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A=COM West Village Phase 11 Market/ Financial Analysis - Durham, North Carolina AECOM Economics was engaged by the City of Durham, North Carolina to analyze the adaptive reuse of a 900,000 - sqaure -foot complex of former tobacco warehouses called West Village Phase II. We analyzed the developer proforma, with the intent of estimating the project's return on investment based on varying levels of public incentive support. The approach evaluated local residential, retail, and office real estate markets, along with basic demographic analysis. In addition, we explored similar downtown housing markets around the country to understand the competitiveness of downtown locations for housing development. As part of the financial analysis, we reviewed developer financial assumptions, conducted interviews with downtown development officials, and evaluated competing adaptive reuse projects in downtown Durham, including American Tobacco as well as the Phase I component of West Village. Relevant secondary data regarding real estate market performance, including vacancy, demand drivers, operating expenses, and lease rates was also collected. The approach also considered the use of historic tax credits and assessed benchmark developer returns on investment, assuming both 100% equity investment and a combination of debt and equity investment. The above steps were used to help develop a preliminary financial analysis of the Phase II project. Based on our analysis, the City moved to approve an agreement with the developer to move the project forward. At build -out, the project will have 366 loft apartments and about 225,000 square feet of office and commercial space.