LENTS TOWN CENTER. Real Estate Market Analysis. January 2012

Transcription

1 LENTS TOWN CENTER Real Estate Market Analysis January 2012

2 Potential Uses Multi-Family Housing Commercial Retail Neighborhood Office

3 Lents Study Area Site 92-H/ Bakery Block LTC-W LTC-N LTC-E LTC-S 93rd & Woodstock Potential Uses Housing Commercial/Mixed-Use Office Commercial Commercial Housing Commercial Office Commercial Mixed-Use Rental Apartment

4 Housing Market Analysis Primary Market Area

5 Households Households Housing Market Analysis Demographic Profile Low rate of families, roughly at 61% 3,500 3,000 DEMOGRAPHICS BY INCOME COHORT 2000 Relatively slow growth, only 0.8% AAGR over last decade Area built-out 2,500 2,000 1,500 1, Under $15,000 $15,000 - $24,999 $25,000 - $34,999 $35,000 - $49,999 $50,000 - $74,999 $75,000 - $99,999 $100,000 - $149,999 $150,000 - $199, $200,000 or More Average HH income is $47,822 3,500 3, DEMOGRAPHICS BY AGE COHORT Two in five HH s earn less than $35,000 annually 2,500 2,000 1, ,000 Largely middle aged. 64% between years old SOURCE: Nielsen Claritas

6 Spring '08 Fall '08 Spring '09 Fall '09 Spring '10 Fall '10 Spring '11 Fall '11 Average Rent (Per Sq. Ft.) Vacancy Rate Housing Market Analysis Rental Apartment Market Trends Rental Apartments are the strongest segment of the real estate market. $0.86 Rental Apartment Market Trends Outer SE Submarket 7% The Outer SE Submarket is weaker than most other areas in the region. But at 3.9% it is still quite healthy. Rents in Outer SE have increased slightly, but not to the extent exhibited elsewhere. The area suffers from a deteriorated supply profile. No new market rate product has been developed in some time. $0.85 $0.84 $0.83 $0.82 $0.81 $0.80 $0.79 $0.78 Average Rent* $0.77 Vacancy Rate $0.76 SOURCE: Metro Multi-Family Housing Association and Johnson Reid 6% 5% 4% 3% 2% 1% 0%

7 Average Rent Housing Market Analysis Rental Competitive Market Profile Survey of 5 area projects totaling nearly 1,000 units. Competitive Market Profile Primary Market Area $1,200 Rental rates range from $700 to $1,000 or $ $1.02 psf. Occupancy exceeds 95% in each project surveyed. Altamont, Scott Mountain, and Parkland are all post-1995 construction and are adequately amenitized. Stone Bridge and Holgate Commons are more seasoned. $1,100 $1,000 $900 $800 $700 $600 $500 $ ,100 1,300 Unit Size Altamont Scott Mountain Parkland Stone Bridge Holgate Commons SOURCE: Johnson Reid

8 Median Sale Price Average Price per S.F. 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 Sales Pace Housing Market Analysis Attached For-Sale Market Trends Sharp deterioration in the market consistent with the broad metropolitan area. Sales pace off 29% from a year ago Sales Velocity 40 Median prices continue to decline on weak demand and REO s price depression Median Price of $99,000 is off 7% from a year ago and 49% from the 2007 peak. $230,000 $210,000 $190,000 $170,000 $150,000 Median Prices $130, $110, $90, $70, $50,000 0 SOURCE: Johnson Reid and RMLS

9 Listing Price Housing Market Analysis Attached For-Sale Competitive Market Profile 128 sales in the last 12-months with 63 active listings. Homes average 1,250 per-square-foot with 3B/2b being most common. Median price of $101,000 or $82 per-square-foot. The market is characterized almost exclusively by 1970 s garden apartment conversions or boom era townhome resales. $450,000 $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 Attached For-Sale Competitive Market Profile Primary Market Area New construction is almost nonexistent in the market. A significant share of sales velocity is either short-sale or REO. $50,000 Listings Sales $ ,000 1,500 2,000 2,500 3,000 3,500 Square Feet SOURCE: RMLS and Johnson Reid

10 Housing Market Analysis Potential Housing Market Depth Factors Influencing Potential Market Depth Demographic Profile Tenure by Age and Income Ability/Willingness to Pay Household Growth Assumptions Housing Preferences Relative Market Conditions

11 Housing Market Analysis Psychographic Analysis LIFESTAGE GROUP Local Index Age Income Urbanicity Median Typical Predominant Housing Typical Social Typical Occupation Typical Racial Demographic Segment HH's Value Class Class Class Income Age Range HH Status Preference Housing Type Group Education Level Type Composition YOUNGER YEARS Midlife Success 3 Movers and Shakers Mid Wealthy Suburban $109, Couples Mostly Owner Mostly SFDU Elite Suburbs College Grad.+ Exec, Prof, WC White, Asian 8 Executive Suites MId Upper-Mid Suburban $78,008 < 55 Singles/Couples Mostly Owner SFDU, Multi-Family, Some Apt The Affluentials College Grad.+ Exec, Prof, WC White, Asian 19 Home Sweet Home Mid Upper-Mid Suburban $72,029 < 55 Couples Mostly Owner SFDU The Affluentials College Prof, WC White 30 Suburban Sprawl Mid Midscale Suburban $53, Singles/Couples Owners Mix SFDU, Low-Rise M.F. Middleburbs College WC White Young Achievers 4 Young Digerati Young-mid Wealthy Urban $91, Family Mix Mix, Owners Apartments & Condos Urban Uptown College Grad.+ Exec, Prof, WC White, Asian, Hispanic 16 Bohemian Mix Youg-Mid Upper-Mid Urban $57,083 < 55 Family Mix Mostly Renters Apartments & Condos Urban Uptown College Prof, WC White, Black, Asian, Hispanic 22 Young Influentials Young-mid Midscale Suburban $51,684 < 55 Singles/Couples Renters Apartments Middleburbs College Prof, WC White, Black, Asian 31 Urban Achievers 1, Young Lower-Mid Urban $37,252 < 35 Family Mix Renters Apartments Midtown Mix Some College Prof, WC, Service White, Black, Asian, Hispanic Striving Singles 44 New Beginnings Young-mid Low Income Suburban $32,558 < 55 Singles/Couples Renters Low Income Apartments Inner Suburbs Some College WC, Service White, Black, Hispanic FAMILY LIFE Accumulated Wealth 2 Blue Blood Estates Mid Wealthy Suburban $126, Families Owners SFDU Elite Suburbs College Grad.+ Exec, Prof, WC White, Asian 6 Winner's Circle MId Wealthy Suburban $112, Families Mostly Owners SFDU Elite Suburbs College Grad.+ Exec, Prof, WC White, Asian Young Accumulators 17 Beltway Boomers MId Upper-Mid Suburban $80, Families Mostly Owners SFDU The Affluentials College Prof, WC White, Asian 18 Kids and Cul-de-Sacs Young-Mid Upper-MId Suburban $76, Families Mostly Owners SFDU The Affluentials College Prof, WC White, Asian, Hispanic 29 American Dreams 5, Mid Upper-Mid Urban $58, Families Owners Mix, SFDU, Low-Rise Condos Urban Uptown Some College WC, Service White, Black, Asian, Hispanic Mainstream Families 36 Blue-Chip Blues Young-MId Midscale Suburban $53, Families Mix, Owners Mix, SFDU, Low-Rise Condos/Apts. Middleburbs Some College WC, Service, BC White, Black, Hispanic 52 Suburban Pioneers Mid Downscale Suburban $35,221 < 55 Family Mix Mix, Owners Mix, SFDU, Low-Rise Condos/Apts. Inner Suburbs Elem. School, H.S. WC, Service, BC White, Black, Hispanic 54 Multi-Culti Mosiac 6, Mid Lower-MId Urban $36, Family Mix Mix, Owners Mix, SFDU, Low-Rise Condos/Apts. Midtown Mix Elem. School, H.S. WC, Service, BC Black, Hispanic Sustaining Families 65 Big City Blues 4, Young-MId Lower-Mid Urban $33,055 < 55 Families, Singles Renters Apartments Urban Cores Elem. School, H.S. WC, Service, BC Black, Asian, Hispanic 66 Low-Rise Living Mid Downscale Urban $25,761 < 55 Families, Singles Renters Apartments Urban Cores Elem. School, H.S. Service, BC Black, Hispanic LIFESTAGE GROUP Index Age Income Urbanicity Median Typical Predominant Housing Typical Social Typical Occupation Typical Racial Demographic Segment Value Class Class Class Income Age Range HH Status Preference Housing Type Group Education Level Type Composition MATURE YEARS Affluent Empty Nesters 1 Upper Crust Mid-Older Wealthy Suburban $121, Couples Owners SFDU Elite Suburbs College Grad.+ Exec, Prof, WC White, Asian 7 Money and Brains Mid-Older Wealthy Urban $93, Couples, Families Mostly Owners Mix, SFDU, Urban Condos Urban Uptown College Grad.+ Exec, Prof, WC White, Asian Conservative Classics 14 New Empty Nests Older Upper-Mid Suburban $75, Couples Mostly Owners SFDU The Affluentials College Mostly Retired White 15 Pools and Patios Mid-Older Upper-Mid Suburban $76, Couples Mostly Owners SFDU The Affluentials College Prof, WC White 21 Gray Power Older Midscale Suburban $55, Singles/Couples Mostly Owners Mostly SFDU, some Condos Middleburbs College Mostly Retired White 26 The Cosmopolitans 1, Mid-Older Upper-Mid Urban $59, Couples Owners Mix, SFDU, Urban Condos Urban Uptown Some College WC White, Black, Asian, Hispanic Cautious Couples 39 Domestic Duos Older Midscale Suburban $51, Singles/Couples Mostly Owners SFDU Middleburbs Some College Mostly Retired White, Black 40 Close-In Couples 4, Older Lower-MId Urban $43, Couples Owners Mix, SFDU, Urban Condos Midtown Mix H.S. Graduate Mostly Retired White, Black, Hispanic 46 Old Glories Older Downscale Suburban $32, Singles/Couples Mostly Renters Apartments Inner Suburbs H.S. Graduate Mostly Retired White, Black 49 American Classics Older Downscale Suburban $36, Singles/Couples Mostly Owners SFDU Inner Suburbs H.S. Graduate Mostly Retired White, Black, Hispanic Sustaining Seniors 59 Urban Elders 1, Older Downscale Urban $26, Singles Renters Apartments Urban Cores Elem. School, H.S. Mostly Retired Black, Asian, Hispanic 61 City Roots 2, Older Downscale Urban $29, Singles/Couples Owners SFDU, Duplexes Urban Cores Elem. School, H.S. Mostly Retired Black, Hispanic TOTAL, ALL HH's 34,645

12 Housing Market Analysis Psychographic Analysis Multi-Culti Mosaics An immigrant gateway community, Multi-Culti Mosaic is the urban home for a mixed populace of Hispanic, Asian, and African- American singles and families. With nearly a quarter of the residents foreign born, this segment is a mecca for first-generation Americans who are striving to improve their lower-middle-class status. American Dreams American Dreams is a living example of how ethnically diverse the nation has become: just under half the residents are Hispanic, Asian, or African-American. In these multilingual neighborhoods--one in three speaks a language other than English--middle-aged immigrants and their children live in upper-middle-class comfort. Close-In Couples Close-In Couples is a group of predominantly older, ethnically diverse couples living in older homes in the urban neighborhoods of mid-sized metros. High school educated and empty nesting, these mostly older residents typically live in older city neighborhoods, enjoying their retirements. Big City Blues With a population that's more than 45 percent Latino, Big City Blues has one of the highest concentration of Hispanic-Americans in the nation. But it's also the multi-ethnic address for low-income Asian and African-American households occupying older inner-city apartments. Concentrated in a handful of major metros, these younger singles and single-parent families face enormous challenges: low incomes, uncertain jobs, and modest educations. More than 15 percent have less than a 9th grade education. City Roots Found in urban neighborhoods, City Roots is a segment of downscale retirees, typically living in older homes and duplexes they've owned for years. In these ethnically diverse neighborhoods--more than 60 percent are African-American or Hispanic--residents are often widows or widowers living on fixed incomes and maintaining low-key lifestyles.

13 Housing Market Analysis Psychographic Analysis The Cosmopolitians Educated, upper-midscale, and ethnically diverse, The Cosmopolitans are urbane couples in America's fast-growing cities. Concentrated in a handful of metros--such as Las Vegas, Miami, and Albuquerque--these households feature older, empty-nesting homeowners. A vibrant social scene surrounds their older homes and apartments, and residents love the nightlife and enjoy leisureintensive lifestyles. Urban Elders For Urban Elders--a segment located in the downtown neighborhoods of such metros as New York, Chicago, Las Vegas, and Miami-- life is often an economic struggle. These communities have high concentrations of Hispanics and African-Americans and tend to be downscale, with singles living in older apartment rentals. Urban Achievers Concentrated in the nation's port cities, Urban Achievers is often the first stop for up-and-coming immigrants from Asia, South America, and Europe. These young singles, couples, and families are typically college-educated and ethnically diverse: about a third are foreign-born, and even more speak a language other than English. Young Influentials Once known as the home of the nation's yuppies, Young Influentials reflects the fading glow of acquisitive yuppiedom. Today, the segment is a common address for younger, middle-class singles and couples who are more preoccupied with balancing work and leisure pursuits. Having recently left college dorms, they now live in apartment complexes surrounded by ball fields, health clubs, and casual-dining restaurants. Young Digerati Young Digerati are tech-savvy and live in fashionable neighborhoods on the urban fringe. Affluent, highly educated, and ethnically mixed, Young Digerati communities are typically filled with trendy apartments and condos, fitness clubs and clothing boutiques, casual restaurants and all types of bars--from juice to coffee to microbrew.

14 Housing Market Analysis PRIZM/Housing Preference Bridge Income Age Cohort Age Cohort Cohort < $15,000 $15,000 - $24,999 $25,000 - $34,999 $35,000 - $49,999 $50,000 - $74,999 $75,000 - $99,999 $100,000 - $124,999 $125,000 - $149,999 $150,000 - $199,999 $200,000+ 2,408 6,720 4,072 3,667 12,571 1, , Urban Achievers Multi-Culti Urban Elders Big City Blues Big City Blues City Roots Urban Elders Young Digerati American Dreams Young Influentials Multi-Culti Close-In Couples Urban Achievers Close-In Couples Young Digerati Cosmopolitians Money & Brains Movers & Shakers Money & Brains

15 Monthly Rent Age Cohort Monthly Rent Age Cohort Housing Market Analysis Rental Market Depth STRUCTURAL DEMAND Demand by Ability to Pay Demand by Age $400 - $ $600 - $800 $800 - $999 $1,000 - $1, Single-Family Multi-Family $1,250 - $1,499 $1,500+ Single-Family Multi-Family Rental Units Rental Units TOTAL DEMAND PROFILE Demand by Ability to Pay Demand by Age $400 - $599 $600 - $800 Single-Family Multi-Family $800 - $999 $1,000 - $1,249 $1,250 - $1, Singel-Family Multi-Family $1, ,000 1,500 2,000 2,500 Rental Units ,000 1,250 1,500 1,750 Rental Units

16 Home Price Age Cohort Home Price Age Cohort Housing Market Analysis Attached For-Sale Market Depth STRUCTURAL DEMAND $50,000 - $99,999 $100,000 - $149,999 $150,000 - $199,999 $200,000 - $249,999 $250,000 - $299,999 $300,000 - $349,999 $350,000 - $399,999 $400,000 - $449,999 $450,000 - $499,999 $500,000+ Demand by Ability to Pay Single-Family Multi-Family Homes Demand by Age Single-Family Multi-Family Homes TOTAL DEMAND PROFILE $50,000 - $99,999 $100,000 - $149,999 $150,000 - $199,999 $200,000 - $249,999 $250,000 - $299,999 $300,000 - $349,999 $350,000 - $399,999 $400,000 - $449,999 $450,000 - $499,999 $500,000+ Demand by Ability to Pay Single-Family Multi-Family ,000 1,500 2,000 Homes Demand by Age Singel-Family Multi-Family ,000 1,250 1,500 1,750 Homes

17 Housing Market Analysis Housing Market Outlook Rental Apartment Market Rental market conditions are excellent. Strong demand, competitive lending, and limited new construction has created a hot market. Projects are beginning to fill the pipeline, but not yet in the market area. New projects will stand out in the market area. Some neighborhood stigma remains. Attached For-Sale 92-H, LTC-N and 93 rd & Woodstock are sites most likely for housing. Very limited product in the area. Attached ownership represents only 5% of ownership housing stock. Newest stock is 3-5 year old resales. Market conditions very week, with market inundated with distressed properties.

18 Retail Market Analysis Primary Trade Area Three Trade Area s Include: Pedestrian Trade Area Neighborhood Serving Five-Minute Drive Time Regional Serving Ten- Minute Drive Time

19 Absorption (Sq. Ft.) Vacancy Rate Retail Market Analysis Retail Market Conditions Broad Portland metro market is stable, with flat vacancy and absorption. 60,000 Retail Market Conditions SE/Clackamas Submarket 7% However, metro-wide lease rates have fallen 5% year-over-year. 40,000 20,000 6% 5% SE/Clackamas vacancy is very low at 5.4%. Second lowest in region. 0-20,000 4% Asking lease rates are averaging just over $16.00 NNN. -40,000-60,000 3% 2% New construction is limited, although some major retailers are in expansion mode. -80, ,000 Absorption Vacancy 1% 0% Tenant-driven use type. SOURCE: NAI Norris, Beggs, & Simpson, and Johnson Reid

20 Retail Market Analysis Retail Market Opportunity Total retail surplus in all three trade areas. A minimum of 34% of local retail sales originates from outside the district. Indicates strength of area as a commercial center, drawing residents from outside the area. Potential opportunities exist in Apparel, Building Materials, Electronics, and Food Stores. Regionally, the area competes with Gateway, Clackamas, and the East Foster & Powell Corridors. Model does not reflect quality. Foodservice and Drinking Places Non-Store Retailers Miscellaneous Store Retailers General Merchandise Stores Sporting Goods, Hobby, Book, Music Stores Clothing and Clothing Accessories Stores Gasoline Stations Health and Personal Care Stores Food and Beverage Stores Building Material, Garden Equip Stores Electronics and Appliance Stores Furniture and Home Furnishings Stores Motor Vehicle and Parts Dealers Foodservice and Drinking Places Non-Store Retailers Miscellaneous Store Retailers General Merchandise Stores Sporting Goods, Hobby, Book, Music Stores Clothing and Clothing Accessories Stores Gasoline Stations Health and Personal Care Stores Food and Beverage Stores Building Material, Garden Equip Stores Electronics and Appliance Stores Furniture and Home Furnishings Stores Motor Vehicle and Parts Dealers Foodservice and Drinking Places Non-Store Retailers Miscellaneous Store Retailers General Merchandise Stores Sporting Goods, Hobby, Book, Music Stores Clothing and Clothing Accessories Stores Gasoline Stations Health and Personal Care Stores Food and Beverage Stores Building Material, Garden Equip Stores Electronics and Appliance Stores Furniture and Home Furnishings Stores Motor Vehicle and Parts Dealers Pedestrian Trade Area Five-Minute Trade Area Ten-Minue Trade Area -1, ,000

21 Retail Market Analysis Potential Retail Market Depth Factors Influencing Average per Household Expenditures Potential Market Depth Trade Area Average Average Household Expenditures Per Household Consumer Spending Profile Household Growth Estimates Non-resident Capture/Resident Retention Sales Support Factors NAICS Category Expenditures Motor Vehicle and Parts Dealers $5, Furniture and Home Furnishings Stores $ Electronics and Appliance Stores $ Building Materials and Garden Equipment $2, Food and Beverage Stores $5, Health and Personal Care Stores $1, Clothing and Clothing Accessories Stores $1, Sporting Goods, Hobby, Book and Music Stores $ General Merchandise Stores $4, Miscellaneous Store Retailers $ Foodservices and Drinking Places $3,637 Totals/Weighted Averages $28,900 1 Average Retail Sales Figures in 2010 Dollars SOURCE: Nielsen Claritas and JOHNSON REID Relative Market Conditions

22 Retail Market Analysis Potential Retail Market Depth Pedestrian Trade Area Sales Support NAICS Category Factor '10-'20 Δ 441 Motor Vehicle and Parts Dealers $387 30,794 32,128 33,520 2, Furniture and Home Furnishings Stores $209 6,116 6,381 6, Electronics and Appliance Stores $302 5,262 5,490 5, Building Materials and Garden Equipment $389 15,649 16,327 17,034 1, Food and Beverage Stores $430 26,745 27,903 29,112 2, Health and Personal Care Stores $279 14,465 15,092 15,746 1, Clothing and Clothing Accessories Stores $156 22,480 23,454 24,470 1, Sporting Goods, Hobby, Book and Music Stores $199 7,593 7,922 8, General Merchandise Stores $164 64,011 66,784 69,677 5, Miscellaneous Store Retailers $127 15,423 16,091 16,788 1, Foodservices and Drinking Places $267 29,054 30,313 31,626 2,572 Totals/Weighted Averages 206, , ,104 18,306 Five-Minute Drive Time Sales Support NAICS Category Factor '10-'20 Δ Totals/Weighted Averages 1,054,869 1,102,147 1,151,543 96,675 Ten-Minute Drive Time Sales Support Spending Supported Retail Demand 2 Spending Supported Retail Demand 2 Spending Supported Retail Demand 2 NAICS Category Factor '10-'20 Δ Totals/Weighted Averages 7,842,751 8,240,519 8,658, ,709 SOURCE: JOHNSON REID 1/ Based on national averages derived from "Dollars & Cents of Shopping Centers," Urban Land Institute, Median sales for neighborhood scale centers were used. 2 Assumes a Market Clearing Vacancy Rate of 10%

23 Retail Market Analysis Retail Market Outlook Market conditions are strong and stable, although rents remain slightly off recent highs. The area is a neighborhood commercial draw, mostly the result of concentrations along the 82 nd corridor. Best opportunities are for niche tenants and/or neighborhood retail services. Specifically specialty grocery, convenience, restaurant, and hardware/building materials. Other potential users would be office tenants (insurance, real estate, CPA, etc.). Retail opportunity locally is likely to be more locally serving, diversifying opportunities to the local and daytime population. LTC-W and the Foster oriented portions of LTC-N and LTC-S have the best opportunity for retail. The latter likely in a storefront configuration. LTC-E is a tougher retail site as it suffers from limited eastbound accessibility. However, it benefits from pedestrian traffic to/from the max station. 92-H and the Bakery Block also have retail potential if configured in a mixed-use setting.

24 Office Market Analysis Primary Market Area

25 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 Absorption (Sq. Ft.) Vacancy Rate Office Market Analysis Office Market Conditions Portland metro market recovering at a measured pace, led by the CBD. 20,000 15,000 Office Market Conditions Eastside Submarket 18% 16% Declining lease rates. 10,000 14% Eastside vacancy at 15%, Eastside net rents at $ , ,000 12% 10% 8% 6% Competitive market lease rates in the $ $17.00/NNN range. -10,000-15,000-20,000 Absorption Vacancy 4% 2% 0% Limited construction activity outside of the CBD. SOURCE: NAI Norris, Beggs, & Simpson, and Johnson Reid

26 Office Market Analysis Potential Office Market Depth Factors Influencing Potential Market Depth Economic Profile Anticipated Industry Growth Office Space Utilization Rates Average Space Required Per Worker Relative Market Conditions Economic Profile Office Primary Market Area (2009) Other Services Leisure & Hospitality Health Services Education Professional & Business Financial Activites Information T.W.U. Retail Trade Wholesale Trade Manufacturing Construction 2.4% 2.0% 4.3% 5.5% 4.8% 6.3% 6.5% 7.9% 11.9% 12.0% 13.4% 12.6% 0% 5% 10% 15% Distribution of Employment SOURCE: U.S. Census Bureau and Johnson Reid

27 Office Market Analysis Potential Marginal Office Market Depth Primary Market Area Base Year Jobs in Office Space Avg. Space Base Year Projected Office Space Employment Sector Per Job 2/ '11-'21 Construction ,832 10,939 11, Manufacturing ,294 16,065 15, Wholesale Trade ,292 11,848 12,432 1,140 Retail Trade , , ,398 7,766 T.W.U ,132 92,423 94,771 4,639 Information ,367 72,624 73,903 2,536 Financial Activities 1,089 1,111 1, , , ,550 18,297 Professional & Business Services 2,076 2,243 2, , , , ,831 Education 1,047 1,128 1, , , ,918 67,437 Health Care and Social Assistance 2,081 2,313 2, , ,299 1,035, ,282 Leisure & Hospitality ,242 79,714 84,453 9,211 Other Services , , ,458 7,137 Government ,566 43,480 45,482 3,916 Total 7,623 8,169 8,763 3,068,974 3,288,838 3,527, ,952 2/ Average office employment density by industry sector based on Urban Land Institute guidelines. 3/ Assumes a market-clearing 10% office space vacancy rate.

28 Office Market Analysis Office Market Outlook Area has excellent regional and local accessibility. Generally poor overall market conditions, but stabilizing. Area rents are among lowest in the region. Reflective of product quality Limited market demand. Best opportunity is in the aggressive recruitment of major tenants or infill/support office space for tenants seeking less than 4,000 square feet (typically neighborhood serving). Professional services and medical office are strongest tenant candidates. LTC-W has the strongest potential for stand alone office development. LTC-S is possible as well. Other sites are likely to have higher value viable uses.