N Fed Highway Mkt Study with tables

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Transcript N Fed Highway Mkt Study with tables

North Federal Highway

Market Study: Key Findings

WTL

+a

Real Estate & Economic Advisors

Washington, DC In association with:

RDS Retail & Development Strategies

Arlington, VA Prepared for:

Delray Beach CRA

Delray Beach, FL August 12, 2014

Objectives of the Market Study

     Update 1999 market study of revitalization & redevelopment potentials Analyze demographic & economic characteristics Evaluate real estate market trends & conditions Measure real estate market potentials, estimate absorption/phasing for key uses:     Residential Speculative/multi-tenant office Lodging/hotel Retail & food service Guide public decisions about zoning, additional infrastructure & other public improvements along the corridor

Study Area Context Study Area

Study Area Land Uses

    

206 acres 46+/- acres & 375,000 SF of “workplace” uses:

      153,300 SF retail (41%) 126,000 SF auto-related (34%) 38,400 SF warehouse (10%) 30,100 SF demolished (8%) 18,200 SF restaurants/food service (5%) 8,800 SF office (2%)

5.6 vacant acres in demolished uses (excludes Swap Shop site) 515 housing units

   47% owner-occupied 34% renter-occupied 19% “unoccupied”

Traffic volumes in 2013 averaged 26,600 vehicles per day

Proposed Development Projects

        Beachway Motel: 13 rooms St. George site:   38 townhouses Mid-2015 delivery Southgate Motel: 29 rooms Goodwill of Delray: 1,518 SF addition Delray Preserve:  188 proposed MF units (22 units/acre) Borton Volvo: 17,226 SF auto-related 2645 North Federal:  11,311 SF professional & medical office space Gulfstream Villas: 15 townhouse units

Key Market Findings

Demographics (2000-2013)

     Very strong population growth in Palm Beach County:

1.3 million residents

 Population increased by 214,500 in

72,700 new HHs

Delray Beach:

61,800 residents

  Added

1,780 residents = 820 HHs

Limited growth next 5 years: 855 residents in <300 HHs Since 2000, Boca, Boynton & West Palm growing

significantly

faster than Delray (9,700 to 21,000 new residents) Study area’s population stable; new housing will add new residents Compared to City, the study area:     More affluent (annual HH incomes of $79,600 vs. $66,600) Spend more on retail ($20,700 vs. $17,500) Spend more on Food & Beverage ($6,700 vs. $5,700) Has fewer unoccupied & vacant housing units

Key Market Findings

Economic Profile



619,000 jobs in Palm Beach County

   Economy in recovery from 2007 — 2009 recession (49,500 jobs lost)

20,200 new jobs

created past 3 years Strongest job growth in Professional Services, Health Care; mirrors national trends 

Delray Beach contains 34,700 jobs: 6% of County

   Jobs-to-population ratio: 0.58

45% of jobs in Services; 27% in Retail 19% of all jobs in Retail sector are in restaurants

Key Market Findings

Economic Profile

 Job growth is a critical barometer of

demand

for ‘workplace’ real estate: commercial office, retail, industrial parks, etc.

 

State forecasts: 83,700 new jobs in Palm Beach County

(2013 – 2021) 

5,000 new jobs in Delray

maintains

its current share if City

Citywide HH retail spending (demand) vs. retailer sales (supply):

   $489 million vs. $523 million Reflects in-flow of visitors to Delray, strength of downtown Can HH sales (“opportunity gap”) in specific categories be

recaptured

Key Market Findings

Housing Market Performance

  

Delray Beach housing inventory:

    34,100 units (38% single-family; 52% multi-family) 8,200+ unoccupied units reflects heavy seasonal occupancy “True Vacancy” (i.e., empty & available) is low:

6.5%

, suggesting

stabilized

occupancies Median value: $141,000 (study area: $224,200)

Annual housing starts (2005-2013):

 Palm Beach County:

4,800 units per year

(62% single family)   Delray Beach:

255 units per year

(61% multi-family) Confirms market-response to moderate-density product such as stacked-flats

Multi-family rental trends:

 Higher rents achieved in Delray than Boynton ($1.57 PSF vs. $1.07 PSF)   Higher vacancy rates in Delray than Boynton (9.8% vs. 3.9%) All comparables defined by industry as “Class A” quality

Key Market Findings

Office & Retail Market Performance

 

Delray Beach office inventory (2006-2013):

  

2.9 million SF

in 301 buildings; comprises mix of “garden” buildings & industry standard suburban office parks Accounts for 12% of County’s 24 million SF inventory Overall vacancies have jumped since 2006: from 8% to 26.5%  Significant challenges of

negative

absorption (leasing):

(677,000) SF vacated since 2006

 Office Depot HQs relocation to Boca responsible for weakened market statistics  Job growth in office-using sectors is critical

Delray Beach retail inventory (2013):



3.9 million SF

in multiple property types  Accounts for 9% of County’s 44.4 million SF inventory 

239,000 SF of net absorption

in 2013  Strengthening regional role as retail destination  $35 million in recaptured Grocery spending: Trader Joe’s (10,000 SF) & Fresh Market (20,000 SF)

Key Market Findings

Office & Retail Market Performance

Key Market Findings

Office & Retail Market Performance

Key Market Findings

Hotel Market Performance



Delray Beach hotel supply:



887 rooms

in 7 properties (as defined by STR): comprises 6.5% share of County’s 13,600+ rooms      Inventory includes 95-room Fairfield Inn under construction Since 2010, annual occupancies have fluctuated between 58% & 70%

4-year average occupancies: 64.9%,

suggests roomnight demand is at threshold for financing new construction (65% to 72%) Colony Hotel & Crane’s Beach Hotel do not report performance to STR Solid annual growth in average daily rates (ADRs): $127 (2010) to $145 (2014)

What We Heard

Stakeholder Interviews

  

Study area lacks identity/brand; does not benefit from economic engine & strong identity of downtown



Land uses characteristic of aging, low-density suburban commercial corridors in south Florida

 

In transition:

 Land values increasing due to proximity to downtown  Private investment in high-quality residential  Difficult to attract commercial re-investment at current low rents  Values driven by perceived future uses

‘Hot button’ issues: increasing residential densities; introduction of rental housing (turnover) Largest contiguous parcels are all auto-oriented uses How to capture spending from high-income HHs (e.g., Gulf Stream)

What We Heard

Stakeholder Interviews

 

Desire for independent, “boutique” retail in walkable district Narrow lot depths, fragmented ownership/parcel assemblage, adjacent rail line complicate development



Challenges of current densities/zoning:

 Will not support significant retail  Precludes ‘Pineapple Grove-type’ development (i.e., surface parking required)  Costs of structured parking too high w/o additional revenues

Is there opportunity to ‘cluster’ new retail (e.g., at George Bush Blvd.)?

 

How can public improvements & other public policies be used to:

 Enhance marketability  Generate private commercial investment  Create pedestrian-friendly areas?

Key Market Findings

Market Directions

  

Retail & Food Service

 Success of Atlantic Avenue has created strong regional destination & identity  Challenges of maintaining specialty retail in a strong food & beverage market, higher rents  Study area retail potentials:  Affected by distance & quality of pedestrian space  Width of North Federal Highway limits easy creation of walkable retail environment  Limited residential densities cannot support walkable retail cluster on its own Significant competitive environment & higher densities in Boynton Beach Transitional uses characteristic of South Florida commercial strips Several buildings worthy of preservation & re use; “character-giving”

Key Market Findings

Market Directions

Market-rate Housing

 Forecasts suggest limited near-term population & HH growth  Near-term demand likely captured by planned projects (e.g., ZOM)  Transitional land uses in study area suggest opportunities for moderate density infill residential development & selected mixed-use  Parcel size, ownership priorities & consolidation potential affect opportunities for multi-family housing  Increased residential densities will be critical to support new retail in study area:  Each new resident =

4 to 7 SF

 Each new office worker =

2 to 5 SF

 Each visitor =

0.5 to 1.5 SF

Key Market Findings

Market Directions

Professional Office/Business Services

 State (DEO) employment forecasts suggest near-term growth:  Retail/Food Service  Professional Services & Finance/Insurance & Real Estate  Job growth in office-using sectors critical to generating near-term demand 

If 2,000 of 5,000 new jobs are office-using = 400,000 SF



Current office vacancies = 793,000 SF

 Current zoning in most of Delray Beach (& study area) restricts higher-density office development  Suggests small scale “garden” product & tenant mix  Limited market potentials in the near-term (3 to 5 years)

Key Market Findings

Market Directions

Hotel/Lodging

 Sustained annual occupancies meet threshold required by capital markets for financing new construction (65% to 72%)  Fairfield Inn may delay near-term feasibility of new hotel in study area  Key planning question:  Where is best location for future hotel product in Delray Beach?

 Locational characteristics that enhance marketability (e.g., Hyatt Place, Fairfield)  Future feasibility studies will be required to warrant conventional financing & determine product type (i.e., business vs. leisure)

Next Steps



Solicit public feedback tonight & continue stakeholder outreach



Estimate potential market demand by use & range (e.g., low/high)



Suggest potential phasing & development strategies

 Consider linkages to downtown (e.g., branding/marketing, land uses)  Consider both natural market growth & “induced” markets 

Prepare draft Market Study report by 9/15 for CRA review



Submit final Market Study report by 9/30

Q & A

Demographic/Economic Profile

Selected Municipalities in Palm Beach County As % of 2000 County

Population Trends (Permanent Residents Only) (1)

Palm Beach County 1,131,191

2013

1,345,652

As % of County Forecast 2020

1,465,300

As % of County Change: 2000-2013 Growth Rate Gain/(Loss)

1.3% 214,461

Delray Beach

Boca Raton Boynton Beach Gulf Stream Briny Breezes Highland Beach Ocean Ridge West Palm Beach

60,020

74,764 60,389 716 411 3,775 1,636 82,103

5.3% 61,801

6.6% 5.3% 0.1% 0.0% 0.3% 0.1% 7.3% 86,041 70,131 974 420 3,572 1,798 103,038

2020

Population Forecasts (1)

Delray Beach Palm Beach County

66,640 1,465,300

Change: 2013-2020 Growth Rate Gain/(Loss)

0.6% 0.7%

4,839 119,648 4.6%

6.4% 5.2% 0.1% 0.0% 0.3% 0.1% 7.7%

66,640

91,679 76,144 963 885 3,917 1,927 113,131

4.5%

6.3% 5.2% 0.1% 0.1% 0.3% 0.1% 7.7%

0.2%

1.1% 1.2% 2.4% 0.2% -0.4% 0.7% 1.8%

1,781

11,277 9,742 258 9 (203) 162 20,935

(1) Population estimates by the Palm Beach County Department of Planning, Zoning, and Building. Population reflects permanent residents only, and does not include temporary residents. Thus, figures do not precisely match Census figures or ESRI estimates in other tables.

www.pbcgov.com/pzb/planning/population/countyprofile.pdf

Source: Palm Beach County Department of Planning, Zoning & Building; WTL+a, July 2014.

Demographic & Economic Profile

City of Delray Beach 2010 2012

Demographic Profile

Population Households Avg. HH Size Median Age Race

White Black American Indian Asian, Pacific Islander Other Two or More Races Hispanic

(1)

Age Distribution

0-14 15-24 25-34 35-44 45-54 55-64 65-74 75+

Average HH Income Median HH Income

60,522 27,193 2.18

39,768 16,961 46.0

122 1,142 1,490 1,039 5,769 60,243 27,247 2.17

46.9

39,374 16,848 124 1,220 1,569 1,108 6,107 8,017 6,578 7,522 7,308 8,727 8,079 6,143 8,148 7,875 6,352 7,438 6,972 8,343 8,399 6,516 8,346 $ 66,636 $ 45,855

% Dist.

2017

61,098 27,538 2.18

48.8

65% 28% 0% 2% 3% 2% 10% 39,007 17,353 138 1,485 1,820 1,296 7,305 13% 11% 12% 12% 14% 14% 11% 14% 7,780 5,883 7,424 6,739 7,633 8,754 7,928 8,954 $ 76,119 $ 53,803

% Dist.

Change: 2012-2017 No.

855

291

64% 28% 0% 2% 3% 2% 12% (367) 505 14 265 251 188 1,198 13% 10% 12% 11% 12% 14% 13% 15% (95) (469) (14) (233) (710) 355 1,412 608

CAGR %

0.28% 0.21% -0.2% 0.6% 2.2% 4.0% 3.0% 3.2% 3.6% -0.2% -1.5% 0.0% -0.7% -1.8% 0.8% 4.0% 1.4% 2.7% 3.2%

Demographic & Economic Profile

City of Delray Beach

Housing Profile

Owner-occupied % of Total Renter-occupied % of Total Unoccupied % of Total

Total Units:

Median Value Average Value

2010

18,189 53% 9,004 26% 6,963 20%

34,156 2012

17,764 52% $ $ 9,483 28% 7,079 21%

34,326

140,692 209,916

% Dist.

2017

18,190 52.1% 9,348 26.8% 7,377 21.1%

34,915

$ $ 165,644 223,971

% Dist.

(1) Persons of Hispanic origin are a subset of other race categories; therefore, totals do not add.

Source: ESRI Business Analyst; WTL +a, July 2014.

Change: 2012-2017 No.

CAGR %

426 0.5% (135) 298

589

-0.3% 0.8%

0.3%

3.3% 1.3%

Demographic & Economic Profile

Study Area 2010 2012

Demographic Profile

Population Households Avg. HH Size Median Age Race

White Black American Indian Asian, Pacific Islander Other Two or More Races Hispanic

(1)

Age Distribution

0-14 15-24 25-34 35-44 45-54 55-64 65-74 75+

Average HH Income Median HH Income

1.86

746 401 45.8

693 23 3 8 5 15 54 410 1.85

759 46.4

701 24 3 8 6 17 60 83 47 89 144 139 135 71 39 83 48 90 141 136 143 79 41 $ 79,643 $ 51,889

% Dist.

2017

798 427 1.87

47.7

92% 3% 0% 1% 1% 2% 8% 725 29 4 11 7 23 80 11% 6% 12% 19% 18% 19% 10% 5% 85 45 94 141 129 155 102 47 $ 95,634 $ 61,418

% Dist.

Change: 2012-2017 No.

CAGR %

1.01% 0.82% 91% 4% 1% 1% 1% 3% 10% 24 5 1 3 1 6 20 11% 6% 12% 18% 16% 19% 13% 6% 2 (3) 4 (7) 12 23 6 0.7% 3.9% 5.9% 6.6% 3.1% 6.2% 5.9% 0.5% -1.3% 0.9% 0.0% -1.1% 1.6% 5.2% 2.8% 3.7% 3.4%

Demographic & Economic Profile

Study Area

Housing Profile

Owner-occupied % of Total Renter-occupied % of Total Unoccupied % of Total

Total Units: 2010

245 49% 156 31% 95 19%

496 2012

238 47% 172 34% 95 19%

505 % Dist.

2017

253 48.2% 174 33.1% 18.7% 98

525 % Dist.

Median Value Average Value $ $ 224,201 327,452 $ $ 265,776 356,115

(1) Persons of Hispanic origin are a subset of other race categories; therefore, totals do not add.

Change: 2012-2017 No.

CAGR %

15 1.2% 2 3

0.2% 0.6%

0.8%

3.5% 1.7%

Source: ESRI Business Analyst; WTL +a, July 2014.

Demographic & Economic Profile

Annual Household Spending, 2012 City of Delray Beach Study Area Total Households (2012) Apparel & Accessories

Men's Wear Women's Wear Children's Wear Footwear Watches & Jewelry Apparel Products & Services

Subtotal: 27,247

437 241 192 145 145

410 Other Entertainment

Pets Toys & Games Recreational Vehicles & Fees Sports/Recreation/Exercise Equipment Photo Equipment & Supplies Reading Catered Affairs

Subtotal: Computers

Computers & Hardware Software & Accessories

Subtotal: Entertainment & Recreation

Membership Fees for Clubs Fees for Participant Sports Admission to Movie/Theatre/Opera/Ballet Admission to Sporting Events Fees for Recreational Lessons Dating Services

Subtotal: TV/Video/Audio

Cable & Satellite TV Services Televisions Satellite Dishes VCRs, Video Cameras & DVD Players Miscellaneous Video Equipment Video Cassettes & DVDs Video Game Hardware/Accessories Video Game Software Streaming/Downloaded Video Rental of Video Cassettes & DVDs Installation of Televisions Audio Rental & Repair of TV/Radio/Audio

Subtotal:

41 51 114 147 58 105 0 75 1 151 12 33 24 27 15 10 41 31 35 25 32 104

Food & Alcohol

Food at Home Food Away from Home Alcoholic & Non-alcoholic Beverages

Subtotal: Household Furnishings & Equipment

Household Textiles Furniture Floor Coverings Major Appliances Housewares Small Appliances Luggage Telephones & Accessories Lawn & Garden Housekeeping Supplies Maintenance & Remodeling Materials

Subtotal: Health & Personal Care

Non- & Prescription Drugs Optical Personal Care Products School Supplies Smoking Products

Subtotal: TOTAL:

Total Annual Spending Per Household As % of Average HH Income

City of Delray Beach Study Area

$ 599 126 196 139 150

$ 1,304

$ 690 157 238 175 90 172 31

$ 1,553

$ 4,721 2,995 954

$ 8,671

$ 5,517 3,629 1,147 $ 100 449 260 8 410 673 246

$ 2,318

$ 119 556 28 299 73 49 10 57 444 774 288

$ 2,697

$ 605 79 425 172 456

$ 1,737

$ 637 92 501 213 519

$ 1,962 $ 476,571,555 $ 8,485,631 $ 17,491 $ 20,697

22.0% 26.0%

Demographic & Economic Profile

County Employment Trends, 1995-2014

In 000s

Industry Sector Mining & Logging Construction Manufacturing Transp/Comm/Trade/Utilities 1995

26.7

78.0

Trade

Wholesale Retail

Information Financial Activities Services

Professional & Business Education/Health Services Leisure & Hospitality Other Services

Government

14.1

56.6

9.3

28.1

38.7

55.7

50.8

22.1

51.2

2000

34.9

28.8

94.4

45.2

19.9

103.6

17.5

68.6

12.4

36.7

77.4

64.4

58.0

25.0

57.0

2005

22.3

72.0

11.1

40.0

95.9

75.6

69.6

28.2

64.9

Change: 1995-2005 Amount

18.5

(58.1) 89.5

15.4

8.2

1.8

11.9

40.2

24.8

47.5

6.1

13.7

CAGR %

5.4% -2.9% 2.9% 4.7% 2.4% 1.8% 3.6% 9.5% 3.1% 3.2% 2.5% 2.4%

2007

45.5

19.2

106.8

27.6

16.3

97.3

23.3

14.9

97.7

24.3

15.4

99.9

0.2

25.7

15.7

101.4

0.2

(19.8) (3.5) (5.4) 23.9

73.3

11.0

40.7

97.3

78.8

73.2

28.2

66.5

2009

21.8

66.6

9.5

35.2

83.3

80.1

68.3

27.0

65.8

2011

21.0

67.9

9.1

36.1

87.0

82.9

70.0

27.6

62.5

2012

21.4

69.5

9.2

36.9

91.2

83.2

73.3

28.4

62.0

2013

21.6

70.6

9.2

37.5

93.3

83.1

75.5

24.0

61.3

Change: 2007-2013 Amount CAGR %

(2.3) (2.7) (1.8) (3.2) (4.0) 4.3

2.3

(4.2) (5.2) -9.1% -3.3% -0.9% -1.6% -0.6% -2.9% -1.4% -0.7% 0.9% 0.5% -2.6% -1.4%

Total (In 000s):

Change During Period:

458.0

575.1

648.3

190.3

117.1

73.2

3.5% 664.4

598.8

600.0

614.7

619.0

(45.4)

16.1

(65.6) 1.2

14.7

4.3

-1.3%

Demographic & Economic Profile

County Employment Forecasts, 2010-2020 Change: 2013-2021 % Dist.

Total CAGR Employment Category 2013 % Dist.

2021 Agriculture/Mining/Construction

Agriculture Mining Construction

Subtotal: Manufacturing

Durable Goods Manufacturing Non-Durable Goods Manufacturing

Subtotal:

6,580 200 25,670

32,450

11,113 4,599

15,712 Transportation/Communications/Public Utilities

Public Utilities Transportation & Warehousing

Subtotal:

1,443 7,637

9,080 Wholesale & Retail Trade

Wholesale Trade Retail Trade

Subtotal:

21,643 70,628

92,271 5.5%

5,971 239 34,439

40,649 2.7%

12,268 4,322

16,590 1.5%

1,546 8,134

9,680 15.7%

24,463 77,779

102,242 6.1%

(609) 39 8,769

8,808 2.5%

1,155 (277)

878 1.4%

103 497

600 15.3%

2,820 7,151

9,971

-1.2% 0.0% 3.7%

2.9%

1.2% -0.8%

0.7%

0.9% 0.8%

0.8%

1.5% 1.2%

1.3%

Demographic & Economic Profile

County Employment Forecasts, 2010-2020 Information Finance/Insurance/Real Estate

Finance & Insurance Real Estate, Rental & Leasing

Subtotal: Employment Category 2013 9,227

22,955 14,517

37,472 Services

Professional, Scientific & Technical Services Management of Companies & Enterprises Administrative & Waste Management Educational Services Health Care & Social Assistance Arts, Entertainment & Recreation Accommodation & Food Services Other Services (Except Government)

Subtotal:

40,948 8,758 43,546 8,655 74,403 15,984 59,540 24,035

275,869 Government 61,265 Self-Employed & Unpaid Family Workers TOTAL: Annual Increase (Rounded): 53,046 586,392 % Dist.

2021 1.6% 9,579 Change: 2013-2021 % Dist.

Total CAGR 1.4% 352 0.5% 6.4% 47.0% 10.4% 9.0%

24,182 16,861

41,043

50,362 9,739 51,040 11,025 90,272 18,734 66,892 26,039

324,103 68,809 57,421 670,116 6.1% 48.4% 10.3% 8.6%

1,227 2,344

3,571

9,414 981 7,494 2,370 15,869 2,750 7,352 2,004

48,234 7,544 4,375 83,724 10,500

0.7% 1.9%

1.1%

2.6% 1.3% 2.0% 3.1% 2.4% 2.0% 1.5% 1.0%

2.0% 1.5% 1.0% 1.7%

Source: Florida Agency for Workforce Innovation; WTL +a, July 2014.

Demographic & Economic Profile

City of Delray Beach Businesses & Employment, 2012 NAICS Category Mining & Natural Resources Construction Manufacturing Transportation & Warehousing Communications Utilities Wholesale & Retail Trade

Wholesale Retail - Home Improvement - General Merchandise - Food Stores - Auto Dealers/Gas Stations - Apparel & Accessory Stores - Furniture/Home Furnishings - Eating & Drinking Places - Miscellaneous & Non-store Retail

Finance/Insurance/Real Estate Services

- Hotel/Lodging - Automotive Services - Motion Pictures & Amusements - Health Services - Legal Services - Educational Institutions - Other Services

Government TOTAL: City of Delray Beach: 2012 Total Employment:

As % of County Employment

Businesses No.

% of Total 143 399 193 142 56 17 1,294

333 961 40 11 86 90 91 107 244 292

703 3,990

33 136 179 564 122 62 2,894

38 6,975

2.1% 5.7% 2.8% 2.0% 0.8% 0.2% 18.6% 10.1% 57.2% 0.5%

100.0% 2012 Population: Jobs/Population Ratio: No.

Employees % of Total 439 2,302 1,140 600 207 64 9,369

1,300 8,069 332 419 877 1,435 284 418 1,556 2,748

2,895 15,822

581 433 786 2,981 396 1,696 8,949

1,903 34,741

1.3% 6.6% 3.3% 1.7% 0.6% 0.2% 27.0% 8.3% 45.5% 5.5%

100.0% 34,741 5.9% 60,243 0.58

Source: ESRI Business Analyst; Dun & Bradstreet, Inc.; WTL +a, July 2014

Demographic & Economic Profile

City of Delray Beach Businesses & Employment, 2012 Employees % of Total % Share of Study Area Employees City by Type NAICS Category No.

Businesses % of Total % Share of Study Area Businesses City by Type No.

Mining & Natural Resources Construction Manufacturing Transportation & Warehousing Communications Utilities Wholesale & Retail Trade

Finance/Insurance/Real Estate Services

- Hotel/Lodging - Automotive Services - Motion Pictures & Amusemts - Health Services - Legal Services - Educational Institutions - Other Services

Government TOTAL:

19 115

1 4 6 15 4 2 83

203 4 13 5 4 1 1 41

8 33 1 1 3 3 6 7

North Federal Highway Study Area Analysis: 2012 Total Employment:

As % of City-Wide Employment

2.0% 6.4% 2.5% 2.0% 0.5% 0.5% 20.2% 9.4% 56.7% 0.0%

100.0%

2.8% 3.3% 2.6% 2.8% 1.8% 5.9% 3.2% 2.7% 2.9% 0.0%

2.9%

64 408

8 16 17 63 7 82 216

7 803 6 54 9 11 1 1 242

17 225 6 48 66 6 15 33 0.7% 6.7% 1.1% 1.4% 0.1% 0.1% 30.1% 8.0% 50.8% 0.9%

100.0% 803 2.3%

1.4% 2.3% 0.8% 1.8% 0.5% 1.6% 2.6% 2.2% 2.6% 0.4%

2.3% 2012 Population: Jobs/Population Ratio: 759 1.06

Demographic & Economic Profile

City of Delray Beach: Retail “Recapture” Opportunities Retail Category Demand (HH Spending) Supply (Store Sales) "Recapture" Opportunity General Merchandise Stores

Department Stores Excl Leased Depts.

Other General Merchandise Stores

Subtotal: Clothing & Accessories Stores

Clothing Stores Shoe Stores Jewelry, Luggage, Leather Stores

Subtotal:

$ 39,949,545 68,269,834

$ 108,219,379

$ 54,628,645 8,073,860

$ 62,702,505

$ (14,679,100) 60,195,974

$ 45,516,874

$ 33,696,863 5,600,293 5,480,136

$ 44,777,292

$ 20,814,383 5,927,795 3,061,927

$ 29,804,105

$ 12,882,480 (327,502) 2,418,209

$ 14,973,187 Furniture & Home Furnishings Stores

Furniture Stores Home Furnishing Stores

Subtotal: Electronics & Appliance Stores

Appliances, TVs, Electronics Stores

Subtotal: Leisure & Entertainment

Sporting Goods Stores Books, Periodicals & Music

Subtotal: Food Services & Drinking Places

Full-Service Restaurants Limited-Service Eating Places Special Food Services Drinking Places -Alcoholic Beverages

Subtotal:

$ 8,575,969 7,843,822

$ 16,419,791

$ 10,691,276 26,210,712

$ 36,901,988

$ (2,115,307) (18,366,890)

$ (20,482,197)

$ 18,526,082

$ 18,526,082

$ 8,063,787

$ 8,063,787

$ 10,462,295

$ 10,462,295

$ 10,104,651 4,699,737

$ 14,804,388

$ 11,313,438 3,561,074

$ 14,874,512

$ (1,208,787) 1,138,663

$ (70,124)

$ 34,151,987 29,837,361 2,748,200 4,902,345

$ 71,639,893

$ 48,733,318 20,591,965 2,764,146 12,792,607

$ 84,882,036

$ (14,581,331) 9,245,396 (15,946) (7,890,262)

$ (13,242,143)

Demographic & Economic Profile

City of Delray Beach: Retail “Recapture” Opportunities Retail Category Demand (HH Spending) Supply (Store Sales) "Recapture" Opportunity Food & Beverage Stores

Grocery Stores Specialty Food Stores Beer, Wine & Liquor Stores

Subtotal: Health & Personal Care Stores

Health & Personal Care Stores

Subtotal:

$ 107,825,925

$ 115,545,944

2,971,821 4,748,198 57,233,703

57,233,703

72,730,801 5,000,766 3,620,203

81,351,770

123,854,661

123,854,661

35,095,124 (2,028,945) 1,127,995

34,194,174

(66,620,958)

(66,620,958) Building Material, Garden Equipment Stores

Building Materials & Supplies $ 19,889,370 Lawn & Garden Equipment & Supplies

Subtotal: $

3,257,464

23,146,834

$ 23,841,250 1,416,666

$ 25,257,916

$ (3,951,880) 1,840,798

$ (2,111,082) Miscellaneous Store Retailers

Florists Office Supplies, Stationery, Gift Stores Used Merchandise Stores Other Miscellaneous Retail Stores

Subtotal: TOTAL: HH Demand vs. Retail Sales

$ $

10,320,047

18,554,871 488,868,177

(2)

836,985 5,959,525 1,438,314 $ 1,682,071 31,360,233 2,714,888 19,046,483

$ $ 54,803,675 522,496,955

$ (845,086) (25,400,708) (1,276,574) (8,726,436)

$ $ (36,248,804) (33,628,778)

Real Estate Market Conditions

Housing Profile City of Delray Beach Amount %

Unoccupied Housing Units By Status

Unoccupied for Other Reasons

Rented (Not Occupied) For Sale Only Sold (Not Occupied) Seasonal/Recreational For Migrant Workers

Subtotal: True Vacancies

Other Vacant Vacant, For Rent

Subtotal: Total Unoccupied Units: TRUE VACANCY: Vacant Units True Vacancy Rate

1,201 721 96 3,898 1

5,917

1,096 1,201

2,297 8,214 2,297 6.5%

20% 12% 2% 66% 0%

72%

48% 52%

28% Study Area Amount

19 23 3 48 -

8 19

27 120 27 5.3% %

20% 25% 3% 52% 0%

78%

30% 70%

23%

Real Estate Market Conditions

Housing Profile

Housing Units By Structure

Detached Attached 2 Units 3 or 4 Units 5 to 9 Units 10 to 19 Units 20 to 49 Units 50+ Units Mobile Home/Other Total Units:

Group Quarters Population

College Housing Military Quarters Correctional Juvenile Nursing Home Other Facilities Non-group Quarters

Total Units: % of Population in Group Quarters: City of Delray Beach Amount %

13,325 3,307 1,243 4,615 2,875 3,155 3,019 3,281 267

35,087

38% 9% 4% 13% 8% 9% 9% 9% 1%

100%

5 575 563 33,944

35,087 3.3%

0% 0% 0% 0% 2% 2% 97%

100% Study Area Amount %

195 102 46 26 71 27 46 -

513

1 512

513 0.2%

38% 20% 9% 5% 14% 5% 9% 0% 0%

100%

0% 0% 0% 0% 0% 0% 100%

100%

Source: Nielsen Claritas 2014 Estimates; American Community Survey; WTL+a, July 2014.

Real Estate Market Conditions

Housing Starts, 2004-2013 Municipality

Delray Beach

Single-family Units Multi-family Units

2-Unit MF Structures 3- & 4-Unit MF Structures 5+ Unit MF Structures

Subtotal: 2005 2006 2007 2008 2009 2010 2011 2012

4 40

8 4 252

264

3 90

217

217

144

144

4 62

517

517 2013 Change: 2005-2013 All Starts 319 116 113 38 28 21 54 44 153 886 Ann'l Avg.

2 4 -

14 15 1,377

1,406

1.6

1.7

153

156 TOTAL-Delray Beach:

As % of Palm Beach County

363

380

206

245

17%

165

11%

120

561

12%

159

2,292

255

Real Estate Market Conditions

Market Performance of Selected MF Complexes Project/Location 1. The Franklin

320 Franklin Club Drive Delray Beach

2. Worthing Place

32 SE 2nd Avenue Delray Beach

Year Built Class & Height

2013 Class A 3 floors

Current Vacancy

7.8%

Unit Type

1 BR 2 BR 3 BR

No. of Units Size (In SF) Monthly Rent Rent Per SF

48 92 40

180

866 1,469 1,616

1,341

$ 1,733 1,970 2,377

$ 1,997

$ 2.00

1.34

1.47

$ 1.49

2010 Class A 6 floors 5.1% 1 BR 2 BR 3 BR 81 128 8

217

1,002 1,214 1,390

1,141

$ 1,908 2,779 3,088

$ 2,465

$ 1.90

2.29

2.22

$ 2.16

3. Water's Edge @ Delray

500 North Congress Avenue Delray Beach 1998 Class A 3 floors 0.0% 1 BR 2 BR 3 BR 56 84 8

148

905 1,083 1,227

1,023

$ 1,144 1,257 1,400

$ 1,222

$ 1.26

1.16

1.14

$ 1.19

Real Estate Market Conditions

Market Performance of Selected MF Complexes Project/Location 4. Blu Atlantic

5550 Nepsa Way Delray Beach

5. Alta Congress

250 Congress Park Drive Delray Beach

Year Built Class & Height

2014 Class A 3 floors

Current Vacancy

6.4%

Unit Type

1 BR 2 BR 3 BR

No. of Units Size (In SF) Monthly Rent Rent Per SF

46 88 37

171

768 1,080 1,303

1,044

$ 1,219 1,459 1,699

$ 1,446

$ 1.59

1.35

1.30

$ 1.38

2013 Class A 4 floors

Selected MF Rentals - Delray Beach Total/Weighted Average:

19.0% Studio 1 BR 2 BR 3 BR 1 98 189 81

369

537 760 1,200 1,446

1,135

$ 1,195 1,355 1,858 2,435

$ 1,849

$ 2.23

1.78

1.55

1.68

$ 1.63

Studio 1 BR 2 BR 3 BR 1 329 581 174

1,085

537 860 1,209 1,396

1,137

$ 1,195 1,472 1,865 2,200

1,796

$ 2.23

1.71

1.54

1.58

$ 1.58

Real Estate Market Conditions

All Workplace Uses, 2014 Inventory No. of Bldgs. Inventory (In SF) In SF Vacancy % Vacant

Retail Office 439 5,167,230 301 2,994,576

Without Office Depot Closing

Industrial 166 2,573,437 218,993 793,379 233,217

Total Net Absorption (In SF) 2006-1Q/2014 Current Average Lease Rate

4.2%

(24,162)

26.5%

(677,345)

(227,345)

9.1%

(177,881)

$ 27.05

$ 21.76

$ 6.81

Citywide Total: 906 10,735,243 1,245,589 11.6% (879,388)

Source: CoStar, Inc.; WTL+a, July 2014.

Real Estate Market Conditions

Office Market Performance, 2006-2014 2006

City of Delray Beach

Inventory No. of Buildings Vacant Stock Vacancy Rate

(1)

Total Net Absorption

(1) Without Closing of Office Depot

3,130,115 315 261,402 8.4% (9,829)

Years of Positive Net Absorption Only

Construction Deliveries Average Rental Rate

(2)

$ 23.46

2007

$ 23.25

2008

$ 22.57

2009

3,128,015 314 384,545 12.3% (125,243) 3,128,015 314 555,343 17.8% (170,798) 3,062,773 304 1,076,355 35.1% 3,094,923 304 1,003,790 32.4% (586,254) 104,715 3,094,923 304 951,752 30.8% 52,038 3,073,278 302 898,095 29.2% 32,012 $ 23.23

2010

$ 22.70

2011

$ 21.24

2012

$ 21.04

2013 1Q/2014 Total Change: 2006-1Q/2014 Ann'l Avg.

2,994,576 301 786,852 26.3% 32,541 2,994,576 301 793,379 26.5% (6,527)

(135,539) (14) 531,977 (677,345) (82,102) (25,261) 55,327

$ 21.10

$ 21.76

% 15.5% -1.1% Years to Stabilized (95%) Occupancy:

Years of Positive Net Absorption Only

13.6

Real Estate Market Conditions

Retail Market Performance, 2006-2014 2006 2007 2008 2009 2010 2011 2012 2013 1Q/2014 Total Change: 2006-1Q/2014 Ann'l Avg.

Inventory No. of Buildings Total Available Space

(1)

Vacancy Rate 5,167,452 466 263,881 5.1% Total Net Absorption

(1)

(58,076)

Years of Positive Net Absorption Only

Construction Deliveries Average Rental Rate

(2)

$ 24.04

5,258,917 467 208,270 4.0% 149,155 $ 24.46

5,375,650 473 434,607 8.1% (115,230) $ 24.63

5,228,517 451 470,910 9.0% (138,801) 5,250,488 447 486,449 9.3% 55,630 $ 24.15

$ 21.07

5,254,452 448 442,185 8.4% 13,250 5,180,664 444 363,447 7.0% 46,169 5,178,256 441 337,024 6.5% 34,039 $ 15.63

$ 17.50

$ 23.37

5,167,230 439 339,454 6.6% (10,298)

(222) (27) 75,573 (24,162) (2,929) 59,649

$ 27.05

% 3.7% 1.7% Years to Stabilized (95%) Occupancy:

Based on Average Annual Absorption (Years with Positive Absorption, Only)

5.4