Page 9 - The Addie

INVESTMENT RATIONALE & RISK
The proposed project is compelling for the following key reasons:
• High Barriers to Entry: Relative to other markets, the 78746 market poses somewhat unique challenges with its combination of limited land availability, complex site conditions, complicated and lengthy zoning and permitting requirements.
• Attractive Site: The proposed site will be gated and located in the Wild Basin Reserve, o ering residents nature views and a feeling of exclusivity and security amidst the Westlake congestion.
• Design: The Property will have a modern, functional, and innovative design providing amenities and features that are well-matched to its intended de- mographic. The design will focus expenditures on the details and high-end nishes homeowners desire. There will be little competition in this segment as there are no new subdivisions planned to this scale in the Westlake Market during the investment period.
• Market Fundamentals: Market characteristics in the West Austin residential market continue to demonstrate increasingly favorable trends, including sale appreciation, material positive net absorption and a limited competitive property pipeline. Improvements to the market are expected to continue through the property’s delivery in 2019 - 2020.
• Demographics: We anticipate The Addie will attract a diverse demographic including empty nesters interested in “right-sizing” to a more practical, low maintenance home, young a uent families seeking the renowned Eanes ISD schools, and young professionals in the tech industry looking for a home close to work with easy access to downtown Austin.
Investment Risks
There are some inherent risks associated with the proposed project:
• Development and Zoning Risk: Development risk is inherent with any development project. This risk will be mitigated in this project because Legacy Per- formance Capital has obtained preliminary approval to build 50 homes on the site prior to purchasing the land.
• Market Home Prices: Market rates for homes underwritten for the property are based on a comprehensive analysis of the market and competitors. Res- idential units will be designed to be e cient and functional, supporting the psf rates. Additionally, the property’s proposed selling prices are a ordable to its targeted demographic
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