rv 2014: tod market dreams + reality by john breitinger
DESCRIPTION
TOD Market Dreams + Realities The station is in, the riders are coming and the development has been proposed. Now everybody wants retail. But is there a market for it? Will it be supported? Or would other uses be more appropriate and generate additional riders? Everyone expects TOD to generate a mix of uses -- to create a 24/7 environment at every station. How do market realities change that equation? Learn what it takes to support that mixed-use environment that everyone expects; how to assess the market and what residents really want; and how to manage expectations if the market doesn't deliver. Moderator: William M. Velasco, Chair of Board TOD Committee, DART, Dallas, Texas Christine Maguire, AICP, EDFP, Senior Manager, Development Planning and Finance Group, Austin, Texas Anne B. Ricker, Principal/Owner, Ricker Cunningham, Centennial, Colorado John Breitinger, Vice President, Investment and Development, United Properties, Bloomington, Minnesota Michael Horsting, AICP, Principal Analyst, Regional Transportation Authority, Chicago, IllinoisTRANSCRIPT
Development Scenario Workshop
Corridor Wide Infrastructure
Recommenda3ons to Accelerate Private Investment Summary
Hosted by: FOR:
Development Scenario Workshop
Development Scenario Workshop
Data Support Provided by: • Cushman Wakefield/Northmarq • Marque@e Advisors
Targeted Infrastructure and Development
public policy + infrastructure investments
Targeting Priority Development Areas
State, regional, local policies and $$
• Met Council • Utilities • Water Districts • Counties • Municipalities
Purpose Southwest LRT Corridor Community Works and ULI Minnesota engaged an independent panel of local and national developers, economists, and designers to work with the Technical Implementation Committee and provide corridor and station recommendations with a particular focus on five key SW LRT Corridor station areas:
– Penn
– Beltline
– Blake
– Golden Triangle
– Mitchell Road
The intended outcome is to identify key development opportunities, barriers and
strengths related to land use and station location, and identify critical infrastructure improvements for consideration by the Cities and SW Project Office linking land use and engineering with
market knowledge.
0%
5%
10%
15%
20%
25%
30%
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Timing Disconnect Between Transit and Developer Decisions
Year
Land
price prem
ium
Transit Infrastructure Timeline
Private Land Development
Hypothe3cal Land Price Impact
Construc)on Final Design Preliminary Engineering
Alterna)ves Analysis
Preliminary Poli)cs Opera)on
Source: Emerson, Donald; “Successfully Naviga3ng the FTA New Starts Process”; PB Consul3ng, 2006
Coordinate District Infrastructure
TOP TEN TOD STRATEGIES
1. IdenNfy specific corridor-‐wide targets for both community benefits and economic development
Artsit’s Studios Workforce Housing Belmar, CO TOD 3.0 Strategies
TOD 3.0 Strategies
2. Incorporate market and development criteria
Cost Assump3ons Construction HARD Cost Estimates for SW Corridor
Pat John Stacie
Site Work Site Prep/Demo/Landscaping $6.00 6 4 psf Assumes structures on site and includes removal of surface parking
Parking Surface Parking $3,000.00 3500 2500 3000 psf incl. landscape and lighting
Structured Parking $16,666.67 12500 17500 20000 psf Structured parking
Below Grade Parking $23,333.33 27500 25000 17500 psf
Retail
Concrete Podium Construction $102.50 100 105 psf
Masonry (CMU) Construction $75.00 90 60 psf Standard retail strip center, dependent upon size
Steel Frame Construction $60.00 60
Storefront $1,050.00 1050 plf
Retail Tenant Fit-Out $85.00 85 psf Depends on end user. Restaurants can have significant higher costs
Office
Multistory Concrete Construction $110.00 110 psf
Steel Frame Construction $105.00 105
Office Tenant Fit-Out $50.00 40 60 psf Depends on end user. Medical office can have significant higher costs
Residential
Single Family Wood Frame Construction $ 60.00 psf Will's best guess
Townhouse Wood Frame Construction $ 80.00 psf Will's best guess
Multifamily Wood Frame Construction $120.00 105 135 psf Includes const profit. overhead, city fees, etc.
Multifamily Concrete Construction $138.00 psf
Industrial
Concrete Tilt-up Construction $45.00 45 psf
Masonry (CMU) Construction $50.00 50 psf
Rent Assump3ons Rent and Vacancy Estimates for SW Corridor
Premium Mitchell Golden Triangle Blake Beltline Penn
Residential Vacancy Rate 2.3% 2.3% 3.2% 2.0% 1.9% Vacancy Rate 10% 2.3% 2.3% 3.2% 2.0% 1.9% Average Size 1,016 1,021 944 902 698 $/SF (month) $1.11 $1.10 $1.04 $1.32 $1.49 $/SF (month) 50% $1.66 $1.65 $1.56 $1.98 $2.23
Office Vacancy % 2.61% 17.81% 21.37% 7.83% 12.29% Vacancy % 10% 2.6% 10.0% 10.0% 7.8% 10.0% Ave Net Rent (yr) $12.83 $12.84 $10.56 $13.09 $12.18 Ave Net Rent (month) $1.07 $1.07 $0.88 $1.09 $1.02 Ave Net Rent (month) 50.0% $1.60 $1.61 $1.32 $1.64 $1.52
Retail Vacancy % 1.97% 6.45% 7.97% 7.38% 18.40% Vacancy % 10% 2.0% 6.5% 8.0% 7.4% 10.0% Ave Net Rent (yr) $19.67 $17.87 $12.45 $16.45 $13.76 Ave Net Rent (month) $1.64 $1.49 $1.04 $1.37 $1.15 Ave Net Rent (month) 50.0% $2.46 $2.23 $1.56 $2.06 $1.72
Project Feasibility Analysis Building Type ConstrucNon
Type Podium Parking Mitchell Golden Triangle Blake Beltline Penn
RESIDENTIAL Low Density Wood No Surface
1 1 1 1 1
Medium Density Wood No Structure 0 0 0 1 1
High Density Concrete No Below Grade
0 0 0 0 1 MIXED-‐USE
Medium Density -‐ ResidenNal Wood Yes Structure
0 0 0 0 1
High Density -‐ ResidenNal Concrete Yes Below
Grade 0 0 0 0 0
MIXED-‐USE OFFICE Medium Wood Yes Structure
1 1 0 1 1
High Concrete No Below Grade
0 0 0 0 0 OFFICE
Low Cinder block No Surface 1 1 1 1 1
Medium Concrete No Structure 1 1 0 1 1
High Steel No Below Grade
1 1 0 1 1
3. Extend mobility, access, connecNons to place
Hop ShuRle -‐ Boulder, CO
TOD 3.0 Strategies
4. Derive the staNon influence area and specific boundaries
TOD 3.0 Strategies
5. Enable market metrics to shape staNon area land uses
Mid-‐rise office – Woburn, MA Freight Project – Denver, CO
TOD 3.0 Strategies
6. Street designs, pedestrian networks and open spaces = transit infrastructure
Alameda Ave Lakewood, CO
CASE STUDY: Creating an Urban Boulevard – Alameda Ave.
TOD 3.0 Strategies
CASE STUDY: Creating an Urban Boulevard – Alameda Ave.
Alameda Ave Lakewood, CO
TOD 3.0 Strategies
CASE STUDY: Creating an Urban Boulevard – Alameda Ave.
Alameda Ave Lakewood, CO
TOD 3.0 Strategies
CASE STUDY: Creating an Urban Boulevard – Alameda Ave.
Alameda Ave Lakewood, CO
TOD 3.0 Strategies
7. Avoid over planning specific development design
MIXED USE OFFICE RESIDENTIAL INDUSTRIAL
TOD 3.0 Strategies
8. Phase incremental infrastructure improvements
Industrial/Residen3al – Boulder, CO
TOD 3.0 Strategies
9. Emphasize shared parking faciliNes
15th and Pearl Parking Garage Boulder, CO
TOD 3.0 Strategies
10. Create a long-‐term district organizaNon/organizer
Federal
Major Employers
TOD 3.0 Strategies
Small Businesses
State
District Coordinator
Local/County Governments
METC
Real Estate Developers Investors
Metro Transit
For Discussion
• Process for Metro Transit to provide opera3ng and capital cost data for alterna3ves early in the PE process;
• Ability to assemble land for cataly3c projects and workforce
housing;
• Legisla3ve enabling language to fund infrastructure
• Coordina3ng en3ty to focus on system wide infrastructure and placemaking