3/13/2013 The Shoppes at Eagle Harbor Carrollton, VA www. WHLR.us - - PDF document

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• www. WHLR.us

The Shoppes at Eagle Harbor Carrollton, VA

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Monarch Bank Virginia Beach, VA

Walnut Hill Plaza Petersburg, VA Riversedge Virginia Beach, VA

Shoppes at TJ Maxx Richmond, VA Perimeter Square Tulsa, OK Amscot Building Tampa, FL

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Twin City Crossing Batesburg-Leesville, SC

Lumber River Village Lumberton, NC

Fairfield Shopping Center Virginia Beach, VA

East Beach Marketplace Norfolk, VA

Port Crossing Harrisonburg, VA

Culpeper Marketplace Culpeper, VA

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T ha nk You 18th Annua l Ma r ke t Re vie w Booth Sponsor s

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Cra ig Co pe L ib e rty Pro pe rty T rust Mo de ra to r

@ ODUCRE E D

1.94 2.65 3.92 4.87 2 4 6 Attorney Commercial Real Estate Professional Hampton Roads Virginia

Minutes to Earn 500 mL of beer

Minutes to Earn 500 mL of beer

Source: US Bureau of Labor & Statistics

OF F ICE MARKE T RE VIE W

De bora h K. Ste a rns, SIOR, CPM

2012 Ye a r in Re vie w

• I

nve nto ry: 39 millio n rsf

• Ab so rptio n:

600,000 rsf

• Va c a nc y:

12.1%

• Ave ra g e ra te :

$17.65

Compa ra tive Ma rke ts

30,000 rsf+ multi-tenant Hampton Roads Richmond Raleigh/ Durham Inventory RSF 20,200,000 27,400,000 27,300,000 Vacancy 16.6% 12.6% 13.3% Avg Rate $18.38 $18.43 $21.03

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Ame rig ro up (315,000 rsf) T he Co nc o urse USAA Re a lty / Do n Crig g e r/ Gra y Ra ndo lph AMSE C (65,000 rsf) 5701 Cle ve la nd Stre e t Olympia / Chip Cutc hins/ L a ng Willia ms Suthe rla nd Glo b a l (40,000 rsf) L ib e rty I V, Che sa pe a ke L ib e rty Pro pe rty T rust/ Bria n De vlin

F

• rt No rfo lk Pla za

$148/ rsf Ma ure e n Ro o ks Pa tric k He nry Co rpo ra te Ce nte r $142/ rsf Sc o tt Ada ms/ Gra y Ra ndo lph

Co mma nde r Co rpo ra te Ce nte r $163/ rsf Sc o tt Ada ms/ Do n Crig g e r

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Top Ten Take-Aways

• Se q ue stra tio n = unc e rta inty
• De fe nse is o n ho ld
• Ne w Co urts impa c t
• L

e nde rs impa c t T e n T a ke - Awa ys – c on’t

• Sub ma rke t Dispa rity
• Ra il Se rvic e = o ppo rtunity
• Ma rke t survive d JF

COM 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

Bill T hro ne , SIOR, CCIM, AL C

F irst Vic e Pre side nt INDUST RIAL PROPE RT IE S

I ndustria l Ma rke t Re vie w

MARK E T I N BAL ANCE : SUPPL Y AND DE MAND

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DRIL L DOWN T O F IND T HE BRIGHT SPOT S SUBMARKE T S T HAT F ARE D WE L L ...  Class A distribution vac anc y le ss than 5%  Suffolk at 13% vac anc y, 3rd 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…

T IME T O BUY?

2012 BIG WINS

2013: BIG T HINGS AHE AD



Conta ine r volume throug h the Port



India n Rive r Distribution Ce nte r, Che sa pe a ke



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

I nve stme nt Sa le s Ma rke t Re vie w

T

• ny Be c k

Vic e Pre side nt F irst Po to ma c Re a lty T rust

Na tiona l Re vie w

• Sa le s Vo lume s Co ntinue d to Gro w o ve r 2011
• F
• c us in Prima ry Ma rke ts, T

ro phy/ Cla ss A Pro pe rtie s

• I

nstitutio na l I nve sto rs the Big Pla ye rs

• Multi-F

a mily Co ntinue s to L e a d the Wa y

Drive rs Be hind Growth

• Histo ric a lly L
• w I

nte re st Ra te s

• I

nc re a sing L e nde r Co nfide nc e

• Willing a nd Ac tive Buye rs with Ca sh

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T he Cha lle ng e s

• Va lua tio ns/ Pe rc e ptio n
• Buye rs a re Winne rs
• Se lle rs a re L
• se rs
• 10 ye a r De b t Ma turity 2016/ 2017
• E

uro pe a n De b t Crisis

• Our Own Go ve rnme nt

30 40 50 60 70 80 90 100 110 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

Comme rc ia l Prope rty Pric e Inde x By Se c tor Gre e n Stre e t Comme rc ia l Prope rty Pric e Inde x By Se c tor

Change in Commercial Property Values Since

Peak Last Period at Current Value Multi-Family 8% N/A Mall 8% N/A Strip Retail

• 3%

2006 Industrial

• 10%

2006 Office

• 15%

2006 Hotel/Lodging

• 22%

2005

F unda me nta ls of Pric ing Improve me nt by Se c tor

• Multi-Family – Low Vacancy Rates, Pushing Rents
• Retail – Location and Quality
• Mall
• Anchored Strip Centers
• Industrial – Rental Rates and Occupancy Bottomed Out
• Office – Push to the Secondary Markets
• Hotel/Lodging – Recession Hurt the Most

Ha mpton Roa ds Re vie w

• Mirrored National Trend with Multi‐Family Leading the Way
• Top Five Transactions, 3 Multi‐Family, 1 Retail, 1 Office
• Over $282,000,000 in Transactions

T a ke a wa ys

• Sales Volumes Will Continue to Improve in 2013
• Pricing Will Continue to Climb in All Sectors
• Focus May Shift Away from Primary Markets

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Da vid Ma c hupa

Vic e Pre side nt RE T AIL PROPE RT IE S

Re ta il Ma rke t Re vie w

Hampton Roads is Open for Business 2012 Theme/Forecast Overview

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%

change

• .9

+ .22

• .66

AVERAGE RENTAL RATE $16.36 PSF $15.06 PSF $15.96 PSF

change

+ .33

• .22

+ .20 OCCUPIED IN SF 32,717,539 16,543,621 49,261,160

2012 Market Activity Watch List

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Grocery Activity New Construction 2013 Projection

ROSE VS. DUNTON

Multifa mily

Ma rke t Re vie w

Dwig ht Dunto n F

• unde r a nd Pre side nt

Bo na ve nture Re a lty Gro up

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Ove rvie w

• 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.

De mo g ra phic s: Ne w K ids o n the Blo c k

Mille nnia ls

Source: Renter Demographics‐ Joint Center for Housing Studies of Harvard University

T he Cha ng ing L a ndsc a pe

T he Ame ric a n Dre a m:

Psyc ho lo g y

T he Cha ng ing L a ndsc a pe

Slower to settle down and start families Willing to pay more for convenience and amenities 60% More likely to change careers

E c o no mic Re a lity

T he Cha ng ing L a ndsc a pe

Student Loans have grown 511% since 1999.

Re nte rs b y Ne c e ssity a nd b y Cho ic e

T

• ug 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%

Wa iting to Sta r t a F a mily

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.

Sources: RCLCO, Pew Research

T he Cha ng ing L a ndsc a pe

Ove rvie w

• 1. T

he Cha ng ing L a ndsc a pe

• 2. T

re nd is o ur F rie nd

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T re nd is Our F rie nd

Ne w Multifa mily De ma nd

(in tho usa nds units)

T re nd to wa rds live wo rk pla y

77% of Millennials want to live in urban areas 67% of Millennials want to live in a walkable community

T re nd to wa rds sma lle r units

More than 50% of Millennials would trade size for proximity to shopping

• r work

Milita ry Ho me o wne rship Plumme ts

 Nationally, Military Homeownership has dropped 8.2%.  In Virginia, it has dropped 20% from its peak in 2006.

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 k Who ’ s Jo ine d the Pa rty

L

• o k Who ’ s Jo ine d the Pa rty

3/13/2013 14 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

Source:

Ha mpton Roa ds Re side ntia l Housing Ma rke t

Inventory 12.3% Existing Home Closings 7.6% Existing Home Average Price 2.0% New Home Closings 15.7% New Home Average Price

• 1.1%

Building Permits 18.5% Interest Rates

• 3.3%

New Home Traffic 9.7%

Source:

Ha mpton Roa ds Re side ntia l Inve ntory

8,000 9,000 10,000 11,000 12,000 13,000 14,000 15,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

07 08 09 10 11 12 13

Analysis by: Source:

2012 E xisting Home De ta c he d Sa le s

Analysis by:

0.0 5.0 10.0 15.0 20.0 25.0 30.0 500 1,000 1,500 2,000 2,500 3,000

<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+ Months to absorb inventory

• No. of Closings

Source:

2012 Ne w Construc tion De ta c he d Sa le s

Analysis by:

0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 50 100 150 200 250 300 350 400 450 500

<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 Months to absorb inventory

• No. of Closings

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Source:

Improve me nts in Compr

• mise d Sa le s

Analysis by:

Foreclosures 4,024

• 15%

Short Sales 1,638 +45%

Source:

L

• t Costs Norma lizing

Analysis by:

• Virginia Beach Community:

Was: $255,000, Now: $100,000

• Chesapeake Community:

Was: $110,000, Now: 80,000

• Suffolk Community:

Was: $157,000, Now $87,500

Source:

Ne w De ta c he d Home s Ar e Sma lle r

2003

2,559 sf. $105/sf 2,746 sf. $154/sf 2,428 sf. $134/sf

2007 2012

Ha mpton Roa ds 2012 E xisting Home Ave ra g e Pric e & Pa yme nt a t 3.5%

All Types $213,919 $961 Detached $228,882 $1,028 Attached $160,687 $722

Source:

Hampton Roads 2012 New Home Average Price & Payment at 3.5%

Source:

All Types $306,341 $1,376 Detached $335,452 $1,506 Multistory $273,065 $1,226 Multiplex $225,474 $1,013 Townhome $248,287 $1,115 Ne w Home s Ar e Affor da ble Ag a in!

Source:

48%

• f Households

Can Afford This Home!

$306,300 2,400 sf, $128/sf 4 Bedrooms

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Ne w Home s Ar e Affor da ble Ag a in!

Source:

62%

• f Households

Can Afford This Home!

$214,900 1,496 sf, $144/sf 3 Bedrooms

Ne w Home s Ar e Affor da ble Ag a in!

Source:

71%

• f Households

Can Afford This Home!

$150,900 1,300 sf, $116/sf 2 Bedrooms

3 Points:

Subje c t to Se que str ation…

Low Inventory Makes a Seller’s Market, Prices Will Rise

3 Points:

Subje c t to Se que str ation.…

Builders: Detached Homes $200k to $450k

If You Build It, They Will Come!

3 Points:

Subje c t to Se que str ation.…

At Current Interest Rates: 70% of Households Can Afford a New Home in Hampton Roads

T AKE T HAT DWIGHT !

3/13/2013 17

@ODUCRE E D

Sa ve the Da te s

• T

hursday, May 9, 2013

CRE E D a nd HRACRE pre se nt Se a L e ve l Rise a nd the Impa c t on Hampton Roa ds

F e a turing Dr. L a rry Atkinso n, Slo ve r Pro fe sso r o f Oc e a no g ra phy Old Do minio n Unive rsity

No rfo lk Pla za Ho te l, 12 No o n – 1:30 p.m. Re g iste r a t info @ hra c re .o rg

T HANK YOU