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MADISON MARKET 2013

MADISON MARKET 2013. LANDRETTI & COMPANY, LLC DOMINIC LANDRETTI, MAI December 2013. DANE COUNTY. Title. Subdivision Plats. New Construction – Major Projects. Total of 16 projects Cost and footages were not available for all projects. Major New Construction - Proposed.

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MADISON MARKET 2013

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  1. MADISON MARKET 2013 LANDRETTI & COMPANY, LLC DOMINIC LANDRETTI, MAI December 2013

  2. DANE COUNTY Title Madison Market 2013 - Landretti & Company - Dominic Landretti, MAI - December 2013

  3. Subdivision Plats Madison Market 2013 - Landretti & Company - Dominic Landretti, MAI - December 2013

  4. Madison Market 2013 - Landretti & Company - Dominic Landretti, MAI - December 2013

  5. New Construction – Major Projects • Total of 16 projects • Cost and footages were not available for all projects Madison Market 2013 - Landretti & Company - Dominic Landretti, MAI - December 2013

  6. Major New Construction - Proposed • Not all footages and costs were available • Projects include all uses • Only two were indicated as industrial • About 60% of the projects are multifamily or mixed use with a large multifamily component • Majority of construction projects are located downtown Madison, about 20% Madison Market 2013 - Landretti & Company - Dominic Landretti, MAI - December 2013

  7. The Constellation Madison Market 2013 - Landretti & Company - Dominic Landretti, MAI - December 2013

  8. Spectrum Brands Madison Market 2013 - Landretti & Company - Dominic Landretti, MAI - December 2013

  9. The Edgewater • 227 Hotel Rooms • 12,500 Commercial Space • Exterior Walking Areas July 2013 September 2013 Madison Market 2013 - Landretti & Company - Dominic Landretti, MAI - December 2013

  10. New Construction Summary • Proposed or under construction to be completed within one to three years • Total square feet and cost was not available for all projects • Total cost was reported for only 43 of the 74 listed projects, or about ~58% • Extrapolates to about $1.4 billion of new construction Madison Market 2013 - Landretti & Company - Dominic Landretti, MAI - December 2013

  11. Historic New Construction Summary • $1.4 billion of construction is equivalent to the new construction added from 2008 to 2012 • Dane County 2013 Equalized Value for commercial and industrial property is $13.5 billion Madison Market 2013 - Landretti & Company - Dominic Landretti, MAI - December 2013

  12. New Construction SummaryOther Notables • Judge Doyle Square, Downtown Madison (Source: WSJ October 6, 2013) • 800 Block East Washington Avenue • $65 million 13 story mixed use project on 4.5 acres to be purchased from City • Phase I - 50,000s square feet for grocery,175 to 240 residential units, and 350 space parking garage • Phase II – 22 owner-occupied homes, 65,000 square foot of commercial space, and 173 parking stalls Madison Market 2013 - Landretti & Company - Dominic Landretti, MAI - December 2013

  13. MultifamilyHighlights Madison Market 2013 - Landretti & Company - Dominic Landretti, MAI - December 2013

  14. Vacancy declined as construction slowed • Permits have not been issued for all proposed construction Madison Market 2013 - Landretti & Company - Dominic Landretti, MAI - December 2013

  15. MultifamilyDemand • Impact on Market: • Population Growth: 1990 to 2000 – 1.5% 2000 to 2010 – 1.4% • Growth may need to increase or percentage of renters may need to increase • Millennial’s are favoring renting versus home ownership – strong Epic influence • Existing occupants will likely upgrade to new housing • Vacancy will likely increase • Rent will experience downward pressure Madison Market 2013 - Landretti & Company - Dominic Landretti, MAI - December 2013

  16. Land Trends • Multifamily sites • Selling between $8,000 and $30,000 per unit with the average about $10,000 to $15,000 per unit • Location and density driving price • Commercial sites • Selling between $5 and $30 per foot • Size and exposure driving price • Industrial land sales are minimal Madison Market 2013 - Landretti & Company - Dominic Landretti, MAI - December 2013

  17. Improved Commercial Trends • Multifamily is dominating the market • Mixed use is predominately multifamily • Office demand appears low • Some new development for existing companies • Spectrum, Mead & Hunt • Both vacated existing space in Madison to move to Middleton • Retail demand is moderate to high • Credit tenants and exposure are necessary • New construction rents are $25-$40 per foot NNN Madison Market 2013 - Landretti & Company - Dominic Landretti, MAI - December 2013

  18. Madison Market 2013 - Landretti & Company - Dominic Landretti, MAI - December 2013

  19. Questions? Thank you Contact: Dominic Landretti, MAI Landretti & Company, LLC 1818 Parmenter Street, Suite 202 Middleton, Wisconsin 53562 (608) 836-3406 x100 appraisal@landretti.com Madison Market 2013 - Landretti & Company - Dominic Landretti, MAI - December 2013

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