MADISON MARKET 2013 LANDRETTI & COMPANY, LLC DOMINIC LANDRETTI, MAI December 2013.

MADISON MARKET 2013LANDRETTI & COMPANY, LLC DOMINIC LANDRETTI, MAI

December 2013

Title

Madison Market 2013 - Landretti & Company - Dominic Landretti, MAI - December 2013 2

DANE COUNTY

Subdivision Plats


Subdivision Municipality LotsRevere Trails Windsor 62Windsor Crossing Windsor 84Kilkenny Farms Waunakee 383Westlawn Estates-4th Add Cottage Grove 83

Total 612

2013 Major Plats


New Construction – Major Projects


• Total of 16 projects• Cost and footages were not available for all

projects

Completed in 2013 ProjectMultifamily

UnitsHotel Units

Commercial Space

Residential Space

Parking Space Total SF

Parking Spaces

Construction Cost

The Constellation-East Washington Mixed Use 220 32,500 192,024 92,300 316,824 268 39,000,000$ 454 W Johnson St – 9 Story Hotel with Retail - nearly complete Hotel 194 2,940 164,967 167,907 25,000,000$ 3210 Maple Grove Dr - Added to Stone Creek in Madison Multifamily 106 108,316 108,316 1581001 University Avenue - Downtown Madison Multifamily 79 102,704 102,704 63 12,500,000$ 633 W Wilson St - downtown Madison Multifamily 60 - 6,800,000$ 701 Lorillard Ct - downtown Madison Multifamily 116 133,897 45,493 179,390 135 20,000,000$ 1815 University Ave - Steve Brown - Near Downtown Madison Multifamily 64 77,200 29,722 106,922 8,500,000$ Arbor Crossing (has 26 affordable units) and retail - Shorewood Hills Multifamily 80 10,000 10,000 Iron Gate, 2525 Ironwood Drive, Sun Prairie - additional 60 units in 2013 Multifamily 60 - 3700 Parmenter Street Middleton - Tribeca Village Phase II Multifamily 48 - 5148 East Cheryl Parkway, Fitchburg Multifamily 78 - ACD Distribution on 3129 Deming Way, Middleton Industrial 53,500 53,500 Costco opens in Prairie Lakes Subdivision Sun Prairie 2013 Retail 152,000 152,000 8,800,000$ Woodman's Sun Prairie Opened 2013 - 225,000sf Retail 225,000 225,000 18,000,000$ Hy-Vee at Westgate Mall opens in 2013 Retail 80,500 80,500 15,000,000$ Spectrum Brands Office opens in Fall 2013 in Middleton Offi ce 210,000 210,000 25,000,000$

Total 911 194 766,440 779,108 167,515 1,713,063 624 178,600,000$

Major New Construction - Proposed


• Not all footages and costs were available• Projects include all uses

– Only 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%

Type ProjectsMultifamily

UnitsHotel Units

Commercial Space

Residential Space


Parking Spaces

Construction Cost

Proposed or Under Const.58 4,113 429 1,132,758 1,726,362 348,180 3,925,264 2,938 626,300,000$

The Constellation


Spectrum Brands


The Edgewater


• 227 Hotel Rooms• 12,500 Commercial Space• Exterior Walking Areas

July 2013

September 2013

New Construction Summary


• Proposed or under construction to be completed within one to three years

• Total 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

construction

Type ProjectsMultifamily

UnitsHotel Units

Commercial Space

Residential Space


Parking Spaces

Construction Cost

Completed 2013 16 911 194 766,440 779,108 167,515 1,713,063 624 178,600,000$ Proposed or Under Const. 58 4,113 429 1,132,758 1,726,362 348,180 3,925,264 2,938 626,300,000$ Total 74 5,024 623 1,899,198 2,505,470 515,695 5,638,327 3,562 804,900,000$

Historic New Construction Summary


• $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 billion

New Construction Summary Other Notables


– 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 stalls

Multifamily Highlights



• Vacancy declined as construction slowed• Permits have not been issued for all

proposed construction

Multifamily Demand


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 pressure

Land Trends


• Multifamily sites– Selling between $8,000 and $30,000 per unit with

the average about $10,000 to $15,000 per unit– Location and density driving price

• Commercial sites – Selling between $5 and $30 per foot– Size and exposure driving price

• Industrial land sales are minimal

Improved Commercial Trends


• 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 NNN


Questions?


Thank you

Contact:Dominic Landretti, MAILandretti & Company, LLC1818 Parmenter Street, Suite 202Middleton, Wisconsin 53562(608) 836-3406 [email protected]

MADISON MARKET 2013 LANDRETTI & COMPANY, LLC DOMINIC LANDRETTI, MAI December 2013.

Documents

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new construction slide

notables madison market

title madison market

constellation madison

edgewater madison market

proposed construction