Rentals (617) 236 4048 | Sales (617) 208 2111
Broker Opinion of Value

Guscott Roxbury Properties

Private Valuation
DUDLEY | ROXBURY
PROPERTY VALUATION REPORT
JACOB REALTY
NEXTGEN REALTY
EXECUTIVE SUMMARY
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We thank you for this opportunity to create a multi-pronged analysis and strategy for your portfolio. Our team of knowledgeable and experienced representatives has spent numerous hours creating a specialized approach for marketing and selling your four buildings.

Anthony Tse is the Founding Partner and Managing Director of Jacob Realty and would be the lead marketing coordinator for this venture. His approach will be multi-faceted including exploring additional commercial redevelopment opportunities of the sites. Josue Vargas, Sales Director of NextGen Realty will also be taking a position on the team. Mr. Vargas has provided conservative market values based on the income approach that gives us a value of approximately $10MM. However, due to the current growth in the Dudley area and the unique position of our firm, we are confident we could set records in achieving your goal of over $15MM for the properties.

As part of a comprehensive strategy, we would explore and highlight potential alternative property uses such as: hotel, short term furnished, office and medical. The expectation is to market this portfolio beyond local & regional buyers, and to approach national and international investors and developers. Innovative advanced marketing will be implemented to help increase the reach and showcase the widest possible development opportunities, with results that could reflect a much higher outcome than the values currently demonstrated through the traditional income approach. Our international reach includes high-net-worth individuals, institutional funds, REITs & developers. Our company also has dedicated agents who are fluent in: Chinese, Korean, Spanish, Russian and more. This world-wide reach allows us to canvas the globe for the most qualified buyers who will provide the highest and best offers.

Your portfolio is made up of some very unique properties and our goal is to market them in a specific way to demonstrate the value in paying a high premium. We strongly believe in the positive upside potential of the Dudley and Dorchester areas and will fight hard to bring that vision to potential investors. We have both personally experienced and been witness to the enormous growth over the years. Our continued involvement in the community and understanding of the current projects in the area, both commercial and residential, will be instrumental in conveying the vision of a rising market with increasing values in years to come. In providing first class marketing such as customized web presence, dynamic email marketing, professional drone photography/video footage and print ads we will present this offering to Boston and beyond.

We feel supremely positioned to maximize the sale of your properties by applying a unique and distinct marketing approach by which we believe we will bridge the gap to achieve the $15MM+ selling price that you desire.

At your convenience we would welcome the opportunity to arrange a time for us to visit again, and for you to meet the entire team that will facilitate the selling of your portfolio. Please feel free to suggest some dates that work for you, and we will coordinate appropriately. Our team is enthusiastic about the opportunity to market your property to the widest reach possible, and we look forward to further discussions about the material to follow; as well as helping you achieve your goals in the shortest time possible.

451 Blue Hill Ave, Boston MA 02121
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Yearly Income: Approx. $376,760

Because of the volatility in commercial investments, most commercial owners look for a 15% to 18% rate of return. In this analysis we used a variety of methods to calculate an appropriate range which was based on income, the strength of tenant and the length of existing leases.

$376,760 / .12 = $3,139,600 on a rental income basis. The figure of $3,139,600 assumes a capture of rate of 12 years without any expenses.

Assuming escalator clauses of between 2-3% could yield an additional $100-$200k bringing the upper level valuation of the property to $3,250,000 – $3,350,000

 
Comparable Sales for 451 Blue Hill Ave Boston MA 02121
Property Location Year Sold Price Price / Sq Ft
258-260 Washington Street 2014 $975,000 $40.50
430-454 Blue Hill Ave 2010 $1,650,000 $82.50
130 Bowdoin Street 2016 $5,200,000 $372.95*

 

* Discretionary inclusion. Investors with secure long term tenants such as Walgreens in this case, pay a premium when they find space suitable for their needs.

The average price per square foot for comparable sales is $165.32 x 18,316 usable square feet at 451 Blue Hill Ave = $3,027,940. Since 2 of the 3 sales are from years 2010 and 2014,a 20% premium was added for increased market conditions resulting in a valuation of $3,633,528.

In summary, we value 451 Blue Hill Ave between $3,200,000 and $3,700,000. This value assumes fully leased property with long term tenants and leases. This number could potentially increase upon a new signed long term lease with the Department of Children and Families.

 

 
 
995 Blue Hill Ave Boston MA 02124
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Yearly Income: Approx. $380,477

 

Assuming a rate of return or cap rate again of 12% we calculate the value to be: $380,477/.12 = $3,170,642

 
Comparable Sales for 995 Blue Hill Ave Boston MA 02121
Property Location Year Sold Price Price / Sq Ft
645 Washington Street 2006 $2,209,000 $95.18
1135 Morton Street 2007 $4,250,000 $132.81
363 Talbot Ave 2014 $1,245,110 $39.07

 

Average Sale price per square foot is $89.02 x 30,000 square feet = $2,670,600.

We value 995 Blue Hill Ave between $2,670,600 and $4,000,000.

The spread in value is significant because there is a substantial divergence in the cost per square foot model and the income approach model. There is considerable price per square foot volatility in the area and we worked to find the most aggressive and highest priced comps.

In its current condition there appears to be factors that could make an investor cautious, namely the Family Dollar possibly being tenancy at will and the uncertainty of the second tenant.

Assuming all three parties were fully leased up with longer term leases, we believe the value could be as high as $4,000,000. ($380,477 x 10 years gross rents,combined with rent escalation)

 
 
632-636 Warren Street Boston MA 02121
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Yearly Income: Approx. $72,900

 

$72,900 X 12 year gross leases = $874,800 with 2 or 3 percent escalator clauses fully leased up with long term leases we can assume a range close to $1,000,000.

 

Comparable Sales for
632 -636 Warren Street Boston MA 02121

Property Location Year Sold Price Price / Sq Ft
1599 Columbus Ave 2016 $1,200,000 $204
3193 Washington Street 2015 $803,274 $183
553 Warren Street 2014 $661,955 $125

 

Average sale price per square foot is $170.66 x 4,428 square feet = $755,712.

We value 632 -636 Warren Street between $755,712 and $1,000,000. The higher end amount is based on the income approach and assumes full and long term leases. The tenants utilizing this space are small owner/operators and that can often discourage buyers from paying a premium vs. a larger national tenant.

 
 
62-70 Warren Street Boston MA 02119
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Yearly Income: Approx. $179,000
(billboards included)

 

$179,000 / .12 = $1,491,667

 

Comparable Sales for
62-70 Warren Street Boston MA 02119

Property Location Year Sold Price / Sq Ft Assumptions
2235 Washington Street 2010 $88.45 If we bring this to today’s pricing using an aggressive formula of 7 % increase over 7 years we could assume a rough appreciation of 50% or $132 per sq. ft.
185 Dudley Street 2014 $62.03 If we add three years at 7 % increase – we end up around $75 per sq. ft. in today’s terms.
12-28 Dade Street 2015 $190.40 If we add two years at a 7 % increase – we end up around $216 per sq. ft.
2093 -2115 Washington Street 2014 $82 If we add another 3 years at 7 % – we end up around $99 dollars per sq ft.

 

Average Sale price per square foot is $130.50 x 13,200 square feet = $1,722,600. This building is truly one of a kind in location and character; and although trends point in the direction of being able to develop higher, without permits in hand our valuation on income and square foot needs to remain conservative based upon what a developer could do by right. With that in mind, we value 62-70 Warren Street to be between $1,722,600 and $2,500,000.

The reason for the large valuation range is based on our belief that someone would pay a premium for this location, and the opportunity to potentially develop. There is no question that a much higher level of return could be captured, but this would require an option agreement giving the buyer time to facilitate efforts to obtain a variance and gain value through square footage.

Knowing your objective to sell the properties in an expeditious manner,that is not an option. Instead we will seek to identify a buyer who is comfortable with assuming a higher level of risk, one not having permits in hand, nor the time to attain them.

Our assessment of the buildings is between $8,450,000 and $10,300,000.

 
VALUATION OVERVIEW
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We all know the value of property is currently on the rise. This valuation is based on recent sales and income value. This is not to say if we were to go to market, we couldn’t exceed these price points, but we felt it best to be completely transparent and honest on where we view the current monetary value of the package. It would be an honor to be able to list and sell these properties, and help in a small way to facilitate history with the development of your 25 story building in Roxbury.

The most important factor is price point. We are confident that if we work together to set pricing on each building that meets your timeline and value points, we can successfully market and sell the properties with the highest level of service, coupled with exposing them in the best light to the widest variety of buyers.

Thank you again for the opportunity and we look forward to your response.

OUR TEAM
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Anthony Tse
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SALES MANAGER
(617) 270 5308
anthony@jacobrealty.com
Josue Vargas
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SALES MANAGER
(617) 595 1019
josue@nextgenrealty.com
Linda Houllahan
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SALES AGENT
(617) 852 7052
lhoullahan@jacobrealty.com