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

▶
real estate centers real estate centers
SMART_READER_LITE
LIVE PREVIEW

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

Feb 28, 2024 341 likes •559 views

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

slide-1
SLIDE 1

1

Old Dominion University Old Dominion University Hampton Roads Real Estate Hampton Roads Real Estate Market Review and Forecast Market Review and Forecast 2005 2005

Presented by: The Center for Real Estate and Economic Development

University of Pennsylvania Samuel Zell and Robert Lurie Real Estate Center at Wharton University of California Berkeley Fisher Center for Real Estate and Urban Economics Virginia Commonwealth University Virginia Real Estate Center Virginia Tech University Virginia Center for Housing Research Old Dominion University 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

Real Estate Centers Real Estate Centers

VOLUNTEER EFFORT PROFESSIONALISM

Executive Committee Executive Committee

  • Ron Bray
  • Craig Cope
  • John Crunkleton
  • Tom Dillon
  • Brian Dundon
  • Joan Gifford
  • Cliff Moore
  • Jonathan Guion
  • Warren Harris
  • Joyce Hartman
  • Andrew Keeney
  • Billy King
  • John Lombard
  • Van Rose
  • Brad Sanford

Sponsorship Sponsorship Committee Committee Cliff Moore, Chair Larry Colorito

Programs Committee Programs Committee

Joyce Hartman, Chair Jonathan Guion Ron Bray Stephanie Sanker Eva Wiggins

slide-2
SLIDE 2

2

Research & Editorial Committee Research & Editorial Committee

Brian Dundon, Chair

Beth Hancock Joy Learn Sandi Prestridge Maureen Rooks Lane Shea Brad Sanford

Special thank you to

Inside Business

for their sponsorship

  • ver the past three

years.

Old Dominion University Old Dominion University Hampton Roads Real Estate Hampton Roads Real Estate Market Review and Forecast Market Review and Forecast 2005 2005

Presented by: The Center for Real Estate and Economic Development

Old Dominion University Old Dominion University Hampton Roads Real Estate Hampton Roads Real Estate Market Review and Forecast Market Review and Forecast

Multi-Family Market

Presented by

Wendy Drucker

Multifamily Market Overview

Wendy C. Drucker - Drucker & Falk, LLC - Newport News, VA 2,178 apartments under construction in Hampton Roads with an additional 1,256 proposed

slide-3
SLIDE 3

3

Apartment Distribution by City

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

slide-4
SLIDE 4

4

Bondale Apartments

slide-5
SLIDE 5

5

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

slide-6
SLIDE 6

6

Bolling Square

  • Rents in Hampton Roads have

increased 43% since 1997

  • Vacancies still below 5%

Income/Expense Comparison - Per Unit Basis

$311 $19 (6.5%) $292 RE Taxes $190 $127 (202.0%) $63 Insurance $6,938 $685 (11.0%) $6,253 Total Income 2003 Variance 2000 101-180 Units $1,046 $107 (11.4%) $939 Payroll $1,547 $253 (19.5%) $1,294 Total Expenses $1,625 $296 (22.3%) $1,329 Total Expenses $982 $116 (13.4%) $866 Payroll $477 $128 (36.0%) $349 RE Taxes $166 $52 (45.0%) $114 Insurance $8,112 $1,636 (25.0%) $6,476 Total Income 2003 Variance 2000 181–250 Units

Insurance Rates Taxes Payroll

  • Management personnel has

shifted from caretaker to that of Asset Manager

  • State and Federal Certifications
  • Growing building industry

competing for these same maintenance people

slide-7
SLIDE 7

7

2004 Sales Activity

Low Interest Rates Sales Prices $21,393 – $135,938 per Unit L

  • w

C a p R a t e s 6 . 8 6 %

  • 9

. 4 %

What’s Driving our Market

  • Military Growth
  • Government Contractors
  • Modeling and Simulation
  • Bio Technology
  • New Industry
  • Growth at the Port
  • Dollars available for Real Estate Investment

& Development

  • Retirees
  • 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

slide-8
SLIDE 8

8

70 75 80 85 90 95 100 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Downtown Norfolk Class A B C Office Space Percentage Occupancy

Percentage Year 70 75 80 85 90 95 100 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Southside Class A B C Office Space Percentage Occupancy

Percentage Year 70 75 80 85 90 95 100 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Peninsula Class A B C Office Space Percentage Occupancy

Percentage Year

CENTRAL BUSINESS PARK BATTLEFIELD

slide-9
SLIDE 9

9

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

slide-10
SLIDE 10

10

5 0 0 0 1 0 0 0 0 1 5 0 0 0 2 0 0 0 0 2 5 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

R e s a l e N e w C o n s t r u c t i o n

10 Year History of Resale and New Construction Closings

  • 7,265 Building Permits
  • 5330 Closed New Home Sales

Permits Closings

2003 2004 2003 2004

7049 7265 4843 5330

Hampton Roads Housing Stats - 2004 Hampton Roads Housing Stats - 2004

  • Average Price of SF New Home

$313,972

  • An Increase of $56,624 or 22 %

in one year

  • Average Price of SF Existing Home

$207,527

  • An Increase of $34,654 or 20 %

in one Year

Growth of Home Sizes & Price Per Square Foot

2002

$170K $79 SF

2150 SF

2003

$258K $104 SF

2480 SF

$313K $118 SF

2004

2647 SF

2005

$398K $142 SF

2800 SF

Market Share 1994 vs. 2004

1994 2004

NC NC

Resale Resale

64% 36% 14% 86% $270,338 $365,384 $95,046 $225,871 $333,778 $107,907 $220,339 $314,936 $94,597 $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 VB Ches Suff Resale NC Diff

Southside Resale VS. New Construction Average Closing Prices for 2004 Single-Family Detached Homes

slide-11
SLIDE 11

11

$124,354 $242,101 $117,747 $164,984 $248,363 $83,379 $256,795 $310,230 $53,435 $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 Ports Norf I/W Resale NC Diff

Southside Resale VS. New Construction Average Closing Prices for 2003 Single-Family Detached Homes

$118,791 $240,363 $121,572 $156,825 $258,726 $101,901 $320,599 $300,018 $20,581 $277,145 $299,073 $22,664 $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000

H NN JCC YC Resale NC Diff.

Peninsula Resale VS. New Construction Average Closing Prices for 2003 Single-Family Detached Homes

Average Consumer Lot Costs Chesapeake

$483,879 $461,433 $493,420 $807,068

  • Greystone - $117,146
  • Ravenna - $127,509
  • Cahoon Plantation - $151,300
  • Edinburgh - $181,805

Average Consumer Lot Costs Suffolk

$700,000* $354,418 $354,146 $533,316

  • Governors Pointe - $199,492
  • Nansemond River Estates - $87,996
  • Hillpoint Greens - $125,916
  • The Riverfront - $179,591

* Projected Average Price

Average Consumer Lot Costs Virginia Beach

$555,655 $661,379 $656,328 $654,516

Lago Mar – $169,698 Mansfield Farms – $272,766 Bay Hill – $279,000 Indian River Plantation -$194,529

Average Consumer Lot Costs Peninsula

$336,689 $326,900 $476,382 $423,782

H Howe Farm– $85,825 N Port Warwick – $91,661 J Fords Colony – $129,028 Y Running Man - $89,717

slide-12
SLIDE 12

12

RESIDENTIAL HOUSING FORECAST

  • 1. Extremely Positive!!!

RESIDENTIAL HOUSING FORECAST

REASONS:

  • 1. Hampton Roads Economics

Hampton Roads Economic Stats - 2004 Employment has Grown Faster in

Hampton Roads Than In The U.S. and Virginia Since Late in 2000

Hampton Roads Has Been Buffered from

Recession by Increases in Military Pay 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

RESIDENTIAL HOUSING FORECAST

REASONS:

  • 2. Hampton Roads Housing Demand

Percent of Households That Purchased A Home in 2004 Compared To The Total Number of Households In The MSA

Charlotte NC MSA

Hampton Roads MSA

Total Closings = 32,985 11 % of HH Total Households = 273,561 Total Closings = 28,630 5 % of HH Total Households = 581,578

Raleigh/Durham MSA

Total Closings = 43,587 8 % of HH Total Households = 506,000

RESIDENTIAL HOUSING FORECAST

REASONS:

  • 3. Hampton Roads Housing Supply
slide-13
SLIDE 13

13

Number of Homes Listed in December 1998-2004 and January 2005

8582 6902 6449 5200 4082 2925 2764 2401

2000 4000 6000 8000 10000 1998 1999 2000 2001 2002 2004 2004 2005

RESIDENTIAL HOUSING FORECAST

REASONS:

  • 4. Effects of Interest Rates

(Mortgage Instruments)

Interest Rate Affect On Housing Affordability

1999 2000 2001 2002 2003 2004 MI $39,704 $42,448 $51,000 $53,900 $56,302 $56,624 IR 8.2% 7.3% 7.3% 5.5% 5.25% 6.0%

= = = = = = TM $154,000 $173,000 210,000 $260,000 $300,000 $275,000

With Down Payment

$375,000 Interest Only $400,000 Interest Only W/ Down Payment $500,000

RESIDENTIAL HOUSING FORECAST

REASONS:

  • 5. Military Influence

Defense Spending In Billions 1990 - 2005

417 379.9 355.1 329 291 221 219 203 218 223 230 238 258 270 295 298

  • 30

20 70 120 170 220 270 320 370 420

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

500 1000 1500 2000 2500 3000 3500 100K 100K-199K 200-299K 300K-399K 400K-499K 500K + 2000 2001 2002 2003 2004

New Construction Closings By Price Points 2000, 2001, 2002, 2003, 2004

  • 222
  • 2209

+1105 +1056 +439 +250

slide-14
SLIDE 14

14

Old Dominion University Old Dominion University Hampton Roads Real Estate Hampton Roads Real Estate Market Review and Forecast Market Review and Forecast

Industrial Market

Presented by

Abe Ellis

Presented By:

R.L. “Abe” Ellis, SIOR

Vice President / Industrial Specialist Thalhimer / Cushman & Wakefield

2005 ODU Real Estate Review

Industrial Market Forecast

SPECIAL THANKS TO ALL OF OUR REPORTERS:

Advantis GVA CB Richard Ellis Ken Benassi, SIOR

  • R. Worth Remick

Trip Ferguson Michael Shapiro NAI Harvey Lindsay Sperry Van Ness Bobby Beasley Jonathan Guion, SIOR Charles Dickinson Joyce Hartman Billy King, SIOR Chip Worley Thalhimer / Cushman & Wakefield Betsi Bartee Ron Biesecker Christine Kaempfe Patrick Mumey, SIOR Bobby Phillips

2004 Summary of Data 2004 Key Industrial Sales

Dexter Street, Portsmouth, Virginia

slide-15
SLIDE 15

15

Suffolk Shell Building Continental Pickett’s Line Road Newport News Lakeview Parkway, Suffolk

What Was New In 2004 ?

Stihl, International Parkway, Virginia Beach Pro-Pak, Taylor Farm Road, Virginia Beach

slide-16
SLIDE 16

16

Taylor Farm Industrial Development SARA LEE EXPANSION

What’s New for 2005 ?

Triumph Industrial Center, Suffolk BRIDGEWAY COMMERCE PARK Maersk Grows in Portsmouth

slide-17
SLIDE 17

17

ASHLEY CAPITAL

Hampton Roads from a Regional and a National Comparison Old Dominion University Old Dominion University Hampton Roads Real Estate Hampton Roads Real Estate Market Review and Forecast Market Review and Forecast

Retail Market

Presented by

Blount Hunter

  • H. Blount Hunter

Retail & Real Estate Research Co.

RETAIL SALES GROWTH

  • Southside: Expect to surpass $10.0 Billion
  • Peninsula: Approaching $4.5 Billion
  • Steady increases during military

deployment—very different from Gulf War experience in early 1990s

  • 2004: “Market caught its breath”
  • 2005-2006: significant new development

RETAIL SALES GROWTH

$0.0 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 1996 1997 1998 1999 2000 2001 2002 2003 2004 Southside Peninsula

slide-18
SLIDE 18

18

RETAIL OVERVIEW

  • 46 million SF GLA (shopping centers)
  • 30 million SF Southside (65 percent)
  • 16 million SF Peninsula (35 percent)

Square footage and population are “balanced” within region Region has 29 SF per capita compared to national average of 22 SF

MARKET DYNAMICS

CONSTRUCTION: DOWN NEW TENANTS: DOWN ABSORPTION: DOWN BIG BOX VACANCY: DOWN OCCUPANCY: UP RENT: UP

AVERAGE RENT

$13.46 $13.88 $13.18 $13.36 $0.00 $2.00 $4.00 $6.00 $8.00 $10.00 $12.00 $14.00 $16.00 $18.00 $20.00 Southside Peninsula 2003 2004

NEW CONSTRUCTION

419500 271600 330000 185000 749000 456600 100000 200000 300000 400000 500000 600000 700000 800000 Southside Peninsula Total 2003 2004

SPACE ABSORPTION

419100 341700 412000 84300 831000 426000 100000 200000 300000 400000 500000 600000 700000 800000 900000 Southside Peninsula Total 2003 2004

VACANCY RATE

0.105 0.089 0.126 0.104 0.119 0.094 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% Southside Peninsula Total 2003 2004

slide-19
SLIDE 19

19

VACANCY BY PRODUCT TYPE

0.098 0.127 0.066 0.135 0.049 0.037 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% 18.00%

Neighborhood Community Regional Power Freestanding Specialty Festival Outlet

“BIG BOX” VACANCY

2.6 million SF “Big Box” vacancy

– 61 percent of total retail vacancy – Disproportionate problem on Peninsula

  • 43 percent of “big box” vacancy is on Peninsula
  • 69 percent of Peninsula’s vacancy is in “big boxes”

– Reflects 30 percent drop in vacancy from 2003 – Absorption: re-leasing and re-use

“BIG BOX” VACANCY

Big Box Vacancy per Square Foot

500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000 1 9 9 7 1 9 9 8 1 9 9 9 2 2 1 2 2 2 3 2 4 Vacant Square Feet Southside Peninsula TOTAL

NOTABLE SALES IN 2004

Greenbrier Mall sold (again) for $102 million or the equivalent of $115 PSF Smaller centers throughout the market generally sold for $70 - $95 PSF

“SWEET SPOTS”

“Sweet Spots” exist throughout the region:

Williamsburg Northern Newport News Coliseum Central Northern Suffolk/Isle of Wight/Route 17 Pembroke/Town Center Victory Crossing/Midtown in Portsmouth Downtown Norfolk/Ghent Greenbrier

“EYE ON THE MARKET”

  • Nationally and locally, department stores

will be under pressure to perform

  • More regional shopping centers will add

non-traditional uses and anchors to increase their appeal

  • “Lifestyle centers” continue to be the

project du jour; strong co-tenancy of retailers, restaurants, and entertainment is critical for success

slide-20
SLIDE 20

20

“EYE ON THE MARKET”

→Suffolk doesn’t have an emerging “central place” for shopping center development →Williamsburg is getting broader retail

  • ffering—just not in mall format

→“Workhorse” retail areas such as Janaf and Coliseum are being overlooked despite strong sales and new investments →Town Center’s challenge is to become more than a restaurant park

“EYE ON THE MARKET”

  • Lord & Taylor’s departure provides good

merchandising opportunity for Lynnhaven

  • MacArthur Center’s sales continue to

rise—opportunities exist for enhanced tenant quality and “third anchor”

  • Northern Newport News will soon surpass

Greenbrier as region’s highest density retail node

THAN THANK YOU! K YOU! Old Dominion University Old Dominion University Hampton Roads Real Estate Hampton Roads Real Estate Market Review and Forecast Market Review and Forecast

Presented by: The Center for Real Estate and Economic Development

University of Pennsylvania Samuel Zell and Robert Lurie Real Estate Center at Wharton University of California Berkeley Fisher Center for Real Estate and Urban Economics Virginia Commonwealth University Virginia Real Estate Center Virginia Tech University Virginia Center for Housing Research Old Dominion University 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

Real Estate Centers Real Estate Centers Executive Committee Executive Committee

  • Ron Bray
  • Craig Cope
  • John Crunkleton
  • Tom Dillon
  • Brian Dundon
  • Joan Gifford
  • Cliff Moore
  • Jonathan Guion
  • Warren Harris
  • Joyce Hartman
  • Andrew Keeney
  • Billy King
  • John Lombard
  • Van Rose
  • Brad Sanford

Sponsorship Sponsorship Committee Committee Cliff Moore, Chair Larry Colorito

slide-21
SLIDE 21

21

Programs Committee Programs Committee

Joyce Hartman, Chair Jonathan Guion Ron Bray Stephanie Sanker Eva Wiggins

Research & Editorial Committee Research & Editorial Committee

Brian Dundon, Chair

Beth Hancock Joy Learn Sandi Prestridge Maureen Rooks Lane Shea Brad Sanford

Special thank you to

Inside Business

for their sponsorship

  • ver the past three

years.

Old Dominion University Old Dominion University Hampton Roads Real Estate Hampton Roads Real Estate Market Review and Forecast Market Review and Forecast

Presented by: The Center for Real Estate and Economic Development