Real Estate Centers Real Estate Centers Hampton Roads Real Estate - PDF document

Old Dominion University Old Dominion University Real Estate Centers Real Estate Centers Hampton Roads Real Estate Hampton Roads Real Estate University of Pennsylvania Samuel Zell and Robert Lurie Real Estate Center at Wharton Market Review and Forecast Market Review and Forecast University of California Berkeley Fisher Center for Real Estate and Urban Economics 2005 2005 Virginia Commonwealth University Virginia Real Estate Center Virginia Tech University Presented by: Virginia Center for Housing Research The Center for Real Estate Old Dominion University and Economic Development Center for Real Estate and Economic Development Johns Hopkins University Allan L. Berman Real Estate Institute University of Connecticut Center for Real Estate and Urban Economic Studies Executive Committee Executive Committee VOLUNTEER EFFORT • Ron Bray • Warren Harris • Craig Cope • Joyce Hartman • John Crunkleton • Andrew Keeney • Tom Dillon • Billy King • Brian Dundon • John Lombard • Joan Gifford • Van Rose • Cliff Moore • Brad Sanford • Jonathan Guion PROFESSIONALISM Programs Committee Programs Committee Sponsorship Sponsorship Committee Committee Joyce Hartman, Chair Cliff Moore, Chair Jonathan Guion Larry Colorito Ron Bray Stephanie Sanker Eva Wiggins 1

Research & Editorial Committee Research & Editorial Committee Special thank you to Brian Dundon, Chair Inside Business Beth Hancock Joy Learn for their sponsorship Sandi Prestridge Maureen Rooks over the past three Lane Shea years. Brad Sanford Old Dominion University Old Dominion University Old Dominion University Old Dominion University Hampton Roads Real Estate Hampton Roads Real Estate Hampton Roads Real Estate Hampton Roads Real Estate Market Review and Forecast Market Review and Forecast Market Review and Forecast Market Review and Forecast 2005 2005 Multi-Family Market Presented by: The Center for Real Estate Presented by and Economic Development Wendy Drucker 2,178 apartments under construction in Hampton Roads Multifamily Market Overview with an additional 1,256 proposed Wendy C. Drucker - Drucker & Falk, LLC - Newport News, VA 2

Apartment Distribution by City City 2000 2004 Virginia Beach 31% 28% Portsmouth 6% 8% Norfolk 16% 16% Newport News 23% 21% Hampton 10% 11% Chesapeake/Suffolk 9% 9% Yorktown/Wmbg/JCC 5% 6% 3

Bondale Apartments 4

Bondale Apartments Bondale Apartments Bondale Apartments Bondale Apartments Bolling Square Bolling Square 5

Bolling Square • Rents in Hampton Roads have increased 43% since 1997 • Vacancies still below 5% Income/Expense Comparison - Per Unit Basis Insurance Rates 101-180 Units 2000 Variance 2003 Total Income $6,253 $685 (11.0%) $6,938 Insurance $63 $127 (202.0%) $190 RE Taxes $292 $19 (6.5%) $311 Payroll $939 $107 (11.4%) $1,046 Total Expenses $1,294 $253 (19.5%) $1,547 181–250 Units 2000 Variance 2003 Total Income $6,476 $1,636 (25.0%) $8,112 Insurance $114 $52 (45.0%) $166 RE Taxes $349 $128 (36.0%) $477 Payroll $866 $116 (13.4%) $982 Total Expenses $1,329 $296 (22.3%) $1,625 Payroll Taxes • Management personnel has shifted from caretaker to that of Asset Manager • State and Federal Certifications • Growing building industry competing for these same maintenance people 6

What’s Driving our Market 2004 Sales Activity • Military Growth s e • Government Contractors Low Interest Rates t a % R 4 • Modeling and Simulation p 0 a . 9 C - • Bio Technology w % o L 6 8 • New Industry . 6 • Growth at the Port • Dollars available for Real Estate Investment & Development Sales Prices • Retirees $21,393 – $135,938 per Unit • Lack of Available Land Where are the Opportunities? What are the Challenges? What’s in the Future? What’s in the Future? Old Dominion University Old Dominion University Hampton Roads Real Estate Hampton Roads Real Estate Market Review and Forecast Market Review and Forecast Office Market Presented by John Profilet 7

Southside Downtown Norfolk Class A B C Office Space Class A B C Office Space Percentage Occupancy Percentage Occupancy 100 100 95 95 Percentage 90 90 Percentage 85 85 80 80 75 75 70 70 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Year Year CENTRAL BUSINESS PARK Peninsula Class A B C Office Space Percentage Occupancy 100 95 Percentage 90 85 80 75 70 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Year BATTLEFIELD 8

AMERIGROUP AMERIGROUP VIRGINIA BEACH TOWN CENTER Old Dominion University Old Dominion University Hampton Roads Real Estate Hampton Roads Real Estate Market Review and Forecast Market Review and Forecast Residential Market Presented by Van Rose 9

10 Year History of Resale and Hampton Roads Housing Stats - 2004 New Construction Closings • 7,265 Building Permits 2 5 0 0 0 • 5330 Closed New Home Sales 2 0 0 0 0 1 5 0 0 0 1 0 0 0 0 7049 7265 5330 4843 5 0 0 0 0 1 9 9 5 1 9 9 6 1 9 9 7 1 9 9 8 1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2003 2004 2003 2004 R e s a l e N e w C o n s t r u c t i o n Permits Closings Growth of Home Sizes & Price Per Hampton Roads Housing Stats - 2004 Square Foot 2002 $170K $79 SF • Average Price of SF New Home 2150 SF 2003 $258K $104 SF $313,972 2480 SF • An Increase of $56,624 or 22 % $313K $118 SF in one year 2004 • Average Price of SF Existing Home 2647 SF $207,527 2005 $398K $142 SF • An Increase of $34,654 or 20 % in one Year 2800 SF Southside Market Share 1994 vs. 2004 Resale VS. New Construction Average Closing Prices for 2004 Single-Family Detached Homes $400,000 $365,384 $333,778 $314,936 $350,000 14% $270,338 $300,000 36% NC NC $225,871 $220,339 $250,000 $200,000 64% 86% $95,046 $150,000 $107,907 $94,597 Resale Resale $100,000 $50,000 $0 VB Ches Suff 1994 2004 Resale NC Diff 10

Southside Peninsula Resale VS. New Construction Average Closing Prices for 2003 Resale VS. New Construction Average Closing Prices for 2003 Single-Family Detached Homes Single-Family Detached Homes $350,000 $350,000 $320,599 $300,018 $310,230 $299,073 $277,145 $300,000 $300,000 $256,795 $258,726 $242,101 $240,363 $248,363 $250,000 $250,000 $164,984 $200,000 $156,825 $200,000 $124,354 $150,000 $121,572 $150,000 $118,791 $101,901 $117,747 $53,435 $83,379 $100,000 $20,581 $100,000 $22,664 $50,000 $50,000 $0 $0 H NN JCC YC Ports Norf I/W Resale NC Diff. Resale NC Diff Average Consumer Lot Costs Average Consumer Lot Costs Suffolk Chesapeake • Greystone - $117,146 • Governors Pointe - $199,492 $483,879 $700,000* • Ravenna - $127,509 • Nansemond River Estates - $87,996 $461,433 $354,418 • Cahoon Plantation - $151,300 • Hillpoint Greens - $125,916 $493,420 $354,146 • Edinburgh - $181,805 • The Riverfront - $179,591 $807,068 $533,316 * Projected Average Price Average Consumer Lot Costs Average Consumer Lot Costs Virginia Beach Peninsula $555,655 $336,689 Lago Mar – $169,698 H Howe Farm– $85,825 Mansfield Farms – $272,766 N Port Warwick – $91,661 $661,379 $326,900 Bay Hill – $279,000 J Fords Colony – $129,028 $656,328 $476,382 Indian River Plantation -$194,529 Y Running Man - $89,717 $654,516 $423,782 11

RESIDENTIAL HOUSING FORECAST RESIDENTIAL HOUSING FORECAST 1. Extremely Positive!!! REASONS: 1 . Hampton Roads Economics Hampton Roads Economic Stats - 2004 RESIDENTIAL HOUSING FORECAST � Employment has Grown Faster in Hampton Roads Than In The U.S. and Virginia Since Late in 2000 REASONS: � Hampton Roads Has Been Buffered from Recession by Increases in Military Pay 2 . Hampton Roads Housing Demand and Housing Allowances � Median Family Income National Average $ 43,300 Chesapeake $ 55,900 Virginia Beach $ 60,611 � Average MSA Military Pay $ 52,600 � Estimated 53,000 Retired Military in HR Percent of Households That Purchased A Home in 2004 RESIDENTIAL HOUSING FORECAST Compared To The Total Number of Households In The MSA Charlotte NC MSA Raleigh/Durham MSA Total Closings Total Closings = 32,985 = 43,587 11 % of HH 8 % of HH REASONS: Total Total Households = 273,561 Households = 506,000 3 . Hampton Roads Housing Supply Hampton Roads MSA Total Closings = 28,630 Total 5 % of HH Households = 581,578 12