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48 <br />STRA TEGY S <br />Demand Analysis <br />Demand for office space in the Town of Chapel Hill is a function of many factors <br />including macroeconomic trends (the national and international economic <br />climate); growth and policies of the University of North Carolina; trends in the <br />technology sector; cost of space; availability and character of office <br />developments; and, importantly, the overall "package" that Chapel Hill presents <br />to prospective office users including the quality-of -life experience (schools, <br />neighborhoods, shopping and entertainment, recreational opportunities, etc.) <br />• Demand for office space in Chapel Hill emanates from several sources that <br />represent a diversified economic base, yet which has the stability and resilience <br />associated with a major University as an anchor; advantageous characteristics <br />associated with technology transfer; entrepreneurship; and, other positive <br />attributes. A summary of demand sources discussed in the report include: <br />University Related; Health Care / Medical; Non - profits; Research / Technology; <br />Professional; Financial Services. <br />• Chapel Hill could see the addition of 500,000 to 700,000 square feet of office <br />space (including projects /properties which are both over and under the 10,000 <br />square foot threshold) based on current and forecast additions to supply of office <br />space, slow but steady growth in demand, etc Based on the historical rate /amount <br />of office space absorption within the Town limits (70,000 square feet per year) it <br />will take approximately 5 -10 years to absorb planned and/or anticipated office <br />space in the Town of Chapel Hill. This coincides roughly with the anticipated <br />development implementation process (building) for currently planned projects, <br />understanding that timelines can be accelerated or slowed based on various <br />economic and individual financial circumstances. It is critical to note that the pace <br />of absorption, hence growth, can be influenced by a similar range of factors. <br />Future demand for office space in Chapel Hill will be influenced by several factors <br />including, but not limited to opportunities and constraints described in this analysis such <br />as: <br />➢ Ability/interest of the State of North Carolina, the Research Triangle, and the <br />Town of Chapel Hill in capturing demand (including demand for office space, <br />but also residential growth, recreational and life -style opportunities) from <br />other markets including those elsewhere in the U.S. (e.g. the Northeast and <br />Midwest) but also potentially international markets. <br />➢ Maintaining and/or increasing the competiveness of Chapel Hill relative to the <br />other office centers within the Research Triangle. Opportunities to exploit <br />apparent weaknesses in the regional market such as aging buildings, suburban <br />design (lack of proximal support amenities such as restaurants, service retail, <br />