Client: City of Davis

The owner of University Commons, a retail center including 105,000 square feet including a Trader Joe’s and Cost Plus World Market adjoining the campus of the University of California at Davis, proposed to redevelop the 7.81-acre site into a vertical mixed-use development featuring 265 multi-family rental housing units, 136,500 square feet of new retail space, and over 300 structured parking stalls.

The City of Davis and the property owner engaged Gruen Gruen + Associates (GG+A) to evaluate the financial feasibility of the proposed development program and to identify what if any amount of Community Enhancement funds the project can potentially support. GG+A obtained information and data from the developer about the proposed building space program, development costs, anticipated rents, expenses and net operating income as well as timing of development and investment and financing parameters anticipated to apply. GG+A reviewed secondary market data reports, the developer’s annual reports, and other data to verify or refine the proforma estimates provided by the developer. GG+A also conducted conferences with the development team.

GG+A synthesized the information and data to structure a discounted cash flow forecast of the proposed development. Based on the results of the financial analysis, GG+A drew conclusions about whether the proposed project could support additional community enhancements and affordable housing contributions. GG+A prepared a report summarizing the work completed, findings and conclusions. GG+A discussed the report with representatives of the City of Davis and developer, each of which accepted the report.