LANDRETTI amp COMPANY LLC DOMINIC LANDRETTI MAI December 2013 Title Madison Market 2013 Landretti amp Company Dominic Landretti MAI December 2013 2 DANE COUNTY ID: 287310
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Slide1
MADISON MARKET 2013
LANDRETTI & COMPANY, LLC
DOMINIC LANDRETTI, MAI
December
2013Slide2
Title
Madison
Market
2013 - Landretti &
Company
- Dominic Landretti, MAI - December 2013
2
DANE COUNTYSlide3
Subdivision Plats
Madison
Market
2013 - Landretti &
Company
- Dominic Landretti, MAI - December 2013
3Slide4
Madison
Market
2013 - Landretti &
Company
- Dominic Landretti, MAI - December 2013
4Slide5
New Construction – Major Projects
Madison
Market
2013 - Landretti &
Company - Dominic Landretti, MAI - December
20135
Total of 16 projectsCost and footages were not available for all projectsSlide6
Major New Construction - Proposed
Madison
Market
2013 - Landretti &
Company - Dominic Landretti, MAI - December
20136
Not all footages and costs were availableProjects include all usesOnly two were indicated as industrial
About 60% of the projects
are multifamily
or mixed use with a large multifamily component
Majority of construction projects are located downtown Madison, about 20%Slide7
The Constellation
Madison
Market
2013 - Landretti &
Company - Dominic Landretti, MAI - December
20137Slide8
Spectrum Brands
Madison
Market
2013 - Landretti &
Company - Dominic Landretti, MAI - December
20138Slide9
The Edgewater
Madison
Market
2013 - Landretti &
Company - Dominic Landretti, MAI -
December 2013
9
227 Hotel Rooms
12,500 Commercial Space
Exterior Walking Areas
July 2013
September 2013Slide10
New Construction Summary
Madison
Market
2013 - Landretti &
Company - Dominic Landretti, MAI - December
201310
Proposed or under construction to be completed within one to three yearsTotal
square feet
and cost was not available for all projects
Total cost was reported for only 43 of the 74 listed projects, or about ~58%
Extrapolates to about
$1.4 billion
of new constructionSlide11
Historic New Construction
Summary
Madison
Market
2013 - Landretti & Company - Dominic Landretti, MAI -
December 2013
11$1.4 billion of construction is equivalent to the new construction added from 2008 to 2012
Dane County 2013 Equalized Value for commercial and industrial property is $13.5 billionSlide12
New Construction Summary
Other
Notables
Madison
Market 2013 - Landretti & Company - Dominic Landretti, MAI -
December 2013
12
Judge
Doyle Square, Downtown
Madison
(Source: WSJ October 6, 2013)
800 Block East Washington
Avenue
$65 million 13 story mixed use project on 4.5 acres to be purchased from City
Phase I - 50,000s square feet for grocery,175 to 240 residential units, and 350 space parking garage
Phase II – 22 owner-occupied homes, 65,000 square foot of commercial space, and 173 parking stallsSlide13
Multifamily Highlights
Madison
Market
2013 - Landretti &
Company - Dominic Landretti, MAI -
December 201313Slide14
Madison
Market
2013 - Landretti &
Company
- Dominic Landretti, MAI - December 201314
Vacancy declined as construction slowed
Permits have not been issued for all proposed constructionSlide15
Multifamily
Demand
Madison
Market
2013 - Landretti & Company
- Dominic Landretti, MAI - December 2013
15
Line
Detail
In 3 Years
Comments
1
Forecasted new competition of units
5,024
2013 Completed
and Proposed
2
Percentage of renter occupied units
41.6%
2010 US Census; includes vacant units
3
Implied housing unit demand (total households)
12,077
Line 1 / Line 2
4
Persons per household
2.33
2010 US Census
5
Population needed to support implied demand
28,139
Line 3 * Line 4
6
Existing Population
497,021
Wisconsin DOA as of 1/1/13
7
Annual population increase needed to support additional demand
1.9%
Growth Rate Factor over three years
Impact on Market:
Population Growth: 1990 to 2000 – 1.5% 2000
to 2010 – 1.4
%
Growth may need to increase or percentage of renters may need to increase
Millennial’s
are favoring renting versus home ownership – strong Epic influence
Existing occupants will likely upgrade to new housing
Vacancy will likely increase
Rent will experience downward pressureSlide16
Land Trends
Madison
Market
2013 - Landretti &
Company - Dominic Landretti, MAI - December
201316
Multifamily sitesSelling between $8,000 and $30,000 per unit with the average about $10,000 to $15,000 per unitLocation and density driving price
Commercial sites
Selling between $5 and $30 per foot
Size and exposure driving price
Industrial land sales are minimalSlide17
Improved
Commercial Trends
Madison
Market
2013 - Landretti & Company - Dominic Landretti, MAI -
December 201317
Multifamily is dominating the market
Mixed use is predominately multifamily
Office demand appears low
Some new development for existing companies
Spectrum, Mead & Hunt
Both vacated existing space in Madison to move to Middleton
Retail demand is moderate to high
Credit tenants and exposure are necessary
New construction rents are $25-$40 per foot NNNSlide18
Madison
Market
2013 - Landretti &
Company
- Dominic Landretti, MAI - December 2013
18Slide19
Questions?
Madison
Market
2013 - Landretti &
Company - Dominic Landretti, MAI - December
201319
Thank you
Contact:
Dominic Landretti, MAI
Landretti & Company, LLC
1818 Parmenter Street, Suite 202
Middleton, Wisconsin 53562
(608) 836-3406 x100
appraisal@landretti.com