Beechwood Hotel
419 W. Beech Street
San Diego, CA 92101
28 Single Room Occupancy
ONE- 1 bed .5 bath
One- 1 bed -1 bath (penthouse)
All SRO's are fully furnished with bedding, furniture, tv, refrigerators and Microwaves while sharing a common area bathrooms.
Note- the development surrounding the property is the all owned by the City of San Diego and is going to be Affordable Housing.
Off Market- Price range 3.0 -3.3M
Lot -5001 SQFT
SQFT- 4,666- According to Tax records
SQFT- 7,221 -According to OLD MLS records
SQFT- 5374
Here is a synopsis of what my developers found on this project.
APARTMENTS ANALYSIS
Breakeven @ 38,000 Rentable SF
Includes:
-Underground construction @ $60,000/parking stall
-Above ground construction at $215/sf
-Assumed approval of height variance (based on surrounding properties)
-500 sf units (above “average quality”; below “luxury”)
-$3.5/sf rents ($1750/mo.)
-$1.25M in soft costs
-$8M in construction costs (above podium)
-$13M+ all-in (includes San Diego Housing Commission fees)
-1% ROI at 5 CAP with above assumptions
Restrictions:
-40,000 sf buildable; no less than 25,000 sf (max/min FAR)
-SDHC Replacement fees of approx. $1,180,000-
-SDHC Relocation fees of approx. $42,000-
-Historical ?
City of San Diego Development Services Department – Historical/Mills Act –Todd McCracken (619) 531-5002
HOSTEL/AirBnB ANALYSIS
Includes:
-No underground parking (parking agreements with nearby parking lot)
-Building shell remains (minor repairs/paint/etc..)
-Majority of construction costs are captured in the interior of the space
-Increase restroom size and fixture count per governing code based on occupancy count
-Above ground construction at $195/sf
-decrease room count from 30 to 15; increase unit SF (total SF remains at 7500)
- 3 bunk beds per room (15 rooms, 3 bunk beds each, total of 90 beds)
-$450K in soft costs
-$1.5M in construction costs (above podium)
-$5.9M+ all-in (includes San Diego Housing Commission fees)
-Assumed $40/bed @ 50% occupancy and 40% operating expenses
-12.5% ROI at 6 CAP with above assumptions
-35% ROI at 5 CAP with above assumptions
Restrictions:
-40,000 sf buildable; no less than 25,000 sf (max/min FAR)
-SDHC Replacement fees of approx. $1,180,000-
-SDHC Relocation fees of approx. $42,000-
-Historical does not have an impact on this development as the shell will remain and only the interior will be demolished (partially).
SDHC Contact for all correspondence regarding SRO properties: Wendi Dewitt (619) 578-7590
Breakdown of SDHC Fees
- Required to pay if you want to reposition or redevelop the parcel.
- If you want to remove this property from the SRO listing and remove the requirement to offer SRO affordable housing units, then you must pay the following fees:
o Replacement Fee – This goes to the SDHC Replacement Fund which is used to offer assistance to other SRO properties that need remodeling. The replacement fee is calculated by using current per-square-foot costs of affordable development in the downtown area, and cutting it in half. The numbers I received from SDHC were $130/sf for land and $228/sf for construction. This equate to $325,000 ($130 x 5000 sf lot divided by 2), and $855,000 ($238/sf x 7500 sf buildable divided by 2). This means the total Relocation Fee owed to the SDHC would be $1,180,000.
§ In lieu of paying the replacement fee, you can also opt to purchase a property not currently operating as an SRO and then convert its use to an SRO. If you plan to demolish 30 units (for example) then you must purchase a property that can accommodate 30 SRO units, known as the replacement property.
o Relocation Fee – This is required if you have tenants that have resided on the property for more than 90 days prior to the date of evicting tenants to begin demolition and/or renovations. The fee is equal to two months rent, plus an additional tenant relocation fee is added, at a maximum of $200. I estimate the relocation fees to total approximately $42,000. There are ways to avoid the Relocation Fee if you follow appropriate protocol (i.e., property is 100% vacant for 90 days prior to demolitions/renovation.
I’ve also attached documentation I feel to be pertinent to the property’s use/designation as an SRO. There are also legal documents to assist in the argument that the property is not currently an SRO (however this may be a very hard battle to fight).
