2q2103 land report
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2Q2013 Land Forecast Report
Scott Davis
CASE Commercial Real Estate Partners
July 18, 2013
Sales Activity Not Reflected in Volume in Q2
$0
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$250,000,000
$300,000,000
$350,000,000
$400,000,000
Source: CoStar, CASE Commercial
Unreported sales pricesdepress appearance of activity.
2Q13 – 4,000 Acres Sold – Activity Remains Strong
2005
- Q1
2005
- Q3
2006
- Q1
2006
- Q3
2007
- Q1
2007
- Q3
2008
- Q1
2008
- Q3
2009
- Q1
2009
- Q3
2010
- Q1
2010
- Q3
2011
- Q1
2011
- Q3
2012
- Q1
2012
- Q3
2013
- Q1
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
Source: CoStar, CASE Commercial
Almost 93% of acreage sold outside Beltway
2009
- Q1
2009
- Q2
2009
- Q3
2009
- Q4
2010
- Q1
2010
- Q2
2010
- Q3
2010
- Q4
2011
- Q1
2011
- Q2
2011
- Q3
2011
- Q4
2012
- Q1
2012
- Q2
2012
- Q3
2012
- Q4
2013
- Q1
2013
- Q2
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Total Outside 610 Outside BeltwayInside Beltway Inside 610
Source: CoStar, CASE Commercial
Inner Loop Properties Fell Off Dramatically
2009
- Q2
2009
- Q3
2009
- Q4
2010
- Q1
2010
- Q2
2010
- Q3
2010
- Q4
2011
- Q1
2011
- Q2
2011
- Q3
2011
- Q4
2012
- Q1
2012
- Q2
2012
- Q3
2012
- Q4
2013
- Q1
2013
- Q2
0
20
40
60
80
100
120
140
160
180
200
Source: CoStar, CASE Commercial
Sales to List Spread Narrows to 2007-2008 Levels
Source: CoStar, CASE Commercial
2007
- Q1
2007
- Q3
2008
- Q1
2008
- Q3
2009
- Q1
2009
- Q3
2010
- Q1
2010
- Q3
2011
- Q1
2011
- Q3
2012
- Q1
2012
- Q3
2013
- Q1
-50.0%
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
Median Days on Market Decreased in Q2/13
Source: CoStar, CASE Commercial
2005
- Q1
2005
- Q3
2006
- Q1
2006
- Q3
2007
- Q1
2007
- Q3
2008
- Q1
2008
- Q3
2009
- Q1
2009
- Q3
2010
- Q1
2010
- Q3
2011
- Q1
2011
- Q3
2012
- Q1
2012
- Q3
2013
- Q1
-
100
200
300
400
500
600
700
800
What Does the Future Hold?
1970 1980 1990 2000 2010 2020 2030 2040
2.2 3.1
3.7 4.7
5.9
7.0
8.1
9.2
0.9 1.6 1.8
2.3 2.6 3.2
3.74.1
People
Region will grow by 3.3 Million
Source: HGAC Demographic Model
In Millions
Gen Y: Millions of 22YO By Year
2000
2001
2002
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
3,400,000
3,500,000
3,600,000
3,700,000
3,800,000
3,900,000
4,000,000
4,100,000
4,200,000
Age 22 Age 25
Peak Rental Demand Peak Owner Demand
Source: US Centers for Disease Control and Prevention
Houston #2 Destination For Millennials
Rank Metro AreaWage Change for
Gen YMedian Pay for
Gen Y
Commute Time for Gen Y % Gen Y
Gen Y Metro Score
1 Seattle 4.4% $ 44,000 24.3 0.22 1.61
2 Houston 4.3% $ 44,000 24.8 0.22 1.52
3 Minneapolis 3.3% $ 42,800 20.4 0.23 1.46
4 Washington, DC 3.2% $ 49,500 30 0.26 1.25
5 Boston 3.3% $ 46,200 29.9 0.25 1.16
6 Dallas 2.9% $ 41,200 20.6 0.21 1.11
7 New York 2.9% $ 46,900 30.6 0.26 1.04
8 Tampa 2.7% $ 36,600 20.7 0.19 0.83
9 - Tie Philadelphia 2.6% $ 42,000 28.7 0.23 0.81
9 - Tie San Francisco 2.2% $ 51,300 29.3 0.22 0.81
Source: Best Cities for Gen Y, www.payscale.com, 2012
Where People Want to Live, by Generation
60+ (Silent + GI)
50-59 (Boomer)
40-49 (Boomer & Gen X)
30-39 (Gen X & Gen Y)
18-29 (Gen Y)0%
20%
40%
60%
80%
100%
14% 15% 14% 18%31%
39% 38% 38%
47%
42%
46% 47% 47%34%
25%
City Suburban Small Town
Source: 2011 National Community Preference Survey, NAR, March 2011
Where Do They Actually Live?
Core Municipalities Suburbs Outside Major Metropolitan Areas0%
10%
20%
30%
40%
50%
2000% of Age 20-29 2010% of Age 20-29
Source: Wendell Cox, www.newgeography.com
Gen Y Still Want Single Family
Fall 2007 “Home Type
Likely to Choose”
Summer 2010 “Anticipated Housing in
2015”
March 2011
“Home Type
Preference”
Apartment/Condo 12% 25% 15%
Rowhouse/Townhouse
12% 6% 6%
Single-Family 70% 64% 74%
Other 5% 5% n/a
Source: RCLCO Survey, 207, ULI/Lachman Survey 2010, NAR ConsumerPreference Study 2011
Gen X & Gen Y Favor Lifestyle Factors – Close to Work, Shopping
Small Lot, Walk to Work
Small Lot, Walk to Shop
Less than Ideal Home, Close to
Shop
Less than Ideal Home, Close to
Work
Urban Setting0%
20%
40%
60%
80%71%
55%52%
42%
51%
62%
46%43%
49% 47%
Gen Y Gen X
15
Source: Robert Charles Lesser Co.
16Job Growth in Suburban Centers
Market 2013 2020 Growth
Inside Loop
Bellaire 34,438 38,320 11.3%
Greenway 63,143 68,148 7.9%
CBD 148,117 153,970 4.0%
TMC 107,344 116,272 8.3%
Galleria 134,162 136,999 2.1%
Inside Beltway
Greenspoint 91,343 100,042 9.5%
Brookhollow 25,526 26,271 2.9%
Northwest Crossing 53,149 56,065 5.5%
Sharpstown 39,327 40,360 2.6%
Westchase 96,223 100,183 4.1%
Outside Beltway
Clear lake 48,897 50,628 3.5%
Katy 18,707 21,591 15.4%
The Woodlands 48,805 55,398 13.5%
West Houston 102,795 108,760 5.8%
Sugar Land 86,934 101,129 16.3%
Total Market 2,959,033 3,275,509 10.7%
Source: HGAC, 2035 Regional Transportation Plan
Houston #1 in Self-Employment Growth
Rank RegionGrowth in Self-employed, 2008-
2011
1 Houston-Sugar Land-Baytown, TX 12.20%
2 Riverside-San Bernardino-Ontario, CA 11.80%
3 Phoenix-Mesa-Glendale, AZ 11.50%
4 Seattle-Tacoma-Bellevue, WA 10.00%
5 Baltimore-Towson, MD 8.60%
6 San Antonio-New Braunfels, TX 8.10%
7 Tampa-St. Petersburg-Clearwater, FL 6.50%
8 Dallas-Fort Worth-Arlington, TX 6.30%
9 Boston-Cambridge-Quincy, MA-NH 5.60%
10 Miami-Fort Lauderdale-Pompano Beach, FL 4.90%
Land Growth Trends
• Houston will grow dramatically over the next two decades
• Gen Y will drive some inner-city interest but still has overwhelming suburban preference
• Real preference by Gen X and Gen Y is for a shorter commute and close to shopping
• Most job growth will be in the suburbs
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