations in
Arkansas, California, Colorado, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas,
Kentucky, Minnesota, Missouri, Michigan, Montana, Nebraska, North
Dakota, Oregon, South Dakota, Tennessee, Texas, Utah, Washington,
Wisconsin and Wyoming. In the past
ten years, Cambridge Partners has evaluated several thousand Low-Income
Housing Tax Credit (LIHTC) apartment units with an aggregate value in the hundreds
of millions of dollars. Moreover, as we render appraisal services
for some of the major banks with LIHTC loans, we are often able
to save our client’s time/money by performing both market
study and appraisal services.