Embedded workshop 12 follow the money infuse 2013

Follow the Money
The Key to Developing Effective Policy
David Bell – Colliers International Consulting
Justin Barer – GP Rollo & Associates
David Fitzpatrick - DIALOG

1. Introduction 1:00 PM
2. Market Analysis Overview 1:15 PM
Coffee Break! 1:55 PM
3. Financial Analysis Overview 2:05 PM
5. Market and Financial Analysis in Action 2:45 PM
6. Case Study Exercise (with coffee break) 3:05 PM
Workshop Overview

Introduction1
1.1 Good Intentions, Poor Outcomes
− Planning policies do not always unfold as envisioned.

1.1 Good Intentions, Poor Outcomes
Introduction1

1.1 Good Intension, Poor Outcomes
Introduction1

1.2 Similar Goals, Different Language
Introduction1
Insert Word Bubble from David Bell
Multidisciplinary TOD language is as
complex as the development type.

1.2 Similar Goals, Different Language – Multi-Disciplinary TOD Language
Introduction1
Insert Word Bubble from David Bell
Real Estate Developers Policy Planners

Market Analysis Overview2
How Can An Understanding of Market Analysis Inform Better Planning Policies
and Yield Better Development Results?
11

2.1 What is Market Analysis?
2.2 Why Do Market Analysis?
2.3 Who Uses Market Analysis?
2.4 How can Market Analysis Inform the Development Process?
2.5 How can Market Analysis Inform the Planning Process?
2.6 Key Drivers of Effective Market Analysis
2.7 Market Analysis in Practice – Canadian Examples & Takeaway Lessons
12

2.1 What is Market Analysis? (Real Estate / Land Use)
− “Market” has many meanings:
• Marketing: Sellers = Client, Buyers = Market
• Business: Various ways of grouping customers (i.e.Geographic, Demographic,
Product type)
• Economics: Supply and Demand, Buyers & Sellers
− Our Focus: Planning – Analysis of Markets for Land Use & related
Product Type (Office, Industrial, Residential, Retail)
13

− Market Intelligence, not just Sharing of Collected Data!
14

− Market Analysis should be an Ongoing Process, Not a One-Time
Snapshot!: Market is a moving target, constantly evolving and shifting. Market
analysis can provide public and private sector decision makers with vital
information at all stages of the planning and development process.
?!
15
Stable!
Growth!

2.2 Why do Market Analysis?
− Objectives of Market Analysis:
• Preliminary project planning – e.g. a developer’s go/no go decision!
• Input for public sector planning and economic development initiatives.
• Build community support for private development proposals.
• Funding: equity investors, debt financing, or government grants
• Fine-tune proposed land use mix and product type
• Market Analysis Outputs = Financial Analysis Assumptions
− Our Focus: Planning Policy– Markets for Major Land Uses & Related
Product Types
16

2.2 Why do Market Analysis? (Real Estate / Land Use)
− Need to assess depth of market (demand) for each major land use under
consideration
− Can not discuss optimal land use mix without understanding support for each.
− A reversal of Ursus Wehrli’s approach to “Tidying Up Art” (TEDTalk)
17

Unlike (BC) voter participation rates, market
reviews can also be inspiring & invigorating.
Cue Urban Land Institute’s latest 2013 Survey
of Views on Housing, Transportation, and
Community:
− Generation Y (1979 to 1995) - 30% of survey
total – 80 million in U.S. population
− Generation X (1966 to 1978) – 23% of survey,
population of 50 million
− Baby Boomers (1947 to 1965) – 31% of survey,
75 million US population
− War Babies (1932 to 1946) – 12% of survey
− Silent Generation (1931 or earlier) – 3% of
survey, numbering 35 million with War Babies
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Fun Highlights of ULI’s America in 2013 Survey:
− Gen Y: expected to have the most profound
impact on land use.
• 59% prefer diversity in housing choices; 62%
prefer developments that mix shopping, dining
and office space; 76% place high value on
community walkability
− Baby Boomers trending toward a clear break
from the past:
• 72% would choose a shorter commute and
smaller home over a longer commute/larger
home; 49% want to live near developments
offering shopping/dining/offices
− Generation X most likely to favour single-family
neighbourhoods:
• 92% commute by car; only 45% want public
transportation options, 54% willing to forego
larger home for shorter commute
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Encouraging Facts – Shifts in Household Travel to Work Mode Share
− Metro Vancouver - 2001 Census: 72% of population chose “Car as driver” as
primary mode of travel to work. 2013 estimate: 68%.
− Over the same period, “Public transit” choice: 11%  16%.
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Canada Line Growth
• Sep. 2009: 2.33 million
(28% of system-wide
volume)
• Dec. 2009: 2.87 million
(33% of system-wide)
• 2010 Olympics spike to
5.46 million/38%
(32% of system)
(34% of system)

− Tracking Progress Against established local & regional Benchmarks/Goals
− Eg. Metro Vancouver’s Regional Growth Strategy
• Population density targets by defined growth node
• Employment density targets
• Related land use/floor area targets
• Measuring gaps (actual vs target timing, and growth)
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METRO VANCOUVER'S REGIONAL GROWTH STRATEGY
Dwelling Unit Growth Targets
Area / Hierarchy 2006 2041 2006-41 AAGR (#)
Metropolitan Core 88,000 119,000 31,000 886
Surrey Metro Centre 8,300 43,000 34,700 991
Regional City Centres 71,000 162,000 91,000 2,600
Municipal Town Centres 49,000 123,000 74,000 2,114
Urban Centres Total 216,300 447,000 230,700 6,591
Frequent Transit Development Areas 217,000 378,000 161,000 4,600
General Urban Area 382,000 561,000 179,000 5,114
Rural, Agricultural, Conservation., Rec. 33,000 36,000 3,000 86
Metro Vancouver Total (nearest 1,000) 848,000 1,422,000 574,000 16,400
Source: Metro Vancouver 2040 Shaping Our Future. Regional Growth Strategy Bylaw No. 1136, 2010
Colliers AAGR (Average Annual Growth Rate) Increase calculations.
METRO VANCOUVER'S REGIONAL GROWTH STRATEGY
Employment Growth Targets
Area / Hierarchy 2006 2041 2006-41 AAGR (#)
Metropolitan Core 256,000 313,000 57,000 1,629
Surrey Metro Centre 18,000 49,000 31,000 886
Regional City Centres 124,000 237,000 113,000 3,229
Municipal Town Centres 69,000 163,000 94,000 2,686
Urban Centres Total 467,000 762,000 295,000 8,429
Frequent Transit Development Areas 254,000 412,000 158,000 4,514
All Other Areas 437,000 579,000 142,000 4,057
Metro Vancouver Total (nearest 1,000) 1,158,000 1,753,000 595,000 17,000
Source: Metro Vancouver 2040 Shaping Our Future. Regional Growth Strategy Bylaw No. 1136, 2010
Colliers AAGR (Average Annual Growth Rate) Increase calculations.

− The core user groups of real estate market analysis are:
1. Real Estate Developers
2. Government Officials (including municipal/regional planners)
3. Investors and Lenders
For CIP InFuse 2013 we are especially interested in the goals and interactions
of planners and developers. Why?
As David mentioned, there is immense, relatively untapped potential to
improve the quality of conversation between planners and developers.
Without healthy discussion of common goals, high likelihood of:
• Undue time delays
• Roadblocks/setbacks
• Compromised vision/results
22

David already introduced the language used by Real Estate Developers and Policy
Planners in describing Transit-Oriented Development opportunities:
Real Estate Developers Policy Planners
23

TOD language of:
Architects & Urban Designers Engineers
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TOD language/measures and goals of Transportation Authorities:
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2.4 How Can Market Analysis Inform the Development Process?
− Critical step in predevelopment process; helps the developer:
• Determine suitability for development
• Nature and depth of demand by land use
• Existing & future potential competitive nodes + potential impacts
(e.g. retail impact analysis)
• Initial development concepts
• Market positioning (product pricing, sizing)
• Optimal project phasing – # of units or floor area per year
• Inputs for proforma cash flow analysis
26

2.5 How Can Market Analysis Inform the Planning Process?
− Municipal/regional housing demand and implications for growth
− Research for large scale redevelopment plans
− What is market supportable?
− Review rezoning applications
− Quantify demand for new TOD when new lines/stations are being planned
− Evaluate fiscal impacts to assist in the consideration of proposed major
projects or land use planning decisions
− Impacts of proposed major retail facilities
− Linking planning efforts to economic development objectives
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Planning
Policy
Economic
Development

2.5 How Can Market Analysis Inform the Planning Process?
− Planning of Public space has a market story.
− Provision of quality public realm  positive impact on rents, prices, demand
The most basic rationale for public space is an economic
one…According to this new paradigm for economic development,
value is attributed to quality of life and place as much or more
than land, labour and capital costs…
Cities and regions that compete with each other primarily on cost
are engaged in a losing game, since “beggar thy neighbour”
policies inevitably lead to a race to the bottom and
impoverishment of the very public realm and public services that
generate wealth.
- Ken Greenberg, “Walking Home”
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2.6 Key Drivers of Effective Land Use Market Analysis
We will look briefly at the key factors and issues needed for consideration of each
of the following major land use markets.
Residential Office/Industrial Retail
− Special Mixed-Use Case  Transit-Oriented Development (TOD)
− Case Study “Take-Aways”
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KEYS TO RESIDENTIAL MARKET ANALYSIS
− Demographic shifts and implications for housing demand by product type
− Employment opportunities & shifting travel preferences
− Competitive market areas widely spread across a given region
− Planning area/site specific level, need to understand:
• Historical market activity by product type
• Competitive areas/subdivisions/projects on prospective buyers’
“radar””
• Annual demand & servicing implications
• Fiscal implications of residential growth
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FISCAL IMPACT BY LAND USE TYPE
Land Use Municipality School District
Office parks + +
Industrial + +
High-rise/studio-1BR apts. + +
Garden condos (1-2 BR) + +
Open space + +
Retail facilities - +
Townhomes (2-3BR) - +
Expensive Single Family - +
Townhomes (2-3BR) - -
Inexpensive Single Family - -
Garden condos (3-4 BR) - -
Mobile homes - -Fiscally
Draining
Fiscally Positive

KEYS TO OFFICE/INDUSTRIAL (i.e. EMPLOYMENT) MARKET ANALYSIS
− Market Area Definition more focused, less subjective than for Residential
− Geographic extent of market area depends on:
• Location of existing/emerging business clusters
• Access to regional transportation network
• Commuting distances from residential concentrations
• Proximity to supporting uses (i.e. educational institutions/training
facilities
• Jurisdictional boundaries
• Quality/appeal of commercial/recreational amenities
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KEYS TO OFFICE/INDUSTRIAL (i.e. EMPLOYMENT) MARKET ANALYSIS (Continued)
− Historical market supply and demand trends (e.g. market cycles mean
straight-line projections usually unreliable)
− Competitive cluster review (quality, user types, remaining capacity)
− Proposed site/area vs. competitive clusters – over time
− Demand a function of growth by industry sector
− Different sectors require more office floor area/land than others
− Per sq. ft. employee ratios decreasing over time
− Industrial demand more driven by corporate level changes in logistics and
industry-wide demand (regional, national, international)
− Surveys of major employers in region offer best possible information on
expansion/contraction and associated space needs but $$$
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KEYS TO RETAIL MARKET ANALYSIS
− Retail follows rooftops. (Residential #1 driver, with additional support from
employment uses, visitors, tourism)
− Accurate trade area delineation – What is the geographic area of influence,
from within which the majority of support (spending) will be drawn?
− Retail floor area needs for a given planning site/plan area a function of:
• Trade area population growth
• Annual spending by retail sector
• Trade area employment growth – mainly lunch/dinner/service impact
• Industry-specific sales productivity rates ($ per sq. ft. per year)
• Market + Physical Context is key – existing travel and shopping
patterns, ease of site access from residential concentrations
• Site Users not necessarily shoppers! (e.g. TOD – ridership does not
equal patronage, modest contribution)
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35
There’s gold in the linking of modes
An alchemical brew for mixed nodes
Give people a choice
And they will rejoice
As it cleans up the build-up on roads
2.6 Key Drivers of Effective Market Analysis
Transit Oriented Development offers a
particularly potent mix of challenges
− Challenges of Mixed-Use + Functional Transit
Integration
− Growing body of knowledge and experience
in terms of:
• Time to implement
• Land use mix – land uses relating to
rapid transit stations?
• Parking needs – what is needed?
• Degree of optimal integration of
commercial uses

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2.7 Market Analysis in Practice (TOD example)
The Plaza at New Westminster Station – Expo/Millenium Line (Metro
Vancouver)
− Transit-Oriented Development in New Westminster, BC:

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The Plaza at New Westminster Station

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2.7 Market Analysis in Practice (TOD best illustrated by example)
− Major Project Takeaways (Architect/Developer perspective):
• Is fully integrated TOD – worth the time and effort? Perhaps Transit-
Adjacent/Related Development offer better cost-benefit ratio?
• Shared parking strategies to reduce parking need
• TODs still require parking as not all visitors will use transit!
• Leverage office vs. residential vs. retail patterns of use
• Parking maximums, not minimums – in mixed-use, urban, transit-
friendly locations, more appropriate
• E.g. City of Vancouver’s Transportation 2040’s policies on parking –
eliminate parking mins., explore district parking strategies
• Suggested reading: “The High Cost of Free Parking”

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2.7 Market Analysis in Practice (TOD best illustrated by example)
− Major Project Takeaways (Architect/Developer perspective):
• Be flexible about intent vs. letter of the law.
• Less rigidity and more focus on people’s needs – POD
• Review antiquated bylaws
• Impact of time: market needs are always evolving, developer costs.
• Iterative aspect to design on longer term projects  leasing
opportunities must be measured against vision  impact physical design

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2.7 Market Analysis in Practice
Anderson Station TOD – (City of Calgary)
− Existing station on Calgary’s South LRT line - subject of a TOD planning initiative

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Downtown Calgary
Anderson
Station

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− In evaluating retail potential, need to understand adjacencies + market
support implications

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− Major Project Takeaways:
• Supply context: retail opportunity based on gaps in existing supply
• Primary drivers of need for additional on-site retail-commercial will be future
on-site residents and office workers
• Market demand insufficient to support a commercialized double-loaded
“high street” streetscape, but sufficient for a small node (50-100K sf)
with future expansion potential
• Must keep in mind future retail anchor need (i.e. supermarket site needs)

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New-Format Retail Design Feasibility Assessment
− Market Drivers: 10M + sf of retail projects in planning/development pipeline
− City’s Larger Planning Objective: Encourage better (more sustainable and
aesthetically pleasing) retail redevelopment forms throughout the city.
− Project Objective: Investigate feasibility of incorporating a range of
desirable urban design characteristics into all suburban retail developments:
• Higher ratio of structured vs. surface parking to enhance urban form
• Double-loaded Main Street orientation with street-fronting retail uses
• Urban street grid to facilitate future redevelopment potential
• Multi-level buildings with complementary uses above at-grade retail
Tools to be used:
1. Market Opportunity Analysis
2. Financial (Developer Proforma) Analysis

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New-Format Retail Design Feasibility Assessment (City of Calgary)
− Major Project Take-Aways:
• Anchor Go/No-Go Decision – without anchor(s), no project!
• Phasing Essential - match new supply to growing market demand
• Structured Parking Kills the Proforma!
• Planning for future redevelopment/intensification is a worthy goal -
supported by integration of a grid of streets
• Second level commercial space must have market support - most
suitable for professional service/office uses
Best Approach to Major/Regional-Serving Retail in Suburbs:
Hybrid Shopping Centre Model

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New-Format Retail Design Feasibility Assessment (City of Calgary)
− The Shops at Don Mills (formerly Don Mills Shopping Centre)
As it was in 1983 2009

3.1 What is Real Estate Economic Analysis?
A means of assessing financial characteristics of development or investment
• DEVELOPMENT:
• Buy, build, sell
• Residential subdivision, multi-family, condo project, some mixed-use (strata
commercial + residential), some pure commercial.
• INVESTMENT:
• Buy, build, hold
• Rental apartments, most commercial buildings, retail developments, multi-tenant
industrial buildings, marinas…
• Land Value (“residual land value analysis”)
Financial Analysis Overview3

3.1 What is Real Estate Economic Analysis?

3.2 What does this have to do with Planning?
• Developing land use policy that motivates private sector to create quality communities
• Engaging with developers on even playing field
• What motivates them? Marketability and profitability.
• Understanding highest and best use, weighing against other considerations

EXAMPLE #1 – Type, Density, Location of Land Uses

EXAMPLE #1 – Type, Density, Location of Land Uses
Given likely revenues, costs, financing and profit
requirements, are these uses & densities feasible?

EXAMPLE #2 – Establishing Density Bonusing & Amenity Contribution Rates: How
Much can Developers Afford?
• Change in use or density can affect financial performance of a development.
Sample Density Bonus Calculation for Low-Rise Apartment
Scenario 1 Scenario 2
Development @ Base Density Development with bonus density
Site Size 43,560 sq.ft. 43,560 sq.ft.
FSR 1.3 1.3+0.1 bonus = 1.4
Gross Floorspace 56,628 60,984
Units (1,000 sq.ft. net) 48 52
Sales Revenue* $16,800,000 $18,200,000
Total Development Costs** $12,000,000 $13,000,000
Amenity Contribution $0 $250,000
Land Cost $3,000,000 $3,000,000
Developer Profit $1,800,000 $1,950,000
*Assume $350,000 per unit
**including marketing, DCCs, all hard and soft costs, interim financing, excluding land cost, total $250,000/unit

EXAMPLE #2 – Establishing Density Bonusing & Amenity Contribution Rates: How
Much can Developers Afford?
• Change in use or density can affect financial performance of a development.
 Pinpoint incremental value being created
 Not left to guess what developer can afford.

EXAMPLE #3 – What is Impact of Municipality Charges/Process on Development
Viability and End-User Affordability?
How are unit prices affected by changes in:
 Planning and approvals times
 Taxes during construction
 Permit fees
 DCCs
 Parking Requirements

A 50% reduction in… Results in…
Planning/approvals times 1% saving per townhouse &
apartment unit
Property taxes Negligible savings
Permits/Fees 0.3%+ saving per unit
DCCs 1% savings per unit
A 25% reduction in… Results in…
Parking requirements 0.6% savings for townhouse
w/surface parking
4.9% per unit savings for
apartment with UG parking

• Taken together, savings can be significant.
• We can use tools of financial analysis to understand how our fees impact
development viability and income requirements.
o Also understand impacts on affordability from:
 Amenity contributions
 Secondary suite rental income
 Increased density
 Green building codes
 LEED certification
 Unified Building Code

Other Examples –
• Distributing fees associated with new neighbourhood
development (e.g. green space levy)
• Municipal land disposition

Other Examples –
Cost of Greenspace Levy by Dwelling Type per Unit
5 Different Methodologies Compared
Per Acre
Buildable Square
Feet
Per Unit
Population Based
(DCC method)
Manual Option
Single Family 1/4 acre lot $31,309 $22,848 $10,538 $14,641 $20,000
Single Family 375 sq. metre lot $12,523 $16,056 $10,538 $15,008 $20,000
Low Density Cluster Homes $15,654 $14,203 $10,538 $12,235 $16,000
Cluster Homes $11,385 $11,115 $10,538 $12,235 $16,000
Townhomes Low Density $9,277 $11,115 $10,538 $10,196 $9,900
Townhomes Medium Density $5,566 $9,263 $10,538 $10,196 $8,250
Apartment Low Density $3,296 $6,175 $10,538 $8,564 $7,500
Mixed-Use (Apartment, Commercial) $3,578 $6,175 $10,538 $8,564 $7,500
Source: GPRA

Other Examples –
Will a developer do this?
NW Corner 100 St. & 100 Ave, Fort St. John BC

3.3 Commonly Used Terms
• Hurdle Rate – minimum profit or yield that is needed to proceed with
development or property acquisition
• Present value – amount in today’s $$$
• Future Value – Total amount in the future
• Discount Rate – like a reverse interest rate
• Net Present Value (NPV) – PV revenues less PV costs
• Internal Rate of Return – rate of return at which NPV is zero. It is rate of
interest that makes sum of all cash flows zero. Useful to compare one
investment to another.
• Hard Costs – materials, excavation, construction
• Soft Costs – architects, lawyers, engineers, municipal fees

3.4 Present Value Example
REVENUES RECEIVED
Year 0 Year 1 Year 2 Year 3
$0 $100 $200 $300
Convert to PV @ 8% Discount Rate
$100/1.08^1 $200/1.08^2 $300/1.08^3
Discounted Revenues
93$ 171$ 238$
 We can sum discounted revenues to provide present value
$93
$171
$238
$502
$502 is the Present Value of $100 received in year 1
$200 received in year 2 and $300 received in year 3

3.5 Tools of Real Estate Financial Analysis
Analysis Tools:
• Back of the Envelope or “Quick” Analysis
• Static Pro Forma Analysis
• Dynamic Analysis (discounted and non-discounted cash flow)

Back of Envelope for Townhouse Development
1.0 Assumptions
Site Area 43,560 sq.ft.
Units 18 per acre
Avg. Unit Size 1,450 sq.ft.
Land Cost $50,000 per unit
Construction Cost $175,000 per unit
Soft Cost 25% of land and hard costs
Unit sales prices $230 per sq.ft.
2.1 Project Costs
Land Cost $900,000
Construction Cost per unit $175,000
Total land & construction cost $3,150,000
Soft Cost $1,012,500
Total Project Cost $4,162,500
2.2 Sales Revenue
Price/sq.ft. $230
Avg. Unit Size 1,450
Price (per unit / total) $333,500 / $6,003,000
2.3 Profit
Profit $ (revenue less cost) $1,840,500
Profit % (of total costs) 44%

Analysis Tools:
• Back of the Envelope or “Quick” Analysis
• Static Pro Forma Analysis
• Dynamic Analysis (discounted & non-discounted cash flow)

When to Use Which Tools?
Static Analysis
 Short-term build and sell developments
 Varying levels of complexity (back of envelope  pro forma)
 Measures viability by PROFIT

Static Analysis
 Profit on total project cost (land + construction + soft costs)
 $ profit = Net sale revenue less project cost
 %profit = $ profit / total project cost

Static Analysis
 Profit on Cost
Project Cost
Items
Amount
Land $100
Building $900
Total Cost $1,000
Net Income:
$100
Return to Cost:
Net Income / Cost
100/1,000
10%

Static Analysis
 Profit on equity investment (project cost – financing)
 $ profit = net sales revenue less total project cost
 % profit = $ profit / equity investment

Static Analysis
 Profit on Equity
Financing Amount
Equity $250
Mortgage $750
Total Cost $1,000
Mortgage Payment (25 yrs, 7%)
$63
Return to Equity
Cash flow / equity
$37 / $250
14.8%
Cash Flow Items Amount
Net Op. Income
(NOI)
$100
Less Mortgage $63
Cash Flow $37

Static Analysis
 Profit on Cost vs. Profit on Equity
10% 14.8%

 Measures viability by calculating NPV and IRR
 Discounted and undiscounted cash flow analyses
 Either can be done with constant dollars or current dollars
 Constant $ - no accounting for inflation
 Current $ - inflates revenues and costs over time
Dynamic Analysis
 Long-term build and hold (phased developments) and build
and sell developments
Undiscounted cash flows can produce results
that overstate project viability

Dynamic Analysis
 Income Producing Property (e.g. office)

3.6 Take-Away Points
• Developers need to make a profit, but municipality can and should share in value
it creates through discretionary powers. Need to do financial analysis to know
what “fair share” is!
• Every planning decision has economic consequences and implications
• Densities & uses
• Ground floor commercial
• Second floor office space
• Underground parking requirements & parking ratios
• How fees are levied
• Economic analysis can help us develop well targeted and implementable policies,
and engage with development community more effectively
• Allows us to make highly informed trade-off choices

4.1 Project Example: Tecumseh Hamlet Secondary Plan
− How does market and financial analysis get applied by planners?
− How do these issues connect with land use planning and design?
Market and Financial Analysis in Action4
Detroit
Windsor
Tecumseh

1. Complete Community
2. Pedestrian Oriented Commercial Node
3. A Greater Mix of Housing Typologies
4. Positive Impact on Tecumseh and Windsor Region
Objectives:
Market Reality: Windsor’s economy is weak
Implication: a “buyers” market
a large development will have
external impacts
4.2 Balancing Objectives with Market, Financial, and Political Realities

Objectives:
Financial Reality: Low rent and land values
Implication: Expensive designs will fail

Objectives:
Political Reality: Planning control is
geographically limited
Implication: Recognize that developers
have alternatives

4.3 Planning in Progress

4.4 Market Analysis
− How much commercial space will be supported
by new residential growth?
− At what size would the development begin to
have negative impacts on other areas of
Tecumseh?
19,500 m2
Supportable
Retail Space
÷ by Sales
Performance
$69 Million
New Retail
Spending
6,875
Residents
x
=
$10,000
Retail Spending
per Resident
=

4.4 Market Analysis – Tenant Identification
grocery stores
3,500 m2
grocery
store

4.4 Market Analysis – Tenant Identification
pharmacies
1,800 m2
pharmacy
3,500 m2
grocery
store

4.5 Site Programming
3,500 m2
grocery
store
1,800 m2
pharmacy
5,000 m2
community centre
AnchorTenants

4.5 Site Programming
−Anchors matter. Any retail development
over 3,000 m2 needs to be anchored.
−Anchors are beneficial in that they draw
visitors to a destination.
−Anchors pay little rent and often exert a
lot of influence over a development.
−The market and financial viability of a
project is dependent on having the right
type of anchors, and the right amount of
anchors.

Anchor Ratio: 60% to 70%

Anchor Ratio: 30% to 50%

Anchor Ratio: Variable

Anchor
50% grocery
store pharmacy
community
centre
Inline
50%
bankbank
dentist doctor produce
barrestaurantrestaurant
cafe clothingcafe shoes
home hardware restaurant

4.6 Layout Planning

Case Study Exercise5
1km
University
ofRegina

CAC – What Happened?
• University determined that revenues from future LOC would allow Centre to
support bank loan: $12.2 million
• Fundraising + Capital Contributions + Loan = $34.2 million
• Total Cost w/interest: $65-70 million.
• Funding Gap: between $30-40 million

• Try to fill funding gap with residential
• Determined that could fit between 124,000 and 200,000 sq.ft. of residential
• Revenue potential of residential depends on strategy:
1. University Development Corporation
2. Hire Project Manager
3. “sell” land on prepaid lease to developer
Residential Revenue Potential
Develops Hires Project Prepaid Land
Amount of Residential On Own Manager Lease $'s Only
Low (124,000 sq.ft.) 19,057,372 15,760,106 8,388,600
Medium (162,000 sq.ft.) 25,339,108 20,852,012 11,153,670
High (200,000 sq.ft.) 31,934,931 26,198,513 14,056,994

• Recommendation: Development Corporation
• Even at highest density, still a funding gap.
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
Develop on Own Hire P. Manager Prepaid Land Lease
Low (124,000 sf)
Medium (162,000 sf)
High (200,000 sf)

CAC – Overall Site Plan

CAC – Overall Site Rendering

CAC – Proposed Link Building

Contact Information
Justin Barer
j.barer@rolloassociates.com
@JMB81
David Bell
David.Bell@colliers.com
@UrbBlurb
David Fitzpatrick
david.fitzpatrick@gmail.com
@reurbanist
Thank you!6

Embedded workshop 12 follow the money infuse 2013

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