DEVELOPMENT ANALYSIS IDENTIFYING THE MARKET AREA
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Transcript of DEVELOPMENT ANALYSIS IDENTIFYING THE MARKET AREA
DEVELOPMENT ANALYSIS
IDENTIFYING THE MARKET AREA
Adam Greenfader
Development Analysis Multi-Family Project - Bayamon, Puerto Rico
June 1, 2007 HillStone Builders, Inc.
_____________________________________________________________________ Axyon
Advanced Solutions For Real Estate Development All Rights Reserved ®
2
Table of Contents
The Goal of this Study .................................................... Pg. 4
General Assumptions ………………………………… Pg. 4
Market Research Sources .................................................... Pg. 5
Executive Summary .................................................... Pg. 6
Key Facts ………………………………… Pg. 6
The Market Area ……………………………………Pg. 9
The Site ………………….……………… Pg 11
Vehicular Circulation Analysis …………………………………….Pg 14
SWOT ANALYSIS ………………………………… Pg.19-23
Design recommendations ………………………………… Pg. 24-32
Housing Supply ………………………………….. Pg. 33-41
New Home Projects: Walk Ups ……………………………………Pg. 34-38
New Home Projects: Mid Rise ……………………………………Pg. 39-47
New Home Projects: Condominiums ……………………………………Pg. 48-51
Future Projects ……………………………………Pg. 52
Highest and Best Use ……………………………………Pg. 53
Price Point ……………………………………Pg. 56-57
Housing Demand & Supply ……………………………………Pg. 58-60
Absorption Rate ……………………………………Pg. 61
Conclusion ……………………………………Pg. 62
Addendum 1 – Buyer Questioner
Addendum 2 – Past sales comparables
Addendum 3 – AXYON Curriculum Vitae
Development Analysis Multi-Family Project - Bayamon, Puerto Rico
June 1, 2007 HillStone Builders, Inc.
_____________________________________________________________________ Axyon
Advanced Solutions For Real Estate Development All Rights Reserved ®
3
The Market Area
The principal market area for the proposed project is the municipality of Bayamón. The
municipality of Bayamón has 44.5 square miles, a population of 224,044 people, and 79,476
total households. It is the second largest municipality second only to San Juan. Census data for
the past thirty years shows a growth pattern in population for Bayamón. Bayamón has had a
steady growth over the past forty years. Taking into consideration the increase in population of
Bayamón, the municipality has been receiving pressure to accommodate the people who migrate
from other areas of the island.
Population Growth Bayamón Since 1940
Development Analysis Multi-Family Project - Bayamon, Puerto Rico
June 1, 2007 HillStone Builders, Inc.
_____________________________________________________________________ Axyon
Advanced Solutions For Real Estate Development All Rights Reserved ®
4
Secondary Market Area
However, since the project is immediately adjacent to Guaynabo, we have considered it a
secondary market. Toa Alta and Caguas are tertiary market areas. These municipalities were
chosen because they all share three distinct characteristics:
1) Proximity to the metropolitan area
2) Located within 20 minutes driving time to proposed project
3) Sub-urban land use characteristics
According to the 2000 Census data, there are approximately 822,400 people that live in the
market area or approximately 21% of the island’s population.
Development Analysis Multi-Family Project - Bayamon, Puerto Rico
June 1, 2007 HillStone Builders, Inc.
_____________________________________________________________________ Axyon
Advanced Solutions For Real Estate Development All Rights Reserved ®
5
The municipality of San Juan has 76.9 square miles, a population of 434,374 people, and
182,101 total households. It is the largest municipality in Puerto Rico.
The municipality of Guaynabo has 27.3 square miles, a population of 100,053 people,
and 36,826 total households. It is the fourth largest municipality after Arecibo.
The municipality of Toa Alta has 27.5 square miles, a population of 63,929 people, and
21,075 total households.
Development Analysis Multi-Family Project - Bayamon, Puerto Rico
June 1, 2007 HillStone Builders, Inc.
_____________________________________________________________________ Axyon
Advanced Solutions For Real Estate Development All Rights Reserved ®
6
The Site
The site is located in the municipality of Bayamón off Highway #174. The site is approximately
22 Cds. The site sits atop a picturesque mountain range and enjoys views of the Guaynabo
municipality.
The area surrounding the site is known by its colloquial name “Guyabón”. The name is a hybrid
of the two municipalities Guyanabo and Bayamón.
Although located in a sub-urban area, the site is principally accessed via heavily forested
roadways. Much of the highway transit is by industrial vehicles and construction trucks moving
rock from nearby quarries.
Development Analysis Multi-Family Project - Bayamon, Puerto Rico
June 1, 2007 HillStone Builders, Inc.
_____________________________________________________________________ Axyon
Advanced Solutions For Real Estate Development All Rights Reserved ®
7
The preponderance of heavy grade vehicular traffic is most notable along Highway #174 and
Highway #833. Most of the construction surrounding the site is either quarries or small
commercial establishments.
Development Analysis Multi-Family Project - Bayamon, Puerto Rico
June 1, 2007 HillStone Builders, Inc.
_____________________________________________________________________ Axyon
Advanced Solutions For Real Estate Development All Rights Reserved ®
8
There are some owner built homes in the surrounding vicinity as well as several residential
communities. The residential communities such as San Agustín, Villa Verde, and Las Américas
are generally older, run down, and cater to families with modest incomes.
Most notably missing from the immediate surrounding area is middle or high end
residential developments.
Development Analysis Multi-Family Project - Bayamon, Puerto Rico
June 1, 2007 HillStone Builders, Inc.
_____________________________________________________________________ Axyon
Advanced Solutions For Real Estate Development All Rights Reserved ®
9
Vehicular Circulation Analysis: Site To Caguas Center
The site is located within minutes of Bayamón’s city center. The vehicular circulation from the
site to the intersection of highway #177 (Los Filtros) is on a well paved road and generally has
light transit. From Los Filtros, vehicular congestion becomes problematic. Notwithstanding,
most of Bayamón’s principal commercial, business, hospitals, recreation, and shopping are
within easy reach of the site.
Development Analysis Multi-Family Project - Bayamon, Puerto Rico
June 1, 2007 HillStone Builders, Inc.
_____________________________________________________________________ Axyon
Advanced Solutions For Real Estate Development All Rights Reserved ®
10
Vehicular Circulation Analysis: Site To Highway #1
The site is also located very close to the adjacent municipality of Guaynabo. The two principal
roads leading to Guaynabo ( 836 & 837) are “mountain” roads with two car lanes. The roads are
generally frequented by commercial traffic and have limited turn off and passing lanes. Lighting
in the evening can be poor in certain sections. Nevertheless, access is generally free of major
traffic.
From the site, one can also reach Highway #1 – “La Muda” in less than 20 minutes.
Development Analysis Multi-Family Project - Bayamon, Puerto Rico
June 1, 2007 HillStone Builders, Inc.
_____________________________________________________________________ Axyon
Advanced Solutions For Real Estate Development All Rights Reserved ®
11
Vehicular Circulation Analysis: Site To Caguas Center
The site is also within easy reach of the municipality of Caguas. To get to Caguas from the site
take Highway #174 and head South. The road will wind through the town of Aguas Buenas and
eventually end at “Las Catalinas Mall”. Like the roads leading to Guaynabo, circulation to
Caguas is on a “mountain” road with two car lanes. The road is generally frequented by
commercial traffic and has limited turn off and passing lanes. Nevertheless, access is generally
free of major traffic. Caguas is located within approximately thirty minutes of the site.
Development Analysis Multi-Family Project - Bayamon, Puerto Rico
June 1, 2007 HillStone Builders, Inc.
_____________________________________________________________________ Axyon
Advanced Solutions For Real Estate Development All Rights Reserved ®
12
Vehicular Circulation Analysis: Site To San Juan (Luis Muñoz Marín Airport)
Accessing the San Juan metropolitan area is also within easy reach of the site. From the site one
can access San Juan from “Los Filtros” (177), Highway #22 or Martínez Nadal (#20). All three
options include well paved roads and highways with multiple car lanes.
Development Analysis Multi-Family Project - Bayamon, Puerto Rico
June 1, 2007 HillStone Builders, Inc.
_____________________________________________________________________ Axyon
Advanced Solutions For Real Estate Development All Rights Reserved ®
13
Site Location: Conclusion
Although not immediately adjacent to a major highway, the site is in close proximity to many
key roads: 174, 177, 833, 836, 20, 22 and 1. These roads provide multiple circulation routes in
and out of the San Juan Metropolitan area. With a cursory inspection, the site appears to be
suited primarily for the subsidy market ( i.e., it is located in a quasi industrial sector). However,
after an in-depth vehicular circulation analysis, the site’s location, although psychologically
distant, is excellent.
Note: A well designed marketing campaign will be required to counterbalance this perceived
weakness.