civic enterprise development (mott smith) - 10.26.11
TRANSCRIPT
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Maltman Bungalows
ULI FALL MEETINGOCTOBER 26, 2011
Civic Enterprise Development LLC
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• Boutique L.A.-based infill developer and planner
• Senior research fellow at USC’s SPPD, adjunct professor of Infill Development in MRED program
• Founding board member of the California Infill Builders Association
• Healthy walk to Sunset Boulevard cafes and shops
• Sold out in 2008 while recession was in full swing at about $500,000 a door
• Exclusively first-time homebuyers
Mott SmithCivic Enterprise Development LLC
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• Boutique L.A.-based infill developer and planner
• Senior research fellow at USC’s SPPD, adjunct professor of Infill Development in MRED program
• Founding board member of the California Infill Builders Association
• Healthy walk to Sunset Boulevard cafes and shops
• Sold out in 2008 while recession was in full swing at about $500,000 a door
• Exclusively first-time homebuyers
Mott SmithCivic Enterprise Development LLC
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• Boutique L.A.-based infill developer and planner
• Senior research fellow at USC’s SPPD, adjunct professor of Infill Development in MRED program
• Founding board member of the California Infill Builders Association
• Healthy walk to Sunset Boulevard cafes and shops
• Sold out in 2008 while recession was in full swing at about $500,000 a door
• Exclusively first-time homebuyers
Mott SmithCivic Enterprise Development LLC
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Project #1Maltman Bungalows
Silver Lake, Los Angeles
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2006
The housing market was booming.
Condos were going up everywhere.
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2006
The housing market was booming.
Condos were going up everywhere.
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2006
The housing market was booming.
Condos were going up everywhere.
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But new development at higher densities was not leading to more affordability.
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But new development at higher densities was not leading to more affordability.
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Why not?
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Parking requirements.
Parking requirements.
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Parking requirements.
Parking requirements.
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Also, condo projects can cost $25,000-$40,000 more per door than
equivalent non-condo projects.
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Also, condo projects can cost $25,000-$40,000 more per door than
equivalent non-condo projects.
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Why?
Common interest subdivisions (e.g., condos) are tailor-made for lawsuits.
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Why?
Common interest subdivisions (like condos) are tailor-made for lawsuits.
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Then a few brilliant L.A. City Planners decided to do something to fix this.
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Small Lot Subdivision ordinance
takes effect in 2005.
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The big idea:
Townhouse density (+/- 20 du/ac) with fee simple ownership.
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The big idea:
Townhouse density (+/- 20 du/ac) with fee simple ownership.
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Lower cost of development.Lower HOA fees.
No lawsuit incentive.
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Lower cost of development.Lower HOA fees.
No lawsuit incentive.
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Lower cost of development.Lower HOA fees.
No lawsuit incentive.
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Meanwhile . . .
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Bungalow Courts were being demolished throughout L.A. for higher-density projects
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Bungalow Courts were being demolished throughout L.A. for higher-density projects
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And Civic Enterprise was looking for its next project.
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We found it while driving around.
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Maltman bungalows pre-renovation, surrounded by newer mid-rise construction. (local.live.com)
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Site: 0.82 acres
Units: 17 (originally built in 1926)
Mix: 11 one-bed (~700 sq. ft.)6 two-bed (~700 sq. ft.)
Zoning: RD2
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Looking west towards Maltman Avenue along central driveway just prior to construction.
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One of the bungalows prior to renovation.
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Original attached garages prior to renovation.
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Typical bathroom prior to renovation.
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Typical kitchen and utility room prior to renovation.
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The Wisehaupt children in the 1940s. The Wisehaupt family owned the Maltman Bungalows from 1935 through 2007. (Photo courtesy of Harold Wisehaupt)
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Photo courtesy of Harold Wisehaupt
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Courtesy of Harold Wisehaupt
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Between November 2005 and November, 2006
List Sale Lot Sale Year SaleTYPE ADDRESS Price Price BR BA SF Size Price/SF Built DOM Date MLS #SFR 2169 Princeton Ave 575,000 588,000 1.0 1.8 864 3,000 681 1938 16 10/5/2006 06-119569SFR 1547 Allesandro St 449,900 440,000 1.0 1.0 702 2,003 627 1923 4 8/14/2006 06-108121SFR 1251 Elysian Park Ave 449,000 449,000 1.0 1.0 480 2,541 935 1923 80 8/1/2006 06-025681SFR 1084 W Edgeware Rd 360,000 373,000 1.0 1.0 408 1,775 914 1928 19 7/19/2006 06-032207SFR 1635 N Alvarado St 409,000 400,000 1.0 1.0 622 3,615 643 1922 98 7/5/2006 06-003133SFR 1510 Morton Ter 367,500 367,500 1.0 1.0 600 2,015 613 1923 18 3/8/2006 06-004441SFR 1710 N Occidental 689,000 680,000 2.0 1.0 810 2,440 840 1938 21 8/29/2006 06-106483SFR 2218 Avon St 629,000 564,000 2.0 2.0 788 3,650 716 1922 69 8/11/2006 06-100861SFR 1589 Curran St 599,000 594,000 2.0 1.0 780 2,750 762 1924 42 7/28/2006 06-100857SFR 1355 Coronado Ter 689,000 675,000 2.0 1.0 896 2,800 753 1923 25 7/25/2006 06-032659SFR 3437 Larissa Dr 648,000 640,000 2.0 1.0 700 3,400 914 1942 15 6/13/2006 06-029361SFR 1544 Sargent Pl 599,000 599,000 2.0 1.0 876 2,840 684 1948 26 4/25/2006 06-013879SFR 1802 W Avalon St 516,000 502,000 2.0 1.0 510 2,550 984 1922 112 3/31/2006 05-066967SFR 630 Laveta Ter 439,900 445,000 2.0 1.0 787 2,250 565 1923 29 3/21/2006 06-003659SFR 1806 Ashmore Pl 374,000 375,000 2.0 1.0 688 2,080 545 1923 72 2/21/2006 05-062063SFR 915 Rosemont Ave 545,000 545,000 2.0 1.0 836 3,000 652 1910 56 1/24/2006 05-063997SFR 1543 Rendall Pl 629,000 625,000 2.0 1.0 766 2,962 816 1926 28 12/2/2005 05-061313
Sale Price per Unit Average Median Sale Price per SF Average MedianAll Units 521,265$ 545,000$ All Units 744$ 716$ 1 BR 436,250 420,000 1 BR 748 735 2 BR 567,636 567,636 2 BR 737 684
Compact Homes* Sold in Silver Lake-Echo Park (MLS Area 21)
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Between November 2005 and November, 2006
List Sale Lot Sale Year SaleTYPE ADDRESS Price Price BR BA SF Size Price/SF Built DOM Date MLS #SFR 2169 Princeton Ave 575,000 588,000 1.0 1.8 864 3,000 681 1938 16 10/5/2006 06-119569SFR 1547 Allesandro St 449,900 440,000 1.0 1.0 702 2,003 627 1923 4 8/14/2006 06-108121SFR 1251 Elysian Park Ave 449,000 449,000 1.0 1.0 480 2,541 935 1923 80 8/1/2006 06-025681SFR 1084 W Edgeware Rd 360,000 373,000 1.0 1.0 408 1,775 914 1928 19 7/19/2006 06-032207SFR 1635 N Alvarado St 409,000 400,000 1.0 1.0 622 3,615 643 1922 98 7/5/2006 06-003133SFR 1510 Morton Ter 367,500 367,500 1.0 1.0 600 2,015 613 1923 18 3/8/2006 06-004441SFR 1710 N Occidental 689,000 680,000 2.0 1.0 810 2,440 840 1938 21 8/29/2006 06-106483SFR 2218 Avon St 629,000 564,000 2.0 2.0 788 3,650 716 1922 69 8/11/2006 06-100861SFR 1589 Curran St 599,000 594,000 2.0 1.0 780 2,750 762 1924 42 7/28/2006 06-100857SFR 1355 Coronado Ter 689,000 675,000 2.0 1.0 896 2,800 753 1923 25 7/25/2006 06-032659SFR 3437 Larissa Dr 648,000 640,000 2.0 1.0 700 3,400 914 1942 15 6/13/2006 06-029361SFR 1544 Sargent Pl 599,000 599,000 2.0 1.0 876 2,840 684 1948 26 4/25/2006 06-013879SFR 1802 W Avalon St 516,000 502,000 2.0 1.0 510 2,550 984 1922 112 3/31/2006 05-066967SFR 630 Laveta Ter 439,900 445,000 2.0 1.0 787 2,250 565 1923 29 3/21/2006 06-003659SFR 1806 Ashmore Pl 374,000 375,000 2.0 1.0 688 2,080 545 1923 72 2/21/2006 05-062063SFR 915 Rosemont Ave 545,000 545,000 2.0 1.0 836 3,000 652 1910 56 1/24/2006 05-063997SFR 1543 Rendall Pl 629,000 625,000 2.0 1.0 766 2,962 816 1926 28 12/2/2005 05-061313
Sale Price per Unit Average Median Sale Price per SF Average MedianAll Units 521,265$ 545,000$ All Units 744$ 716$ 1 BR 436,250 420,000 1 BR 748 735 2 BR 567,636 567,636 2 BR 737 684
Compact Homes* Sold in Silver Lake-Echo Park (MLS Area 21)
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Our goals:
1.Subdivide Maltman Bungalows as SFRs
2.Restore units’ historic character
3.Sell below current entry-level pricing
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Our goals:
1.Subdivide Maltman Bungalows as SFRs
2.Restore units’ historic character
3.Sell below current entry-level pricing
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Our goals:
1.Subdivide Maltman Bungalows as SFRs
2.Restore units’ historic character
3.Sell below current entry-level pricing
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The Deal:
1.Closed in early 2006 for $2.95 million
2.60% acquisition financing
3.80% LTC construction loan
4.Single equity investor
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The Deal:
1.Closed in early 2006 for $2.95 million
2.60% acquisition financing
3.80% LTC construction loan
4.Single equity investor
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The Deal:
1.Closed in early 2006 for $2.95 million
2.60% acquisition financing
3.80% LTC construction loan
4.Single equity investor
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The Deal:
1.Closed in early 2006 for $2.95 million
2.60% acquisition financing
3.80% LTC construction loan
4.Single equity investor
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The Deal:
1.Closed in early 2006 for $2.95 million
2.60% acquisition financing
3.80% LTC construction loan
4.Single equity investor
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Challenges:
1.New ordinance
2.Relocation
3.Entitlements
4.Utilities work
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Challenges:
1.New ordinance
2.Relocation
3.Entitlements
4.Utilities work
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Challenges:
1.New ordinance
2.Relocation
3.Entitlements
4.Utilities work
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Challenges:
1.New ordinance
2.Relocation
3.Entitlements
4.Utilities work
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Montage of bungalows during renovation.
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Looking west along central driveway during utilities trenching process.
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Unsalvageable wooden windows and doors were documented and replaced with custom reproductions. Nearly all original hardware was restored.
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Original garage rooflines were documented and reproduced in new construction. Note 6” air gap between the rebuilt structures.
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Skilled craftsmen reproduced original stucco texture on rebuilt garages, each matching the unique finish of the attached bungalow.
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Paint colors were chosen from a period-appropriate pallate.
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Photos by Axel Koester
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Schedule:
1.Entitlements – 9 months2.Construction – 12 months
3.Sales (2007-2008) – 3 months for 16 units, 6 months for last unit
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Results
• Preserved a classic bungalow court
• Created 17 new first-time homeowner households (including three former tenant households)
• Demonstrated market for compact units
• Helped work through some regulatory issues for small lot projects
• Doubled our investors money
• Achieved a 17% net margin
![Page 69: Civic Enterprise Development (Mott Smith) - 10.26.11](https://reader036.vdocuments.us/reader036/viewer/2022062312/555597e8b4c905a5178b4f74/html5/thumbnails/69.jpg)
Results
• Preserved a classic bungalow court
• Created 17 new first-time homeowner households (including three former tenant households)
• Demonstrated market for compact units
• Helped work through some regulatory issues for small lot projects
• Doubled our investors money
• Achieved a 17% net margin
![Page 70: Civic Enterprise Development (Mott Smith) - 10.26.11](https://reader036.vdocuments.us/reader036/viewer/2022062312/555597e8b4c905a5178b4f74/html5/thumbnails/70.jpg)
Results
• Preserved a classic bungalow court
• Created 17 new first-time homeowner households (including three former tenant households)
• Demonstrated market for compact units
• Helped work through some regulatory issues for small lot projects
• Doubled our investors money
• Achieved a 17% net margin
![Page 71: Civic Enterprise Development (Mott Smith) - 10.26.11](https://reader036.vdocuments.us/reader036/viewer/2022062312/555597e8b4c905a5178b4f74/html5/thumbnails/71.jpg)
Results
• Preserved a classic bungalow court
• Created 17 new first-time homeowner households (including three former tenant households)
• Demonstrated market for compact units
• Helped work through some regulatory issues for small lot projects
• Doubled our investors money
• Achieved a 17% net margin
![Page 72: Civic Enterprise Development (Mott Smith) - 10.26.11](https://reader036.vdocuments.us/reader036/viewer/2022062312/555597e8b4c905a5178b4f74/html5/thumbnails/72.jpg)
Results
• Preserved a classic bungalow court
• Created 17 new first-time homeowner households (including three former tenant households)
• Demonstrated market for compact units
• Helped work through some regulatory issues for small lot projects
• Doubled our investor’s money
• Achieved a 17% net margin
![Page 73: Civic Enterprise Development (Mott Smith) - 10.26.11](https://reader036.vdocuments.us/reader036/viewer/2022062312/555597e8b4c905a5178b4f74/html5/thumbnails/73.jpg)
Results
• Preserved a classic bungalow court
• Created 17 new first-time homeowner households (including three former tenant households)
• Demonstrated market for compact units
• Helped work through some regulatory issues for small lot projects
• Doubled our investor’s money
• Achieved a 17% net margin
![Page 74: Civic Enterprise Development (Mott Smith) - 10.26.11](https://reader036.vdocuments.us/reader036/viewer/2022062312/555597e8b4c905a5178b4f74/html5/thumbnails/74.jpg)
Lessons Learned
• Create your own model.
• Know your regulators well.
• Entrepreneur’s advantage—spotting a product (small homes) and a regulatory pathway (SLO) that bigger developers hadn’t.
• Investor—getting the right investor can make all the difference.
• Design—The woonerf works.
• One and two bedrooms
• Healthy walk to Sunset Boulevard cafes and shops
• Sold out in 2008 while recession was in full swing at about $500,000 a door
• Exclusively first-time homebuyers
![Page 75: Civic Enterprise Development (Mott Smith) - 10.26.11](https://reader036.vdocuments.us/reader036/viewer/2022062312/555597e8b4c905a5178b4f74/html5/thumbnails/75.jpg)
Lessons Learned
• Create your own model.
• Know your regulators well.
• Entrepreneur’s advantage—spotting a product (small homes) and a regulatory pathway (SLO) that bigger developers hadn’t.
• Investor—getting the right investor can make all the difference.
• Design—The woonerf works.
• One and two bedrooms
• Healthy walk to Sunset Boulevard cafes and shops
• Sold out in 2008 while recession was in full swing at about $500,000 a door
• Exclusively first-time homebuyers
![Page 76: Civic Enterprise Development (Mott Smith) - 10.26.11](https://reader036.vdocuments.us/reader036/viewer/2022062312/555597e8b4c905a5178b4f74/html5/thumbnails/76.jpg)
![Page 77: Civic Enterprise Development (Mott Smith) - 10.26.11](https://reader036.vdocuments.us/reader036/viewer/2022062312/555597e8b4c905a5178b4f74/html5/thumbnails/77.jpg)
Lessons Learned
• Create your own model.
• Know your regulators well.
• Entrepreneur’s advantage—spotting a product (small homes) and a regulatory pathway (SLO) that bigger developers hadn’t.
• Investor—getting the right investor can make all the difference.
• Design—The woonerf works.
• One and two bedrooms
• Healthy walk to Sunset Boulevard cafes and shops
• Sold out in 2008 while recession was in full swing at about $500,000 a door
• Exclusively first-time homebuyers
![Page 78: Civic Enterprise Development (Mott Smith) - 10.26.11](https://reader036.vdocuments.us/reader036/viewer/2022062312/555597e8b4c905a5178b4f74/html5/thumbnails/78.jpg)
Lessons Learned
• Create your own model.
• Know your regulators well.
• Entrepreneur’s advantage—spotting a product (small homes) and a regulatory pathway (SLO) that bigger developers hadn’t.
• Investor—getting the right investor can make all the difference.
• Design—The woonerf works.
• One and two bedrooms
• Healthy walk to Sunset Boulevard cafes and shops
• Sold out in 2008 while recession was in full swing at about $500,000 a door
• Exclusively first-time homebuyers
![Page 79: Civic Enterprise Development (Mott Smith) - 10.26.11](https://reader036.vdocuments.us/reader036/viewer/2022062312/555597e8b4c905a5178b4f74/html5/thumbnails/79.jpg)
Lessons Learned
• Create your own model.
• Know your regulators well.
• Entrepreneur’s advantage—spotting a product (small homes) and a regulatory pathway (SLO) that bigger developers hadn’t.
• Investor—getting the right investor can make all the difference.
• Design—The woonerf works.
• One and two bedrooms
• Healthy walk to Sunset Boulevard cafes and shops
• Sold out in 2008 while recession was in full swing at about $500,000 a door
• Exclusively first-time homebuyers
![Page 80: Civic Enterprise Development (Mott Smith) - 10.26.11](https://reader036.vdocuments.us/reader036/viewer/2022062312/555597e8b4c905a5178b4f74/html5/thumbnails/80.jpg)
http://www.flickr.com/photos/dylanpassmore/5583411502/sizes/m/in/photostream/
![Page 81: Civic Enterprise Development (Mott Smith) - 10.26.11](https://reader036.vdocuments.us/reader036/viewer/2022062312/555597e8b4c905a5178b4f74/html5/thumbnails/81.jpg)
The front door should be the real in-and-
out. Not just ceremonial.
![Page 82: Civic Enterprise Development (Mott Smith) - 10.26.11](https://reader036.vdocuments.us/reader036/viewer/2022062312/555597e8b4c905a5178b4f74/html5/thumbnails/82.jpg)
Thank You