Marketing Presentation - Louisiana Commercial Realty

Marketing Presentation
10 acres land for $1,420,000
Zoned RM-4
10303 I-10 Service Road
Read Road at Interstate 10
New Orleans, Louisiana 70127
Presented By:
Robert Hand, MBA
RE/MAX Commercial Brokers Inc.
3331 Severn Avenue-Suite 200
Metairie, Louisiana 70002
July 21, 2010
Table of Contents
Page
Property Description
3-4
Neighborhood Rejuvenation
5
Survey
6
Comparable Properties
7
Supply Analysis
8-9
Demand Analysis
10
Zoning
11
Demographics
12-16
Traffic Count
17
Page 2 of 18
Property Description
Located at the Read Road and I-10 Intersection
The property is located in the eastern area of New Orleans, on Interstate 10 Service Road, near
the intersection of Read Road. Interstate 10 runs from Jacksonville, Florida to San Antonio,
Texas, and the eastern area of New Orleans enjoys traffic from both New Orleans’ Central
Business District and residents of Slidell, Louisiana, about 26 miles to the Northeast.
Page 3 of 18
Property Description
The 10 acre property was previously the Bern-Mas Apartments, which were destroyed during
Hurricane Katrina in 2005. The area has witnessed rebuilding by businesses and residences,
evidenced by nearby Lake Forest Shopping Center and the new Lowe’s just on the other side of
I-10 at Read. On June 16, 2010, the city announced nearby Methodist Hospital will be developed.
These developments could create an imbalance of demand over supply for multi-family housing,
and the target property is the largest RM-4 zoned property in Orleans and Jefferson Parish.
Page 4 of 18
Neighborhood Rejuvenation
Within a 5 minute drive time, the growth of population in the area is 7 times the national average
(see page 14 chart), and the satellite map below shows a few of the nearby businesses, such as
Lowe’s, McDonald’s, Waffle House, Popeye’s, Day’s Inn, Best Western, Chase, and large new
developments such as the Methodist Hospital and Village de Jardin.
Village de Jardin, a 224-unit mixed-use senior housing center in eastern New Orleans between
Lake Forest Boulevard and Interstate 10. The $39.7 million project, funded by the Federal
Emergency Management Agency and the Louisiana Recovery Authority, is expected to be
completed in 18 months. The senior housing section of the complex will consist of two apartment
buildings, each five stories tall with 150 either one- or two-bedroom apartments. Space is being
considered for a commercial kitchen and dining area, a covered garage, an exercise facility, a
lounge, a wellness center/clinic, activity rooms, a common area and administrative and
maintenance offices. The attached unit housing is composed of eight buildings with three
individual living spaces connected by exterior porches and common garden areas. There will be
14 single-family garden homes. In addition, there will be 45 townhouse-style apartments and
retail space for lease. The total amount of FEMA funding available for the project is $46.4 million,
including $6.6 million previously obligated for demolition of the former Gaslight Apartments.
The Methodist Hospital was purchased on June 16, 2010, by the city of New Orleans for
$16.25 million, with Mayor Mitch Landrieu promising to redevelop the vacant building into an 80bed public hospital that would be the first to open east of the Industrial Canal since Hurricane
Katrina in 2005. Administration officials say the city is negotiating with a potential operator for a
new hospital and plans to open an emergency department within a year and complete a full
renovation sometime in 2013 to serve a population base now at 77,000 and projected to be
105,000 by 2014. The total redevelopment, according to the Landrieu administration’s 100-page
review of the health care system in eastern New Orleans, is projected to cost $110 million.
Page 5 of 18
Survey
The 10.2 acre property includes lot 2C-1, 215,630sf, and lot 2C-2, 229,529sf,
and runs the entire block from I-10 Service Road to Plainfield Drive.
Page 6 of 18
Comparable Properties For Sale
In Orleans and Jefferson Parishes, there is no other property for sale zoned RM-4 over 5 acres.
There are only a few sites over 10 acres regardless of zoning. The closest property comparable to
the target site is the previous Kenilworth Shopping Center, location #1 on map, now 12.9 acres
land for sale at $5.68/SF.
1
2
3
4
5
6
Street Address
Type
Asking Sale
Price
$ 3,200,000
Land Size
6600 Morrison Road
Land, Shopping Center
Interstate 510 Service Rd.
Land, Office
$ 995,000
20.900
1 Westbank Expressway
Land, Hotel
$ 3,950,000
11.339
$
8.00
Chef Menteur Highway
Land, Industrial
$ 950,000
12.006
$
1.82
Land, Residential
$ 2,850,500
224.143
$
0.29
Land, Golf Course
$ 8,102,160
62.000
$
3.00
English Turn/Delacroix
Behrman Hwy.
Source:
LACDB.com
Times Picayune, June 16, 2010
Page 7 of 18
12.930
Price/SF
$
$
5.68
1.09
Supply Analysis-Nearby Apartments
There are 10 apartments within a 5 minute drive time that are in operation, ranging from 200 to
350 units in each.
Page 8 of 18
Supply Analysis-Nearby Apartments
Many apartments in the area use Section 8 so the rent charged depends on the income of the
tenant, but stated market rents for one bedrooms average $625 and for two bedrooms $850,
with one apartment complex, Magnolia Gardens, below market rents with one bedrooms at $525
and two bedrooms at $575.
Page 9 of 18
Demand Analysis-Nearby Universities
Near four Universities and Lakefront Airport
The property is centrally located among four universities in New Orleans:
1. William Carey College, 300 student population
2. Southern University, 3,140 student population
3. University of New Orleans, 12,000 student population
4. Dillard University, 950 student population
Page 10 of 18
Zoning
The property is zoned RM-4, which allows the highest density for apartment dwellings. The
minimum lot area per dwelling unit is 400sf, and the maximum floor area is 4.0.
Section 4.12. - RM-4 Multiple-Family Residential District.
4.12.1. Purpose of the District.
The purpose of this district is to provide for a variety of dwelling types,
including apartment hotels, the larger of these being accompanied by accessory
commercial uses, including restaurants and shops. High population density is
permitted. The height of buildings is not limited. Signs are limited and access to
commercial facilities is limited to maintain a predominantly residential character
in the district. This district is appropriate for application in central city areas and
to accommodate institutions for higher learning.
Source: http://library.municode.com
Page 11 of 18
Demographics
In the 5 minute drive time, population from 2000 to 2009 declined from 67,717 to
32,391, while the renter occupied housing percent declined from 46% to 22%. The
population is expected to grow to 45,693 by 2014. In the apartment renters prime age
bracket of 20-35, there are currently 6,717 people in the 5 minute drive time area but
only approximately 2,500 existing apartment units, not including additional demand from
the new Methodist Hospital. The household growth rate from 2009 to 2014 is among the
highest in the US at 7.28%.
5 minute drive
time
10 minute
drive time
15 minute
drive time
67,717
343,898
658,759
Population Density, 2000
Population Density, 2009
Per Capita Income, 2009
Average Household Income, 2009
Renter Occupied Housing Units, 1990
Renter Occupied Housing Units, 2000
Renter Occupied Housing Units, 2009
Renter Occupied Housing Units, 2014
2009 Population, age 20-24
2009 Population, age 25-34
Households By Income, 2009
under $10,000
$10,000-$19,999
$20,000-$29,999
$30,000-$39,999
$40,000-$49,999
$50,000-$59,999
over $60,000
Households By Income, 2009
2009 to 2014 Household Growth Rate
Source: Site To Do Business, CCIM.com
Page 12 of 18
32,391
14,405
40,743
200,007
16,875
42,560
45%
46%
22%
32%
2,426
4,291
47%
47%
29%
39%
15,489
27,241
5 minute
drive time
14%
17%
14%
14%
9%
9%
19%
11,440
7.28%
478,534
20,391
50,039
10 minute
drive time
16%
18%
15%
12%
9%
8%
19%
77,589
5.92%
45%
45%
33%
39%
38,109
67,181
15 minute
drive time
13%
16%
13%
12%
9%
8%
19%
191,851
3.34%
Demographics
The annual growth rate in the area of 5 minute drive time is 7 times the state and national
average (see chart below, Trends 2009-2014).
Page 13 of 18
Demographics
5 Minute Drive Time Percent Employed By Industry Group
10 Minute Drive Time Percent Employed By Industry Group
Source: CCIM.com, Site To Do Business
Page 14 of 18
Demographics
Population within a 5 minute drive time exceeds the US average for apartment rental age group,
20-35.
59% of the population with a 5 minute drive time earn less than $40,000, creating demand for
rental units since home buying is out of reach.
Page 15 of 18
Demographics
Within the 5 minute drive time, renter occupied housing units have declined more rapidly than
the decline in population, suggesting there is more demand than supply for rental units.
Population declined from 2000 to 2009 by 52% but renter occupied units declined by 57%. From
2009 to 2014, renter occupied household units is expected to grow 30%, but currently there is
no new construction in the area, making demand more inelastic for existing units.
5 Minute Drive Time
2000
2009
2014
Renter Occupied Household Units
12,600
5,401
7,781
Population, 5 minute drive time
67,717
32,391
45,693
Source: CCIM.com, Site To Do Business
Page 16 of 18
Traffic Count
The 2008 traffic study by the Louisiana Department of Transportation showed the I-10 traffic
between 34,000 and 58,000 cars per day.
Source: http://www.dotd.la.gov
Page 17 of 18
Contact
Marketed exclusively by:
Robert Hand, MBA
RE/MAX Commercial Brokers, Inc.
3331 Severn Avenue-Suite 200
Metairie, Louisiana 70002
Office: 504-838-0001
Fax: 504-835-0900
Cell: 504-289-8172
www.neworleansindustrial.com
Page 18 of 18