University of Washington November 4, 2010 Retail Development.
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Transcript of University of Washington November 4, 2010 Retail Development.
University of WashingtonNovember 4, 2010
Retail Development
F. KEMPER FREEMAN, JR.CHAIRMAN & CEOKEMPER DEVELOPMENT COMPANY
Kemper Development Company and Retail Development
Future Importance of China
4
Eastside Economy
5
The Bellevue CollectionDowntown Bellevue - 1946
6
The Bellevue CollectionDowntown Bellevue - 2010
7
The Bellevue Collection1980 – 41% leakage in Retail Sales
8
The Bellevue Collection2005 – 257% Positive Capture of Retail Sales
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The Bellevue CollectionAdjacency
10
The Bellevue CollectionPortfolio Overview
• Locally focused
• Market Leader is several forms of commercial real estate
• Diversified by asset class in search of synergy
• Privately held
• Ranked 23rd of top 100 real estate companies in US by McGraw Hill
Retail Office Hotel Residential
Total
Bellevue Square
1,331,300
-0- -0- -0- 1,331,300
Bellevue Place
62,700 433,800 672,400
733 rooms
-0- 1,168,900
Lincoln Square
309,600 540,400 312,600
337 rooms
230,900
148 units
1,393,500
Total 1,703,600
974,200 985,000
1,070 rooms
230,900
148 units
3,893,700
Assorted land and underdeveloped parcels are not included in totals above.
JIM MELBYPRESIDENTKEMPER DEVELOPMENT COMPANY
Financial Consequences of Retail
Retail Economics
200.00$ 250.00$ 300.00$ 350.00$ 400.00$ 450.00$ 15.00$ 6.8% 5.4% 4.5% 3.9% 3.4% 3.0%
Rent 20.00$ 9.0% 7.2% 6.0% 5.1% 4.5% 4.0%Per 25.00$ 11.3% 9.0% 7.5% 6.4% 5.6% 5.0%
Foot 30.00$ 13.5% 10.8% 9.0% 7.7% 6.8% 6.0%35.00$ 15.8% 12.6% 10.5% 9.0% 7.9% 7.0%40.00$ 18.0% 14.4% 12.0% 10.3% 9.0% 8.0%45.00$ 20.3% 16.2% 13.5% 11.6% 10.1% 9.0%50.00$ 22.5% 18.0% 15.0% 12.9% 11.3% 10.0%55.00$ 24.8% 19.8% 16.5% 14.1% 12.4% 11.0%60.00$ 27.0% 21.6% 18.0% 15.4% 13.5% 12.0%
Development Cost Per Foot
Sales Per Foot 250.00$ Operating Expenses 10.00$ Occupancy Cost Ratio 14%
200.00$ 250.00$ 300.00$ 350.00$ 400.00$ 450.00$ 15.00$ 6.8% 5.4% 4.5% 3.9% 3.4% 3.0%
Rent 20.00$ 9.0% 7.2% 6.0% 5.1% 4.5% 4.0%Per 25.00$ 11.3% 9.0% 7.5% 6.4% 5.6% 5.0%
Foot 30.00$ 13.5% 10.8% 9.0% 7.7% 6.8% 6.0%35.00$ 15.8% 12.6% 10.5% 9.0% 7.9% 7.0%40.00$ 18.0% 14.4% 12.0% 10.3% 9.0% 8.0%45.00$ 20.3% 16.2% 13.5% 11.6% 10.1% 9.0%50.00$ 22.5% 18.0% 15.0% 12.9% 11.3% 10.0%55.00$ 24.8% 19.8% 16.5% 14.1% 12.4% 11.0%60.00$ 27.0% 21.6% 18.0% 15.4% 13.5% 12.0%
Development Cost Per Foot
Retail Economics
Sales Per Foot 400.00$ Operating Expenses 10.00$ Occupancy Cost Ratio 14%
200.00$ 250.00$ 300.00$ 350.00$ 400.00$ 450.00$ 15.00$ 6.8% 5.4% 4.5% 3.9% 3.4% 3.0%
Rent 20.00$ 9.0% 7.2% 6.0% 5.1% 4.5% 4.0%Per 25.00$ 11.3% 9.0% 7.5% 6.4% 5.6% 5.0%
Foot 30.00$ 13.5% 10.8% 9.0% 7.7% 6.8% 6.0%35.00$ 15.8% 12.6% 10.5% 9.0% 7.9% 7.0%40.00$ 18.0% 14.4% 12.0% 10.3% 9.0% 8.0%45.00$ 20.3% 16.2% 13.5% 11.6% 10.1% 9.0%50.00$ 22.5% 18.0% 15.0% 12.9% 11.3% 10.0%55.00$ 24.8% 19.8% 16.5% 14.1% 12.4% 11.0%60.00$ 27.0% 21.6% 18.0% 15.4% 13.5% 12.0%
Development Cost Per Foot
Retail Economics
Sales Per Foot 600.00$ Operating Expenses 10.00$ Occupancy Cost Ratio 14%
200.00$ 250.00$ 300.00$ 350.00$ 400.00$ 450.00$ 15.00$ 6.8% 5.4% 4.5% 3.9% 3.4% 3.0%
Rent 20.00$ 9.0% 7.2% 6.0% 5.1% 4.5% 4.0%Per 25.00$ 11.3% 9.0% 7.5% 6.4% 5.6% 5.0%
Foot 30.00$ 13.5% 10.8% 9.0% 7.7% 6.8% 6.0%35.00$ 15.8% 12.6% 10.5% 9.0% 7.9% 7.0%40.00$ 18.0% 14.4% 12.0% 10.3% 9.0% 8.0%45.00$ 20.3% 16.2% 13.5% 11.6% 10.1% 9.0%50.00$ 22.5% 18.0% 15.0% 12.9% 11.3% 10.0%55.00$ 24.8% 19.8% 16.5% 14.1% 12.4% 11.0%60.00$ 27.0% 21.6% 18.0% 15.4% 13.5% 12.0%
Development Cost Per Foot
Retail Economics
Retail Economicswith Percentage Rent
Sales Per Foot 600.00$ 7.0%Operating Expenses 10.00$ Occupancy Cost Ratio 14%
200.00$ 250.00$ 300.00$ 350.00$ 400.00$ 450.00$ 15.00$ 18.9% 15.1% 12.6% 10.8% 9.5% 8.4%
Rent 20.00$ 18.9% 15.1% 12.6% 10.8% 9.5% 8.4%Per 25.00$ 18.9% 15.1% 12.6% 10.8% 9.5% 8.4%
Foot 30.00$ 18.9% 15.1% 12.6% 10.8% 9.5% 8.4%35.00$ 18.9% 15.1% 12.6% 10.8% 9.5% 8.4%40.00$ 18.9% 15.1% 12.6% 10.8% 9.5% 8.4%45.00$ 20.3% 16.2% 13.5% 11.6% 10.1% 9.0%50.00$ 22.5% 18.0% 15.0% 12.9% 11.3% 10.0%55.00$ 24.8% 19.8% 16.5% 14.1% 12.4% 11.0%60.00$ 27.0% 21.6% 18.0% 15.4% 13.5% 12.0%
Development Cost Per Foot
Kemper Development 2010
17
Lincoln Square
• Started in 1998 by Canadian developer
• Purchased by KDC in 2003
• Includes:Retail – 300,000 sfHotel – 337 room WestinResidential – 148 condosGarage – 1,700 stallsOffice – 540,000 sf
18
Lincoln SquareOffice Building economic value created by retail
0%
5%
10%
15%
20%
25%
30%
Dec-88
Dec-89
Dec-90
Dec-91
Dec-92
Dec-93
Dec-94
Dec-95
Dec-96
Dec-97
Dec-98
Dec-99
Dec-00
Dec-01
Dec-02
Dec-03
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-10
Bellevue CBD
Eastside
Seattle CBD
Source: CB Richard Ellis
AcquireLincoln Square
Approached by Eddie Bauer
Commence Office
ConstructionOpen Office
Building
Lincoln Square Office Building History
Approached by Eddie Bauer
