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4. Retail Development: • Retail development could be possible if it were service -oriented to the immediate residents and members of the YMCA • Total square footage could range anywhere from 5,000 sq. ft. — 20,000 sq. ft. depending on the types of tenants • A triple net lease would need to be about $20 per sq. ft. for new construction 5. Barriers to Development: • Current rental rates for multi -family development and lease rates for retail development are too low to support new construction o Multi -family rental rates are estimated to be $1.25 — $1.50 per sq. ft. in the City; however, rental rates need to be between $1.80 — $2.05 per sq. ft. to support new construction of a high quality, high amenity project o Retail triple net lease rates are currently around $12 per sq. ft.; however, these lease rates need to be around $20 per sq. sf. to support new construction • Since Lino Lakes has an unproven multi -family market and lower than normal market rate rents and lease rates, public assistance would be required with any type of rental multi -family and/or retail development to achieve the necessary operating revenue • Development fee structure is too high for rental residential and/or retail development o This will prohibit any type of rental residential and retail development to occur, or drastically increase the amount of public assistance necessary o The only viable development that could support the current fee structure is a for -sale development similar to the townhomes built by DR Horton Summary of Developer Roundtables: Timberland Partners, Ryan Sailer and Biorn Strommen — Timberland Partners focuses on multi -family development and mixed -use development, but they've also taken on townhome development as well. • Development Types: o Retail: Service -oriented, fast casual, and/or medical (5,000 — 8,000 sq. ft.) o Residential: Senior cooperative development (250 units maximum), or a Townhome development (9-10 units per acre) similar to DR Horton's development • For -Sale Developments: $300,000 - $350,000 per unit • Rental Developments: Average rent of $1.80 per sq. ft. • Positive Attributes: o Development is shifting out into suburbs o Demographics are good o Great access to 1-35W o Parks and public outdoor space nearby o Good location • Negative Attributes: o Construction cost are high and won't be decreasing in the near future o Underwrite flat rent growth since Lino Lakes is an unproven multi -family apartment market o Economic uncertainty o Development fee structure in the City it too high o Grocery access is poor • Land acquisition price for a multi -family development would be about $8,000 per unit • Public assistance would be required with any type of development BUILDING COMMUNITIES. IT'S WHAT WE DO. ® info@ehlers-inc.com �, 1 (800) 552-1171 ® www.ehiers-inc.com