1. Presentation Downtown Real Estate Market Analysis Presented to: The City of Concord, North Carolina Presented by: Economics Research Associates April 8, 2008

2. Assignment Market analysis for downtown Concord Stakeholder interviews –CDDC & City staff –Downtown merchants, brokers, developers Assess real estate market potentials –Retail, Residential, and Office Market implications for downtown Policy Implications for downtown revitalization

3. Stakeholder Interviews Impending closure of Phillip Morris Downtown Kannapolis – 350-acre NCRC Development of new competitive nodes: –US 29 / US 601 –US 29 / Philip Morris –Airport / West Concord –Afton Village Area Consequences of rapid growth –Infrastructure needs –Distance between east & west Concord –Regional water resources

4. Stakeholder Interviews The Concord Hotel is the redevelopment priority Key downtown Anchors include: –City, County Offices, Courts, and Jail –The Arts Center & Davis Theater The City controls several redevelopment sites Cabarrus Avenue improvement program Parking supply Barbara Scotia College Lack of modern downtown housing options Downtown is physically constrained Long-term vision for downtown

5. Demographic Findings Population – Annualized growth of 5.2% –70,000 residents by 2008 Young families with children are the driver –Contrary to national trend – smaller household size Per capita income growth –Growth rates are well above inflation –$32,111, compared to MSA ($36,761) Educational Attainment –Undergrad / graduate attainment slightly behind Household segmentation –Growth of younger affluent families

6. Retail Market Analysis Regional inventory of 75 million square feet –57 square feet per resident Concord – 5.3 million square feet of retail space –81 square feet per resident w/ Concord Mills –61 square feet per resident w/out Concord Mills Vacancy levels are modest –Region (6.1%) / Concord (5.1%) –Population and income growth will drive demand Mecklenburg County remains the retail engine –Suburban growth is shifting the market

7. Retail Market Concentration

8. Downtown Retail Inventory

9. Downtown Inventory

10. Source Zip Codes for Downtown

11. National Retail Sales Trends

12. Retail Implications Lease rate comparisons –South Charlotte: $23/sq.ft. –Downtown Concord: $5-$10/sq.ft Competition with suburban “greenfield” retail Vacancy is low – new development is likely Significance of key anchors: –Downtown office market –Restaurants and bars –Arts and entertainment Goal - expand trade area for downtown

13. Office Market Assessment

14. Office Market Implications Concord share of office market –75% of Cabarrus County office inventory –1.4% of regional office inventory –68% of Concord inventory is in downtown Office rents in Concord have grown faster than the region Policy Implications –The NCRC project will reshape the market –Downtown office demand is linked to site availability –Opportunity for smaller professional service firms

15. Residential Market Assessment Change in Home Values

16. Residential Market Assessment

18. Age of downtown housing stock

19. Residential Market Assessment Urban Housing Opportunity

20. Residential Market Implications Charlotte regional home values are resisting national trends Afton Village provides an example of premiums that can be achieved for walkable urban housing Downtown will soon gain a 102-unit senior housing project Opportunity for a downtown housing market with 300 to 400 modern housing units Question – size of downtown

21. Project Recommendations Downtown Parking Urban Residential Development –102-Unit Senior Project –6-Unit adaptive reuse project on Union St. Priority Projects –Hotel Concord / Helig Meyers –Old Police Station –Reuse of City Hall and Annex on Union Street

22. Project Recommendations Retail Clustering Strategies –Apparel and accessories –Furniture, home furnishings & accessories Downtown Demand Generators –Arts and entertainment –City / county government –Urban residential development Policy Direction –Role of the City of Concord –Role of the CDDC –Use of incentives for downtown revitalization –Expansion of downtown boundaries –Economic Development Considerations