Item 26 - Public Hearing Regarding Bristol Project

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ta www.FinanceDTA.com SECTION VI RETAIL MARKET RESEARCH Buildings are rated through an examination of the design and construction of a building. For example, the type of exterior materials, the quantity and quality of windows and the lobby finishes present in office buildings; the ceiling height and number of loading docks in warehouses and distribution centers; the entrances and parking areas for retail properties; and the types of finishes offered in the units of multi family buildings. These examples, as well as many other factors all have an effect on a building's rating. The multitude and diversity of decisions that are made when designing, constructing, renovating and managing a building creates a built environment in which no building is identical to another, even when of the same property type. However, CoStar tracks the entire range of buildings, from skyscrapers in large cities to single story buildings in smaller markets." At the time of this Report, the draft Specific Plan did not contain a product mix for the various retail sites, except that the Specific Plan discusses a space large enough for a full-size grocery store. We assumed the 350,000 SF of retail space will target the needs of those living in the proposed urban village, such as specialty retail, dry cleaners, ice cream stores, liquor stores, coffee shops, gyms, and banks. A specialty retailer focuses on selling a specific product category or product line rather than offering general consumer goods. We also believe that shoppers will be attracted to the new retail space due to the ease of access to and from the proposed underground parking complex. We have assumed the retail venues will be designed to achieve a five-star rating. As shown in Figure 13, a five-star rating earns a lower cap rate than a lower rating. Based upon this, DTA has assumed a cap rate of 4.75% for general retail and 4.50% for grocery store(s). Grocery stores in traditional neighborhood commercial centers generally enjoy lower rental rates than other tenants, primarily since a grocery store will generate significant traffic that benefits other shops. However, since there will be more than 6,750 residents living within the community, it is not necessary for a grocery store to generate significant additional traffic since there will be foot traffic from the individuals residing within the Specific Plan area. DTA interviewed Al Marasca, the retired president of Ralphs, one of the largest grocery chains in Southern California, and he confirmed that based upon company policies, Ralphs would be interested in entering this market. In general, their philosophy was that if there were an additional 5,000 residents within a defined shopping area, his former company would invest in the community. He also acknowledged that the addition of 6,750 residents within this urban village could capture new residents that would provide a strong incentive for his former company to open a new facility within the Specific Plan area. Related Bristol at 3600 South Bristol Street Draft Market Study Report Exhibit 10 September 2023 27