Week 8 Case Study-Schwartz

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Published on October 20, 2018

Author: lindseypaige27

Source: authorstream.com

Lakeforest Mall Redevelopment Analysis: Lakeforest Mall Redevelopment Analysis MPRE 341: Foundations of Real Estate Markets Lindsey Schwartz REDEVELOPMENT PROPOSAL: REDEVELOPMENT PROPOSAL 2 Residential Office Retail SITE OVERVIEW: SITE OVERVIEW LOCATION The Site is located in Gaithersburg Maryland. Montgomery County.701 Russell Avenue. SECONDARY MARKET 15 minute drive time and extends out to include part of Rockville. PRIMARY MARKET 10 minute drive time extending south of Clarksburg and includes Germantown, Derwood, and Redland. 3 TRANSIT Located 0.5 miles off of I-270 exit 11. Accessible from Montgomery Village Highway and Fredrick Avenue. TOPOGRAPHY Relatively flat land with three retaining ponds to the west. Prime for redevelopment. SITE OVERVIEW: 4 SITE OVERVIEW Lakeforest Mall DEMOGRAPHICS: DEMOGRAPHICS POPULATION 68,710 estimated population expected to increase to 74,790 within the next 5 years. Average age is 35. INCOME The average household income in the area is $ 74,098. EMPLOYMENT Montgomery county unemployment rate is 3.6%. This is below the overall state unemployment rate of 4.2 %. 5 OFFICE: OFFICE VACANCY Montgomery County’s office vacancy rate is 25.4% NEEDED SUPPLY Even with a 0.0% absorption rate by year 2020 1,034,800 square feet of office is needed by year 2020 to account for growth in employees. SUPPLY 20,302,720 square feet of office space with two new offices coming online soon. 6 ABSORPTION Net absorption turned negative in 2009 and remained low ever since. RENT Rent declined more than 7.8% since 2008. Current rent in the area is $28.18 per square foot RESIDENTAL: RESIDENTAL RENT A verage rent for a studio is $1,269, one bedrooms $1,303, two bedrooms $1,599, and three bedrooms $1,854. M edian gross rent within Gaithersburg is $ 1,586 NEEDED SUPPLY While additional units are needed within the next 5 years the biggest gap in supply is for affordable units. HOME OWNERSHIP The median cost of a house in the submarket is $369,900 . 7 RENT vs. OWN 56.6% of the units in the submarket are owned rather than rented. MORTGAGE COST M edian home ownership cost with a mortgage is $2,191 RETAIL: RETAIL SALES PER CAPITA Sales per capita in 2015 was $232.97 and the 2020 value is $22,807.69 a difference of $574.72 or 1.026% CAPTURE RATE The capture rate is calculated at approximately 42%. 8 SALES Total sales in the trade area is $1.95B annually. This figure is expected to increase to $2.15B by year 2020 . SUPPLY Approximately 7.8 million square feet of retail. Comprised of 4 3% GAFO, 43% NGS, 20% F& B. DEVELOPMENT RECCOMENDATION: DEVELOPMENT RECCOMENDATION The analysis conducted shows that the Lakeforest mall site highest and best use is to be developed into a mixed use development featuring both residential and retail offerings. PROOF OF CONCEPT: PROOF OF CONCEPT 10 THANKS!: 11 THANKS! Any questions? You can find me at lps41@georgetown.edu

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