1	Old Town Temecula Market Overview Prepared for: City of Temecula Prepared by: Keyser Marston Associates, Inc. November 5, 2007
2	Overview Recent Trends Market Potential Retail/Restaurant Office Space Hotel Residential Financial Feasibility Issues Illustrative Examples of Mixed-Use Developments
3	Recent Trends
4	Downtowns: A Place to Live, Work, and Play Communities want to revitalize their downtowns and build new town centers Successful districts combine specialty retail, restaurants, entertainment, multi-family, civic uses, and parking Trend will resume, despite the current downturn in the housing market
5	Why Develop Downtown Mixed-Use Districts?
6	Market Strengths Changing demographics: Baby boomers/Empty nesters Generations X and Y Foreign-born residents Demand for lifestyle retail and restaurants Rising land values/shrinking land inventory
7	Key Factors Rapid growth in Temecula Valley Significant new investment in Old Town Renewed interest in town centers and mixed-use development Housing market “rollercoaster”
8	Housing Growth
9	Population and Income
10	Public Investment in Old Town
11	Civic Center (93,000 SF) Increase Old Town’s visibility Bring employees and visitors Add 488 parking spaces
12	New Developments Entrepreneurial investors are developing new commercial and mixed-use buildings Completed since 2002 Retail: 48,800 SF Restaurant: 15,700 SF Office: 32,300 SF
13	Development in Pipeline Commercial development in the pipeline = estimated 227,000 SF Additional 52,000 SF planned adjacent to Civic Center
14	Existing Tenant Mix in Old Town
15	Distribution of Retail Sales
16	Market Potential
17	Key Challenges Competition from greenfield development, but few remaining vacant sites Mixed-use buildings on “urban” sites Specialized expertise High construction costs Market limitations Limited population west of I-15 Current housing market downturn Parking supply Reliance on dispersed parking supply High cost of on-site parking
18	Retail/Restaurant
19	Office Space New buildings charging higher rents for small suites Small to medium professional tenants: Finance, insurance, and real estate Attorneys Architects Engineers Business services Appeal of proximity to Civic Center
20	Hotel Hotel industry recovered from impacts of 9/11 San Diego visitor market among strongest in U.S. 3- and 4-star conference hotels in pipeline throughout San Diego Temecula Valley building rooms at 5%/year, adding occupied room nights at 9%/year Plus: 522-room Pechanga Resort
21	Hotel (Cont’d.) Opportunities to co-market Old Town and wine country Potential types of hotels: Bed & breakfast inns Boutique hotels Conference hotel
22	Residential Today: significant downturn in Temecula Valley housing market Strong long-term fundamentals will support demand for attached housing Condos and townhomes more attractive as single-family prices rise Increased interest from apartment developers Living in mixed-use districts appeals to young professionals and empty nesters
23	Overall Market Strength
24	Annual Absorption Long-Term Projection
25	Conceptual Plans
26	Financial Feasibility Issues: Density, Parking, and Construction Cost
27	Retail/Restaurant New ground-floor uses along Front, Main, and near Civic Center Take advantage of existing shared parking resources plus Civic Center garage New residential, office, and hotel uses will expand retail base
28	Retail Design Issues in Mixed-Use Buildings Frontage and visibility Configuration: height and depth Parking: location, supply, cost Deliveries Utility locations
29	Flex Space and Shopkeeper Units – A Solution?
30	Office Space Existing uses largely rely on street parking and public lots Larger office buildings will likely require dedicated parking 3- and 4-story buildings less feasible in near-term due to high cost of on-site parking
31	Hotel Typical configuration for a conference hotel: Mid-rise building Large floorplate for meeting rooms High parking requirement Comparable developments have received $ public financial assistance Benefits: Stimulates retail/restaurant sales TOT to City
32	Residential Housing (esp. for-sale) requires exclusive parking Structured parking is not financially feasible in near-term Most feasible solution is tuck-under parking 3-story townhomes Opportunities east of Mercedes St. Housing with wrap parking can be configured on larger sites Long-term potential: 3-4 story wood-frame condominiums and apartments over/adj. to parking
33	Garden Apartment/Townhome
34	Type V with Wrap Parking
35	Type V over Podium Parking
36	Illustrative Examples of Mixed-Use Developments: Surface Parking
37	CityMark Paseo La Mesa CityMark Development 18 townhomes and live/work residences Private garage parking Opened in 2003
38	Heritage Town Center Chula Vista The Otay Ranch Co. 10-acre site with affordable senior and multi-family apartments and street level retail space 497 parking spaces Opened in 2003
39	Kensington Plaza San Diego The Kensington Partnership 11 live/work lofts over restaurant and retail space Private garage parking for residential and surface lot for retail Opened in 2000
40	Mission Hills Commons San Diego Carter Reese Associates 65 residential units and 15,000 SF of retail space Subterranean garage, private garages, and shared surface lot for retail uses Opened in 2004
41	Illustrative Examples of Mixed-Use Developments: Structured Parking
42	Brea Downtown Brea CIM Group Mixed-use development consisting of retail, entertainment (2 Edwards Cinemas), office space, and 62 loft units (32 affordable units) 2 parking structures – 1,750 spaces Opened 2001
43	Plaza Almeria Huntington Beach Pelican Properties 42 for-sale townhomes and 36,000 SF of office and retail space Structured parking (podium) Opened in 1999
44	Uptown District San Diego Odmark & Thelan/ Oliver McMillan 144,000 SF of retail space and 318 residential units Combination of subterranean, podium, and surface parking Opened in 1991
45	Discussion