Potomac View FINAL

8/6/2019 Potomac View FINAL

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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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6

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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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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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

Documents

Potomac View FINAL