potomac view final
TRANSCRIPT
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Crystal Partners LLCAli Fardshisheh
Christine HalberstadtKerry McNamara
Jonathan PriceMartin Tovar
Potomac ViewMall 3 Redevelopment Site, Crystal City, VA
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Introduction
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Site Description
Land: 112,192 sf
DevelopmentAllowed: 1.05 Million
sf Height allowance:
300ft
Current use: office
building
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360 View
S. Bell St.
18th St.
Crystal Dr.
20th St.
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Site Location Regional and Local
Demand Drivers
Pentagon Contractors
National Airport
GSA
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Site Overview
The Crystal City submarketprovides the relatively uniqueopportunity for
redevelopment adjacent toMetro in Arlington County.
The site is surrounded bycomplementary and attractive
land uses.The site offers a walkable
environment with access toretail, restaurants,
convenience retail, and other
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Site Amenities Strong infill location with excellent access.
Regional and local roads
Unparalleled access to Reagan National Airport
Strong existing and future transit options
Zip Car
Capital Bikeshare (3 nearby locations) The site is in the middle of a cluster of fine
dining that the site can leverage.
Parking
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Market Opportunity
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Market Opportunity- Our
Vision Lead the revitalization outlined in theCrystal City Sector Plan
Provide balanced mix-use (office,residential, retail, hotel, cultural)
Relate architectural & urban design to
human scale Multimodal connectivity & access Sustainable & green building Long-term economic sustainability
1. Center Park2. Metro Market Square
3. Multi-Modal Station4. New Metro Entrance
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Market Opportunity- Our
Vision Develop the site as a full block,lifestyle oriented, mixed useredevelopment project
Differentiate from the existing dated
office supply with quality, cuttingedge aesthetics and a fresh feel
Target market will be the lifestyleconscious business traveler, metrorenter professional as well as imagefocused corporate tenants.
Potomac
View
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Market Opportunity- Our
Vision Project would consist of twotowers Tower 1: Class A office building
391,500 sf Tower 2: Boutique hotel and
apartments 225,000 sf hotel 160 Rooms (avg. 600
sf/each) 7 Floors 6,000 sf Conference
Space 199,300 sf apartment
Retail will encompass 60,000 sfacross the two towers ground
floor, 15,000 sf on second floorof hotel and 10,000 sfrestaurant/bar on roof of officebuilding
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Redevelopment has theopportunity to do to Crystal Citywhat Waterview did for Rosslyn
Waterview is prime exampleof how smart mixed-usedevelopment can succeed whenplanned correctly.
With a few modifications theWaterview can be replicated inCrystal City
Waterview Project a Model of
Success
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Optimal Transportation
Access Reagan National DC Metro (Blue &
Yellow Lines) VRE GW Parkway, I-395 and
Route 1
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15
11,000
16,000
9,6007,900
6
,50
0
48
,0
00
Traffic Counts Support
Growth
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Concrete Jungle?
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Retail
Similar to Washington Harbor, but no need for flood walls!
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Parking
UNADJUSTED
LAND USES SQ. FT. DEMAND
Office 333333 333 %5 .5555 %555 777 %55 .7 7 %55 .7 7 %5General Retail 33333 333 %5 .7 77 %55 .77 7 %55 .77 7 %555 777 %7 7Grocery 55555 %5 .33 %55 55 %55 .7 7 %555 %55Restaurant 55555 77 %55 %55 55 %555 77 %55 55 %555Hotel ( rooms)77 777777 777 %7 %7 %555 777 %7 %555Apartment ( rooms)77 555555 777 %555 777 %555 777 %555 777 %555 777 %555Total 999999 9999 .9999 9999 888 999 7
am- am33 3
Nights Day
am- pm3 3
WeekendWeekday
Evening
pm- am5 55
Day
am- pm5 5
Eveni
pm-5 5
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Comparable Markets #Bldgs Total RBA Direct SF Total SF Vac %
Pentagon City 3 ,333333 ,33333 ,55555 . %333 5 5 5 $ .555
Tysons Corner 33 , ,7 777 777 , ,777 777 , ,777 777 . %7 77 ,77 777 5 5 $ .Rockville 77 , , ,77 777 , . %7 77 - ,7 777 5 5 $ .5555Old Town Alexandria
55
, , , ,77 777
. %7 77
- ,7 777 5 5
$ .5555
Bethesda/Chevy 77 , ,777 777 ,77 777 ,77 777 . %77 ,7 777 5 5 $ .7 77Clarendon/Court 77 , ,777 777 , , . %5555 ,77 777 5 5 $ .5555Rosslyn 55 , ,777 777 ,77 777 ,77 777 . %5555 - ,77 777 5 ,555555 $ .5555Crystal City 55 , ,777 777 , ,77 777 . %7 77 ,777 5 5 $ .West End 55 , ,777 777 ,77 777 , . %7 77 ,7 777 ,77 777 5 $ .7 77Ballston 77 , ,777 777 ,77 777 ,77 777 . %555 - ,7 777 ,555555 ,555555 $ .5555Virginia Square 5 ,77 777 ,7 777 ,7 777 . %77 ,777 5 5 $ .5555Capitol Riverfront , ,
5555555
, , . %5555
- ,55555 5
, $ .5555
NoMa 77 , ,777 777 , ,777 777 , ,777 777 . %7 77 ,77 777 5 5 $ .CBD 555 , ,7 777 777 , ,777 777 , ,777 777 . %7 77 - ,7 777 5 ,77 777 $ .Southwest 77 , ,777 777 , ,777 777 , ,777 777 . %7 77 ,77 777 5 5 $ .7 77East End , ,7 777 777 , ,777 777 , ,777 777 . %7 77 ,77 777 5 ,77 777 $ .5555Capitol Hill 55 , ,777 777 ,77 777 ,77 777 . %555 ,77 777 5 5 $ .7 77
Under
Const SF
Quoted
Rates
Existing Inventory Vacancy YTD Net
Absorption
YTD
Deliveries
Class A Submarket Statistics: FirstQuarter 2011
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Office Market Comparables: FurtherDetail
Existing Inventory Vacancy YTD NetAbsorption
YTDDeliveries
UnderConst SF
QuotedRates
Market # Bldgs Total RBA Direct SF Total SF Vac %
Urban 323 83,400,678 10,169,875 11,439,341 13.70% 776,499 572,900 799,290 $52.94
Suburban 1,025 161,908,227 23,315,909 25,630,774 15.80% -1,641 144,000 3,196,872 $31.34
Crystal City Class A 15 4,690,420 666,792 697,889 14.90% 6,214 0 0 $41.38
Crystal City Class B 21 6,034,354 278,776 336,453 5.60% -8,240 0 0 $37.68
Crystal City Class C 10 1,111,460 162,880 164,080 14.80% -11,728 0 0 $25.57
Crystal City Totals 46 11,836,234 1,108,448 1,198,422 10.10% -13,754 0 0 $39.47
Source: CoStar Property
H stor ca De ver es n
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H stor ca De ver es nWashington DC Metro
(Millions of SF)
0
5
10
15
20
25
1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Annual Deliveries of Office Space
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Release of BRAC Space
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
2011 2012 2013 2014 2015 After 2015
Source: Arlington Economic Development
SF
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Crystal City: Aging Office Product
2000
9%1980
54%
2010
9%
199028%
The chart above represents the decade in which buildings in the Crystal City Submarket where built. Source: CoStar
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Proximity to Capitol Hill & Pentagon
Lobbying Groups
Law Firms
Trade Associations
Defense Contractors
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Market Opportunity
Reagan National Airport (DCA) In 2009, 12.2 million visitors
(Reagan & Dulles) spentestimated $10.6 billion at hotels,restaurants, entertainment,retail, local transportation.
TicketPayment
%
Self 40.2
Business 35.5Govt./ Military 10.8
Relatives 6.7
FrequentFlyer 3.6
Other 3.2
TransportationUse UponArrival UponDeparture
% %
32.9 28.3
27.8 15.1
18.6 25.58.4 7.8
4.4 2.8
4.4 1.8
Taxi
PersonalVehicle
MetrorailRental
HotelShuttle
SuperShuttle
Annual Passenger Change
2008 2009 2010
-4% -3% 3.50%
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Hotel Analysis
Rack Rate - Crystal City Hotels (SEASONAL)
Season March July October December
$ $ $ $
Embassy Suites 230 240 160 230
Marriott 170 190 170 170
Sheraton 200 186 225 170
Hyatt 180 180 200 154Hilton 240 240 240 240
Renaissance 320 300 320 320
Total Average 223$ 223$ 219$ 214$
Rack Rate - Crystal City
Weekly Monday - Thursday Friday - Sunday
Embassy Suites
Marriott
Sheraton
Hyatt
Hilton
Renaissance
Total Average 309$ 192$
270
294
310
320
220
134
170
300
320$ $
340
160
170
Americana Hotel 100
Courtyard (Marriott) 272
Crowne Plaza Washington 308
Doubletree Hotel 632Embassy Suites 267
Hampton Inn 161
Hilton 386
Holiday Inn 280
Hyatt 685
Marriott Crystal City 345
Marriott Crystal Gateway 700
Radisson 245
Renaissance 626
Sheraton 218
TOTAL INVENTORY 5225
Hotel Room Inventory
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Hotel AnalysisADR - Crystal City Hotels
Weekly Monday - Thursday Friday - Sunday
Embassy Suites
MarriottSheraton
Hyatt
Hilton
Renaissance
Total Average 283$ 135$
240 90
300 130
270 178
300 120
320 160270 130
$ $
RevPAR - Crystal City
ADR 2010 190
Occupancy 2010 76.2%
RevPAR 145$
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Residential Analysis Rent Grow
A Growing area of a resilient Arlington submarket
Source: REIS
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sidential Analysis Crystal City
* The charts above show that the robust Crystal City/Pentagon Citysubmarket is outpacing the suburban Virginia market as a whole,which is one of the most resilient markets in the entire country.
Source: REIS
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esidential Analysis New Produ
* The chart above showsthat new developmentscancommand substantial rentpremiums in this market. Source: REIS
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esidential Analysis Target Mar
- Career-oriented Work hard- Lifestyle focused Play hard- Upper Middle Income, more of it disposable- More likely to rent
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Clear fit for the Laptops and Lattes andMetro Renters
Class A Multifamily propertywith full hotel style amenitiesthat can command market
rents Average income of $98K and
high net worth of $287K
Single and double unit mix
Traditionally singles who livealone or with a roommate
Urban location with easyaccess to many dining,
cultural and retail options as
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Next Steps
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Timing of the Real Estate
Cycle
H stor ca De ver es n
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H stor ca De ver es nWashington DC Metro
(Millions of SF)
0
5
10
15
20
25
1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Annual Deliveries of Office Space
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Next Steps/Key Questions Secure Financing
Future resiliency of Arlington economy - what are the threats?
Market Cycles and project timing - what is their impact on optimaltiming?
Corporate housing opportunities?
Comp surveys/interviews - who has been renting in recent luxuryapartment developments?
Tourism and visitor trends and drivers - relationship to proximity ofoffice core
Relationship of economic and demographic growth to demand for local-
serving office Further investigate retail options tailored to capture discretionary
income of Laptop and Lattes crowd
Further segmentation of existing and potential households by householdtype