Agenda - 08-19-2010 - 1 - Laserfiche WebLink

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STMATEGY S 47 The individual square footage of office properties ranges from about 2,000 square feet to about 180,000 square feet. Most properties range from about 10,000 square feet to about 30,000 square feet. The average office property therefore includes about 20,000 square feet of leasable space. Properties are primarily comprised of Class A and Class B space. Current (spring 2010) vacancy rates are about 14% totaling approximately 300,000 square feet of untenanted space, mostly located within three projects including one that has only just opened (i.e. 54 East). Total office space within the Research Triangle is estimated to include approximately 50 million square feet. This figure includes about 40 million square feet in blocks over 10,000 square feet in size as typically tracked; and, an estimated 10 million square feet of smaller office spaces. Therefore it is estimated that Chapel Hill has only about 4% -5% of the total office market supply in the Research Triangle region. Based on data provided by the County and organized by the Chapel Hill Economic Development office, approximately 70,000 square feet of office space has been absorbed on an average annualized basis during the period 1969 — 2007, within the Town limits. This does not include individual spaces smaller than 10,000 square feet that have been absorbed, as this information has not been historically tracked. Based on planned and forecast projects, it is reasonable that the Town of Chapel Hill office market may see the addition of approximately 500,000 to 700,000 square feet of leasable space over the next 5 -10 years given typical development cycles. The forecast supply is also based on the assumption that demand will eventually exceed the current supply vacancy, and that overall economic conditions improve. Considering Chapel Hill's relatively small share of the office market supply within the Research Triangle (4% - 5 %) a modest incremental gain in share could dramatically influence the local environment and further contribute to the fiscal base of the Town. For example a 1% supply-share increase within the Research Triangle (from 5% to 6% of the market supply) could mean an estimated additional 400,000 square feet of office space; another 1% equals another 400,000 square feet, and so on. In actuality, even if Chapel Hill's relative share remains the same it will have 4% - 5% of a growing market. Therefore, an actual increase in share could mean substantially greater incremental gains in supply. 4