Euclid
Making a Cost-Prohibitive Net Zero Project Pencil Out
Can value engineering and fresh capital preserve the project vision?
An investor bought a single-family row home to turn into Net Zero energy efficient condos, but couldn’t make the numbers work after purchasing the property and investing in plans. Another developer investor expressed interest in the project, but couldn’t make the risk/reward add up. NewCity helped the parties structure the right deal with enough capital, the expertise to overcome municipal hurdles, and the value engineering to make the project viable. The project yielded six units and a profit for the client on a minimal capital outlay.
New City Project Phases
Strategy
Assembly
Transformation
Value Realization
By bringing together property, capital, and full-cycle development expertise, NewCity shifted an unviable project into a $4+ million building at sale.
<$100K
initial client investment
$4MM
final outsale value
250K
in value engineering
Remove planned building underpinning
Value-engineered the HVAC and electrical systems
Value-engineered the building envelope
Redesigned and re-permitted the Green Area Ratio (GAR) plan
Adjusted the building finishes to optimize value for budget
Value Creation Strategies
Project Details
Project Type
Conversion of a single-family two-story rowhome into a four-and-a-half-story six-unit condo.
Business Context
Provide the strategy, deal structure, on-the-fly redesign expertise and build capacity to turn one person’s impossible Net Zero project into a viable partnership with a successful outcome.
Starting Point
The property owner had unworkable plans and not enough capital to complete an energy-efficient condo conversion of a DC area two-story rowhome. The second developer, our client, liked the property, but couldn’t get the project numbers to make the risk worth the reward.
Key Challenges
There was insufficient capital to complete the job and no viable plan to reach profitability.
The investors needed a workable deal structure to get the project off the ground.
All the energy-efficient technologies required redesign to make them cost-effective enough for project viability.
HVAC, electrical, plumbing, and insulation systems all required special approaches.
The plans needed modification and resubmission to comply with value engineering and updated GAR design.
NewCity Alchemy
NewCity structured the partnership so the client could develop the project with a minimal initial investment. We value-engineered the structures, systems, and finishes to retain the net zero outcomes on a viable budget.
“As a repeat client of NewCity, I can confidently say their team has been an invaluable asset in my real estate ventures. I've worked with NewCity on several projects, most recently on the Euclid conversion. NewCity helped structure the partnership so I could develop the project with a minimal initial investment. They value-engineered the structures, systems, and finishes to retain the net zero outcomes on a more reasonable budget. Their development expertise and unwavering commitment to client success make them an ideal partner for any real estate project. I look forward to continuing my work with NewCity and highly recommend their services to anyone seeking expert real estate development guidance.”
— Marc Bassin, Brickstone Development
Project Galleries
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