2013 SVC Economic Forum Presentation

7/29/2019 2013 SVC Economic Forum Presentation

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CORY REDDINGCD REDDING CONSTRUCTION


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CORY REDDINGCD REDDING CONSTRUCTION


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CHAD FREEMANINDUSTRIAL MARKET UPDATE


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INDUSTRIAL MARKET UPDATECHAD FREEMAN

Industrial sales were

significantly higher in

2012 compared to 2011

Major component of

this was the Sumco

South Building ($5.9M)

Trend is that we areseeing movement in the

distressed property

type and that inventory

is decreasing

SEDCOR is seeing

increased interest in

existing building stock

with large footprints


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Volume of leasing dramatically

improved

More than half of this volume

was in two short-term leases

Transaction size and volume

has increased over the last twoyears

New expansion may be slow

2009 was the last time an

industrial user signed a 40,000

SF lease in a new building (to

the user), for more than a year

Low cost of capital may be

attractive to build in 2013-2014


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Vacancy factor, which finished at 12.8% in

2011, finished 2012 at 12.3%

The average asking rent for leases closed in

2012 was $.33/SF per month

Final effective rents were likely far below

that amount because of continued

concessions

Leasing activity still well below pre-recession

levels

Landlords reducing asking rents to attract

the limited tenants that are in the market


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Low Cost of Capital

Decreased competitors

Modest increases in

market demand

Uncertainty continuing to

slow growth

SEDCOR is currently working with a portfolio ofcompanies evaluating projects to:

Potentially invest over $144m in local economy

Add approximately 1,600 jobs to the region

Recruit and expand within the Salem region


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Sold to: Gilgamesh Campus, LLC

Price: $1,075,000

Notes: 17,476 SF on 2.78 acres

Leased to: Kettle Foods

Size: 118,000 SF

Notes: Expansion from 60,000

Sold to: Local Investor

Price: $5,967,500

Notes: 189,376 SF on 10.5 acres



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More market activitythan 2012 based on

local growth and low

cost of capital

Uncertainty is key

CHAD [email protected] FREEMAN


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DON COLEMANWELLS FARGO


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We cover that Greater Oregon Market which includes:

Salem

Medford

Bend

And Everything in Between!

For those Investor/Developers in the Tri-County area of Multnomah, Washington and Clackamas,our Portland office is ready to serve your financing needs.

14

Salem Commercial Real Estate

WHAT AREA DOES THE SALEM STAGECOACH COVER?

S l C i l R l E


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15

Salem Commercial Real EstateLOAN STRUCTURE

All construction loans are typically full recourse to the sponsor with pricing based on 30 day LIBOR. Loan tocost and loan to value are indicative of the debt yield. Debt yield is defined as stabilized NOI divided byloan commitment. A 10% debt yield will typically drive equity of 15% with the loan to value in the rangeof 70%. As debt yield increases so does the equity.

PROPERTY TYPE DEBT YIELD

Multi-Family 10%

Self Storage 10%

Retail/Office/Industrial 11%

Hospitality 12%

Wells Fargos underwriting can be defined as People, Credit and Real Estate. We are relationship drivenand our vision is We want to satisfy all our customers financial needs and help them succeed

financially. For the right person and project, Wells Fargo is your source for a consistent supply of capitalto help you accomplish your vision.

S l C i l R l E t t


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Salem Commercial Real EstateHilfiker Square - 42,320 sq ft, Acquisition and Renovation, Commercial St, Salem

S l C i l R l E t t


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Salem Commercial Real EstateVista Place 11,204 sq ft, Construction and Permanent,

Commercial Street, Salem

S l C i l R l E t t


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Salem Commercial Real EstateODOT Building - 82,055 sq ft, Permanent Loan, Fairview Industrial, Salem

S l C i l R l E t t


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Salem Commercial Real EstateODFW Building - 110,000 sq ft, Renovation, Fairview Industrial Drive, Salem, TomCor Construction and

Dalke Construction

S l C i l R l E t t


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Salem Commercial Real EstateBaxter Ridge Apartments - 96 Units, Construction Loan, Baxter Road, Salem

S l C i l R l E t t


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Salem Commercial Real EstateWaterPlace 37,349 sq ft, Office with Restaurant, Construction and Permanent Loan, Liberty Street,

Salem

S l C i l R l E t t


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Salem Commercial Real Estate25,106 sq ft, Flex Industrial Buildings, Permanent Loan, Vista Ave, Salem

S l C i l R l E t t


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Salem Commercial Real EstateFairview Business Park 113,211 sq ft, Industrial Commercial, Permanent Loan, Fairview Industrial

Drive, Salem

Salem Commercial Real Estate


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Salem Commercial Real EstateHampton Inn 86 Rooms, Construction Loan, Hawthorne Ave, Salem


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tCHRIS FISCHER, CCIMINVESTMENT & MULTIFAMILY MARKET UPDATE


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INVESTMENT & MULTIFAMILY MARKET UPDATECHRIS FISCHER, CCIM


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1%

4.5% 6.5%

10%


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Interest rate future

Weak economic recovery

Housing recovery impact

Inflation . . .

Changing tax structure

Fiscal Cliffs

Euro Debt Crisis


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Current interest rates are still low

Strong buyer presence is creating a competitive market

1031 Transactions are back up

Multifamily is still the darling investment

Low cap rates + low interest rates = excellent rates

Understanding that there is both uncertainty and opportunity

is essential moving forward.


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MARK SHIPMANSAALFELD GRIGGS PC


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Two Significant Land Use Projects

that will Launch in 2013

one public, one private. . .


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Public UDCRewrite of Salems

Development Code


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Chapter 157

IP - INDUSTRIAL PARK

157.010. Classification of Uses

157.020. Permitted Uses

157.010. Classification of Uses. Most permitted, special, and conditional uses are classified with reference to

the Standard Industrial Classification (SIC) Manual, (See 113.090). Numbers in parenthesis following a use

designation indicate that the use is listed and described under the number in the SIC. Where particular

activities otherwise included under a SIC category are excluded from the permitted, special, or conditionaluse, those particular activities are listed, preceded by the words "BUT EXCLUDING" following the more

general category from which they are excluded. Particular activities thus excluded may or may not be listed in

other sections of this chapter.

157.020. Permitted Uses. The following uses, when developed under the general development standards in

this zoning code applicable to the IP district and to all such uses, generally, are permitted in the IP district:

(c) Manufacturing:

(1) Beverages (208);

(f) Retail trade:

(1) Eating and drinking places (581);


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UDC 400

(a) General Manufacturing.

(1) Characteristics. General Manufacturing is characterized by the production, processing, fabrication, assembly, or packaging of

primarily finished products for entry into the stream of commerce for ultimate sale to the end user. Materials used generally

include semi-finished products produced in Heavy Manufacturing industries; and may include some small amounts of natural

and/or raw materials. Products produced can be of any size, but are generally smaller than those produced in HeavyManufacturing. Production does not involve significant impacts on adjacent properties due to noise, vibration, dust, smoke, fumes,

or noxious odors; and is not dangerous or polluting. General Manufacturing uses may require large, medium, or small scale

facilities and the work, and the storage of product, may be conducted either inside or outside. Products are generally not displayed

or sold on site, but if so, they are a subordinate part of sales.

(2) Examples. Breweries, wineries, distilleries, and cider houses where on-site food and/or beverage consumption is not the primary

activity; commercial or industrial catering kitchens where food is prepared and delivered off-site; manufacturing of apparel; food,

beverage and related products; pharmaceuticals; production or assembly of equipment, machinery, and fabricated products; wood,

plastic, metal, ceramic, rubber, textile, and leather products; chemical products manufacturing that does not involve, or that doesnot have, significant impacts on adjacent properties due to noxious odors, noises, dust, smoke vibrations, or potential danger;

computer and electronic products.

(3) Exceptions.

(A) The production of printed materials is included in Manufacturing: Printing.

(B) Wineries, breweries, distilleries, or cider houses that are accessory to establishments for on-site retail food and/or beverage

consumption are classified under Retail Sales and Services: Eating and Drinking Establishments.

400.100. Manufacturing. Manufacturing consists of the production, processing, fabrication, packaging, or assembly of

goods. Natural, man-made, raw, secondary, or partially completed materials may be used in the manufacturing process.

Products may be finished or semi-finished and are generally made for the wholesale market, for transfer to other plants, or to

order for firms or consumers. Goods are generally not displayed or sold on site, but if so, they are a subordinate part of sales.

Relatively few customers come to a manufacturing site.


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Private Boise Redevelopment

Waterfront Parcel

North Block Parcel


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Private - Boise RedevelopmentWaterfront Parcel


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Private - Boise RedevelopmentNorth Block Parcel


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Private - Boise RedevelopmentNorth Block Parcel


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tCURT ARTHUR, SIOROFFICE MARKET UPDATE

OFFICE MARKET UPDATE


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OFFICE MARKET UPDATECURT ARTHUR, SIOR



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OFFICE MARKET UPDATECURT ARTHUR, SIOR



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OFFICE MARKET UPDATECURT ARTHUR



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OFFICE MARKET UPDATECURT ARTHUR


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tTONK FISCHERFISCHER HAYES & ASSOCIATES, P.C.

TONK FISCHER


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TONK FISCHERFISCHER HAYES & ASSOCIATES, P.C.

CONCLUSION: The changeswerent nearly as bad as they

could have been. Federal Capital

Gains went up as much as 60%.

Married couples with estates

under $10 million and 1031

facilitators are the big winners

with these changes.


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tJENNIFER MARTIN, CCIMRETAIL MARKET UPDATE

RETAIL MARKET UPDATE


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RETAIL MARKET UPDATEJENNIFER MARTIN, CCIM

180+ properties surveyed

4.3+ million SF

35 better/14 worse

others full/same vacancy



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RETAIL MARKET UPDATEJENNIFER MARTIN, CCIM

CBD- Six & Metropolitan

North- Roths, OfficeDepot, Circuit City

South- GI Joes & Safeway

East- Big Lots, Borders,

St. Vincent, Home &

Dining

7.9%

5.4%

8.4%

5.4%5.1%

7.5%

Central

Business

Dist.

North

Salem/Keizer

South Salem East Salem West Salem Total w/o

Malls



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JENNIFER MARTIN, CCIM



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JOBS, JOBS, JOBS

Industrial

Single & Multi Family

Office

Daily needs retail

Discretionary retail


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2013 SVC Economic Forum Presentation

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