Sperry Van Ness | Miller Commercial Real EstateChesapeake Beach Bay Club

August 18, 2011

ULI PresentationWesley Cox, CCIM Bradley Gillis, CCIM

Topic Outline2

The changing face of the Eastern Shore

Key economic drivers on the Eastern Shore

Why companies choose to locate on the Eastern Shore

Types of deals being completed & current opportunities

2011-2012 Forecast

The Changing Face of the Eastern Shore3

“Textiles to Technology”

“Graying of the Shore”

“Brain Drain”

“Ocean City-National Destination”

The Changing Face of the Eastern Shore4

Salisbury University– Seagull Square, T.E.T.C Building, Perdue School of

BusinessWor-Wic Community College– Allied Health Building

Perdue Farm’s L.E.E.D Renovation & Solar FieldOcean City Convention Center ExpansionShore Health-proposed expansionP.R.M.C-expansion Airport Runway Expansions – Salisbury & Easton

Key Economic Drivers on the Shore

Universities & Community Colleges– Chesapeake College, Wor-Wic, Salisbury University,

University of Maryland, Washington College, etc…

Regional Medical Centers– Peninsula Regional Medical Center, Atlantic General

Hospital, Shore Health Systems, University of Maryland Medical Center

Diverse employment base– Shown in the pie chart

Wallops Island / NASA

Additional Economic Drivers

Salisbury/Wicomico County Airport

Perdue Farms & Amick Farms

Harvard Custom Manufacturing (Labinal)

Northrop Grumman

Lankford Sysco

Hyatt Regency - Cambridge

Ocean City!!

Key Economic Drivers on the Shore

Our Diversified Economy

Why Companies Choose the Shore

Transportation Network– Airports, Rail, Ports

Maryland Broadband Cooperative

Financing & Incentives

Quality of Life

Access to a strong labor pool

Within a 4 hour drive of 45 million people

Current projects on the Shore9

Achievement Park-Easton– Former Cadmus building– 150,000 SQ FT Medical/Professional Office Building

Shore Health System-Grasonville– 60,000 SQ FT Medical Office Building

AC Wind-Salisbury– 150,000 SQ FT

Tri County Council Building-Salisbury– 75,000 SQ FT Government Office Building

Types of Completed Deals10

White Marlin Mall / Tanger Outlets-West Ocean CityBayliner Marine-Salisbury-2010– $1.3M-130,000 SF of warehouse/office

GKD-Expansion-Cambridge Foodswing-start up-CambridgeCadmus Printing-2011– $3.0M-200,000 SF of warehouse/office

Powerwave Building-2009– $4.0M-75,000 SF of office/manufacturing

Current Opportunities11

Industrial buildingsShadow inventory Income producing real estateDistressed Real Estate – REO’s

Shore Statistics

Vacancy Rates– Industrial, Retail, Office, Multi-family

7th in the Nation – Retail SF per Capita (Salisbury) Retail Demand – 90% of national retailers plan to boost store

counts over the next 12 months– 70% of them felt the economy is stable or

improving

2011-2012 Forecast13

Lending is loosing up– Feds are saying ‘Lend money!’– User focused

Interest rates still low– 4.5%-6% for a user/occupier purchase

• 3-5 Year ARM– 5%-7% for qualified investor purchase

Buyers are seeing opportunity – Deals are happening

2011-2012 Forecast14

Nationwide CRE is seeing a pick-up – Trickle down effect

Today’s RealityMore distressed properties to hit the marketLand is not selling– Existing Buildings are cheap, no reason to build– If the building exists

A/E firms are hearing chatter - However lack of financingConstruction will continue to hurt

- Replacement Cost vs. “Today’s Values”

2011-2012 Forecast15

Users are King

Banks will begin selling more REO properties- Shadow inventory – Bank controlled properties not

currently being marketed Auctioneers are dealing only with – Estates – Banks

Thank You!!

• 206 East Main 206 East Main

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Salisbury, MD Salisbury, MD

2180121801

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Wesley Cox, CCIM Senior Advisor

Bradley Gillis, CCIM Senior Advisor