West Covina General Plan Update

Transcription

February 23, 2015
Context
West Covina Demographics
Market Analysis
Retail
Office
Multifamily Residential
Hotel
Industrial
Demand Analysis
Recommendations and Success Factors
 Current population: 107,600 people
 Housing tenure: 65% owners, 35% renters
 Household type: more families (80%) than Los Angeles
County (67%), many with children (45%)
 Age: well-distributed, but the fastest growing demographic
is the elderly.
 Median income: $67,100, well higher than Los Angeles
County median income ($53,300)
 Race/Ethnicity: highly diverse, with the majority of residents
of Hispanic origin and over a quarter of the population of
Asian origin.
 Jobs: 29,700, mostly in retail trade, health and other
services
HR&A Advisors, Inc.
West Covina General Plan Update| 3
An established community, West Covina is only expected to add roughly
1,800 households over the next 20 years according to SCAG forecasts.
Projected and Actual Population Growth
(2000-2035)
140,000
Projected and Actual Household Growth
(2014-2035)
40,000
120,200
120,000
101,304
106,098 107,640
112,200
35,000
31,276
31,596
32,100
2000
2010
2014
32,600
2020
33,900
30,000
100,000
25,000
80,000
20,000
60,000
15,000
40,000
10,000
20,000
5,000
0
0
2000
2010
2014
2020
2035
2035
Source: SCAG, US Census
HR&A Advisors, Inc.
West Covina is wealthier than LA County as a whole, with 45% of households
earning more than $75,000 a year.
Share of Households by Income (2014)
25.0%
West Covina Median
HH Income: $67,100
20.0%
15.0%
10.0%
5.0%
0.0%
<$15,000
Source: ESRI
HR&A Advisors, Inc.
$15,000 $24,999
$25,000 $34,999
$35,000 $49,999
West Covina
$50,000 $74,999
$75,000 $99,999
$100,000 $149,999
$150,000 - $200,000+
$199,999
Los Angeles County
Residents are aging in place, with the population over 55 growing, while the
number of those under 45 are declining.
 Similar to Los Angeles County,
West Covina saw the greatest
growth in residents aged
between 55 and 64.
 The median age in West
Covina is 36.4, just slightly
higher than Los Angeles
County at 35.1
Distribution of Population by Age Cohort
(2000-2014)
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
 Distribution of residents by
age is roughly similar to LA
County as a whole.
-5.0%
-10.0%
-15.0%
-20.0%
0 - 4 5 - 9 10 - 15 - 20 - 25 - 35 - 45 - 55 - 65 - 75 - 85+
14 19 24 34 44 54 64 74 84
West Covina
Los Angeles County
Source: US Census
HR&A Advisors, Inc.
Owning a home is the preferred option in West Covina and the ratio of
owners to renters remains largely stable, even after the Great Recession.
West Covina Housing Tenure (2014)
West Covina Housing Tenure
22,000
Vacant
20,000
4%
18,000
16,000
14,000
12,000
Renter
34%
10,000
Owner
62%
8,000
6,000
4,000
2,000
0
Owner
2000
Source: ESRI, US Census American Fact Finder
HR&A Advisors, Inc.
Renter
2010
Vacant
2014
Source: ESRI, US Census American Fact Finder
West Covina’s schools perform better than both LA County and California on
average and West Covina is generally better-educated than the County.
School District Performance
Educational Attainment (2014)
60%
50%
Academic Performance Index
800
40%
30%
700
20%
10%
0%
600
West Covina
Unified
LA County
Average
2012
2013
Source: California Department of Education
HR&A Advisors, Inc.
California
Average
No High School High School
Diploma
Diploma or GED
West Covina
Bachelor's
Degree or
Higher
Los Angeles County
Source: US Census
West Covina lost approximately 5,000 jobs in the years after the recession.
Residential employment was not hit as hard as Los Angeles County.
West Covina
Los Angeles County
35,000
14%
30,000
12%
4,500,000
14%
4,000,000
12%
3,500,000
25,000
10%
20,000
8%
2,500,000
8%
15,000
6%
2,000,000
6%
10,000
4%
10%
3,000,000
1,500,000
4%
1,000,000
5,000
2%
-
0%
Jobs
Source: California EDD
HR&A Advisors, Inc.
Unemployment Rate
2%
500,000
0
0%
Employment
Unemployment Rate
Source: California EDD
54% of West Covina residents are employed, comparable to Walnut and
Diamond Bar, and well above San Gabriel Valley and LA County averages.
Jobs (2014)
60,000
50,000
40,000
30,000
20,000
10,000
0
Industry
El Monte
West Covina
Baldwin Park
Diamond Bar
Walnut
La Puente
Source: LEHD, US Census
HR&A Advisors, Inc.
Retail Trade, Health Services, Leisure & Hospitality and Professional Services
sectors support roughly two-thirds of jobs in West Covina.
West Covina Employment Profile (2014)
Financial Activities
5.7%
Other Services
7.3%
Real Estate & Investment
Construction
Wholesale Trade
Transportation
Communication & Utility
Agriculture & Mining
4%
3%
3%
2%
1%
0.5%
Education
9.9%
Professional &
Business Services
14.1%
Source: CA EDD
HR&A Advisors, Inc.
Retail Trade
23.3%
Health Services
15.2%
Leisure & Hospitality
15.0%
West Covina lost roughly 1,400 jobs between 2002 and 2012, a decline of
roughly 0.5% annually.
West Covina Job Growth
Fastest Changing Employment Sectors (2002-2012)
6.0%
4.0%
2.0%
0.0%
-2.0%
-4.0%
West Covina Historical
Average: -0.5%
-6.0%
-8.0%
Source: California EDD, Census OnTheMap
HR&A Advisors, Inc.
Construction, Health Services & Professional jobs are expected to outperform
in the San Gabriel Valley in both employment growth and annual wage.
San Gabriel Valley Employment Performance and Projected Growth
$95,000
Quadrant 3 – Below Average Job Growth
& Above Salary Performance
$85,000
36,463
Annual Wage (2012)
$75,000
Quadrant 1 - Above Average Job Growth
& Salary Performance
Information
9,866
Transportation & Utilities
20,581
Manufacturing
Wholesale Trade
54,594
39,915
$65,000
$55,000
Professional & Business
Services
80,595
Construction
21,354
Health Services
86,484
Public Administration
61,409
$45,000
Natural Resources
1,530
$35,000
Retail Trade
71,363
$25,000
Other Services
20,629
$15,000
Below Average Salary Performance
$5,000
-2%
-1%
0%
1%
Projected Job Growth (2012-2022)
Education
21,297
62,035
& Below Average Salary Performance
2%
3%
4%
Sources: LAEDC / San Gabriel Valley Economic Partnership, CA EDD, Census OnTheMap, HR&A
HR&A Advisors, Inc.
Health and Professional Services are among the largest sectors in West
Covina, both with higher wages and higher than average job growth.
San Gabriel Valley Employment Performance and Projected Growth
$95,000
& Above Salary Performance
$85,000
36,463
Annual Wage (2012)
$75,000
& Salary Performance
Information
9,866
Transportation & Utilities
20,581
Manufacturing
Wholesale Trade
54,594
39,915
$65,000
$55,000
Professional &
Business Services
80,595
Construction
21,354
Health Services
86,484
Public Administration
61,409
$45,000
Natural Resources
1,530
$35,000
Retail Trade
71,363
$25,000
Other Services
20,629
$15,000
Below Average Salary Performance
$5,000
-2%
-1%
0%
1%
Projected Job Growth (2012-2022)
Education
21,297
62,035
& Below Average Salary Performance
2%
3%
4%
Sources: LAEDC / San Gabriel Valley Economic Partnership, CA EDD, Census OnTheMap, HR&A
HR&A Advisors, Inc.
Context
Market Analysis
Retail
Office
Hotel
Industrial
Demand Analysis
Context
Market Analysis
Retail
Office
Hotel
Industrial
Demand Analysis
West Covina has 6.7 million square feet of retail space, roughly 80 percent of
which is located in shopping centers.
 14 of the 50 shopping centers in the
city of West Covina exceed 100,000
square feet of leasable area.
Shopping Center Retail in West Covina
 Retail is primarily clustered along
Interstate 10 around the Plaza West
Covina and Eastland Center, as well
along the Azusa and Glendora
corridors.
 Plaza West Covina and the Eastland
Center make up approximately half
of all shopping center space in the
city.
<50,000 sf
50-125k sf
125-500k sf
>500k sf
Sources: CoStar, HR&A Advisors
HR&A Advisors, Inc.
No retail space has been added in West Covina since 2008. Non-shopping
center retail has vacated more space than leased space in the past three years.

Shopping centers have absorbed roughly 190,000 square feet of space and vacancies have returned
to pre-recession lows.

Non-shopping center retail has recovered poorly from the recession, and vacancies have only
dropped due to the removal of space from the market.
Deliveries Absorption and Vacancy
Non-Shopping Center Retail
16%
500,000
16%
400,000
14%
400,000
14%
12%
300,000
6%
-
4%
10%
200,000
SF
SF
8%
100,000
Vacancy
10%
200,000
12%
300,000
8%
100,000
6%
-
4%
(100,000)
2%
(100,000)
2%
(200,000)
0%
(200,000)
0%
SF Delivered
Net Absorption
Vacancy
Vacancy
Shopping Center Retail
500,000
SF Delivered
Net Absorption
HR&A Advisors, Inc.
Shopping Center retail in West Covina was not hit as hard by the recession as
other retail, but rents have stagnated.

Shopping center vacancies have recovered to pre-recession levels, but rents have not, currently
around $21.00 psf or roughly $4.00 below 2008 levels.

Plaza West Covina annual rents are roughly $10 higher per square foot than city-wide averages,
with almost no vacancy.
Shopping Center Retail
20%
$30
16%
18%
12%
$15
10%
8%
$10
6%
4%
$5
2%
$0
0%
Rent
Vacancy
Average Rent
14%
$20
14%
$25
16%
Vacancy
Average Rent
$25
12%
$20
10%
$15
8%
6%
$10
Vacancy
$30
Non-Shopping Center Retail
4%
$5
2%
$0
0%
Rent
Vacancy
HR&A Advisors, Inc.
West Covina has a reasonable mix of traditional retail formats, organized
along the freeway and north-south corridors.
Regional Mall
Power Center
Discount Retail
Community Retail
Local Retail
Sources: CoStar, Market Intelligence, HR&A Advisors
HR&A Advisors, Inc.
Newer or recently renovated shopping centers are performing better than
others.
West Covina Village
87% Leased
Avg. $1.34 psf
Built 1982
Plaza West Covina
99% Leased
Avg. $2.88 psf
Built 1961 / Ren. 1993
Eastland Center
99% Leased
Avg. $1.85 psf
Built 1965 / Ren. 1998
McIntyre Square
96% Leased
Avg. $2.70 psf
Built 1959 / Ren. 2012
Hong Kong Plaza
91% Leased
Avg. $2.39 psf
Recently Renovated
Sunset Square
98% Leased
Avg. $1.25 psf
Built 1970 / Ren. 2009
South Hills Plaza
82% Leased
Avg. $1.50 psf
Built 1982 / Ren. 2005
The Lakes
94% Leased
Avg. $1.95 psf
Built 1997 / Ren. 2005
Heights at West Covina
98% Leased
Avg. $1.90 psf
Built 2007
HR&A Advisors, Inc.
Much retail in West Covina is clustered in smaller shopping centers with a
specific niche, whether discount, entertainment, ethnic or food.
West Covina Village
380k SF / 30 stores
Stater Bros, Discount
Outlet
Plaza West Covina
380k SF / 193 stores
Sears, JC Penney, Macy’s
Best Buy
Eastland Center
920k SF / 37 stores
Target, Walmart,
Burlington Coat, Dick’s
McIntyre Square
112k SF / 17 stores
Restaurants
Hong Kong Plaza
230k SF / 27 stores
Food Court
Sunset Square
230k SF / 27 stores
DD’s Discounts,
Gonzalez Market,
Susie’s Deals
South Hills Plaza
207k SF / 30 stores
Marukai Supermarket
The Lakes
180k SF / ~5 stores
Edward’s Theater,
Class A Office
Heights at West Covina
350k SF / 18 stores
Target, Home Depot,
Petsmart
HR&A Advisors, Inc.
Retail centers that have a tenant mix aligned to market needs and with recent
reinvestment have proven to be successful in West Covina.
 Strip malls focusing on food and
dining have proven to be successful:
–
Rents at McIntyre Square, which
has a majority of fast-casual
dining tenants, are higher than all
other area centers other than
Plaza West Covina.
–
Hong Kong Plaza is similarly
booming, with high rents and a
diverse mix of food-related
tenants.
HR&A Advisors, Inc.
Though Plaza West Covina is the largest mall in the San Gabriel Valley, many
shoppers are choosing more diverse retail, dining & entertainment options.
Plaza West Covina
1.65m SF
Westfield Santa Anita
1.3m SF
Shoppes at Chino Hills
380k SF
Old Town Pasadena
Brea Mall
1.3m SF
HR&A Advisors, Inc.
West Covina retail has similar vacancies to Los Angeles County and the
desirable Pasadena submarket, but achieves lower rents.
Average Quoted Retail Rents (Year-End 2014)
$35.00
Retail Vacancy (Year-End 2014)
5.0%
4.5%
$30.00
4.0%
$25.00
3.5%
3.0%
$20.00
2.5%
$15.00
2.0%
1.5%
$10.00
1.0%
$5.00
0.5%
0.0%
$West Covina
HR&A Advisors, Inc.
Pasadena /
Arcadia /
Monrovia
Los Angeles
County
West Covina
Pasadena /
Arcadia /
Monrovia
Los Angeles
County
Roughly two-thirds of West Covina retail space was built or last renovated
before 1997 and may be in need of repositioning.
West Covina Retail Space by Year Built/Renovated
2008-2017
480,824 SF
1948-1957
261,852 SF
1958-1967
78,305 SF
1968-1977
403,849 SF
1998-2007
1,716,130 SF
1978-1987
734,268 SF
1988-1997
1,955,235 SF
HR&A Advisors, Inc.
Compared to Los Angeles County as a whole, West Covina has an overall
surplus in traditional retail sales, but leakage in food and beverage sales.
Taxable Sales per Capita (Year-End 2012)
$3,000
“Brick and Mortar”
Sale Per Capita
West Covina $10,650
Los Angeles $8,900
$2,500
$2,000
$1,500
$1,000
$500
$0
Automotive
Furnishings &
Appliance
Food &
Gasoline
Clothing
General
Beverage
Stations
Merchandise
Retail
Stores
West Covina
Los Angeles County
Restaurants
and Bars
Other Retail
Sources: California Board of Equalization, HR&A Advisors
HR&A Advisors, Inc.
Compared to Los Angeles County as a whole, West Covina has an overall
surplus in traditional retail sales, but leakage in food and beverage sales.
 On a per-capita basis, West
Covina has lower food and
beverage, gasoline and
dining sales as compared to
LA County.
$150
$130
$110
$90
Millions
 This food, beverage and
dining leakage amounts to
roughly $35 million in
potential sales.
West Covina Retail Sales Gap (Year-End 2012)
$70
$50
$30
$10
-$10
 West Covina has a healthy
surplus of motor vehicle and
parts, clothing and general
merchandise sales on a percapita basis.
-$30
Sources: California Board of Equalization, HR&A Advisors
HR&A Advisors, Inc.
Context
Market Analysis
Retail
Office
Hotel
Industrial
Demand Analysis
West Covina has 2.6 million SF of office space, of which, roughly 1 million SF is
in six Class A buildings.

Only 5 office buildings in the city of West
Covina exceed 100,000 square feet of
gross leasable area.
West Covina Office Space
Class C
778,000 SF
Class A
992,000 SF
Class B
813,000 SF
Class A
Class B
Class C
HR&A Advisors, Inc.
West Covina General Plan Update|
30
No significant amount of office space has been added in West Covina since
2008.

West Covina absorbed just under 100,000 square feet of retail space in 2014, the most in almost
two decades.

Even before the Great Recession, vacancies have steadily trended higher.
150,000
18%
16%
100,000
14%
12%
10%
-
8%
(50,000)
6%
4%
(100,000)
2%
(150,000)
0%
SF Delivered
Net Absorption
Vacancy
HR&A Advisors, Inc.
Vacancy
SF
50,000
After peaking in 2008, rents have stagnated in West Covina and vacancy
increased, even post-recession.

Actual rents are just under $27 psf annually on average for Class A space, with Class B & C space
closer to $20 psf.

Vacancy is roughly similar across classes, with highest vacancies for Class A space at 12.5 percent,
and average vacancy under to 5 percent for Class C space.
$35
18%
$30
16%
14%
$25
12%
$20
10%
$15
8%
6%
$10
4%
$5
2%
$0
0%
Rent
Vacancy
HR&A Advisors, Inc.
Vacancy
Average Rent
Rent and Vacancy
Although there are many older buildings in West Covina, most office space was
built in the ‘80s and ‘00s.
West Covina Office Buildings by Year Built/Renovated
West Covina Office Space by Year Built/Renovated
35
700,000
30
600,000
25
500,000
20
400,000
15
300,000
10
200,000
5
100,000
0
0
Class A
Class B
Class C
Class A
Class B
Class C
HR&A Advisors, Inc.
There is some newer and recently-renovated office space in West Covina,
although performance is sub-par for non-medical office.
 The Lakes at West Covina, shown at
top right, has above-average rents,
but high vacancy. The two buildings
were built in 1990 and renovated in
2004.
 Nogales Medical Plaza, built in
2008 and shown at bottom right, is
almost fully leased and has the
highest weighted rents in West
Covina.
Lakes at West Covina
$26.40 psf
84% Leased
Nogales Medical Plaza
$27.50 psf
96% Leased
HR&A Advisors, Inc.
Based on West Covina’s current share of San Gabriel Valley office space, the
city could capture a demand for roughly 400,000 sf of space through 2035.
 Based on projected growth of office-using employment, West Covina could add as
over 2,000 jobs in the next 20 years.
 Over half of the projected job growth in the San Gabriel Valley is expected to be
healthcare related, creating significant demand for medical office space.
West Covina Office Space Demand
West Covina Fair Share Capture of Jobs
West Covina Supportable SF
4.3%
Less Current Vacant Office Space1
Low Area Capture
Medium Area Capture
High Area Capture
75.0%
100.0%
125.0%
Change
'15 - '20
535
160,372
Change
'20 - '25
486
145,870
Change Cumulative
'25 - '35
‘15- ‘35
1,100
2,121
330,119
636,361
-103,198
-85,998
-42,999
-232,195
42,880
57,174
71,467
44,904
59,872
74,840
215,340
287,120
358,900
303,124
404,166
505,207
Source: US Census LEHD Data, CA EDD Forecasts, HR&A Advisors
1 Assumes that 50% of existing vacant space is market-competitive and leasable and that 25% of that existing vacant space is absorbed by 2020,
50% is absorbed by 2025, and 60% is absorbed by 2035.
HR&A Advisors, Inc.
Context
Market Analysis
Retail
Office
Hotel
Industrial
Demand Analysis
West Covina has a strong rental residential market.
Absorption (Units)
 West Covina’s rental multifamily
supply consists of older units, with no
new rental apartments built in at
least the last ten years.
WestCovina
CovinaRental
RentalMultifamily
Multifamily--Class
ClassAA
West
300
300
10%
10%
200
200
8%
8%
100
100
6%
6%
00
4%
4%
-100
-100
2%
2%
-200
-200
0%
0%
Vacancy (Units)
 Class A vacancy rates fell by more
than half between 2009 and 2014
and are currently extremely low.
300
10%
200
8%
100
6%
0
4%
-100
2%
-200
0%
Net Absorption
Vacancy (Units)
 Over 5,000 apartment units in West
Covina are considered Class A, which
is 43% of the overall residential
inventory.
Absorption (Units)
West Covina Rental Multifamily – Class B/C
Vacancy
Sources: REIS
HR&A Advisors, Inc.
Asking rents in West Covina for Classes A, B, and C residential
multifamily rose steadily until 2008, but have since been been mostly
flat.
West Covina Multifamily Average Asking Rent
$1,600
$1,400
$1,200
$1,000
$800
$600
$400
$200
$0
A
BC
Sources: REIS
HR&A Advisors, Inc.
Recent West Covina condominium sale prices are on par with nearby
cities.
Median Condo Sales Price. 2014
$400,000
$350,000
$300,000
$250,000
$200,000
Condo Sales, 2014
250
200
150
100
50
0
Terra Grande Townhomes
Built 2008 / 2,300 SF, 3-BR
Recently listed at $480,000
Source: DQ News, 3Q 2014
HR&A Advisors, Inc.
There is little new pipeline development for either rental or forsale multifamily units in West Covina.
 Currently the city’s only new
residential
building
under
construction, the Lakes at West
Covina will be a mixed-use
development with 450 apartments
and 20,000 SF of retail space.
The Lakes at
West Covina
HR&A Advisors, Inc.
Newly-built rental apartments in the competitive market are
amenity-rich and command premium rents.
Paragon at Old Town
163 Units, built 2011
$2,124 to $2,775
Avalon San Dimas
$1,675 to $2,310
Rancho Monte Vista
$1,350 to $1,679
College Park
$1,429 to $2,355
Sources: HR&A
HR&A Advisors, Inc.
Demand for new residential product will come from rental turnover
in the region as well as new household growth.
 By 2035, there are expected to be an additional 8,900 households in and around
West Covina, of which the City can capture a portion with new multifamily housing.
 Historically, in West Covina, renters have favored multifamily housing, with only
three percent of owners living in condominium units.
West Covina Residential Demand
New Owners
'15 - '20 ’20 - ’35
Low West Covina Capture
Medium West Covina Capture
High West Covina Capture
113
123
134
156
169
183
New Renters
'15 - '20 ’20 - ’35
724
802
881
888
980
1,073
Cumulative
‘15- ‘35
1,880
2,076
2,271
Source: US Census Data, SCAG Projections, HR&A Advisors
HR&A Advisors, Inc.
Context
Market Analysis
Retail
Office
Hotel
Industrial
Demand Analysis
The San Gabriel Valley is dominated by independent hotels, with most hotels
clustered along freeways.
Upper Upscale
Midscale
Upscale
Independent
Upper Midscale
Economy
Sources: Smith Travel Research (STR)
HR&A Advisors, Inc.
West Covina has nine hotels with 750 rooms in total; there are also clusters of
hotels in nearby Baldwin Park and La Puente.
Courtyard Baldwin Park
(Est. ADR: $154) | Upscale
Comfort Suites La Puente
(Est. ADR: $127)
Walnut Inn & Suites
(Est. ADR: $117)
Holiday Inn West Covina
(Est. ADR: $134)
Hampton Inn West Covina
(Est. ADR: $114)
1West Covina Hotel Supply
Hotel Name
Class
Covina Motel
Independent
Walnut Inn & Suites
Independent
Wayside Motel
Independent
Days Inn West Covina
Economy
Five Star Inn
Independent
Fairfield Inn & Suites
Upper Midscale
Best Western
Upper Midscale
Hampton Inn
Upper Midscale
Holiday Inn West Covina
Upper Midscale
Total
Rooms
20
51
53
58
70
110
125
129
135
751
HR&A Advisors, Inc.
The Upper Midscale and Upscale hotel market has been improving since the
recession.
 Revenue per available room (RevPAR) is currently about $67.
 RevPAR fell in 2009 from $63.50 to $48.50 – mirroring a declining occupancy rate
(60% in 2008 to 48% in 2009).
 Since 2009 however, RevPAR has increased 38 percent since 2009, marking a
strong recovery in the hotel market since the Great Recession.
San Gabriel Valley Upper Midscale and Upscale Hotel Market Performance
$80
$70
$60
$50
$40
$30
$20
$10
$-
80%
70%
60%
50%
40%
30%
20%
10%
0%
2009
2010
2011
RevPAR
2012
2013
2014
Occupancy
HR&A Advisors, Inc.
There are about 1,300 hotel rooms in the pipeline within about a 30 minute
drive of West Covina, but none within the City itself.
 Presently, there are 8 hotel projects
(1,400 rooms) either in the planning, final
planning, or construction phases in the
area. All of these projects are expected
to come online before 2017.
Vacant rental car lot to be
transformed into a 110 room
hotel in Azusa.
 Of these, 1 hotel will be Upper Upscale,
6 will be Upscale and 1 will be Upper
Midscale.
 The closest planned project is the Home2
Suites planned on a vacant lot of a
former Enterprise Car rental in Azusa.
 The second closest planned project is a
133-room Hilton Garden Inn in El Monte.
Sources: Smith Travel Research (STR), East LA Market Area Pipeline Reports
HR&A Advisors, Inc.
There are about 1,300 hotel rooms in the pipeline within about a 30 minute
drive of West Covina, but none within the City itself.
Upper Upscale
Midscale
Upscale
Independent
Upper Midscale
Economy
Sources: Smith Travel Research (STR), East LA Market Area Pipeline Reports
HR&A Advisors, Inc.
Based on West Covina’s current and future residents and employees, there is
demand for 136 hotel rooms through 2035.
 Based on the City’s current resident and employee base and taking into account the
City’s existing hotel supply, there is existing demand for 136 hotel rooms.
 Room nights supported by residents and employees estimated based on Los Angeles
County averages and applied to West Covina.
West Covina Hotel Room Demand
Cumulative New Office Employees in West Covina
New Employee Room Demand @ 70% Capacity
Cumulative New Residents in West Covina
New Resident Room Demand @ 70% Capacity
Cumulative New Office Employees in West Covina
New Employee Room Demand @ 70% Capacity
Cumulative New Residents in West Covina
New Resident Room Demand @ 70% Capacity
Less Existing Hotel Room Supply
Total Demand
Room Nights Change Change Change Cumulativ
Per Res./Emp. '15 - '20 '20 - '25 '25 - '35 e ‘15- ‘35)
5.24
535
486
1,100
2,121
11
10
23
44
.52
3,050
2,667 5,333
11,050
6
5
11
21
5.24
29,406
604
.52
107,600
217
-751
135
Sources: Los Angeles Convention and Visitors Bureau, Los Angeles Tourism and Convention Board, TNS TravelsAmerica, 2011, SCAG Growth Forecast, EDD,
HR&A Advisors
HR&A Advisors, Inc.
Context
Market Analysis
Retail
Office
Hotel
Industrial
Demand Analysis
West Covina has only nine industrial buildings, totaling 473,000 SF, which is less
than 1 percent of industrial square footage in the East San Gabriel Valley area.
 There is no Class A industrial space in
West Covina. Only 21 percent of
leasable space is classified as Class B,
and the rest is Class C.
 In the San Gabriel Valley, industrial
buildings are generally clustered
around State Route 60 and west of
Interstate 605.
 Only one project has been built
recently in West Covina, the
Prosperity Business Park. The average
age of industrial buildings is over 40
years old.
Prosperity Business Park
Built 2009
Industrial Buildings
No Vacant Industrial Land
HR&A Advisors, Inc.
Only one new industrial building has been delivered in the last 15 years. There
is currently almost no vacant industrial space in West Covina.
Deliveries, Absorption, & Vacancy
50,000
7%
6%
40,000
5%
4%
20,000
3%
Vacancy
SF
30,000
2%
10,000
1%
-
0%
(10,000)
-1%
SF Delivered
Net Absorption
Vacancy
HR&A Advisors, Inc.
Though the San Gabriel Valley is expected to gain over industrial 16,000 jobs
by 2035, West Covina is not likely to capture a significant share.
 Manufacturing and other industrial jobs are projected to decline county-wide through
2035.
 Based on West Covina’s existing share of Industrial space, the city is not likely to
capture demand for significantly more than 15,000 SF of Industrial space through
2035.
West Covina Industrial Space Demand
San Gabriel Valley New Industrial Jobs
San Gabriel Valley Supportable SF
Change
Change
Change Cumulative
'15 - '20 '20 - '25 '25 - '35
‘15- ‘35
4,303
3,796
8,213
16,312
2,151,637 1,898,044 4,106,490 8,156,170
Less San Gabriel Valley Vacant Space1
-1,739,412 -1,449,510 -724,755 -3,913,676
Low Area Capture
Medium Area Capture
High Area Capture
0.1%
0.3%
0.5%
412
1,237
2,061
449
1,346
2,243
3,382
10,145
16,909
4,242
12,727
21,212
Source: US Census LEHD Data, CA EDD Forecasts, HR&A Advisors
1 Assumes that 50% of existing vacant space is market-competitive and leasable and that 25% of that existing vacant space is absorbed by 2020,
50% is absorbed by 2025, and 60% is absorbed by 2035.
HR&A Advisors, Inc.
Context
Market Analysis
Retail
Office
Hotel
Industrial
Demand Analysis
West Covina outperforms the County in most sales categories, but “leaks” $35m
in annual food and dining sales, which could be captured by new retail space.
Retail
$35m
Annual Food &
Dining Leakage
70,000 SF
Existing support
for new food and
dining space
130,000 SF
Potential retail
demand from
future Office &
Residential
HR&A Advisors, Inc.
Driven by projected growth of health-related jobs, West Covina could capture
over 2,000 new workers by 2035, supporting up to 400,000 sf of new office.
Retail
Office
$35m
2,100
Annual Food &
Dining Leakage
West Covina fair
share capture of
regional job growth
(2015-2035)
70,000 SF
Existing support
for new food and
dining space
130,000 SF
400,000 SF
Supportable new
office space by
2035
Potential retail
demand from
future Office &
Residential
HR&A Advisors, Inc.
Although West Covina residents favor single-family homes, there could be
significant support from future younger residents for new multifamily housing.
Retail
Office
$35m
2,100
Annual Food &
Dining Leakage
West Covina fair
share capture of
regional job growth
(2015-2035)
70,000 SF
Existing support
for new food and
dining space
130,000 SF
400,000 SF
Supportable new
office space by
2035
Multifamily
Residential
1,800 units
Supportable new
multifamily rental
units by 2035
300 units
Supportable new
multifamily condo
units by 2035
Potential retail
demand from
future Office &
Residential
HR&A Advisors, Inc.
There is an existing gap in hotel accommodations for visits by friends and family
of West Covina residents, which alone could support one or more hotels.
Retail
Office
$35m
2,100
Annual Food &
Dining Leakage
West Covina fair
share capture of
regional job growth
(2015-2035)
70,000 SF
Existing support
for new food and
dining space
130,000 SF
Potential retail
demand from
future Office &
Residential
HR&A Advisors, Inc.
400,000 SF
Supportable new
office space by
2035
Multifamily
Residential
1,800 units
Supportable new
multifamily rental
units by 2035
300 units
Supportable new
multifamily condo
units by 2035
Hotel
70 rooms
Existing, un-met
demand from West
Covina residents’
friends and
relatives
65 rooms
Potential hotel
demand from
future Office and
multifamily
Residential by 2035
Context
Market Analysis
Retail
Office
Hotel
Industrial
Demand Analysis
Repositioning underperforming retail with a mix of uses can be a city-wide
strategy.
Strip Mall, Rowland Heights
HR&A Advisors, Inc.
Transforming the area around Plaza West Covina into a “town center”-type
development is a worthy aspiration and has been successful in many cities.
Americana on Brand, Glendale
HR&A Advisors, Inc.
Higher-density residential can support an active “downtown” and a wide
variety of neighborhood and regional retail.
Paseo Colorado, Pasadena
After
Before
HR&A Advisors, Inc.
62
Semi-enclosed plazas, with mixed-use retail, dining and multifamily residential
ensure activity throughout the day and into the evening.
Belmar, Colorado
After
Before
HR&A Advisors, Inc.
63
Open shopping streets can attract so-called “High Street” retail, with higher
sales than traditional enclosed malls.
Westfield UTC, San Diego
After
Before
HR&A Advisors, Inc.
64
Embracing food and dining and creating inviting spaces can help revitalize strip
retail and establish a “third space,” or community anchor with regular visitors.
Sunset Junction, Los Angeles
HR&A Advisors, Inc.
65
For-sale medical office space is already in high demand and will likely be
bolstered by projected growth in Health Services employment.
Metro Business Center, Diamond Bar
Renovated 2015
HR&A Advisors, Inc.
66
Multifamily housing in close proximity to food, dining and retail can draw
younger residents and capture rental turnover from farther-flung communities.
The Lakes, West Covina
Under Construction
HR&A Advisors, Inc.
67
An upper-midscale hotel would cater to visiting friends/family of residents who
do not have higher-end local options and support a vibrant downtown.
Hilton, San Gabriel
HR&A Advisors, Inc.
68
February 23, 2015

West Covina General Plan Update

Transcription

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