Having gone years without a property-value assessment — given its tax-exempt status as state owned — the University of Iowa’s for-sale Mayflower Residence Hall over the summer received an updated evaluation that, on a preliminary basis, valued it at $30.7 million.
If that assessment holds, it’s nearly $15 million shy of the $45 million UI officials are asking for the 326,000-square-foot, 55-year-old Mayflower — currently housing more than 1,000 UI students.
An alternate approach for determining value — using income rather than square footage and building-depreciation considerations — came up with a $32.1 million estimate, according to Iowa City Assessor Brad Comer.
“This is a more reliable approach for apartment buildings and may still be used for this building,” he said. “The difficulty with that approach is determining the rents, because there is not current rent or properties with a similar layout to Mayflower.”
Generally speaking, Comer stressed the assessment could change and isn't final.
“The building is really one of a kind in Iowa City,” he said. “If it were to sell prior to assessments going out, we would likely put a lot of weight on the sale price when determining a final assessment.”
Assessments aren’t final until March, and any remodeling or updating also could impact the final number.
“Sales of other large student apartment buildings may lead us to a different conclusion, simply changing our mind,” Comer said. “We always review our assessments during the final stretch.”
Should Mayflower sell to a private operator for the asking price $45 million, it could generate $930,000 in property tax income — which is $930,000 more than UI pays as an exempt agency, according to Jeff Edberg, listed as the Realtor on the Mayflower sale.
“It would be a welcome addition,” he said.
Eight to nine “quality” groups are interested and in talks for the property, Edberg told The Gazette on Thursday. Although he didn’t disclose names, Edberg said one prospect is local and the rest are national groups.
“Now we're getting to higher-level people … coming back to actually look at the building,” he said. “Last week we had one tour from a highly-qualified, interested group — followed by a Zoom call with their decision-makers — and we think we're getting close to getting an offer from them.”
This week, Edberg said, he’s had another three showings, “also with highly-qualified people.”
“I had a showing today, and it was difficult to show because there were no vacancies,” he said. “We had to make a special appointment with a very understanding student to let us show their home.”
The local interest involves a former UI student who lived in Mayflower years ago, Edberg said.
“He went to U of I and then went off to make his fame and fortune and came back,” he said. “It's cathartic for him — coming home. But he knows the building better than I do.”
Regarding the national interest, according to Edberg, there are two types of prospective buyers — one focused solely on student housing and the other open to “different real estate opportunities.” All are companies with experience owning and managing hundreds if not thousands of units.
“Most have just the focus of student housing,” he said. “And there are some unique requirements you're dealing with relative to that particular age group. They have a particular set of needs … Like an exercise room is very welcome and well used.”
Mayflower Residence Hall — the first thing many UI visitors see, if they take the Dubuque Street exit off Interstate 80 — sits on 4.1 acres overlooking the Iowa River. More than 170 years ago, it housed business owner Walter Terrell, who in the 1840s became the first person in Iowa to get a permit to build a dam and mill — doing so along the Iowa River, according to historical records.
Across the street from his mill in 1851 Terrell built his mansion, which in the 1930s or 1940s became Mayflower Inn — featuring the popular Mayflower Nite Club. That structure was razed in the 1960s and replaced in 1968 with the eight-story Mayflower Apartments at 1110 N. Dubuque St.
The university in 1979 began leasing portions of the complex due to student-housing overcrowding. It bought the building outright in 1983 for a “bargain sale price of $6.5 million,” according to the deed. Mayflower underwent significant renovations in 1999 and a decade later in 2009 — after flood damage in 2008.
The suite-style residence hall had its most recent upgrades in the spring, according to Edberg, after campus planners in February disclosed intentions to sell Mayflower and use its proceeds — plus any more it needs to borrow — to build a new $40 million to $60 million hall for returning students.
The returning-student hall — differing from most in the UI residence system that prioritize first-year students — would house 250 to 400 on the campus’ east side. Current students have signed contracts to live in Mayflower through the rest of this academic year, which will be its last as a dorm.
Although UI officials have said Mayflower is the “last chosen” and “first transferred from” dorm — given, largely, its distance from the main campus — Edberg said the hall is full this fall.
“That speaks well of the property, when it’s full,” he said. “They give it life.”
Because state-owned property is exempt from paying property tax, the Iowa City Assessor’s Office didn’t have a current assessment on record when UI announced intentions to sell this year. Once students moved out in the spring, though, Assessor Comer said his team got in before the fall — taking a couple approaches.
The one that generated the $30.7 million value included $1.4 million for the land and $29.3 million for the dwelling.
“In older buildings, the depreciation can be difficult to estimate,” Comer said. “The building will need some updates to the rooms, and a new owner will likely open up the lower level parking again.”
The lower-level parking was walled off after the historic 2008 flood, according to assessor documents. It has other underground parking used only by staff, and its first floor includes a large lobby with meeting rooms, a lounge, offices, computer lab, storage, and an exercise room.
Rooms occupy floors two through eight — with each floor offering 36 two-bedroom suites capable of housing four, amounting to a capacity topping 1,000. Each suite includes a kitchen and bathroom. The building also boasts a convenience store and exterior parking, with 173 spaces.
“The process is we'll get an offer, then that offer will be negotiated with the university,” Edberg said. “Then they will take it to the executives, to make sure everybody locally is on board. They'll take it to the Board of Regents for final approval, and then start working on the details.”
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If that assessment holds, it’s nearly $15 million shy of the $45 million UI officials are asking for the 326,000-square-foot, 55-year-old Mayflower — currently housing more than 1,000 UI students.
An alternate approach for determining value — using income rather than square footage and building-depreciation considerations — came up with a $32.1 million estimate, according to Iowa City Assessor Brad Comer.
“This is a more reliable approach for apartment buildings and may still be used for this building,” he said. “The difficulty with that approach is determining the rents, because there is not current rent or properties with a similar layout to Mayflower.”
Generally speaking, Comer stressed the assessment could change and isn't final.
“The building is really one of a kind in Iowa City,” he said. “If it were to sell prior to assessments going out, we would likely put a lot of weight on the sale price when determining a final assessment.”
Assessments aren’t final until March, and any remodeling or updating also could impact the final number.
“Sales of other large student apartment buildings may lead us to a different conclusion, simply changing our mind,” Comer said. “We always review our assessments during the final stretch.”
Should Mayflower sell to a private operator for the asking price $45 million, it could generate $930,000 in property tax income — which is $930,000 more than UI pays as an exempt agency, according to Jeff Edberg, listed as the Realtor on the Mayflower sale.
“It would be a welcome addition,” he said.
Interest is strong
Eight to nine “quality” groups are interested and in talks for the property, Edberg told The Gazette on Thursday. Although he didn’t disclose names, Edberg said one prospect is local and the rest are national groups.
“Now we're getting to higher-level people … coming back to actually look at the building,” he said. “Last week we had one tour from a highly-qualified, interested group — followed by a Zoom call with their decision-makers — and we think we're getting close to getting an offer from them.”
This week, Edberg said, he’s had another three showings, “also with highly-qualified people.”
“I had a showing today, and it was difficult to show because there were no vacancies,” he said. “We had to make a special appointment with a very understanding student to let us show their home.”
The local interest involves a former UI student who lived in Mayflower years ago, Edberg said.
“He went to U of I and then went off to make his fame and fortune and came back,” he said. “It's cathartic for him — coming home. But he knows the building better than I do.”
Regarding the national interest, according to Edberg, there are two types of prospective buyers — one focused solely on student housing and the other open to “different real estate opportunities.” All are companies with experience owning and managing hundreds if not thousands of units.
“Most have just the focus of student housing,” he said. “And there are some unique requirements you're dealing with relative to that particular age group. They have a particular set of needs … Like an exercise room is very welcome and well used.”
'They give it life’
Mayflower Residence Hall — the first thing many UI visitors see, if they take the Dubuque Street exit off Interstate 80 — sits on 4.1 acres overlooking the Iowa River. More than 170 years ago, it housed business owner Walter Terrell, who in the 1840s became the first person in Iowa to get a permit to build a dam and mill — doing so along the Iowa River, according to historical records.
Across the street from his mill in 1851 Terrell built his mansion, which in the 1930s or 1940s became Mayflower Inn — featuring the popular Mayflower Nite Club. That structure was razed in the 1960s and replaced in 1968 with the eight-story Mayflower Apartments at 1110 N. Dubuque St.
The university in 1979 began leasing portions of the complex due to student-housing overcrowding. It bought the building outright in 1983 for a “bargain sale price of $6.5 million,” according to the deed. Mayflower underwent significant renovations in 1999 and a decade later in 2009 — after flood damage in 2008.
The suite-style residence hall had its most recent upgrades in the spring, according to Edberg, after campus planners in February disclosed intentions to sell Mayflower and use its proceeds — plus any more it needs to borrow — to build a new $40 million to $60 million hall for returning students.
The returning-student hall — differing from most in the UI residence system that prioritize first-year students — would house 250 to 400 on the campus’ east side. Current students have signed contracts to live in Mayflower through the rest of this academic year, which will be its last as a dorm.
Although UI officials have said Mayflower is the “last chosen” and “first transferred from” dorm — given, largely, its distance from the main campus — Edberg said the hall is full this fall.
“That speaks well of the property, when it’s full,” he said. “They give it life.”
'Will need some updates’
Because state-owned property is exempt from paying property tax, the Iowa City Assessor’s Office didn’t have a current assessment on record when UI announced intentions to sell this year. Once students moved out in the spring, though, Assessor Comer said his team got in before the fall — taking a couple approaches.
The one that generated the $30.7 million value included $1.4 million for the land and $29.3 million for the dwelling.
“In older buildings, the depreciation can be difficult to estimate,” Comer said. “The building will need some updates to the rooms, and a new owner will likely open up the lower level parking again.”
The lower-level parking was walled off after the historic 2008 flood, according to assessor documents. It has other underground parking used only by staff, and its first floor includes a large lobby with meeting rooms, a lounge, offices, computer lab, storage, and an exercise room.
Rooms occupy floors two through eight — with each floor offering 36 two-bedroom suites capable of housing four, amounting to a capacity topping 1,000. Each suite includes a kitchen and bathroom. The building also boasts a convenience store and exterior parking, with 173 spaces.
“The process is we'll get an offer, then that offer will be negotiated with the university,” Edberg said. “Then they will take it to the executives, to make sure everybody locally is on board. They'll take it to the Board of Regents for final approval, and then start working on the details.”
Preliminary Mayflower assessment tops $30M, below $45M asking price
Having gone years without a property-value assessment – given its tax-exempt status as state owned – the University of Iowa’s for-sale Mayflower Residence Hall over the summer received an updated evaluation that, on a preliminary basis, valued it at $30.7 million.
www.thegazette.com
