www.otteau.com
800.458.7161
Changed Circumstances
for
Real Estate Demand
2014 NJ Planning Conference
January 23, 2014
Bringing Clarity to Real Estate
As President of Otteau Valuation Group Mr. Otteau manages
facets of the firm's business in...
MarketTRAC by OTTEAU.com
Stay Informed Throughout the Year on the Latest Trends
© Copyright 2013 Otteau Valuation Group, I...
© Copyright 2013 Otteau Valuation Group, Inc.
• Changed Circumstances
• Real Estate Demand Trends
• Where Do We Go From He...
A Quick Look Back…
© Copyright 2014 Otteau Valuation Group, Inc.
US Economic Growth
© Copyright 2014 Otteau Valuation Group, Inc.
-14.0
-9.0
-4.0
1.0
6.0
11.0
16.0
1930
1932
1934
1936
193...
US Economic Growth
© Copyright 2013 Otteau Valuation
Group, Inc.
-14.0
-9.0
-4.0
1.0
6.0
11.0
16.0
1930
1932
1934
1936
193...
US Economic Growth
© Copyright 2014 Otteau Valuation Group, Inc.
-3.5
-1.5
0.5
2.5
4.5
6.5
1980198119821983198419851986198...
Changed Circumstances
Geo-Politics & Technology Deliver a One-Two Punch
© Copyright 2014 Otteau Valuation Group, Inc.
Soviet Collapse a Trigger Point
 Thatcher: “Proves no alternative” (to capitalism)
 Greenspan: “Seminal Economic Moment...
Changed Circumstances
Capitalism’s Triumph Launched Global Competition
© Copyright 2014 Otteau Valuation Group, Inc.
11000...
Changed Circumstances
Technology Delivers a One-Two Punch – Eliminating Millions More Jobs
© Copyright 2014 Otteau Valuati...
US Economy Requires Fewer Workers
GDP up 5.6%, Employment down by 1.6-MM Jobs
© Copyright 2014 Otteau Valuation Group, Inc...
Technological Efficiency Constrains Income
© Copyright 2014 Otteau Valuation Group, Inc.
-0.2%
3.5%
5.5%
5.8%
6.2%
6.9%
-0...
Job Recovery Pace from Past Economic Recessions
© Copyright 2013 Otteau Valuation
Group, Inc.
Profits Up, Personal Income ...
Implications for
Real Estate Demand
© Copyright 2014 Otteau Valuation Group, Inc.
Changed Circumstances
Changed Circumstances
© Copyright 2014 Otteau Valuation Group, Inc.
US Economy Still Strong….but Far Less Benevolent
Per...
© Copyright 2014 Otteau Valuation Group, Inc.
Changed Circumstances
Households Adjust to the New Realities
-90,000
-80,000...
Changed Circumstances
New Jersey Homeownership from 71% to 65%
© Copyright 2014 Otteau Valuation Group, Inc.
71.3
69.1
69....
Changed Circumstances
Households Adjust to the New Realities
© Copyright 2014 Otteau Valuation Group, Inc.
24.7%
8.0%
2.3%...
Changed Circumstances
The Rise of the Cities!
© Copyright 2014 Otteau Valuation Group, Inc.
$$ - Walkability Creates Value...
Changed Circumstances
Transit Oriented Demand Growing
© Copyright 2013 Otteau Valuation Group,
Population Growth & Job Cre...
Changed Circumstances
Technology Jobs Shifting to Urban Places
© Copyright 2014 Otteau Valuation Group, Inc.
Population Gr...
Economy – 4 ½ Years After
© Copyright 2014 Otteau Valuation Group, Inc.
-2.7
2.0
-2.0
-8.3
-5.4
-0.4
1.3
3.9
1.6
3.9
2.8 2.8
-1.3
3.2
1.4
4.9
3.7
1.2
2.8
0.1
1.1
2.5
4.1
2008q1
2008q2
2008q3
200...
-2.7
2.0
-2.0
-8.3
-5.4
-0.4
1.3
3.9
1.6
3.9
2.8 2.8
-1.3
3.2
1.4
4.9
3.7
1.2
2.8
0.1
1.1
2.5
4.1
2008q1
2008q2
2008q3
200...
© Copyright 2014 Otteau Valuation Group, Inc.
All 50 State Economies Growing
© Copyright 2014 Otteau Valuation Group, Inc.
All 50 State Economies Growing
NJ Reported Loss of 36,300 Jobs in December
© Copyright 2014 Otteau Valuation Group, Inc.
Purchase
Contracts
Rising
© Copyright 2014 Otteau Valuation
Group, Inc.
86,310
80,417
64,103
67,736
61,807
57,190
69,494
8...
© Copyright 2014 Otteau Valuation Group, Inc.
40000
45000
50000
55000
60000
65000
70000
75000
JAN FEB MAR APR MAY JUN JUL ...
Recovery Concentrations
Recovery Zone Expanding
© Copyright 2013 Otteau Valuation Group, Inc.
2011
2013
Less Than 8 Mos.
B...
Recovery Concentrations
2013
© Copyright 2013 Otteau Valuation Group, Inc.
Less Than 8 Mos.
Between 8-12 Mos.
Greater Than...
© Copyright 2014 Otteau Valuation Group, Inc.
Unemployment by County
1 Hunterdon North 4.6 12 Union North 6.8
2 Morris Nor...
-3.5%
-1.9%
-4.1%
2.9%
2.1%
4.1%
6.4%
-6.5%
-4.5%
-2.5%
-0.5%
1.5%
3.5%
5.5%
7.5%
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q...
-2.8%
1.6%
3.6%
2.7%
4.7%
6.4%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
Median Home Prices
4-Quarter Change
NJ-South NJ-North
...
© Copyright 2014 Otteau Valuation Group, Inc.
11.6%
10.6%
7.9%
6.0%
5.6% 5.5%
5.1%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
Fl NJ NY DE PA Phila Metro US
Mortgage Del...
20.8%
18.4%
10.5%
6.7%
4.2%
2.5%
1.0%
6.0%
11.0%
16.0%
21.0%
Urban "Sandy" Towns New Jersey Gold Coast Suburban-South Subu...
New Jersey Sector Trends
© Copyright 2013 Otteau Valuation Group, Inc.
Apartments 96,700 Apts
All-Age Homes 88,364 Homes
5...
New Jersey Sector Trends
© Copyright 2013 Otteau Valuation Group, Inc.
29.4
16.8
11.0
0.5
0.2
0.0 5.0 10.0 15.0 20.0 25.0 ...
New Jersey Sector Trends
© Copyright 2013 Otteau Valuation Group, Inc.
7.5%
8.8%
10.2%
14.0%
14.4%
16.1%
21.7%
22.4%
0.0%
...
© Copyright 2014 Otteau Valuation Group, Inc.
Planning for Tomorrow
©
Cop
yrig
ht
201
0
Ott
eau
Val
Planning for Tomorrow
New Jersey Land Use Controls Among Most Restrictive in Nation
Recognize Today’s Changed Circumstances
 Real Estate Demand No Longer a Field-of-Dreams
 What We Don’t Need is ‘MORE OF...
© Copyright 2013 Otteau Valuation Group, Inc.
About OTTEAU Valuation Group
Bringing Clarity to Real Estate
About Us: The l...
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Changed Circumstances for Real Estate Demand

  1. 1. www.otteau.com 800.458.7161 Changed Circumstances for Real Estate Demand 2014 NJ Planning Conference January 23, 2014
  2. 2. Bringing Clarity to Real Estate As President of Otteau Valuation Group Mr. Otteau manages facets of the firm's business including serving as General Manager of www.otteau.com which is an information provider on real estate trends. He has been actively engaged in real estate consultation and valuation since 1974 and holds the State Certified General Real Estate Appraiser certification, the highest level offered. His practice is concentrated in providing project feasibility, marketing analysis, redevelopment guidance and valuation analysis to developers, financial institutions, Governmental entities and investors. Frequently quoted in the New York Times and Wall Street Journal, and having made television appearances on CNBC, Bloomberg and NBC, Mr. Otteau is widely respected for his knowledge and insight into real estate trends. His attention to detail and comprehensive fact finding has made him the go-to person for industry professionals seeking to enhance their competitive position in the marketplace. Jeffrey has provided testimony as an expert witness at the municipal, county and state levels, authored several texts on property Valuation techniques and has lectured throughout the United States and in Canada. He served on the Appraisal Standards Advisory Council, which consulted with the Appraisal Foundation in Washington, D.C. on its agenda of projects and major technical issues. Mr. Otteau served as a past Chairman of the Employee Relocation Council's Appraisal Standards Council and was inducted into their distinguished Hall of Leaders in 1995. © Copyright 2013 Otteau Valuation Group, Inc.
  3. 3. MarketTRAC by OTTEAU.com Stay Informed Throughout the Year on the Latest Trends © Copyright 2013 Otteau Valuation Group, Inc. • MarketNEWS from OTTEAU.com – Provides timely commentary & analysis of emerging economic and real estate trends including home sales, multi-family apartments, retail, office, and warehousing sectors. • The OTTEAU Report Quarterly – This is the real estate industry’s report card on housing trends that real estate professionals have relied upon for the past 30 years. Published 4 times a year, these reports provide detailed analysis for key housing markets throughout New Jersey, New York’s Hudson Valley, Eastern Pennsylvania and Northern Delaware. • MarketTRAC Monthly by OTTEAU.com – The ultimate tool for staying informed on emerging housing trends. Published 12 times a year, these monthly updates will keep you informed on the latest hyper-local market trends. • Real Estate Price Index – A retrospective price index that measures real estate price changes by property type (e.g. housing, retail, warehousing, etc.) and geographic regoin (northern, central & southern New Jersey). This index provides guidance for evaluating existing loan portfolios, first-glance refinancing viability and risk assessment. Details @ Otteau.com/MarketTrac.aspx
  4. 4. © Copyright 2013 Otteau Valuation Group, Inc. • Changed Circumstances • Real Estate Demand Trends • Where Do We Go From Here ? Real Estate Demand Forecast Agenda of Topics
  5. 5. A Quick Look Back… © Copyright 2014 Otteau Valuation Group, Inc.
  6. 6. US Economic Growth © Copyright 2014 Otteau Valuation Group, Inc. -14.0 -9.0 -4.0 1.0 6.0 11.0 16.0 1930 1932 1934 1936 1938 1940 1942 1944 1946 1948 1950 1952 1954 1956 1958 1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 GDP Change from 1930-2012
  7. 7. US Economic Growth © Copyright 2013 Otteau Valuation Group, Inc. -14.0 -9.0 -4.0 1.0 6.0 11.0 16.0 1930 1932 1934 1936 1938 1940 1942 1944 1946 1948 1950 1952 1954 1956 1958 1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 GDP Change from 1930-2012
  8. 8. US Economic Growth © Copyright 2014 Otteau Valuation Group, Inc. -3.5 -1.5 0.5 2.5 4.5 6.5 198019811982198319841985198619871988198919901991199219931994199519961997199819992000200120022003200420052006200720082009201020112012 GDP Change: 1980-2012
  9. 9. Changed Circumstances Geo-Politics & Technology Deliver a One-Two Punch © Copyright 2014 Otteau Valuation Group, Inc.
  10. 10. Soviet Collapse a Trigger Point  Thatcher: “Proves no alternative” (to capitalism)  Greenspan: “Seminal Economic Moment of our Time”  BRIC nations: Adopt capitalism  Added a Billion Low Wage Workers into the System Capitalism Loves a ‘Cheap Date’  High Wages & Benefit Costs Fueled Job Flight  Economic growth shifted to emerging markets  Slower US Job Creation & Wage Growth  High Tax Rates Keep Profits Offshore Changed Circumstances Capitalism’s Triumph Launched Global Competition © Copyright 2013 Otteau Valuation Group, Inc.
  11. 11. Changed Circumstances Capitalism’s Triumph Launched Global Competition © Copyright 2014 Otteau Valuation Group, Inc. 11000 12000 13000 14000 15000 16000 17000 18000 19000 20000 1000'sofPersons US Manufacturing Employment US Manufacturing Jobs Average $51,000 Annually
  12. 12. Changed Circumstances Technology Delivers a One-Two Punch – Eliminating Millions More Jobs © Copyright 2014 Otteau Valuation Group, Inc.
  13. 13. US Economy Requires Fewer Workers GDP up 5.6%, Employment down by 1.6-MM Jobs © Copyright 2014 Otteau Valuation Group, Inc. 73 Months & Counting $15.0 $15.8 138.0 136.4 127,000 129,000 131,000 133,000 135,000 137,000 139,000 141,000 143,000 $13,500 $14,000 $14,500 $15,000 $15,500 $16,000 TotalNon-FarmJobsinMillions GDPinBillions US GDP vs. US Total Non-Farm Jobs GDP Non-Farm Jobs
  14. 14. Technological Efficiency Constrains Income © Copyright 2014 Otteau Valuation Group, Inc. -0.2% 3.5% 5.5% 5.8% 6.2% 6.9% -0.8% 0.7% 1.3% 0.1% 2.7% 1.1% -2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 2008q4 2009q4 2010q4 2011q4 2012q4 2013q3 Productivity vs. Income Gains Worker Productivity Personal Income
  15. 15. Job Recovery Pace from Past Economic Recessions © Copyright 2013 Otteau Valuation Group, Inc. Profits Up, Personal Income Down
  16. 16. Implications for Real Estate Demand © Copyright 2014 Otteau Valuation Group, Inc. Changed Circumstances
  17. 17. Changed Circumstances © Copyright 2014 Otteau Valuation Group, Inc. US Economy Still Strong….but Far Less Benevolent Personal Income Remains Constrained In-Sourcing a Positive Trend, but Returns Fewer Jobs Households & Employers Adapt & Seek Efficiencies Changing Dynamics for Where People Live & Work Real Estate Demand No Longer a Field-of-Dreams Financial Viability No Longer a Certainty – present & future Municipal Tax Base Less Certain
  18. 18. © Copyright 2014 Otteau Valuation Group, Inc. Changed Circumstances Households Adjust to the New Realities -90,000 -80,000 -70,000 -60,000 -50,000 -40,000 -30,000 -20,000 -10,000 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 -23,759 -33,225 -45,045 -56,989 -72,547 -69,160 -56,208 -31,690 -66,603 -76,175 -88,979 NJ Net Domestic Migration New Jersey Holds #1 Ranking 64% of NJ HH Goods Shipments are Outbound
  19. 19. Changed Circumstances New Jersey Homeownership from 71% to 65% © Copyright 2014 Otteau Valuation Group, Inc. 71.3 69.1 69.9 70.1 68.5 70.4 69.4 67.9 68.8 68.9 67.6 68.0 67.8 68.2 66.7 66.6 66.6 66.2 65.2 65.6 67.3 68.5 64.0 66.2 67.6 66.1 65.5 66.3 64.4 66.2 67.7 67.9 65.6 64.1 65.2 62.0 63.0 64.0 65.0 66.0 67.0 68.0 69.0 70.0 71.0 72.0 Q12005 Q22005 Q32005 Q42005 Q12006 Q22006 Q32006 Q42006 Q12007 Q22007 Q32007 Q42007 Q12008 Q22008 Q32008 Q42008 Q12009 Q22009 Q32009 Q42009 Q12010 Q22010 Q32010 Q42010 Q12011 Q22011 Q32011 Q42011 Q12012 Q22012 Q32012 Q42012 Q12013 Q22013 Q32013 NJ Homeownership Rate NJ Homeownership Rate 4 per. Mov. Avg. (NJ Homeownership Rate) Source: Otteau Valuation Group, Census.gov
  20. 20. Changed Circumstances Households Adjust to the New Realities © Copyright 2014 Otteau Valuation Group, Inc. 24.7% 8.0% 2.3% 0.2% 0.1%2.3%4.9% 13.6% 17.1% 26.8% 65% Childless Married-Couple Family, with children Other Family, Female Householder, with children Other Family, Male Householder, with children Nonfamily, Male Householder, with children Nonfamily, Female Householder, with children 60% of Households = 1 or 2 Persons 127 118 70 63 0 20 40 60 80 100 120 140 1909 1960 2007 2012 US Birth Rates per 1,000 Women Source: Pew Research Center
  21. 21. Changed Circumstances The Rise of the Cities! © Copyright 2014 Otteau Valuation Group, Inc. $$ - Walkability Creates Value - $$
  22. 22. Changed Circumstances Transit Oriented Demand Growing © Copyright 2013 Otteau Valuation Group, Population Growth & Job Creation More Urban-Centric 24% 32% 52% -5% 5% 15% 25% 35% 45% 55% 1990-1999 2000-2009 2008-2012 NJ Rail Towns Share of BP's
  23. 23. Changed Circumstances Technology Jobs Shifting to Urban Places © Copyright 2014 Otteau Valuation Group, Inc. Population Growth & Job Creation More Urban-Centric Metro Total Investment Urban Investment Urban Share Suburban Investment Suburban Share San Francisco Bay Area $13,597 $11,649 85.70% $1,948 14.40% San Francisco $8,449 $6,935 81.60% $1,564 18.40% San Jose (Silicon Valley) $5,014 $4,668 93.10% $345 6.90% Boston $3,275 $2,391 73.00% $884 27.00% New York $3,147 $2,447 77.70% $701 22.30% Los Angeles $2,461 $1,941 78.90% $520 21.10% Washington/Baltimore $1,127 $772 68.50% $354 31.50% San Diego $942 $865 91.80% $78 8.20% Chicago $668 $360 54.00% $307 46.00% Austin $630 $555 88.00% $75 12.00% Seattle $591 $495 83.70% $97 16.30% Philadelphia $341 $53 15.60% $288 84.40% Dallas $251 $157 62.70% $93 37.30% Venture Capital in Urban vs. Suburban Zip Codes - 2011 Ranked by Investment (dollars in millions)
  24. 24. Economy – 4 ½ Years After © Copyright 2014 Otteau Valuation Group, Inc.
  25. 25. -2.7 2.0 -2.0 -8.3 -5.4 -0.4 1.3 3.9 1.6 3.9 2.8 2.8 -1.3 3.2 1.4 4.9 3.7 1.2 2.8 0.1 1.1 2.5 4.1 2008q1 2008q2 2008q3 2008q4 2009q1 2009q2 2009q3 2009q4 2010q1 2010q2 2010q3 2010q4 2011q1 2011q2 2011q3 2011q4 2012q1 2012q2 2012q3 2012q4 2013q1 2013q2 2013q3 PercentChange Source: U.S. Dept. of Commerce, Bureau of Economic Analysis US Economy Quarterly GDP Change Economic Momentum Building © Copyright 2014 Otteau Valuation Group, Inc.
  26. 26. -2.7 2.0 -2.0 -8.3 -5.4 -0.4 1.3 3.9 1.6 3.9 2.8 2.8 -1.3 3.2 1.4 4.9 3.7 1.2 2.8 0.1 1.1 2.5 4.1 2008q1 2008q2 2008q3 2008q4 2009q1 2009q2 2009q3 2009q4 2010q1 2010q2 2010q3 2010q4 2011q1 2011q2 2011q3 2011q4 2012q1 2012q2 2012q3 2012q4 2013q1 2013q2 2013q3 PercentChange Source: U.S. Dept. of Commerce, Bureau of Economic Analysis US Economy Quarterly GDP Change Economic Momentum Building © Copyright 2014 Otteau Valuation Group, Inc.
  27. 27. © Copyright 2014 Otteau Valuation Group, Inc. All 50 State Economies Growing
  28. 28. © Copyright 2014 Otteau Valuation Group, Inc. All 50 State Economies Growing NJ Reported Loss of 36,300 Jobs in December
  29. 29. © Copyright 2014 Otteau Valuation Group, Inc.
  30. 30. Purchase Contracts Rising © Copyright 2014 Otteau Valuation Group, Inc. 86,310 80,417 64,103 67,736 61,807 57,190 69,494 81,000 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 2006 2007 2008 2009 2010 2011 2012 2013 YTD Home Purchase Contracts January-November NJ
  31. 31. © Copyright 2014 Otteau Valuation Group, Inc. 40000 45000 50000 55000 60000 65000 70000 75000 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC MarketTRAC Monthly by Otteau.com NEW JERSEY INVENTORY OF UNSOLD HOMES 2009 2010 2011 2012 2013
  32. 32. Recovery Concentrations Recovery Zone Expanding © Copyright 2013 Otteau Valuation Group, Inc. 2011 2013 Less Than 8 Mos. Between 8-12 Mos. Greater Than 12 Mos. 2012
  33. 33. Recovery Concentrations 2013 © Copyright 2013 Otteau Valuation Group, Inc. Less Than 8 Mos. Between 8-12 Mos. Greater Than 12 Mos.
  34. 34. © Copyright 2014 Otteau Valuation Group, Inc. Unemployment by County 1 Hunterdon North 4.6 12 Union North 6.8 2 Morris North 5.0 13 Gloucester South 6.9 3 Somerset North 5.1 14 Ocean North 7.2 4 Mercer North 5.3 15 Camden South 7.4 5 Bergen North 5.6 16 Hudson North 7.6 6 Middlesex North 6.0 - 7.8 7 Monmouth North 6.1 17 Essex North 7.9 8 Warren North 6.1 18 Passaic North 8.0 9 Sussex North 6.2 19 Atlantic South 10.2 10 Burlington South 6.6 20 Cumberland South 10.3 11 Salem South 6.8 21 Cape May South 12.3 Statewide Unemployment by County Rank County Region UE Rate Rank County Region UE Rate
  35. 35. -3.5% -1.9% -4.1% 2.9% 2.1% 4.1% 6.4% -6.5% -4.5% -2.5% -0.5% 1.5% 3.5% 5.5% 7.5% 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 New Jersey Median Home Prices 4-Quarter Change New Jersey Home Prices Rising © Copyright 2013 Otteau Valuation Group, Inc.
  36. 36. -2.8% 1.6% 3.6% 2.7% 4.7% 6.4% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% Median Home Prices 4-Quarter Change NJ-South NJ-North Home Prices on the Move © Copyright 2014 Otteau Valuation Group, Inc.
  37. 37. © Copyright 2014 Otteau Valuation Group, Inc.
  38. 38. 11.6% 10.6% 7.9% 6.0% 5.6% 5.5% 5.1% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% Fl NJ NY DE PA Phila Metro US Mortgage Delinquency 90+ Days DQ% Mortgage Delinquency by State 90+ Days DQ% © Copyright 2014 Otteau Valuation Group, Inc.
  39. 39. 20.8% 18.4% 10.5% 6.7% 4.2% 2.5% 1.0% 6.0% 11.0% 16.0% 21.0% Urban "Sandy" Towns New Jersey Gold Coast Suburban-South Suburban-North %ofMortgagedHomes Foreclosure Inventory by Market Segment Foreclosure Inventory by Market © Copyright 2013 Otteau Valuation Group, Inc.
  40. 40. New Jersey Sector Trends © Copyright 2013 Otteau Valuation Group, Inc. Apartments 96,700 Apts All-Age Homes 88,364 Homes 55+ Homes 562 Homes Warehouse 1.7 Million Ft2 Office 2.5 Million Ft2 Retail 2.4 Million Ft2 2013 Real Estate Absorption
  41. 41. New Jersey Sector Trends © Copyright 2013 Otteau Valuation Group, Inc. 29.4 16.8 11.0 0.5 0.2 0.0 5.0 10.0 15.0 20.0 25.0 30.0 Office Retail 55+ Homes All-Age Homes Apartments Years of Supply Supply Availability by Sector New Jersey
  42. 42. New Jersey Sector Trends © Copyright 2013 Otteau Valuation Group, Inc. 7.5% 8.8% 10.2% 14.0% 14.4% 16.1% 21.7% 22.4% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% Urban Essex Hudson Waterfront Shorthills/Millburn Princeton New Jersey Meadowlands Parsippany Route 287 Office Vacancy by Submarket
  43. 43. © Copyright 2014 Otteau Valuation Group, Inc. Planning for Tomorrow
  44. 44. © Cop yrig ht 201 0 Ott eau Val Planning for Tomorrow New Jersey Land Use Controls Among Most Restrictive in Nation
  45. 45. Recognize Today’s Changed Circumstances  Real Estate Demand No Longer a Field-of-Dreams  What We Don’t Need is ‘MORE OF THE SAME’ Do a Better Job Informing the Public  Too Many Local Decisions Based on Past Circumstances  Linkage between Housing and School Enrollment has Changed  Need More Small Lot Residential Zoning Recognize Transportation Infrastructure a Core Asset  Creating Density Along Transportation Corridors  Direct Linkage to Job Retention & Growth  Office Demand Shifting to Transportation Hubs Planning is ‘The Pathway’ to Future Prosperity  Sometimes, it’s about saying YES  Places that Adapt Will Prosper………..Those that Don’t Will be Left Behind  Failure to Adapt Threatens Non-Residential Tax Base © Cop yrig ht 201 0 Ott eau Val Planning for Tomorrow
  46. 46. © Copyright 2013 Otteau Valuation Group, Inc. About OTTEAU Valuation Group Bringing Clarity to Real Estate About Us: The lightning strike speed of today's information flow has accelerated The pace of change for real estate markets. As a result, trends that previously took Years to develop can now unfold in a few short months. Our mission is to assist our clients In keeping pace with that change by providing insightful analysis and cutting edge pricing skills. To accomplish this we have assembled a team of skilled professionals specializing in the complex field of real estate market analysis. With broad based experience in real estate valuation and consultation, our firm engages in a diversified practice encompassing all property types.  Appraisal Services are provided to financial & lending institutions, developers & builders, attorneys, investors, relocation management service companies, governmental agencies, corporations and the public.  Our Consulting Group provides a wide array of services with respect to market analysis, project feasibility, demographic trends, project valuation and municipal entitlement proceedings.  Litigation support is provided for matters requiring the valuation and corresponding expert testimony for eminent domain proceedings, contractual disputes, bankruptcy, tax appeals, equitable distribution, estate valuation and stigma related issues.  OTTEAU.com offers a wide range of informational content and analysis of real estate trends including published and live session formats. MarketTRAC is an online market data service available for subscription on www.otteau.com. Copyright Restrictions  All information is Copyright protected  Content may not be reproduced, or disseminated without express prior written consent  Content is licensed for individual use and may not be replayed or replicated for group presentation  Managers may not reproduce, disseminate or present content to sales associates.  Sessions may not be recorded in audio or video

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