The Mandate
A regional multifamily developer focused on workforce-housing product engaged Feasibility Study Consultant to prepare a third-party feasibility study supporting a Conventional financing request for a project located in Bexar County, Texas. Total project capitalization fell within the $25M-$50M band. The capital provider, a regional bank construction lender, required documentation consistent with current program review standards. The analytical question put to the team: Did San Antonio MSA workforce-renter household growth absorb 240 units at 60% to 80% area median income rent levels.
Engagement Scope
- Primary market area defined as a 5-mile radius
- Comparable supply set of 15 properties
- Demand model framework: income-qualified renter-household capture analysis
- Financial projection horizon: 10 years
- Site inspection completed; operator interviews where applicable
- Primary data collection through field reconnaissance and third-party market data
Methodology Applied
Primary Market Area
The PMA was defined as a 5-mile radius from the subject site, calibrated to the demand catchment behavior typical of multifamily assets in Texas. The boundary captured the population, employment, and competitive supply base relevant to the subject's operating thesis.
Supply and Demand Reconciliation
The comparable supply set comprised 15 properties operating within the PMA or in directly substitutable submarkets. Demand was modeled using a income-qualified renter-household capture analysis approach over a 10 years horizon. The reconciliation tested whether incremental supply, including the subject, could be absorbed within the projection window without compromising stabilized occupancy assumptions.
Capture Rate Calibration
The subject's capture rate was calibrated against the absorption capacity of the PMA. The analysis concluded that PMA absorption capacity exceeded subject build-out by a factor of 2.3 across the projection window, with a stabilized capture rate of 5.4%.
Exhibit 1: Comparable Supply Set, Texas PMA
[Table or chart rendered in delivered report.]
Exhibit 2: Demand Projection Summary, 10 years Horizon
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Exhibit 3: Subject Capture Rate vs. PMA Absorption Capacity
[Table or chart rendered in delivered report.]
Analytical Conclusions
- Income-qualified renter households at 60% to 80% AMI grew at a 5.1% trailing CAGR within the PMA.
- Comparable workforce-product properties operated at 95% to 97% stabilized occupancy.
- Subject's projected 18-month lease-up to 94% occupancy was supported by the income-qualified demand pool.
- Stabilized debt yield of 8.8% cleared the lender's 7.5% review threshold.
Deliverable
The delivered report ran 166 pages with 38 exhibits distributed across nine analytical sections, plus appendices documenting comparable supply data, demographic inputs, and financial projection assumptions. The document was prepared to the documentation standards of the regional bank construction lender. The corresponding Conventional review framework guided exhibit selection and supporting documentation.