market analysis - plan hillsborough...market analysis technical memo 2 june 28, 2016 prepared by:...

Market AnalysisTechnical Memo 2

June 28, 2016

Prepared by:

WTL+aPrepared for:

HDR

On behalf of:

WTL+a

WTL +a R e a l E s t a t e & E c o n o m i c A d v i s o r s W a s h i n g t o n , D C — P r o v i n c e t o w n , M A 2 0 2 . 6 3 6 . 4 0 0 2 3 0 1 . 5 0 2 . 4 1 7 1 7 7 4 . 5 3 8 . 6 0 7 0 2

General & Limiting Conditions Every reasonable effort has been made to ensure that the data contained in this study reflect

the most accurate and timely information possible. These data are believed to be reliable at the

time the study was conducted. This study is based on estimates, assumptions, and other

information developed by WTL +Associates (referred hereinafter as “WTL+a”) from its

independent research effort, general knowledge of the market and the industry, and

consultations with the client and its representatives. No responsibility is assumed for

inaccuracies in reporting by the client, its agent and/or representatives, or any other data source

used in preparing or presenting this study.

No warranty or representation is made by WTL+a that any of the projected values or results

contained in this study will actually be achieved. Possession of this study does not carry with it

the right of publication thereof or to use the name of "WTL+a" in any manner without first

obtaining the prior written consent of WTL+a. No abstracting, excerpting or summarizing of this

study may be made without first obtaining the prior written consent of WTL+a. This report is not

to be used in conjunction with any public or private offering of securities or other similar purpose

where it may be relied upon to any degree by any person, other than the client, without first

obtaining the prior written consent of WTL+a. This study may not be used for purposes other

than that for which it is prepared or for which prior written consent has first been obtained from

WTL+a.

This study is qualified in its entirety by, and should be considered in light of, these limitations,

conditions and considerations.

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Table of Contents

General & Limiting Conditions ........................................................................................ 2

Table of Contents ................................................................................................................ 3

Tables & Figures .................................................................................................................. 4

1 Executive Summary ..................................................................................................... 5

Introduction ................................................................................................................................ 5

Study Area Boundaries .............................................................................................................. 6

Market Study Methodology ........................................................................................................ 6

2 Demographic & Economic Profile ............................................................................ 8

Demographic Trends & Forecasts .............................................................................................. 8

Household Incomes & Retail Spending .....................................................................................14

Retail “Recapture” Opportunities ...............................................................................................17

Economic Characteristics ..........................................................................................................20

3 Real Estate Market Conditions ................................................................................26

Housing.....................................................................................................................................26

Multi-tenant/Speculative Office ..................................................................................................37

Hotel/Lodging ............................................................................................................................41

Retail ........................................................................................................................................47

Winthrop Town Centre ..............................................................................................................57

Walkable Developments & Future Planning for Brandon ...........................................................58

4 Market Potentials & Strategies ...............................................................................60

Setting the Stage: Development Context...................................................................................60

Market-rate Housing..................................................................................................................61

Multi-tenant/Speculative Office ..................................................................................................64

Lodging/Hospitality ....................................................................................................................68

Retail ........................................................................................................................................70

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Tables & Figures Table 1: Summary of Market/Development Potentials ................................................................ 7 Table 2: Regional Population Trends & Forecasts, 2000—2030 ................................................ 9 Table 3: Brandon Study Area Demographic Trends & Forecasts, 2000—2020 .........................11 Table 4: Brandon CDP Demographic Trends & Forecasts, 2000—2020 ...................................13 Table 5: Annual Household Consumer Spending, 2015 ............................................................15 Table 6: Retail “Recapture” Opportunities—Brandon Study Area, 2015 ....................................18 Table 7: Tampa—St. Petersburg MSA Employment Trends, 1995—2014 ................................21 Table 8: State Employment Forecasts for Hillsborough County, 2015—2023 ...........................23 Table 9: Business Mix—Brandon Study Area, 2015 ..................................................................24 Table 10: Housing Profile—Brandon Study Area, 2010—2020 .................................................27 Table 11: Housing Starts—Selected Municipalities, 2006—2015 ..............................................29 Table 12: Housing Starts—Brandon Study Area, 2011—Q2/2015.............................................31 Table 13: Brandon—Plant City Apartment Metrics, 2015 ..........................................................33 Table 14: Profile of Selected Apartment Complexes, 2015 .......................................................35 Table 15: Office Market Profile—Hillsborough County, 2015 .....................................................38 Table 16: Office Market Profile—Brandon Study Area, 2006—2015 .........................................40 Table 17: Hotel Inventory, by Property Class & Location in Hillsborough County, 2016 ............43 Table 18: Selected Competitive Hotel Inventory ........................................................................44 Table 19: Hotel Performance Metrics—Selected Properties, 2009—2014 .................................46 Table 20: Tampa MSA Retail Inventory, by Submarket, 2015 ...................................................48 Table 21: Estimated Brandon Retail Inventory, by Location, 2016.............................................50 Table 22: Retail Market Profile—Brandon Study Area, 2006—2015 ..........................................52 Table 23: Walk Score Categories ..............................................................................................59 Table 24: Walk Scores—Selected Tampa Neighborhoods ........................................................59 Table 25: Housing Potentials—Scenario #1, 2015—2025 .........................................................62 Table 26: Housing Potentials—Scenario #2, 2015—2025 .........................................................63 Table 27: Office Market Potentials—Hillsborough County, 2015—2023 ....................................66 Table 28: Office Market Potentials—Brandon Study Area, 2015—2023 ....................................67 Table 29: Retail “Recapture” Opportunities—Study Area Households .......................................74

Figure 1: Brandon Study Area Boundaries ................................................................................. 6 Figure 2: Retail Surplus & Leakage—Brandon Study Area, 2015 ..............................................17 Figure 3: Brandon—Plant City Apartment Submarket ...............................................................32 Figure 4: Tampa East Office & Retail Submarket ......................................................................39

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1 Executive Summary

Introduction WTL+a, a national real estate and economic development consulting firm based in Washington,

DC, with significant project experience throughout Florida, was retained by HDR, Inc., on behalf

of the Hillsborough County Metropolitan Planning Organization (MPO) and The Planning

Commission (TPC), to prepare a land use market analysis as part of a pilot project jointly

sponsored by these two agencies for a “Mixed-use Centers & Corridors” planning study in

Brandon, an unincorporated area of Hillsborough County.

The MPO and TPC identified the following key objectives for the study:

Coordinate the envisioned land use pattern with planned transportation improvements along

major corridors in the Brandon study area;

Determine the transportation system needed to support projected growth under the

Unincorporated County’s Vision Map;

Refine the Unincorporated County’s Vision Map and Socio-Economic (SE) Dataset for the

study area;

Identify corridors and mixed use centers that can become community focal points for both

transportation and land use;

Apply policy recommendations of TPC’s Strip Commercial and Mixed-Use Development in

Hillsborough County (Dover Kohl, 2014) to a specific pilot area to evaluate how they can be

implemented, identify needed changes, etc. in order to ultimately develop a countywide set

of policies related to development along corridors and at activity nodes in Hillsborough

County;

Assess the feasibility of multiple east-west corridor improvements in the study area; and

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Assess and implement policies that follow recommendations made in previous studies and

plans, including: Hillsborough County Comprehensive Plan; Brandon Main Street (BMS)

Community Plan; State Road 60 (Brandon Boulevard) Overlay District; and, the Brandon

Boulevard (SR 60) Compatibility Study, prepared by the MPO.

Study Area Boundaries As illustrated in Figure 1 below, the study area comprises a three-mile by six-mile area, with

13,950 acres of land and 25,000 parcels across a large geography of approximately 22 square

miles in eastern Hillsborough County. Its boundaries include SR 60/Brandon Boulevard on the

north; S. Dover Road and Little Road on the east; Bloomingdale Avenue on the south; and U.S.

Route 301/I-75 on the west:

Figure 1: Brandon Study Area Boundaries

Market Study Methodology The market analysis is comprised of the following key tasks:

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Demographic & Economic Profile—evaluates those factors informing market demand for

various land uses, including: growth trends and forecasts in population and households;

household consumer spending, and job growth and projections in key industry sectors;

Real Estate Market Conditions—examines key metrics and market performance in

commercial ’workplace’ (e.g., general and medical office), supporting retail and services,

lodging/hospitality, and residential uses, including: building inventory; vacant building stock;

vacancy rates; annual net absorption (leasing activity); rental rates, housing starts, etc. over

the past five to 10 years to understand Brandon’s competitive market position in

Hillsborough County to accommodate the land uses identified above;

Market/Development Potentials—considers the findings of the economic profile and

market conditions findings and tests market-support for the land uses identified above. This

key task serves as the basis for implementation recommendations/strategies; and

Implementation Issues/Strategies—outlines preliminary recommendations pertaining to

implementation and policy/planning strategies, such as potential refinements to the County’s

Unincorporated Vision Map as well as land use policy recommendations in other studies and

plans as identified above.

Table 1: Summary of Market/Development Potentials

Use Forecast Period Market Potentials

Market-rate Housing 10 Years 2,800 Units

General & Medical Office 8 Years 250,000 to 300,000 SF

Lodging/Hospitality 10 Years 100—150 Rooms

Supporting Services/Retail 10 Years In Balance

The analysis of market potentials is detailed in Section 4 of this report.

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2 Demographic & Economic Profile

The following evaluates those indices that drive fundamental market demand for residential and

commercial/workplace land uses that are likely to comprise future development (and

redevelopment) initiatives in the Brandon study area. These indices include population and

household growth, employment trends and forecasts, household consumer spending patterns,

visitor behavior and spending and, other indicators based on available data that inform the

depth and magnitude of potential market support for these uses.

This profile and analysis is based on data from various secondary public and private sources,

including: U.S. Census Bureau; University of Florida Bureau of Business & Economic Research;

State of Florida Department of Economic Opportunity (DEO); Hillsborough County; ESRI

Business Analyst; Dun & Bradstreet, Inc.; and other sources.

Demographic Trends & Forecasts WTL+a evaluated historic population

patterns and growth forecasts in the

study area, the Brandon CDP (Census-

Designated Place), selected

municipalities, and in Hillsborough

County using the sources above. Key

findings are summarized below, with

data illustrated in Tables 2 through 9.

Population & Households As illustrated in Table 2 below, Hillsborough County’s population increased—from almost

999,000 residents in 2000 to 1.32 million residents in 2015, reflecting a population

increase of 326,600 over the past 15 years, and representing sustained annual growth of

1.9% per year;

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Table 2: Regional Population Trends & Forecasts, 2000—2030

% of % of 1-Apr % of % of2000 County 2010 County 2015 County Amount CAGR (2) 2020 2025 2030 County Amount CAGR (2)

PopulationHillsborough County 998,948 1,229,226 1,325,563 326,615 1.9% 1,463,200 1,586,400 1,697,600 372,037 1.7%

Plant City 29,915 3.0% 34,721 2.8% 36,710 2.8% 6,795 1.4% 39,302 42,077 45,048 2.7% 8,338 Tampa 303,447 30.4% 335,709 27.3% 358,279 27.0% 54,832 1.1% 378,676 400,234 423,019 24.9% 64,740 Temple Terrace 20,918 2.1% 24,541 2.0% 25,567 1.9% 4,649 1.3% 27,336 29,227 31,249 1.8% 5,682 Unincorporated 644,668 64.5% 834,255 67.9% 905,007 68.3% 260,339 2.3% 1,013,345 1,134,651 1,270,480 74.8% 365,473 2.3%

(1) Based on the 2015-2040 Low-Medium-High Population Forecasts prepared by BEBR. Analysis uses the Moderate Growth Scenario for Hillsborough County.(2) CAGR=Compound Annual Growth Rate.(3) Population forecasts for 2015-2030 assume that each incorporated municipality (and unincorporated area) in Hillsborough continues the same rate of growth as occurred between 2000-2015.

Source: U.S. Census Bureau; University of Florida, Bureau of Business & Economic Research; ESRI Business Analyst; WTL+a, February 2016.

Change: 2000-2015 Change: 2015-2030Forecasts (3)

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Notably, the unincorporated areas of Hillsborough County captured the lion’s share of population growth over the past 15 years. In fact, almost 80% of the County’s growth

since 2000 has occurred in the unincorporated areas (that includes the Brandon study

area)—with 260,300 new residents. This reflects a sustained annual growth rate of 2.3%

per year—higher than the County as a whole;

Moreover, unincorporated areas of Hillsborough are comprising a larger share of the

County. In 2000, these areas accounted for 64% of the County’s population. By 2015,

unincorporated areas comprised over 68% of the County’s total population;

The three incorporated municipalities added population at significantly lower rates of growth

ranging from 1.1% to 1.4% per year. The City of Tampa added 54,800 new residents, while

Plant City and Temple Terrace added between 4,600 and 6,800 new residents each over

the past 15 years;

Since 2000, Unincorporated Hillsborough has Captured

Fully 80% of the County’s Population Growth

Based on the Moderate Growth scenario of long-term population forecasts through 2030

(prepared by the University of Florida/Bureau of Economic & Business Research/BEBR),

Hillsborough County is expected to add more than 372,000 new residents, which

translates into an annual growth rate of 1.7% per year, for a 2030 population of 1.69 million

residents; and

If the unincorporated areas continue to grow at the same pace over the next 15 years as

occurred over the past 15 years (a “straight-line” forecast) of 2.3% per year, this could be

expected to translate into 365,500 new residents, for a 2030 population of 1.27 million. If

so, the unincorporated areas would comprise fully 75% of Hillsborough County by 2030, up

from 68% in 2015.

In order to examine demographic characteristics in the Brandon study area, WTL+a utilized five-

year forecasts prepared by ESRI Business Analyst (a demographic forecasting service).

Notable findings are summarized below and illustrated in Table 3 for the study area and Table 4

for the Brandon Census-Designated Place (CDP) as defined by the Census Bureau:

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Table 3: Brandon Study Area Demographic Trends & Forecasts, 2000—2020

2000 2010 2015 % Dist. 2020 % Dist. No. CAGR %Demographic ProfilePopulation 58,424 74,925 77,412 80,887 3,475 0.88% As % of Brandon CDP 74.1% 72.4% 71.8% 71.3%Households 22,282 29,715 30,677 32,091 1,414 0.91%Avg. HH Size 2.50 2.50 2.51 2.50 Median Age 35.6 36.7 37.3 Race White 54,332 54,607 71% 55,482 69% 875 0.3% Black 11,118 11,926 15% 12,897 16% 971 1.6% American Indian 277 312 0% 350 0% 38 2.3% Asian, Pacific Islander 2,829 3,307 4% 3,932 5% 625 3.5% Other 3,542 3,991 5% 4,462 6% 471 2.3% Two or More Races 2,826 3,269 4% 3,765 5% 496 2.9%Total: 74,924 77,412 80,888 3,476 Hispanic (1) 16,358 18,802 24% 21,881 27% 3,079 3.1%

Age Distribution 0-14 14,808 14,326 19% 14,618 18% 292 0.4% 15-24 10,471 10,506 14% 10,332 13% (174) -0.3% 25-34 11,568 12,087 16% 12,740 16% 653 1.1% 35-44 10,839 10,611 14% 11,348 14% 737 1.4% 45-54 11,085 10,939 14% 10,186 13% (753) -1.4% 55-64 8,301 9,306 12% 10,213 13% 907 1.9% 65-74 4,447 5,910 8% 7,041 9% 1,131 3.6% 75+ 3,407 3,726 5% 4,407 5% 681 3.4%

Income ProfileHouseholds by Income <$15,000 8.5% 7.5% $15,000 - $24,999 8.8% 6.1% $25,000 - $34,999 9.3% 7.1% $35,000 - $49,999 15.8% 14.3% $50,000 - $74,999 22.6% 24.6% $75,000 - $99,999 15.1% 17.6% $100,000 - $149,999 12.9% 13.9% $150,000 - $199,999 4.3% 5.8% $200,000+ 2.7% 3.1%Average HH Income 70,366$ 78,987$ 2.3%Median HH Income 56,172$ 62,521$ 2.2%

(1) Persons of Hispanic origin are a subset of other race categories; therefore, totals do not add.http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?src=CF

Source: U.S. Census Bureau; American Community Survey; ESRI Business Analyst; WTL +a, February 2016.

Change: 2015-2020

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WTL +a R e a l E s t a t e & E c o n o m i c A d v i s o r s W a s h i n g t o n , D C — P r o v i n c e t o w n , M A 2 0 2 . 6 3 6 . 4 0 0 2 3 0 1 . 5 0 2 . 4 1 7 1 7 7 4 . 5 3 8 . 6 0 7 0 1 2

In 2015, the Brandon study area contained over 77,400 residents in more than 30,600 households. Over the past 15 years, the study area’s population increased at a sustained

annual growth rate of 1.89% per year—on par with the County as a whole—adding almost

19,000 new residents since 2000;

Since long-term forecasts are not available, ESRI Business Analyst five-year forecasts

through 2020 suggest that the study area will add almost 3,500 new residents in 1,400+ new households by 2020;

ESRI forecasts further suggest that population growth will be greatest in three age cohorts over the next five years, including those ages 35-44, 55-64 and 65-74. WTL+a

notes that this is likely to translate into opportunities for specific types of housing, such as

age-restricted and active adult for older cohorts as well as first-time and “move-up” housing

for those ages 35-44; and

Other demographic characteristics suggest that the Brandon study area is a diverse and

solidly middle-income area in Hillsborough County:

Population that is 71% White, 15% Black, and 24% Hispanic

Median age of 36.7 years, which is forecast to increase to 37.3 years by 2020

Average household incomes in 2015 were almost $70,400 per year, while fully 20%

of households have annual incomes greater than $100,000 per year

Average household incomes are forecast to increase by 2.3% per year, to almost

$79,000 by 2020, which is slightly greater than the Brandon CDP as a whole.

2000—2015: 19,000 New Residents

in the Brandon Study Area

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Table 4: Brandon CDP Demographic Trends & Forecasts, 2000—2020

2000 2010 2015 % Dist. 2020 % Dist. No. CAGR %Demographic ProfilePopulation 78,863 103,483 107,875 113,396 5,521 1.00% As % of Unincorporated Hillsborough County 12.2% 12.4% 11.9% 11.2%Households 28,833 39,857 41,621 43,892 2,271 1.07%Avg. HH Size 2.68 2.52 2.52 2.51 Median Age 34.7 35.8 36.6 Race White 74,504 75,565 70% 77,247 68% 1,682 0.4% Black 16,648 17,967 17% 19,491 17% 1,524 1.6% American Indian 412 479 0% 550 0% 71 2.8% Asian, Pacific Islander 3,684 4,381 4% 5,278 5% 897 3.8% Other 4,562 5,188 5% 5,842 5% 654 2.4% Two or More Races 3,673 4,295 4% 4,988 4% 693 3.0%Total: 103,483 107,875 113,396 5,521 Hispanic (1) 21,687 25,139 23% 29,450 26% 4,311 3.2%

Age Distribution 0-14 19,736 19,363 18% 20,100 18% 737 0.7% 15-24 15,243 15,063 14% 14,777 13% (286) -0.4% 25-34 17,275 18,220 17% 18,992 17% 772 0.8% 35-44 15,142 15,297 14% 16,531 15% 1,234 1.6% 45-54 15,297 15,029 14% 14,259 13% (770) -1.0% 55-64 11,036 12,511 12% 13,688 12% 1,177 1.8% 65-74 5,667 7,735 7% 9,398 8% 1,663 4.0% 75+ 4,087 4,657 4% 5,651 5% 994 3.9%

Income ProfileHouseholds by Income <$15,000 8.0% 7.0% $15,000 - $24,999 8.4% 5.8% $25,000 - $34,999 9.1% 6.8% $35,000 - $49,999 16.0% 14.6% $50,000 - $74,999 24.9% 26.8% $75,000 - $99,999 15.4% 18.4% $100,000 - $149,999 12.7% 13.7% $150,000 - $199,999 3.1% 4.3% $200,000+ 2.3% 2.5%Average HH Income 68,308$ 76,229$ 2.2%Median HH Income 56,022$ 61,815$ 2.0%

Educational ProfileYears of Education (2014 American Community Survey/ACS) Less than 9th Grade 2.2% 9th-12th Grade, No Diploma 6.7% High School Graduate (Includes Equivalency) 28.6% Some College, No Degree 25.4% Associate Degree 9.8% Bachelor's Degree 19.4% Graduate/Professional Degree 7.8%

(1) Persons of Hispanic origin are a subset of other race categories; therefore, totals do not add.http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?src=CF

Source: U.S. Census Bureau; American Community Survey; ESRI Business Analyst; WTL +a, February 2016.

Change: 2015-2020

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Household Incomes & Retail Spending With 2015 average household incomes of $70,366, study area households are slightly more

affluent than their counterparts in both the Brandon CDP as well as Hillsborough County,

where average household incomes range from $68,308 in the CDP to $69,979 in the

County. This suggests slightly more disposable income and spending potentials among

study area households. Moreover, forecast growth in incomes (2.3% per year) is expected

to be above the rate of inflation, suggesting real growth in income over the next five years;

Household retail spending is the primary driver of demand for retail space such as shopping

centers, “Big Box” stores such as Wal-Mart or Target, food & beverage, and specialty or

destination retail projects. Household retail spending patterns among households in the

Village and surrounding jurisdictions are illustrated in Table 5;

The study area’s 30,600+ households spend an average of $18,688 per year on consumer retail goods, including clothing, entertainment/recreation, electronics, groceries,

food & beverage, household furnishings and health care. This is slightly more than that

spent by households in the Brandon CDP ($18,146 per year), and on par with that spent by

households in Hillsborough County as a whole ($18,599 per year);

Retail spending generally comprises 26% to 27% of average household incomes among

study area households; this proportion is also generally comparable in the CDP as well as

Hillsborough County; and

Gross retail spending among households in the Brandon study area totals $573 million per year, as compared to $755 million per year for the entire CDP and $9.3 billion

per year for all County households. Household spending in the study area accounts for 6%

of the countywide total. Notably, household spending totals are irrespective of location (i.e.,

spending can occur anywhere).

Brandon is a Regional Retail Destination with

Over $2.0 Billion in Annual Retail Sales

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Table 5: Annual Household Consumer Spending, 2015

Hillsborough Brandon StudyCounty CDP Area

Total Households (2015) 502,217 41,621 30,677

Apparel & AccessoriesMen's Wear 413$ 405$ 416$ Women's Wear 773 760 780 Children's Wear 363 359 367 Footwear 438 429 440 Watches & Jewelry 140 139 142 Apparel Products & Services 92 89 91

Subtotal: 2,219$ 2,181$ 2,236$

ComputersComputers & Hardware 207$ 205$ 210$ Software & Accessories 28 43 44

Subtotal: 236$ 248$ 254$

Entertainment & RecreationMembership Fees for Clubs 162$ 158$ 163$ Fees for Participant Sports 116 114 117 Admission to Movie/Theatre/Opera/Ballet 158 156 160 Admission to Sporting Events 61 60 62 Fees for Recreational Lessons 111 109 114 Dating Services 0.63 0.65 0.65

Subtotal: 609$ 599$ 618$

TV/Video/AudioCable & Satellite TV Services 835$ 806$ 831$ Televisions 143 141 145 Satellite Dishes 2 2 2 VCRs, Video Cameras & DVD Players 11 11 11 Miscellaneous Video Equipment 11 11 12 Video Cassettes & DVDs 31 31 32 Video Game Hardware/Accessories 23 23 23 Video Game Software 27 27 28 Streaming/Downloaded Video 6 6 6 Rental of Video Cassettes & DVDs 23 23 24 Installation of Televisions 1 1 1 Audio 116 113 117 Rental & Repair of TV/Radio/Audio 5 5 5

Subtotal: 1,234$ 1,200$ 1,235$

(1) Consumer spending data are derived from the 2011 and 2012 Consumer Expenditure Surveysconducted by the Bureau of Labor Statistics (BLS)

Source: ESRI Business Analyst; Bureau of Labor Statistics; WTL +a, February 2016.

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Table 5 (Continued): Annual Household Consumer Spending, 2015

Hillsborough Brandon StudyCounty CDP Area

Other EntertainmentPets 512$ 494$ 512$ Toys & Games 114 113 116 Recreational Vehicles & Fees 180 168 178 Sports/Recreation/Exercise Equipment 176 173 178 Photo Equipment & Supplies 79 79 81 Reading 138 133 139 Catered Affairs 22 22 23

Subtotal: 1,222$ 1,182$ 1,226$

Food & AlcoholFood at Home 4,905$ 4,769$ 4,913$ Food Away from Home 3,137 3,084 3,165 Alcoholic & Non-alcoholic Beverages 1,006 989 1,015

Subtotal: 9,048$ 8,842$ 9,094$

Household Furnishings & EquipmentHousehold Textiles 92$ 90$ 93$ Furniture 497 490 501 Floor Coverings 21 20 21 Major Appliances 248 241 249 Housewares 68 66 68 Small Appliances 42 41 43 Luggage 9 8 9 Telephones & Accessories 48 47 48 Lawn & Garden 379 360 377 Housekeeping Supplies 672 652 673 Maintenance & Remodeling Materials 249 236 248

Subtotal: 2,324$ 2,252$ 2,332$

Health & Personal CareNon- & Prescription Drugs 562$ 533$ 555$ Optical 81 78 81Personal Care Products 451 443 454School Supplies 175 173 176Smoking Products 433 415 429

Subtotal: 1,701$ 1,643$ 1,695$

TOTAL:

Total Annual Spending 9,337,283,752$ 755,271,314$ 573,281,346$

Per Household 18,592$ 18,146$ 18,688$

As % of Average HH Income 26.57% 26.57% 26.56%

(1) Consumer spending data are derived from the 2011 and 2012 Consumer Expenditure Surveysconducted by the Bureau of Labor Statistics.

Source: ESRI Business Analyst; Bureau of Labor Statistics; WTL +a, February 2016.

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Retail “Recapture” Opportunities Another key indicator of retail market potentials involves what is known as “retail opportunity

gap”. This compares annual household spending (i.e., “demand”) in specific merchandise

categories against estimated annual retail sales by businesses in those same categories (i.e.,

“supply”). The difference between demand and supply represents the recapture opportunity, or

surplus, available in each retail category in the reporting geography. When demand is greater than supply, there is an apparent opportunity for additional retail space in that category.

By comparison, when demand is less than supply, there is a surplus of sales in that retail

category (i.e., positive value = recapture opportunity, while a negative value = surplus of sales,

or “inflow” of sales from outside of the reporting geography). For Brandon, findings are

illustrated in Table 6. Key findings indicate that:

Figure 2: Retail Surplus & Leakage—Brandon Study Area, 2015

In sales data provided by the Bureau of Labor Statistics (BLS) and Claritas, Inc., study area

households spend more than $819 million per year. This estimate is higher than annual

spending illustrated in Table 5 because it includes additional merchandise categories such

as Building Materials and Leisure & Entertainment. This compares to estimated store sales of over $2.0 billion per year generated by the significant retail inventory in Brandon;

and

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Table 6: Retail “Recapture” Opportunities—Brandon Study Area, 2015

Demand Supply "Recapture"Retail Category (HH Spending) (Store Sales) Opportunity

General Merchandise StoresDepartment Stores Excl Leased Depts. 138,339,565$ 456,825,626$ (318,486,061)$ Other General Merchandise Stores 50,782,923 225,964,065 (175,181,142)

Subtotal: 189,122,488$ 682,789,691$ (493,667,203)$

Clothing & Accessories StoresClothing Stores 41,566,584$ 160,236,807$ (118,670,223)$ Shoe Stores 7,118,343 32,515,225 (25,396,882) Jewelry, Luggage, Leather Goods 9,359,154 24,446,082 (15,086,928)

Subtotal: 58,044,081$ 217,198,114$ (159,154,033)$

Furniture & Home Furnishings StoresFurniture Stores 19,870,302$ 45,002,944$ (25,132,642)$ Home Furnishing Stores 13,442,000 18,428,903 (4,986,903)

Subtotal: 33,312,302$ 63,431,847$ (30,119,545)$

Electronics & Appliance StoresAppliances, TVs, Electronics Stores 45,206,082$ 66,382,107$ (21,176,025)$

Subtotal: 45,206,082$ 66,382,107$ (21,176,025)$

Leisure & EntertainmentSporting Goods Stores 19,140,603$ 68,116,280$ (48,975,677)$ Books, Periodicals & Music 7,486,323 10,507,394 (3,021,071)

Subtotal: 26,626,926$ 78,623,674$ (51,996,748)$

Food Services & Drinking PlacesFull-Service Restaurants 65,256,897$ 146,398,319$ (81,141,422)$ Limited-Service Eating Places 42,690,282 119,214,772 (76,524,490) Special Food Services 1,886,789 472,376 1,414,413 Drinking Places -Alcoholic Beverages 5,797,147 3,303,140 2,494,007

Subtotal: 115,631,115$ 269,388,607$ (153,757,492)$

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Table 6 (Continued): Retail “Recapture” Opportunities—Brandon Study Area, 2015

Demand Supply "Recapture"Retail Category (HH Spending) (Store Sales) Opportunity

Food & Beverage StoresGrocery Stores 171,080,658$ 368,925,924$ (197,845,266)$ Specialty Food Stores 14,058,656 13,749,930 308,726 Beer, Wine & Liquor Stores 8,423,808 11,945,910 (3,522,102)

Subtotal: 193,563,122$ 394,621,764$ (201,058,642)$

Health & Personal Care StoresHealth & Personal Care Stores 62,574,116$ 139,205,432$ (76,631,316)$

Subtotal: 62,574,116$ 139,205,432$ (76,631,316)$

Building Material, Garden Equipment StoresBuilding Materials & Supplies 42,925,066$ 71,111,022$ (28,185,956)$ Lawn & Garden Equipment & Supplies 5,532,357 1,235,887 4,296,470

Subtotal: 48,457,423$ 72,346,909$ (23,889,486)$

Miscellaneous Store RetailersFlorists 1,850,762$ 2,080,936$ (230,174)$ Office Supplies, Stationery, Gift Stores 9,222,773 14,967,983 (5,745,210) Used Merchandise Stores 4,563,283 6,119,925 (1,556,642) Other Miscellaneous Retail Stores 31,046,079 66,310,123 (35,264,044)

Subtotal: 46,682,897$ 89,478,967$ (42,796,070)$

TOTAL:

HH Demand vs. Retail Sales 819,220,552$ 2,073,467,112$ (1,254,246,560)$

(2)

(1) Claritas' "Retail Market Power" data is derived from two major sources of information. Demand data are derived from Consumer Expenditure Surveys fielded by the U.S. Bureau of Labor Statistics (BLS). Supplydata are derived from the Census Bureau. The difference between demand and supply represents the"recapture opportunity", or surplus, available for each retail category in the reporting geography. Whendemand is greater than supply, there is an apparent opportunity for additional retail space in that category.By comparison, when demand is less than supply, there is a surplus of sales in that retail category (i.e.,positive value = recapture opportunity, while negative value = surplus of sales).

(2) Total household retail spending excludes spending on Non-Store Retailers (Internet); Motor VehicleParts and Dealers; and Gas Stations.

Source: Bureau of Labor Statistics; Claritas, Inc.; ESRI Business Analyst; WTL +a, February 2016.

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While there are specific merchandise categories where apparent “recapture” opportunities

due to leakage may be possible (such as Special Food Services and Drinking Places), this

analysis reveals that there is net inflow of retail sales to Brandon of over $1.2 billion per year as a result of Brandon’s role as a regional retail destination.

Economic Characteristics Employment Trends—Tampa/St. Petersburg MSA Job growth is a key barometer of demand for “workplace” uses such as multi-tenant office

space, industrial parks, retail centers and the like. WTL+a examined trends and forecasts in

employment growth, utilizing data for the Tampa-St. Petersburg-Clearwater Metropolitan

Statistical Area (MSA) as prepared by the state’s labor agency, the Department of Economic

Opportunity (formerly known as the Agency for Workforce Innovation/AWI), for the period

between 1995 and 2014. This data is critical to understanding market potentials for workplace

real estate, such as office buildings, in Brandon. Key findings are summarized below and

illustrated in Table 7:

The MSA added a remarkable 241,700 new jobs in the 10-year period between 1995 and 2005. This growth, which translates into almost 25,000 new jobs annually, was focused

largely in specific sectors, including: Professional/Business Services (97,300), Construction

(35,200) and Financial Activities (31,800). In particular, growth in Professional/Business

Services fueled demand for office space in key locations across the MSA during this period.

Other sectors with solid job growth during this period also included: Retail Trade (18,700);

Leisure & Hospitality (18,300); and Government (16,500);

The MSA Gained 241,700 Jobs (1995—2005) &

Lost 125,900 Jobs in the 2007—2009 Recession

By contrast, the economic downturn of 2007—2009 resulted in the loss of almost 126,000

jobs throughout the MSA; since 2011, however, the region’s economy has significantly

recovered, with the creation of 109,100 new jobs, thereby recovering fully 87% of the job

losses caused by the recession. In the past seven years, job losses were greatest in

Construction (-33,500), Manufacturing (-16,600) and Information (-5,900);

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Table 7: Tampa—St. Petersburg MSA Employment Trends, 1995—2014

Industry Sector 1995 2000 2005 Amount CAGR % 2006 2008 2010 2012 2014 Amount CAGR %In 000sAgriculture & Mining 400 500 800 400 7.2% 700 500 500 500 500 (200) -4.1%Construction 57,000 68,800 92,200 35,200 4.9% 92,700 69,100 51,400 55,100 59,200 (33,500) -5.5%Manufacturing 79,700 88,700 78,500 (1,200) -0.2% 77,800 67,800 58,400 59,400 61,200 (16,600) -3.0%Transp/Warehousing/Utilities 33,200 37,500 32,200 (1,000) -0.3% 30,900 28,200 26,600 27,600 30,200 (700) -0.3%Trade Wholesale 51,000 57,400 53,600 2,600 0.5% 55,000 51,200 46,300 49,000 50,900 (4,100) -1.0% Retail 138,900 155,800 157,600 18,700 1.3% 157,400 147,100 145,800 150,900 160,000 2,600 0.2%Information 29,800 40,900 32,200 2,400 0.8% 31,700 29,000 25,600 25,900 25,800 (5,900) -2.5%Financial Activities 72,400 94,300 104,200 31,800 3.7% 104,300 96,900 90,500 98,100 103,500 (800) -0.1%Services Prof'l/Business Services 93,100 167,100 190,400 97,300 7.4% 200,600 177,200 180,600 196,300 205,700 5,100 0.3% Education/Health Services 143,800 143,700 159,600 15,800 1.0% 166,100 175,600 180,600 184,200 192,900 26,800 1.9% Leisure & Hospitality 111,200 117,400 129,500 18,300 1.5% 132,500 124,100 120,700 129,700 142,000 9,500 0.9% Other Services 42,100 45,100 47,000 4,900 1.1% 47,200 44,500 41,800 41,500 45,400 (1,800) -0.5%Government 134,200 147,900 150,700 16,500 1.2% 152,900 158,000 155,100 153,800 155,700 2,800 0.2%

Total (In 000s): 986,800 1,165,100 1,228,500 241,700 2.2% 1,249,800 1,169,200 1,123,900 1,172,000 1,233,000 (16,800) -0.2%

Change During Period: - 178,300 63,400 21,300 (80,600) (45,300) 48,100 61,000

(1) As of year-end for each reported year.

http://floridajobs.org/labor-market-information/data-center/statistical-programs/current-employment-statistics

Source: Florida Department of Economic Opportunity; WTL +a, February 2016.

Change: 1995-2005 Change: 2006-2014

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Notably, the Services sector—which comprises multiple categories such as Business and

Professional Services, Health, Education and Leisure/Hospitality, has recovered more

quickly than others, gaining 26,800 new jobs between 2007 and 2014; and

As illustrated in Table 7, the Florida Department of Economic Opportunity (DEO) estimates

that Hillsborough County contains 712,400 jobs (2015), comprising approximately 58% of the 1.2 million total jobs in the MSA. This includes both full-time and part-time jobs

(i.e., both registered with the Unemployment Insurance Fund and not reported) as well as

self-employed and unpaid family workers;

As illustrated in Table 8, Dun & Bradstreet, Inc. estimates that Hillsborough County contains

approximately 644,800 full-time jobs (2015), which reflects a jobs-to-population ratio of 0.49.

That is, there are 0.49 jobs per resident for the 1,308,300 residents in the County. By

comparison, Florida’s state jobs-to-population ratio is 0.39 (2014), which reflects the large

number of retirees in the state, while the jobs-to-population ratio for the United States is 0.60

(2014). The ratio reflects the concentration of larger employment centers such as downtown

Tampa, Westshore, and Brandon.

Employment Forecasts—Hillsborough County Employment forecasts for specific jurisdictions in Florida (defined as Workforce Development

Regions) are also prepared by the Department of Economic Opportunity. As illustrated in Table

8, these forecasts suggest that:

Hillsborough County (DEO Workforce Region #15) is expected to add more than 88,300 new jobs between 2015 and 2023, reflecting a sustained annual pace of 11,000

new jobs annually over this eight-year period;

The Services sector is expected to comprise fully 44% of all new jobs in the county—adding

almost 52,200 new jobs—with the largest gains expected in Health Care,

Professional/Business Services and Administrative sectors.

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Table 8: State Employment Forecasts for Hillsborough County, 2015—2023

Employment Category 2015 % Dist. 2023 % Dist. Total CAGR

Agriculture/Mining/ConstructionAgriculture/Forestry 10,493 10,346 (147) -0.2%Mining 238 228 (10) 0.0%Construction 33,022 42,080 9,058 3.1%

Subtotal: 43,753 6.1% 52,654 6.6% 9,048 2.3%

Manufacturing Durable Goods Manufacturing 14,312 15,105 793 0.7% Non-Durable Goods Manufacturing 11,265 10,826 (439) -0.5%

Subtotal: 25,577 3.6% 25,931 3.2% 354 0.2%

Transportation & WarehousingUtilities 2,785 2,840 55 0.2%Transportation & Warehousing 15,981 16,941 960 0.7%

Subtotal: 18,766 2.6% 19,781 2.5% 1,015 0.7%

Wholesale & Retail TradeWholesale Trade 32,676 35,155 2,479 0.9%Retail Trade 73,393 79,692 6,299 1.0%

Subtotal: 106,069 14.9% 114,847 14.3% 8,778 1.0%

Finance/Insurance/Real EstateInformation 16,811 16,111 (700) -0.5%Finance & Insurance 52,473 58,144 5,671 1.3%Real Estate, Rental & Leasing 13,340 15,099 1,759 1.6%

Subtotal: 82,624 11.6% 89,354 11.2% 6,730 1.0%

ServicesProfessional, Scientific & Technical Services 56,649 68,344 11,695 2.4%Management of Companies & Enterprises 10,195 11,071 876 1.0%Administrative & Waste Management 55,430 65,559 10,129 2.1%Educational Services 12,466 15,185 2,719 2.5%Health Care & Social Assistance 73,633 89,102 15,469 2.4%Arts, Entertainment & Recreation 14,377 15,968 1,591 1.3%Accommodation & Food Services 55,706 62,978 7,272 1.5%Other Services (Except Government) (1) 22,575 25,007 2,432 1.3%

Subtotal: 301,031 42.3% 353,214 44.1% 52,183 2.0%

Government 83,486 11.7% 90,393 11.3% 6,907 1.0%

Self-Employed & Unpaid Family Workers 51,064 7.2% 54,527 6.8% 3,463 0.8%

TOTAL: 712,370 800,701 88,331 1.5%

Annual Increase (Rounded): 11,000

(1) Other Services includes Repair & Maintenance, Personal & Laundry and Membership Associations.http://www.floridajobs.org/labor-market-information/data-center/statistical-programs/employment-projections

Change: 2015-2023

Source: Florida Department of Economic Opportunity; WTL +a, February 2016.

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Table 9: Business Mix—Brandon Study Area, 2015

NAICS Category No. % of Total No. % of Total

Agriculture & Mining 83 2.2% 448 1.2%Construction 206 5.4% 1,197 3.2%Manufacturing 43 1.1% 280 0.8%Transportation & Warehousing 70 1.8% 418 1.1%Communications 33 0.9% 275 0.7%Utilities 2 0.1% 12 0.0%Wholesale & Retail Trade

Wholesale 79 334 Retail 1,035 16,665 - Home Improvement 50 739 - General Merchandise 36 2,949 - Food Stores 83 1,962 - Auto Dealers/Gas Stations 63 467 - Apparel & Accessory Stores 127 1,399 - Furniture/Home Furnishings 82 698 - Eating & Drinking Places 302 6,298 - Miscellaneous & Non-store Retail 291 2,152 Subtotal - All Retail: 1,114 29.4% 16,999 46.1%

Finance/Insurance/Real Estate 522 13.8% 3,363 9.1%Services

- Hotel/Lodging 7 92 - Automotive Services 91 476 - Motion Pictures & Amusements 107 565 - Health Services 371 4,941 - Legal Services 59 279 - Educational Institutions 49 1,906 - Other Services 867 5,396 Subtotal - Services: 1,551 41.0% 13,655 37.0%

Government 12 0.3% 90 0.2%Unclassified Establishments 151 4.0% 159 0.4%

TOTAL: 3,787 100.0% 36,896 100.0%

ANALYSIS:2015 Employment 36,896

As Share of Brandon CDP & Hillsborough County 77.9% 5.7%

2015 Population 80,887

Jobs/Population Ratio 0.46

Source: ESRI Business Analyst; InfoGroup, Inc.; Dun & Bradstreet, Inc.; WTL +a, February 2016.

Businesses Employees

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Employment in Brandon As illustrated in Table 9, Dun & Bradstreet, Inc. and ESRI Business Analyst estimate that there

are almost 3,800 businesses in the Brandon study area, providing almost 36,900 jobs.

The study area’s largest sector is Retail Trade, which accounts for fully 46% of all jobs. The

second largest sector is Services, which includes Healthcare, Professional/Business Services,

Leisure & Hospitality and other jobs in a range of sectors, accounts for 37% of all jobs in the

study area;

36,900 Jobs in Brandon

in Almost 3,800 Businesses

The study area contains approximately 5.7% of all at-place jobs in Hillsborough County. This is known as fair share, and has been considered in our analysis of workplace

(office) market potentials in Section 4 of this report. In addition, the data suggest that the

study area’s current jobs-to-population ratio is 0.46, which is on par with suburban

communities with similar development patterns and mix of workplace real estate; and

Fair Share: Brandon Accounts for

5.7% of Hillsborough County Jobs

As noted, the business mix in the Brandon study area is most heavily-weighted toward

Retail Trade (46%) and Services (37%). These sectors fuel demand for shopping centers

and retail stores as well as office buildings, medical facilities and lodging/hospitality uses.

Section 3 of this report examines market conditions in various real estate sectors in Brandon

in order to evaluate market/redevelopment potentials in Section 4.

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3 Real Estate Market Conditions

WTL +a evaluated real estate market conditions in the Brandon study area and in other

selected, competitive locations in Hillsborough County to understand how recent market trends,

current economic conditions, and future growth affect opportunities for new development and

redevelopment of the study area. This analysis is considered a critical component when testing

overall market potentials as it informs and guides land use policy decisions.

This section of the report analyzes historic and current building inventory, occupancy and

vacancy levels, annual absorption (leasing) activity, historic development trends, and other

appropriate market indices for residential, lodging and workplace/office commercial uses based

on available data. Key findings are summarized below and illustrated in Tables 10 through 19.

Housing As illustrated in Table 10 below,

based on data from ESRI Business

Analyst and the American Community

Survey (ACS), the study area contains

more than 33,300 housing units;

Just under 50% of the study area’s

housing stock is owner-occupied; another

42% of the housing inventory is rental; and, approximately 8% is “unoccupied” (estimated at

2,635 units). In 2015, the median unit value of all housing units in the study area was

$197,600. Over the next five years, median housing values are forecast to increase at a

compound annual rate of 2.4% per year—to $222,900; and

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Table 10: Housing Profile—Brandon Study Area, 2010—2020

2010 2015 % Dist. 2020 % Dist. No. CAGR %Housing TenureOwner-occupied 17,399 16,583 17,184 601 0.7%

% of Total 53.8% 49.8% 49.6%Renter-occupied 12,316 14,094 14,907 813 1.1%

% of Total 38.1% 42.3% 43.1%Vacant 2,620 2,635 2,531 (104) -0.8%

% of Total 8.1% 7.9% 7.3%Total Units: 32,335 33,312 34,622 2,287 0.8%

Owner-Occupied Value$0 - $99,999 938 6% 406 2% (532) -15.4%$100,000 - $199,999 7,577 46% 6,068 35% (1,509) -4.3%$200,000 - $299,999 5,607 34% 7,333 43% 1,726 5.5%$300,000 - $399,999 1,590 10% 1,922 11% 332 3.9%$400,000 - $499,999 427 3% 651 4% 224 8.8%$500,000 - $749,999 282 2% 535 3% 253 13.7%$750,000+ 163 1% 269 2% 106 10.5%

Median Value 197,642$ 222,882$ 2.4%Average Value 224,834$ 256,234$ 2.6%

Unoccupied Housing Units By Status (2010 Census)Unoccupied for Other Reasons

Rented (Not Occupied) 36 5%For Sale Only 454 62%Sold (Not Occupied) 66 9%Seasonal Use 178 24%For Migrant Workers 1 0%

Subtotal: 735 28%True Vacancies

Other Vacant 755 39%Vacant, For Rent 1,161 61%

Subtotal: 1,916 72%

Total Unoccupied Units: 2,651 8.2%

TRUE VACANCY: Vacant Units 1,916

True Vacancy Rate 5.9%

All Housing Units By Structure (2013 American Community Survey)1 Unit, Detached 16,986 51%1 Unit, Attached 2,683 8%2 Units 339 1%3 or 4 Units 868 3%5 to 9 Units 2,250 7%10 to 19 Units 5,582 17%20 to 49 Units 1,633 5%50 or more Units 713 2%Mobile Home 992 3%Boat/RV/Other 10 0%Unaccounted/Unknown 1,256 4%

Total Units: 33,312 100%

Source: ESRI Business Analyst; American Community Survey; WTL +a, February 2016.

Change: 2015-2020

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More specific analysis of the study area’s unoccupied housing stock indicates that the 2,635

units that are unoccupied are empty for various reasons; notably, this does not accurately

reflect actual vacant units. For example, this includes 178 units that are seasonally-owned

(i.e., occupied for only a portion of the year, such as by snowbirds who vacation in Florida).

Combined with other units, such as those that are sold but not yet occupied, the study area’s true vacancy is lower—5.9%, or roughly 1,900 units.

In order to document how population and household growth affects market potentials in

Brandon, WTL+a reviewed information on annual housing starts/residential building permits.

This is particularly critical because, as noted in Section 2, Hillsborough County (and the study

area) experienced significant increases in population over the past 15 years, generating new

residential development of various product types and in multiple locations throughout the

County.

As illustrated in Table 11 below, key findings indicate that:

Since 2006 (which includes the end of the 2004-2006 boom years, the 2007-2009

recession, and subsequent recovery and economic momentum through 2015), housing

starts across Hillsborough County resulted in delivery of 68,100 new housing units,

producing a sustained annual pace of 6,810 units per year. In terms of unit distribution,

this includes 43,600 single-family units (64% of the total) and almost 24,500 multi-family

units (36%);

Consistent with population growth as detailed in Section 2, the County’s unincorporated

areas captured the lion’s share of new residential development. In fact, there were over

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Table 11: Housing Starts—Selected Municipalities, 2006—2015

Total Annual % ofMunicipality 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Starts Average County

Single-family DetachedPlant City 328 167 114 80 24 69 86 109 142 120 1,239 124 2.8%Tampa 1,940 1,008 636 453 455 590 547 686 712 1,036 8,063 806 18.5%Temple Terrace 97 15 6 6 1 - 14 39 6 5 189 19 0.4%Unincorporated County 6,274 3,282 2,356 1,939 2,423 2,416 3,412 3,964 3,551 4,508 34,125 3,413 78.2%

SFD-Hillsborough County: 8,639 4,472 3,112 2,478 2,903 3,075 4,059 4,798 4,411 5,669 43,616 4,362 64%% Change-Previous Year - -48% -30% -20% 17% 6% 32% 18% -8% 29%

Multi-familyPlant City 15 - 68 6 3 48 - 2 - 130 272 27 1.1%Tampa 985 2,386 986 387 643 103 2,081 1,174 1,843 2,126 12,714 1,271 51.9%Temple Terrace - - - - - - - - - 262 262 26 1.1%Unincorporated County 1,815 576 2,036 920 401 954 1,091 904 1,236 1,306 11,239 1,124 45.9%

MF-Hillsborough County: 2,815 2,962 3,090 1,313 1,047 1,105 3,172 2,080 3,079 3,824 24,487 2,449 36%% Change-Previous Year - 5% 4% -58% -20% 6% 187% -34% 48% 24%

http://socds.huduser.org/permits/

Source: U.S. Census Bureau; U.S. Dept. of Housing & Urban Development; WTL+a, February 2016.

Change: 2006-2015

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Table 11 (Continued): Housing Starts–Selected Municipalities, 2006—2015

Total Annual % ofMunicipality 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Starts Average Total

Total StartsPlant City 343 167 182 86 27 117 86 111 142 250 1,511 151 2.2%Tampa 2,925 3,394 1,622 840 1,098 693 2,628 1,860 2,555 3,162 20,777 2,078 30.5%Temple Terrace 97 15 6 6 1 - 14 39 6 267 451 45 0.66%Unincorporated County 8,089 3,858 4,392 2,859 2,824 3,370 4,503 4,868 4,787 5,814 45,364 4,536 66.61%

TOTAL-Hillsborough County: 11,454 7,434 6,202 3,791 3,950 4,180 7,231 6,878 7,490 9,493 68,103 6,810 100%% Change-Previous Year - -35% -17% -39% 4% 6% 73% -5% 9% 27%

http://socds.huduser.org/permits/

Source: U.S. Census Bureau; U.S. Dept. of Housing & Urban Development; WTL+a, February 2016.

Change: 2006-2015

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45,300 new unit starts in unincorporated areas of Hillsborough, comprising more than 66%

of total new housing starts countywide;

Planning Commission staff provided data on housing starts, by unit type, in the Brandon

study area. As illustrated in Table 12, between 2011 and the second-quarter of 2015 there

were almost 900 housing starts in the study area, equating to an average of 179 units per year, which accounts for roughly 2.6% of all housing starts in the County during this

period;

Notably, fully 73% (650+ units) of new housing starts in the study area were single-family

detached and attached, reinforcing the market observation that residential development

patterns in the study area are low-density and characteristic of outlying suburban locations.

Only 27% (240 units) of housing starts in the study area since 2011 comprised multi-family

units.

Table 12: Housing Starts—Brandon Study Area, 2011—Q2/2015

Through Q2 Total Annual % ofUnit Type 2011 2012 2013 2014 2015 Starts Average Total

Single-family Attached 63 54 38 78 18 251 50 28%Single-family Detached 6 14 110 177 96 403 81 45%Multi-family - 8 - 160 72 240 48 27%Other (Accessory, Mobile Home) 1 1 1 - - 3 0.6 0.3%

Total-Study Area: 70 77 149 415 186 897 179

As % of Hillsborough County 2% 1% 2% 6% 2% 2.6%

Source: Hillsborough County Planning Commission; HDR, Inc.; WTL+a, March 2016.

Change: 2011-2015

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Figure 3: Brandon—Plant City Apartment Submarket

As illustrated in Figure 3, Brandon is located in the “Brandon—Plant City” apartment submarket,

a larger geographic area that extends from I-75 east to Plant City. It includes various

submarkets and neighborhoods, such as Bloomingdale and Riverview. Based on data from

REIS, Inc. (a national real estate database), Table 13 summarizes key metrics in the area’s

multi-family apartment inventory, as its overall health is key to understanding market potentials

for new rental housing:

There are almost 16,600 rental units in the submarket, accounting for fully 10% of the entire

Tampa MSA apartment market. Notably, vacancy rates have remained generally stable—in

the range of 5% to 6%. In fact, over the past six years, vacancies averaged 5.2%. The

apartment industry considers “stabilization” (i.e., full market strength) to be 5% vacancy,

which suggests that the area’s multi-family rental market is generally stabilized;

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Table 13: Brandon—Plant City Apartment Metrics, 2015

Brandon/Pl CitySubmarket 1 - 10 11 - 20 Total

Total Inventory (Units) 16,585 2,520 3,075 5,595 As % of Submarket N/A 15% 19% 34%As % of Tampa MSA 10.2% 1.6% 1.9% 3%

Unit Distribution by Year BuiltBefore 1970 0% 0% 0% 0%1970-1979 2% 0% 0% 0%1980-1989 23% 25% 39% 33%1990-1999 22% 23% 29% 26%2000-2009 42% 52% 32% 41%After 2009 11% 0% 0% 0%

Vacancy Rate by Year BuiltBefore 1970 N/A N/A N/A N/A 1970-1979 4.3% N/A N/A N/A 1980-1989 4.3% 4.3% 5.6% 5.0%1990-1999 4.8% 4.7% 6.1% 5.4%2000-2009 6.4% 3.6% 6.3% 5.1%After 2009 9.2% N/A N/A N/A

Historic Vacancy Rates2010 6.2% N/A N/A N/A 2011 4.6% 5.5% 6.7% 6.2%2012 4.3% 4.5% 5.7% 5.2%2013 5.0% 6.1% 6.6% 6.4%2014 5.1% 4.7% 6.5% 5.7%2015 5.8% 4.2% 6.1% 5.2%

Annual Average (2010-2015): 5.2% 5.0% 6.3% 5.7%

Average Annual Absorption2010 570 - - - 2011 575 - - - 2012 46 25 25 50 2013 219 (40) (23) (63) 2014 305 35 3 38 2015 417 13 10 23

Annual Average (2010-2015): 355 8 4 12

Asking Monthly RentStudio 674$ 607$ N/A One Bedroom 937 905 905 Two Bedroom 1,175 1,119 1,105 Three Bedroom 1,345 1,322 1,272

Average Effective Rent: 1,097$ 1,052$ 1,048$

Average Unit Size (SF)Studio 332 288 N/A One Bedroom 756 748 763 Two Bedroom 1,088 1,122 1,047 Three Bedroom 1,306 1,390 1,237

Rent Per SFStudio 2.03$ 2.11$ N/A One Bedroom 1.24$ 1.24$ 1.21$ Two Bedroom 1.08$ 1.01$ 1.06$ Three Bedroom 1.03$ 0.96$ 1.03$

Source: REIS Reports; WTL+a, February 2016.

Comps (Table 18)

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Rental rates range from a high of $2.03 per sq. ft. per month for studios to $1.24 per sq. ft.

for one-bedrooms to $1.03 per sq. ft. for three-bedroom units; and

Annual absorption (i.e., leasing) for the six-year period between 2010 and 2015 has

averaged a solid 355 units per year. Since the area’s apartment market is effectively

stabilized, the pace of annual absorption is indicative of demand for net new apartment

construction.

WTL+a also profiled 20 rental properties in the Brandon study area. This profile is illustrated in

Table 14 and summarized below:

There are 5,595 units among these 20 properties, which accounts for 34% of all units in

the Brandon—Plant City submarket, but only 3% of the MSA’s total rental inventory.

Vacancy rates have ranged from 4% to 6% since 2010, consistent with the larger

submarket. Over the past six years, vacancies averaged 5.7%, illustrative of a stabilized

apartment market;

Data on average annual absorption/leasing activity is limited to 2012 to 2015. According to

REIS, absorption among the comparable properties averaged only 12 units per year during this period. This limited activity reflects the generally stabilized nature of the

apartment market in the Brandon study area; and

Rental rates are generally similar to the larger submarket—ranging from $2.11 per sq. ft. per

month for studios, $1.21 to $1.24 per sq. ft. per month one-bedrooms, $1.01 to $1.06 per sq.

ft. per month for two-bedrooms, and $0.96 to $1.03 per sq. ft. per month for three-bedroom

units.

In summary, the multi-family housing market in Brandon is stabilized, and appears to have fully

recovered from the 2007—2009 recession. While almost 900 units of new housing have been

delivered since 2011, residential development is limited relative to the County as a whole.

Other market indices that reflect the overall strength of the study area’s housing market include:

low vacancy rates, moderate rental pricing and, the availability of a diverse product mix—

ranging from single-family detached to attached to garden apartments—that provide

opportunities for first-time and move-up buyers across product lines.

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Table 14: Profile of Selected Apartment Complexes, 2015

Year BuiltClass & Current Unit No. of Size Monthly Rent

Project/Location Height Vacancy Type Units (In SF) Rent Per SF

Versant Place 2000 5.0% 1 BR 139 843 940$ 1.12$ 1010 Versant Drive A 2 BR 172 1,172 1,055 0.90 Brandon 3 floors 3 BR 72 1,377 1,245 0.90

383 1,091 1,049$ 0.96$

Park at Pienza 1985 5.7% 1 BR 4 1,060 999$ 0.94$ 1212 Askew Drive A 2 BR 80 1,433 1,319 0.92 Brandon 2 floors 3 BR 4 1,768 1,549 0.88

88 1,431 1,350$ 0.94$

Paddock Club of Brandon I 1997 4.8% 1 BR 24 960 1,043$ 1.09$ 921 Paddock Club Drive A 2 BR 343 1,231 1,156 0.94 Brandon 3 floors 3 BR 72 1,442 1,372 0.95

439 1,251 1,185$ 0.95$

Paddock Club of Brandon II 1999 4.5% 1 BR - - -$ -$ 921 Paddock Club Drive A 2 BR 66 1,109 1,097 0.99 Brandon 3 floors 3 BR 66 1,442 1,191 0.83

132 1,276 1,144$ 0.90$

Camden Lakeside 1985 7.0% 1 BR 128 608 986$ 1.62$ 529 S. Parsons Avenue B/C 2 BR 100 810 1,062 1.31 Brandon 2 floors 3 BR - - - -

228 697 1,019$ 1.46$

Westbury at Lake Brandon 2001 4.7% 1 BR 182 789 899$ 1.14$ 1210 Westbury Point Drive A 2 BR 211 1,024 1,075 1.05 Brandon 3 floors 3 BR 32 1,224 1,375 1.12

425 938 1,022$ 1.09$

Indigo Point 1988 4.6% 1 BR 104 542 850$ 1.57$ 1850 Providence Lakes Road B/C 2 BR 111 881 1,154 1.31 Brandon 2 floors 3 BR 24 1,107 1,530 1.38

239 756 1,059$ 1.40$

Lakewood 1981 0.0% Studio 17 288 607$ 2.11$ 1651 Lake Meadow Circle S B/C 1 BR 59 576 750 1.30 Brandon 1 floor 2 BR 7 864 887 1.03

83 541 732$ 1.35$

Hamlin at Lake Brandon 2004 0.3% 1 BR 156 858 950$ 1.11$ 1501 La Dora Drive A 2 BR 171 1,227 1,161 0.95 Brandon 3 floors 3 BR 32 1,523 1,415 0.93

359 1,093 1,092$ 1.00$

The Park at Sienna Phase III 2002 4.2% 1 BR 72 820 766$ 0.93$ 1918 Plantation Key Circle B/C 2 BR 72 1,020 975 0.96 Brandon 3 floors 3 BR - - - -

144 920 871$ 0.95$

ANALYSIS: Total/Weighted Average: 4.1% 2,520 1,020 1,052$ 1.03$

Source: REIS Reports/REIS, Inc.; RDS/WTL+a, February 2016.

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Table 14 (Continued): Profile of Selected Apartment Complexes, 2015

Year BuiltClass & Current Unit No. of Size Monthly Rent

Project/Location Height Vacancy Type Units (In SF) Rent Per SF

The Park at Sienna Phase I 1992 5.5% 1 BR 212 900 765$ 0.85$ 1918 Plantation Key Circle B/C 2 BR 140 1,020 1,007 0.99 Brandon 3 floors 3 BR 48 1,200 1,157 0.96

400 978 897$ 0.92$

Charleston Landings 1986 4.3% 1 BR 148 628 790$ 1.26$ 902 Delaney Circle A 2 BR 124 913 950 1.04 Brandon 2 floors 3 BR 28 1,162 1,150 0.99

300 796 890$ 1.12$

Lakewood Place 1988 4.6% 1 BR 130 650 1,103$ 1.70$ 350 Lakewood Drive A 2 BR 216 950 1,284 1.35 Brandon 2 floors 3 BR - - - -

346 837 1,216$ 1.45$

Asprey at Brandon Lakes 2001 5.9% 1 BR 84 828 945$ 1.14$ 1240 Astor Common Place A 2 BR 191 1,160 1,113 0.96 Brandon 3 floors 3 BR 48 1,376 1,285 0.93

323 1,106 1,095$ 0.99$

Hamilton Bay 1989 8.8% 1 BR 190 716 870$ 1.22$ 1801 Princeton Lakes Drive A 2 BR 204 988 1,062 1.07 Brandon 3 floors 3 BR 48 1,185 1,239 1.05

442 764 999$ 1.31$

Lucerne 2002 6.2% 1 BR 96 828 945$ 1.14$ 1419 Lake Lucerne Way A 2 BR 153 1,158 1,110 0.96 Brandon 3 floors 3 BR 26 1,377 1,315 0.95

275 1,064 1,072$ 1.01$

Camden-Providence Lakes 1996 5.4% 1 BR 116 771 995$ 1.29$ 1702 Chapel Tree Circle A 2 BR 120 1,179 1,134 0.96 Brandon 2 floors 3 BR 24 1,365 1,356 0.99

260 1,014 1,092$ 1.08$

The Village at Brandon 1987 4.5% Studio - - -$ -$ 1002 Creek Bridge Road A 1 BR 70 980 999 1.02 Brandon 2 floors 2 BR 42 1,175 1,249 1.06

112 1,053 1,093$ 1.04$

The Park at Dorchester 2000 6.9% 1 BR 114 819 993$ 1.21$ 2211 Grand Isle Drive A 2 BR 167 1,137 1,190 1.05 Brandon 2 floors 3 BR 96 1,265 1,399 1.11

377 1,073 1,092$ 1.02$

Tuscany Villa 1997 7.3% 1 BR 72 705 899$ 1.28$ 1919 Sterling Palms Court A 2 BR 108 947 1,014 1.07 Brandon 3 floors 3 BR 60 1,120 1,201 1.07

240 918 1,037$ 1.13$

ANALYSIS: Total/Weighted Average: 5.9% 3,075 947 1,048$ 1.11$

Source: REIS Reports/REIS, Inc.; RDS/WTL+a, February 2016.

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Multi-tenant/Speculative Office A critical component of the market analysis for the Brandon study area includes an evaluation of

the area’s competitive office market to ensure that redevelopment opportunities (and

subsequent land use and implementation strategies) are tailored to attract future private

investment in Brandon. Moreover, specific metrics in this profile are key to testing potential

market support, and to guiding appropriate updates to the County’s land use codes.

WTL+a evaluated market performance in Brandon and other relevant submarkets in

Hillsborough County to understand the study area’s relative competitive position in the region’s

office market. This is based on data from CoStar, Inc., a national real estate database, for

2006—2015, and includes the following key market indices: total inventory, construction

deliveries, annual leasing (i.e., net absorption) activity, vacant stock, vacancy rates, and rental

rates. Key findings are illustrated in Table 15 and noted below:

Hillsborough County

Hillsborough County contains 61.7 million sq. ft. of office space distributed across the

Central Business District (downtown Tampa) and five suburban submarkets. There is more than 6.2 million sq. ft. of vacant office space (including both vacant and sublet space), which reflects a current vacancy rate of 9.9%; and

Multiple factors have combined to strengthen overall leasing activity, including recovery from

the 2007—2009 recession, net new job growth in office-using sectors and new or expanded

businesses throughout the County. In fact, net absorption totaled more than 1.6 million sq. ft. countywide in 2015. If this pace is sustained, it will require approximately 3.4 years to

reduce the County’s vacant office space to stabilized levels in the range of 5% to 7%

vacancy (i.e., the office industry considers stabilized occupancies to be in the range of 93%

to 95%).

Brandon Study Area

As illustrated in Figure 4, the Brandon study area is located in the East Tampa office

submarket. This submarket contains over 9.8 million sq. ft. of office space, or roughly

19% of the County’s gross inventory. According to CoStar, East Tampa contains over

992,000 sq. ft. of vacant space, reflecting a vacancy rate of 10%. Leasing activity in

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Table 15: Office Market Profile—Hillsborough County, 2015

2015 Years toNo. of Inventory % of Total % Net Stabilized 2015 Under

Buildings (SF) Total Direct % Sublet % Vacant Absorption Occupancy Deliveries Construc'n All Class ACBD (1)Downtown Tampa: 119 9,657,600 16% 956,014 9.9% 68,346 0.7% 10.6% (6,003) N/A - - 24.52$ 26.53$

Non-CBD (Ranked by Size)Westshore 647 17,269,088 33% 1,762,647 10.2% 84,257 0.5% 10.7% 362,530 4.5 37,320 175,998 24.55$ 28.39$ Northwest Tampa 1,077 9,979,598 19% 1,055,344 10.6% 1,050 0.0% 10.6% 304,526 3.2 60,569 10,178 18.15 23.31 Northeast Tampa 531 9,902,144 19% 1,036,250 10.5% 44,423 0.4% 10.9% 439,528 2.2 84,976 - 20.17 23.42 East Tampa (2) 750 9,874,442 19% 976,419 9.9% 15,858 0.2% 10.0% 449,411 2.0 358,337 31,200 18.50 21.51 South Tampa 283 5,024,632 10% 132,748 2.6% 1,200 0.0% 2.7% 54,899 2.2 2,753 19,389 21.75 23.00 Suburban: 3,288 52,049,904 84% 4,963,408 9.5% 146,788 0.3% 9.8% 1,610,894 2.9 543,955 236,765 20.62$ 23.93$

TOTAL: 61,707,504 100% 5,919,422 9.6% 215,134 0.3% 9.9% 1,604,891 3.4 543,955 236,765 22.57$ 25.23$

(1) This illustrates the estimated time (in years) to achieve stabilized occupancies (defined as 93% occupancy), based on average annual absorption in 2015.(2) The Brandon Study Area is located in the East Tampa office submarket.

Source: CoStar, Inc.; NAI Hallmark Partners; WTL+a, March 2016.

Asking Rents/SFWeighted Average

Direct & Sublet Vacant Space

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East Tampa in 2015 generated 449,400 sq. ft. of positive net absorption. If this pace is

sustained, it would require approximately two years for the East Tampa submarket to

achieve 93% stabilized occupancies. We note, however, that over half of the submarket’s

net absorption was due to delivery of one owner-user building—the USAA building.

WTL+a also compiled information on market performance among the 414 general and medical

office buildings located in the study area, based on data from CoStar, Inc. Key findings indicate

that:

Figure 4: Tampa East Office & Retail Submarket

The 414 office buildings in the study area are scattered in multiple locations, and include

numerous, smaller office buildings in small office parks along Bloomingdale Avenue as well

as a cluster of medical office buildings surrounding the Brandon Regional Hospital;

The study area’s office inventory includes more than 2.5 million sq. ft. of general and medical office space, or fully 26% of the entire East Tampa submarket. This suggests an

average building size of approximately 6,100 sq. ft., which is characteristic of non-

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Table 16: Office Market Profile—Brandon Study Area, 2006—2015

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Total Ann'l %OfficeInventory 2,065,275 2,307,079 2,369,862 2,452,912 2,467,856 2,472,556 2,490,056 2,495,056 2,500,236 2,542,341 477,066 As % of East Tampa Submkt 26%No. of Buildings 326 384 398 404 408 409 410 411 412 414 88 Vacant Stock (1) 149,356 244,303 272,761 382,889 313,487 347,571 354,742 307,140 267,467 258,509 109,153 Vacancy Rate 7.2% 10.6% 11.5% 15.6% 12.7% 14.1% 14.2% 12.3% 10.7% 10.2% 3.9% Total Change Past 5 Years -20.0%Total Net Absorption/Leasing 46,750 148,759 53,025 (20,707) 53,963 (28,634) 9,579 53,102 44,853 52,063 412,753 Average Annual (In SF) 41,275 New Construction 34,320 241,804 62,783 83,050 14,944 4,700 17,500 5,000 5,180 42,105 511,386 Average Base Rent 17.90$ 18.08$ 18.77$ 17.62$ 16.28$ 15.57$ 15.17$ 15.13$ 15.95$ 16.11$ -1.2%Average Gross Rent 21.25$ 21.30$ 21.70$ 20.72$ 18.64$ 17.76$ 16.87$ 16.64$ 17.98$ 19.13$ -1.2%

Medical Office (Included Above)Inventory 635,745 674,518 698,733 719,983 724,983 729,683 729,683 729,683 734,863 773,968 138,223 As % of Study Area 31% 29% 29% 29% 29% 30% 29% 29% 29% 30%No. of Buildings/Centers 71 78 83 87 88 89 89 89 90 91 20 Vacant Stock (1) 71,863 113,910 93,936 104,653 84,997 89,627 97,677 82,548 66,471 87,333 15,470 Vacancy Rate 11.3% 16.9% 13.4% 14.5% 11.7% 12.3% 13.4% 11.3% 9.0% 11.3% 0.0% Total Change Past 5 Years -3.8%Total Net Absorption/Leasing 18,827 (1,274) 43,889 8,833 24,656 70 (8,050) 15,629 21,257 18,243 142,080 Average Annual (In SF) 14,208 New Construction 18,752 38,773 24,215 21,250 5,000 4,700 - - 5,180 39,105 156,975 Average Base Rent 17.77$ 18.16$ 18.53$ 17.48$ 15.93$ 16.29$ 16.09$ 15.95$ 16.72$ 17.40$ -0.2%Average Gross Rent 23.24$ 23.29$ 23.60$ 21.56$ 19.38$ 20.59$ 19.77$ 19.23$ 20.75$ 22.46$ -0.4%

(1) Includes existing vacant direct and sublet space.


Change: 2006-2015

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investment grade, Class B/C quality buildings. The real estate industry classifies these as

“garden” office buildings;

As a result of the presence of Brandon Regional Hospital, the study area contains 91

medical office buildings with 774,000 sq. ft. of space, which comprises approximately 30%

of the study area’s total office inventory. Vacancy rates among Brandon’s medical office

buildings have fluctuated between 9% and 17% per year since 2006; and

Illustrative of ongoing recovery in both the regional (county) and local (Brandon) office

markets, office vacancies in Brandon have declined—from a recession-based peak of

almost 16% in 2009 to 10% in 2015. Reduced vacancies are also reflected in leasing

activity: Brandon experienced over 412,700 sq. ft. of net absorption between 2006 and 2015, which translates into annual net absorption of 41,275 sq. ft. per year. Absorption

in medical office accounted for roughly 35% of total activity, or 14,200 sq. ft. per year since

2006.

Brandon’s Office Market is Generally Healthy: Annual Net Absorption

of 41,275 SF/Year & Declining Vacancy Rates Since 2009

Hotel/Lodging WTL+a also reviewed market performance and metrics in the area’s supply of hotels/lodging

facilities. This was completed to understand how Brandon could be positioned to accommodate

additional lodging as a key economic activity to support its significant commercial economy.

Importantly, from a competitive perspective, hotels serve as a critical supporting amenity to

corporate and business activity generators as well as visitors, and their proximity and overall

market performance is key to understanding market potentials. Notable findings are highlighted

as follows and illustrated in Table 17 through Table 19:

Hotel occupancies are a principal source of information on visitor markets, and measures of

demand for hotel development follow general industry patterns that identify markets as ready to

add more room capacity. The general thresholds used in the capital markets to test growth

capacity for new hotel rooms include: Average Daily Rates (or ADRs) and average annual

occupancy levels (allowing for possible seasonal changes). Notably, the hotel industry

WTL+a


considers average annual occupancy between 65% and 72% as a break-even threshold necessary to support additional capacity and warrant development of new hotel rooms. The following data are provided by STR Global, the industry leader in hotel market performance.

Hillsborough County

As illustrated in Table 17, Hillsborough County contains more than 21,477 hotel rooms.

Average annual occupancy at the countywide level is not known, although the lodging

market in many locations throughout Florida has strengthened significantly since the 2007—

2009 recession. The location and pricing of new hotels is highly dependent on proximity to

available business and leisure markets as well as to amenities that visitors require. These

include: a range of offerings of restaurants and food service; nearby shopping; attractions

that can draw visitors; and safe, attractive environments;

Hotel-based room taxes are a major contributor to Hillsborough County’s tourism revenues,

but they do not represent a full profile of visitors who come to stay. There is another

category known as VFRs (Visiting Friends & Relatives); these visitors may not be counted

among those overnight visitors staying in hotels. As VFRs also spend on dining out,

entertainment and gifts for their hosts, they have a demonstrably major impact on local retail

businesses; and

The County’s largest hotel submarkets include Westshore (with 37% of supply), Downtown

and Ybor City (almost 20% of supply) and the area surrounding Busch Gardens (11.5%).

Brandon is the fourth largest hotel market in Hillsborough County, with roughly 2,100 rooms

accounting for almost 10% of the County’s hotel room inventory.

Brandon Area

As illustrated in Table 18, WTL+a obtained aggregated market performance data on 19 (of 20)

properties that report their performance to STR Global. One property, Brandon Motor Lodge,

does not report to STR. We note that STR has strict criteria regarding the release of

aggregated performance data in key metrics (e.g., occupancy levels, average daily rates/ADRs,

and revenues per available room). Since data are aggregated, market performance

characteristics of individual properties is not known. Key findings are illustrated in Table 19, and

summarized below:

WTL+a


Table 17: Hotel Inventory, by Property Class & Location in Hillsborough County, 2016

As % ofUpper Upper Total Hillsborough

Location Economy Mid-scale Mid-scale Upscale Upscale Luxury Rooms County(1) (2) (3) (4) (5) (6)

Brandon 288 288 576 792 147 - 2,091 9.7%Plant City 174 - 218 - - - 392 1.8%Ruskin 20 56 - 157 - - 233 1.1%Sun City Center - 80 75 - - - 155 0.7%

Tampa Airport/Westshore 824 1,042 1,367 1,996 1,887 765 7,881 36.7% Busch Gardens 1,023 489 578 126 247 - 2,463 11.5% Downtown/Ybor City 531 453 138 475 2,655 - 4,252 19.8% East 120 - 158 - 266 - 544 2.5% Fairgrounds 558 101 258 - 250 - 1,167 5.4% North 101 289 494 434 - - 1,318 6.1% Other 341 383 - 147 110 - 981 4.6%Subtotal: 3,498 2,757 2,993 3,178 5,415 765 18,606 86.6%

TOTAL: 3,980 3,181 3,862 4,127 5,562 765 21,477 100%

% Dist. by Class 19% 15% 18% 19% 26% 4%

(1) Examples of economy class properties include: Days Inn; Extended Stay America; Red Roof Inn; and Travelodge.(2) Examples of mid-scale class properties include: Best Western; LaQuinta Inn; Quality Inn & Suites; Ramada Inn and Wingate by Wyndham.(3) Examples of upper mid-scale properties include: Comfort Inn; Fairfield Inn; Hampton Inn; and Holiday Inn Express & Suites.(4) Examples of upscale properties include: Marriott Courtyard; Crowne Plaza; Doubletree; Hilton Garden Inn; Hyatt Place; and Residence Inn. (5) Examples of upper upscale properties include: Hyatt; Marriott; Sheraton; Westin and Wyndham.(6) Examples of luxury properties include: Grand Hyatt Tampa Bay and Intercontinental.

Source: STR Global; WTL+a, February 2016.

No. of Rooms by Property Class

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Table 18: Selected Competitive Hotel Inventory

Opening No. of % of STRFacility/Location Date Rooms Supply Product Class Market Data

BrandonExtended Stay America Jul 1997 142 7% Economy Class YesBrandon Motor Lodge Jun 1970 35 2% Economy Class NoRed Roof Inn Sep 1987 111 5% Economy Class YesQuality Inn & Suites (Near Casino) Sep 1989 59 3% Midscale Class YesLa Quinta Inns & Suites (Regency Park) Nov 1997 128 6% Midscale Class YesLa Quinta Inns & Suites Jun 1985 101 5% Midscale Class YesHoliday Inn Express Feb 1998 119 6% Upper Midscale Class YesCountry Inn & Suites Oct 2006 82 4% Upper Midscale Class YesClarion Inn Tampa Jun 1973 119 6% Upper Midscale Class YesComfort Suites Jan 1998 69 3% Upper Midscale Class YesFairfield Inn & Suites May 1997 107 5% Upper Midscale Class YesHampton Inn Tampa Aug 1995 80 4% Upper Midscale Class YesResidence Inn (Sabal Park) Nov 1998 102 5% Upscale Class YesMarriott Courtyard Nov 1997 90 4% Upscale Class YesHilton Garden Inn (Riverview) Jan 2009 119 6% Upscale Class YesHomewood Suites Sep 2006 126 6% Upscale Class YesHilton Garden Inn Feb 2002 152 7% Upscale Class YesStaybridge Suites May 2007 100 5% Upscale Class YesSpringhill Suites Feb 2008 103 5% Upscale Class YesEmbassy Suites Dec 2007 147 7% Upper Upscale Class Yes

TOTAL ROOMS: 2,091

As % of Hillsborough County Inventory 9.7%


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As illustrated in Table 19, hotel occupancies have improved significantly—from a recession-based low of 58% in 2010 to 78.2% at year-end 2015. Average annual

occupancy over this six-year period was 66.8%, thus within the threshold for new

construction/financing. In fact, since 2010, occupancies have strengthened at a sustained

compound annual increase of 6.2% per year;

As noted, the Brandon Motor Lodge does not report its performance to STR Global. With

only 35 rooms, it is not considered to be “investment-grade” property, as the hotel industry

typically considers 80 rooms as the standard/threshold for financing purposes;

Notably, the newest property (Hilton Garden Inn) was delivered in January 2009. With

improvements in occupancies (and rates as detailed below), and no new hotel deliveries in

fully seven years, market performance suggests that new hotel development in Brandon

should be supportable; and

Other metrics indicating the strength of the area’s hotel market include significant

improvements in average daily rate/ADR, which jumped from $75 per room per night in 2010

to $95 per room per night in 2015 (a 4.8% per year increase). In addition, revenue per

available room (or RevPAR), which considers simultaneous changes in both room rates and

annual occupancies, improved from almost $44 per room per night to almost $75 per room

per night. This reflects a remarkable compound annual increase of 11.3% per year over this

six-year period.

In conclusion, these performance metrics in Brandon’s lodging market are very solid, and

indicate strong market potentials to support new hotel development. Notably, with the exception

of the Embassy Suites, the Brandon hotel market is characterized by limited-service properties that tap price-sensitive markets, such as I-75 pass-through traffic, military and group

business and the like. Section 4 of this report analyzes overall market demand and identifies

both locational and market considerations for new lodging prospects in the Brandon study area.

WTL+a


Table 19: Hotel Performance Metrics—Selected Properties, 2009—2014

Jan YTD2010 2011 2012 2013 2014 2015 2016 Average CAGR

Performance Characteristics (1)Number of Rooms 2,059 2,055 2,057 2,057 2,056 2,056 Available Room Nights (Supply) 751,535 750,555 751,048 750,805 751,703 750,440 751,014 -0.03%Occupied Room Nights (Demand) 435,807 467,266 473,410 502,162 545,035 587,091 501,795 6.1%Annual Occupancy (%) 58.0% 62.3% 63.0% 66.9% 72.5% 78.2% 68.3% 66.8% 6.2%Average Daily Rate 75.49$ 78.78$ 86.37$ 83.30$ 89.20$ 95.55$ 108.43$ 85.41$ 4.8%

(2) Revenue Per Available Room 43.77$ 49.04$ 54.44$ 55.72$ 64.67$ 74.75$ 85.77$ 57.06$ 11.3%Year-to-Year % Growth

Annual Occupancy - 7.4% 1.2% 6.1% 8.4% 7.9% (12.7%)Average Daily Rate - 4.4% 9.6% (3.5%) 7.1% 7.1% 13.5%Revenue/Available Room - 12.0% 11.0% 2.3% 16.1% 15.6% 14.7%

Selected Property Rooms % Dist. Year Open Rooms % Dist.Brandon Motor Lodge (No STR Data) 35 2% 1970 154 7%Clarion Inn Tampa Brandon 119 6% 1973 271 13%La Quinta Inns & Suites Tampa Brandon West 101 5% 1985 837 40%Red Roof Inn Tampa Brandon 111 5% 1987 829 40%Quality Inn & Suites Tampa Brandon Near Casino 59 3% 1989 - 0%Hampton Inn Tampa Brandon 80 4% 1995 Total: 2,091 100%Extended Stay America Tampa Brandon 142 7% 1997Fairfield Inn & Suites Tampa Brandon 107 5% 1997Courtyard Tampa Brandon 90 4% 1997 Rooms % Dist.La Quinta Inns & Suites Tampa Brandon Regency 128 6% 1997 288 14%Residence Inn Tampa Sabal Park Brandon 102 5% 1998 288 14%Comfort Suites Tampa Brandon 69 3% 1998 576 28%Holiday Inn Express Tampa Brandon 119 6% 1998 792 38%Hilton Garden Inn Tampa East Brandon 152 7% 2002 147 7%Homewood Suites Tampa Brandon 126 6% 2006 - 0%Country Inn & Suites Tampa Brandon 82 4% 2006 Total: 2,091 100%Staybridge Suites Tampa East Brandon 100 5% 2007Embassy Suites Tampa Brandon 147 7% 2007Springhill Suites Tampa Brandon 103 5% 2008Hilton Garden Inn Tampa Riverview Brandon 119 6% 2009

Total: 2,091 100%

(1) CAGR=Compound Annual Growth Rate.(2) Revenue per available room is total annual room revenue divided by available rooms. It is the best measure of year-to-year growth because it considers

simultaneous changes in both room rate and annual occupancies.


Luxury

EconomyMid-scale

Upper Mid-scaleUpscale

Upper-Upscale

1980-19891990-19992000-2009After 2010

By STR Hotel Class

CHANGE: 2010-2015

By Period Built1970-1979

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Retail The following examines retail market trends and characteristics of the significant amount of

retail space located in the Brandon study area. For purposes of this analysis, the term ‘retail’ is

assumed to include the following types of businesses:

Specialty retail stores, department stores, outlet and discount retailers

Home products, furniture stores and other large format household goods retailers such as

home improvement, office supply businesses and sports equipment stores

Food and beverage operators such as full-service restaurants, cafes and diners, carry-out

and delivery food service, specialty food service such as bakeries, liquor bars and liquor

stores, and entertainment venues serving alcoholic beverages

Consumer services such as banks, convenience stores, gas stations, hair and nail salons,

spas, auto supplies and repairs, movie theaters, event venues, automobile tire stores,

equipment rental businesses, commercial gyms and auto sales offices/showrooms, florists,

banks and financial institutions, gas stations and auto-related sales and products

Grocery stores, warehouse stores and specialty produce retailers, meat markets/butcher

shops and ethnic food markets, farmers market buildings and fruit and vegetable specialty

food retailers, and

Although considered a retail use under many zoning definitions, self-storage facilities were

not included in the retail inventory summary prepared by WTL+a.

Regional Retail Inventory

As illustrated in Table 20 below, CoStar, Inc., a national real estate database, estimates that the

Tampa Metropolitan Statistical Area (MSA) includes 223.9 million sq. ft. of retail space.

There are six retail submarkets in Hillsborough County with a total of 59.3 million sq. ft. of space, or almost 27% of the MSA’s total inventory. At year-end 2015, Hillsborough County contains 2.98 million sq. ft. of vacant retail space, reflecting an overall vacancy rate of 5%. This is illustrative of a stabilized retail market (i.e., 5% vacancy is the real estate industry’s

accepted threshold of “full” occupancy), although there are pockets of weakness, such as a 20%

vacancy rate in downtown Tampa.

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WTL+a notes that total retail supply is a quantitative estimate only; it does not reflect physical

conditions, functional and/or physical obsolescence, and relative competitive positioning of the

inventory. We further recognize that the 223.9 million sq. ft. estimate includes potentially

significant amounts of older, marginal or non-competitive retail space that may suffer from

physical and/or functional obsolescence and difficult to operate under current market conditions.

Over time, changes in the retail industry, consolidation of chains, and differences in shopper

behavior have resulted in reduced demand for specific formats (like Big Box stores), shifts in

approach (such as Wal-Mart choosing to close a number of smaller Neighborhood Market

stores, and construction of larger format buildings. A relevant example in the Brandon study

area is the closing of a neighborhood Wal-Mart on Lithia/Pinecrest Road, and construction of a

large Sam’s Club to the south on Bloomingdale Avenue.

Table 20: Tampa MSA Retail Inventory, by Submarket, 2015

As % ofTotal Submarket & Vacant %

Submarket Inventory (SF) MSA Inventory (SF) VacantHillsborough CountySubmarkets

NW Tampa 18,462,643 31% 1,035,922 6%East Tampa 13,030,464 22% 486,664 3.7%NE Tampa 12,269,486 21% 575,537 5%Westshore 8,273,793 14% 433,436 5%South Tampa 5,961,554 10% 196,894 3%Tampa CBD 1,297,347 2% 259,958 20%

Subtotal - Hillsborough: 59,295,287 26.5% 2,988,411 5.0%

Other CountiesHernando County 8,703,479 4% 560,109 6%Manatee County 19,798,658 9% 1,310,915 7%Pasco County 24,695,349 11% 1,877,066 8%Pinellas County 54,517,249 24% 3,349,273 6%Polk County 28,319,858 13% 1,766,011 6%Sarasota County 28,622,692 13% 1,460,295 5%

Tampa MSA 223,952,572 100% 13,312,080 5.9%

Source: CoStar, Inc.; WTL+a/RDS Inventory, March 2016.

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Brandon Retail Context & Development Patterns

The prevailing development patterns of retail in Brandon reflect typical suburban planning

concepts that have generated expansive growth since the 1950s, allowing commercial and retail

development to cluster along major traffic corridors and with large areas of single- and multi-

family housing on large, interstitial blocks/parcels. These planning policies and practices

fostered assembly of selected sites and development of major retail clusters such as the

Westfield Brandon Mall. Other large parcels in Brandon were used to construct Big Box/large

format stores (e.g., Wal-Mart, Sam’s Club, Home Depot, Lowes) near I-75, and to provide for

large surface parking fields required by suburban zoning.

As Hillsborough County grew east and south of downtown Tampa and I-75 was completed,

most of Brandon’s retail inventory has developed along Brandon Boulevard (State Route 60),

the oldest and most concentrated in density and development of the east-west corridors in the

study area, with subsequent retail clusters located along the Causeway Boulevard/Lumsden

Road and Progress Boulevard/Bloomingdale Avenue east-west corridors.

Other retail development is clustered/concentrated sporadically along north-south corridors in

the western part of the study area along Providence Road, S. King’s Avenue, at selected

intersections on Lithia/Pinecrest Road, and surrounding Brandon Regional Hospital. This low-

density ‘clustering’ pattern has resulted in a series of automobile-dependent strip shopping

centers, individual pad sites and stand-alone retail structures surrounded by surface parking

lots, which is the dominant response to parking needs in Brandon. Notably, land values in the

study area do not currently support the capital investment costs required to build structured

parking without subsidies, resulting in large, impervious-surface parking lots along the corridors

based on zoning requirements for commercial land uses.

This automobile orientation and land-planning pattern makes most of Brandon’s commercial corridors pedestrian unfriendly—and even dangerous—for pedestrians given

the width of major roads in the study area. For various reasons, there also appears to be a

parking shortage in the blocks surrounding the Brandon Regional Hospital, despite the presence

of structured parking, vehicles park on landscaped areas, above curbs and in any available

space. While this study does not include a parking inventory, the relationship between parking

requirements, parking capacity and utilization, and land values will become more important to

development policy and land use codes as Brandon continues to evolve.

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As an alternative, the apparent popularity of Winthrop Town Centre, which displays a number of

characteristics of ‘New Urbanism’ (e.g., walkable environments, mixed uses combining retail,

office, public services and a range of housing types), suggests that the future development and

redevelopment of catalytic sites in Brandon could share in the emerging market preference for

mixed-use, walkable environments. One measure of walkability is the metrics approach used to

determine “Walk Scores”, which are described below.

Brandon Retail Inventory

Two methods were utilized in estimating the study area’s total retail inventory. In the first,

WTL+a conducted on-the-ground windshield surveys, reviewed property data from the

Hillsborough County Property Appraiser, and prepared building measurements based on take-

offs from aerial photographs. The second method obtained retail inventory data from CoStar,

Inc. by drawing the study area’s boundaries and retrieving information from their database.

These findings are illustrated in Table 21 and Table 22 below.

Table 21: Estimated Brandon Retail Inventory, by Location, 2016

SF-Total % ofCorridor Inventory (1) Study Area

Route 60/Brandon Boulevard 4,850,496 53%Lumsden Corridor 1,302,415 14%Bloomingdale Corridor 1,897,382 21%Other & Lithia/Pinecrest 1,119,484 12%

Estimated Total: 9,169,776 100%

As % of East Tampa 70%

As % of Hillsborough County 15%

(1) Total inventory is an estimate based on both on-the-ground windshield surveys, review of property data from the Hillsborough County Property Appraiser, and building take-offs based on aerial photographs.

Source: WTL+a/RDS Inventory, March 2016.

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Based on this analysis, Brandon is a regional retail destination, in large part because of the Westfield Brandon Mall and the significant amount of collateral retail, food service and consumer services located throughout the study area. The retail mix in the denser retail

locations near I-75 is dominated

by Westfield Brandon Mall, a 1.12

million sq. ft. enclosed shopping

mall with 28 food & beverage

operators and over 150 retail

stores. As defined by the

International Council of Shopping

Centers/ICSC (an international

trade association for the shopping

center industry), Westfield

Brandon Mall is considered a

‘super-regional mall’, which ICSC defines as including 1 million gross sq. ft. or more. (Greater

Tampa includes four other super-regional malls: University Mall (1.3 million sq. ft.); Westfield

Citrus Park (1.0 million sq. ft.); Westshore Plaza (1.0 million sq. ft.); and International Plaza/Bay

Street (1.19 million sq. ft.) (the Bay Street dining district totals 125,000 sq. ft.).

According to ICSC, the assumed “trade area” for super-regional malls can extend beyond the

immediate area outward from 25 to as many as 50 miles, depending on the amount and location

of competing retail offerings. The proximity of Westfield Brandon to I-75 and other major roads

providing access to downtown Tampa and the eastern/southern parts of Hillsborough County

indicates a larger potential “sales capture area” beyond the Brandon study area, and suggests

that a large portion of the mall’s sales (as well as other retail uses nearby) represent “inflow”

from other submarkets.

Key findings from the submarket and study area retail inventories indicate that:

CoStar data estimates that the East Tampa submarket (which includes the Brandon study

area; see previous Figure 4) includes 13 million sq. ft. of retail space, of which 486,700 sq.

ft., or only 3.7%, is vacant. In effect, East Tampa is a stabilized retail submarket;

CoStar tracking of net absorption (leasing activity) in 2015 suggests that East Tampa experienced positive net absorption of almost 169,000 sq. ft. during the year;

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Table 22: Retail Market Profile—Brandon Study Area, 2006—2015

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Total Ann'l %RetailInventory 8,935,367 9,199,578 9,266,499 9,292,648 9,296,948 9,296,948 9,321,677 9,299,806 9,262,927 9,370,939 435,572 No. of Properties 428 440 448 452 453 453 456 453 451 451 23 Vacant Stock (1) 242,213 281,182 577,708 753,252 680,108 585,026 598,082 572,571 403,622 308,315 66,102 Vacancy Rate 2.7% 3.1% 6.2% 8.1% 7.3% 6.3% 6.4% 6.2% 4.4% 3.3% 2.2% Total Change Past 5 Years -55.0%Total Net Absorption/Leasing 346,008 222,542 (185,479) (103,540) 79,844 90,506 9,273 984 132,070 203,319 795,527 Average Annual (In SF) 79,553 New Construction 375,942 264,211 66,921 26,149 4,300 - 26,387 1,200 3,880 150,235 919,225 Overall Rent (NNN) 25.12$ 19.29$ 20.12$ 17.19$ 14.82$ 14.98$ 13.01$ 13.71$ 13.81$ 16.74$ -4.4%

(1) Includes existing vacant direct and sublet space.


Change: 2006-2015

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Based on the windshield surveys conducted by WTL+a, the study area contains almost 9.2

million sq. ft. of retail and consumer services uses (excluding self-storage facilities), or 70%

of the larger East Tampa submarket;

By comparison, CoStar estimates that the Brandon study area contains 9.37 million sq. ft. of

retail space in 450 properties. As illustrated in Table 22 above, the inventory has expanded

due to more than 919,000 sq. ft. of new construction deliveries over the past 10 years.

Vacancy rates have declined from a recession-based peak of 8% in 2009 to current levels of

3.3%. A critical metric of the overall health of a real estate sector—net absorption—

suggests that the study area has absorbed, on average, almost 80,000 sq. ft. of net leasing activity annually over the past 10 years;

The on-the-ground inventory based on windshield surveys suggests that the difference in

estimated totals between the two methods may result from self-storage facilities being

included as retail space, and how selected consumer service businesses are defined;

While Brandon contains over 15% of all retail space in Hillsborough County, the study area

accounts for only 8% of the County’s population. The economic and market characteristics

of this disproportionate space-to-resident population suggests that total retail in the study area is supported by a much larger trade area, and a far greater number of residents and workers shopping in Brandon’s retail offerings, than just the study area’s population. This is a demonstrated market characteristic of super regional malls, which

typically draw from trade areas extending up to 25 miles (or more), depending on location

and types of competitive offerings. Super-regional mall trade areas are also affected by

driving distance, normally drawing from driving distances up to 30 minutes;

The imbalance between total retail inventory to nearby population is the basis for “net

inflow”, that is, total retail spending in excess of what Brandon’s population alone would

support (as defined by industry-standard spending levels as a share of household income).

While Brandon’s retail concentrations attract significant spending and generate sizable

annual retail sales taxes, they also generate substantial traffic and parking demand in a

largely auto-dependent area;

As noted previously in Section 2, total potential ‘buying power’ (defined as available

spending on all retail categories, irrespective of location) generated by Brandon’s

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households totals $819 million per year. Annual store sales in the study area total $2.1

billion per year—a difference of $1.25 billion per year. This difference represents the

amount of “inflow”, which is spending attracted to Brandon’s retail uses from outside the

study area, and in excess of what Brandon’s residents alone could support. This reinforces

Brandon’s key role as a regional retail destination in Greater Tampa.

Brandon Retail Business Mix

Based on the windshield inventory, the Brandon study area includes the following retail and food

service and retail operations:

Food & Beverage

Food & Beverage Services include full-service, fast food/counter service, diners, bars and

taverns, liquor stores, nutritional/health supplement stores and carry-out/delivery oriented

food businesses

Including the 28 food service operators in

Westfield Brandon Mall, the study area includes

between 260 and 275 Food & Beverage businesses

The offerings range from full-service

restaurants such as Cheesecake Factory and

Bonefish Grill, to numerous fast food and carry-out

restaurants (estimated at 120 businesses, or 45%

of total food service operations)

Because branded fast-food pad sites generate high sales and are easier to finance, these

small buildings generate high property values across the spectrum of food and beverage

service operations; this is frequently why standalone pad sites at malls and community

centers are occupied by branded fast food operators

Branded/chain affiliated Food & Beverage operators account for 60% of all food service in

the study area; non-branded, locally-owned food and beverage operations total about 40%,

and

The study area’s major corridors vary in their F&B owner/operator patterns: fully 70% of F&B

along Brandon Boulevard/Route 60 is comprised of branded food service businesses, while

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only about 25% of the north/south and Lithia/Pinecrest corridors’ operations are branded

operators.

Large Format Stores & Grocery Retailers

The study area includes 18 large format stores (defined as 40,000 sq. ft. or more). Existing

operations by Wal-Mart include: two Wal-Mart stores (94,000 and 100,000 sq. ft.,

respectively); two Wal-Mart Superstores (including the new Superstore near Lithia/Pinecrest

Road of 152,000 sq. ft. and opening in 2016); and, two Wal-Mart Neighborhood Stores

(ranging from 28,000 to 34,000 sq. ft.). The Neighborhood Store on Lithia/Pinecrest will

close due to proximity of the new Wal-Mart superstore located to the south at the

intersection of Lithia/Pinecrest and Bloomingdale Avenue

Large-format stores comprise approximately 1.9 million sq. ft., or 21% of total retail in the study area

Warehouse stores include a 190,000 sq. ft.

Costco Warehouse Club and a 154,500 sq. ft.

Sam’s Club

Two Lowes Home Improvement Centers (130,000 and 175,000 sq. ft., respectively)

A 195,000 sq. ft. Target Superstore and a 100,000 sq. ft. K Mart (closed)

Six additional large-format stores ranging in size from 42,000 sq. ft. (Kane’s Furniture) to

Best Buy (48,000 sq. ft.)

There are 10 grocery stores (six Publix ranging

from 43,000 to 62,000 sq. ft. each), two Winn-Dixie

stores (estimated at 40,000 and 51,000 sq. ft.,

respectively); and two ALDI grocery markets

(estimated at 48,000 sq. ft. each). In addition, there is

a 55,400 sq. ft. former Albertson’s Grocery store that

is currently vacant

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Grocery store space is estimated to total approximately 547,000 sq. ft., with branded

grocery stores accounting for roughly 500,000 sq. ft. of that amount, or 5.5% of total study

area retail, and

In addition, the study area also has 12 specialty ethnic food markets, fresh produce and

specialty butcher/meat markets totaling 45,000 sq. ft. of additional Grocery Store retail

space.

National/Regional Branded & Local Businesses

Among existing retail businesses in the study area, over half of the retail offerings are brand-

affiliated retail stores, Food & Beverage operations and Consumer Services. Of the 262

Food & Beverage offerings identified in the inventory, 154 (almost 60%) businesses are

branded F&B operators, while 108 (40%) are local, non-branded businesses. There are

also numerous duplications of several national and regional brands. For example, the study

area includes multiple examples of Walmart Neighborhood Stores, but the Lithia/Pinecrest

location recently closed as a result of the new Super Wal-Mart, which recently opened at

Bloomingdale Avenue and Lithia/Pinecrest Road, and

Grocery-related categories include four regional/national brands: Walmart (the nation’s

largest grocery business by sales volume); Lakeland-based Publix Supermarkets (the

dominant grocery store chain in Florida); Winn-Dixie Stores; and two locations of ALDI, a

German specialty grocer which carries many of its own store brands and provides discount

pricing. The study area also includes several specialty ethnic markets, mostly in secondary

locations along the State Route 60 corridor.

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Winthrop Town Centre Winthrop Town Centre is an example of a pedestrian-oriented,

walkable mixed-use development located on the Bloomingdale

corridor east of I-75. The project, which is located on a 148-acre

site acquired by the developer in 2000, was built in phases over

the past 15 years. To date, 167,000 sq. ft. of commercial retail

(representing approximately 2% of the study area’s total retail

inventory), 18,000 sq. ft. of medical office, and 250 residential units have been completed.

More specific commercial and residential uses include:

250 housing units (with entitlements for another 80 single-family detached units and 450

multi-family units)

A 54,000 sq. ft. Publix Supermarket

A cluster of chain-affiliated and locally-owned concept restaurants and stores, and

A public charter school.

The Town Centre is compactly planned, and located along and visible from Bloomingdale

Avenue. Several stakeholders interviewed for the market study noted the desirability of its

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distinctly walkable character and convenience of the planning concept as well as the

differentiated character of locally-owned restaurants located in the project. Moreover, brokers

commented that the walkable environment has demonstrated market appeal to specific

consumer markets, and that the rate of absorption of Winthrop’s residential products had

accelerated because of the proximity to retail and food services without requiring driving for

every errand. This represents the direct effect of a planning concept on market demand and the

value of a differentiated product within the larger market area. As noted, Brandon’s historic

development patterns reflect auto-related suburban characteristics so prevalent over the past 50

years. In recent years, however, consumer priorities have come to value more walkable

environments, and Winthrop, which reflects numerous “New Urbanism” planning principles has

attracted residents because of its plan and walkable layout.

Walkable Developments & Future Planning for Brandon The term “Walk Score” is defined through a patented methodology created by WalkScore (a

registered trademark) to measure the walkability of any given address or project plan. Walking

routes to nearby amenities are measured and documented according to the amount of time

required to access stores, libraries and recreation venues, parks, services and other uses

without requiring a car. Population density and road metrics such as block length and

intersection density/traffic volume are used to determine pedestrian friendliness.

Proximity to amenities located within a five-minute walk (0.25 miles) receive the maximum ‘walk

score’ points, while diminishing amounts are assigned as walking distances increase. No points

are awarded after a 30-minute walking distance. Relative score comparisons as determined by

WalkScore are illustrated as follows:

Table 23 describes walk score categories and their differences in scoring (standards used

by WalkScore across the U.S.), and

Table 24 illustrates current walk scores of selected Tampa-area neighborhoods

Reflecting its traditional suburban development patterns and physical layout, Brandon has an overall Walk Score of 24, which reflects its significant, car-dependent nature. Notably,

Winthrop Town Centre reportedly has a Walk Score of 64 (as provided by the developer).

Tampa and selected neighborhoods are all considered Car-Dependent by WalkScore.

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Table 23: Walk Score Categories

Table 24: Walk Scores—Selected Tampa Neighborhoods

Score Category Description

90-100 Walker's Paradise Daily errands do not require a car

70-89 Very Walkable Most errands can be completed on foot

50-69 Somewhat Walkable Some errands can be completed on foot

25-49 Car-Dependent Most errands require a car

0-24 Car-Dependent Almost all errands require a car

Source: WalkScore; WTL+a, May 2016.

WalkArea Score

Tampa (Citywide) 49Sulphur Springs, Lowry Park 49Egypt Lake - Leto 47Palm River - Clair Mel 28Lake Magdalene 28Westchase 26East Lake - Orient Park 26Brandon 24Citrus Park 21Bloomingdale (S. of Bloomingdale Avenue) 17Valrico 13

Source: www.WalkScore.com/Florida; WTL+a, June 2016.

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4 Market Potentials & Strategies

The primary objective of the market study is to test market potentials for revitalization and

redevelopment in the Brandon pilot project study area as a means of guiding specific changes

and updates to the County’s land use policies. More specifically, the market study is intended to

measure market opportunities for ‘workplace’ uses (office, medical, business/professional

services); market-rate housing; supporting retail; and, lodging/hospitality uses.

Setting the Stage: Development Context As noted in Section 1, the Brandon study area covers a significant geographic area of

approximately 13,950 acres and 22+ square miles. Despite its large size, it is characterized by

several key physical elements/factors that are likely to affect the study area’s overall

marketability for future revitalization/redevelopment and private investment in particular

initiatives and/or projects. These include:

Linear commercial corridors such as State Route 60 and Bloomingdale Avenue that are both

vehicular in scale and behavior

Physical environments that are less pedestrian-friendly and not walkable

A range of parcels—ranging from large, cohesive sites with specific uses (such as Westfield

Brandon Mall) to community and strip retail centers surrounded by large surface parking

lots, to smaller parcels with narrow lot depths, and diversified/fragmented ownership

patterns that may hinder assemblage opportunities

Adjacency to lower-density single-family detached and moderate-density multi-family

residential that may be impacted by future uses and redevelopment, such as higher

densities

A mix of commercial uses—at generally low densities/floor area ratios (FAR)—with no

dominant or prevailing use cluster and no clear ‘place-identity’ defined by these uses

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Aging strip and pad retail uses on the study area’s primary commercial corridors that are

affected by significant market competition from newer, investment-grade centers and

tenancies, and

An unknown number of sites that could potentially be aggregated for larger-scale

redevelopment, such as the former vacant “Big Box” centers/uses in scattered locations

throughout the study area.

Each of these elements will be a factor in identifying appropriate revitalization and

redevelopment initiatives. Each may require different responses, incentives, redevelopment

approaches, or changes in zoning and development policies if the study area is to plan for its

long-term future. Moreover, priorities and preferences of stakeholders interviewed as well as

ongoing discussions about an appropriate ‘scale’ and ‘character’ (which reflect the wide-ranging

and sometimes conflicting views of local residents, property owners and businesses) suggest

that implementing change to accommodate revitalization and redevelopment in Brandon will be

complex, incremental in scale and timing, and dependent on creating a community-supported,

long-range vision and changes to regulatory and land use policies that are grounded in

economic and market realities. These various factors have been considered in the market

analysis of each use that follows.

Market-rate Housing The demand analysis that measures market potentials for new housing considers two

scenarios:

Scenario #1—Utilizes an annual (“straight-line”) growth rate of 1.89% per year consistent

with actual population growth rates that occurred in Brandon between 2000—2015

Scenario #2—Utilizes an annual growth rate of 0.88% per year, which is the 2015—2020

population forecast prepared by ESRI Business Analyst, and extrapolated through 2025

In each scenario, the only known residential project (at this time), Winthrop (450 planned multi-

family units), is allocated its share of future unit demand.

Scenario #1

As noted in the demographic profile in Section 2, the population of Brandon increased by

fully 19,000 new residents over the past 15 years. If the pace of growth continues at this

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historic rate of 1.89% per year, it would yield an additional 15,975 new residents and roughly

6,365 new housing units (assuming that the actual average household size of 2.51 remains

unchanged):

Table 25: Housing Potentials—Scenario #1, 2015—2025

Scenario #1 assumes that the 450 units planned at Winthrop are built out, thereby reducing

gross demand to an estimated 5,900 “unallocated” units of net demand. There may be

other residential projects in the planning or entitlement stages that are not known at this

time. Moreover, the analysis makes no assumptions regarding residential product types or

locations/sites where new residential development in the study area may occur.

Scenario #2

Scenario #2 utilizes five-year growth forecasts prepared by ESRI of 0.88% per year and

extrapolates the growth rate over the 10-year analysis period through 2025. As noted in

Section 2, ESRI considers multiple factors in its forecasts (e.g., it is likely to have assumed

delivery of new units at Winthrop, etc.). This growth rate yields more than 7,100 new

residents, which translates into more than 2,800 new housing units (assuming that average

household size of 2.51 remains unchanged):

Average 2025Population Household Housing

2015 2025 Change Size (2) UnitsScenario 1: Straight-line Trend (1)Historic Annual Growth Rate (2000-2015) 1.89%Current & Future Population 77,412 93,387 15,975 2.51 6,365 Allocation to Known Residential Projects Winthrop (Entitled MF Units) 450 Subtotal - Allocated Units: 450

Scenario #1 - Unallocated Units: 5,915

(1) Scenario #1 assumes that the Brandon study area continues to grow at the same pace it did between 2000 and 2015.(2) In order to convert 2025 population growth into housing units, the analysis assumes that average household size remains the same in 2025 as it was in 2015 (2.51 persons per household).(3) Scenario #2 utilizes ESRI's 2015-2020 population growth forecasts (Table 4) and applies them through 2025. It also assumes no change in average household size.

Source: U.S. Census; ESRI Business Analyst; WTL+a, March 2016.

Forecasts

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Table 26: Housing Potentials—Scenario #2, 2015—2025

After netting out the allocation of 450 units at Winthrop, Scenario #2 illustrates market potentials for almost 2,400 unallocated units of net demand in Brandon over the next 10 years. There may be other residential projects in the planning or entitlement stages that

are not known at this time. Moreover, the analysis makes no assumptions regarding

residential product types or locations/sites where new residential development in the study

area may occur, and

Notably, if the pace of average annual housing starts (as occurred in the study area

between 2011 and 2015) continues at 179 units per year, it would require approximately 2.5

years to absorb the 450 units entitled at Winthrop (at 100% capture) and roughly 13 years to

absorb the 2,400 units supportable in the market.

In outlining potential implementation strategies for new housing, WTL+a notes that the

estimates identified in these scenarios should be considered “planning targets”. That is, as

development proposals for specific sites (other than the 450 units planned for Winthrop) are

unknown at this time, we are illustrating planning targets because of a range of uncertainties.

Average 2025Population Household Housing

2015 2025 Change Size (2) UnitsScenario 2: ESRI Forecast (3)Forecast Annual Growth Rate (2015-2020) 0.88%Current & Future Population 77,412 84,518 7,106 2.51 2,831 Allocation to Known Residential Projects Winthrop (Entitled MF Units) 450 Subtotal - Allocated Units: 450

Scenario #2 - Unallocated Units: 2,381

Historic Annual Housing Starts (2011-2015) (Table 17) 179 Years Required to Absorb Allocated Units: 2.5

Years Required to Absorb Unallocated Units: 13

(1) Scenario #1 assumes that the Brandon study area continues to grow at the same pace it did between 2000 and 2015.(2) In order to convert 2025 population growth into housing units, the analysis assumes that average household size remains the same in 2025 as it was in 2015 (2.51 persons per household).(3) Scenario #2 utilizes ESRI's 2015-2020 population growth forecasts (Table 4) and applies them through 2025. It also assumes no change in average household size.

Source: U.S. Census; ESRI Business Analyst; WTL+a, March 2016.

Forecasts

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These include: unknown sites and assemblage opportunities; unknown/proposed densities and

product mix; market competition in nearby/proximate locations such as in Falkenburgh Road

corridor inside I-75 (which has experienced new, multi-family development); potential zoning

and regulatory restrictions/issues; and “macro-economic” issues such as interest rate

fluctuations, hard and soft development costs, land costs, and availability of construction

financing. These, and other, conditions are likely to affect overall market demand for new

housing in the Brandon study area in the future.

As detailed in the demographic profile in Section 2, population forecasts suggest that growth will

be highest in selected age cohorts, including those ages 35-44, 55-64 (empty nesters, active

adults) and 65-74 (retirees, elderly). WTL+a notes that this is likely to translate into

opportunities for specific types of housing, such as age-restricted and active adult for older

cohorts as well as first-time and “move-up” housing for those ages 35-44. Opportunities to

encourage “aging-in-place” housing product should be encouraged in the County’s land use and

regulatory codes, including assisted living units, independent living units, congregate care

facilities, etc.

Multi-tenant/Speculative Office The first step in measuring support for new office space in Brandon examines market potentials

for office use countywide and allocates demand to the study area. As illustrated in Table 27

(Part I), the analysis translates employment forecasts (for 2015—2023) among specific industry

sectors in Hillsborough County (as prepared by the Florida Department of Economic

Opportunity/DEO), into demand for office space by applying an occupancy factor (of occupied

space per employee), and estimates the proportion of employees in each sector who are office

workers. We note that DEO employment forecasts are issued only in eight-year periods.

The analysis also considers demand generated by other market factors, such as vacancy

adjustments, part-time/self-employed individuals (who may or may not occupy multi-tenant

office space), and cumulative replacement; these estimates either increase or reduce future

demand for office space. Cumulative replacement, for example, considers tenants that move

when a building is removed from the inventory due to physical and/or functional obsolescence.

The office analysis is illustrated in Table 27 and Table 28 and summarized below:

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Hillsborough County

The analysis indicates gross demand for 8.9 million sq. ft. of office space across

Hillsborough County between 2015 and 2023, generated by growth in office-using jobs and

inclusive of adjustments related to vacancy, cumulative (building) replacements, tenant

churn, etc.;

From a financing perspective, however, some portion of the County’s existing 6.1 million sq.

ft. of vacant office space (see Table 15) would need to be leased before new office space

could be financed. It is also not known how much of the remaining existing vacant inventory

suffers from physical and/or functional obsolescence, will be converted to other uses such

as residential, or could be demolished. For purposes of this analysis, WTL+a conservatively

assumes that fully 35% of the County’s vacant office inventory is leased before financing is

provided for new office construction. This serves to reduce the County’s office vacancy rate

(to roughly 6.5% from current levels), and lowers demand generated by job growth in office-

using sectors to approximately 6.7 million sq. ft. of net new space by 2023;

Brandon Study Area

The next step in the analysis is illustrated in Table 28. This estimates opportunities for new

office development in Brandon based on the study area’s current share of employment (see

Table 9), which is estimated at roughly 5.7% of Hillsborough County;

Under this “fair share” analysis, the study area would continue to capture 5.7% of future

countywide job growth, or 5,000+ new employees, by 2023. Assuming similar proportions of

office-using jobs and occupancy factors translates into gross demand for approximately 418,000 sq. ft. of office space over the next eight years;

However, as discussed in Section 3 (see Table 16), there is approximately 258,500 sq. ft. of

vacant office space in the study area today. As the study area’s office building inventory is

comprised primarily of smaller, “garden” office buildings (i.e., which are more difficult to

finance as these are typically not investment-grade properties and, therefore, higher risk),

the analysis assumes that fully 50% of the existing vacant space is leased before financing

is provided for new office construction); and

This yields net demand for approximately 289,500 sq. ft. of new office space in Brandon by 2023.

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Table 27: Office Market Potentials—Hillsborough County, 2015—2023

New Jobs % Office- SF Occupancy 2023 DemandIndustry Sector 2015-2023 Using Factor (In SF)

Hillsborough CountyAgriculture/Mining & Construction 9,048 10% 175 158,300 Manufacturing 354 20% 200 14,200 Transp/Communications/Utilities 1,015 40% 200 81,200 Wholesale & Retail Trade 8,778 20% 175 307,200 Finance/Insurance/Real Estate 6,730 85% 275 1,573,100 ServicesProfessional, Scientific & Technical Services 11,695 90% 250 2,631,400 Management of Companies & Enterprises 876 60% 250 131,400 Administrative & Waste Management 10,129 35% 175 620,400 Educational Services 2,719 20% 225 122,400 Health Care & Social Assistance 15,469 35% 200 1,082,800 Arts, Entertainment & Recreation 1,591 20% 175 55,700 Accommodation & Food Services 7,272 20% 175 254,500 Other Services (Except Government) 2,432 35% 225 191,500 Government 6,907 60% 150 621,600 Self-Employed 3,463 10% 200 69,300

Total/Weighted Average: 88,331 41% 200 7,915,000

+ Vacancy Adjustment @ 5% (1) 395,800 + Cumulative Replacement Demand 7.5% (2) 593,600

2023 Gross Demand - Hillsborough County: 8,904,400 Existing Vacant Office Space (Table 23) 6,134,556 Less Lease-up Required @ 35% (2,147,095) (3) (2,147,095) Remaining Vacant Space: 3,987,461 % Vacant 6.5%

2023 Net Demand - Hillsborough County: 6,757,300

(1)

(2)

(3)

space is leased, thereby reducing the overall vacancy rate to approximately 6.5% (i.e., stabilized levels).(4) This reflects current employment in the Brandon study area (see Table 11). The analysis assumes that the

study area maintains its "fair share" of Hillsborough County's total employment base in the future.

From a financing perspective, some portion of existing vacant office space in Hillsborough County will need tobe leased before financing of new construction is viable. The analysis assumes that 35% of existing vacant office

Source: Florida Dept. of Economic Opportunity; CoStar, Inc.; WTL +a, March 2016.

This allows for a 5% "frictional" vacancy rate in new office space delivered to the market (i.e., this accounts fortenant movement to new space).This represents new space required by existing businesses to replace obsolete or otherwise unusable office space. This is assumed to represent 7.5% of total demand.

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Table 28: Office Market Potentials—Brandon Study Area, 2015—2023

Office Market Potentials in Brandon:

250,000 to 300,000 SF of Net Demand by 2023

As noted, Brandon’s office market is oriented primarily to professional and business services

(e.g., accounting, legal, etc.) generated by nearby household “rooftop” demand as well as

medical office resulting from the presence of Brandon Regional Hospital. Market observations

conducted during the study suggest that some portion of the study area’s medical office

buildings (particularly those surrounding the hospital) may be candidates for future rehabilitation

or redevelopment. Given apparent parking demand, and the physical and land use challenges

New Jobs % Office- SF Occupancy 2023 DemandIndustry Sector 2015-2023 Using Factor (In SF)

Brandon Study AreaTotal Employment (Table 11) (4) 36,896 As % of Hillsborough County 5.72%

Fair Share Analysis2015-2023 Employment Growth (If Fair Share Maintained) 5,056 % Office-using Jobs 41%SF Occupancy Factor 200

2023 Gross Demand (In SF): 418,700 Less Lease-up of 50% of Existing Vacant Space (129,250)

2023 NET DEMAND (In SF): 289,450

(1)

(2)

(3)

space is leased, thereby reducing the overall vacancy rate to approximately 6.5% (i.e., stabilized levels).(4) This reflects current employment in the Brandon study area (see Table 11). The analysis assumes that the

study area maintains its "fair share" of Hillsborough County's total employment base in the future.

From a financing perspective, some portion of existing vacant office space in Hillsborough County will need tobe leased before financing of new construction is viable. The analysis assumes that 35% of existing vacant office

Source: Florida Dept. of Economic Opportunity; CoStar, Inc.; WTL +a, March 2016.

This allows for a 5% "frictional" vacancy rate in new office space delivered to the market (i.e., this accounts fortenant movement to new space).This represents new space required by existing businesses to replace obsolete or otherwise unusable office space. This is assumed to represent 7.5% of total demand.

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of insufficient area/parcels available to accommodate new, infill development, structured parking

and the apparent need for public realm improvements, the area surrounding the hospital should

be considered for more detailed planning and land use studies.

Brandon is considered a tertiary office market in Hillsborough County, with only 2.5 million

sq. ft. of inventory, which accounts for a very limited market share of 4% of the County’s 61.7

million sq. ft. office market. This suggests that, beyond Brandon Regional Hospital, there are no

logical or ready-made demand generators (such as universities, courthouses and the like) that

could serve to generate additional demand and provide opportunities for similar businesses

(such as law firms) to cluster. It is notable that the study area’s office inventory is limited even

with its superior regional access provided by I-75, the Selmon Expressway, US 301 and

Brandon Boulevard. It is likely to remain a tertiary office market for the foreseeable future.

Lodging/Hospitality Demand for new hotel rooms is typically driven by several segments—overnight visitors (like

tourists, convention delegates, etc.) to Hillsborough County, proximity to commercial

development clusters such as office parks, adjacency to highway interchanges, and/or demand

generated by specific users such as a medical complex. The following examines market

potentials for new hotel development in Brandon on a preliminary basis, as critical data on visitor behavior and spending was not available to conduct the lodging analysis. The

following information on Hillsborough County’s visitor market, which is typically prepared by

area Convention & Visitors Bureaus (CVBs) or Tourist Development Councils (TDCs) in Florida,

was not available:

Annual visitors, by market segment (i.e., leisure, group, business, etc.) over time to track

market trends and changes in the number of visitors;

Overnight visitors, including those staying in hotels/motels as well as Visiting Friends &

Relatives (VFRs);

Other critical demand factors, including: average party size, average length of stay and

overnight location within Hillsborough County; and

Visitor behavior and spending patterns, such as travel, lodging, food & beverage, retail

shopping, etc.

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As a result, a more precise analysis of roomnight/room potentials could not be completed.

However, a review of hotel market performance in/surrounding the Brandon study area

suggests that market performance is sufficiently strong to support additional hotel development.

As noted in Section 3 of this report, 19 (of 20) hotel properties located in the market area report

significantly improved performance since 2010:

Annual occupancies jumped from 58% per year in 2010 to 78% in 2015, reflecting a

remarkable, sustained annual increase of 6.1% per year during this period. This translates

into occupied annual roomnights of 587,000 in 2015;

As the breakeven threshold in the hotel industry is 65%, and the capital markets typically

seek sustained annual occupancies of 65% to 72%, this analysis suggests that Brandon’s hotel market now exceeds market thresholds for financing new hotel development. In

fact, occupancies have exceeded 72% since 2014, and the last hotel to be built in Brandon

was the Hilton Garden Inn in 2009;

As noted previously in Section 3, other factors supporting market opportunities for new hotel

development also include significant growth in both average daily rates (ADRs) and revenue

per available room (REVPAR) of 4.8% and 11.3% per year, respectively, since 2010; and

Demand for additional hotel rooms will be predicated on continued/ongoing growth in key

drivers such as overnight visitors, demand generated by groups and pass-through traffic on I-

75 as well as continued stability and growth in Brandon’s office market.

The preliminary demand analysis suggests market potentials for a minimum of 100 to 150 rooms in the study area over the next five or more years. This is further predicated on the

following factors:

Identifying candidate site(s) in appropriate locations of the study area. The most marketable

sites would include those that provide frontage and/or visibility to I-75, adjacency to

Westfield Brandon Mall, or (secondarily) Brandon Boulevard/SR 60 or those that generate

amenity value, such as location on a body of water;

Ensuring that appropriate zoning and entitlements can be secured by a prospective

developer, such as building heights that strengthen visibility (say from I-75) and

marketability; and

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While ‘natural’ market growth suggests that a limited-service property (such as a national

chain-affiliated) is supportable, we recommend that County marketing/outreach consider

working with prospective developers to secure a well-qualified hotel developer/operator with

an agreement to provide a “select-service” level hotel. Examples include aloft (by Starwood

Corporation) and Hyatt Place (Hyatt Hotels), which are not currently located in Brandon.

Both national chains provide a level-of-service that will reinforce “branding” and identity

required to strengthen Brandon’s competitive position in the regional marketplace.

Moreover, these examples will serve to tap multiple market segments—including both

business and leisure travelers. We recommend that additional limited-service hotels be

discouraged in Brandon, given the preponderance of this product in/adjacent to the study

area today.

Hotel Market Potentials in Brandon:

100—150 Rooms in “Select Service” Property

Retail The Brandon study area is well-established as a regional retail destination primarily

concentrated along I-75 and the State Route 60/Brandon Boulevard corridor. Since the study area’s retail inventory attracts significant sales inflow from other areas, the viability and sustainability of retail uses in Brandon is a certainty. However, there are also a number of

underutilized retail locations, obsolete buildings/retail pads, and small strip centers with empty

retail space. Despite available market support, these properties may be potential locations for

redevelopment, either because their center/building layouts are not consistent with the

requirements of retail operations in 2016, or that their existing physical conditions may not

warrant reinvestment as currently configured.

Table 29 summarizes potential supportable retail and food service, as demonstrated by

estimating retail expenditures of study area households that are potentially available for

“recapture”, as illustrated in Section 2. In other words, in selected categories, Brandon

households are spending more than Brandon’s businesses in those categories are selling—the

difference is the amount of resident sales that could be ‘recaptured’ with more and/or better

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offerings. There are a number of factors which should also be considered before taking these

estimates of additional, supportable space. These include:

Estimated total available sales are based on national averages of spending patterns and

total spending power (sometimes known as ‘disposable income’);

Supportable space (in sq. ft.) should fall within acceptable levels to warrant

investment/reinvestment in a commercial property by the landlord/developer as well as

providing sufficient profits to justify business sustainability;

Achieved rents for retail and food service generally fall within a range of 8% to 12% of total

annual sales. For example, assuming an average of 10% of sales, a 1,000 sq. ft. business

generating $300 per square foot of sales (or $3.6 million in total annual sales) could “afford”

to pay $36,000 per year in rent and other occupancy costs such as utilities, a pro rata share

of property taxes (if the space is not owned by the business), and other costs such as

common area maintenance;

Based on conservative national averages, the return-on-investment for commercial retail

properties generally requires minimum sales volumes and achieved rent level of $250 to

$300 per sq. ft., with rents of $25 to $30 per sq. ft. to be economically viable as a

commercial real estate investment. For some businesses, (depending on the quality of

construction and interior finishes), sales and rents of $400 per sq. ft. (or rent of $40 per sq.

ft. assuming a 10% factor) are ‘safer’ to support sufficient returns to the property

owner/developer;

Grocery stores (as a retail category) have much lower profitability (usually in the range of

1.5% to 3% of total annual sales). Because the profit margins are so low and grocery stores

are larger than most retail stores, higher sales productivity is required to ensure business

viability. Some more modest grocery operators can sustain business with sales between

$450 to $550 per sq. ft., while some top grocery operators generate annual sales of over

$900 per sq. ft. Our analysis assumes an average sales productivity of $750 per sq. ft. to

incorporate a range of quality operators, and to allow for inflation over the next 10 years;

Total available sales from study area households (as illustrated in Section 2 and in Table

29) represent all sales which can be made in any location. It is not possible to capture

100% of all sales at all times, so a ‘capture rate’ that is actually achievable will always be

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less than 100% of all potential sales. Because the timing and nature of future retail

operators in Brandon is not known, total available sales and a range of potential supportable

space will, by the nature of growth and change in the retail industry, be a proportion of the

possible total, but exact figures are unknown;

Although the strength and market ‘reach’ of current retail offerings are fully recognized, real potential to significantly increase total supportable space generated by recapturing spending by study area households is limited. Since Brandon is a strong regional retail

destination generating net inflow of sales from other locations, and market segments well-

beyond study area households (such as other metropolitan area households), its ability to

consistently capture an increasing share of the market is currently ‘in balance’;

Moreover, the competitive context and market characteristics of total regional offerings do

not suggest that Brandon will dominate the market much more than it already does. The

primary benefit of drawing significant retail sales from outside the study area’s resident

market is the amount of sales tax generated without having to provide full community

services to consumers from other areas of Hillsborough County and/or incorporated

municipalities. The following example illustrates this context:

Dick’s Sporting Goods at Westfield Brandon Mall successfully captures sales in the

Sporting Goods & Equipment category within the study area, but the 160,000 sq. ft. Bass

Pro Shops Outdoor World (located just outside the study area across I-75 from Brandon)

no doubt captures a substantial portion of available sales potential in this category not

currently realized within the study area. However, since this tenant is located “outside”

of the study area, it is not included in study area retail offerings and sales totals;

Since a retailer’s ability to pay rent is determined in large part by average sales productivity

(total annual sales per sq. ft. of leased store space) and not all retail businesses will perform

at the same level of sales productivity, this analysis examines total available sales by retail

category assuming both “high” and “low” required sales levels. For purposes of this

analysis, required sales productivity has been estimated at a low of $300 per sq. ft. per year

and a high of $400 per sq. ft. per year. Sales productivity for Grocery Stores was calculated

using $750 per sq. ft.;

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Table 29 illustrates Brandon’s role as a regional retail destination: there are more than $1.2

billion in total current sales in Brandon originating from consumers who do not live or work in

Brandon. That is, red numbers reflect the difference between total possible spending by

Brandon households and what is sold to ALL consumers by retailers located in the study

area. Conversely, green numbers represent retail categories in which household spending

exceeds current achieved sales, suggesting that a very limited number of retail categories in

Brandon could potentially ‘recapture’ resident spending that is “leaking” out of the study area

to other places. Table 29 illustrates that less than 30,000 sq. ft. of additional retail space

would be supportable in the study area IF fully 100% of leakage in these categories could be

recaptured; and

It should be noted that these differences in supportable space are negligible it may also

mean that existing retailers in Brandon in some of these categories may be performing at

higher levels of sales productivity than the amounts used as examples.

The key findings of the retail analysis suggest that:

With current annual sales of over $2.0 billion per year, Brandon is a successful regional retail destination, attracting expenditures from non-Brandon market segments

(such as regional residents, visitors, nearby employees, etc.), and providing significant retail

inventory (estimated at 9.2 to 9.4 million sq. ft.) and an assortment of retail offerings than

Brandon residents alone could support;

Retail spending and consumer behaviors are constantly changing; this is what makes

retailing such a challenging business sector from a real estate perspective. Older, less well-maintained or less functionally appropriate retail locations/properties in Brandon should be evaluated in greater detail as likely candidates for redevelopment, including

opportunities for conversion of outmoded retail buildings and sites to higher-density, mixed-

use projects, or as locations that will catalyze redevelopment in larger sub-areas; and

Retail redevelopment occurs through a number of strategies, particularly where land values

exceed current investment returns because retail buildings no longer meet the needs of

operators, or where public incentives are utilized (through infrastructure and/or financial or

regulatory/land use policies) to alter allowed densities or add new uses.

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Table 29: Retail “Recapture” Opportunities—Study Area Households

Study Area HHsSales Recapture 300$ 400$

Category Opportunity Per SF Per SF

General Merchandise StoresDepartment Stores (Excl Leased Depts) (318,486,061)$ - - Other General Merchandise Stores (175,181,142) - -

Clothing & AccessoriesClothing (118,670,223)$ - - Shoes (25,396,882) - - Jewelry Luggage & Leather Goods (15,086,928) - -

Furniture & Home FurnishingsFurniture Stores (25,132,642)$ - - Home Furnishings (4,986,903) - -

Electronics & Appliance Stores (21,176,025)$ - -

Leisure & EntertainmentSporting Goods & Equipment (48,975,677)$ - - Books, Periodicals & Music (3,021,071) - -

Food Services & Drinking PlacesFull-service Restaurants (81,141,422)$ - - Limited-service Eating Places (76,524,490) - - Special Food Services 1,414,413 4,715 3,536 Drinking Places - Alcoholic Beverages 2,494,007 8,313 6,235

(1) Grocery Stores (197,845,266) - - Specialty Food Stores 308,726 1,029 772 Beer, Wine & Liquor Stores (3,522,102) - -

Health & Personal Care (76,631,316)$ - -

Building Material, Garden Equipment Building Materials & Supplies (28,185,956)$ - - Lawn & Garden Equipment & Supplies 4,296,470 14,322 10,741

Miscellaneous Store RetailersFlorists (230,174)$ - - Office Supplies, Stationery, Gifts (5,745,210) - - Used Merchandise Stores (1,556,642) - - Other Miscellaneous Retail (35,264,044) - -

Total - Study Area Households: (1,254,246,560)$ 28,379 21,284

(1) Annual sales productivity of Grocery Stores is assumed at $750 per sq. ft.

Source: Bureau of Labor Statistics; Claritas, Inc.; ESRI Business Analyst; WTL+a, June 2016.

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