5. OPPORTUNITY TO ATTRACT A WIDER VARIETY OF AUDIENCES FOR
RESIDENTIAL DOWNTOWN WITH WALKABILITY AND AMENITIES
STRENGTHS
Large student body and small amount of on-campus
housing creates a strong market audience for apartments
and affordably priced single family homes and condos
Riverfront serves as an amenity, opportunity to draw
audience by river-oriented product
Proximity Heritage Square serve as focal points for
downtown area
Ease of access to both Dallas and Austin through I-35
Sites of cultural interest and entertainment, including
proximity to BU sporting event facilities, serve as areas of
interest for downtown residents.
Heritage Quarters- new student apartments in downtown Proximity to downtown jobs (in particular government,
insurance and retail employers)
CHALLENGES
Perception of Downtown's quality of life deters many
potential buyers
Not an established residential location (lack of variety of
product)
Lack of appetite for dense residential development
Lack of local serving retail
Challenges associated with retrofitting older buildings or
building new projects downtown
Direct competition with lower-cost suburban homes
Austin Avenue Flats- newly constructed condo building with many
units leasing
4 02-12283.00
6. RESIDENTIAL MARKET IS DRIVEN BY BAYLOR STUDENTS,
WITH MAJORITY CHOOSING RENTAL PRODUCT
Apartment market driven by proximity
to Baylor University and Central
Newly constructed student Business District
apartments, Heritage Square, is Emerging rental market
commanding the highest rents downtown includes new New urban product such as Austin
per unit at $1.50/sf. This construction condominium
quality construction and
Avenue Flats and Praetorian Lofts
apartment is performing well in
lease-up, mostly due to its high rehabilitation of existing are renting for more than $1.00/sf.
level of amenities. product into loft style Highest premium for rental above
apartments. retail.
Dorm style apartments for Baylor
Older apartments Students are highly amentized and
target retail and carry hefty rents of $1.30-$1.50/sf.
manufacturing and are rented by room. Other new
employees. Rents
communities with the same quality of
average $0.80/sf.
amenities but do not rent by room
have rents around $1.00/sf.
Many Baylor students choose to live
in older communities, east of campus
that rent for $0.60 to $0.90/sf.
Baylor University area has student-
oriented apartments both in student
Individually owned-professionally
dorm and traditional apartment style. managed condominiums and
townhomes compete with the older
traditional apartments.
Newly constructed Residences at
Central Texas Marketplace
appeal to hospital, education and
skilled-manufacturing employees.
Rents average $0.90 /sf.
Greater Downtown Waco
SOURCE: RCLCO
Apartment Communities
5 02-12283.00
7. MOST NEWER COMMUNITIES RENT FOR MORE THAN $1.00 PER
FOOT, STUDENT- DORM STYLE APARTMENTS ARE CLOSER TO
$1.50
Wgt. %
Relevant Price Under-
Apartment Per Total grad
Communities Occ SF Units student
1 Behrens Lofts 93% $1.02 57 25%
2 Austin Avenue
92% $1.68 49 30%
Flats
3
Praetorian Lofts 100% $1.16 12 25%
4 LL Sams Lofts 100% $1.11 126 95%
5 75%,
7 Aspen Heights 100% $1.20 107 100%
1 4 in 2008
3 2 6
Abby Glen 92% $1.00 168 100%
6
7 Heritage
75% $1.45 368 100%
Quarters
8 The Grove 98% $1.34 192 100%
5
One bedrooms appear to be the most popular
8 floorplan downtown. Not many are available and
more young professions or grad students look for
apartments downtown
Greater Downtown Waco
SOURCE: RCLCO
6 02-12283.00
8. HOME PRICES ACROSS WACO ARE RELATIVELY AFFORDABLE: THE
DOWNTOWN AREA HAS THE AMONG THE MOST AFFORDABLE AND
IS NOT AN ESTABLISHED FOR-SALE RESIDENTIAL LOCATION
Higher end GREATER
homes are DOWNTOWN
located in more AREA
suburban
locations
around the lake
Source: Trulia, Claritas 2008
7 02-12283.00
9. THE DOWNTOWN AREA CURRENTLYLACKS NEW RESIDENTIAL
PRODUCT, EXISTING HOMES ARE VERY AFFORDABLY PRICED
Waco has virtually no new single
family homes available in Waco city
limits.
Older, more established
single family Austin Avenue Lofts and other loft
neighborhoods: Dean- buildings downtown were first
Highlands, North Waco, conceived as condo buildings but
Brook Oaks. Ranging in sales have been slow, priced from
price from $60,000- $119-495K. Units are currently for
$150,000. rent from $850 to $2,400/month.
Single family homes are priced very
Austin affordably with an average sales
Avenue Lofts price $130,000, or $45/SF.
Listing prices within the downtown
area average under $100,000.
Old Waco
High Most single-family and multi-family
homes around Baylor are investment
properties for Baylor student rentals.
Currently on-hold redevelopment of
the old Waco High site will add
Older, less established Baylor neighborhood is a roughly 70 new affordable condos to
single-family homes , mixture of single family downtown.
majority of listing pricing and multifamily homes.
from $30,000-$75,000.
SOURCE: RCLCO
Greater Downtown Waco
8 02-12283.00
11. THE DOWNTOWN AREA ENJOYS A VARIETY OF RETAIL MARKET
AUDIENCES, REPRESENTS AN OPPORTUNITY TO ATTRACT NEW
RETAIL USES
STRENGTHS
Strong downtown convention and visitor traffic
will serve downtown retail
Government and insurance jobs will fuel office-
serving retail and restaurants
Growing downtown residential population could
fuel local-serving retail
Large student body represents a strong market
audience for local-serving and boutique retail
Unique entrepreneurship program at Baylor
Shops at River Square include restaurants and local boutique retail could spur boutique store-front opportunities for
stores, targeting Baylor students and downtown employees.
students
CHALLENGES
Household incomes present challenges for
recruiting retailers with narrow locational
criteria
Majority of existing space downtown is older
space with smaller floorplates, makes
attracting larger tenants difficult
Large amount of obsolete retail space begs
redevelopment
Majority of large-scale retailers located along
Valley Mills Drive and 340 Loop
Major regional retailers are already present at large centers in the Lack of night-time population could be difficult
market, eg. Central Texas Marketplace
for grocery stores or restaurants to survive
10 02-12283.00
12. THE DOWNTOWN AREA TYPICALLY ATTRACTS SMALLER FORMAT
RETAILERS, WITH THE BIG BOX STORES LOCATING ALONG VALLEY
MILLS AND I-35
Downtown renovation is beginning in
the Heritage Square and River
The western part of the River Square is new
Square area.
study area includes office/retail development with a
mostly vacant variety of boutique shops and
New trolley system linking Baylor to
dilapidated street front restaurants. This development the downtown area will bring a
retail is very popular among Baylor greater interest to downtown retail
students and downtown
employees.
and restaurants
Valley Mills Drive
Corridor includes lower Downtown street-front retail around
density older strip retail
with regional serving Heritage Square rents from $12-
tenants. $16/SF.
Downtown residents and students
must travel to suburban centers to
Heritage Square area has been
shop
redeveloping in the last few
years, offering renovated and
Rents at large suburban centers
new construction space. range from $17-$20/SF, with
Tenants include restaurants, restaurant/outparcel space renting
bars, and coffee shops serving from $12-$16/SF.
downtown employees,
conventioneers ,and visitors
Wal-Mart Planned Town Center development
anticipates rents of roughly $20/SF
Richland Mall , built in 1980 for space. Well over current
and renovated in 1996,and is
more than 700,000 square Central Texas Marketplace is a
downtown average.
feet. Main tenants are newly constructed 700,000 square
Dillards and JCPenney and foot power center. Major national
Movie Theater. tenants include Belk, Sports
Greater Downtown Waco
Authority and Bed Bath and Beyond. Retail under 10K SF
SOURCE: RCLCO, Costar Retail over 10K SF
11 02-12283.00
13. DOWNTOWN RESIDENTS AND VISITORS MUST DRIVE OUTSIDE THE
DOWNTOWN AREA FOR MUCH OF THEIR SHOPPING NEEDS
Relevant Lease
Key Total
Retail Occ Rates
Tenants SF
Comps (NNN)
EXISTING RETAIL CENTERS
1 Ninfa’s,
River Square Crickets Bar 92,874 100% $16
and Grill,
2
HEB Center HEB 77,534 97% N/A
3 1
7
3 Heritage Square Bar, 7,85
Square Retail 2 100% $17
Olive Branch
2 OUTSIDE GREATER DOWNTOWN AREA
8 4 Tractor
Waco
Supply 160,000 89% $12
Commons
Store
4 5 Central Texas Marshalls,
700.000 93% $20
Marketplace Belk
6 Dillards, JC
Richland Mall 708,068 98% $15
6 Penny
PLANNED AND PROPOSED
7 61,000
Town Square N/A total N/A $20-$25
5 planned
8 Speight Ave. N/A 4,000 N/A $24
SOURCE: RCLCO
Greater Downtown Waco
12 02-12283.00
15. MUCH OF DOWNTOWN OFFICE SPACE IN NEED OF REHABILITATION
TO ATTRACT NEW TENANTS
STRENGTHS
Study area encompasses central business district with
notable historic buildings
Concentration of government and insurance employers
Walkability creates active daytime population, attractive
to employees
Proximity to I-35
Redevelopment downtown (including Chamber of
Commerce and Roosevelt building) could spur further
development
Regional serving airport
Redevelopment downtown, catalyzed by Heritage Square and Quality infrastructure and streetscape
Chamber Building (left)
CHALLENGES
Developable land underutilized with extensive parking
lots
Many major employers are located outside of the study
area and CBD
Lack of traditionally office using employers in the MSA
Large amount of obsolete and vacant space in need of
redevelopment
Asking rents for quality space are high compared to
suburban space
Lack of service-oriented retail for office workers
Vacant Waco Tribune Building
14 02-12283.00
16. DOWNTOWN REPRESENTS 40% OF THE OCCUPIED OFFICE SPACE
WITHIN THE MSA
Office market in downtown Waco is small
and comprised of mostly of insurance,
finance, government and emerging telecom
tenants..
Downtown office space rents from $6/ SF
for older street front space to $18/SF for
River Square
high-rise space.
The Roosevelt
Office leasing above $18/SF is sparse,
many companies will settle for lower quality
Office space intermixed with retail
centers along N. Valley Mills
space under $18/sf.
Road and Bosque Boulevard. The newly renovated Roosevelt is currently
100% occupied and had rents of $18/SF but
offered concessions.
Downtown office space, mostly The Roosevelt shows a pent-up up demand
built from 1910-1950, is in need of for newer office space but it did not produce
renovation. Many office tenants net- new tenants. Mostly relocations from
are in need of better quality space other lower quality space downtown.
Cluster of office space along N. Valley Mills
and Bosque Blvd. are achieving roughly
Legend Crossing $15/SF.
Currently proposed office at Legends
Crossing is looking to collect the highest
rents in the city of $22.50 to $24.50/SF.
Greater Downtown Waco
Downtown Office
SOURCE: RCLCO, Costar Suburban Office
15 02-12283.00
17. WACO EXISTING OFFICE TENANTS ARE COST SENSITIVE, MOST WILL
NOT RENT SPACE FOR MORE THAN $18/SF REGARDLESS OF THE
QUALITY Avg.
Relevant Lease
Office Total Rates
Comps Key Tenants SF Occ. (NNN)
EXISTING OFFICE
1 Seg-it, LAN Inc.,
River Nelson Law Firm,
20,500 61% $16
Square New England
Financial
2 National Lone Star Legal
Floyd's Aid, Central TX 57,332 91% $18
Building Social Services
3 Naman, Howell,
Smith & Lee, July
The Business
3 1 110,510 100% $16
Roosevelt Services, Pakis,
2 6
Giotes, Page &
5 Burleson
4
4 Bank of
Bank of America 15,727 75% $12
America
5 Kress
N/A 40,374 $17
Building
6 Wells
Wells Fargo 218,168 100% N/A
Fargo
Greater Downtown Waco
SOURCE: RCLCO
16 02-12283.00
19. CONVENTION AND VISITOR TRAFFIC HAS FUELED WACO’S
HOTEL MARKET, OPPORTUNITY TO CAPTURE MORE OF THIS
DEMAND WITH RENOVATED CONVENTION CENTER
STRENGTHS
Close proximity to major entertainment venues
Immediate access to convention center
Adjacent to Central Business District
Strong regional access
Strong demonstrated performance
Proximity to Baylor University
Recently renovated Hilton at the Convention Center
CHALLENGES
Seasonality of tourists, convention, and student
activity
Large amount of delapidated underperforming
product
Limited tourist-serving retail and entertainment
options
Lack of major airport
Hotel Waco
18 02-12283.00
20. HOTELS WITH ADR’S ABOVE $75 ARE THE STRONGEST
SEGMENT OF THE MARKET WITH 63% OCCUPANCY IN 2008
Average hotel quality is low in Waco,
yet consistent demand will continue
to grow with the renovation of the
convention center and visitor traffic
due to Baylor athletics
Downtown hotels Occupancy among the 29 hotels
targeting business and Waco area hotels (including
convention travelers
downtown hotels) through 1Q 2009 is
with proximity to
convention center and at 51% and is down 6% from 2008
bulk of financial and Revenue per room, however,
government offices
increased roughly 12% from 1Q 2008
to 1Q 2009.
The Waco hotels are geared towards
Hotels along I-35 target mid-priced business travelers,
highway travelers and conventioneers, weekend sport
visitors to Baylor travelers.
athletics
Many hotels downtown are also
oriented toward I-35 travelers.
The Hilton hotel, recently renovated,
carries the bulk of the business and
convention demand. It boasts an
occupancy of 70%
SOURCE: Waco Convention & Visitors Bureau, TravelTex Greater Downtown Waco Hotel Location
19 02-12283.00
21. FEW UPSCALE HOTELS IN WACO, MANY ROOMS
UNDER $90 PER NIGHT
Typical
# of Room
Relevant Room Rate
Hotel Comps s Range1
1 Hilton 196 $119
Courtyard
2 153 $109
by Marriott
Residence
3 78 $100
Inn
1 4 Hotel Waco 114 $80
2 4
3
5 Clarion 148 $89
Best
6 84 $80
5 Western
6 7 La Quinta 102 $67
7
Econo
8 53 $64
Lodge
8
SOURCE: RCLCO 1 Based on weekday rack rate, August 2009
20 02-12283.00
22. FUTURE OPPORTUNITIES ASSESSMENT
Waco Existing Conditions and Market Assessment
Future Market Opportunities
• Opportunity by Land Use
• Target Markets
• Long-Term Demand Figures
21 02-12283.00
24. MODERATE DEMAND EXISTS WITHIN DOWNTOWN WACO FOR
NEW LARGE-SCALE OFFICE SPACE
Economy is relatively healthy in Waco but the fastest growing
employment sectors, namely healthcare and education, are
not users of conventional office space.
Other large Waco employment sectors including manufacturing
and trade, transportations, and utilities typically locate in
warehouse and industrial space outside of the urban core
To date, the corporate office market has had a price ceiling of
approximately $18/sf, limiting the opportunity for new
construction office projects
The market in Waco has largely been driven by government,
insurance, and finance tenants.
The Roosevelt, at approximately 110,00 SF
Large companies seeking build-to-suit opportunities (larger is a good example of a recently renovated
floorplates, newer buildings, air & light quality, updated office building in Waco
features) may be attracted to new construction or rehab
opportunities in Downtown Waco
23 02-12283.00
25. OVER THE NEXT FIVE YEARS DOWNTOWN IS LIKELY
TO ADD ABOUT 75,000 SF OF OFFICE SPACE
Statistical demand analysis shows that
downtown can support approximately 76,000 SF
of additional office space by 2015 and 350,000
by 2025. The demand is likely to be split
between rehab projects and build-to-suit
opportunities.
Additional office demand could be driven by the
introduction of one or more large corporate
users into the downtown market or through
economic development efforts to recruit new
tenants from an emerging office using sector
such as information and technology.
Example of rehabbed small office space (LoDo
Denver, CO.)
02-12283.00
27. THE BULK OF DOWNTOWN RESIDENTIAL DEMAND EXISTS
FOR PRODUCT OFFERED AT $250K & BELOW1
Demand for residential units primarily exists for units priced
$150,000 and below for multifamily units and $250,000 for
single-family homes.
Young professional households and some students are
typically more flexible and willing to buy into downtown
neighborhoods before all residential amenities, including retail
and green space have been put in place.
Example of Midrise condominium project
Younger households are most likely to seek out locations
directly within entertainment districts as they are more likely to
take full advantage of the entertainment benefits and more
willing to put up with the challenges (parking, noise, event
crowds)
The target market audience (below age 44) currently makes up
nearly 70% of the downtown area
Initially, the empty-nester (age 45 and up) market will be
shallow but has the potential to grow over time if the downtown
is able to become a more established residential neighborhood
and can connect successfully to existing cultural amenities. Example of a small lot single family home
1 See Exhibit III-1 for statistical demand analysis and underlying assumptions
26 02-12283.00
28. RCLCO PRIMARY HOME STATISTICAL DEMAND MODEL
ANNUAL NEW HOME DEMAND WITHIN PRIMARY MARKET AREA1
AGE AND INCOME QUALIFIED NEW HOME DEMAND 2009-2014
Primary • Income Qualified • % Buy New Attached3
Market Area X • Annual turnover rate2 X • Downtown Capture
Owners • % Remain owners
DEMAND
Primary FOR UNITS
• Income Qualified • % Buy New Attached PRICED
Market Area X • Annual turnover rate X • Downtown Capture $110,000
Renters • % Renters become owners TO
$375,000
Primary
Market Area • % Buy New Attached
New X • Income Qualified X • Downtown Capture
• % Owner Households
Households
1The 2
Primary Market Area (PMA) is defined as the Waco MSA. Turnover is defined as those households that move within a given year
3 Attached product includes condominiums or townhomes
27 02-12283.00
29. DEMAND FOR FOR-SALE PRODUCT DROPS OFF SHARPLY
ABOVE $200,000
2009-2014 Annual Statistical Demand for Units in Downtown by
Price Point
New or Rehabbed Multifamily and Small Lot Single-Family Homes
70
Single Family
Multifamly
22
37
13
13
12 6
7 4 2
Less than $112,000- $150,000- $188,000- $250,000-
$112,000 $150,000 $188,000 $250,000 $375,000
28 02-12283.00
30. AT $120K - $200K PRICE RANGE, PURCHASING A ONE-OR TWO-
BEDROOM COMPARABLE CONDOMINIUM IS 30% LESS EXPENSIVE
THAN RENTING IN WACO
Avg. Monthly Monthly Monthly Tax Total Actual Cost of
Unit Type Purchase Mortgage Property Condo Saving Housing Rent 3 Owning vs.
Price 1 Payment2 Taxes 4 Fees6 s5 Cost Renting
One Bedroom $119,000 $574 $228 $110 ($214) $699 $950 -$251 (-26%)
Two Bedroom $200,000 $1062 $422 $170 ($395) $1,259 $1,870 -$611 (-33%)
Comparing the rents at Austin Avenue Lofts, the monthly cost of owning a one bedroom
condominium is roughly $251/month less than renting at the building and a two bedroom will cost
roughly $611 less per month – or 26% and 33% less than renting, respectively. This represents
an unmet and underlying demand for for-sale condominium product downtown.
Mortgage Assumptions
Down Payment 15%
Marginal Tax Rate 28%
Interest Rate 5.50% 1 Price based on conceived pricing from Austin Avenue Lofts
2 Reflects an average payment, assuming a three-year hold period, on a 30 year mortgage
Condo Fees $0.15/sf 3 Current rents at the Property
4 Based on City of Waco tax rate of $2.56 mills per $100.
5 Calculation based on property tax plus interest expense at 28% tax rate
6 Assumption of potential condo fees on site
29 02-12283.00
32. RCLCO STATISTICAL DEMAND MODEL FOR RENTAL UNITS
ANNUAL RENTAL DEMAND WITHIN PRIMARY MARKET AREA1
AGE AND INCOME QUALIFIED NEW RENTAL DEMAND 2009-2014
• Income Qualified
Primary
• Annual turnover rate • % Rent New
Market Area X • % Remain renters
X
Renters • Downtown Capture
• % Rent apartment vs. home
DEMAND
FOR NEW
RENTAL
UNITS
Primary
Market Area • Income Qualified • % Rent New
New X • % Renter Households X • Downtown Capture
Households • % Rent apartment vs. home
1The 2
Primary Market Area (PMA) is defined as the Waco MSA. Turnover is defined as those households that move within a given year
31 02-12283.00
33. DEMAND FOR MULTIFAMILY RENTAL PRODUCT IS PRIMARILY BELOW
$875 BUT MUCH OF DEMAND IS DRIVEN BY STUDENTS WHO TEND TO
HAVE ROOMMATES
2009-2014 Annual Statistical Demand for Rental Units in Downtown
by Price Point
39
9
6
1
less than $875 $875 - $1250 $1250 - $1875 $1875 - $2500
Monthly Rent
32 02-12283.00
34. STUDENT TARGETED APARTMENTS ARE A
VIABLE OPTION DOWNTOWN
Rental product is a logical fit for Downtown
• Demonstrated demand at projects like Heritage
Quarters, offering amenities such as fitness
center, pool, lounge area and access to
downtown, have performed very well.
• The newly implemented bus route connecting
Recently constructed Heritage Quarters are student targeted
Baylor to Heritage Square, in addition to planned
apartments in Downtown Waco retail offerings and downtown events, should
enhance the appeal of downtown living for
students and young professionals.
• High quality apartments would appeal to a broad
market audience, particularly students and
downtown employees seeking flexibility and
affordability
• Rental properties are attractive to landowners or
developers seeking long-term holds on income
The Praetorian lofts have a mix of students and young producing assets.
professionals
33 02-12283.00
36. DOWNTOWN WACO HAS A VARIETY OF MARKET AUDIENCES
BUT ONLY CAPTURES 33% OF THEIR POTENTIAL
EXPENDITURES
Existing Market Audience Breakdown Downtown Area Households
Of the $510 million in potential annual 10,086 downtown households1
spending of these markets audiences the $67M total annual retail spending
Downtown Area is only capturing 36%.
Students
5% 14,500 downtown students
$18M total annual retail spending
25% 36% Area Employees
16,000 downtown employees
$45M total annual retail spending2
Downtown Conventioneers
106,000 conventioneer visitors
24%
$9M total annual retail spending3
10%
Tourists
2.9 M annual tourists3
1
Claritas
$47M total annual retail spending
2
Expenditures from ICSC "Office Worker Retail Spending Patterns"
3
Based on data form the Waco Convention and Visitors Bureau
NOTE: Excludes some retail uses including automotive and electronic/mail order shopping.
35 02-12283.00
37. RCLCO PROJECTS IMPROVED RETAIL DEMAND OVER THE NEXT
FIVE YEARS: GROWTH IN MARKET AUDIENCES+ INCREASED
MARKET CAPTURE = MORE EXPENDITURES
$24 million additional sales potential
69,000 sq. ft. additional supportable space in
Downtown Area
$100
$90 + $12M
2008 2013
$80
$70
+ $7M
$60
+ $3M
$50
$40
$30
+ $1M
$20
+ $1M
$10
$0
($ mil.) Households Students Employees Conventioneers Tourists
36 02-12283.00
38. NEIGHBORHOOD-SERVING RETAIL NEEDED TO PREVENT RETAIL
DOLLARS FROM LEAKING OUT OF THE DOWNTOWN AREA
Statistical demand1 dovetails with interview feedback which
reveals the need for more service-oriented retail to support
growing residential base, students and existing office tenants.
Currently these market audiences are driving to Central Texas
Marketplace or Valley Mills Drive for the majority of their retail
needs. Retailers at Denver’s Lower Downtown
Warehouse District
Potential neighborhood retail demand (2009-2014)2:
Level of existing Future Primary Market Audiences
retail in category Potential
Convenience Grocery/Specialty Food Low 13,000 SF Residents, Students, Employees
Apparel and Accessories Low 17,000 SF Employees, Students, Residents
Personal Care Low 13,000 SF Employees, Residents, Students
Restaurant and Bars Medium/High 18,000 SF Residents, Employees,
Tourist/Convention, Students
Other Discretionary Low 8,000 SF Employees, Residents, Students
TOTAL 69,000 SF
37 02-12283.00
40. CONTINUED SUCCESS IN ATTRACTING EVENTS TO
DOWNTOWN AREA WILL DRIVE HOTEL DEMAND
Waco room night bookings for Events, Conventions, and Sports have
increased from 411,000 in 1995 to 525,000 in 2007. This represents
an annual growth rate of 2%.1
Visitor spending on hotels and motels has increased from $38 million
in 2001 to $56 million in 2008. This represents an annual growth rate
of 7%.1
According to the Office of the Governor occupancy in all Waco hotels
was 61% in 2008, while occupancy in hotels with average daily rates
above $75 was 63%.
Currently the market for hotel rooms with average daily rates above
$75 is undersupplied, with demand outpacing supply.
1 Waco Convention and Visitors Bureau
39 02-12283.00
41. DOWNTOWN CAN SUPPORT AN ADDITIONAL HOTEL
BY 2014
The demand for the next five years is within the ‘upscale’
segment of the hotel market (hotel with average daily rates
above $75).
RCLCO estimates demand for a 214 upscale rooms by
2014.
RCLCO recommends diversifying hotel offerings in
Downtown by adding a least one non-chain hotel catering
to Baylor families and offering classic ‘college town’
architecture and amenities. Examples of other college
towns with classic hotels include Tuscaloosa, Alabama
and Auburn, Alabama.
The Auburn University Inn and
Conference Center
40 02-12283.00
43. SUMMARY OF WACO TARGET MARKETS
LAND USE TARGET MARKET
Commercial
Small-scale convenience retail tenants serving local households, downtown tourists, local
employees, and Baylor students. Over long term the opportunity could evolve into larger scale
Retail formats as the household density increases in the downtown area.
Rehab spaces will primarily appeal to small tenants such as law-firms, engineering and other small
professional service firms. Also an opportunity to pursue build-to-suit opportunities for large office
Office tenants either as a headquarters location or anchor of a multi-tenant building. These large users
could include insurance companies, business service firms, or government agencies.
Targeted to a wide range of convention-goers, Baylor visitors, business travelers, tourists, and
Hotel event visitors. The short term opportunity calls for more hotels in the upscale segment (ADR of
$75+) and a non-conventional hotel offering targeting Baylor visitors.
Residential
Targeted primarily to younger professionals earning $45-$75k seeking the urban lifestyle. Mainly 1-
For-Sale Multifamily and 2- person households seeking 1- and 2-bedroom units. Secondary target markets include
empty-nesters and students.
Targeted primarily to students seeking an alternative to on campus housing or lower quality rental
options. The secondary market includes professionals earning $30-$55k seeking the urban lifestyle
For-Rent Multifamily
and proximity to employment. This group should include a large number of government and
insurance sector employees.
Targeted to younger professionals and empty-nesters earning $60-$100k seeking the privacy of
Single-Family
single-family residence with the convenience of an urban location.
42 02-12283.00
44. SUMMARY OF FUTURE LAND USE OPPORTUNITY
BASE LINE SCENARIO
Overall Opportunity Cumulative Depth of Demand Average
Assessment1 in Downtown Area (SF) Initial Pricing/ Annual
Land Use Lease Rates Demand
Near Mid Long By By By (2009$)2 (2010 to
(0-5 yr) (5-10 yr) (10+) 2015 2025 2050 2050)
Commercial
Office X X XX 75K 350K 1.1M $16-$18 26K
Hotel XXX XX XX 100K 300K 900K Variable 21K
Retail XXX XX XX 85K 240K 800K $16-$19 19K
Residential
Multifamily For-Sale XX XX XX 150K 425K 1.2M $150-$200/sf 29 units
Multifamily For-Rent XXX XXX XXX 285K 800K 2.3M $1.10-1.40/sf 62 units
Single-Family XX XXX XXX 275K 777K 2.2M $110-$120/sf 24 units
Based on the Baseline Scenario the study area would add the following between 2010 and 2050:
5,000 housing units, 19,000 new residents, and 5,600 office using jobs.
1 X= minimal, XX = moderate, XXX = strong 2Commercial rents are triple net
43 02-12283.00
45. SUMMARY OF FUTURE LAND USE OPPORTUNITY
AGGRESSIVE SCENARIO
Overall Opportunity Cumulative Depth of Demand Average
Assessment1 in Downtown Area (SF) Annual
Land Use Demand
Near Mid Long By By By (2010 to
(0-5 yr) (5-10 yr) (10+) 2015 2025 2050 2050)
Commercial
Office X X XX 100K 420K 1.4M 32K
Hotel XXX XX XX 110K 325K 1.1M 26K
Retail XXX XX XX 150K 420K 1.4M 32K
Residential
Multifamily For-Sale XX XX XX 225K 650K 1.8M 43 units
Multifamily For-Rent XXX XXX XXX 400K 1.1M 3.3M 90 units
Single-Family XX XXX XXX 450K 1.2M 3.6M 38 units
Based on the Aggressive Scenario the study area would add the following between 2010 and 2050:
7,300 housing units, 28,000 new residents, and 7,000 office using jobs.
1 X= minimal, XX = moderate, XXX = strong 2Commercial rents are triple net
44 02-12283.00
46. ASSUMPTIONS FOR FUTURE DEMAND SCENARIOS
LAND USE ASSUMPTIONS
Commercial
The baseline scenario is based solely on the projected growth of each of the market audience
groups (residents, students, tourists, employees, etc) while the aggressive scenario is based on
Retail growth plus an additional 2% capture of expenditures.
The baseline scenario has the downtown capturing its current ‘fair-share’ of office using
employment growth which is currently at 40% of the MSA. The aggressive scenario shows the
Office downtown area with a 50% capture rate, including the ability to locate 25% of healthcare and
education jobs with the study area.
Aggressive scenario is based on 2% long term annual growth of business and leisure travel while
Hotel
the baseline scenario is based on 1% growth.
Residential
The baseline scenario assumes that 100% sales will occur above $112,000 while the aggressive
For-Sale Multifamily
scenario assumes that with incentives the market can deliver product below this price point.
The baseline scenario assumes the downtown area captures its ‘fair share’ of apartment demand at
For-Rent Multifamily
13% of the MSA, while the aggressive scenario assumes that downtown captures 20% of demand.
The baseline scenario assumes that 100% sales will occur above $188,000 while the aggressive
Single-Family
scenario assumes that with incentives the market can deliver product below this price point.
45 02-12283.00
47. Imagine Waco: Greater
Downtown Waco Plan
Building Prototype
Summaries
Based on RCLCO and FAI
Research – For review and
consideration
Draft – 9/22/09
48. Building Prototypes
Project will create general prototypes for development in the Downtown:
53. Mixed-Use Prototypes
• Mixed Use Residential (Low-
,Mid- and High Rise)
• Mixed Use Office (Low-,
Mid- and High-Rise)
• Live-Work
02-12283.00
54. Mixed Use Residential (High Rise)
Uses Residential and
Retail
Site Size 30,000 sf
Height 10 stories
FAR 6.8
Residential Units 163
% Open Space 15%
Parking Spaces 184
Parking Type Below-grade
02-12283.00
55. Mixed Use Residential (Mid Rise)
Uses Residential and
Retail
Site Size 30,000 sf
Height 5 stories
FAR 2.24
Residential Units 38
% Open Space 15%
Parking Spaces 36
Parking Type Surface and Internal
02-12283.00
56. Mixed Use Residential (Low Rise)
Uses Residential and
Retail
Site Size 20,000 sf
Height 3 stories
FAR 1.37
Residential Units 18
% Open Space 15%
Parking Spaces 28
Parking Type Surface and Internal
02-12283.00
57. Mixed Use Office (High Rise)
Uses Office and Retail
Site Size 30,000 sf
Height 10 stories
FAR 4.13
Residential Units N/A
% Open Space 10%
Parking Spaces 300
Parking Type Below-grade
02-12283.00
58. Mixed Use Office (Mid Rise)
Uses Office and Retail
Site Size 30,000 sf
Height 5 stories
FAR 3.01
Residential Units N/A
% Open Space 10%
Parking Spaces 120
Parking Type Surface and Internal
02-12283.00
59. Mixed Use Office (Low Rise)
Uses Office and Retail
Site Size 20,000 sf
Height 3 stories
FAR 1.10
Residential Units N/A
% Open Space 10%
Parking Spaces 37
Parking Type Surface and Internal
02-12283.00
60. Live-Work
Uses Residential and
Retail
Site Size 2,500 sf
Height 2 stories
FAR 0.98
Residential Units 1
% Open Space 30%
Parking Spaces 2
Parking Type Garage
02-12283.00
61. Residential Prototypes
• Small Lot Single Family
• Townhome
• Garden Apartments
• Apartment Mid-Rise
• Warehouse Rehab
02-12283.00
62. Small Lot Single Family
Uses Residential
Site Size 4,000 sf
Height 2 stories
FAR 0.71
Residential Units 1
% Open Space 25%
Parking Spaces 2
Parking Type Garage
02-12283.00
63. Townhome
Uses Residential
Site Size 2,500 sf
Height 2 stories
FAR 0.89
Residential Units 1
% Open Space 30%
Parking Spaces 2
Parking Type Garage
02-12283.00
64. Garden Apartment
Uses Residential
Site Size 20,000 sf
Height 3
FAR 1.21
Residential Units 22
% Open Space 20%
Parking Spaces 22
Parking Type Surface
02-12283.00
65. Apartment Mid-Rise
Uses Residential
Site Size 20,000
Height 5 stories
FAR 2.52
Residential Units 40
% Open Space 10%
Parking Spaces 40
Parking Type Surface and Internal
02-12283.00
66. Warehouse Rehab (Lofts)
Uses Residential
Site Size 20,000 sf
Height 3 stories
FAR 1.79
Residential Units 32
% Open Space 0%
Parking Spaces 32
Parking Type Surface
02-12283.00
67. Commercial Prototypes
• Hotel
• Office Mid-Rise
• Main Street Retail
• Restaurant or Theater
Rehab
02-12283.00
68. Hotel
Uses Restaurant and
Hotel
Site Size 30,000
Height 10 stories
FAR 2.91
Residential Units 193 rooms
% Open Space 10%
Parking Spaces 202
Parking Type Structured
02-12283.00
69. Office Mid-Rise
Uses Office
Site Size 40,000
Height 5 stories
FAR 1.68
Residential Units N/A
% Open Space 10%
Parking Spaces 135
Parking Type Structured
02-12283.00
70. Main Street Retail
Uses Retail
Site Size 20,000 sf
Height 1 story
FAR 0.68
Residential Units N/A
% Open Space 10%
Parking Spaces 14
Parking Type Surface/On-
Street
02-12283.00
71. Restaurant or Theater Rehab
Uses Restaurant
Site Size 10,000 sf
Height 1 story
FAR 0.86
Residential Units N/A
% Open Space 10%
Parking Spaces 0
Parking Type On-street
02-12283.00
