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Infill Development

By special correspondent Peter Tonner

On Wednesday, 17 September 2014, over 40 planning and architectural professionals from across the Bay Area attended our Regional Urban Design Monthly Program on the topic of ‘Infill Development’.

Infill1East Bay chapter member Matt Taecker, AIA, AICP and a panel of speakers with combined expertise in real estate development, urban regeneration and economic consulting led us through some of the core financial fundamentals of infill redevelopment.

After an overview of the topic was provided by Matt, Bill Lee of Land Econ Group–an economics consulting professional with over 35 years of experience–took us through his involvement in the LA Exposition Metro Line (Phase 2). When completed, this project will link Culver City and downtown Santa Monica by rail, thereby connecting Santa Monica to downtown Los Angeles, Pasadena, San Fernando Valley, South Bay, Long Beach and dozens of points in between.

(Click Here for presentation slides.)

Bill forecast the economic potential of the points in between Culver City and Santa Monica, highlighting a 10 year pro forma which included elements such as financing costs, capitalization costs, parking rates, rate of rent increase, etc. By utilizing this method Land Econ were able to deduce a number of reasonable projections with regards to which areas between Culver City and Santa Monica were likely to yield more attractive cost benefits based on area specific strengths and weaknesses.

Infill2Our second guest speaker of the evening, Steve Hixson of Hixson and Associates, trained as an architect prior to moving into real estate development and consultancy.

(Click Here for presentation slides.)

 

Steve discussed some of the early obstacles of infill land acquisition (i.e. fragmented ownership, potential for urban speculators) and explained the financial challenges of developing small sites v large sites and low rise v high rise. Steve demonstrated that in the existing market cycle low rise buildings (five to seven stories) and super high rise buildings (seventeen stories) are likely to be more viable than mid-high rise (seven to seventeen stories).

Infill3

Our final speaker was Alexander Quinn, Director of AECOM’s Sustainable Economics Division for the Americas Region. Alexander discussed a number of findings from financial modeling projects he had worked on in Oakland and Berkeley. 

(Click Here for presentation slides.)

His research on Oakland closely resembled Steve’s analysis of the development potential of small and super high rise buildings and his Berkeley examples highlighted some of the potential impacts of Measure R on development. Additionally, Alexander demonstrated that rental-residential currently provided more cost benefits over office use and discussed ways in which developers can achieve project feasibility: such as partnering with the landowner, changing unit mix, and increasing building efficiency, etc.

Our panel took a wide range of questions from our audience to close the symposium and the conversation continued well into the reception where Ian Ross from OppSites gave attendees a demonstration of his firm’s innovative mapping platform.

 

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