The Mandate
A regional developer with prior mixed-use projects in the Fargo MSA engaged Feasibility Study Consultant to prepare a third-party feasibility study supporting a Conventional financing request for a project located in Cass County, North Dakota. 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 downtown Fargo office, multifamily, and ground-floor retail demand support a 142-unit, 28,000-square-foot mixed-use program.
Engagement Scope
- Primary market area defined as a 3-mile radius
- Comparable supply set of 16 properties
- Demand model framework: stacked-component mixed-use absorption 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 3-mile radius from the subject site, calibrated to the demand catchment behavior typical of mixed-use assets in North Dakota. 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 16 properties operating within the PMA or in directly substitutable submarkets. Demand was modeled using a stacked-component mixed-use absorption 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 1.7 across the projection window, with a stabilized capture rate of 6.8%.
Exhibit 1: Comparable Supply Set, North Dakota PMA
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Exhibit 2: Demand Projection Summary, 10 years Horizon
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Exhibit 3: Subject Capture Rate vs. PMA Absorption Capacity
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Analytical Conclusions
- Downtown Fargo Class A multifamily absorbed 184 units annually against the comparable supply set.
- Ground-floor retail leased to two anchor and four shop tenants pre-completion.
- Sub-grade parking solved a key downtown amenity constraint identified in submarket analysis.
- Stabilized aggregate debt yield of 8.6% cleared the lender's 7.5% threshold.
Deliverable
The delivered report ran 168 pages with 39 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.