Metro Phoenix Market Overview
Fourth Quarter 2008 LAND ADVISORS ORGANIZATION ons ti 9 information/GIS , ransac d t an ith the largest and most respected l w n i on 3 billi . $5 over d ose Founded in 1987 in Scottsdale, Arizona in 1987 in Scottsdale, Founded Currently have over $3.8 billion in exclusive listings Unparalleled database containing nearly 300,000 property Established relationships ith the largest and most respected Exclusive focus on land brokerage and its relative product types Exclusive focus on land brokerage and finished lots, commercial/industrial Investment land, platted Cl d $5 3 billi i l t d ti owners the country companies in investment and development real estate and master planned land Future Inland target market expansion includes: Sacramento, Current Tucson, regional office locations: Scottsdale, Northern Empire, San Antonio, Atlanta, Raleigh Durham and Jacksonville Grown to 70 employees: 38 agentsGrown to 70 employees: 9 information/GIS Arizona, Denver, Austin, Dallas, Houston and Orlando specialists and 23 support specialists including marketing, and 23 support specialists including specialists escrow, and financial operations • • • • • • • • • • Organization Core Competencies Market Coverage Personnel Performance Who We Are LAND ADVISORS ORGANIZATION Where We Are and Where Where We’re Going Population Employment Perm it Acti vit y Resale New Home Pricing Inventory Regional Growth Population LAND ADVISORS ORGANIZATION 80% Utah 56% STATE % GROWTH Texas 60% Florida Arizona 109% Nevada 114% United States 29% FASTEST GROWING STATES 184 , 768 2030 , 33,317,744 12 768 184 POPULATION 054 , 281 2000 , 20,851,820 12 281 054 POPULATION Texas Pennsylvania 1 California 33,871,648 46,444,861 2 345 Florida6 New York7 Illinois 15,982,378 18,976,4578 North Carolina9 28,685,769 19,477,429 8,049,313 12,419,293 Georgia 12,227,739 13,432,892 Ohio 8,186,453 12,017,838 11,353,140 11,550,528 1028 Arizona Nevada 5,130,632 1,998,257 10,712,397 4,282,102 TOP 10 MOST POPULATED STATES IN 2030 RANK STATE Projected Population Growth Population Projected 2000 - 2030 Source: U.S. Census Bureau Source: LAND ADVISORS ORGANIZATION MSA 65.9% Phoenix-Mesa 18.8% 2000 - 2008 Balance of State Balance of State Tucson MSA Phoenix-Mesa MSA 15.3% Tucson MSA Annual Population Growth Distribution Distribution Annual Population Growth Source: Arizona Department Department Commerce, 2008 Arizona of Source: LAND ADVISORS ORGANIZATION
00%
. 5.00% 4.50% 4 00% 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00%
0,248 7 7 4,6
4.0% 179,609
0,639 9 9 4,4 2% .
3 32%
139,751
0,888 5 5 4,3
1.4% 59,687
1,201 9 9 4,2
1.2% 51,752
9,449 3 3 4,2
66,987 1.6%
2,462 7 7 4,1
2.7%
109,017
3,445 6 6 4,0
4.3%
168,240
5,205 9 9 3,8
4.1% 152,745
2,460 4 4 3,7 020 ,
4.0%
144 020 144
8,440 9 9 3,5
3.2%
110,952
7,488 8 8 3,4
3.2% 108,568
8,920 7 7 3,3 9% . 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 39% 3 127,044 0 4,000,000 6,000,000 5,000,000 3,000,000 2,000,000 1,000,000 Metro Phoenix Projected Population Growth Metro Source: Arizona Department Department Commerce, 2008 Arizona of Source: Employment LAND ADVISORS ORGANIZATION 6,191 4,917 8,066 k 1 - 25 Healthcare West JPMorgan Chase & Co.& JPMorgan Chase McDonald's Corp.Freeport-McMoRan Copper & Gold Inc. 9,200 Co.American Express Target Corp. 9,050 Pinnacle West Capital Corp.Bank of America Corp. 7,500 7,200 Scottsdale HealthcareWalgreen Co. 7,000 Catholic 7,373 6,700 Circle KCVS Caremark Corp.Carondelet Health Networ 6,663 5,170 5,375 700 , 12 700 10,073 International Inc. Arizona’s Top 50 Largest Employers Top 50 Employers Arizona’s Largest Wal-Mart Stores Inc.Banner HealthInc.Apollo Group 31,785 Wells Fargo & Co.Honeywell Inc. Raytheon Co. 22,152 14,783 Kroger Co. 14,000 Home Depot Inc.Bashas' SupermarketsSafeway 11,695 US Airways 10,753 11,000 11,281 Intel Corp. 10,021 10,000 Source: Arizona Republic,Arizona 2008 Source: LAND ADVISORS ORGANIZATION 038 862 , , 3,200 3 038 are lthC Inc. s ' ea H lthC IBM Corp.Starbucks Corp.Cox Communications Inc.University Medical CenterDillard 3,416 s Lincoln Health NetworkJohn C. 3,226 3,450 3,135 3,600 Costco WholesaleTMC C4 Systems.General Dynamics 3,000 Inc.Gannett Co., 3,119 USAAFreescale Semiconductor Inc.Abrazo Health Care 2,900 2,933 2 2,930 181 , 4,500 4 181 s t esor & R & s l e t o Htl & R & Htl H t d Boeing Co. arwoo Salt River ProjectMarriott InternationalUnited Parcel ServiceAlbertsons Inc.The 4,588 4,889 Mayo Foundation 4,582 Qwest Communications Inc.St 4,241 4,500 Southwest Airlines Co. d FedEx Corp. 4,241 Inc.Lowe's Companies Sun Health 4,120 Corp. 3,900 3,910 3,837 Arizona’s Top 50 Largest Employers 50 Largest Top Arizona’s 26 - 50 Source: Arizona Republic,Arizona 2008 Source: LAND ADVISORS ORGANIZATION 3% 3% . . 13% 1 23% 2 700 100 , , 20 700 46 100 200 000 , , 587 928 , , 1 587 200 1 928 000 1,582,200 1,566,5001,626,400 -15,7001,714,5001,829,6001,881,900 39,200 -1.0% 88,1001,841,200 115,100 52,300 2.4% 5.1% -54,800 6.2% 2.7% -4.7% e, Nonfarm Employment) (Total 2008 2000 2001 2002 2003 2004 2005 2006 2007 2008 Year Employment Change % Change Metro Phoenix Annual Employment Source: Arizona Department of Commerc Department of Arizona Source: Permit Activity LAND ADVISORS ORGANIZATION 406 2521 HOMES
HOMES
BUILDERPULTE HOMES R HORTON COMBINEDD SHEA HOMESTAYLOR MORRISONCENTEX HOMES 2026 MERITAGE HOMES RICHMOND AMERICANLENNAR HOMES PERMITS HOMESSTANDARD PACIFIC 696 K HOVNANIAN 781 369 330 423 348 318 PULTE HOMES, 20.00% PULTE D R HORTON COMBINED, 16.10% K HOVNANIAN, 2.50% K HOVNANIAN, HOMES, 2.60% STANDARD PACIFIC STANDARD 90% SHEA HOMES, 6.20% . 2 90% 3.20% 5.50% LENNAR HOMES, LENNAR 2.80% MERITAGE HOMES, RICHMOND AMERICAN, TAYLOR MORRISON, Top 10 Builder Market Share Past 12 Months through December 31, 2008 Source: RL Brown Source: RL CENTEX HOMES, 3.40% LAND ADVISORS ORGANIZATION 279 HOME
BUILDERKB HOME BEAZER HOMESWOODSIDE HOMESMARACAY HOMESENGLE HOMESWILLIAM LYON HOMESHOMESASHTON WOODS 189 236 BLANDFORD HOMES PERMITS 188 ROBSON COMMUNITIES 158 156 T.W. LEWIS COMPANY 169 127 155 113 1.50% WOODSIDE HOMES, BEAZER HOMES, 1.90% KB HOME, 2.20% 1.50% MARACAY HOMES, 0.90% T.W. COMPANY, LEWIS ENGLE HOMES, 1.30% 1.00% 1.30% 1.20% 1.20% WILLIAM LYON HOMES, ROBSON COMMUNITIES, Top 11-20 Builder Market Share Past 12 Months through December 31, 2008 BLANDFORD HOMES, ASHTON WOODS HOMES, Source: RL Brown Source: RL LAND ADVISORS ORGANIZATION
1 0.8 0.6 0.4 0.2 0 -0.2 -0.4 -0.6 -0.8
12 20 38,000
11 20 27,600
37.7%
10 20 20,000
38.0% -12.6%
09 20 11,000
81.8%
08 20 12,582
-59.6%
07 20 31,1 72
06 20 38,753
05 20 6 6 60,92
04 20 57,360
03 20 85 2 2 47,
02 20 40,002
01 20 37,170
00 20 4,232 3 3
99 19 38,448
98 19 36,562
97 19 210 , , 32
96 19 3 3 29,51
95 19 28,58 3 3
94 19 28,224
93 19 23,215
92 19 19,449
91 19 0 3 3 14,3
90 19 11,304
89 19 12,135
88 19 36 3 3 15,
87 19 8,424 1 1
86 19 23,758
85 19 23,052
84 19 21,115
83 19 21,449
82 19 3 3 3 13,8
81 19 3 3 12,74
80 19 3 3 12,98 0 000 , Permit History: Historical and ProjectedPermit History: Historical as of Dec 2008 70,000 60 50,000 40,000 30,000 20,000 10,000 Source: RL Brown Housing Reports,Housing MarketRL Brown Forecast 2009-2012 Source: LAND ADVISORS ORGANIZATION Projected 449 , 239 , 4 239 449 UNDERPRODUCTION 2008 Population: OVERPRODUCTION 2,488,125 1994 Population: 1994 1996 1998 2000 2002 2004 2006 2008 0 000 , Metro Phoenix Building Permit TrendsPhoenix Building Permit Metro as of Dec 2008 70 000 60,000 50,000 40,000 30,000 20,000 10,000 Source: RL Brown, Housing Forecast (Compiled By: Land Advisors) Land (Compiled By: Forecast Housing Brown, RL Source: LAND ADVISORS ORGANIZATION
Population 000 , 000
,
5,000,000 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1 000 000 500,000 0
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
as of Dec 2008 2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985 1984
Permits
1983
1982
1981 1980 0 000 ,
40,000 70,000 60,000 50,000 30 20,000 10,000
Phoenix MSA Population and Permits Phoenix MSA Population and Permits
s t t Permi Source: U.S. Census Bureau & RL Brown Housing Reports RL Brown U.S. Census Bureau & Source: Metro Phoenix Single Family Residential Permits as of Dec 2008
2005: 12,188 2005: 8, 154 2006: 7,450 2006: 6,424 2007: 6,472 2007: 4,524 2008: 2,628 (-59.4%) 2008: 1,222 (-72.9%)
2005: 16,224 2006: 11,143 2005: 9,749 2007: 10, 255 2006: 9,288 2008: 2,900 (-71.7%) 2007: 8,782 2008: 3,135 (-64.3%)
2005: 17,245 2006: 9,752 2007: 6,343 2008: 2,697 (-57.5%)
Source: RL Brown (Compiled By: Land Advisors) LAND ADVISORS ORGANIZATION 000
,
0 7,000 6,000 5,000 4 000 3,000 2,000 1,000
Nov-08
Sep-08
Jul-08
May-08
Mar-08
Jan-08
Nov-07
Sep-07
Jul-07
May-07
Mar-07
Jan-07
Nov-06
Sep-06
Jul-06
May-06
Mar-06
Jan-06
Nov-05 Sep-05
Permits
Jul-05
May-05
Mar-05
Jan-05
Nov-04
Sep-04
Jul-04 Total Listings
May-04
Mar-04
Jan-04
Nov-03
Sep-03
Jul-03
May-03
Mar-03 Jan-03 0 000 000 , , 40,000 10,000 60,000 50 000 30,000 20 000 Permits vs. MLS Listings January 2003 through November 2008 2003 through January Source: MLS / RL Brown (compiled by Land Advisors) by (compiled Brown RL / MLS Source: Resale
LAND ADVISORS ORGANIZATION
Market on Days erage v v A
160 140 120 100 80 60 40 20 0
Dec-08
3 3 52,00
Nov-08
Sep-08
Jul-08
ay-08 M M
Mar-08
Jan-08
Nov-07
Sep-07
Jul-07
ay-07 M M
Mar-07
Jan-07
Nov-06
DOM
Sep-06
Jul-06
ay-06 M M
Mar-06
Jan-06
Nov-05 Total Sales
Sep-05
Jul-05
ay-05 M M
Mar-05
Jan-05
Nov-04
Total Listings
Sep-04
Jul-04
ay-04 M M
Mar-04
Jan-04 Nov-03
December 2008
– Sep-03
Jul-03
ay-03 M M
Equilibrium at 35,000 Mar-03 Jan-03 0 MLS Resale Figures Sales & Days on Market Listing, Figures MLS January 2003 60,000 50,000 40,000 30,000 20,000 10,000 Source: MLS (compiled by Land Advisors) by (compiled Source: MLS LAND ADVISORS ORGANIZATION 2008 33,836 thru Oct. ‘08 4,587 4,378 4,104 4,013 3,717 3,402 2,969 2,365 2,249 2,052 the surge began 18 months ago: 1,617 1,344 1,093 936 806 676 579 553 475 - 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 Jul-07 Jul-08 Jun-07 Jun-08 Apr-07 Apr-08 Jan-08 Feb-08 Oct-08 Oct-07 Sep-08 Sep-07 Mar-08 Nov-07 Dec-07 Aug-08 Aug-07 May-07 May-08 Month by Month Foreclosures Monthly foreclosures since Source: Arizona Republic 11.30.08, The Information Market Information The 11.30.08, Republic Arizona Source: LAND ADVISORS ORGANIZATION Neg Equity Near Neg Equity 0% 10% 20% 30% 40% 50% 60% … ia an g g New Ohio Iowa Texas Florida Arizona Virginia Nevada Geor Arkansas Michi Colorado California Nebraska Tennessee Equity Levels by State Source: First American CoreLogic, American Sept 2008 First Source: New Home Pricing LAND ADVISORS ORGANIZATION
, $62,200 TX ARLINGTON ARLINGTON - - SALES PRICE INCOME DALLAS-FORT $227,980 WORTH WORTH NV , $60,100 LAS VEGAS- PARADISE NV PARADISE $323,874 Price
- - Sales
$59,200 &
ONTARIO, CA BERNARDINO BERNARDINO RIVERSIDE-SAN $443,543 Income
SAN SAN - - $69,400 Median 758 , SAN DIEGO- MARCO, CA 864 CARLSBAD CARLSBAD $ $, AZ , $59,100 SCOTTSDALE AZ SCOTTSDALE PHOENIX-MESA- $242,097 $0 $100,000 $900,000 $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 New Home Sales Price Activity 3Q 2008 $1,000,000 Source: Hanley Wood Market Intelligence Market WoodHanley Source: LAND ADVISORS ORGANIZATION
10% 0% -10% -20% -30% 40% 30% 20%
$255 ,636
5%
2 6 6 $243,4
5% $231,869
5% $220,828
3% $214,397
-11%
7 9 9 $242,0
-21% $306,355
22%
95 7 7 $251,
29%
195,000 $ $
13%
240 $173,
8%
0 0 $159,99
2%
0 0 $156,56
4% $150,770
3% $146,710
5% $139,070
2% $136,130
4% $130,750
2% $127,600
3% $124,475
11%
12,500 1 1 $ onomic Analysis, Land Organization Advisors projection
3%
$1 08,800
1%
7,500 0 0 $1
-2%
$1 09,300
3%
5,850 0 0 $1
2%
3,950 0 0 $1 $0 000 , $50,000 $350,000 $300,000 $250,000 $200,000 $150 000 $100,000 Median New Home Sale Price and Projected for Phoenix MSA Historical Source: ASU Dept. of Realty Studies, Dept. Realty Ec US Bureau ASU of of Source: LAND ADVISORS ORGANIZATION $214,397 $162,000 Resale Homes New Homes 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 $0 000 , $50,000 $25,000 $75,000 $250,000 $225,000 $125,000 $100,000 $325,000 $300,000 $275 000 $200,000 $175,000 $150,000 Average Annual Change in Home Pricing 1995 - 2008 NOTE PRICING TREND TREND PRICINGNOTE LINE EXCLUDES through 2006 2004 Hanley Wood/ASUResearch Center Source: Inventory LAND ADVISORS ORGANIZATION 7,174 vacant lots 4,112 vacant lots 14,812 vacant lots 8,633 vacant lots s t o t l vacan 340 , 19 340 t lt 19 340 t 8,308 vacant lots Total Vacant Lots: 62,400 as of Dec 2008 LAND ADVISORS ORGANIZATION 5,582 vacant lots 778 vacant lots 8,511 vacant lots Attached <30 total lots, >100’): 42,700 lots Attached <30 total lots, 7,232 vacant lots s t o t l vacan 866 , 14 866 t lt 14 866 t 5,812 vacant lots Total Vacant Lots (Net of Active Adult, LAND ADVISORS ORGANIZATION 23% 9,600 37% 15,900 Investors Private Developers Builders/Banks/ 40% 17,150 Public/Top 10/ Start-up Builders Vacant Lot Market Share by Owner Vacant Lot LAND ADVISORS ORGANIZATION 2,416 761 2,405 423 638 355 4,916 2,957 1,801 3,118 2,313 6,789 2,251 5,826 / 604 , 1 604 1,230 Private Builders Banks/Developers Public Top 10/Start-up Builders Investors 2,978 Vacant Lots by Submarket: 42,700 Vacant Lots LAND ADVISORS ORGANIZATION $350 $375 $418 350 $100 $ 195 400 $ $ $740 $250 $400 $400 475 $ $450 $550 $650 $400 $250 Comparable Price/Finished Front Foot LAND ADVISORS ORGANIZATION month closings -month closings Active Subdivisions 685 active subdivisions 685 active lots 56,800 vacant 25,438 12 12- LAND ADVISORS ORGANIZATION Final -Final Proposed Subdivisions Platted Lots In Process Over 265,000 Pre Pre- Regional Growth
LAND ADVISORS ORGANIZATION
M 56 43 91 75 9M 3M 190 211 136 326 . 2.2B 69 5,805 1. 10.2M 85,943 498 9M 320.6M 640.8M 768.5M
91 4B . 218 116 143 227 197 357 918 3 4B 2.3B 1.7B 8.3B 5.7M 825M 11.8M 19.0M 83,573 41,585
M 81 3B . 6 332 206 137 291 174 309 . 4 3B 1.3B 2.8B 1.3B 9.8B 969 1,138 16.0M 16.5M 83,930 51,442
M 69 9B . 3 464 220 147 338 157 314 . 4 9B 1.5B 2.5B 1.1B 030 1,336 10.1B 1 16.1M 16.9M 67,830 72,153
M 52 1B . 8 389 205 140 115 306 342 2 1B 1.1B 1.5B 1.0B 5.8B 7. 1,242 13.2M 19.7M 57,480 37,800 2004 2005 2006 2007 Thru 3Q08 Retail Totals Office Total SF Total SF Industrial Apartment Price Per SF Price Per SF Price Per SF Transactions Transactions Transactions Transactions Transactions Price Per Unit Sales Volume Sales Volume Sales Volume Sales Volume Sales Volume Total NumberofUnits Total Number of Units/SF of Number Total
Historical Transactions
h h Kammrat Source: LAND ADVISORS ORGANIZATION 216.4M Additional Sq Ft Additional Sq Needed by 2020 Needed by Capita Sq Ft Per 334 18 32.6M , Sq Ft Net Absorption Rate Vacancy meet the need if we grow by 33%. 72.4M 19.1% 548 264.9M 12.5% 833,623 66 119.2M 143.7M 7.5% 232,798 36 64.6M Rentable Area Retail In 12 years, we will need an additional 16,561 acres of land to Office Industrial Metro Phoenix Market Share 4Q2008 Source: CBRE Source: LAND ADVISORS ORGANIZATION ) 348 77 40 , 209 326 as of 12/08 1.4B 1,143 1,231 5 348 ( 15,660 206.2M 397.2M 765.5M 660 , 48 660 053 , 85 053 809 , 218 809 944 , 358 608164 465 167 595 160 196 5.5B 10.3B 6.9B 5.4B 6.9B 5.5B 10.3B 4.2B 7.7B 4.6B 2.4B 4.6B 4.2B 7.7B 5,438 6.163 5,029 5,370 3,757 7,506 5,5231,223 5,887 1,3691,745 799 2,144 618 1,424 1,409 2004 2005 2006 2007 2008 374.6M 614.9M 687M 734M 687M 374.6M 614.9M 911.4M 1.96B 1.64B 2.2B 188 944 198,139 232,477 95,605 59,971 Acres Acres Acres Acres TOTALS INDUSTRIAL RESIDENTIAL Transactions Transactions Transactions Transactions Sales Volume Sales Volume Sales Volume Sales Volume COMMERCIAL Land Transactions Source: CoStarComps Thank You
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