DEVELOPMENT ANALYSIS IDENTIFYING THE MARKET AREA

DEVELOPMENT ANALYSIS

IDENTIFYING THE MARKET AREA

Adam Greenfader

Development Analysis Multi-Family Project - Bayamon, Puerto Rico

June 1, 2007 HillStone Builders, Inc.

_____________________________________________________________________ Axyon

Advanced Solutions For Real Estate Development All Rights Reserved ®

2

Table of Contents

The Goal of this Study .................................................... Pg. 4

General Assumptions ………………………………… Pg. 4

Market Research Sources .................................................... Pg. 5

Executive Summary .................................................... Pg. 6

Key Facts ………………………………… Pg. 6

The Market Area ……………………………………Pg. 9

The Site ………………….……………… Pg 11

Vehicular Circulation Analysis …………………………………….Pg 14

SWOT ANALYSIS ………………………………… Pg.19-23

Design recommendations ………………………………… Pg. 24-32

Housing Supply ………………………………….. Pg. 33-41

New Home Projects: Walk Ups ……………………………………Pg. 34-38

New Home Projects: Mid Rise ……………………………………Pg. 39-47

New Home Projects: Condominiums ……………………………………Pg. 48-51

Future Projects ……………………………………Pg. 52

Highest and Best Use ……………………………………Pg. 53

Price Point ……………………………………Pg. 56-57

Housing Demand & Supply ……………………………………Pg. 58-60

Absorption Rate ……………………………………Pg. 61

Conclusion ……………………………………Pg. 62

Addendum 1 – Buyer Questioner

Addendum 2 – Past sales comparables

Addendum 3 – AXYON Curriculum Vitae



_____________________________________________________________________ Axyon


3

The Market Area

The principal market area for the proposed project is the municipality of Bayamón. The

municipality of Bayamón has 44.5 square miles, a population of 224,044 people, and 79,476

total households. It is the second largest municipality second only to San Juan. Census data for

the past thirty years shows a growth pattern in population for Bayamón. Bayamón has had a

steady growth over the past forty years. Taking into consideration the increase in population of

Bayamón, the municipality has been receiving pressure to accommodate the people who migrate

from other areas of the island.

Population Growth Bayamón Since 1940



_____________________________________________________________________ Axyon


4

Secondary Market Area

However, since the project is immediately adjacent to Guaynabo, we have considered it a

secondary market. Toa Alta and Caguas are tertiary market areas. These municipalities were

chosen because they all share three distinct characteristics:

1) Proximity to the metropolitan area

2) Located within 20 minutes driving time to proposed project

3) Sub-urban land use characteristics

According to the 2000 Census data, there are approximately 822,400 people that live in the

market area or approximately 21% of the island’s population.



_____________________________________________________________________ Axyon


5

The municipality of San Juan has 76.9 square miles, a population of 434,374 people, and

182,101 total households. It is the largest municipality in Puerto Rico.

The municipality of Guaynabo has 27.3 square miles, a population of 100,053 people,

and 36,826 total households. It is the fourth largest municipality after Arecibo.

The municipality of Toa Alta has 27.5 square miles, a population of 63,929 people, and

21,075 total households.



_____________________________________________________________________ Axyon


6

The Site

The site is located in the municipality of Bayamón off Highway #174. The site is approximately

22 Cds. The site sits atop a picturesque mountain range and enjoys views of the Guaynabo

municipality.

The area surrounding the site is known by its colloquial name “Guyabón”. The name is a hybrid

of the two municipalities Guyanabo and Bayamón.

Although located in a sub-urban area, the site is principally accessed via heavily forested

roadways. Much of the highway transit is by industrial vehicles and construction trucks moving

rock from nearby quarries.



_____________________________________________________________________ Axyon


7

The preponderance of heavy grade vehicular traffic is most notable along Highway #174 and

Highway #833. Most of the construction surrounding the site is either quarries or small

commercial establishments.



_____________________________________________________________________ Axyon


8

There are some owner built homes in the surrounding vicinity as well as several residential

communities. The residential communities such as San Agustín, Villa Verde, and Las Américas

are generally older, run down, and cater to families with modest incomes.

Most notably missing from the immediate surrounding area is middle or high end

residential developments.



_____________________________________________________________________ Axyon


9

Vehicular Circulation Analysis: Site To Caguas Center

The site is located within minutes of Bayamón’s city center. The vehicular circulation from the

site to the intersection of highway #177 (Los Filtros) is on a well paved road and generally has

light transit. From Los Filtros, vehicular congestion becomes problematic. Notwithstanding,

most of Bayamón’s principal commercial, business, hospitals, recreation, and shopping are

within easy reach of the site.



_____________________________________________________________________ Axyon


10

Vehicular Circulation Analysis: Site To Highway #1

The site is also located very close to the adjacent municipality of Guaynabo. The two principal

roads leading to Guaynabo ( 836 & 837) are “mountain” roads with two car lanes. The roads are

generally frequented by commercial traffic and have limited turn off and passing lanes. Lighting

in the evening can be poor in certain sections. Nevertheless, access is generally free of major

traffic.

From the site, one can also reach Highway #1 – “La Muda” in less than 20 minutes.



_____________________________________________________________________ Axyon


11

Vehicular Circulation Analysis: Site To Caguas Center

The site is also within easy reach of the municipality of Caguas. To get to Caguas from the site

take Highway #174 and head South. The road will wind through the town of Aguas Buenas and

eventually end at “Las Catalinas Mall”. Like the roads leading to Guaynabo, circulation to

Caguas is on a “mountain” road with two car lanes. The road is generally frequented by

commercial traffic and has limited turn off and passing lanes. Nevertheless, access is generally

free of major traffic. Caguas is located within approximately thirty minutes of the site.



_____________________________________________________________________ Axyon


12

Vehicular Circulation Analysis: Site To San Juan (Luis Muñoz Marín Airport)

Accessing the San Juan metropolitan area is also within easy reach of the site. From the site one

can access San Juan from “Los Filtros” (177), Highway #22 or Martínez Nadal (#20). All three

options include well paved roads and highways with multiple car lanes.



_____________________________________________________________________ Axyon


13

Site Location: Conclusion

Although not immediately adjacent to a major highway, the site is in close proximity to many

key roads: 174, 177, 833, 836, 20, 22 and 1. These roads provide multiple circulation routes in

and out of the San Juan Metropolitan area. With a cursory inspection, the site appears to be

suited primarily for the subsidy market ( i.e., it is located in a quasi industrial sector). However,

after an in-depth vehicular circulation analysis, the site’s location, although psychologically

distant, is excellent.

Note: A well designed marketing campaign will be required to counterbalance this perceived

weakness.