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Memorandum May 29,2014 <br /> EPSP Economic Feasibility Analysis Page 11 <br /> • This analysis assumes an unleveraged internal rate of return of about 20 percent is <br /> reasonable to justify the investment reflective of the risk and complexity associated with the <br /> Project. A reasonable unleveraged rate of return range could vary from 16 percent to above <br /> 20 percent based on a number of factors described above. <br /> • EPS revised Its improved residual land value estimates based on the continued pro forma <br /> • review and recent market activity. Improved residential market rate land values are <br /> estimated to range between $1.3 and $1.6 million per acre, as shown in Table 4 below. <br /> These estimates are consistent with the Tri-Valley land sales. Given the importance of the <br /> residual land value calculations to the Project feasibility, additional analysis may be <br /> warranted to refine these estimates. <br /> Table 4 Improved Residential Residual Land Value Estimates <br /> Land Value(rounded) <br /> SFR Density Per unit or sq.ft. Per acre <br /> 4du/acre $337,000 $1,346,000 <br /> 8du/acre $162,000 $1,293,000 <br /> 11du/acre $145,000 $1,597,000 <br /> 11du/acre(affordable) ($284,300) ($3,127,000) <br /> /T <br /> In121000V210!>D ImO•M2109q,na0_052124.00= <br />