STEP UP DOWNTOWN | Draft Market Assessment

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Presentation slides of the Draft Market Assessment shown at the second advisory committee meeting for the STEP UP DOWNTOWN project on April 16, 2014.

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STEP UP DOWNTOWN | Draft Market Assessment

  1. 1. 2014 Market Assessment DRAFT FINDINGS – APRIL 2014
  2. 2. Process for the Market Assessment  Assessment to identify opportunities through next investment cycle (5 to 7 years) and inform “Step Up” plan  Primary and secondary data sources  Stakeholder interviews – real estate, investment & economic development
  3. 3. Market Assessment Document  Top Global Trends in Effect in Cleveland  Market Opportunities in this Investment Cycle  Key Market Indicators in Cleveland
  4. 4. Global Trends in Effect in Cleveland
  5. 5. Top Global Trends in Effect  Need for skilled talent is driving businesses to compact urban centers ◦ Millennials today 36% of US workforce, 50% by 2020  Millennials & empty nest Boomers want to live downtown ◦ 40% increase in Downtown Cleveland residents  Changing workforce demographics also include women ◦ Focus on safety, mixed-use & cultural diversity
  6. 6. Top Global Trends in Effect  Demand for Mobility Options ◦ Downtown Walk Score 87; Transit: 82; Bike 52.  Health & Wellness Opportunity for Cleveland ◦ Both Industries and Lifestyle Preferences  Social Equity a Growing National Concern ◦ Downtown as a common gathering place, inviting and welcoming to all
  7. 7. Current Market Opportunities
  8. 8. Residential: Strong & Sustained  Residential is driving the current investment cycle  800+ units added w/o increasing vacancy rate  2,000 more units online by 2015 growing downtown population to 15,000  Remaining tax credit eligible properties could supply another 2,000 to 2,500 units – will be absorbed this cycle?  Demand for resident-serving amenities
  9. 9. Office & Retail: Niche Opportunities OFFICE Overall 18% vacancy / $17 rates “Super A” niche: ◦ Modern formats / smaller footprints ◦ Regional retention ◦ 8-9% vacancy & ~$30 leasing rates ◦ May support additional new build Entrepreneurial niche ◦ Street level retail conversions ◦ Co-working space RETAIL Oversupply - contracting nationally Consolidate in key activity centers & pedestrian connectors Niche opportunities ◦ General Merchandise $16.5 leakage ◦ Resident & worker-serving personal services ◦ Visitor-serving near convention center ◦ Health & fitness related
  10. 10. Visitor: Building Out  $465M investments in Convention Center & Global Center for Health Innovation  Playhouse Square expansion & enhancements  1,800 new hotel rooms in progress/planned  Revenue and occupancy numbers will be closely watched  Casino Phase II timing still TBD
  11. 11. Key Indicators for Downtown
  12. 12. Reasons for Key Indicator Recommendations Tell the story succinctly and powerfully  Promote & Extend Residential Demand  Recruit & Retain Skilled Talent  Attract & Retain Businesses  Uncover & Promote Niche Opportunities  Report Data Specific to Downtown
  13. 13. Residential & Worker Indicators 12,000 Downtown Residents 124,000 Downtown Workers Resident Demographics ◦ 51% hold a Bachelor’s or Advanced Degree ◦ 74% White Collar ◦ 70& single, never married ◦ Average per capita income 64% higher than metro average Residential occupancy ◦ 95% for last 11 quarters Cleveland Diversity Index: 62.1 Cleveland Cost of Living Index: 101.0 Median Annual Wage for MSA $35,610 ◦ ~$0.5 M MSA workers’ salaries support $1,000/mo Transit Ridership Increases 2013: ◦ Light Rail: 4.6% ◦ Heavy Rail 5.7%
  14. 14. Commercial Indicators ◦ 18% overall office vacancy ◦ Asking Lease Rates Q2 2013 $19.10 ◦ 37,600 net absorption 2013 ◦ Regional retention of businesses ◦ “Super A” ~8-9%vacancy; $30.00 s.f. asking rate ◦ Aggregate Disposable Income: $37.7 M Visitor Indicators ◦ Convention Center Bookings projected 300,000 ◦ Number Hotel Beds: 3,557 ◦ Hotel Occupancy: 67.2% ◦ Revenue per Available Room: $79.33 ◦ Downtown Visitor Attraction: 8.5 M to top 5 venues
  15. 15. New: Civic Realm Indicators Safety: Comparative Crime Rates; Availability of Ambassadors Mobility: Ridership; Walk score: 87; Transit: 82; Bike: 57 Connectivity: Bike Lanes/Racks; Transit Ridership; Wifi Hotspots Diversity& Culture: 356 Ethnic Restaurants; 36 Cultural Gardens; 1000+ Performances; Pop-Ups & Tactical Urbanism
  16. 16. 2014 Market Assessment DRAFT FINDINGS – APRIL 2014

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