Market Analysis

Market Analysis for real estate development typically involves a review of broader economic conditions, followed by a review of the real estate market specifically. The latter starts with a description of the market as a whole, as well as the quantification and characterization of the demand and supply of space. Variations in the location, quality, price, and positioning of space are discussed. Case Studies and potential concepts may also be provided. Each use (office, retail, residential, etc.) is different and warrants a separate analysis, often using different sources.

Demand Drivers

Residential is driven by population growth, household size, incomes, and affordability…as well as lifestyle changes, population mobility, employment (location, duration, job security), and the character of the existing housing stock (unit type, size, amenities, etc). Demand can vary for rental vs sale product (the market for the former is currently growing). There can also be management and control considerations. A range of options have been considered here: single-family homes, townhomes, condos, and traditional rental apartments, as well as niche variations: serviced apartments, resort residential, multi-generational/senior housing – some of these blur the line between residential and hospitality. For the most part we have been brainstorming ideas in this regard first, and a final decision will be based on market sounding and acceptance.

Hotels are driven by tourism numbers, both business and leisure, length of stay, persons per room, and the competitive landscape of similar properties (of which there are not many) and alternative accommodations in the vicinity. There is limited information on local tourism, but we provide information on the existing accommodations sector for context so that the reader has a rough understanding of the market.

Retail is driven by population and incomes in the surrounding area, spending habits, and factors such as location, convenience, and experience offered by a particular site in relation to its competitors. Retail is a sector that is undergoing major changes, which makes it hard to model in terms of demand; many of the changes are driven by the continued growth of e-commerce, direct delivery, and changing lifestyle expectations. People are still spending, but they are not visiting traditional bricks and mortar stores to the same degree as before, or for the same reasons. Many existing players are struggling; many new players are entering the space; there are new channels of marketing; traditional “retail rules” are increasingly irrelevant. At a national level there is broad consensus that the overall landscape may be “over-retailed” and that much of the existing inventory of space will not only change tenants; it may also be re-purposed into something else. “Experience Retail/F&B” is on the rise, which is something we should consider, given the site’s location. But we also need to be realistic about the size of any retail component here (not large, given the fact that the site is fairly small, in a less visible and mostly residential area)

Food and Beverage (F&B) facilities are driven by many of the same factors as retail: population and incomes, spending habits, lifestyle, location, and experience. Spending on F&B has been increasing - a long-term trend associated with both increasingly busy lifestyles and a shift in spending away from acquiring “things”; the focus is increasingly “experiences” (of which dining is one) instead. Both daytime employment and nighttime/weekend residential populations drive F&B spending; tourism can also have an impact. The site we are considering currently lacks any zoning for F&B, but the addition of such elements could improve its attractiveness both to future owners/tenants and the broader public.

Office is driven by service sector employment, location, price, quality, amenities and of course the competitive context. Traffic congestion, transit options, and travel times would normally be important to consider as part of a location assessment, but they don’t appear to be issues in Clewiston. In fact, Clewiston’s employment base is not particularly office-focused at present. While that may change over time, the site being considered is a less likely candidate for any substantial office development.

Demand Modelling

Once there is a general understanding of the market, a mathematical “demand model” – basically an excel spreadsheet - is often created as a working tool that helps document assumptions embedded in the calculations and provide the reader with an understanding of the various factors behind the demand for space. When planning for larger land areas, these models help determine the right balance of different uses and densities, as well as the phasing of development and associated infrastructure. When considering smaller, individual sites the models tend to be more for scenario planning and are assumption-based; nevertheless, they still help inform the development program and strategy.

Recommended Program & Positioning

Some preliminary ideas for the program have been forward towards the end of this report; these are subject to change based on confirmation of the allowable development amounts and type. The existing zoning places limitations on what could be developed here but it is the consultant’s understanding that the city may be re-evaluating that in light of new projections for the area’s overall growth.

Select pages from the report are shown below to give an overall sense of the type of work product.