Mixed Use Case Studies: The Price of Success Marc DeCandia Sharon Coleman Joe Haeussler Kevin Jennings Britt Snider Ballard Spahr Vulcan Real Estate The Corky McMillin Companies Bank of America Merrill Lynch The JBG Companies NAIOP. Do not distribute or reproduce without permission.
Marc DeCandia Of Counsel Marc DeCandia s practice focuses on condominium and community association law, and the development of commoninterest projects Marc serves as Vice Chair, Common Interest Community Committee, American Bar Association Section of Real Property, Trusts and Estate Law He is a member of the Urban Land Institute Washington Housing Initiative Counsel NAIOP. Do not distribute or reproduce without permission. 2
Sharon E. Coleman Director, Real Estate Development Sharon Coleman oversees development activities for Vulcan's commercial office and biotechnology projects in the Pacific Northwest Her expertise includes site evaluation and project feasibility as well as design and construction of commercial projects Coleman has a focused expertise in adaptive reuse of historic landmark structures and she is instrumental in the formation and adoption of city-wide sustainability initiatives in Seattle Coleman has more than 25 years of real estate development, design, and project management experience in the Washington and California markets NAIOP. Do not distribute or reproduce without permission. 3
Joe Haeussler Senior Vice President, Commercial Real Estate Joe Haeussler started his career in commercial real estate over 20 years ago Joe oversees commercial real estate operations at McMillin His expertise includes: -- office and retail development -- retail and office leasing -- commercial property sales -- tenant improvement build outs -- historic adaptive reuse to office and retail -- entitlements and asset management NAIOP. Do not distribute or reproduce without permission. 4
Kevin W. Jennings Senior Vice President Kevin Jennings is a Senior Vice President and Southern California Market Manager in Commercial Real Estate Banking at Bank of America Merrill Lynch. He is responsible for providing a wide range of banking services, including debt, capital market, treasury management and wealth management products, to commercial real estate developers and investors throughout Orange County and the Inland Empire. Based in Irvine, Jennings has been involved in real estate financing and investment for more than 30 years. Jennings is an active member of NAIOP SoCal and serves on the Board of Directors and its Executive Council. Jennings is a graduate of the University of San Diego with a degree in economics and finance. NAIOP. Do not distribute or reproduce without permission. 5
Britt A. Snider Senior Vice President Senior Vice President, Development Oversees office development portfolio and many mixed use projects in downtown Washington, D.C. Has developed nearly 2 million sq ft of office, residential and retail product in the Washington, DC metropolitan area Formerly real estate investment banker; assisted in over $750 million in capital markets transactions NAIOP. Do not distribute or reproduce without permission. 6
Session Objectives Five things attendees will learn from this session The impact that adjacent and complementary uses can have upon the timing of the development How to deal creatively with the challenges posed by historic buildings Unique financing vehicles employed in mixed use projects How transit can give a boost to a mixed use project Examples of successful retail strategies NAIOP. Do not distribute or reproduce without permission. 7
South Lake Union NAIOP. Do not distribute or reproduce without permission. 8
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South Lake Union Before In the early 2000s South Lake Union was a dormant industrial area Location of a few major employers (Fred Hutch Cancer Research Center, PEMCO Insurance, KING-5 Broadcasting and The Seattle Times) Only 17,000 jobs and 600 units of housing South Lake Union had become a neighborhood that many drove through, but rarely to NAIOP. Do not distribute or reproduce without permission. 11
South Lake Union Today Today, South Lake Union has become a platform for innovation and is attracting leading organizations of the 21st century South Lake Union has been transformed by revitalized parks, new open spaces, an integrated public transportation system, local and national retail and restaurants, and renovated historic structures 35,000 jobs and 7,000 residents NAIOP. Do not distribute or reproduce without permission. 12
$590 MILLION SINCE 2004, PUBLIC AND PRIVATE SOURCES CONTRIBUTED $590 MILLION INTO INFRASTRUCTURE PROJECTS NAIOP. Do not distribute or reproduce without permission. 13
STREETCAR $52 million The Seattle Streetcar line opened in December 2007. Ridership is outperforming initial projections and the streetcar now carries about 3,000 week-day riders A number of South lake Union employers cite the Streetcar line as an major impetus for their decision to locate in the neighborhood Several large employers have helped fund increased service during peak hours in the afternoon as a result of employee demand NAIOP. Do not distribute or reproduce without permission. 14
The streetcar has helped SLU achieve a transit-friendly environment The streetcar line connects riders to Lake Union, and also to the bus tunnel and light rail as part of a regional transit network The City is now looking at a streetcar network, with the second phase under construction (connecting the International District, First Hill and Capitol Hill neighborhoods) NAIOP. Do not distribute or reproduce without permission. 15
Retail Strategy Important to identify existing neighborhood assets (REI Flagship Store adjacent to Vulcan s Alley24 development) and neighborhood limitations (SLU was never going to be a fashion retail center) Anchored successful retail lease-up at Alley24 focus on destination boutique sports and recreation uses that had synergy with REI along with cafes and restaurants to serve workers and residents NAIOP. Do not distribute or reproduce without permission. 16
Retail Strategy National retail anchors that add value to neighborhood Whole Foods and West Elm Bring in vibrant retail mix: both unique and local restaurants and retailers NAIOP. Do not distribute or reproduce without permission. 17
Retail Strategy Amazon.com headquarters located along Terry Avenue incorporated 100,000 SF of retail space Terry Avenue design guidelines enabled pedestrian activated corridor Bring in restaurant operators that create destination dining for lunch, evening and weekend Provide service retail for convenience of the employment center and residential base NAIOP. Do not distribute or reproduce without permission. 18
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Historic Preservation Keeping historic structures preserves neighborhood character Vulcan has nominated several buildings for landmark status and eventual incorporation into development projects Vulcan has preserved five historic structures in South Lake Union and adapted them for apartments, restaurants, office and retail space NAIOP. Do not distribute or reproduce without permission. 20
Historic Preservation NAIOP. Do not distribute or reproduce without permission. 21
Liberty Station NAIOP. Do not distribute or reproduce without permission. 22
Liberty Station (Former Naval Training Center) San Diego, CA NAIOP. Do not distribute or reproduce without permission. 23
Naval Training Center (NTC) San Diego c.1920 NAIOP. Do not distribute or reproduce without permission. 24
Naval Training Center (NTC) San Diego c. 1920 NAIOP. Do not distribute or reproduce without permission. 25
Naval Training Center (NTC) San Diego c. 1920 NAIOP. Do not distribute or reproduce without permission. 26
Historic District Formed NAIOP. Do not distribute or reproduce without permission. 27
Embrace the History NAIOP. Do not distribute or reproduce without permission. 28
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Liberty Station The Mixed Use Plan NAIOP. Do not distribute or reproduce without permission. 30
Integration of Historic and New Development NAIOP. Do not distribute or reproduce without permission. 31
Liberty Station Use Adjacency NAIOP. Do not distribute or reproduce without permission. 32
Liberty Station Use Adjacency NAIOP. Do not distribute or reproduce without permission. 33
Liberty Station Use Adjacency NAIOP. Do not distribute or reproduce without permission. 34
Process v. Design NAIOP. Do not distribute or reproduce without permission. 35
Process v. Design Vons Think out of the Box NAIOP. Do not distribute or reproduce without permission. 36
Process v. Design Stone Brewing Company NAIOP. Do not distribute or reproduce without permission. 37
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Marketing Tenant Target NAIOP. Do not distribute or reproduce without permission. 39
Marketing Tenant Target NAIOP. Do not distribute or reproduce without permission. 40
Continue to Target! NAIOP. Do not distribute or reproduce without permission. 41
Summary Adjacency Mature Complementary Property Types Together Process v. Design Adaptive Reuse needs creative thinking Think Out of the Box! Marketing Tenant Targeting NAIOP. Do not distribute or reproduce without permission. 42
Liberty Station NAIOP. Do not distribute or reproduce without permission. 43
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L Enfant Plaza Aerial View National Mall 10 th Street Corridor L Enfant Plaza SW Waterfront NAIOP. Do not distribute or reproduce without permission. 45
L Enfant Plaza: Existing Uses and Future Development Existing Uses 810,000 sq ft of office 350 key, full-service hotel 200,000 sq ft of retail and food court Future Development 800,000 sq ft of new office (2 buildings) 200,000 sq ft of new extended stay hotel or residential Completely renovated retail (final phase under construction now) NAIOP. Do not distribute or reproduce without permission. 46
L Enfant Plaza Site Plan National Mall Southwest Waterfront NAIOP. Do not distribute or reproduce without permission. 47
Mixed-Use in a Government-Centered Environment Create an urban, mixed-use environment in a governmentcentered submarket The right retail can diversify tenant mix Office is critical but design must be targeted to GSA tenants Hotels are important for contractors and conferences Residential is a nice-to-have but not required NAIOP. Do not distribute or reproduce without permission. 48
Mixed-Use Must-Have s in a GSA Environment Transit-oriented development Retail offerings that are relevant for GSA tenants Office space that can be supported by GSA rents Highly efficient office floor plates Residential product needs to be supportable by GSA salaried employees Conference / assembly space for conventions and seminars NAIOP. Do not distribute or reproduce without permission. 49
Strategic Mix of Uses to Meet GSA Needs Retail Office Hotel NAIOP. Do not distribute or reproduce without permission. 50
Future Development at L Enfant Plaza Office Extended Stay Hotel Retail NAIOP. Do not distribute or reproduce without permission. 51
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Q&A This is your opportunity to make this session exactly what you need it to be Ask the question. Please note that this session is being recorded, so before speaking, please either proceed to a standing microphone or raise your hand and wait until a mic runner reaches you. Thank you! NAIOP. Do not distribute or reproduce without permission. 53
Thank You! Marc DeCandia Of Counsel Ballard Spahr LLP 301.664.6202 decandiam@ballardspahr.com Kevin W. Jennings Senior Vice President Bank of America Merrill Lynch 949.794.7139 Kevin.jennings@baml.com Sharon E. Coleman Director, Real Estate Development Vulcan Inc. 206.342.2149 sharonc@vulcan.com Britt A. Snider Senior Vice President The JBG Companies 240.333.3831 bsnider@jbg.com Joseph Haeussler Senior Vice President, Commercial Real Estate The Corky McMillin Companies 619.794.1238 jhaeussler@mcmillin.com NAIOP. Do not distribute or reproduce without permission. 54