Transcript United States Housing Outlook When Will Markets Recover?

THE CONCORD GROUP
Downtown Bothell Redevelopment
Economic Feasibility Analysis and Downtown Programming
THE CONCORD GROUP
August 24, 2009
Real Estate Advisory Services
• The Concord Group provides vital analytical and market input
throughout all stages of an asset’s lifecycle:
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Market and economic analysis
Land-use programming and phasing
Product segmentation & positioning strategy
Comprehensive marketing strategy
Consumer research and focus groups
Downtown
Programming
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Property due diligence
Financial optimization
Value assessment
Investment and disposition strategy
Strategic planning
Asset repositioning
Asset or Property Level
Recommendations
THE CONCORD GROUP
Objectives
• The project team was tasked to identify a development
strategy for Downtown Bothell that:
1.
2.
3.
Represents the market and financial ‘highest and best’ mix of uses
Meets the planning and financial criteria of potential third party
developers
Meets the needs and wants of the citizens of Bothell
THE CONCORD GROUP
Methodology
Site Evaluation
Physical WalkThroughs
Parcel-Specific
Data
Review Prior
Reports
Market Analysis
Demand
Conditions
Supply Trends
Case Studies/Lessons Learned
Local
Regional
Evaluate strategic positioning of
downtown Bothell in regional
context
Determine depth of demand for land
uses under consideration
Identify opportunites and challenges
similar developments have faced
Analyze parcel constraints and
suitability for land uses under
consideration
Project downtown Bothell's capture
of future regional demand
Assess public/private partnerhsip
structures, specificially as they relate
to City Hall development
Preliminary Development
Scenario
Financial Analysis
THE CONCORD GROUP
Recommended Strategic Plan
Feedback from City
Market Results
Market Area Definition
For-Sale
Residential
For-Rent
Residential
Central-North
Eastside
Central-North
Eastside
Qualified Market Area Demand Pool
Annual
2,208
10-Year Total
22,810
Retail
Office
Hotel
Bothell/Kenmore/
Woodinville/North
Suburbs
Bothell/Kenmore/
Woodinville/Kirkland
Bothell/ Kenmore/ Mill
Creek/ Woodinville/
Kirkland
units
units
54,443
units
units
162,800
1,628,200
s.f.
s.f.
334,100
3,340,600
s.f.
s.f.
36
362
rooms
rooms
Opportunity Capture
(Downtown)
1.0%
HH
1.0%
HH
8.0%
s.f.
3.0%
s.f.
5.0%
rooms
10-Year Downtown
Development Potential
228
311,900
units
s.f.
544
525,400
units
s.f.
130,300
s.f.
100,200
s.f.
18
3,617
rooms
s.f.
46 Net Acres;
1.07MM Square Feet of
Development over 10yrs
THE CONCORD GROUP
Residential Opportunities
• Future employment and household growth in the region will
fuel demand for 228 for-sale units in Downtown Bothell over
the next ten years. Buyers qualified by lifestyle, product type
and income.
For-Sale (Current - 2013)
2,000
• Key buyer types:
Close-In Urban Adventurers
Bothell Boosters
Puget Sound Commuters
Regional Upscale Urbanites
• Key issues:
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Downtown competition
Rent versus own
Synergy of uses
Product types
THE CONCORD GROUP
1,600
For-Sale Units
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1,200
800
400
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Total For-Sale Demand
(2009-2013)
Projected Supply (20092013)
Potential Demand
Current Retail Gap (1)
492.2
Retail Opportunities
Entertainment (2)
14.8
74.0
Annual Demand from HH Growth
98.8
494.0
Total Square Footage Demanded
98.8
1,060.2
Potential Supply
Current Supply Overhang
• Current spending gap and additional
growth over 10 Years
Projected Deliveries (2009-2014)
140.6
Projected Supply (2009-2014)
140.6
demonstrates demand for 130k
square
feet
of
NEW
retail
in
Under / (Over) Supply
(41.8)
Downtown Bothell.
• Key tenant types:
(3)
1,200
Secondary Retail Trade Area (Current - 2014)
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Restaurants
Pubs
Clothing
Grocery
• Competitive strengths:
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Square Footage (Ks)
1,000
800
600
400
200
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Potential Demand Growth
Current Retail Gap
Mixed Use Environ.
Pedestrian-oriented
Synergy of uses
High traffic counts/road improvements
THE CONCORD GROUP
Entertainment
Projected Supply Growth
New Demand
New Supply
0.0
702.9
702.9
357.3
Retail Gaps and Demand
Take-Out Rest.
Sit-Down Rest.
Miscellaneous
Jewelry
Home Repair
Home Furnishings
Grocery
Food/Drink Store
Electronics
Drugstore
Department Store
Collectables
Clothing/Accessories
Books/Music/Hobby
Beauty Supplies
Bars/Clubs
0%
5%
10%
15%
Current Gap
THE CONCORD GROUP
20%
25%
Future Demand
30%
35%
40%
Catalytic Parcels
Anderson Building’s unique
character and northern location
will provide a draw for potential
tenants. Key ‘promontory’ and
intro to downtown activity
Future new City Hall
development will serve as a
linkage between Main Street
and 527.
THE CONCORD GROUP
Programming
PARCEL(S)
EARLIEST MKT
ENTRY
Park/River
A
2013
0.2
0.35
Pop Keeney South
O,P
2013
1.8
0.57
30
Pop Keeney South
Q,R
2013
1.9
0.57
32
Central Commercial
K
2013
1.4
Central Commercial
L
2013
0.9
Anderson
M
2013
3.1
0.45
Safeway Edge
I,J
2013
0.1
0.00
City Hall
H1,H2
2015
1.8
1.21
Pool/Skatepark
N
2015
1.7
0.83
Crossroads
B,C1,C2
2015
0.6
0.37
Crossroads
D
2015
2.0
0.34
25,000
5,000
Crossroads
E,F,G
2015
0.7
0.41
10,000
2,500
Hope Link/Dawson
S,T,U
2016
* 1.4
0.21
50,000
37,650
CLUSTER
NET ACRES
TOTAL
17.7
IMPLIED
F.A.R.
FOR-RENT RESIDENTIAL
MR
GAR
TH
FOR-SALE RESIDENTIAL
MR
ROW
L/W
ANCH
RETAIL
INLINE
M/U
CL A
0.74
25,000
20,000
0.37
5,000
0.55
TH
OFFICE
CL B
M/U
MID
HOTEL
BOU
B&B
CIVIC
CH
3,150
25
15,000
10,000
17,000
25
10,000
3,000
15,000
20,000
11
55,000
7,500
10,000
20
0
0
20
25
87
11
0
43,000
40,000
17,500
15,000
0
0
0
55,000
TOTAL BY LAND USE
20
123
130,650
72,500
0
55,000
10-YEAR DOWNTOWN POTENTIAL (FROM MARKET DEMAND)
544
228
130,255
100,218
18
55,000
DEVELOPMENT SCENARIO CAPTURE % OF 10-YEAR DOWNTOWN POTENTIAL
4%
54%
100%
72%
0%
100%
10-YEAR DOWNTOWN POTENTIAL (FROM MARKET DEMAND) WITH PLACEMAKING UPLIFT
(20% uplift)
DEVELOPMENT SCENARIO CAPTURE % OF 10-YEAR DOWNTOWN POTENTIAL W/UPLIFT
653
274
156,306
120,262
22
55,000
3%
45%
84%
60%
0%
100%
THE CONCORD GROUP
Value Creation
Anderson Building and City
Hall Catalysts
Years 1 - 5
(2010 - 2014)
Pre-disposition
(Pre-2010)
Years 6 - 10
(2015-2019)
Value created primarily through City's
dispositions of parcels to developers - last
parcels disposed 2013
Last development of Cityowned parcels around 2017
City-catalyzed development
spurs new development (on non
City-owned parcels), values
rise, more tax revenue
generated
Baseline market prices and residual land
values
Value Created
City invests in
acquiring
parcels, capital
improvements
Potential 15% - 20% uplift in market
prices (with higher uplift for residual land
values) and absorption as development
takes shape and more jobs, housing and
retail located downtown
Time
THE CONCORD GROUP
Years 11+
(2020+)
Additional uplift in market prices
and residual land values, as well as
increased market share absorption as
redevelopment matures
Key Conclusions
• Catalytic parcels are available and under City control
• City involvement as active development partner
• Future mixed use district anchored by retail, residential, civic and
cultural uses
– 46 Acres
– 1MM+ Square Feet of development over 10yrs
• Market opportunity is strong for retail uses – 130ksf of total
demand/capture opportunity
• Additional demand
– 770 residential units (for sale and for rent)
– 100ksf office
• Majority of demand opportunity is for complimentary or
appropriate tenant types
• Anderson Building and future City Hall developments represent first
developments in a new, mixed-use development node.
THE CONCORD GROUP
The Concord Group: Overview
The Firm
The firm was founded in 1995 with a
vision of delivering the highest level of
quality, insight and responsiveness to the
real estate industry. Today we have
offices in Newport Beach, San Francisco
and Boston, whose teams complete over
350 engagements annually in the United
States, Europe, Asia, Latin America and
the Caribbean.
Our team consists of highly talented and
dedicated professionals with deep roots
in real estate development, strategy and
finance. We hold leadership roles in
associations that help shape the future
of real estate.
THE CONCORD GROUP
Core Services
Our services include market analysis,
transaction due diligence and asset
valuation. Recently our focus has been
on strategic market and financial
valuations
of
distressed
assets.
Additionally, we continue to be involved
with developer, financial and public
agency clients assessing strategies and
tactics to maximize the value of ownedassets.
Clients in the financial sector include
major investment/commercial banks,
private equity firms and other
institutional and entrepreneurial capital.
In land use and infrastructure
specifically, we have a cadre of
developer/builder clients spanning all
property sectors.
The Concord Group & THG
Tim M. Cornwell
Richard M. Gollis
Director
[email protected]
Principal in Charge
[email protected]
www.theconcordgroup.com
Newport Beach: 130 Newport Center Dr, Suite 230, Newport Beach, CA 92660| Phone: 949.717.6450
San Francisco: 251 Kearny St, 6th Floor, San Francisco, CA 94108 | Phone: 415.397.5490
Boston: 77 Summer St, 7th Floor, Boston, MA 02110 | Phone: 617.451.1100
Robert Holmes
[email protected]
www.thgadvisory.com
Dexter Horton Building Suite 1400, 710 Second Avenue, Seattle, WA 98104| Phone: 206.245.2006
THE CONCORD GROUP