Appendix: Dorsey’s Search Village Center, Detailed Market Analysis · 2017-09-01 · Retail and...

Appendix: Dorsey’s Search Village Center, Detailed Market Analysis

November 2014

Appendix: Columbia Market Analysis & Economic Development Services Study

Project Team

Columbia Association, Howard County Department of Planning and Zoning, and Howard County Economic Development Authority

Consultant Team

Retail and Development Strategies, LLC in association with WTL+a, and Folan Consulting

Documentation and Distribution

This Columbia Market Study Appendix supplements the separately bound final Columbia Market Study report. There is an appendix for each village center studied and for the former GE Appliance site, Dobbin Road and Snowden River Parkway study area (GEDS). Each appendix includes extensive location-specific data analysis and documentation of market conditions, which support the findings in the final Columbia Market Study report.

In keeping with Columbia Association’s sustainability practices, a limited number of copies of this report and the appendix materials were printed. The Columbia Market Study and Technical Appendix are available online at: www.columbiaassociation.org/marketstudy.


http://www.columbiaassociation.org/marketstudy

Table of Contents

Introduction .............................................................................................................................. 1

Property Description ................................................................................................................ 1

Occupancy Patterns ............................................................................................................... 2

Demand Potentials: Retail ....................................................................................................... 4

Supermarket Potentials .......................................................................................................... 5

Existing & Planned Competitive Environment (3 Miles) .......................................................... 5

Existing Market Support/Trade Areas ..................................................................................... 7

Other Retail Potentials ............................................................................................................11

Inventory of Existing & Planned Retail ...................................................................................11

Drive Time Demographics .....................................................................................................13

Potential Buying Power: Food Service ...................................................................................16

Demand Potentials: Office ......................................................................................................20

Office Market Performance: 2005—2013 ...............................................................................20

Office Market Potentials ........................................................................................................23

Office Demand from Fair Share Growth .................................................................................24

Demand Potentials: Housing .................................................................................................27

Characteristics of the Housing Market ...................................................................................28

Key Market Findings, Strengths & Weaknesses ...................................................................29


Tables & Figures

Table 1: Market & Land Use Profile—Dorsey’s Search Village Center ...................................... 3

Table 2: Competitive Supermarkets—Dorsey’s Search Village Center ...................................... 6

Table 3: Demographic Characteristics, 2010—Dorsey’s Search Village Center ........................ 8

Table 4: Supermarket Trade Area Demographics—Dorsey’s Search Village Center ................11

Table 5: Nearby Regional Retail Centers—Dorsey’s Search Village Center .............................12

Table 6: Five & 10-Minute Drive Time Demographics—Dorsey’s Search Village Center ..........15

Table 7: Potential Food & Beverage Capacity—Dorsey’s Search Village Center .....................17

Table 8: Existing Retail & Office Tenants—Dorsey’s Search Village Center .............................18

Table 9: Comparison of Retail Market Indicators—Columbia Village Centers ..........................19

Table 10: Office Market Trends—Ellicott City, 2005—2013 ......................................................22

Table 11: Employment Forecasts & Allocation to Columbia .....................................................25

Table 12: Office Demand Analysis, 2020 .................................................................................26

Table 13: 5-Minute Drive-time—ESRI Housing Forecasts, 2017 & 2017 ..................................27

Table 14: 5-Minute Drive-time–County New Housing Estimates, 2015 & 2020.........................28

Figure 1: Aerial View—Dorsey’s Search Village Center ............................................................ 2

Figure 2: Trade Areas—Dorsey’s Search Village Center ..........................................................10

Figure 3: Five-, 10- & 15-Minute Drive Times—Dorsey’s Search Village Center ......................14

Figure 4: Ellicott City Office Submarket Boundaries .................................................................20


Introduction This appendix supplements the separately bound Columbia Market Study final report. There

is an appendix for each village center included in the market study as well as for the “GEDS”

study area (defined as the former GE Appliance site, Dobbin Road and Snowden River Parkway

areas). This appendix includes detailed market analysis, demographics, existing conditions and

findings for Dorsey’s Search Village Center. This information provides the basis for the findings

and recommendations in the Columbia Market Study report. The report and the

supplementary appendices are available online

at: www.columbiaassociation.org/marketstudy.

Property Description Dorsey’s Search Village Center contains 106,456 gross sq. ft. of commercial uses located at

4715-4735 Dorsey Hall Drive in the Village of Dorsey’s Search. The center opened in 1989,

with 12 in-line retail tenants and a 55,000 sq. ft. Giant grocery store. The village’s community

center, Linden Hall, is an 8,048 sq. ft. facility that Columbia Association opened in 1992.

According to a marketing brochure prepared by the property owner, Kimco Realty, the center

contained 14 in-line tenants in 2013. Kimco acquired Dorsey’s Search Village Center from The

Rouse Company in 2002.

The village center is illustrated in Figure 1. The village center contains the following uses:

86,456 sq. ft. of gross leasable area (GLA) of retail space includes a core retail center of

79,252 sq. ft. as well as 7,204 sq. ft. in two pad/outparcel retail uses: a Sunoco gas

station/mini-mart and Capital One Bank. Each of the two outparcels is in separate, private

ownership.

20,000 sq. ft. of general office uses located in a Class B professional office building adjacent

to the retail center that was delivered in October 1989. Data on the property’s size was

provided by CoStar, Inc., a national real estate database, and confirmed in the Kimco

marketing brochure.

According to property tax data provided by the Howard County Department of Finance, there

are approximately 10 parcels and multiple owners at Dorsey’s Search Village Center. The main

portion of the shopping center is located on two parcels comprising 11.61 acres. In addition, the

Sunoco gas station is located on a 1.47-acre parcel. The office building is located on a 5.37-Appendix: Columbia Market Analysis & Economic Development Services Study

1

http://www.columbiaassociation.org/marketstudy

acre site. Columbia Association owns Linden Hall, which is located on a 3.01-acre parcel.

Howard County survey data suggest 1,037 surface parking spaces associated with all uses.

This would suggest a parking ratio of roughly 10.7 spaces per 1,000 sq. ft. of gross building

area associated with all uses in the village center, higher than the typical ratio associated with

suburban community retail centers (which generally fall within the range of 4.0 to 5.0 spaces per

1,000 sq. ft. of GLA).

Figure 1: Aerial View—Dorsey’s Search Village Center

Source: www.Bing.com/maps.

Occupancy Patterns As of the November 15, 2013 CoStar property profile provided by Howard County, Dorsey’s Search Village Center is one of the healthiest village centers in Columbia, with 100%

occupancy in its core retail center, pad retail uses, and the professional office building. The

retail merchandise mix includes: six food service tenants, including fast casual restaurants; six

retailers oriented to general convenience and service, such as a dry cleaner, car care,

parcel/mail center, and three nail and hair salons; and, two general business service

tenancies—a veterinarian and a wine and liquor store. Use mix, and vacancy rates are

illustrated in Table 1.


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Table 1: Market & Land Use Profile—Dorsey’s Search Village Center

YearBuilt & Core Pad TOTAL Core Pad TOTAL

Village Center (1) Parking Retail Retail Office Other AREA Retail Retail Office Other VACANT

Dorsey's Search Village Center Original: 79,252 4,000 20,000 3,204 106,456 - - - - - 4715 Dorsey Hall Drive 1989 Capital One Sunoco 0.0% 0.0% 0.0% 0.0% 0.0%Columbia Renovated: Bank Gas Station Land Area: Average

8,048 26.64 Rents:Owner: Parking: Linden Hall acres 28.00$ Kimco Realty Corp. (2002) 1,037 Density: NNNAnchor: Ratio/1,000: 0.09 24.99$ Giant 9.7 FAR FS/Office

(1) As reported by the Howard County Department of Finance.

Source: Columbia Association; Howard County Department of Economic Development; CoStar, Inc.; RDS; WTL+a, updated June 2014.

Land Use Mix (In Sq. Ft.) Vacant Space & % Vacant


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By comparison, the overall retail vacancy rate of the 801,312 sq. ft. of core and pad retail space

located in the eight village centers under study is 10.1%, which is elevated due to the vacant

supermarket space at Long Reach Village Center. Without Long Reach, the village center retail

vacancy rate is low (2.8%) and comparable to the overall Columbia retail vacancy rate of 2%.

Demand Potentials: Retail The following analyzes potential market support for retail space at Dorsey’s Search Village Center.

While it is important to examine the individual village center markets, the final analysis also

compares important market indicators for each of the village centers studied. This is critical given

the close proximity of some of the village centers, overlapping trade areas, market competition, and

the changing dynamics of the retail environment.

As discussed later in the section entitled Existing Market Support/Trade Areas, variations in the

number, proximity, and typical drive times to competing grocery offerings are significant factors in

the viability of village center grocery anchors.

Types of Retail Centers

The village centers in Columbia were developed as neighborhood retail centers, or retail centers anchored by a supermarket with ancillary retail space (typically between 50,000 and 100,000 sq. ft.).

By comparison, community retail centers are larger, containing from 120,000 sq. ft. to as much as 400,000 sq. ft., and anchored by a discount store, junior department store, or variety store. The largest retail centers are regional or super-regional malls, with over 500,000 sq. ft. of retail space and multiple department store and entertainment (e.g. theaters) anchors. The Mall at Columbia as currently configured is a 1.2 million sq. ft. super-regional mall.

Retail typologies have evolved over the past several years to include variations of the major retail center types identified above; these include lifestyle centers (typically outdoor settings with unique and/or upscale tenants); power centers (250,000 to 750,000 sq. ft. of unenclosed retail space, typically with three or more big box anchors); and outlet centers (typically unenclosed retail centers in which manufacturers sell products directly to the public). As might be expected, the trade areas, or geographic reach, of each of these centers vary widely depending upon size, critical anchors, road network, and competitive environment.


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Supermarket Potentials The following examines overall market potential for a supermarket at Dorsey’s Search Village

Center based on an analysis of the competitive environment and identification of a viable trade

area. A retail trade area delineates the physical/geographic boundaries from which a retail center

is drawing the majority of its customers. It typically includes both a primary and secondary trade

area. The trade area typically accounts for about 90 percent of total sales, with an additional 10

percent attributed to “inflow”, or sales outside of the defined trade area.

Existing & Planned Competitive Environment (3 Miles) Dorsey’s Search Village Center was built in 1989, and includes a 55,000 sq. ft. Giant Food store.

The village center is located at the northern reaches of Columbia and, therefore, competition from

other village centers is more limited. Nevertheless, west of Route 29, both Harper’s Choice Village

Center and Wilde Lake Village Center are located within three miles of the Dorsey’s Search Village

Center (Harper’s Choice is located at the edge of the three-mile radius). There are also other

supermarket-anchored neighborhood centers located roughly three miles from Dorsey’s Search,

including three (Giant, Safeway and Mars) located along Route 40/Baltimore National Pike as

enumerated below as well as the Safeway at Long Gate.

As illustrated in Table 2, there are two existing supermarkets located within an estimated six-minute

drive (based on drive time data from MapQuest) of Dorsey’s Search Village Center. These two

supermarkets include a 56,000 sq. ft. Giant store at Columbia Palace (east of Route 29) and the

Whole Foods store at the former Rouse Company Headquarters building. With the exception of

Whole Foods, the closest competition located west of Route 29 is David’s Natural Market at the

Wilde Lake Village Center. It should be noted that David’s Natural Market is a family-owned

organic market and does not carry the same variety as a more traditional food market such as

Giant. East of Route 29, the Safeway located at the Long Gate Shopping Center is slightly closer

(3.4 miles) but is approximately a seven-minute drive from Dorsey’s Search Village Center.

Moreover, while Whole Foods operates as a natural and organic foods supermarket (in fact, it is the

largest U.S. retailer of natural and organic foods and the 12th largest food retailer overall1), it does

compete to some degree with local, regional, national and international conventional and specialty

supermarkets, natural food stores, membership clubs, and farmers markets. Similar to

conventional supermarkets, Whole Foods has specific market and location criteria pertaining to

education levels, population densities, and incomes levels within certain drive times when making

1 Progressive Grocer, 2012 sales rankings. Appendix: Columbia Market Analysis & Economic Development Services Study

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location decisions. Similarly, after a site has been identified, an internal team at Whole Foods

projects sales, construction costs, and operating costs for the selected site. Whole Foods typically

selects sites that are located in high traffic areas and on or near premier real estate sites.

Table 2: Competitive Supermarkets—Dorsey’s Search Village Center

The closest traditional supermarkets located west of Route 29 are the Safeway located at Harper’s

Choice; the Safeway located at the Enchanted Forest Shopping Center on Baltimore National Pike;

Retail Center Location Store Minutes Miles

Columbia Palace Columbia Giant 6.0 2.4 8805 Centre Park Drive

Wilde Lake Village Center Columbia David's Natural Market 7.0 3.1 10451 Twin Rivers Road

Oakland Mills Village Center Columbia Food Lion 7.0 3.4 5880 Robert Oliver Place

Long Gate Shopping Center Ellicott City Safeway 7.0 3.4 4310 Montgomery Road

Long Gate Shopping Center Ellicott City Target 7.0 3.4 4310 Montgomery Road

St. John's Plaza Ellicott City Mars Supermarket 8.0 3.4 9150 Baltimore National Pike

Former Rouse Headquarters Columbia Whole Foods 6.0 3.5 10275 Little Patuxent Parkway

Chatham Station Shopping Center Ellicott City Giant 9.0 3.7 9200 Baltimore National Pike

Enchanted Forest Shopping Center Ellicott City Safeway 9.0 3.7 10000 Baltimore National Pike

Golden Triangle Shopping Center Ellicott City Lotte Plaza Asian 9.0 3.8 8801 Baltimore National Pike & International Market

Harper's Choice Village Center Columbia Safeway 7.0 3.9 5485 Harpers Farm Road

(1) Drive times and distances are from MapQuest.

Source: RDS; Folan Consulting, March 2014.

Distance (1)


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the Safeway located at Long Gate Shopping Center; and, the Giant located at the Chatham Station

Shopping Center on Baltimore National Pike. Mars Supermarket, which is a family-owned grocery

store with 16 other stores in Maryland, is also located within the cluster of retail along Route

40/Baltimore National Pike.

Existing Market Support/Trade Areas Different retailers determine market support in different ways. Since the village center prototype

was established to provide a supermarket anchor and smaller service and retail tenants, the

analysis of retail market potentials is focused on demographics of village residents (which are

important to smaller service and retail tenants such as cleaners and salons) as well as

demographics for a viable trade area for a supermarket (which is based primarily on existing and

planned supermarket competition).

As illustrated in Table 3, the total population of the Village of Dorsey’s Search is 5,541, with a

relatively high mean household income of $120,558 (versus $112,900 for all of Columbia). The

percent of renter-occupied housing units is notably higher than that for Columbia as a whole (42%

for the Village of Dorsey’s Search versus 32% for Columbia). The percentage of family households

within the Village of Dorsey’s Search is lower than that for Columbia (58% for Dorsey’s Search

compared to 67% for Columbia).


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Table 3: Demographic Characteristics, 2010—Dorsey’s Search Village Center

Village ofDorsey's Search % Columbia %

Race & Hispanic Ethnicity White 3,727 67% 51,150 57% African American or Black 784 14% 22,201 25% American Indian & Alaska Native 22 0% 368 0% Asian 737 13% 9,955 11% Native Hawaiian & Other Pacific Islander 5 0% 29 0% Some Other Race 65 1% 2,579 3% Population of Two or More Races 394 7% 4,033 4%Total Population: 5,541 100% 90,315 100% Hispanic or Latino 330 6% 7,146 8% Non-Hispanic or Latino 5,212 94% 83,170 92%

Mean Household Income 120,558$ 112,900$

Total Occupied Housing Units 2,517 35,811 Owned 1,451 58% 24,198 68% Renter-Occupied 1,066 42% 11,613 32%

Total Households 2,517 35,812

Total Families (1) 1,453 58% 23,770 66% Husband/Wife Family 1,146 79% 18,190 77% Husband/Wife with Children < 18 509 35% 8,441 36% Other Family 307 21% 5,579 23% Other Family with Children < 18 183 13% 3,516 15%

% 25+ with Bachelor's Degree 64% 61%% 25+ with Graduate/Prof Degree 33% 30%

(1) A family consists of two or more people (one of whom is the householder) related by birth, marriage, or adoption residing in the same housing unit.

Source: Columbia Association; RDS; Folan Consulting, January 2014.


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Determining a Viable Trade Area & Estimated Supermarket Sales A primary and secondary trade area for Dorsey’s Search Village Center has been estimated based

on the location of existing and planned competition and the existing road network. Retailers

typically evaluate roadway access to a major arterial and have criteria related to traffic counts when

making site location decisions. Dorsey’s Search Village Center is located near the intersection of

Route 29 and Route 108. Old Annapolis Road, which provides access to the back of the village

center, reports average annual daily traffic (2012) counts of 9,411 west of Columbia Road.

Average annual daily traffic (AADTs) counts of 23,850 are reported along the section of Columbia

Road near the intersection with Old Annapolis Road. Average daily traffic counts are a key factor in

location decisions for major retail tenants; for example, large retail chains often require a minimum

of 20,000 to 25,000 AADTs as a baseline criterion for a favorable site location decision.

Figure 2 illustrates the potential trade area by U.S. Census Block Group. It is important to note that

this is the supermarket trade area and reflects the location of competitive supermarkets. As a

result, it does not necessarily follow village boundaries. Since the immediate Dorsey’s Search area

comprises relatively large (geographic) census blocks, a few of the primary trade area census

blocks extend fairly far to the north (including census blocks 6023042, 6023051, 6023052).

Nevertheless, these census blocks include a significant geographic area that is proximate to the

Dorsey’s Search Village Center.

The total trade area surrounding Dorsey’s Search Village Center is estimated to include 19,915 residents, well above the 10,000 to 12,000 resident thresholds typically required for planning and constructing a new supermarket. However, as noted earlier, Dorsey’s Search

Village Center is proximate to multiple competing grocers.


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Figure 2: Trade Areas—Dorsey’s Search Village Center


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Table 4: Supermarket Trade Area Demographics—Dorsey’s Search Village Center

Other Retail Potentials Inventory of Existing & Planned Retail There has been significant growth in the retail environment in the Columbia area over the past

several years, including the Dobbin Road corridor, along Route 175, and Snowden Parkway. Most

major big box and discount retailers are located to the south of Dorsey’s Search Village Center,

including Dobbin Center, Columbia Crossing I and II, Gateway Overlook, and Snowden Square.

As illustrated in Table 5, major discount and big box retailers such as Wal*Mart, Costco, Lowe’s,

Home Depot, Target, and BJ’s Wholesale are represented in the Columbia market. Long Gate

Shopping Center, which is located to the north in Ellicott City, is anchored by Safeway, Target,

Barnes & Noble, and Michaels. The Mall at Columbia, with 1.4 million sq. ft. of existing space

Total HousingCensus Block Group Population Units

Primary Trade Area6054011 2,327 1,237 6023062 3,074 1,443 6023043 1,660 555 6054012 645 247 6023042 1,784 581 6023051 1,450 498 6023052 2,217 769 Subtotal: 13,157 5,330

Secondary Trade Area6023061 2,146 821 6023041 1,285 449 6054013 1,380 648 6054014 797 360 6055031 1,150 427 Subtotal: 6,758 2,705

TOTAL: 19,915 8,035

Source: U.S. Census Bureau, 2010 Census; RDS; Folan Consulting, January 2014.


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Table 5: Nearby Regional Retail Centers—Dorsey’s Search Village Center

Size (SF) & Properties & AverageCompetitive Retail Centers % Leased Year Built Rents Major Tenants Other

Dobbin Center 295,159 12 39.00$ 6435 Dobbin Road 96% 1982 ColumbiaManager: Rosenthal Properties

Columbia Crossing I & II 495,953 16 28.00$ Dobbin Rd & Rte. 175 100% 1996/1997 ColumbiaManager: Kimco Realty Corp.(majority of center)

Gateway Overlook 528,350 9 23.00$ Off I-95 at Rte. 175 & Rte. 108 99% 2007ColumbiaManager: Washington Real EstateInvestment Trust (214,281 SF) &General Growth Properties

Snowden Square 500,000 17 28.00$ Snowden River Pkwy & Robert Fulton 100% 1993ColumbiaManager: Manekin LLC

Dobbin Station N/A 4 N/A 6781 Dobbin Road 100% N/A Columbia

Columbia Mall 1,390,000 1 N/A 10300 Little Patuxent Parkway N/A 1971ColumbiaManager: General Growth Properties

Long Gate Shopping Center 595,410 11 N/A 4310 Montgomery Road 100% 1996/1997 Ellicott CityManager: Kimco Realty Corp.

Source: Various centers; CoStar, Inc.; RDS; Folan Consulting, January 2014.

Six non-owned outparcels include: bank, McDonald's, Chik-fil-A,

Wendy's Starbucks

Wal*Mart, Ross Dress for Less, Offenbachers, Haverty's

Big Lots, Nordstrom Rack, Books-A-Million, Dick's

Sporting Goods, TJ Maxx, Staples, Jo-Ann Fabrics, Old Navy, Target, REI, Toys R

Us, Babies R Us

Restaurant cluster includes La Madeleine, Famous Dave's Ribs,

Don Pablo's, Macaroni Grill

Costco, Lowe's, Trader Joe's, Best Buy, Office Depot, Golf

Galaxy

Restaurants include: Houlihan's, Mimi's Café. Paragon at Gateway

Overlook (340 apartments)

Petco, LaZBoy Food service tenants include: Chipotle, Noodles and Company

Target, Safeway, Kohl's, Barnes & Noble, Michaels Originally developed by Opus

Expansion added 40,000 SF; Restaurant cluster includes:

Cheesecake Factory, PF Chang's, Uno Chicago Grill, Champs

Americana

Lord & Taylor, Macy's, Nordstrom, Sears, AMC Theaters, JC Penney

United Artists 14 Theaters, Bed Bath & Beyond,

Marshalls, BJ's, Michael's, Home Depot, PetSmart

Built to complement the 295,200 SF Dobbin Center


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(including its recent expansion), is a super-regional mall with a large trade area (the presence of

Nordstrom as an anchor tenant typically extends the reach of a regional mall). There are also a

number of national chain restaurants and food service tenants located in close proximity to

Dorsey’s Search Village Center. National chain operators (located mostly in or proximate to the

mall), include: Cheesecake Factory, Chipotle, Five Guys, PF Chang’s, Panera, and UNO Chicago

Grill. In addition, national chain operators located near Dorsey’s Search Shopping Center, include:

Outback Steakhouse and Carrabba’s Italian Grill, which are also relevant competition for food

service uses at Dorsey’s Search than the mall.

Drive Time Demographics To better understand the potential market for other retail (e.g., alternative retail anchors, food

service, other general merchandise, etc.) at Dorsey’s Search Village Center, a five-, 10-and 15-

minute drive time analysis was conducted. The reach of larger retail anchors and restaurants

(especially restaurant clusters) is typically wider than that for supermarkets or smaller service-

oriented retailers. Retailers often consider drive times as a measure of the competitive context.

Figure 3 illustrates the 5-, 10- and 15-minute drive times for the Dorsey’s Search Village Center.

Table 6 documents the drive time area demographics. As illustrated, the five-minute drive time is

almost totally confined to the west of Route 29, with the exception of a small area along Route 108.

The five-minute drive time also extends to the south—roughly to Little Patuxent Parkway and to the

west past Centennial Lake.

The 10-minute drive trade area extends east of U.S. Route 29, approximately to Snowden River

Parkway (in some sections), and includes some of the large-scale regional retail shopping centers

such as Columbia Crossing. The 10-minute drive time also extends to the north to I-70, and

includes portions of Ellicott City and to the south to Route 32 and just beyond Route 32 along

Route 29. As a result of the expanded trade area to the south, the 10-minute drive also includes

the planned development in Downtown Columbia. As noted previously, plans have been approved

for up to 5,500 new residential units, 4.3 million sq. ft. of new office space, and 1.25 million sq. ft. of

new retail space.


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Figure 3: Five-, 10- & 15-Minute Drive Times—Dorsey’s Search Village Center


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Table 6: Five & 10-Minute Drive Time Demographics—Dorsey’s Search Village Center

While the geography identified in Figure 3 is considered a relatively large trade area for a small

community retail center, it was included in order to test the viability of additional food service

tenants at the Dorsey Search Village Center. We note that a 15-minute drive time trade area was

not analyzed in detail since it encompasses the broader region and is considered more reflective of

a trade area for a regional mall/large scale big box shopping center.

0 - 5 Minutes 0 - 10 Minutes

Population2010 8,832 122,907 2012 8,865 124,909 2017 Forecast 9,114 131,260 Total Change 2012 - 2017 249 6,351 Annual Growth Rate, 2012 - 2017 0.56% 1.00%

Households2010 3,928 48,447 2012 3,950 49,331 2017 Forecast 4,061 51,935 Total Change 2012 - 2017 111 2,604 Annual Growth Rate, 2012 - 2017 0.56% 1.03%

Median Household Income2012 101,059$ 96,181$ 2017 108,984$ 105,100$

Median Age2012 37.1 38.4 2017 37.5 38.7

2010 Housing TenureOwner-Occupied Households 58.2% 65.3%Renter-Occupied Households 41.8% 34.7%

Source: ESRI Business Analyst; RDS; Folan Consulting, March 2014.


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Potential Buying Power: Food Service

We have focused the following analysis on demand potentials for a larger cluster of food service

tenants at Dorsey’s Search Village Center. The center appears relatively healthy, with 100%

occupancy, a strong anchor, and an affluent market in the immediate area.

Market potential for food service tenants is quantified below and provides a starting point for retail

strategies at Dorsey’s Search as part of implementation strategies that will be identified in

subsequent phases of the study. Total supportable space for food service can be based on

capturing a small percentage of total available spending (typically 5% or less) on “Food Away from

Home,” as defined by the U.S. Census Bureau, within a five- to 10-minute drive of the village

center. This is a reasonable assumption given the number of competitive food & beverage tenants

located in the surrounding area.

The analysis also assumes that a percentage of sales will be attributed to “inflow” sales. This can

include residents driving by and not included in the 10-minute drive time area as well as area

employees (e.g., employees working in nearby professional office space). Consumer research

from the International Council of Shopping Centers (ICSC) shows that trade areas can be

expanded during weekdays due to nearby worker expenditures.

As reflected in Table 7, it is estimated that Dorsey’s Search Village Center can effectively support approximately 16,000 sq. ft. of dining and food service space. This suggests that, in

addition to the estimated 10,000 sq. ft. of existing food service tenants (identified in Table 8),

market supports exists for an additional 6,000 sq. ft. of food service uses.

Capture rates are based on capture rates for similarly sized retail centers in highly competitive

environments. In order to estimate the amount of supportable food service space at the village

center, an average sales productivity for food service tenants was applied. It should be stressed

that this is an average. For example, McDonald’s average sales are about $600 per sq. ft., while

fast food restaurants in regional malls average $450 per sq. ft. and national chain restaurants can

average from $400 to $800+ per sq. ft. It should be noted that locally-owned and independent

retailers may operate with lower sales productivities.


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Table 7: Potential Food & Beverage Capacity—Dorsey’s Search Village Center

Table 8 summarizes existing retail and office tenants. Table 9 is an overview of key market

indicators for each village center considered in the study.

5-Minute Drive-timeTotal Households 4,061 Median Household Income 108,984$

Gross Household Income: 442,584,024$ x % Spent on Food Away from Home 4.4%

Total Spending on Food: 19,473,697$ x Capture Rate 5%

Estimated Spending Potential (5-Minute): 973,685$

5- to 10-Minute Drive-timeTotal Households 47,874 Median Household Income 105,100$

Gross Household Income: 5,031,557,400$ x % Spent on Food Away from Home 4.4%

Total Spending on Food: 221,388,526$ x Capture Rate 2.5%

Estimated Spending Potential (5-10 Minute): 5,534,713$

TOTAL - Resident Spending on Food: 6,508,398$ + Inflow (Nearby Employees) @ 11% 723,155

TOTAL - Spending Potentials: 7,231,553$ / Average Sales (Per SF) 450$

TOTAL SUPPORTABLE SPACE (In SF): 16,070

(1) Reflects median income for 0-10 mile drive time.(2) Reflects average spending based on disposable income allocated to Food

Away from Home from U.S. Census Consumer Expenditure Survey andaverage spending potential assumptions.

Source: ESRI Business Analyst; RDS; Folan Consulting, February 2014.


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Table 8: Existing Retail & Office Tenants—Dorsey’s Search Village Center

Food Service General Service Business/Office Other Anchors

Honeybaked Ham Avalon Nails and Spa Banfield Pet Hospital Dorsey's Search Wine Giant FoodHunan Legend Cleaners Plus of Ellicott City & Spirits Linden Hall

Subway Great Clips Capital One Bank Community CenterTrattoria - Pizza, Pasta Master Barber Dorsey's Search

& More Parcel Plus Office BuildingWhirlz Yogurt Bar Auto Stream Car Care

Yama Sushi Center-Shell

Source: Columbia Association; Howard County; RDS; Folan Consulting, August 2014.


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Table 9: Comparison of Retail Market Indicators—Columbia Village Centers

Competitive Supermkts Non-Trad'l Grocers Potential Res'l Competitive Visibility & Average Daily Med HH IncomeVillage Center & Size (In SF) W/I 5-6 Minute Drive Market Growth Environment Access Ratings Traffic (2012) 5-Min Drive 10-Min Drive 5-Min Drive Notes

Dorsey's Search (Kimco Realty Corp.)

2: Giant (Columbia Palace): 56,000 SF;

Whole Foods: 45,000 SFNone

Limited in 5-minute drive-time, plus

growth in Downtown Columbia & planned units in Ellicott City

Limited

Moderate: near intersection of Rte 29 & Rte 108; direct

access from Dorsey Hall Rd, Old Annapolis Rd.

Old Annapolis Rd: 9,422; Columbia

Rd near Old Annapolis Rd:

23,850

8,865 124,909 101,059$ Relatively affluent, well leased, minimal competition

Harper's Choice (Kimco Realty Corp.)

3: Giant (Hickory Ridge): 58,000 SF; Whole

Foods: 45,000 SF; Roots Market (Clarksville

Square)

None

Strong in 5-minute drive-time due to

growth in Downtown Columbia; impacts

unknown

Limited

Poor to Moderate: direct access to Harper's Farm Rd, which connects to Rte 108

(approximately 1-mile)

Harper's Farm Rd: 11,431

24,290 82,055 92,533$ High, close-in density

Hickory Ridge (Kimco Realty Corp.)

4: Whole Foods: 45,000 SF; Safeway (Harper's Choice); Harris Teeter (Kings Contrivance);

David's Natural Market (Wilde Lake)

None

Moderate in 5-minute drive-time, plus

growth in Downtown Columbia

Moderate

Poor to Moderate: direct access off Freetown Road,

connects to Cedar Lane & to Rte 32 to the south

Freetown Rd: 5,061; Cedar Lane:

21,96018,993 93,887 102,053$ Proximity to new development in

Town Center

Kings Contrivance (Kimco Realty Corp.)

2: Giant (Owen Brown); Giant (Hickory Ridge):

58,000 SFNone

Moderate in 5-minute drive-time, plus in-fill housing growth along

Rtes 29 & 216

LimitedPoor to Moderate: Guilford Rd

connects to Broken Land Pkwy & Rte 32

Guilford Rd: 7,620 15,365 148,272 99,180$ Safeway lease not renewed in 2005; leased to Harris Teeter with newly-

built store; well-leased

Long Reach (Howard County)

5: Giant (Columbia Palace): 56,000 SF; Giant (Lynwood Sq.);

Wegmans: 135,000 SF; Food Lion; Trader Joe's

4: Wal*Mart, BJ's, Costco & Target

Moderate in 5-minute drive-time

High

Poor to Moderate: major access off Tamar Drive,

proximate to Snowden River Pkwy, Rte 175

Tamar Drive @ Rte 175: 12,081

17,061 107,005 82,417$ Lost supermarket anchor

Owen Brown (Fleur Associates LLC)

4: Food Lion (Oakland Mills); Harris Teeter (Kings Contrivance);

Wegmans: 135,000 SF; Whole Foods: 45,000 SF

1: BJ's

Strong in 5-minute drive-time due to

growth in Downtown Columbia; potential growth on Route 1

Corridor

Moderate

Poor to Moderate: access to Cradlerock Way, which

connects to Broken Land Pkwy; access limited across

Route 29

Broken Land Pkwy @ Cradlerock Way:

31,12017,356 138,696 88,292$

Long-term impacts of Wegman's; weak Food Lion at Oakland Mills; proximity to commercial centers along Snowden River Parkway

Oakland Mills (Cedar Realty Trust,

Inc.)

3: Giant (Dorsey's Search); Giant (Owen Brown); Whole Foods:

45,000 SF

1: Wal*Mart

Limited in 5-minute drive-time, plus

growth in Downtown Columbia

Moderate

Poor to Moderate: access to Stevens Forest Rd, which connects to Broken Land

Pkwy; access limited across Route 29

Stevens Forest Rd: 11,821

6,989 94,525 73,246$ Two prior supermarket operators closed at this location

River Hill (Kimco Realty Corp.)

1: Roots Market (Clarksville Square)

None

Limited in 5-minute drive time; some new, low-density housing

expected

Limited Good: borders Rte 108 Rte 108: 19,220 5,252 66,628 170,708$

County's largest Giant (63,000 SF); borders non-New Town zoned land; highest income levels; best visibility;

typically well leased

Source: Retail Development Strategies; Folan Consulting; WTL+a, updated November 2014.

Population Density - 2012


19

Demand Potentials: Office As defined by CoStar, Inc., a national real estate market database, Columbia’s office building

inventory is distributed over three geographic areas—Columbia North, South and Town Center.

However, Dorsey’s Search Village Center, which includes 20,000 sq. ft. of professional office

space in a freestanding building adjacent to the core retail center, is the only village center located

outside of these three areas, in the Ellicott City submarket on the border of the Columbia Town

Center submarket. For purposes of this analysis, we examined market characteristics of the

Ellicott City submarket for Dorsey’s Search.

Figure 4: Ellicott City Office Submarket Boundaries

Source: CoStar, Inc.

Office Market Performance: 2005—2013 The consultants examined office market trends in the Ellicott City submarket between 2005 and

2013. This period was chosen because it includes multiple economic cycles: from the 2005–2007

boom to the 2007–2009 downturn and subsequent recovery. Market performance over the past

nine years in Ellicott City suggests: Appendix: Columbia Market Analysis & Economic Development Services Study

20

An inventory of more than 1.8 million sq. ft. of office space. Since 2005, Ellicott City’s office

market has added 196,700 sq. ft. of new construction ;

A slight decrease in the amount of vacant office space—from 132,000 sq. ft. in 2005 to

106,400 sq. ft. in 2013, reflecting a decrease in the vacancy rate from 7.4% in 2005 to 5.7% in

2013;

Average annual absorption characteristic of a tertiary suburban office market—which was

sustained at 14,900 sq. ft. per year since 2005; and


21

Table 10: Office Market Trends—Ellicott City, 2005—2013

2005 2006 2007 2008 2009 2010 2011 2012 2013 Total Ann'l Avg. %Ellicott CityInventory 1,779,424 1,826,124 1,834,124 1,834,124 1,832,534 1,820,736 1,820,736 1,860,736 1,859,036 79,612 Vacant Stock (1) 132,031 111,466 98,893 85,574 99,907 101,314 94,471 98,535 106,424 (25,607) % Vacant 7.4% 6.1% 5.4% 4.7% 5.5% 5.6% 5.2% 5.3% 5.7% -3.2%Total Net Absorption 29,111 67,265 20,573 13,319 (15,923) (13,205) 6,843 35,936 (9,589) 134,330 14,900 New Construction 90,200 53,500 8,000 - - 5,000 - 40,000 - 196,700

Years to Stabilized Occupancy (2) 7

(1) Includes existing vacant relet and sublet space.(2) Illustrates the required number of years necessary to achieve stabilized occupancies (93%) based on historic annual net absorption/leasing activity.

Source: CoStar, Inc.; RDS; WTL+a, February 2014.

Change: 2005-2013


22

From a financing perspective, assuming that the average annual pace of absorption over the

past eight years—14,900 sq. ft. per year—is sustained, approximately seven years will be required to achieve industry-standard levels of stabilized occupancies of 93%. In other

words, it could take fully seven years to lease 93% of the existing 106,400 sq. ft. of vacant

office space in Ellicott City. Office rents in the submarket have averaged $21.98 per sq. ft. on

a full-service basis since 2005.

As noted, the Dorsey’s Search Village Center contains 20,000 gross sq. ft. of office space. This

comprises 1.1% of the 1.8 million sq. ft. of office space in Ellicott City (and 0.12% of the combined

Columbia and Ellicott City office inventory of 16.2 million sq. ft.). As of November 15, 2013, the

village center’s office space was 100% occupied, with a tenant roster oriented to professional and

business services supporting the surrounding neighborhood. Office tenancies in the village

centers likely draw their primary business/market support primarily from surrounding “rooftops”

(i.e., households).

Office Market Potentials Job growth in specific office-using employment/industry sectors is a key barometer of demand for

future office space. The following examines market potentials for future office development using

a fair share analysis through 2020. Fair share assumes that, all else being equal, the current

share, or ratio, of space is maintained at a future point in time as growth occurs. Key findings are

summarized below and illustrated in Tables 11 and 12.

As illustrated in Table 11 on the next page, the Round 8A employment forecasts prepared by

the Howard County Department of Planning & Zoning, and used by the Baltimore Metropolitan

Council, suggest that Howard County will add 30,000 new jobs for the 2010 to 2020 forecast

period. The BMC forecasts do not distinguish what types of new jobs will be created beyond

“Retail” and “Non-Retail” employment, which is a limitation in the analysis;

Currently, the Columbia CDP (Census-Designated Place) comprises 38% of Howard County’s

total jobs. Presuming that Columbia maintains its fair share of the county total suggests that

more than 9,100 new jobs would be created in Columbia by 2020; and

The next step estimates how many new jobs will be office-using jobs. Currently, office-using

jobs in Columbia comprise roughly 67% of total jobs, translating into more than 47,600 office

jobs across Columbia. If the share of office-using jobs is maintained at 67%, this translates

into approximately 6,100 new jobs in office-using sectors of the economy by 2020.


23

The final step allocates new office jobs to Dorsey’s Search Village Center. This scenario

considers that the office space in the village center is primarily oriented to nearby households with

a mix of professional and service office tenants.

Office Demand from Fair Share Growth The village center captures its fair share of new job growth based on the share of its occupied

office space (20,000 sq. ft.) relative to the amount of (combined) occupied office space in

Columbia and Ellicott City (14.0 million sq. ft.), or 0.14%. This yields a nominal nine new jobs;

Using an average occupancy factor of approximately 250 sq. ft. per employee yields

estimated demand for 2,241 sq. ft. of additional office space at Dorsey’s Search by 2020. Since the existing office building is 100% occupied, demand could potentially yield new

construction;

However, from an investment risk perspective, it is unlikely that such a small amount of office

space could be built (i.e., financed), particularly on a multi-tenant/speculative basis. Currently,

the office buildings in each of the village centers—including Dorsey’s Search—would be

characterized in the industry as “garden” office buildings. The industry defines this product as

generally containing from 5,000 to 25,000 sq. ft. of space, and investment risk is carefully

weighed against building size, potential net absorption, competition and other market factors;

and

Another factor affecting overall market potentials for development of new office space in the

village centers is site capacity, that is, whether there is sufficient space available to

accommodate new office buildings.


24

Table 11: Employment Forecasts & Allocation to Columbia

As % of 2012-20202010 2012 Total 2020 Forecast

Howard County: All JobsBMC Round 8 Total Jobs (1) 181,381 187,381 100.0% 211,381 24,000 Less Self-Employed/Part-time (2) 38,151 20.4% 43,037 4,886 Total - Full-time Jobs (2012-2020): 149,230 79.6% 168,344 19,114

Howard County: Full-time Jobs Only (3)Mining & Natural Resources 2,522 1.7% 2,845 323 Construction 11,031 7.4% 12,444 1,413 Manufacturing 10,675 7.2% 12,042 1,367 Transportation & Warehousing 3,879 2.6% 4,376 497 Communications 2,195 1.5% 2,476 281 Utilities 594 0.4% 670 76 Wholesale & Retail Trade 31,496 21.1% 35,530 4,034 Finance/Insurance/Real Estate 9,308 6.2% 10,500 1,192 Services 66,790 44.8% 75,345 8,555 Government 10,740 7.2% 12,116 1,376 Total - Full-time Jobs (2012-2020): 149,230 100.0% 168,344 19,114

Columbia (CDP)FAIR SHARE: (4) Total Jobs (2012-2020): 71,153 38% 80,266 9,113

(1) Reflects Round 8 employment forecasts for "Retail" and "Non-Retail" jobs for 2010-2020, as prepared by the Howard County Department of Planning & Zoning, and used by the Baltimore Metropolitan Council (BMC). BMC does not prepare job forecasts by industry sector.(2) The forecasts include both part-time and self-employment jobs. These are excluded from the analysis because it is unknown how many part-time and self-employed jobs will demand workplace real estate such as office or industrial space.(3) This illustrates the distribution of jobs, by industry sector, in 2012. The analysis assumes that the distribution of jobs, by industry sector, will remain the same in 2020.(4) Columbia's current (2012) share of all jobs in Howard County was 38%. The analysis assumes that Columbia maintains its share in 2020.

Source: Baltimore Metropolitan Council (BMC) Round 8 Forecasts; ESRI Business Analyst; RDS; WTL+a, revised April 2014.


25

Table 12: Office Demand Analysis, 2020

Employment ForecastsTotal Employment-Columbia CDP

2012 71,153 2020 80,266

New Jobs: 9,113

2012 Office Jobs-Columbia/Ellicott City SubmarketsOccupied Office Inventory 14,000,563 Occupancy Ratio Per SF 257

Total: 47,673 As % of Total Jobs 67%

2020 Office Jobs-Columbia TAZ ZonesExisting Jobs 47,673 + Share of New Jobs @ 67% 6,106

Total: 53,778

Office Market Potentials-Dorsey's SearchFair Share AnalysisOccupied Office Space-Dorsey's Search 20,000 As % of Columbia/Ellicott City (Fair Share) 0.14%

2020 Office Jobs to Columbia 6,106 Fair Share 0.14%

Allocation to Dorsey's Search: 9 Existing Jobs 78

2020 Office Jobs-Dorsey's Search: 87 Occupancy Ratio Per SF 257

Gross Demand (SF): 22,241 Occupied Office Space 20,000

Net Demand (SF): 2,241

Existing Vacant Office Space: -

Source: ESRI Business Analyst; CoStar, Inc.; RDS: WTL+a, March 2014.


26

Demand Potentials: Housing The consultants considered two data sources to estimate future potentials for new housing at

Dorsey’s Search Village Center. In the first, five-year forecasts for 2012—2017 from ESRI

Business Analyst, a private data forecasting service, were reviewed.

The second data source considers short- and long- term forecasts for housing units prepared by

Howard County’s Department of Planning & Zoning (DPZ) controlled to the PlanHoward 2030

projections. These latest projections are known as Round 8A, and are based on known projects in

the development pipeline; future units that could be built on undeveloped land; and, new units in

zones allowing for redevelopment. DPZ forecasts are used to plan for new infrastructure, including

roads, water and sewer service, parks and recreation, schools and other capital facilities.

In the first, ESRI forecasts suggest 113 new owner- and renter-occupied units through 2017

(ESRI) (plus a reduction in existing vacancies of 35 units), while Howard County’s forecasts

suggest 93 units through 2020 within approximately a five-minute drive of Dorsey’s Search Village

Center (plus another 10 single-family units located just outside of the five-minute drive). ESRI’s

forecasts are based on current and past trends and do not distinguish by product type. Sources

used to develop ESRI housing estimates are: construction data from Metrostudy, Census Bureau

data, and building permits. Forecasts for new housing within a five-minute drive-time of Dorsey’s

Search account for a scattering of new units anticipated over the next five years.

Tables 13 and 14 illustrate housing forecasts based on ESRI and Howard County estimates,

respectively.

Table 13: 5-Minute Drive-time—ESRI Housing Forecasts, 2017 & 2017

% of % of2012 Total 2017 Total Change

Dorsey's SearchHousing Units

Owner-Occupied 2,239 54.6% 2,349 56.2% 109 Renter-Occupied 1,710 41.7% 1,713 41.0% 3 Vacant Units 152 3.7% 117 2.8% (35)

Total: 4,101 100.0% 4,179 100.0% 113

Source: ESRI Business Analyst; RDS; WTL+a, March 2014.


27

Table 14: 5-Minute Drive-time–County New Housing Estimates, 2015 & 2020

We understand that Centennial Crossing, a proposed residential development containing 90 rental

units, is assumed by Howard County planning estimates to be completed between 2020 and 2025.

In addition, land adjacent to the village center and along Route 108 has been rezoned from R-20

(low-density single-family) to R-Apt, which will allow other projects such as Centennial Crossing.

Characteristics of the Housing Market

In terms of the character of housing in the Village of Dorsey’s Search, the 2010 U.S. Census

reported a total of 2,627 housing units. As reported in the "Characteristics of Columbia” (Columbia

Association, 2012), the housing stock is comprised of single-family detached (38%); townhouses

(19%); and multi-family dwellings (42%). Notably, 27% of Dorsey’s Search residents live in multi-

family structures of 10 or more units. Fully 58% of the housing units in Dorsey’s Search are owner-

occupied versus 42% that are renter-occupied—one of the highest rental rates among Columbia’s

10 villages. The report also indicates 110 vacant units, for an overall vacancy rate of 4.2%, which

is comparable to Columbia as a whole. However, true vacancy, which includes units available for

rent/unoccupied and other vacant, is significantly lower—with 72 true vacant units reflecting a

vacancy rate of 2.7%. According to “Sales Price Trends” report (Columbia Association, 2013),

between 2000 and 2010, the average sales price of housing units in Dorsey’s Search jumped by

fully 109%—from $154,567 to $322,608 in 2010, as compared to 84% for Columbia villages overall

and 82% for Howard County. As a result of stabilized occupancies and a significant increase in

housing values, the Village of Dorsey’s Search is expected to remain a strongly marketable

location for new housing.

% of % of2015 Total 2020 Total Total

Dorsey's SearchHousing Unit by Product

Single-family Detached - 0.0% 93 100.0% 93 Single-family Attached - 0.0% - 0.0% - Multi-family - 0.0% - 0.0% -

Total: - 0.0% 93 0.0% 93

Source: Howard County; RDS; WTL+a, March 2014.


28

As noted, forecasts suggest roughly 93 to 113 new housing units could be built within

approximately a five-minute drive-time of the village center. Several factors, however, will likely

determine the overall marketability of any new housing near Dorsey’s Search Village Center,

including:

Site carrying capacity, including the amount of land available to accommodate new housing

development as well as densities that assume continued availability/use of surface parking;

The pace of unit absorption/leasing after delivery of the multi-family units under construction at

Wilde Lake Village Center. Wilde Lake Village Center redevelopment is the most recent and

market-relevant example of newer, freestanding multi-family development introduced to the

village centers. Its overall market success, therefore, will be relevant as a comparison to

housing potentials at Dorsey's Search;

Competition with initial phases of multi-family development in Downtown Columbia as well as

whatever future redevelopment may occur in older, “close-in” village centers such as Long

Reach, Oakland Mills and Owen Brown that may undergo redevelopment before Dorsey’s

Search;

The availability of construction and permanent financing available for new housing

construction; and

Continued population and household growth and net new job creation in Howard County and

Columbia.

Even with strong/stable market conditions in the housing market in Dorsey’s Search, the consultant

team believes that near-term competition, potential site uncertainties/constraints, and other factors

as identified above is likely to preclude the development of new housing in the Dorsey’s Search

Village Center for the next several years. Detailed feasibility studies will be required to determine

phasing/timing, and whether new housing product at Dorsey’s Search is rental or fee simple.

Key Market Findings, Strengths & Weaknesses

The market analysis of Dorsey’s Search Village Center draws the following key market conclusions

as well as observations of the center’s major strengths and weaknesses:

Dorsey’s Search Village Center is located near the intersection of Route 29 and Route 108.

Dorsey Hall Road provides direct access to the village center; it also provides quick access to

Columbia Road, with average annual daily traffic counts of 23,850 vehicles per day. Among


29

the village centers, only River Hill provides better access and visibility to a major arterial. In

turn, Columbia Road provides quick access to Route 108 and Route 29;

The Village of Dorsey’s Search contains a population of 5,541 residents in 2,517 households,

comprising 6.1% of Columbia’s total population according to “Characteristics of Columbia”

(Columbia Association, 2012);

Overall retail and office occupancies at Dorsey’s Search Village Center over the past two years

have been stable. As of the November 15, 2013 CoStar property profile provided by Howard

County, the village center—including its core, pad and other retail uses—was 100% occupied. The village center’s office building was also 100% occupied;

By comparison, the overall retail vacancy rate of the 801,312 sq. ft. of core and pad retail

space located in the eight village centers under study is 10.1%, which is elevated due to the

vacant supermarket space at Long Reach Village Center. Without Long Reach, the village

center retail vacancy rate is low (2.8%) and comparable to the overall Columbia retail vacancy

rate of 2%;

There are two supermarkets located within an estimated six-minute drive of the Dorsey’s

Search Village Center, including a 56,000 sq. ft. Giant store at Columbia Palace (east of Route

29), and the Whole Foods store at the former Rouse Company Headquarters building. With

the exception of Whole Foods, the closest competition located west of Route 29 is the newly

expanded David’s Natural Market at the Wilde Lake Village Center. It should be noted that

David’s Natural Market is a family-owned organic market and does not carry the same variety

as a more traditional supermarket such as Giant. Also, while Whole Foods does compete to

some extent with traditional supermarkets, its focus is on organic and natural foods;

The closest traditional supermarkets include: Safeway, located at Harper’s Choice (built in

1971, renovated in 1998); Safeway, located at the Enchanted Forest Shopping Center on

Baltimore National Pike (built in 1992, currently managed by Kimco); Giant, located at the

Chatham Station Shopping Center on Route 40/Baltimore National Pike (redevelopment of

Chatham Mall was completed in 2000); Mars Supermarket, also located on Route 40; the Food

Lion at Oakland Mills Village Center; and, the Safeway located at Long Gate Shopping Center;

The total trade area for the Dorsey’s Search Village Center is estimated to include 19,915

residents, well above the 10,000 to 12,000 resident thresholds typically required for planning

and constructing a new supermarket. The center is healthy, with 100% occupancy, a strong

anchor, and an affluent immediate market area;


30

The regional retail environment is competitive. The 10-minute drive time trade area extends

east of U.S. Route 29, approximately to Snowden River Parkway (in some sections) and

includes some of the large-scale regional retail shopping centers such as Columbia Crossing.

Long Gate Shopping Center, which is located to the north in Ellicott City, is anchored by

Safeway, Target, Barnes & Noble, and Michaels. The 10-minute drive time also includes the

planned new development as part of the redevelopment of Downtown Columbia, including

plans for up to 5,500 new residential units, 4.3 million sq. ft. of new office space, and 1.25

million sq. ft. of new retail space;

Total supportable space for food service is based on capturing a small percentage of total

available spending (typically 5% or less) on “Food Away from Home”, as defined by the U.S.

Census Bureau, within a five- to 10-minute drive of the village center. It is estimated that the

Dorsey’s Search Village Center can effectively support about 16,000 sq. ft. of dining and food service space. This suggests that an additional 6,000 sq. ft. could be accommodated

in addition to the estimated 10,000 sq. ft. of existing food service tenants;

Dorsey’s Search Village Center is the only village center located in the Ellicott City office

submarket (on the border of the Columbia Town Center submarket). While office vacancies

have declined in this market area since 2005, net absorption (i.e., leasing activity) in the Ellicott

City submarket averages only 14,900 sq. ft. per year. Although located immediately within or

adjacent to the Ellicott City and Columbia Town Center market areas, the scale and smaller-

tenant office orientation of space in Dorsey’s Search Village Center suggests that it will not

directly compete with either of these larger submarkets;

From a financing perspective, assuming that this average annual pace of absorption is

sustained, approximately seven years will be required to achieve industry-standard levels of stabilized occupancies of 93%. In other words, it could take fully seven years to

lease 93% of the existing 106,400 sq. ft. of vacant office space in the Ellicott City submarket;

Currently, Columbia comprises 38% of Howard County’s total jobs. Presuming that Columbia

maintains its fair share of any future job growth in Howard County suggests that more than

9,100 new jobs would be created in Columbia by 2020;

The office demand analysis suggests limited additional support for approximately 2,540 sq. ft. of professional office space by 2020. Since the existing office building is 100%

leased, this demonstrates the attractiveness of Dorsey’s Search for office users in the

marketplace. However, from an investment risk perspective, it is unlikely that such a


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small amount of office space could be built (i.e., financed), particularly on a multi-

tenant/speculative basis. Currently, the office buildings in each of the village centers—

including Dorsey’s Search—would be characterized in the industry as “garden” office buildings.

The industry defines this product as generally containing from 5,000 to 25,000 sq. ft. of space,

and investment risk is carefully weighed against building size, potential net absorption,

competition and other market factors;

Another factor affecting overall market potentials for development of new office space in the

village centers is site capacity, that is, whether there is sufficient space available to

accommodate new office buildings; and

ESRI forecasts suggest 93 to 113 new housing units could be built within approximately a five-minute drive-time of the village center over the next several years. In addition, as

noted, land adjacent to the village center and along Route 108 was recently rezoned from R-20

to R-Apt., which will allow development of multi-family residential uses. However, as a result of

the uncertainties and potential site constraints identified in the housing analysis above, the

consultant team does not believe that any new housing will be built within the Dorsey’s Search

Village Center before 2020.


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Appendix: Dorsey’s Search Village Center, Detailed Market Analysis · 2017-09-01 · Retail and...

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