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O F F E R I N G S U M M A RY
BOSTON, MA
A SHOVEL-READY, ADAPTIVE
RE-USE HOTEL DEVELOPMENT
PROJECT
2
T H E O F F E R I N G
Holliday Fenoglio Fowler, L.P. (“HFF”) is pleased to offer, on an exclusive basis, the opportunity to participate in the redevelopment of the historic Chain Forge Building (the “Hotel” or “Property”) in Boston’s Charlestown neighborhood. Located at 105 First Avenue, the site is situated within the Historic Monument Area of the Charlestown Navy Yard which is home to the famed USS Constitution and is a stop along the popular Freedom Trail. The Bunker Hill Monument, the Massachusetts General Hospital’s (“MGH”) Martinos Center and the brand-new Spaulding Rehabilitation Hospital (ranked one of the top rehabilitation hospitals by U.S. News and World Report), are located within a few blocks of the site.
Originally built in 1900 as a chain making factory for the United States Navy, the opportunity exists to restore the existing structure into a one-of-a-kind hotel with 229 guestrooms, an indoor pool, a fitness center, a 6,000 square foot restaurant and bar, and 3,300 square feet of meeting space. Much of the original chain making equipment which was left within the building can be incorporated into the interior design and used as an interpretive exhibition for the public.
Kavanagh Advisory Group (“KAG”), the Boston Redevelopment Authority (“BRA”) designated developer, has secured zoning approval, negotiated the framework of a very attractive ground rent and special tax assessment agreement, and identified approximately $22 million in historical federal, state and Brownfields tax credits.
PROPERTY OVERVIEW
Address: 105 First Avenue - Boston, MA
Site Square Footage: 65,000 SF
Total Gross Square Footage: 180,000 SF
Number of Floors: 5
Number of Rooms: 229
Parking:Valet Parking; tentative agreement to lease 200 spaces from nearby surface parking lot
Food & Beverage: 6,000 SF Restaurant and Bar
Function & Meeting Space:3,300 SF Divisible into Two Meeting Rooms
Ownership Structure: Leasehold (99 Year Lease)
Brand & Management: Unencumbered
3
T H E O F F E R I N G
KAG has worked diligently on the Chain Forge Building redeveloped project since originally being designated “Interim Developer” by the BRA in 2009. The Chain Forge Building is now a shovel-ready hotel development project where construction can begin as early as late 2016 with the Hotel opening as early as late 2019.
The all-in development cost is expected to be approximately $99 million ($432,409 per key) based on a detailed construction estimate prepared by Consigli Construction Co., Inc. and a detailed soft cost estimate prepared by KAG. Once construction is completed, approximately $22 million ($95,240 per key) of federal, state and Brownfield tax credits reduce the all-in basis to approximately $77 million ($337,169 per key).
As part of its pre-development activities, KAG engaged PKF to prepare a market demand study for the proposed Hotel and the projected performance upon stabilization is strong.
DEVELOPMENT COST SUMMARY
Line Item Total Per Key
Hard Costs $77,917,497 $340,251
Soft Costs / Financing Costs $21,104,211 $92,158
Total Costs $99,021,708 $432,409
Federal Tax Credits $17,310,000 $75,590
State Tax Credits $3,000,000 $13,100
Brownfields Tax Credit $1,500,000 $6,550
Total Tax Credits $21,810,000 $95,240
Net Basis $77,211,708 $337,169
STABILIZED PERFORMANCE SUMMARY
YR 3 - 2022
Occ 81.0%
ADR $308
RevPAR $250
Total Revenue $24,011,000
NOI $8,809,000
NOI Margin 36.7%
* Supported by 2015 PKF Market Demand Study
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I N V E S T M E N T H I G H L I G H T S
SHOVEL-READY HOTELDEVELOPMENT PROJECT
ONE-OF-A-KIND, ADAPTIVE RE-USE HOTEL
93
BOSTON
SOMERVILLE
LOGANINTERNATIONAL
AIRPORT
CHELSEA
EAST BOSTON
CAMBRIDGE
93
1
1A
90
90
1A
SIGNIFICANT ECONOMIC INCENTIVES
EXCELLENT LOCATION, ACCESS
BOSTON: A WORLD-RENOWNED CITY
UNENCUMBERED BY BRAND & MANAGEMENT
ACCESS TO LODGING DEMAND DRIVERS
STRONG MARKETFUNDAMENTALS
$22M of Tax Credits
Ground Rent and Special Tax
Assessment Agreement
SPAULDING HOSPITAL
USS CONSTITUTION
Boston Lodging Market Historical Performance
83%
82%
81%
80%
79%
78%
77%
5
2 MILE RADIUS
DOWNTOWN CROSSING
BOSTON LOGANINTERNATIONAL
AIRPORT
MALDEN
SOMERVILLE
BROOKLINE
93
1
93
90
CAMBRIDGE
MEDFORD
EVERETT
CHELSEA
REVERE
SOUTH BOSTON
BRIGHTON
WATERTOWN
BELMONT
ARLINGTON
EAST BOSTON
BEACON HILL
BACK BAY
SEAPORT
CHARLESTOWN
NORTH END
SULLIVAN SQUARE
CHARLES RIVER
SOUTH STATION
HAYMARKET
SOUTH END
NAVY YARD
TUFTSMEDICAL
CHINATOWN
BACK BAY STATION
LONG WHARF
WORLD TRADECENTER
COMMUNITYCOLLEGE
NORTH STATION
BOSTONSTATE STREET
BUS ROUTE 93
BUS ROUTE 93
L O CAT I O N OV E RV I E W
6
93
BOSTON
SOMERVILLE
LOGANINTERNATIONAL
AIRPORT
CHELSEA
EAST BOSTON
CAMBRIDGE
93
1
1A
90
90
1A
BUNKER HILL MONUMENT
FREEDOM TRAIL
D E M A N D M A P
DENNY MEIKLEHAMManaging [email protected]
ALAN [email protected]
MATT ENRIGHTSenior [email protected]
Financing Contact:ANTHONY CUTONEManaging [email protected]
If you have any questions or require additional information, please contact any of the HFF professionals below:
ONE POST OFFICE SQUARE, SUITE 3500BOSTON, MASSACHUSETTS 02109
P | 617.338.0990 F | 617.338.2150
www.hfflp.com
©2016 HFF (Holliday Fenoglio Fowler, L.P.) and HFFS (HFF Securities L.P.) are owned by HFF, Inc. (NYSE: HF). HFF operates out of 22 offices nationwide and is a leading provider of commercial real estate and capital markets services to the U.S. commercial real estate industry. HFF together with its affiliate HFFS offer clients a fully integrated national capital markets platform including debt placement, investment sales, equity placement, advisory services, loan sales and commercial loan servicing. For more information please visit www.hfflp.com or follow HFF on Twitter at www.twitter.com/hff.
HFF has been engaged by the owner of the property to market it for sale. Information concerning the property described herein has been obtained from sources other than HFF, and neither Owner nor HFF, nor their respective equity holders, officers, employees and agents makes any representations or warranties, express or implied, as to the accuracy or completeness of such information. Any and all reference to age, square footage, income, expenses and any other property specific information are approximate. Any opinions, assumptions, or estimates contained herein are projections only and used for illustrative purposes and may be based on assumptions or due diligence criteria different from that used by a purchaser, and HFF, its partners, officers, employees and agents disclaim any liability that may be based upon or related to the information contained herein. Prospective purchasers should conduct their own independent investigation and rely on those results. The information contained herein is subject to change.
