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Home My WebLink About2.A. Maxfield Research Market Study Presentation 4ROSEMOUNTEXECUTIVE SUMMARY CITY COUNCIL City Council Work Session Date: March 4, 2014 AGENDA ITEM: Maxfield Research Market Study AGENDA SECTION: Presentation Discussion PREPARED BY: Kim Lindquist, Community Development AGEN A NO. Director 2, ATTACHMENTS: APPROVED BY: Oa.) RECOMMENDED ACTION: Presentation of Study Findings ISSUE Mary Bujold of Maxfield Research will be in attendance to present market information about Rosemount. Ms. Bujold's firm conducted an update to the County's Housing Needs Assessment and made a presentation to various community representatives earlier this year. The Study can be accessed at http://www.dakotacda.org/housing data.htm#Needs Assessment . More recently Ms. Bujold conducted a market study in conjunction with the South Gateway task force work. Staff has asked that a presentation be made to the entire Council, Planning Commission and Port Authority which highlights portions of both studies. Staff had also requested that the additional research occur so that some of the information reflects the entire community and not just the South Gateway area. xiield 4 �r, 4, Rese a eh Im .✓ i91• leiw.44 a.j ag[0111111 _ _ !IR ".....4---::::4' IIIIIIMIMIIIIIIMIIIITMIIIVIITIIJ ..,...Po.a..�....,rte.. ,.w�- Summary of Findings — Rosemount Growth Trends and South Gateway Corridor Redevelopment Analysis Presented to: Rosemount City Council Presented by: Mary Bujold I Maxfield Research Inc. May 13, 2014 ROSEMOUNT imiiiii " - Housing Submarkets Dakota County Submarkets > Consistent with 2005 study e County Submarkets > 3 Primary Submarkets ' / 0 ,., 1=1 A biewer Developed Communities '� Q Growth Communities QRural Area ➢ Developed • Cities with limited land available for new development l ➢ Growth • Cities with a higher proportion of land �3" available for new development • Rosemount is listed in this category IIIIIIIIMP ➢ Rural ■ Rural towns and townships ; most of these areas are likely to remain low density . Nr.any lw M 4ROSE\4OUNT „_ aY MINNESOTA Growth projections were compiled by Maxfield Research from a thorough review of several factors (i.e. impact of recession/recovery, 2010 Census, building permits, recent population and household growth estimates, etc.) o Maxfield's projections reflect more modest growth between 2010-2020 and more robust growth between 2020 and 2030 o Maxfield's projections reflect continued outward expansion of the existing Metropolitan Area, but increased redevelopment Dakota County Total Population 2000-2040 90000 80000 70000 d 0 60000 y % O 50000 s v 40000 y E 1111 20000 _ Ji ;z 2 �A fk_ 2000 2010 2020 2030 2040 a Apple Valley ■Burnsville is Eagan Farmington ■Hastings ■Inver Grove Heights Lakeville Mendota Heights Rosemount South St. Paul West St. Paul V '7 ROSEMOUN'T' pJ � w - - r h i I Key Findings n _ gap cs ey dings "� Population Growth • +49,525 households (2010-2030) (Co.) ��°"� 7 W:,1, 2o1oto2oso ■, Less than 1,000 • 7,925 households (2010-2030) 1,001 5,000 (Rosemount) 5,001-15,000 15,001-26,000 • Demand for additional housing • 34,525 owned/15,100 rental (Co.) v • 6,385 owned/1,540 rental (Rose.) Ql N'�` • Increase in senior housing demand, but y is expected to accelerate after 2020 4 r3.•10,110110 4}....„......'u^ Inoi FT • Increase in redevelopment and in-fill /op • Proportion of rental to increase against , ownership from 2010-2020, but only modestly in most communities , ., A • Trend toward shrinking household sizes XnEnic M a . ........................... .... rz...... ,- - i ROSEMOUNT rissaimi"- Age Distribution 55+ age cohorts will have Age Distribution of the Population Rosemount, 2000-2030 the highest growth rates 12,000 10,000 There will continue to be a 8000 however a large number of 6000 z I 4,000 children and teens (< 17) which is expected to remain 2,000 [ lid' 1111 ■iI .111.0011 p 0 the largest age group through 17 and 18-34 35-44 45-54 55-64 65-74 75+ Under 2030. 1 2000 .2010 ■2020 •2030 axneld a kr.rAII II IN y1-r - ., n 11i1iII Employment iiimis i , , • Employment & Housing Demand • Job growth +36,300 ('00-'10) (+24%) (Co.) Employment Growth(jobs) 2030 • +976 ('00-'10) (+15%) (Rosemount) to 1 C� 0to499 500 to 4,999 • +34,340 jobs '10-'20 (+19%) (Co.) 5999 10,000 000 to to 9 12,500 • +2,768 '10-'20 (+38%) (Rosemount) • 11.0% Metro Area jobs in Dakota Co. • Wages for jobs in Dakota Co. are 16% , lower than the Metro average Q • Difference between owner/renter incomes and incomes of Dakota Co. Ilk workers: 111 ❑ Median HH income: $71,360 (Co.) ❑ $86,880 (owner) vs. $38,880 (renter) Pern MP . a mu ❑ Median HH Income $77,475 (Rose.) MI ❑ Avg. Dakota Co. wage: $50,180 r 9 3 y,J ; ROSEMOUNT Rental Housing - -'s .,-: - y . .�. �, , . . . Metro Area Trends Rosemount > Current preferred real estate segment for investors > 176 units Majority of new product is in the urban core > 1.7% vacancy rate > Development pipeline: 750 units (Dakota Cty.) > Vacancies Very Low I Rents increasing for > Development pipeline: 16,000+ units (Metro) > Smaller unit types (EFF/1BR) Dakota County Overall $795 avg. rent ■ 24,113 units I 1.5% vacancy rate > Avg. rent range = $545 to $1,051/mo. 96% participation rate Market Rate Rental Stock by Year Built 9,000 2.5 8,000 7,000 2 N E 6,000 D C CI 5,000 1 R d H E 4,000 v 7 1 u Z 3,000 a 2,000 -- 0.5 1,000 0 0 Pre 1960s 1960s 1970s 1980s 1990s 2000s Nun Vacancy Rate —r--Number of Units afield 5% Vacancy = Market Equilibrium "� °'"' v a a. l ... ....'1 ' ' -- ROSEMOUNT Multifamily Housing 4 ' AT J Chart shows total rental demand by product type for Rosemount (2010-2030) Challenge to develop market Rosemount Rental Demand by Decade 2010-2030 rate housing because of the 300 current rent gap between what 260 250 230 market is willing to pay and ; 200 210 n 200 ` 180 180 160 the cost to construct .s a at 150 .` I 120 Z 100 a ? 0 Rental Market Rate Rental Affordable Senior Market Rate Senior Affordable 2010-2020 8 2020-2030 flxfliiL+ ( " ROSEMOUNT :� iF.,. For-Sale Market For-Sale Market Lot Supply • Housing market rebounding • New plats low during downturn • Permits issued for 96 SF in • Vacant developed lot supply at less Rosemount in 2013 than 2 years (SF), 17 years (ME) in • Lender-mediated properties waning Rosemount • Growth communities resuming for- sale Some bank-owned lots still available sale construction Average Home Resale Prices-Rosemount 2005 through 2013(March) $350,000 $450,000 $300,000 —.._.. r—' I $400,000 7 pI 711-7_ _ i $350,000 $250,000 ___._ 1 i 1 I I $300,000 $200,000 s 5250,000 $150,000 ' I l l 1 E I l $200.000 $100,000 • _ $150,000 $100,000 $50,000 ' $50,000 NSF-Rose OMF-Rose SF-Co. —MF-Co. a Source: Minnesota Association of Realtors Ma X'UtL.. .... ..................................................... ... wA ROSEMOUNT � ` - Housing Demand , Chart shows total projected housing demand Rosemount Housing Demand by Decade for Rosemount (2010-2030) 2010-2030 4,000 Majority of demand will be for single- = 3,5°° 3,400 • 3,000 bo family housing ! • 2,500 1 2,000 1 1,500 1,300 With increased affordability of single-family ! • 1,000 I 820 685 homes, builders are focusing on this product 2 5 0 III 260 200 180 180 120 230 160 210 55 125 versus tow n h o m es; �a�� `a��J �Qa.e aa��e ��aae `aao�e `ya,� ,ode e�`J\� ale v- *.z, P,o ON c' a�� a�� c`a ,o4' 00 Leo We anticipate that for-sale townhome �o,�,a ,o`y tee° �� yep development will increase again within •2010-2020 2020-2030 about 24 months afield .� f 1 I�fWD1YY IIH. T '"i ' ROSEMOLINT °° � Key Takeaways • Rosemount is projected to have strong household and employment growth over the next 20 years • Development of UMore and its absorption could increase the rate of growth in the community somewhat beyond what is currently projected over the next 20 years • Strong population and household growth will increase interest among retail and service users that want to capture demand from the local household base xfield .. NewarcM W'. A it=== - ROSEMOUNT imogic SOUTH GATEWAY CORRIDOR ASSESSMENT Summary of Findings . mom. •• M- x Current Conditions ons > Current Conditions Gateway Corridor ❑ Mix of Office, Retail and Light Industrial Uses /Mad...and cu.ww M.nr �M,;M.. ❑ Most buildings are older +u�r.cti a�ct�xw 0' "° F ❑ Built in the 1980s • ;, . ;;�,.,.., ❑ Mix of uses and building conditions ti ;"" is not visually appealing s�oe4P �„; . ,. ., ❑ Several non-conforming uses per „ Lia909.1.99m.111131/,anMar >y :. City zoning 32 n W" ...A.m Strengths of the Corridor ��°.. ❑ Located at the Intersection of two if ✓tl! NY,Au . major thoroughfares (Cty. Rd. 42 and 39 Gart.19031911,931 valoce"NaAG Highway 3 Y - N u ,,8 d ti w 0 O K w a ._— _ .... �.. ... , rte- .,... .. ... K ROSEMOUNT South Urban Gateway Analysis for Reinvestment • Land Use(2030( N ixfield • R,Karq N. • ROSEMOUNT �e s Traffic Volumes Traffic Volumes-South Gateway Recent Traffic Volumes i 4sr,= y • E on Cty. 42 — 12,600 (2012) oF ft Sc�S' ta3ro 11s,vv .,,, A !i X-0 g y �� • , o g ( St IN ,. t r� • W on Cty. 42 — 17,700 (2012)< sr w 7100 _ " ` asm s` w�T03 30 0 • y h , ( ) 5300 ^ ., toa 6100 €, 5800 E on 160 - 9,800 (2011) c • 0 146a)St r)', `4}. Br>G�d` , IL a a 1i°' ° 10 S�Z TatfSIw sew r o` > h • W on 160th — 13,700 (2011) ' P? oW t148thStW L"'tirTSlw_1 Y 5T:1 0 -, i > "dOystw A • Non Hwy. 3 — 12,400 (2012) pp 4 p ° ja i+ 1h q. •' :: 9� 3` r ate° a ` �w- 17700 " ��oo • Son Hwy. 3 — 8,900 (2012) 19100 , . 3400 o t' o› dim o twoj'r a,., T, $ Projected Traffic Volumes (2030) ` � i52 itz s�w� rY< w t51w st"' I v • E. on Cty. 42 — 27,000 st, g 1 163 l: :54z tw n > F t55tnstw c� ?' • W. on Cty. 42 — 28,000 j a ° t94Oksew 0 • E. on 160th — 25,000 G ��T:W N ' - is °. .; 4/A o cue "'o ,: GaA W. on 160th — 36,000 t Or N .aa �S F �p 1 h i m IV % M 4 Caton , & Q 4 t58tho --,; StW r G} v O !17000 137,00- -- a5 ' w t 9.800 a o to . nnod „c. ROSEMOUNT Land Use Except for Parcel 32, which is R.getd.Mtu.1 .. , 6 anon,ore V:n S now(1.1tolp ; Business Park, all other parcels ' Rosemount Mr4t Owre k1,1 ..:v ....I r. Mons Kong Mc donw tllstm ' Only amen Ia.won. `i are guided for commercial C3.ppndd.cans f O V e rm Maw llNon Sa Ban F development 1 md.pendenl School D t..Rl 1 0...INm 54tc Ban AZ 1S Calton Woof AMS , 14 ...pendent School OW 156 p 15 State tam n �V ��' �; 16 i.aps.BOUtlt tamey Daarat 2 1? NAnIRn Pedtanc DenUit.R a 1R Aapp.nnmato Adjacent guided land uses N Rpp CN.upava/MwrrasLan n Rose nark MerMmul Mg 7 4 11 CMUUSt lamely Deno,ry 1 13 1G"`Lw' Include neighborhood 32 33 n \Went wn 26 Bag Reuel snip Cenler k 11 Vaaniatd E 2 Gown Oa rwasN l5 Tie Sp Ca commercial downtown t,11,rx 5 ill Access Specnitses mternatron fh R... unt lNe.u. a 12 `dl commercial and various 13 Rtck5AUl.mOt Yl Repay ..., Id cau tins Mwl,n°MI, IS tams.andi 16 Vaunt Land U cinted Lori UtN residential densities aa_•tl N Mupc AMCn■l.a J 19 Wtded Cent hand . er 43 ipllpr Rpom.unl 411140 D,lrp � 2 42 lamer RCiem.001£111240 Not(: 1 1 I 43 (.liner 3CSem.tnt 01146e Dump lD 5 Existing land use is a mix of g 4 office, retail, industrial and o cC agricultural uses W 0 x vi .a.. � � �..,.wm �yy_ n.,. Although commercial uses dominate, „„...n» there is limited synergy among the South Urban Gateway Analysis for Reinvestment • *4 ROSEMOUNT Land lJse iln3t�l N existing uses Maxi'4 MINNESOTA cld kr.raal1 into • ;:'——— •. . . ::. .. . , .,_. ,. :, tio.,„„.... ,„„„..rr ROSENIOt�NT I ''.n-- ....'simmic General Trade Area 1101 ' u ► ► • "'_ °Ut Rosemount will draw customers srP��i l "3. it: Mendota Richfield Z. . I I —t a LA,' primarily from south central .�: ;fin Pint:,', Dakota Count v i 1., c o ottaye z nin(ton E:y;rri "'"'': :,,,,ndspt 4Cirud 1 Retail and office will draw from L SWrd FL.,,,,.,,,,,,, Burnsville ___,.-�.~ more local trade area v,nn, ID f Ro.:tiviowd --� 1e0t1rStE Industrial will draw from the larger trade area L. ' L.,,...,..,.„„, _.4„,..,__, La —60 y a vermillion g mxill�d uf. ......... . .. .. ' ' ROSEMOLINT -� - Retail Trade Area wminyton ��° E�a� :y, �,, The Primary Retail Trade ‘` 3 . ....... „ < : ud Area consists of Rosemount, Lo,„ Empire Township and Apple Grey Cray..: v.elr Burnsville - Valley .__ Apps._ v511e, L • ,_ ` .._ _�J ,tnt,StE Households located in the SE portion of Eagan may also be a market for some types of goods Vermillion tl 190teSir and services in Rosemount due `'AW('"" to shorter drive-times. F.rI1JV_/I S VI:t nlptai 'Wield Ne..arh Im. � � '� ROSEMOLINT �� Covered Employment ws/111117alt • The number of jobs located in the City of Rosemount increased by 3.5% from 2Q12 to 2Q13 • Avg. weekly wages increased by 11.4% over this same period • Rosemount has higher proportions of Mfg., Education and Health Services jobs than does Dakota Co. • Note: Other Services includes Repair and Maintenance, Personal Care Services, Laundry Services, Religious/Civic/Professional Organizations and Private Households Public Administration includes Administration of Human Resources, Environmental Quality Housing, Urban Planning and Community Development, National and International Affairs, Executive, Legislative and other Government Support 2013 Q2 Employment: % of Total 0% 5% 10% 15% 20% 25% 30% Natural Resources & Mining Construction Manufacturing Trade, Transportation, Utilities Information Financial Activities aM Professional & Business Services Education& Health Services Leisure & Hospitality ■ Rosemount Other Services Dakota Cty. Public Administration x ` - 6 • p Consumer Expenditures iiimic� .i ► • - Average Annual Household Expenditures Average Annual HH Expenditures and Median Household Income • Avg. annual spending per HH 574,000 Avg. Spending/HH is similar in Rosemount to Co. $72,000 Median HH Income • Median HH income is slightly higher $70,000 in Rosemount than in Dakota Co. $68000 ct $77,475 versus $71,360 N r\ N $66,000 0 in 00 oill $64,000 al o $62,000 r; _ __ _n.___.___._ Rose mount Dakota Cty. Average Annual Household Expenditures by Category Avg. Annual HH Expenditures by Category $30,000 All Other Goods and Services • Food at Home, Food Away from Home and Entertainment/Recreation are the largest $25,000 .....36101401101.{....6111 pets discretionary expenditure categories $20.000 .Household • Food, Household Items and Goods/Services Furnishings/Equipment account for about 33% of all expenditures $15,000 •Food Away From Home Expenditures by category are similar between $10,000 •Food at Home Rosemount and Dakota Co. $5,000 ■Entertainment/Recreation $0 Mai= ■Apparel ., itXfiNi(I Rosemount Dakota Cty. . E � ��►h. rA rz ROSEMOUNT Local Retail Leakage me ► • - • Leakage is the amount of Retail Surplus/Leakage Factor by Industry consumer dollars being spent Food Services & Drinking Places outside of the community for Nonstore Retailers various types of goods and Miscellaneous Store Retailers j General Merchandise services Sporting Goods, Hobby... Clothing and Accessories... Gasoline Stations 1 • 54% of retail goods and services Health & Personal Care Food & Beverage Stores including food and drink are Bldg -r�- Materials, Garden Equip... g purchased outside of the Electronics &Appliance _ Furniture & Home Furnishings community Motor Vehicle & Parts 100 80 60 40 20 0 20 40 60 80 100 • Categories with the highest leakage rates include: • General Mdse (99%) • Clothing/Acc. (87%) • Elec./Appl. (83%) • Food Service (57%) • Non-store retailers currently account for 12% of sales (about un !!..,». $25.0 million) -az '� ROS�MOLINT � --- - - Business Establishments mill. . BUSINESSES THAT PRIMARILY OCCUPY OFFICE SPACE BY SIZE OF BUSINESS(EMPLOYEES)2011 The majority of business ROSEMOUNT ZIP CODE 55068 250 — establishments in the City that 200 utilize office space are small to tAw 150 118 mid-size, ranging from 1 to 19 p p E 100 ----- ---------- people z 50 19 ' 1 to 4 5 to 9 10 to 19 20 to 49 50 to 99 100 or more Size of Business(Number of Employees) EMPLOYEES OCCUPYING OFFICE SPACE BY BUSINESS SIZE In total, businesses u t i l i z i n g ROSEMOUNTZIP CODE 55068 400 _ office space in the City 450 416 have an estimated 1,115 employees 400 266 Z 350 g 300 The largest number of businesses t. 250 195 ` 200 In Rosemount have between z150 119 120 100 10 and 19 employees 50 0 Ito 4 5 to 9 10 to 19 20 to 49 50 to 99 100 or more f! • a k n t:l(1 x 11 K.we w Size of Business(Employees) =1 ROSEMOUNT Business Establishments BUSINESSES THAT PRIMARILY OCCUPY OFFICE SPACE BY SIZE OF BUSINESS(EMPLOYEES)2012 The majority of business GATEWAY CORRIDOR 250 establishments that are -- utilizing office space in the Gateway Corridor are small to E 100 mid-size, ranging from 1 to 19 5 50 - people 9 10 r- r 0 0 0 0 1 to 4 5 to 9 10 to 19 20 to 49 50 to 99 100 or more Size of Business(Number of Employees) EMPLOYEES OCCUPYING OFFICE SPACE BY BUSINESS SIZE In total, businesses utilizing GATEWAY CORRIDOR 2012 500 office space in the Gateway Corridor 450 have an estimated 150 employees 300 x r, 350 300 250 200 150 0 100 20 63 65 0 0 50 1 to 4 5 to 9 1010 19 20 to 49 50 to 99 100 or more M Mc. Size of Business(Employees) ROSEMOUNT Office Market Multi-Tenant Office Space Total and Occupied Eagan has the greatest amount 9,000,000 8,000,000 of office space, 7.7 million sf, 000,000 Followed by Burnsville with v 6,000,000 u- 5,000,000 2.9 million sf. 4,000,000 V1 3,000,000 2,000,000 Highest office vacancy rate is 1,000,000 ■ ■ ■ ■ ■ ■ ---- - Lakeville at 16.7%, lowest is Rosemount Apple Valley Burnsville Eagan Lakeville Inver Grove Heights Rosemount at 0%. Inver Grove ■Total SF •Occupied SF Heights is also low at 2.5%. Office Vacancy Rates 18.0% 16.72% 15.65% 16.0% c 14.0% (+ 12.0% A c10.0% 7.99% 9.40% u 8.0% v a 6.0% 4.0% 2.50% 2.0% 0.00% ■ 0.0% Rosemount Apple Valley Burnsville Eagan Lakeville Inver Grove Heights � ixficld Krti,•u'I la,. clef=" ° ,..,.'u ROSEMOUNT . „ Office Lease Rates.....„Ia...‘ ' f, . Office Lease Rates by Community Average Office Rent/Sq. Ft. (lease rates shown as net) ( $16.00 $14.00 Rosemount $6.00-$15.00 Z $12.00 Apple Valley $4.25-$26.00 LL $10.00 Burnsville $10.00-$18.00 6. $8.00 $6.00 Eagan $5.00-$25.00 ce $4.00 Lakeville $8.00-$25.00 $2.00 $0 .00 Grove Heights $5.00-$16.00 .00 Rosemount Apple Burnsville Eagan Lakeville Inver Valley Grove Heights 4 ,�V Nr.�ar.�In... R ROSEVIOUNT Retail Market II soliosiu Multi-Tenant Retail Space Total and Occupied 7,000,000 Burnsville has the greatest amount 6,000,000 of retail space, followed by Eagan 5,000,000 4,000,000 83,000,000 Apple Valley had the lowest vacancy v, �.W°W° 4.79% 1,000,000 Rosemount Apple Valley Burnsville Eagan Lakeville Inver Grove Rose m o u nt's vacancy rate was Heights •Total SF ■Occupied SF less than Lakeville, but higher than Apple Valley, Burnsville and Eagan Retail Vacancy Rates 25.0% 20.62% Retail vacancy rates are generally 20.0% 15.00, lower than the Metro Area indicating 10.0% 8.28% 7.78% 9.55% a strong retail market 4.79% 5.53% 5.: 1 . 1. Rosemount Apple Valley Burnsville Eagan Lakeville Inver Grove Heights • Id • Mi. .••••rea toe t� � .� ROSEMOUNT . �� r. e: Retail Lease Rates Range of Retail Lease Rates by Community (all lease rates quoted as triple net) Average Retail Rent/Sq. Ft. • Rosemount $8.00-$15.00 • Apple Valley $4.00-$23.00 $18.00 I $16.00 • Burnsville $4.25-$24.00 Z $14.00 • Eagan $14.00-$32.00 ? $12.00 LL $10.00 • Lakeville $10.00-$22.00 $8.00 • Inver Grove Heights $5.00-$22.00 c $6.00 $4.00 $2.00 $0.00 Rosemount Apple Burnsville Eagan Lakeville Inver Valley Grove Heights ��xllcld .Ini M Nr�r.lrr . ROSEMOUNT ' ` Industrial Market y, Industrial Space Eagan, Burnsville and 14,000,000 Total and Occupied Lakeville have the highest 12,000,000 10,000,000 inventories of industrial space 8�0�0 u.g 6,000,000 ar 4,000,000 Rosemount's inventory of 2,000,000 Industrial space is above that 0 Rosemount Apple Valley Burnsville Eagan Lakeville Inver Grove Heights Of Apple Valley and Inver .Total SF ■Occupied SF Grove Heights Industrial Vacancy Rates 30.0% 25.0% 24.45% Industrial vacancy rates range 20.0% 17.44% ro from a low of 4.0% in Apple 7 15.0% 12.34% 10.14% $77% - 10.0% Valley to a high of 25% in 5.0% 3'930 Inver Grove Heights 0.0% Rosemount Apple Valley Burnsville Eagan Lakeville Inver Grove uK Heights '� ROSEMOUNT Lease Rates Industrial Lease Rates by Community Low/High Industrial Rent/Sq. Ft. (range listed as triple net) $18.00 $16.00 Rosemount $4.25-$8.50 $14.00 $12.00 Apple Valley $4.25-$14.40 $io.00 d $8.00 Burnsville $3.95-$10.25 c4 s600 $4.00 I I I U I Eagan $4.50-$9.00 $2.00 Lakeville $4.25-$8.25 so.00 Rosemount Apple Valley Burnsville Eagan Lakeville Inver Grove Inver Grove Heights $4.25-$11.00 Heights •Average Rent Low •Average Rent High NNN=Triple Net which excludes all utilities, taxes and common area charges which are extra Maxfirlq...h. ■ 17a a� rf I ROSEMOUNT Land Values N MINNESOT . 2 IPrged Map ID 11 In Canon Non ! I 2 VHMK Imam W CNN". • Ro.emu Mehet wpm. f S Nag KongHWV Land values are generally �y� 6 Mc6m+da C y.( DN1,... YJ 1 2 $ 1012 9 rImpalsCam 3 commensurate with the size 5 6 13 I6 Vamia Sm.Sae I 1 9 4 11 a Mdepe4ea OIM sc6acl [I01 z 7 Il Cm100TraiaAm1 of the parcel 1) Calm hMa AWS*ply 14 lvhpltlet Sclpd Oii 196 .0 15 16 17 8 v 666 PMm n 16 l asps 3 Naedt Frail D.yale 9 v 18 19 26 14 17 waa,P1Amfc D.e6cky 20 21 27 it D..K.m on. 22 23 19 O.me C..3. A6 30 28 10 R.WCN.apnceeAm.11aeram . 24 25 292° ` 11 Raw Pak M.chumal HI41 1 g 13 However, parcels that are , A 14 V«.01..06 i 82 u Vacua I located on high volume 66 Rag R.a 96pCaer Su 1: Vac.Lad 1. ClweR..61 19 The 46M..n 1 10 A�° °l °e traffic arteries tend to have fi' 11 Rammmm lima. !2 116196 33 Mies A.caaMe1A_ WACKEER �'° M FurnIA1.OewiMAMy higher land values LAKE as P.ml Aar 37 ..h6 Cowl Lm6 , ) 16 M•!,.A.tamfl. 19 (#kdN6 rud 1106 {- 40 sa.sh.c1..P. f 41 1(.00.Nounml V6mg.DuO7 41 PawRawm'°�wD�p In considering parcels for redevelopment, V Palmer ROCmdV6egc Du�p__.. A Office/retail users will pay a higher price/ SF for land than industrial users s �� rm (4, rt Redevelopment should target commercial , a Users to the high value parcels t T T�V l T 7� South Urban Gateway Analysis for Reinvestment • ROSEMOUNT Land Values-Per Square Foot N MINNESOTA $.09-12 Dt-$2:a I- 1`.'.al 01226.1'50•6.51.11101 v Cpl R rt.p.'"74," " ROSEMOUNT - Sample Land Values The table shows a sample of land values taken from SAMPLE LAND VALUES BY USE TYPE Dakota County Assessor's 2013 Sample Land Values records. Retail Office Rosemount $4.00-$11.01 $4.50-$5.25 Apple Valley $10.50-$13.49 $6.25-$8.24 Smaller size parcels tend to Burnsville $6.00-$11.00 $4.00-$10.00 Eagan $8.87-$13.98 $4.00-$10.15 have a slightly lower land Lakeville $9.00-$16.06 $2.00-$8.50 value than larger parcels and Inver Grove Heights $5.50-$9.04 $4.35-$9.02 retail land values are Source: Dakota County Assessor moderately higher than those for office. \,fIxflId . ... ....... .................................. ... . .. 4"T .,-, „:_ ,.- - r 'T ROSEMOLIN-T' Vacant Land by Zoning VACANT LAND BY ZONING CITY OF ROSEMOUNT The largest share of vacant land 2014 (71%) is currently zoned agricultural Vacant Land By Zoning Acres Potential/Units/SF j and agricultural preserve RR Rural Residential 142.38 142 R1 Low Density Residential 208.24 624 R2 Moderate Density Residential 10.04 60 R3 Medium Density Residential 33.75 1,012 These uses will gradually change C3 Highway Service Commercial 2.39 21,000 C4 General Commercial 76.69 1,001,880 over time as growth occurs and BP Business Park 236.18 2,057,600 IP Industrial Park 11.05 96,268 demand for various uses in GI General Industrial 458.65 3,995,758 AGP Agricultural Preserve 1,711.04 n/a the community increase. AG Agricultural 7,357.23 n/a WM Waste Management 0.04 n/a Total 10,247.68 Agricultural will most likely be Source: City of Rosemount rezoned to residential, commercial and industrial uses; current need is most significant for low- and mod- density residential to accommodate growth Ixf j(j em•artli 1st ,m ROSEMOUNT Y . Total Demand Estimates ESTIMATED DEMAND FOR RESIDENTIAL UNITS AND COMMERCIAL AND INDUSTRIAL SPACE Estimates are based on projected CITY OFROSEMOUNT growth in Rosemount for 2015-2025 2025-2035 Retail households, employment and General Commercial 221,565 - 360,145 461,084 - 500,000 Specialty Retail 50,000 - 60,000 75,000 - 80,000 general projected business Estimated Lease Rates $16.00 - $20.00 growth and development. Office General Office 35,000 - 50,000 60,000 - 80,000 Medical Office 15,000 - 20,000 30,000 - 50,000 The projections consider the Estimated Lease Rates $12.00 - $20.00 amount of vacant land in Residential Single-Family(For-Sale) 1,280 - 1,800 3,000 - 3,400 Rosemount; current land Apartments 400 - 440 355 - 380 Senior Housing 260 - 280 410 - 440 availability exceeds demand to For-Sale Townhomes 800 - 820 685 - 750 Estimated Lease Rates $1.40 - $1.40 2035. Industrial Office-Warehouse 80,000 - 125,000 150,000 - 200,000 Warehouse 200,000 - 250,000 300,000 - 350,000 Need for more land zoned for Single-User 250,000 - 350,000 280,000 - 350,000 Estimated Lease Rates $4.00 - $8.00 Low-density and moderate-density Source: Maxfield Research Inc. Residential to support projected Growth. 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I '� ROSEMOLINT �' "SUGAR Demand Estimates r ► ► • ESTIMATED DEMAND FOR SPACE SOUTH URBAN GATEWAY CORRIDOR Demand estimates anticipate 2015-2025 2025-2035 continued growth in Rosemount Retail General Commercial 25,000 - 35,000 80,000 - 100,000 Specialty Retail 3,000 - 5,000 5,000 - 15,000 Estimates are not cumulative Estimated Lease Rates $16.00 - $20.00 $12.00 - $23.00 meaning each time segment is separate but demand remaining Office General Office 5,000 - 10,000 10,000 - 20,000 from the earlier time period Medical Office 3,500 - 6,000 5,000 - 8,000 Estimated Lease Rates $12.00 - $20.00 $18.00 - $25.00 may be added onto the next period provided that the space Residential Apartments 80 - 100 100 - 125 has not already been captured Senior Housing 0 - 0 50 - 60 elsewhere in Rosemount For-SaleTownhomes 0 - 0 40 - 50 Estimated Lease Rates $1.40 - $1.40 $1.65 - $1.65 Sub categories may be Industrial interchangeable, primarily with Office-Warehouse 25,000 - 30,000 35,000 - 50,000 g p y Warehouse 100,000 - 150,000 100,000 - 200,000 industrial Single-User 50,000 - 150,000 100,000 - 150,000 Estimated Lease Rates $4.00 - $8.00 $5.00 - $10.00 Notes: Square footages shown reflect new space which would replace some For-sale and senior housing could older space and/or increase the total amount of commercial space in the Corridor. Corridor property is currently guided as commercial;industrial is anticipated to be considered once additional occur south of the Gateway Corridor commercial district. retail redevelopment takes hold Square footages assume that land area is available to accommodate building sizes. Source: Maxfield Research Inc. 'Ixiield :: RnKanM Iar. ;x. ._, .. 61E0 .`�014C111111►� Financial Tools ..... _ u ► ► • . , • Tools to assist with redevelopment in Minnesota have become more limited due to a reduction in the potential uses of tax increment financing • However, this tool remains one of the most widely used for redevelopment • Other tools include: — Land Write Downs — Grants — Low-Interest Loans — Partnering with other County and State Agencies — Essential Function Bonds • All of these present their own challenges Ma ■A■p Id N ~arch 1st m- " ROSEMOUNT w Key Takeaways r , ,.',4:-,.: ......._ milmmommormiffl, wissitillifi • Rosemount is projected to add more than 7,900 new households over the next 20 years. • Although demand for rental housing will increase modestly, we anticipate continued strong demand for single-family homes in the community. • Rosemount has a growing household base with a high median household income ($77,475-2013) • There is a growing employment base that includes higher proportions of jobs in Manufacturing, Education and Health Services and Trade/Transp./Utilities. As Rosemount expands, the mix of businesses is likely to shift somewhat. • Retail service businesses in Rosemount are spread out in several different locations; Rosemount has a historic Downtown where a number of small independent businesses have located. • With projected high traffic volumes, the South Urban Gateway could attract more commercial development. M axficld I�fWill'.M. ]Itit*1Ski Key Takeaways . , . . 10111111111/116 • Rosemount households are currently spending a high proportion of their retail dollars outside of the community, most likely in Apple Valley • Retailers generally look for locations where there is a growing customer base, sites for new stores (vacant) and/or locations adjacent to major anchors • Attracting new retail to the Gateway Corridor may require removing older space to make property available for new construction. • We recommend that you provide/offer larger size parcels for greater flexibility in attracting new retail. This would mean combining smaller parcels to create larger development parcels in the Gateway Corridor. • The Gateway Corridor could be repurposed as a focus for a larger community commercial center. This would require some site assembly and most likely waiting for a larger user. . , 1 xfield . . eld t d . ROSEMOUNT s City-Wide Takeaways y MIN • Coming out of the Recession, development interest expanding, but is focused primarily on residential and industrial • Retail and office development are lagging behind as technology is causing shifts in the manner in which we purchase goods and utilize office space • Fundamentally, population and household growth will feed demand for retail goods and services, but there will be a greater emphasis on retail services than retail goods moving forward • Retail development will evolve toward convenience nodes and central commercial districts which higher concentrations of goods and services; the Gateway Corridor has excellent visibility and access and is situated between two well-traveled highway corridors • Industrial development typically fluctuates; currently on an upswing, but there is greater movement toward bringing some manufacturing jobs back to the US M4 y py il4 AnNf d Wt. l ROSEMOUNT Questions ... . Mary Bujold Maxfield Research Inc. . a 612.904.7977 1 mbujold @maxfieldresearch.com f fj axficlel Nr.rarch I... 6