Sperry Van Ness | Miller Commercial Real EstateChesapeake Beach Bay Club
August 18, 2011
ULI PresentationWesley Cox, CCIM Bradley Gillis, CCIM
Topic Outline2
The changing face of the Eastern Shore
Key economic drivers on the Eastern Shore
Why companies choose to locate on the Eastern Shore
Types of deals being completed & current opportunities
2011-2012 Forecast
The Changing Face of the Eastern Shore3
“Textiles to Technology”
“Graying of the Shore”
“Brain Drain”
“Ocean City-National Destination”
The Changing Face of the Eastern Shore4
Salisbury University– Seagull Square, T.E.T.C Building, Perdue School of
BusinessWor-Wic Community College– Allied Health Building
Perdue Farm’s L.E.E.D Renovation & Solar FieldOcean City Convention Center ExpansionShore Health-proposed expansionP.R.M.C-expansion Airport Runway Expansions – Salisbury & Easton
Key Economic Drivers on the Shore
Universities & Community Colleges– Chesapeake College, Wor-Wic, Salisbury University,
University of Maryland, Washington College, etc…
Regional Medical Centers– Peninsula Regional Medical Center, Atlantic General
Hospital, Shore Health Systems, University of Maryland Medical Center
Diverse employment base– Shown in the pie chart
Wallops Island / NASA
Additional Economic Drivers
Salisbury/Wicomico County Airport
Perdue Farms & Amick Farms
Harvard Custom Manufacturing (Labinal)
Northrop Grumman
Lankford Sysco
Hyatt Regency - Cambridge
Ocean City!!
Key Economic Drivers on the Shore
Our Diversified Economy
Why Companies Choose the Shore
Transportation Network– Airports, Rail, Ports
Maryland Broadband Cooperative
Financing & Incentives
Quality of Life
Access to a strong labor pool
Within a 4 hour drive of 45 million people
Current projects on the Shore9
Achievement Park-Easton– Former Cadmus building– 150,000 SQ FT Medical/Professional Office Building
Shore Health System-Grasonville– 60,000 SQ FT Medical Office Building
AC Wind-Salisbury– 150,000 SQ FT
Tri County Council Building-Salisbury– 75,000 SQ FT Government Office Building
Types of Completed Deals10
White Marlin Mall / Tanger Outlets-West Ocean CityBayliner Marine-Salisbury-2010– $1.3M-130,000 SF of warehouse/office
GKD-Expansion-Cambridge Foodswing-start up-CambridgeCadmus Printing-2011– $3.0M-200,000 SF of warehouse/office
Powerwave Building-2009– $4.0M-75,000 SF of office/manufacturing
Current Opportunities11
Industrial buildingsShadow inventory Income producing real estateDistressed Real Estate – REO’s
Shore Statistics
Vacancy Rates– Industrial, Retail, Office, Multi-family
7th in the Nation – Retail SF per Capita (Salisbury) Retail Demand – 90% of national retailers plan to boost store
counts over the next 12 months– 70% of them felt the economy is stable or
improving
2011-2012 Forecast13
Lending is loosing up– Feds are saying ‘Lend money!’– User focused
Interest rates still low– 4.5%-6% for a user/occupier purchase
• 3-5 Year ARM– 5%-7% for qualified investor purchase
Buyers are seeing opportunity – Deals are happening
2011-2012 Forecast14
Nationwide CRE is seeing a pick-up – Trickle down effect
Today’s RealityMore distressed properties to hit the marketLand is not selling– Existing Buildings are cheap, no reason to build– If the building exists
A/E firms are hearing chatter - However lack of financingConstruction will continue to hurt
- Replacement Cost vs. “Today’s Values”
2011-2012 Forecast15
Users are King
Banks will begin selling more REO properties- Shadow inventory – Bank controlled properties not
currently being marketed Auctioneers are dealing only with – Estates – Banks
Thank You!!
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Wesley Cox, CCIM Senior Advisor
Bradley Gillis, CCIM Senior Advisor