Chris Mefford Who we are CAI is a planni anning ng and econom - PowerPoint PPT Presentation

Chris Mefford

Who we are CAI is a planni anning ng and econom onomics cs firm rm. What we believe Succe ccessful ssful strat rategies egies are ground unded ed in data ta and econom nomic c theor eory. Community Attributes How – What makes our approach unique tells data-rich stories about We produce uce sophist histicat ated ed analys lysis and tell ll data ta-ric rich h communities that are stories ories with th an emp mphas hasis on desi sign gn and technology chnology. important to decision-makers. What we do We lead ad strat ategies, egies, produc uce e repor orts, ts, and devel elop op technology chnology to reach ach more re peopl ple e and imp mprove e imp mpac act. t. CAI Confidential 2 8/12/2019

Contents • A little context • Regional growth models • Thurston County trends and economic drivers • U.S. and Global trends and economic drivers 3

A little context 4

U.S. Economic Recovery Months of expansion following recession, NBER definition Recession Period Recovery/ Expansion Period Months of Recovery/Expansion 2008-2009 2009 - ? 1 122 1990-1991 1991-2001 2 120 1960-1961 1961-1970 3 106 1981-1982 1982-1990 4 92 1937-1938 1938-1945 5 80 2001 2001-2008 6 73 1973-1975 1975-1980 7 58 1929-1933 1933-1937 8 50 1948-1949 1949-1953 9 45 1913-1915 1915-1918 10 44 *2008-2009 expansion period still ongoing. 0 25 50 75 100 125 Sources: National Bureau of Economic Research, 2019; Community Attributes Inc., 2019. 5

U.S. Labor Force Participation & Unemployment 3.7% 7% Unemplo mploym yment ent Rate in U. U.S. Labor or Force ce UNEMPLOYMENT Rate e % Particip icipati ation n % 63.2% .2% Labor Force 12.0 12. 70.0 70. Labor or Forc rce e Par Partici cipati pation Partic icipati ation on August st 2019 68.0 68. 10.0 10. 66.0 66. 64. 64.0 8.0 8. 62. 62.0 6.0 6.0 60.0 60.0 58. 58.0 Unemplo mploym yment ent 4.0 4. 56.0 56. 54.0 54.0 2.0 2. 52. 52.0 0.0 0. 50.0 50. 6

Workers and Income Wages & Incomes Workers by Wage Range (2018 dollars) Washington State Washington State, Based on Median Annual Earnings 90th Percentile Thousands of Workers 2018 $ (0.6% CAGR) 1,600 2007 2018 1,386 $100,000 1,400 75th Percentile 1,261 (0.6% CAGR) 1,200 $80,000 1,011 50th Percentile 1,000 861 (0.3% CAGR) 800 $60,000 25th Percentile 600 (0.8% CAGR) 435 427 422 $40,000 400 268 10th Percentile 200 (0.6% CAGR) $20,000 0 Less than $32,000 to $50,000 to $80,000 to $32,000 $50,000 $80,000 $125,000 $0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Annual Median Earnings 2018 $ Sources: U.S. Bureau of Labor Statistics, Occupational Employment Statistics, 2018. 7

Where will we grow? Sources: Washington Office of Financial Management, 2019; Community Attributes Inc., 2019. 8

A little theory 9

Circular Flows of the Economy Robert Gordon, 2002 10

Major Industries in Washington 4,326,400 Total Jobs Sources: Bellevue Creative Economy Study, 2017; QCEW, 2017; Washington State Employment Security Department, 2017; QCEW, Bureau of Labor Statistics, 11 2017; Industry/Occupation Crosswalk, Washington State Employment Security Department, 2017; Bureau of Economic Analysis, 2017

Major Industries in Washington Percent of Export Jobs by Industry Sources: Bellevue Creative Economy Study, 2017; QCEW, 2017; Washington State Employment Security Department, 2017; QCEW, Bureau of Labor Statistics, 12 2017; Industry/Occupation Crosswalk, Washington State Employment Security Department, 2017; Bureau of Economic Analysis, 2017

Total Washington Exports by Commodity or Merchandise Source: U.S. Census Bureau, 2018. 13

Washington Non-Aerospace Exports 2018 Source: U.S. Census Bureau, 2018. 14

Washington Aerospace Exports 2018 Source: U.S. Census Bureau, 2018. 15

Thurston County 16

Real Estate: Single Family Housing Zillow Home Value Index, United States and Washington Metros | Q3 2019 $600,000 $492k $500,000 $404k $404k $400,000 $374k $364k $329k $327k $312k $303k $300k $284k $270k $263k $250k $249k $248k $300,000 $230k $215k $195k $182k $177k $200,000 $100,000 $0 Sources: Zillow, 2019. 17

Real Estate: Single Family Housing Zillow Home Value Index, Olympia and Comparable (Population Rank) Metros | Q3 2019 $400,000 $374k $350,000 $328k $327k $303k $300,000 $269k $256k $241k $250,000 $215k $200,000 $150,000 $100,000 $50,000 $0 Bremerton, WA Greeley, CO Olympia, WA Kennewick, WA Merced, CA Crestview-Fort Wilmington, NC Yakima, WA Walton Beach- Destin, FL Sources: Zillow, 2019. 18

Real Estate: Single Family Housing Change in Zillow Home Value Index, United States and Washington Metros | 2009-2019 18% 16.5% 16% 15.1% One Year (2018-2019) 14% 12.9% 10 Year (2009-2019) 12.0% 11.9% 12% 10.0% 9.8% 9.8% 10% 8.4% 8.3% 7.8% 8% 7.4% 7.2% 6.6% 6.4% 6.1% 6.9% 6% 5.0% 4.9% 4.5% 4.9% 4% 4.8% 3.4% 4.4% 4.3% 4.2% 4.2% 4.1% 3.9% 3.8% 3.7% 3.6% 3.6% 3.5% 3.4% 3.4% 3.0% 3.0% 2.8% 2% 2.7% 1.1% 0% Sources: Zillow, 2019. 19

Average Lease Rate and Change in Lease Rate, Thurston County | 2009-2019 Real Estate: Multifamily Housing Rate / SF $0.0 $0.00 $0.2 $0.20 $0.40 $0.4 $0.60 $0.6 $0.80 $0.8 $1.00 $1.0 $1.2 $1.20 $1.4 $1.40 $1.6 $1.60 Sources: CoStar, 2019. 2009 Q1 2009 2009 Q2 2009 2009 2009 Q3 2009 2009 Q4 2010 2010 Q1 Lease Rate Change (Y/Y %) Lease per SF 2010 2010 Q2 2010 2010 Q3 2010 2010 Q4 2011 2011 Q1 2011 2011 Q2 2011 2011 Q3 2011 2011 Q4 2012 Q1 2012 2012 Q2 2012 2012 Q3 2012 2012 2012 Q4 2013 2013 Q1 2013 2013 Q2 2013 Q3 2013 2013 Q4 2013 2014 2014 Q1 2014 2014 Q2 2014 2014 Q3 2014 Q4 2014 2015 2015 Q1 2015 2015 Q2 2015 2015 Q3 2015 2015 Q4 2016 2016 Q1 2016 Q2 2016 2016 2016 Q3 2016 2016 Q4 2017 2017 Q1 2017 2017 Q2 2017 Q3 2017 2017 Q4 2017 2018 2018 Q1 2018 2018 Q2 2018 2018 Q3 2018 2018 Q4 2019 2019 Q1 2019 Q2 2019 20 QTD Rate Change -6. -4. -2. 0. 0.0% 2.0% 2.0% 4.0% 4. 6. 6.0% 8.0% 8. 10. 10.0% 12.0% 12. 6.0% 4.0% 2.0% 0% 0% 0% 0% 0% 0% 0% 0% 0%

Real Estate: Multifamily Housing Vacancy Rate, Thurston County | 2009-2019 8.0% 7.0% 6.0% 5.1% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Sources: CoStar, 2019. 21

Units Delivered (Net of Demolition), Thurston County | 2009-2019 Real Estate: Multifamily Housing (20 (200) (10 (100) 10 100 200 20 300 30 400 40 50 500 Sources: CoStar, 2019. 0) 0) 0 2009 2009 Q1 2009 2009 Q3 2010 2010 Q1 2010 Q3 2010 2011 Q1 2011 2011 Q3 2011 2012 2012 Q1 2012 2012 Q3 2013 2013 Q1 2013 2013 Q3 2014 2014 Q1 2014 2014 Q3 2015 Q1 2015 2015 Q3 2015 2016 2016 Q1 2016 2016 Q3 2017 2017 Q1 2017 2017 Q3 2018 2018 Q1 2018 Q3 2018 2019 Q1 2019 22 QT QTD

Real Estate: Commercial Office Vacancy Rate, Lewis, Thurston, Pierce and King Counties | 2009-2019 14% THUR TH URSTON STON 12% LEWIS LE WIS PIERCE PI 10% KING KI NG 8% 8% 6% 6% 4% 4% 2% 2% 0% 0% Sources: CoStar, 2019. 23

Real Estate: Commercial Office Average Lease Rate, All Classes, Lewis, Thurston, Pierce and King Counties | 2009-2019 $35.00 THURSTON $30.00 LEWIS PIERCE $25.00 KING $20.00 $15.00 $10.00 $5.00 .00 $0.00 .00 Sources: CoStar, 2019. 24

Real Estate: Commercial Office Absorption (Square Feet), Thurston County| 2009-2019 400,000 300,000 200,000 100,000 0 2009 Q1 2009 Q4 2010 Q3 2011 Q2 2012 Q1 2012 Q4 2013 Q3 2014 Q2 2015 Q1 2015 Q4 2016 Q3 2017 Q2 2018 Q1 2018 Q4 QTD (100,0 (10 ,000) (200,0 (20 ,000) (300,0 (30 ,000) (400,0 (40 ,000) Sources: CoStar, 2019. 25

Real Estate: Commercial Office Deliveries (Square Feet, net of demolitions), Thurston County| 2009-2019 300,000 200,000 100,000 0 2009 Q1 2009 Q3 2010 Q1 2010 Q3 2011 Q1 2011 Q3 2012 Q1 2012 Q3 2013 Q1 2013 Q3 2014 Q1 2014 Q3 2015 Q1 2015 Q3 2016 Q1 2016 Q3 2017 Q1 2017 Q3 2018 Q1 2018 Q3 2019 Q1 QTD (100,000) (200,000) (300,000) Sources: CoStar, 2019. 26

Real Estate: Industrial Vacancy Rate, Lewis, Thurston, Pierce and King Counties | 2009-2019 14.0% THURSTON 12.0% LEWIS 10.0% PIERCE KING 8.0% 6.0% 4.0% 2.0% 0.0% Sources: CoStar, 2019. 27

Real Estate: Industrial Lease Rate, Lewis, Thurston, Pierce and King Counties | 2009-2019 $12.00 THURSTON LEWIS $10.00 PIERCE $8.00 KING $6.00 $4.00 $2.00 $0.00 Sources: CoStar, 2019. 28

Real Estate: Industrial Absorption (Square Feet), Thurston County| 2009-2019 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0 (200,000) (400,000) Sources: CoStar, 2019. 29

Real Estate: Industrial Deliveries (Square Feet, net of demolitions), Thurston County| 2009-2019 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0 (200,000) (400,000) Sources: CoStar, 2019. 30

A little theory 31