RDEV688X Market Analysis

Market Feasibility Analysis Village at Odenton Station

Prepared By: Timur S Ryspekov

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TABLE OF CONTENTS
TABLE OF CONTENTS .................................................................................................................................... 2 I. INTRODUCTION ........................................................................................................................................... 3 II. LOCATION AND NEIGHBORHOOD CONTEXT ........................................................................................ 4 A. SITE LOCATION AND SURROUNDING LAND USES ........................................................................................ 4 B. SUBJECT PROJECT DESCRIPTION .............................................................................................................. 8 C. TRANSPORTATION AND TRANSIT ACCESSIBILITY ......................................................................................... 9 D. AVAILABILITY OF NEIGHBORHOOD SERVICES AND AMENITIES ....................................................................... 11 E. SCHOOLS................................................................................................................................................... 13 III. ECONOMIC CONTEXT ............................................................................................................................ 14 A. B. C. D. LABOR FORCE AND UNEMPLOYMENT ....................................................................................................... 14 AT-PLACE EMPLOYMENT......................................................................................................................... 16 MAJOR EMPLOYERS ............................................................................................................................... 20 COMMUTING PATTERNS ............................................................................................. 22

IV. SOCIO-ECONOMIC AND DEMOGRAPHIC CONTEXT ...........24ERROR! BOOKMARK NOT DEFINED. A. B. C. D. DEFINITION OF MARKET AREA ................................................................................................................. 24 GROWTH TRENDS................................................................................................................................... 25 DEMOGRAPHIC CHARACTERISTICS .......................................................................................................... 29 INCOME CHARACTERISTICS ..................................................................................................................... 32

V. COMPETITIVE ANALYSIS ....................................................................................................................... 34 A. B. C. AREA HOUSING STOCK CHARACTERISTICS .............................................................................................. 34 GENERAL OCCUPANCY RENTAL MARKET ................................................................................................. 40 RENTAL PIPELINE COMMUNITIES ............................................................................................................. 43

VI. FINDINGS AND CONCLUSIONS ............................................................................................................ 45 A. B. C. D. E. OVERALL FINDINGS ................................................................................................................................ 45 DERIVATION OF DEMAND......................................................................................................................... 48 TARGET MARKET. ................................................................................................................ 55 UNIT DISTRIBUTION AND DERIVATION OF PROPOSED RENT ................... 56ERROR! BOOKMARK NOT DEFINED. ABSORPTION ESTIMATE .......................................................................................................................... 57

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I. INTRODUCTION
The following market feasibility analysis is to evaluate a future transit-oriented mixed-use development, construction to begin January 2013-September 2014, of a proposed rental community in Odenton, Maryland. The Village at the Odenton Station site is located in the Anne Arundel County and spreads over a 400,000 sq. ft. land parcel. The development will introduce 57,000 sq. ft. of retail and 235 apartment homes in this luxury community. The proposed site is located between two major cities- Washington D.C (30miles away) and Baltimore, Maryland (24 miles away) (MAP1). One of the busiest rail stations on the Penn line with over 2000 riders a day, MARC Odenton station is literally across the street from this emerging community. Historically, Odenton became the hub for supplies during the American Civil War. Serving as a connection point between the Capitol and the North via railway, Odenton had access to the port city Baltimore. The farming town grew accordingly to the development of the railroad and in 1878 became the largest city in the state of Maryland with 100 residents. In 1920 at the advent of World War I, The United States Department of War acquired 19000 acres of land for a training camp known as the Fort Meade that drove many farmers off their land to a denser lifestyle. The Base Realignment and Closure (BRAC) plan of 2005 will ensure both residential and commercial growth in the Odenton area. Adjacent to the Fort George G. Meade base, emerging development will be serving the expanding activity and population in the area. In addition, the state of Maryland has committed $2 billion for the BRAC-related infrastructure improvements. By consolidating military activities in the Fort Meade area the estimated number of emerging jobs is around ten thousand. This market analysis will focus on the following areas: Site Analysis Economic Market Area Designation Demographics Competition Appraisal

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II. LOCATION AND NEIGHBORHOOD CONTEXT

A. Site Location and Surrounding Land Uses

Located in the western part of the Anne Arundel County, rectangular (Map 3) parcel is located thirty miles away from the nations capital Washington D.C, twenty four miles away from the largest city in MarylandBaltimore and five miles away from the Baltimore Washington International Thurgood Marshall Airport (BWI). MAP 3 SITE

Immediate surroundings include the following: To the east: Parking lot with nearly 2000 surface parking spaces serving the MARC Railway Station commuters. The Odenton Station is one of the busiest railway stations on the Penn line offering transfers to Baltimore and Washington DC Union Station.(Fig.1, 2, 3) Going clockwise on the intersection on the Odenton Rd and Morgan Rd to the southeast of the site is a Epiphany Episcopal Church behind which is a cemetery (Fig. 4). Odenton road to the east of Morgan Rd is mostly single family housing with 1-2 stories homes most of which have a garage. To the south of the site and west off Morgan Rd, are small business industrial facilities. Electric Contractor and a Tech Mark, Weyers Floor service and others are spread throughout the Odenton Rd. Mixed between them are single family houses and two local bars/restaurants.(Fig. 5,6,7) At the turn of the Odenton Rd, to the southwest of the site Fort Meades fence marking bases territory. (Fig 8) To the west of the site are more industrial- oriented small businesses: L&C Electric, North County Towing, Auto Parts store and others. Again, facilities are mixed with residential single family houses. Fig. (9,10) To the north of the site is an office building. Top floor is fully vacant; first floor is rented by the Kidstation Early Education Center with classrooms and an outdoor playground. Fig (11) Also to the north is a church Fig.(12) and a bank. 4|

SITE: IMMEDIATE SURROUNDINGS

FIG 1: MARC STATION

FIG 2: MARC STATION

FIG 5: SINGLE FAMILY HOUSES

FIG 3: PARKING. MARC STATION

FIG 6: LOCAL BARS

FIG 4: EPITHANY EPISCOPAL CHURCH

FIG 7: BUSINESS FACILITIES

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SITE: IMMEDIATE SURROUNDINGS CONTINUED

FIG 8: FORT MEADE FENCE

FIG 11: OFFICE BUILDING

FIG 9: NW INDUSTRIAL FACILITIES

FIG 12: CHAPEL

FIG 10: NW MIXED RESIDENTIAL

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VIEWS OF SUBJECT SITE

There is an existing development project under construction on the site. (Fig 12, 13, 14) The Village at Odenton Station will include 235 new luxury apartment as well as retail and office space over underground parking that will house 640 spaces. Groundbreaking Ceremony was on October 2nd, 2008 and the project is set to be completed sometimes in 2012. Competition section of this market study will focus in depth on the existing project.

WEST TO EAST VIEW

ALONG DUCKENS ST.

ALONG DUCKENS ST. 2

WEST TO EAST

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B.

Subject Project Description

The Village at Odenton Station is Anne Arundel Countys first transit- oriented mixed-use development. Final product will cover 1,620 acres of land with 235 luxury apartment homes, 57,000 sq ft of retail space and underground parking garages. Tenants are expected to pay for all utilities including gas, electric, hot water and heat. Luxury apartments will have nine-foot ceilings, walk- in closets, panel doors, open kitchens and ceramic tile entries and baths. Some units will include lofts, balconies, fireplaces and other amenities based on their location. Among other amenities are standard appliances that include microwave, dishwasher, self-cleaning oven, icemaker, disposal and full size washer and dryer. Developed community will offer complement amenities including a clubhouse, party room, 24/7 fitness center, conference room, business center, cyber caf, lobby, small theater, outdoor courtyards, outdoor swimming pool and grill area. Security amenities will include controlled building and parking access and standard concierge services.

Project Name: Address: City, County, zip: Project Information

Number of Residential Buildings Building Type Number of Stories Construction Type Design Characteristics (exterior)

Village at Odenton Station Town Center Blvd Odenton, MD Additional Information

One Mid-Rise 4 + underground garage New Const. Brick & Stucco

21113
Construction Start Date Date of First Move-In Construction Finish Date Parking Type Parking Cost

3/2010 2011 2011 Garage $0

Community Amenities

Clubhouse, Party Room, 24/7 Fitness Center, Conference Room, Business Center, Cyber Caf, Lobby, Small Theater, Outdoor Courtyards, Outdoor Swimming Pool, Grilling Area, Controlled Building and Parking Access, Standard Concierge Services, Retail Shoppes

Kitchen Amenities
Dishwasher Disposal Microwave Range Refrigerator

Yes Yes Yes Yes Yes

Utilities Included
Water/Sewer

Owner Tenant Tenant Elec Tenant Tenant

Unit Features

9 Foot Ceilings, Walk-In Closets, Panel Doors, Open Kitchen and Ceramic Tile Entries and Baths, Lofts, Balconies, Fireplaces, Microwave, Dishwasher, Self-Cleaning Oven, Ice-Maker, Disposal, Full Size Washer and Dryer

Trash Heat Heat Source Hot/Water Electricity

Other:

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C.

Transportation and Transit Accessibility

The site is located directly across the street (Morgan Rd) from the MARC Railway Station. One of the busiest railway stations on the Penn line, Odenton Station boards over 2000 passengers on daily basis. Destinations include a short commute to the nations capital, Baltimore MD or the BWI airport. (Map 4) Central Maryland Regional Transportation/ Connect-A-Ride services in West Anne Arundel County: Route K, M serving Arundel Mills Mall, Severn, Meade Village, Pioneer City, Seven Oaks, Odenton MARC, and Odenton is another way to get around locally. There is also a shuttle bus that offers transfers between Odenton MARC railway station and Fort Meade. Still most commuters and future residents will be relying on a vehicle as the primary mean of transportation. Village at the Odenton Station has several vehicular access points: Patuxent freeway 32 from the west, Annapolis rd. 175 from the east, Telegraph rd. 170 from the north, and Piney Orchard Pkwy from the South (Map 2). Interstate 95 can be accessed within 10 miles via Patuxent freeway. Interstate 95 is a major highway just under 2,000 miles that connects most Northern point of the east coast at the Canadian borderHoulton, ME and the most Southern point of the East coast- Miami, FL. More importantly to the site, I-95 serves as the main access point to Washington D.C and Baltimore, MD. MAP 4: MARC Railway

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According to the Marylands Department of Transportation (http://www.mdot.maryland.gov/Planning/CTP_11_16/SHA2011.html), several improvements are underway in the Anne Arundel County. Most of the improvements are directly related to the BRAC of 2005. The following improvements have direct effect on accessibility and convenience of the Village at Odenton Station location. A study is conducted to identify traffic flow improvements on MD 175, Annapolis Road from MD 295 to MD 170 (5.2) miles. Bicycles and pedestrian accommodations will be provided where appropriate (BRAC Related). The project is to address current and future congestion along MD175 and to improve access to Fort Meade upon base consolidation. A study is conducted to improve MD 3 from US 50 to MD 32 that will address safety and capacity concerns (8.89 miles). Bicycle and pedestrian access will be provided where appropriate. Wider curb lanes are also expected. The project is to reduce congestion in the corridor.

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D. Availability of Neighborhood Services and Amenities

Besides the immediate amenities within the proposed community, future residents will find several local day-to-day need shops, small businesses and gas stations. Most of the three- mile radius around the proposed site is residential. After expanding the study to general area, there are numerous single family communities (Fig. 15, 16, 17, 18) along Piney Orchard Pkwy and many in construction mode. At the three mile mark south on Piney Orchard Pkwy is a shopping center with a grocery store, dry-cleaning, bank and other small retail and service providing businesses Fig. 13, 14. There is another shopping center the intersection of 175 and 170 with a few restaurants and auto repair shops. There are several churches alongside 170. Odenton is very limited when it comes to shopping. Clothing, electronics and other goods that fall under the category of the comparison goods can be obtained a drive away. The closest shopping mall is located in Hanover, MD. Just five miles away from the Odenton Station this indoor outlet shopping mall houses numerous stores (Full directory can be viewed at simon.com/mall/malldirectory.aspx?id=1230). The outlet center also offers on-site dining restaurants including the Medieval Times, and a movie theater. Also five miles away is a Night Hawk Golf Course and numerous Parks including Patuxent River Park, Towsers Park, Odenton Park, Midland Park, Meade Village Park, Severn Danza Park and others. The closest hospital to the Odenton Station is the Johns Hopkins Community Physicians located on Annapolis Rd. Also on Annapolis Rd a Health Care Enterprises and the Orchard Surgical Center.
Establishment Type Address Distance

Odenton Shopping Ctr Arundel Mills Mall Smith Bus Services MARC Odenton Rail Station Sandy's Convenience Store 7 Eleven Riece's Store Harvest Moon Produce & Seafood SuperFresh Bloom (FIG13) Weis Markets Seth Cameron Johns Hopkins Community Phys Pain Relief Therapies NovaCare - Odenton Ferry Point INC Synergy Martial Arts Carter School- Dance-West County Wheels Skating Center Win Win Gymnastics Greenway Bowl Odenton Parks Martial Arts Shelton Martial Arts Seven Oaks Community center Odenton Library Post Library Kimbrough Army Hospital Medical Library Odenton Elementary School Arundel Middle School Ark & Dove School of Music

Entertainment Shopping Mall/ Entertainment Transportation/Bus Charter Transportation/Train Convenience Shopping Convenience Shopping Convenience Shopping Convenience Shopping Convenience Shopping Convenience Shopping Convenience Shopping Medical Clinic Medical Clinic Alternative Medecine Medical Clinic Medical Clinic Recreation Recreation Recreation Recreation Recreation Recreation Recreation Recreation Library Library Library School School School

1115 Annapolis Rd, Odenton, MD 7000 Arundel Mills Cir, Hanover, MD 1890 Bucklina Avenue, Odenton, MD 245 Burns Crossing Road,Severn, MD 1350 Odenton Road, Odenton, MD 8374 Piney Orchard Parkway, Odenton, MD 1099 Annapolis Road, Odenton, MD 1155 Annapolis Rd, Odenton, Maryland 8741 Piney Orchard Parkway, Odenton, MD 2294 Blue Water Boulevard, Odenton, MD 1416 Annapolis Road, Odenton, MD 1132 Annapolis Road, Odenton, MD 8288 Telegraph Road, Odenton, MD 1215 Annapolis Road, Suite 204, Odenton, MD 8379 Piney Orchard Parkway, Odenton, MD 1360 Blair Drive, Odenton, MD Waco, Odenton, MD 1200 Odenton Road, Odenton, MD 8266 Lokus Road, Odenton, MD 8246 Telegraph Road, Odenton, MD 8251 Telegraph Rd # A, Odenton, MD 1202 Annapolis Rd # D, Odenton, MD 2110 Charter Oaks Boulevard, Odenton, MD 1270 Odenton Road, Odenton, MD 418 Llewellyn Avenue, Ft George Meade, MD 2480 Llewellyn Ave # 5800, Ft George Meade, MD Odenton, Maryland 1179 Hammond Lane, Odenton, MD 8424 Piney Orchard Parkway, Odenton, MD

1.7 mi E 6.6 mi N .2 mi NE 29ft SE 2.7mi SE .6mi SE .6mi SE 1.4mi SE 1.2mi SE 1.7mi SE 1.0mi NW .2mi N 1.2mi E .9mi NE 1.0 mi E .6mi E .4mi E .5mi SE 1.1mi SE .9mi NE 1.0 mi NE 1.0 mi NE 1.0 mi E 1.3 mi NW .8 mi SE 1.5mi NW 1.2mi NW .8 mi SE 1.5 mi SE .7 mi SE

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FIG 13: BLOOM

FIG 14: OTHER SMALL BUSINESSES

FIG 15: TOWNHOUSES

FIG 16: SINGLE FAMILY

FIG 16: SINGLE FAMILY

FIG 17: SINGLE FAMILY

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E. Schools
There is a number of educational institutions in Odenton. Odenton Christian School is about a mile away as well as the Odenton Elementary School. Waugh Chapel Elementary, Ridgeway Elementary and Seven Oaks Elementary Schools are all within five miles radius. Arundel Middle and High schools are two miles away. University of Maryland College Park is fifteen miles away. Classroom examination scores are an evaluation technique to ensure the overall quality of instructions based on location. The following are students scores in site-adjacent schools.

Anne Arundel County Elementary Schools

Maryland School Assessment Report, 20082009 School year % Students with Special Services All Grades Composite 87.1 86.7 78.8 LEP 1.6 3.3 4.8 FARMS 18.8 22.3 30.9

% Students Achieving Proficient or Advanced County Rank 46 47 70 Grade 3 Math Reading 89.0 87.1 73.6 87.0 86.1 83.0 Grade 4 Math Reading 95.6 92.4 88.1 86.8 92.6 86.3 Grade 5 Math Reading 81.7 88.7 70.3 91.6 90.4 86.4

School Seven Oaks Elementary Waugh Chapel Elementary Odenton Elementary

Science 77.8 69.8 63.6

Anne Arundel County Middle Schools

Maryland School Assessment Report, 2008-2009 School year % Students with Special Services All Grades Composite 80.0 LEP 1.5 FARMS 17.6

% Students Achieving Proficient or Advanced County Rank Grade 7 Math Reading 78.5 80.2 Grade 8 Reading 88.4

School Arundel Middle

Math 77.5

Science 75.2

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Anne Arundel County High Schools

Maryland High School Assessment Report, 2008-2009 School year % Students Achieving Proficient or Advanced County Rank Market Rank 1 School Arundel High Math 97.4 High School Reading 94.5 Science 91.4 All Grades Composite 94.4 % Students with Special Services LEP 0.0 FARMS 10.8

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III. ECONOMIC CONTEXT

A. Labor Force and Unemployment
Unemployment rate in Anne Arundel County has been below the Nations average for two decades. According to the Department of Labor, Anne Arundel County has an unemployment rate of 6.8% and the Nations average was 9.7% in 2010 (Table A). The rate has drastically increased in 2008 when been yet another recession hit. Over 10,000 jobs were lost in a two-year period almost doubling the unemployment rate (3.9% in 2008 to 6.8% in 2010). The rate, however, is expected to drop significantly over the next few years. According to the Maryland Department of Transportation, Anne Arundel County is expected to gain over 10,000 jobs by 2013 with over 5,000 by the end of 2011. Falling under the Base Realignment and Closure of 2005, Fort Meade will add over 4,000 positions for the Defense Information Services Agency, over 1,000 in Army, Navy and intelligence services, 663 positions for the Defense Media Agency (DMA), 760 positions for the Defense Adjudication Co-location and others. As a result Fort Meades growth is 1.8 million sq. feet of new consolidated facilities for Intelligence Community Use completed by 2014 (AAEDC 2011). In addition, an expected number of 20,000-30,000 of new jobs will be derived from private industries serving Fort Meades impact. According to the Anne Arundel Economic Development Corporation 4,000 new jobs will also emerge with the introduction of the Gaming and Entertainment Facility at Arundel Mills. This world class gaming facility for video lottery will bring $400 million annually to State Education Trust Fund, $30 million to Anne Arundel County and $60 million in parking and road improvements in the area. Table B zooms in on the unemployment rate from January 2010 to August 2011. There is a decrease of .7% in unemployment in Anne Arundel county while the national unemployment rate increased a full 1%. The map of Maryland (TABLE B1) marks Anne Arundel County as one of few areas with 6.1%-7.0% unemployment rate.

TABLE A: Annual Unemployment Rates

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TABLE B: Monthly Unemployment Rates

(Bureau of Labor Statistics Map) TABLE B1: Unemployment rate in Maryland

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B. At Place Employment
Anne Arundel County is rich for government (Federal, State and Local) employment. In 2001 government to private sector jobs was at 20% (34,194/165,981), in 2010 the percentage remained at 20% (38,826/187,683) but is expected to grow in the next three years due to BRAC. In addition to the Federal Government, there is a vast range of private sector employment led by the Trade- Transportation- Utilities industry at 51,142, Professional-Business industry at 33,790 and Leisure and Hospitality at 27,441 in 2010. (TABLE C, D)The three industries make up 60% of County Employment.

TABLE C: At Place Employment

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TABLE D: Change in At Place Employment In comparison to the Nations average, Anne Arundel County has proportionally more jobs in Professional Business Industry by 2%. The county is also leading in the Trade-TransportationUtilities industry by 3.5% mainly due to the Baltimore Washington Thurgood Marshall International Airport (BWI) and many ports in the Baltimore city. As mentioned in the Site Analysis MARC Railway serves Anne Arundel county in and out of Washington D.C and the city of Baltimore. Anne Arundel County is above the Nations employment rate by 2.3% in Leisure and Hospitality industry. Government average is very close at 17.5% for United States and 17.1% for Anne Arundel County. (TABLE E, F)

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TABLE E: Employment by Sector

TABLE F: Annualized Employment Change by Sector

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Sage Policy Group, Inc in their BRAC Impacts on Fort Meade Area Housing states that the majority (35%) of current Fort Meades workers residences are located in the Anne Arundel County with second to highest average housing cost of $403, 687. Sage Policy Group, Inc estimates 35.2% of all BRAC-related housing demand to locate in Anne Arundel County by 2014.

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C. Major Employers
Among the major government and private employers in the Anne Arundel County are Ft. George G. Meade, BWI, U.S Naval Academy, Northrop Grumman and CSC. (TABLE G) Even though Federal Government industries dominate countys job market, the area contains commercial, retail, health and hightech industries. Located in between Fort Meade and BWI, smaller companies are spread out throughout the area while most major employers are located to the Northwest of the site. (TABLE F)
Estimated # of Employees

Government Employers

Product of Service Dept. of Defense intelligence training & administration; major tenants National Security Agency, DISA (source for emp#: Ft. Meade) County public education K-12 (employee number includes full-time, part-time & contractual employees) Regional airport State government services Local government services Federal naval education facility U.S. Coast yard, industrial supply, logistics and operational support Public two-year college Incoming mail service Government services Product of Service HDQT, Electronic Systems Sector Airline, East coast flight center Hospital Hospital Information assurance & signals intelligence solutions Consumer goods Information technology services HDQT, IT & engineering placement HDQT, aircraft & avionic telecommunication systems Groceries Engineering services HDQT, networking services & communications networking equipment Telecommunications Groceries Consumer Goods Restaurants Home improvement supplies Telecommunications Hotels/ motels Cosnumer goods

Ft. George G. Meade Anne Arundel County Public Schools BWI Thurgood Marshall Airport State of Maryland Anne Arundel County Government U.S. Naval Academy U.S. Coast Guard Yard & Tenant Command Anne Arundel Community College US Postal Service City of Annapolis Government Private Sector Employers Northtop Grumman Southwest Airlines Anne Arundel Health System Baltimore Washington Medical Center Booz Allen Hamilton Walmart / Sam's Club CSC Allegis Group ARINC Giant Food Lockheed Martin Ciena Verizon Safeway Target McDonald's Home Depot AT&T Services Marriott International Sears

55365 14000 9717 9577 4163 2340 1200 1100 650 550 Estimated # of Employees 7500 3200 2800 2650 2100 2056 1829 1500 1100 1100 925 850 844 800 775 750 705 700 700 640

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Johns Hopkins HealthCare Shoppers Food Warehouse Maryland Jockey Club. Laurel Park Kohl's Source: AAEDC 2010

625 625 616 564

Medical Services Groceries Thoroughbred horse racing Consumer goods

TABLE G: List of Major Employers

TABLE F: Map of Major Employers adjacent to the site

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D. Commuting Patterns
Even though the unemployment rate in the Anne Arundel County is lower than in the Nations average rate, many choose to reside in other regions and commute to the county via car, bus or railway. According to the Maryland Department of Labor, Licensing and Regulation, 41.9% of Anne Arundel county workers reside in the county. 12.6% in Baltimore County, 8.8% in Baltimore City and 4.3% in Montgomery County. (TABLE H) The data covers private sector and state and local government employment only; federal employment is excluded. According to the same agency, 10% of all workers in the state of Maryland live in the Anne Arundel County. (TABLE I)

Workers in the Anne Arundel County WIA -- Where They Live

Anne Arundel

1.2% 1.9% 2.1% 3.0%

4.3% 11.9%

Baltimore County

Baltimore City
Prince George's

Howard

41.9%
Montgomery

5.2%
Harford

7.0% 8.8% 12.6%

Queen Anne's Carroll Frederick

All Other

TABLE H: Where Anne Arundel County workers live

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Workers in Maryland -- Where They Live

Baltimore County

Montgomery
Baltimore City

22.9% 2.5% 15.8% 3.3% 4.2% 4.6% 5.0% 9.1% 10.0%

10.2%
Prince George's Anne Arundel Howard Harford Frederick Carroll Washington All Other

12.5%

TABLE I: Where do Maryland workers live

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IV. Socio-Economic and Demographic Context

A. Definition of Market Area

This report focuses on the Village at Odenton Station Market Area (Table 1) that shares socioeconomic and demographic characteristics with the proposed development region. The market area is defined by the Howard County borderline to the West, Fort Meade base to the South, the city of Crofton to the South East, Pasadena and Highway 97 to the East, and Rt. 100 and the Baltimore Washington Thurgood Marshall International Airport (BWI) to the North. In addition to the geographical characteristics, defined marked area covers a number of multifamily rental communities throughout (TABLE 2). Existing multifamily rental communities are to be considered competition and will help identify Market Areas supply and demand. The Village at Odenton Station Market Area housing consists of primarily small family households in both attached (townhouses) and detached units. Majority of the population within the market area own their home and about one third rent. Market Area surrounds the Fort Meade base and demand for off-base living with minimal commute is high. Due to the military base, Market Area defined has a high percentage of wellpaid positions exceeding $75,000 annually (according to the Maryland Department of Transportation). To better describe the characteristics of the Market Area, it will be compared with the Anne Arundel County as a whole.

TABLE 1: VILLAGE AT ODENTON STATION MARKET AREA

TABLE 2: MULTIFAMILY RENTAL COMMUNITIES

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B.

Growth Trends

According to the same source, Anne Arundel County is to expect a total of 4,457 new households, with 2,737 that will be looking for higher cost/quality housing. Defined Market Area experiences its largest population increase (35.5%) in the 1990-2000 due to the job gains at Ft. Meade. In addition, an increase in the household demand of 44.6% in the 10 year period was double of what the Anne Arundel County experienced. (TABLE 3) Household numbers had slowed but not stopped during the 2000-2011 period due to the fall in the real estate market, overall economy and other factors. (TABLE 5) Annual growth in the market area grew by 781 or 3.8% during 1990-2000 periods. During 2000-2011 population growth slowed but still remained at 422 or 1.5%. It is projected to slow down even further in the period of 2011-2016 to 342 or 1.1%. (TABLE 4) in the next 5 years can be directly identified with the BRAC process at the Fort Meade.

TABLE 3: POPULATION

TABLE 4: PROJECTED GROWTH

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As a result of BRAC, Maryland Department of Planning expects a total of 28,176 new households broken down as follows: Fort Meade: 10,678 (49%), APG 14,159 (56%) and AAFB 474 (1.9%). Maryland Department of Planning also projects the distribution of BRAC related households to make up 18% or 4,457 in the Anne Arundel County. According to the U.S Census of Population and Housing of 2000, about 15% of all Anne Arundel Countys dwelling units were constructed in the Market Area from 1976 to 1984. From 2000-2009, Anne Arundel County averaged at 2,118 building permits a year. Similarly to the nation, as the real estate market started to fall, number of permits started to decrease and in the 2008- 2009 went down to an average of 1074 permits- almost half of building permits granted in previous years. (TABLE 5) Anne Arundel Countys market is mostly directed towards the single family detached housing permits; however, starting in 2000- the percentage of multifamily housing permits grew and in 2009 was at 29% of the total permits. (GRAPH 2)

TABLE 5: BUILDING PERMITS

GRAPH 2: BUILDING PERMITS RATIO

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TABLE 6 and GRAPH 4 below demonstrate that primary ownership residencies are single family detached housing units making up 78% of all ownership housing demand in the county, and 68% in the Market Area. Owners of multifamily housing units make up only 2.9% of all housing demand in the Market Area.

TABLE 6: OWNED HOUSING UNITS

GRAPH 4: OWNED HOUSING

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Multifamily units are more in demand in the rental housing. Over 50% of renter occupied households are multifamily units in the Market Area. Rental/ Owner ratio in both Anne Arundel County and the defined Market Area are similar with one quarter of total housing units to be occupied by renters. In 2000, Market Area had 6,817 renter occupied units that is 26.9% of the total housing market. In comparison, in 2000, Anne Arundel County 43,749 equaling to 24.5% of renter occupied housing units. In 2011, total housing market increased, therefore a figure of 26.3% or 7,886 of renter occupied housing was recorded in the defined market area. In comparison, Anne Arundel County dropped to 24.3% or 46,770 rented occupied housing units. Vacancy rates are much different. In the defined Village at Odenton Station Market Area, vacancy rate was at 3% in the year of 2000, 4% in 2011, and is projected to be 4% in 2016 while in the Anne Arundel County is was at 14.8% in 2000, at 20.2% in 2011 and is projected to increase to 21%. According to the Bureau of Labor Statistics, national average vacancy rate is at 7.9%. (TABLE 8, GRAPH 6)

TABLE 8: RENTER/ OWNER RATIO

GRAPH 6: RENTER/ OWNER RATIO 28 |

C.

Demographic Characteristics

While the distribution of age in the defined Village at Odenton Station Market Area is very similar to the Anne Arundel County, there are some trends that should be noted. The median age in the Market Area is 35 years old. Anne Arundel Countys median age is 37 making up 15.8% of the whole countys population of 515, 313. (TABLE 9, GRAPH 7.) Population of 21-34 makes up 17.6% (90,589) in the Anne Arundel County and 19.9% (17,361) in the defined market area. Age of population that is more inclined to own housing rather than rent is 35-54. In Anne Arundel County 30.3% (156,238) make up the 35-54 population. In the defined market area 32.5% make up 28,306 households between the ages of 35-54. In addition to potential renters age statistics, the tables demonstrate that about 24% of the defined Market Areas population is children under 18 who live with their parents. Population over 65 is at a little over 8% in the Market Area in comparison to the Countys 12%.

TABLE 9: AGE DISTRIBUTION

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GRAPH 7: AGE DISTRIBUTION TABLE 10 below compared Market Areas household type trends to the Anne Arundel Countys. Similarly to the Anne Arundel County, defined Market Area is dominated by married couples without children (28.3%- 8,316), followed by married with children (26.9%- 7,917) and living alone (20.5%6,033).

TABLE 10: HOUSEHOLD TYPE

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GRAPH 8: HOUSEHOLD TYPE

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D.

Income Characteristics

Graph demonstrates that the defined Market Areas income is higher than the countys income when it goes above the range of $75-$99,9K a year. For example, 14.0% in the Market Area over 12.3% in the county make between 100-124K a year. Overall 78.2% of the population residing in the Market Area are making over 50K a year. High income is mostly driven by the military associated employment at Fort Meade. Nearly 40% earn from 50k-100k a year in the defined Market Area.

GRAPH 9: HOUSEHOLD INCOME BY AREA

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GRAPH BORROWED FROM WIKIPEDIA.ORG

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V. Competitive Analysis
A. Area Housing Stock Characteristics
Over half (50.2%) of the Anne Arundel County renters live in a multi-family residential community. More than half (54%) of renters live in a multi-family community within the defined market area. Renter- to- owner ratio in both Anne Arundel County and the defined market area are similar- one quarter of total housing units is occupied by renters. Vacancy rates vary from county to market area. In the Village at Odenton Station market area, vacancy rate was at 3% in 2000, at 4% in 2011, and is projected to remain at 4% in 2016 in contrast to the Anne Arundel Countys vacancy rate- 14.8% in 2000, 20.2% in 2011, and projected to increase to 21%. According to the Bureau of Labor Statistics, national average vacancy rate is at 7.9%. See tables 2 and 3, graphs 2 and 3. The rental stock characteristics, in the defined market area, are similar to those in the Anne Arundel County. According to the 2000 Census, in the Anne Arundel County, 77% of all owner- occupied housing is a single family detached unit at 104,818 units. Similarly, in the defined market area, 67.5% of the homeowners prefer to live in a single family detached unit, followed by 23.1% of single family attached units. Owners of multifamily housing units make up only 2.9% of all owned housing demand in the defined market area. See tables 1 and graph 1.

TABLE 1: OWNED HOUSING UNITS

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GRAPH 1: OWNED HOUSING

TABLE 2: RENTED HOUSING UNITS

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GRAPH 2: RENTED HOUSING

TABLE 3: RENTER/ OWNER RATIO

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GRAPH 3: RENTER/ OWNER RATIO Based on the BRAC report, over half (53.5%) of new households will be looking for housing of higher cost/quality, over one-quarter (28.4%) will be looking for housing of middle cost/quality, and just under one fifth- (18.1%) for lower cost/quality housing. (GRAPH 4)

GRAPH 4: HOUSING DEMAND IN ANNE ARUNDEL COUNTY According to the U.S Census of Population and Housing of 2000, about 15% of all Anne Arundel Countys dwelling units were constructed in the Market Area from 1976 to 1984. Almost 20% of all dwelling units built since 1939 were developed between 1990- 1994 due to the previous BRAC agreement that drove demand for new and improved housing to the defined market area. (GRAPH 5) From 2000-2009, Anne Arundel County averaged at 2,118 building permits a year. Similarly to the nation, as the real estate market started to fall, number of permits started to decrease. Between 2008 and 2009 number of permits went down to 37 |

an average of 1,074 which is roughly a fifty percent decrease in building permits granted in comparison to the previous years. (TABLE 4) Anne Arundel Countys market is mostly directed towards the single family detached housing permits; however, starting in 2000- the percentage of multifamily housing permits grew and in 2009 it was at 29% of the total permits.

TABLE 4: BUILDING PERMITS

GRAPH 5: BUILDING PERMITS RATIO According to the citi-data.com, estimated median house value in Anne Arundel County was 13% more than the states average at $365,400 in 2009. Home value remained almost static since the recession in 2008 when the value was almost 15% more. (GRAPH 6)

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GRAPH 6: HOME SALES

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B. General Rental Market

The multi-family rental stock around the Village at Odenton Station is rich with options. There are 20 multi- family apartment communities in the defined market area with an average of 295 units per community. Such inventory includes a series of unit types varying from one bedroom/ one bath, two bedroom/ one and two baths to a three bedroom/ two baths units. Most apartment complexes are garden structure type apartments built before 1980s- 11 communities between 1963 and 1979, 5 communities were built between 1991and 2000 and 4 were built between 2001 and 2010. Most properties are general occupancy and some offer age-restricted units. Most of the multifamily communities offer such amenities as fitness rooms, clubhouses, playgrounds and tennis courts. Fewer communities offer pools, hot tubs and saunas, gated entries and business/ computer centers. In addition to common amenities, several apartment complexes offer rent specials, free first months and other discount as an incentive to potential residents. Such incentives are often used as a marketing strategy to maximize occupancy when most needed. Similarly to the Anne Arundel Countys 27%, about 30% of the defined market areas complexes offer some kind of an incentive. Consequently to the household type, (about 55% in Anne Arundel County and about 52% in the defined market area are couples married with or without children) majority of units offered are two bedroom units. About 25% of the 20 multi-family communities in the defined marked areas are operated by the Dolben Co. There is currently a project in place that focuses on the Village at Odenton Station. Dolben Co. Inc is planning to develop a 235 luxury apartment plus retail complex. Construction began in July 2010 and is set to be open for business in late 2012. In the defined market area, the average rent for a one bedroom/one bathroom apartment is $1.58 per square foot at $1126 rent and an average of 710 square feet. Average price per square foot for a two bedroom two bathroom apartment is $1.37 at $1303 for rent and 947 average square footage. Three bedroom/ two bathroom units average is also $1.37 at $1596 for rent and an average square footage of 1,162. The following is a brief description of several multi-family communities within the defined market area: Concord Park at Russett is a mid-rise, 335 units multi-family apartment complex that was built in 2005. This luxury complex is located to the WEST of the site and offers 1,2 and 3 bedroom apartments with 21 different floor plan options. Apartments feature 9-foot ceilings, fireplace, wood flooring, private balcony and full size washer and dryer in each residence. Amenities include fitness and aerobic center, conference room, cyber caf with gourmet coffee bar, resort-style swimming pool and fountain, guest suite for resident visitors and a movie theater with HD sound. Rent fluctuates from $1420 for a 1 bedroom/1 bathroom to $2300 a month for a 3 bedroom/ 2 Bath apartment. Among services are package acceptance service with in-home delivery, coffee and tea, 24-hour emergency maintenance and concierge services. According to the Real Property Research Group field survey of 2005, the apartment complex is offering $120 off/ month on Auriga, Rigel, Pleiades & $60 off/month on Polaris as potential renters incentives. Lodge at Seven Oaks is another luxury multi-family community apartment complex located in Odenton, MD about 2 miles NORTH of the site. Some feature of this apartment complex include: 9-foot ceiling, track lighting , available oversize terraces, ceramic bathroom tile, maple cabinetry, oval soaking tubs, built in wine racks, black-on-black appliances, dishwasher and a full size built in washer and dryer. Community amenities include fitness club, resort-style pool, poolside grills, clubhouse kitchen, and private movie screening room, sports lounge and available detached garages. Apartment sizes fluctuate from 1 bedroom/1 bath to 3 bedroom/2 bath. As potential residents incentive, this multi-family complex offers discounts on select units. Riverscape Apartments are located to the SOUTH of the site and is an award-winning multi-family luxury apartment community. Apartments come on 1 bedroom/1 bath, 2 bedroom/ 1 and 2 baths and 3 bedrooms/ 2 baths configurations. Apartment amenities include 9-foot ceilings, gas fireplace, in unit washer and dryer and wall-to-wall carpeting.

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Community amenities include a club house, a 24 hour fitness room and an outdoor pool. Prices fluctuate from $1260 for a 744 sq. ft. to $1815 for a 1246 sq. ft. apartment. Riverscape apartments do not offer any potential residents incentives at this time. The Groves at Piney Orchard is a multi-family garden style apartment community situated to the SOUTH of the site. This complex offer 1 bedroom/1 bath, 2 bedroom/ 1, 2 bath and 3 bedroom/ 2 bath apartments for rent. Prices start at $1405 for a 744 sq.ft. apartment to $1835 for a 1246 sq.ft. apartment. Apartment amenities include a balcony or a patio, full size washer and dryer and walk-in closets. Community amenities include an outdoor pool, Jacuzzi, clubhouse, playground, 45-acre preserve with walking and hiking trails and tennis courts. Currently, this complex does not offer potential residents incentive.

Table 26 presents several multi-family communities within the defined market area. Some of the communities have vacancy rate of 0%- The Groves at Piney Orchard, Scotts Manor and Park Glen. Some have a very low vacancy rate, for example, Lodge at Seven Oaks at 0.3%, Somerset Woods at 1.0%, Riverscape at 1.4% and others. The average total vacancy rate is calculated from adding all vacancy rates from the subjects site similar communities within the defined market area and dividing by the total number of communities. The average vacancy rate is 3.41%. According to the Financial News USA, the national apartment vacancy rate is at 8%.

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Table 27 shows that most of the surrounding apartments in the defined market area are Garden style complexes. There are three townhouse complexes and one midrise complex. Average rent for a one bedroom/ one bathroom unit is $1,126, $1,303 for a two bedroom/ two bathroom and $1,596 for a three bedroom/ two bathroom unit. Average size for a one bedroom/ one bathroom unit is 775 sq. ft., 999 sq. ft. for a two bedroom/ two bathroom unit and 1,256 sq. ft. for a three bedroom/ two bathroom unit. Average rents per square foot are $1.45, $1.30 and $1.27 accordingly. One bedroom/ one bathroom units make up 28.8% of all units while more than a half (55.6%) are two bedroom/ two bathroom units. The smallest (15.6%) number are the three bedroom/ two bathroom units.

Table 30 is a list of defined market area communities and a list of utilities they include. Two communities out of 27 communities include every utility on the list: Heat, Hot Water, Cooling, Electric, Water and Trash. Most communities include trash disposal and a few more (5) offer water included in the price of rent. In addition to utilities, most apartment complexes offer free surface parking; ten communities offer storage 42 |

wither on site, in the room or in building. Most units offer such standard amenities as dishwasher, microwave and in-unit laundry with the exception of four communities. For example, Park Glen does not offer any of the amenities mentioned above, but trash. In contrast, Ashley apartments offer all amenities included in the price of rent but the microwave. Table 31 lists multifamily rental community amenities in the primary market area. Some communities do not offer any amenities from the list. For example, Scotts Manor, Crofton Village Apts, North Forest, Carlyle Apartments and Keswick Park. Others offer as many as 7 amenities at a time with the most popular amenitis being clubhouse, fitness room, pool and playground. Riverscape @ Piney Orchard offers the following: clubhouse, fitness room, pool, hot tub, sauna, tennis court and business/ computer center. Camden Russett offers clubhouse, fitness room, poo, playground, tennis court and business center. While offering none of the above described amenities, Park Glen is the only community that offers a gated entry.

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C. Rental Pipeline Communities

There is a large number of planned developments in progress within the defined market area. These transit oriented communities are anticipating regions growth due to the BRAC expansion at Fort Meade and the location- Odenton MARC rail station. A number of projects had been put on hold due to the fall of the real estate market and recession; however, once finances are available projects are set to return to their regular schedule. In addition to financial restrictions, much of Odentons Town Center is in a need of major road work and other infrastructure improvements. In August 2010, Anne Arundel County funded a series of infrastructure improvement projects in the area. According to the RPRG, there are five new multi-family residential projects in the planning/ construction phases within the defined market area.

Total rental spaces created within the next three years is 487 in comparison to the Anne Arundel Countys total of 796, this makes up 61% of all new rental housing in the county. Proposed 807 multifamily units make up 55% of all countys rental housing in the next three to five year period. As of today, 212 luxury apartments are planned to be developed in the next 5 year period.

Within the next 3 years

Odenton Gateway in the Odenton Town Center is an 18 acre, 252 unit residential apartment complex that will include retail and some office spaces. The project is underway and its infrastructure work is set to begin soon. The Village at Odenton Station by the Dolben Co. Inc is under construction for a 235 luxury multi-family apartment community with retail space is set to be completed in by the end of 2012. Also in the Odenton Town Center, Nevamar Properties is planning on a development of 350-400 apartment units over a 54 acre site that would include retail and office space. The project is currently in phase 1 and is preparing submission of garden apartments. Development plans by Bozzuto for the Odenton Town Square in the Odenton Town Center will bring a 457 unit apartment complex with 250 townhouses and 74,000 sq.ft. of retail space to the city of Odenton. Broadstone at Odenton Town Center is a complex of 212 luxury apartments with retail and office spaces.

Within the next 3-5 years

Within the next 5 years

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VI. FINDINGS AND CONCLUSIONS

A. Overall Findings

Based on the conducted market study of land use, economical and demographical trends of both Anne Arundel county and the defined market area, the following conclusions can be drawn:

Most current development in the Anne Arundel County is due to the BRAC and NSA. A large number of potential residents are expected to arrive to and around the Fort Meade area. BRAC will not only bring employees to the area but also create employment opportunities for local residents. Much of present local economics will be positively stimulated. 4th strongest BRAC related development pressure with 4,457 after Cecil, Howard and Baltimore Counties. BRAC is expected to make up 12.5% of all housing supply in 2009-2015. Over 90% of BRAC households are expected to locate within 45 minute commute to Fort Meade. Situated across the street from one of the busiest railway stations on the Penn line- Odenton Station, Village at Odenton Station is a desired location for commuters. Many of the 2000 riders that board the train at the Odenton Station every day commute to the two major neighboring cities- Washington D.C and Baltimore MD. While suburban, defined market area offers an easy access to culture, attractions and opportunities of city life making it a desired area for residence. Transit- oriented mixed-use development is new to the Anne Arundel County and particularly to the defined market area. Appealing location of the subject site is backed by a series of infrastructure development projects to ease traffic, improve pedestrian and biker experience, enhance street appeal and add to the prosperity of local businesses. As the market study shows, a large number of commuters are driving. Subject site is located minutes away from the Interstate 95- leading to Baltimore or Washington DC. It is also located by the Freeway 32 leading towards Howard County and Route 50 that leads towards Annapolis, Bay Bridge and the Eastern Shore. Subjects site offers a reasonable commuting distance to surrounding markets with easy access. Construction of MD 175 and MD 198 underway to meet BRAC demand. Sidewalk and bicycle access from Odenton Station will be constructed. Shuttle from Fort Meade base to the Odenton MARC station and other locations will be provided for employees to reduce single occupant vehicles and reduce general vehicular congestion 41% of Anne Arundel county workers reside in the County (excluding federal employment) Initial feasibility study had been done for a WMATA Green Line to Fort Meade

In summary, subject sites location is desirable due to the BRAC development and a convenient access to Washington DC and Baltimore via railway or a short driving commute. Among other public amenities are retail stores. Subjects site is located minutes away from the Arundel Mills. Arundel Mills is a shopping center that offers entertainment, dining and shopping with the convenience of a drive. In addition, grocery and convenience stores are within the walkable distance of under a mile. A number of medical clinics are just under a mile away- Seth Cameron, Johns Hopkins Community Physicians, NovaCare and Ferry Point INC. There are several high ranking schools located in Odenton. Higher education includes the University of Maryland that is located thirty miles away. A series of public libraries and recreation facilities can also be found within the defined market area. Outdoor activities include, biking, numerous walking and running trails and a golf course.

Based on the market study, Village at Odenton Station sites surrounding areas pro vide a number of publicly available amenities 45 |

Anne Arundel Countys unemployment rate has been below Nations average for over a decade. County is expected to gain over 10,000 jobs by the year 2013 and around 5,000 by the end of 2011. BRAC related employment is around 30,000 jobs by 2013, about 60% of which are Fort Meade servicing employment.

Recent job opportunities being high demand on housing. Over a half of BRAC related new households will be looking for higher cost/ quality housing Similar to the Countys 24.5%, primary market area projected number of renter- occupied units is 8,369 making up 26% of all housing market by 2016. Anne Arundel Countys residents prefer owning to renting at 76% of homeownership. Majority of population is between the ages of 25 and 55 Defined Market Areas median income is $82,848 a year. Anne Arundel County median household income is $80,559. In comparison to the closest Baltimore county income of $65,646. Defined market area and specifically subjects site median income is in the high $80k a year. (see table below)

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2011 Household Income by Area

25%

20%

% of Households

15%

10%

5%

0%

<$15K

$15-$24.9K $25-$34.9K $35-$49.9K $50-$74.9K $75-$99.9K

$100$124.9K

$125$149.9K

$150$199.9K

$200+K

Anne Arundel County

Primary Market Area

Married couples with and without children make up 55% of all household types, followed by living alone at 23%

High median income provides a healthy market demand for luxury apartments for single and married household types. Subjects site is one of the few mid-rise luxury mixed-use apartment complexes in the defined market area. Among competitors is Concord Park at Russett located to the west of the subject site. Overall there are 20 multi- family communities with average of 295 units per community. The subjects site rental market is characterized by numerous public and private amenities that much of competition does not offer. For example, the MARC railway station is located directly across the street. Market areas rent distribution averages from $1,113 for a one bedroom/ one bathroom, $1,285 for a two bedroom/ two bathroom and $1,585 for a three bedroom/ two bathroom apartments. Upper tier and lower tier disparity is almost 90% for all three apartment types. Pipeline was multi-family residential communities in the defined market area includes 729 units within the next three years and 1,167 units within the next 3-5 years. Southern Management Corporation is planning to develop Town center at Arundel Preserve with 242 luxury rental community, it is currently under construction and is scheduled to be completed early 2012. Dolben Co, Inc is planning a development at the Village at Odenton Station across from the Odenton MARC station with 235 luxury apartments and retail. Construction is currently underway and will be completed by the mid 2012. Odenton Gateway LLC& Elms Street Development are planning to develop an 18 acre, 252 residential apartment complex with a medical office and retail. Infrastructure work is set to begin soon.

While competition for luxury apartments will exist in the defined market area with 729 units within the next three years, given demand is high enough to fulfill supply. Given that land prices are unlikely to drastically change, in order to make land more affordable per housing unit- it is likely for the housing density to increase to fit the demand. 47 |

B.

Derivation of Demand

Per the Growth Trends section above, it is estimated that there are 29,418 households in the Village at Odenton Station defined market area as of 2010, a number that is projected to climb to 31,007 by 2014. Employing these projections, an estimate of demand for rental housing in the defined market area can be computed over the three-year period.

There will be an estimated 29,981 households in the market as of 2011, and 31,692 households by 2014. Village at Odenton Station market area will thus gain 1026 or 1.1% net households during this period. A number of factors contribute to the removal of housing units.1 Disasters, such as fires and tornados, occur somewhat randomly. However, the decision whether to repair or demolish a unit is based on the economic value of the property. Thus, a unit being permanently lost in a disaster should be correlated with factors such as its age, structure type, and physical condition. Demolitions can also be instigated through the loss of economic value or in response to a situation where vacant land has become more valuable than the land plus its existing structure. Based on American Housing Survey data, researchers have analyzed Components of Inventory Change (CINCH). CINCH data indicated that renter-occupied or vacant units were far more likely to be demolished than owner-occupied units; among renter-occupied and vacant units, single-family detached units were more likely to be demolished than multi-family units. Based on four recent years of statistical observations (1997-2001), a period which the author states reflects improvements in the data collection starting at that time, the average housing stock loss was computed at 0.37 percent per year. A removal rate of 0.37 percent of the housing stock annually can be assumed. The size of the housing stock in 2011, 2012, and 2013 via interpolation of housing stock estimates for 2011 and 2014 was determined. Applying the removal rate over the three years a total of 8 units are likely to be lost. Combining this figure with projected household increases, the total demand for housing units in the market would be expected to increase by 1477 between 2011 and 2014. As of 2011, 26.3% percent of the households in the defined market area are renters. It is projected to increase to 26.4% percent by 2016. Applying this tenure proportion, the net new demand for rental housing over the three-year period is estimated at 389 units. The current competitive supply of stabilized rental units in the defined market are includes 630 multi-family units. Of those units, 19 are calculated to be vacant due to a 5 percent vacancy rate. Typically, it is assumed that a 5.0 percent vacancy rate is required to keep a rental market relatively fluid. There must be some number of quality units vacant and available at any given time so that households seeking rental units can be accommodated and can have some choice among units. We have focused on the multi-family units in this component for a number of reasons. We know that the subsidized rental market is generally fully subscribed with waiting lists. The scattered single-family rental market is extremely fluid and cannot be relied upon to consistently serve renter households since the inventory can convert to homeownership very quickly. Given the marketplace of 1026 units, 51 vacancies would be required to arrive at a 5.0 percent vacancy rate. Subtracting the 19 existing vacant units from this number reveals an unmet demand for 32 additional rental units. There will be a total demand for 420 additional rental units in the primary market considering household trends, necessary unit replacement, and the preferred structural vacancy rate. Based upon the observed construction, Village at Odenton Station (235 units) is likely to open by mid-2012. Town Center at Arundel Preserve (242 units) has a strong chance of being operational by 2012. Planners also expect the 252-unit rental community to be constructed at the Odenton Gateway (Otto-Baldwin property). Incorporating the subject project, the total new rental supply through 2014 would thus be negative 201 units.

Data and analysis for this section is derived from The Destruction of Housing Capital: A Preliminary Exploration into Demoli tions and Disasters. ICF Consulting and Econometrica Inc. performed under the AHS Analytical Support Contract. November 30, 2 003.

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Subtracting the planned additions to the supply from total demand for new rental units it may be concluded that there is an excess supply of 201 units of rental housing in the defined market area between 2011 and 2014.

The derived excess supply for 201 units of rental housing suggests that an additional modestsized project could not be absorbed into the defined market area rental marketplace over the next three years. It is possible that this excess of supply would be accounted for by the BRAC demand easily due to the subjects site location and irregularities in the annual household growth data. Proposed development at the Village at Odenton Station will be constructed by early 2012 given past complications experienced by the project. If the Village at Odenton Station community was placed in service by 2011 as preliminarily proposed, the derivation of demand indicates that there may be a slight oversupply in the rental market. This apparent oversupply would be alleviated via slight shifts in the defined markets area homeownership patterns. Specifically, it is overly conservative to assume that the markets 2011 tenure rate (26.3 percent renter households and 73.7 percent homeowners) will be maintained. The high homeownership rates in the Anne Arundel County are likely to come down somewhat as the area continues its suburban evolution. Specifically, if the land prices are presumed to remain at their high, market will tend to build more units per square foot of land. Rental housing will be needed to accommodate workers in middle to high-income service jobs, for example. As an illustration of this point, if it were assumed that renters represented 40 percent of the net new demand for housing units between 2011 and 2014 (rather than 26.3 percent), the calculation fulfills the supply.

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C. Target Market
Similar to other real estate, location is a primary factor when selecting a temporary dwelling unit. Convenience of employment location, transportation, commute and other factors are particularly important when selecting an apartment. For those renters that are looking to maximize convenience and obtain affordability and comfort, apartment rental is probably the best option. Village at Odenton Station has a prime location across the street from the MARC Odenton Railway Station for commuters, and a walking distance away from the largest employer in the market area- Fort Meade. The prime location on its own can define the subject site as a luxury mixed-use complex. Convenient access to many major highways, public and private amenities, Fort Meade and the Odenton Railway Station make this location suitable for a wide range of existing and potential residents. Several grocery stores, restaurants, personal services, schools, hospitals and others are either a walk or a drive away and serving both residents and visitors. Due to the lack of competition in the defined market area for mid-rise luxury mixed use luxury apartment complexes, Village at Odenton Station will be the primary choice of residence for several target groups. The upcoming employment expansion in the defined market area due to BRAC is expected to influence subjects site greatly. Many potential residents are expected to be drawn from the relocation project. Given current insufficient job market, it is expected that many employees who would retain their current job position would follow it to Maryland. Such migration will bring numerous potential residents who will be looking for a higher end luxury mixed-use community living. Following household profiles can be expected to fulfill the Village at Odenton Station apartments. Single Young Professionals, Including in Roommate Arrangements. Households within this target market will include primarily early career professionals in their mid-20s to mid-30s with incomes near the countywide median income. Such households are typically not yet prepared to purchase a home, but have fairly high amounts of disposable income. Single young professionals tend to seek out a community that is somewhat prominent and which offers access to a range of amenities both on and off site. Singles would likely pursue one- or two-bedroom units, while roommates would likely prefer two- or three-bedroom floor plans. Young Couples Without Children. [Village at Odenton Station] would appeal to young married or unmarried couples for the same reasons it would appeal to single young professionals. Disposable income tends to be large with young couples, given the typical presence of two wage earners in these households. Young couples would presumably prefer two- or possibly three-bedroom units. Families with Young Children. The subject sites two- and three-bedroom units will be spacious enough to accommodate families with young children (headed by couples or single persons). As their children approach school age, these households would likely elect to purchase homes, thereby removing themselves from the rental market.

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D.

Unit Distribution and Derivation of Proposed Rent

1. Unit Distribution

As proposed, Village at Odenton Station will have 56 One Bedroom/ One bathroom units (24% of the total), 144 Two Bedroom/ Two Bathroom units (61% of the total) and 35 Thee Bedroom/ Two Bathroom units (35% of the total)- summing to an overall total of 235 apartments. Similar distribution can be found in the competitions numbers. Concord Park at Russett has a total of 335 units out of which 211 are Two Bedroom/ Two Bathroom units equaling to 62%. Similarly at the Field Stone Farm apartments, there are 111 Two Bedroom/ Two Bathroom units out of a total of 187 units equaling to 59%. Adding a variety to floor plans by adding such amenities as balconies and dens will widen a variety of the target groups. Also a variety among unit sizes will provide potential residents with options based on a family size. 2. Unit Size Proposed square footage will differ from the competition. One bedroom/ one bathroom units are larger (900 sq. ft) than other units in the defined market area and will have three various floor plans. Two bedroom/ two bathroom apartments are within the range of competition in the defined market area will range from 1,150 to 1,250 sq. ft and have four floor plan variations including units with balconies and dens. Three bedroom/ two bathroom units will range between 1,300 sq. ft and 1,400 sq. ft and will have two unit type variations to include a balcony. 3. Unit Features and Community Amenities As proposed all units are to include the following: nine-foot ceilings, walk- in closets, panel doors, open kitchens and ceramic tile entries and baths. Such appliances as microwave, dishwasher, self-cleaning oven, ice-maker, disposal and full size washer and dryer are standard. Some units in the mixed-use complex are to include the following: lofts, balconies, fireplaces and other amenities based on their location. Developed community will offer complement amenities including a clubhouse, party room, 24/7 fitness center, conference room, business center, cyber caf, lobby, small theater, outdoor courtyards, outdoor swimming pool and grill area. Security amenities will include controlled building and parking access and standard concierge services. 4. Rents

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E.

Absorption Estimate

The newest apartment complex built in the defined market area is the Lodge at Seven Oaks (2007). The vacancy rate of the multi-family housing complex is at .3% with only 1 unit available. Concord Park at Russett and Fieldstone Farm both were built in 2005 and maintain a vacancy rate of 7.2% and 1.1% accordingly. With such low vacancy rates in the defined market area, market study shows that the Village at Odenton Station should be absorbed relatively quickly with low vacancy rate. It is recommended to complete the project is two phases: first retail and second apartments. This will allow for quality advertisement prior to the completion of the project. First phase will also include preleasing of the office and residential spaces. Allocation of parking should also be included in the first phase of the project. Due to its desired location, the competitive sizes of proposed units and potential BRAC related residential growth, Village at Odenton Station will be a successful establishment of a luxury multi-family transitoriented community. In addition, high demand for higher quality complex due to BRAC will drive the absorption at a moderate to high pace. A three month preleasing period could result in a 95% absorption rate with 223 units occupied and most of the retail spaces leased. Carefully targeted retail leases will also add to the amenities of the subjects site. An onsite grocery store, bank, dry cleaning, restaurants and other small businesses will draw both resident and visitors to walk the square at the Village at Odenton Station.

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