3/13/2013 The Shoppes at Eagle Harbor Carrollton, VA www. WHLR.us 1
3/13/2013 Walnut Hill Plaza Monarch Bank Petersburg, VA Virginia Beach, VA Shoppes at TJ Maxx Riversedge Richmond, VA Virginia Beach, VA Amscot Building Perimeter Square Tampa, FL Tulsa, OK 2
3/13/2013 Twin City Crossing Lumber River Village Batesburg-Leesville, SC Lumberton, NC Fairfield Shopping Center Virginia Beach, VA East Beach Marketplace Norfolk, VA Culpeper Marketplace Port Crossing Harrisonburg, VA Culpeper, VA 3
3/13/2013 T ha nk You 18 th Annua l Ma r ke t Re vie w Booth Sponsor s 4
3/13/2013 Cra ig Co pe L ib e rty Pro pe rty T rust Mo de ra to r @ ODUCRE E D Minutes to Earn 500 mL of beer Virginia 4.87 OF F ICE MARKE T RE VIE W Hampton Roads 3.92 Minutes to Earn 500 Commercial Real mL of beer 2.65 Estate Professional Attorney 1.94 De bora h K. Ste a rns, SIOR, CPM 0 2 4 6 Source: US Bureau of Labor & Statistics 2012 Ye a r in Re vie w Compa ra tive Ma rke ts • I nve nto ry: 39 millio n rsf 30,000 rsf+ Hampton Raleigh/ multi-tenant Roads Richmond Durham • Ab so rptio n: 600,000 rsf Inventory • Va c a nc y: 12.1% RSF 20,200,000 27,400,000 27,300,000 Vacancy 16.6% 12.6% 13.3% • Ave ra g e ra te : $17.65 Avg Rate $18.38 $18.43 $21.03 5
3/13/2013 Ame rig ro up (315,000 rsf) AMSE C (65,000 rsf) T he Co nc o urse 5701 Cle ve la nd Stre e t USAA Re a lty / Do n Crig g e r/ Gra y Ra ndo lph Olympia / Chip Cutc hins/ L a ng Willia ms Suthe rla nd Glo b a l (40,000 rsf) F o rt No rfo lk Pla za L ib e rty I V, Che sa pe a ke $148/ rsf L ib e rty Pro pe rty T rust/ Bria n De vli n Ma ure e n Ro o ks Pa tric k He nry Co rpo ra te Ce nte r Co mma nde r Co rpo ra te Ce nte r $142/ rsf $163/ rsf Sc o tt Ada ms/ Do n Crig g e r Sc o tt Ada ms/ Gra y Ra ndo lph 6
3/13/2013 Top Ten Take-Aways T e n T a ke - Awa ys – c on’t • Se q ue stra tio n = unc e rta inty • Sub ma rke t Dispa rity • De fe nse is o n ho ld • Ra il Se rvic e = o ppo rtunity • L e nde rs impa c t • Ma rke t survive d JF COM • Ne w Co urts impa c t T e n T a ke Awa ys – c on’t • Mo rtg a g e b usine ss is ho t • Va c a nc y will g o b e lo w 10% • I t’ s still a b o ut jo b s MARK E T I N BAL ANCE : SUPPL Y AND DE MAND I ndustria l Ma rke t Re vie w Bill T hro ne , SIOR, CCIM, AL C F irst Vic e Pre side nt INDUST RIAL PROPE RT IE S 7
3/13/2013 T IME T O BUY? DRIL L DOWN T O F IND T HE BRIGHT SPOT S Class A distribution vac anc y le ss than 5% Suffolk at 13% vac anc y, 3 rd straig ht ye a r of improve me nt Gre e nbrie r sta bilizing a t ~8% vac a nc y Norfolk Industrial Park at ~8% vac anc y Oyste r Point a ve ra g e d 3.7% va c a nc y ove r the la st 5 ye a rs… SUBMARKE T S T HAT F ARE D WE L L ... 2012 BIG WINS Conta ine r volume throug h the Port I nve stme nt Sa le s India n Rive r Distribution Ce nte r, Che sa pe a ke Ma rke t Re vie w 2700 Inte rnational Parkway, Virginia Be ac h Re g iona l Comme rc e Ce nte r, Suffolk Pana ma Ca na l E xpa nsion T o ny Be c k Vic e Pre side nt 2013: BIG T HINGS AHE AD F irst Po to ma c Re a lty T rust Na tiona l Re vie w Drive rs Be hind Growth • Sa le s Vo lume s Co ntinue d to Gro w o ve r 2011 • Histo ric a lly L o w I nte re st Ra te s • F o c us in Prima ry Ma rke ts, T ro phy/ Cla ss A Pro pe rtie s • I nc re a sing L e nde r Co nfide nc e • I nstitutio na l I nve sto rs the Big Pla ye rs • Willing a nd Ac tive Buye rs with Ca sh • Multi-F a mily Co ntinue s to L e a d the Wa y 8
3/13/2013 Comme rc ia l Prope rty T he Cha lle ng e s Pric e Inde x By Se c tor • Va lua tio ns/ Pe rc e ptio n • Buye rs a re Winne rs 110 • Se lle rs a re L o se rs 100 90 80 • 10 ye a r De b t Ma turity 2016/ 2017 70 60 • E uro pe a n De b t Crisis 50 40 30 • Our Own Go ve rnme nt Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Apartment Mall Strip Centers Industrial Office Hotel F unda me nta ls of Pric ing Gre e n Stre e t Comme rc ia l Prope rty Pric e Inde x By Se c tor Improve me nt by Se c tor • Multi-Family – Low Vacancy Rates, Pushing Rents Change in Commercial Property Values Since Last Period at • Retail – Location and Quality Peak Current Value • Mall Multi-Family 8% N/A • Anchored Strip Centers Mall 8% N/A • Industrial – Rental Rates and Occupancy Bottomed Out Strip Retail -3% 2006 Industrial -10% 2006 • Office – Push to the Secondary Markets Office -15% 2006 • Hotel/Lodging – Recession Hurt the Most Hotel/Lodging -22% 2005 T a ke a wa ys Ha mpton Roa ds Re vie w • Mirrored National Trend with Multi ‐ Family Leading the Way • Sales Volumes Will Continue to Improve in 2013 • Top Five Transactions, 3 Multi ‐ Family, 1 Retail, 1 Office • Pricing Will Continue to Climb in All Sectors • Over $282,000,000 in Transactions • Focus May Shift Away from Primary Markets 9
3/13/2013 Hampton Roads is Open for Business Re ta il Ma rke t Re vie w Da vid Ma c hupa Vic e Pre side nt RE T AIL PROPE RT IE S Overview 2012 Theme/Forecast Southside Peninsula Total NUMBER OF PROPERTIES 286 138 424 GLA IN SF 34,924,153 18,532,649 53,456,802 VACANT SF 2,534,765 1,944,109 4,195,642 % VACANT 6.32% 10.73% 7.85% - .9 + .22 - .66 change AVERAGE RENTAL RATE $16.36 PSF $15.06 PSF $15.96 PSF + .33 - .22 + .20 change OCCUPIED IN SF 32,717,539 16,543,621 49,261,160 2012 Market Activity Watch List 10
3/13/2013 New Construction Grocery Activity 2013 Projection ROSE VS. DUNTON Multifa mily Ma rke t Re vie w Dwig ht Dunto n F o unde r a nd Pre side nt Bo na ve nture Re a lty Gro up 11
3/13/2013 De mo g ra phic s: Ne w K ids o n the Blo c k Ove rvie w Mille nnia ls 1. T he Cha ng ing L a ndsc a pe T he re a re 80 Million Mille nnia ls, ra ng ing in a g e fro m 16-29. Ove r 80% o f a ll ho use ho lds a g e d 25 o r unde r a re re nte rs, a lo ng with 65% o f tho se a g e d 25-29. T he Cha ng ing L a ndsc a pe Source: Renter Demographics ‐ Joint Center for Housing Studies of Harvard University Psyc ho lo g y E c o no mic Re a lity Slower to settle down and start T he Ame ric a n Dre a m : families Student Loans have grown Willing to pay more for 511% since convenience 1999. and amenities 60% More likely to change careers T he Cha ng ing L a ndsc a pe T he Cha ng ing L a ndsc a pe Re nte rs b y Ne c e ssity Ove rvie w a nd b y Cho ic e T oug h E c onomic Conditions Mille nnia ls’ une mplo yme nt ra te : 10.9% Na tio na l Une mplo yme nt Ra te : 7.7% 1. T he Cha ng ing L a ndsc a pe Wa iting to Sta r t a F a mily 2. T re nd is o ur F rie nd 75% o f a ll Mille nnia ls a re Sing le 47% o f a ll Mille nia ls live with a F a mily Me mb e r L ife style Dr ive n 77& o f Mille nnia ls wa nt to live in urb a n a re a s 67% o f Mille nnia ls wa nt to live in a wa lka b le c o mmunity More Wome n Working 96% o f Mille nnia ls list b e ing inde pe nde nt a s the ir mo st impo rta nt life g o a ls. T he Cha ng ing L a ndsc a pe Sources: RCLCO, Pew Research 12
3/13/2013 T re nd to wa rds live wo rk pla y Ne w Multifa mily De ma nd (in tho usa nds units) 77% of Millennials want to live in urban areas 67% of Millennials want to live in a walkable community T re nd is Our F rie nd T re nd to wa rds sma lle r units Milita ry Ho me o wne rship Plumme ts Nationally, Military More than 50% of Millennials would Homeownership has dropped 8.2%. trade size for proximity to shopping or work In Virginia, it has dropped 20% from its peak in 2006. L o o k Who ’ s Jo ine d the Pa rty Ove rvie w 1. T he Cha ng ing L a ndsc a pe 2. T re nd is o ur F rie nd 3. L o o k Who ’ s Jo ine d the Pa rty 13
3/13/2013 All in all Multifamily still gets a big thumbs up of approval! Re side ntia l Ma rke t Re vie w J. Va n Ro se , Jr., MIRM Pre side nt Ro se & Wo mb le Re a lty, Ne w Ho me s Ha mpton Roa ds Ha mpton Roa ds Re side ntia l Housing Ma rke t Re side ntia l Inve ntory 15,000 Inventory 12.3% 14,000 Existing Home Closings 7.6% 13,000 Existing Home Average Price 2.0% 12,000 New Home Closings 15.7% 11,000 New Home Average Price -1.1% 10,000 Building Permits 18.5% 9,000 Interest Rates -3.3% 8,000 New Home Traffic 9.7% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: 07 08 09 10 11 12 13 Analysis by: Source: 2012 E xisting Home 2012 Ne w Construc tion De ta c he d Sa le s De ta c he d Sa le s 3,000 30.0 500 40.0 450 35.0 Months to absorb inventory 2,500 25.0 400 Months to absorb inventory 30.0 No. of Closings 350 2,000 20.0 25.0 No. of Closings 300 250 20.0 1,500 15.0 200 15.0 10.0 1,000 150 10.0 100 500 5.0 5.0 50 0 0.0 0.0 0 <200. 200-250. 250-300. 300-350. 350-400. 400-450. 450-500. 500-550. 550-600. 600-650. 650-700. 700-800. 800-900. 900-1000. 1000-1.5m <100. 100-150. 150-200. 200-250. 250-300. 300-350. 350-400. 400-450. 450-500. 500-550. 550-600. 600-650. 650-700. 700-800. 800-900. 900-1000. 1000+ Source: Source: Analysis by: Analysis by: 14
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