seacrest village/intown key findings & recommendations: market analysis update
TRANSCRIPT
Seacrest Village/Intown
Key Findings & Recommendations:Market Analysis Update
Overview
ERA Scope of Work Relevant Market Trends• Market Potentials & Preliminary
Development Program• Next Steps – Financial
Feasibility & Planning Evaluation/Testing
ERA Scope of Work
Understand the fundamentals—what is Boynton Beach’s economy today?
Identify drivers of demand that support new development
Examine real estate market trends & characteristics
Test market potentials for a range of uses—housing, workplace, supporting retail
Measure financial feasibility—does redevelopment makes sufficient financial sense?
Outline CRA/City responsibilities to induce redevelopment
Demographics
Palm Beach County Population expanded by 129,000 in 46,000
new HHs since 2000 2007: 1.2 million residents, 515,000 HHs 2012: forecasts suggest 101,000 new
residents in 36,000 new HHs (7,200 per year)
Population is aging slightly: 44 today, 46 in 2012
Average HH incomes expected to jump from $87,000 to $108,000 next five years
Increasingly diverse population
Demographics
Boynton Beach Boynton’s share of County has held steady—
6.5% 2000-07: 8,000 new residents in 3,000 HHs
(440/year) 2007: 77,800 residents, 34,000 HHs 2012: Pace of growth to increase—6,300 new
residents in 2,400 HHs (480/year) 2020: 17,300 new residents in 6,600 HHs
(500/year) Average HH incomes of $64,000 to rise to
$76,000 next five years Strongest growth expected among peak
earners, empty nesters
Employment
Palm Beach County 2000-07: 53,200 new jobs (7,600/year) 2020 forecast: 114,500 new jobs (8,800/year) Strongest sectors: Services (60%) & “FIRE”
(26%), Construction 33,000 jobs in Boynton Beach—6% of County
total (“fair share”)—majority in Retail sector City’s share expected to increase; 10,200 new
jobs by 2020 Critical barometer of demand for new
commercial development
Housing
Boynton Beach City issues 675 permits/year (avg. since 1997)
—50% split between MF & SFD County issues 11,600 permits/year—67% SFD Upward pressures on market dynamics—loss
of rental units to conversions, declining vacancies, price escalations
Median price of SFD: $350,000 (citywide), $222,500 (CRA)
Reported 58% increase in rents since 2000: $1,150/month (2005)
Housing
Comparable Projects Profiled 20 for-sale residential projects along
A1A Market activity has slowed substantially in
past 18 months Slowdown producing significant excess
inventory, conversions to rental, site plan extensions, project cancellations
Delayed market recovery could further increase inventory
Condominiums: $289-$520K/unit & average monthly absorption of 7 units
THs: $221-$337K/unit & average monthly absorption of 3 units
Retail
Boynton Beach Inventory: 5.7 million SF —13% of County Suggests 74 SF per County resident—far
above national average of 26 SF/capita Reflects City’s role as dominant retail
destination, importance to tax base Active leasing market—789,000 SF absorbed
since 2001 Vacancy rate of only 2% Average rents of $17 per SF—below threshold
feasibility for new construction Apparent opportunities: $4.7 million in retail
leakage within 1-mile of Seacrest Village site
Office
Boynton Beach Demand driven by ‘rooftop’ growth for
professional & business services tenants Inventory: 1.8 million SF in 84 buildings—
County share limited (4%) “Class A” properties comprise only 17% of
inventory Key metric: 63,000 SF average annual
absorption—compared to 600,000 SF countywide
Price-sensitive market: lowest vacancies among Class C stock
10,000 new jobs forecast for the City bodes well for office demand
Market Potentials: 10 Years
Housing
For-Sale For-Sale MF Workforce TotalScenarios Condos THs Rental Condos Units
Baseline 100 64 126 126 415 Moderate 168 84 219 206 677 High 236 103 312 286 938
AverageNet Density
Total (Units PerUnits Acre) ** Per Year Per Month
Baseline 415 20 42 3.5 Moderate 677 32 68 5.6 High 938 45 94 7.8
* Residential program assumes 30% workforce housing per City code.**Assumes that 20% of Seacrest Village is set aside for circulation, open space, stormwater, etc.
Unit Type*
Average Absorption
Market Potentials: 2012
Retail Issue of investment-grade retail standards Primary markets: each resident typically
supports 3 to 7 SF; each employee supports 2 to 5 SF
Each visitor supports 0.5 SF Growth in office & residential generates new
retail demand Partial-year residency affects resident-based
demand Population growth fueling overall strong
demand – dominated by West Boynton
Market Potentials: 2012
Retail• Significant physical constraints of HOB site (lack
of frontage, FEC RR) limit market potentials• Theoretical opportunity to stem retail leakage• Second-tier grocery store critical to support
neighborhood retail program• Limited supporting convenience/service tenants
will follow• Subsidized* Market Potential: 50,000 to
75,000 SF (with grocery store)• Without grocery store: 15,000 to 30,000 SF
Market Potentials: 2012
Supporting Uses: Professional Office
• Majority of new office development in Boynton expected in superior locations (e.g., downtown, West Boynton)
• HOB site is a tertiary office location • Limited market for “rooftop–serving”
professional office tenants• Public sector tenant could induce the
market• Market Potential: 5,000 – 20,000 SF
Project Schedule
Next Steps
Financial Feasibility Study (May/June)
Planning Evaluation/Testing – will integrate market study, financial feasibility study, and evaluate physical development program on site (June)
Work-In-Progress Presentation: June 12