Seacrest Village/Intown Key Findings & Recommendations: Market Analysis Update

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