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DEVELOPMENT ANALYSIS IDENTIFYING THE MARKET AREA

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New road construction makes the site a completely different market.

New road construction makes the site a completely different market.

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  • 1. DEVELOPMENT ANALYSIS IDENTIFYING THE MARKET AREA Adam Greenfader
  • 2. Development Analysis June 1, 2007 Multi-Family Project - Bayamon, Puerto Rico HillStone Builders, Inc. Table of Contents The Goal of this Study .................................................... Pg. 4 General Assumptions ………………………………… Pg. 4 Market Research Sources .................................................... Pg. 5 Executive Summary .................................................... Pg. 6 Key Facts ………………………………… Pg. 6 The Market Area ……………………………………Pg. 9 The Site ………………….……………… Pg 11 Vehicular Circulation Analysis …………………………………….Pg 14 SWOT ANALYSIS ………………………………… Pg.19-23 Design recommendations ………………………………… Pg. 24-32 Housing Supply ………………………………….. Pg. 33-41 New Home Projects: Walk Ups ……………………………………Pg. 34-38 New Home Projects: Mid Rise ……………………………………Pg. 39-47 New Home Projects: Condominiums ……………………………………Pg. 48-51 Future Projects ……………………………………Pg. 52 Highest and Best Use ……………………………………Pg. 53 Price Point ……………………………………Pg. 56-57 Housing Demand & Supply ……………………………………Pg. 58-60 Absorption Rate ……………………………………Pg. 61 Conclusion ……………………………………Pg. 62 Addendum 1 – Buyer Questioner Addendum 2 – Past sales comparables Addendum 3 – AXYON Curriculum Vitae _____________________________________________________________________ 2 Axyon Advanced Solutions For Real Estate Development All Rights Reserved ®
  • 3. Development Analysis June 1, 2007 Multi-Family Project - Bayamon, Puerto Rico HillStone Builders, Inc. The Market Area The principal market area for the proposed project is the municipality of Bayamón. The municipality of Bayamón has 44.5 square miles, a population of 224,044 people, and 79,476 total households. It is the second largest municipality second only to San Juan. Census data for the past thirty years shows a growth pattern in population for Bayamón. Bayamón has had a steady growth over the past forty years. Taking into consideration the increase in population of Bayamón, the municipality has been receiving pressure to accommodate the people who migrate from other areas of the island. Population Growth Bayamón Since 1940 _____________________________________________________________________ 3 Axyon Advanced Solutions For Real Estate Development All Rights Reserved ®
  • 4. Development Analysis June 1, 2007 Multi-Family Project - Bayamon, Puerto Rico HillStone Builders, Inc. Secondary Market Area However, since the project is immediately adjacent to Guaynabo, we have considered it a secondary market. Toa Alta and Caguas are tertiary market areas. These municipalities were chosen because they all share three distinct characteristics: 1) Proximity to the metropolitan area 2) Located within 20 minutes driving time to proposed project 3) Sub-urban land use characteristics According to the 2000 Census data, there are approximately 822,400 people that live in the market area or approximately 21% of the island’s population. _____________________________________________________________________ 4 Axyon Advanced Solutions For Real Estate Development All Rights Reserved ®
  • 5. Development Analysis June 1, 2007 Multi-Family Project - Bayamon, Puerto Rico HillStone Builders, Inc. The municipality of San Juan has 76.9 square miles, a population of 434,374 people, and 182,101 total households. It is the largest municipality in Puerto Rico. The municipality of Guaynabo has 27.3 square miles, a population of 100,053 people, and 36,826 total households. It is the fourth largest municipality after Arecibo. The municipality of Toa Alta has 27.5 square miles, a population of 63,929 people, and 21,075 total households. _____________________________________________________________________ 5 Axyon Advanced Solutions For Real Estate Development All Rights Reserved ®
  • 6. Development Analysis June 1, 2007 Multi-Family Project - Bayamon, Puerto Rico HillStone Builders, Inc. The Site The site is located in the municipality of Bayamón off Highway #174. The site is approximately 22 Cds. The site sits atop a picturesque mountain range and enjoys views of the Guaynabo municipality. The area surrounding the site is known by its colloquial name “Guyabón”. The name is a hybrid of the two municipalities Guyanabo and Bayamón. Although located in a sub-urban area, the site is principally accessed via heavily forested roadways. Much of the highway transit is by industrial vehicles and construction trucks moving rock from nearby quarries. _____________________________________________________________________ 6 Axyon Advanced Solutions For Real Estate Development All Rights Reserved ®
  • 7. Development Analysis June 1, 2007 Multi-Family Project - Bayamon, Puerto Rico HillStone Builders, Inc. The preponderance of heavy grade vehicular traffic is most notable along Highway #174 and Highway #833. Most of the construction surrounding the site is either quarries or small commercial establishments. _____________________________________________________________________ 7 Axyon Advanced Solutions For Real Estate Development All Rights Reserved ®
  • 8. Development Analysis June 1, 2007 Multi-Family Project - Bayamon, Puerto Rico HillStone Builders, Inc. There are some owner built homes in the surrounding vicinity as well as several residential communities. The residential communities such as San Agustín, Villa Verde, and Las Américas are generally older, run down, and cater to families with modest incomes. Most notably missing from the immediate surrounding area is middle or high end residential developments. _____________________________________________________________________ 8 Axyon Advanced Solutions For Real Estate Development All Rights Reserved ®
  • 9. Development Analysis June 1, 2007 Multi-Family Project - Bayamon, Puerto Rico HillStone Builders, Inc. Vehicular Circulation Analysis: Site To Caguas Center The site is located within minutes of Bayamón’s city center. The vehicular circulation from the site to the intersection of highway #177 (Los Filtros) is on a well paved road and generally has light transit. From Los Filtros, vehicular congestion becomes problematic. Notwithstanding, most of Bayamón’s principal commercial, business, hospitals, recreation, and shopping are within easy reach of the site. _____________________________________________________________________ 9 Axyon Advanced Solutions For Real Estate Development All Rights Reserved ®
  • 10. Development Analysis June 1, 2007 Multi-Family Project - Bayamon, Puerto Rico HillStone Builders, Inc. Vehicular Circulation Analysis: Site To Highway #1 The site is also located very close to the adjacent municipality of Guaynabo. The two principal roads leading to Guaynabo ( 836 & 837) are “mountain” roads with two car lanes. The roads are generally frequented by commercial traffic and have limited turn off and passing lanes. Lighting in the evening can be poor in certain sections. Nevertheless, access is generally free of major traffic. From the site, one can also reach Highway #1 – “La Muda” in less than 20 minutes. _____________________________________________________________________ 10 Axyon Advanced Solutions For Real Estate Development All Rights Reserved ®
  • 11. Development Analysis June 1, 2007 Multi-Family Project - Bayamon, Puerto Rico HillStone Builders, Inc. Vehicular Circulation Analysis: Site To Caguas Center The site is also within easy reach of the municipality of Caguas. To get to Caguas from the site take Highway #174 and head South. The road will wind through the town of Aguas Buenas and eventually end at “Las Catalinas Mall”. Like the roads leading to Guaynabo, circulation to Caguas is on a “mountain” road with two car lanes. The road is generally frequented by commercial traffic and has limited turn off and passing lanes. Nevertheless, access is generally free of major traffic. Caguas is located within approximately thirty minutes of the site. _____________________________________________________________________ 11 Axyon Advanced Solutions For Real Estate Development All Rights Reserved ®
  • 12. Development Analysis June 1, 2007 Multi-Family Project - Bayamon, Puerto Rico HillStone Builders, Inc. Vehicular Circulation Analysis: Site To San Juan (Luis Muñoz Marín Airport) Accessing the San Juan metropolitan area is also within easy reach of the site. From the site one can access San Juan from “Los Filtros” (177), Highway #22 or Martínez Nadal (#20). All three options include well paved roads and highways with multiple car lanes. _____________________________________________________________________ 12 Axyon Advanced Solutions For Real Estate Development All Rights Reserved ®
  • 13. Development Analysis June 1, 2007 Multi-Family Project - Bayamon, Puerto Rico HillStone Builders, Inc. Site Location: Conclusion Although not immediately adjacent to a major highway, the site is in close proximity to many key roads: 174, 177, 833, 836, 20, 22 and 1. These roads provide multiple circulation routes in and out of the San Juan Metropolitan area. With a cursory inspection, the site appears to be suited primarily for the subsidy market ( i.e., it is located in a quasi industrial sector). However, after an in-depth vehicular circulation analysis, the site’s location, although psychologically distant, is excellent. Note: A well designed marketing campaign will be required to counterbalance this perceived weakness. _____________________________________________________________________ 13 Axyon Advanced Solutions For Real Estate Development All Rights Reserved ®