Valbridge Property Advisors | Kansas City recently appraised a proposed homeless shelter located in Minneapolis, Minnesota on a site featuring a religious facility serving as the interim use.
The project involved the valuation of a homeless shelter condominium on the first two floors of a four-story building. The third and fourth floors will feature an apartment project that will be subdivided from the homeless shelter. The apartment portion requires separation from the homeless shelter use for New Market Tax Credits (NMTCs) incentive, which cannot be used for multifamily financing. The homeless shelter portion will include approximately 25,000 square feet of shelter space and shared access to common area and parking spaces. The shelter will have 12, six-person rooms sleeping a total of 72 people. This project was atypical since it involved a proposed homeless shelter. Most homeless shelters are conversions from other uses such as warehouses, hotels, motels, multifamily, etc.
The project was funded by significant incentives including Federal/State/City grants, New Market Tax Credits, and donations. The appraisal required expanding our search for comparables on a national basis including six properties (a dormitory, four hotels, and a hostel) that were purchased for conversion to a homeless shelter use. Tyler Siegworth, MAI, and Josh Folland, MAI, CCIM appraised the property.