Tell us about your specialty practice area and what it means?
My specialty is generally urban planning. Urban planning, or land use planning, is a broad subject area. Such that there are many specialties within planning that are both widely and not widely known. At Valbridge Property Advisors my principal role is commercial market analysis. However, I also provide planning services, most typically to support zoning special exceptions and site feasibility studies, as well as economic development studies, fiscal impact analysis, and site selection services.
What type of clients/projects do you work with or on most in your specialty?
Most of my clients are developers of affordable housing. Applications for LIHTC require a market study nationwide. Each state has different standards, but generally, the concepts are the same. We also perform similar studies for HUD financing. Other key clients are convenience store companies like 7-11 and Royal Farms, and developers for similar chains like Wawa, who find they are required to complete needs analyses for proposed gas stations in many jurisdictions, based on zoning requirements. For those clients, I produce a needs analysis report and then provide expert testimony at hearings for approvals. Developers also hire us to do Fiscal Impact Analysis that they use to both secure zoning modifications and also to attract investment.
Tax Increment Financing (TIF) or Special Taxing Districts (STD) are specialty areas that we serve.
We are typically engaged by the developer in concert with the municipal entity, through a third-party bonding or underwriting agency, like Municap or Stifel. For these projects, we provide a combined appraisal and market analysis (if hired for both) that tests the market for the buildout term of the development and lifetime of the bonding. These are extensive studies that measure every development in the marketplace and assess the absorption assumptions.
I try to capture at least one municipal contract every year, typically in the realm of economic development studies, housing studies, or small area planning. These are very competitive and require teaming with other firms to put forth a substantial effort and product. I am presently teamed with the University of Baltimore Jacob France Institute on an open-end contract with Montgomery County, MD for economic studies. We have also teamed on other projects for Howard County and Baltimore County, MD.
One product line we try to promote is what we call “product placement,” wherein a developer or landowner engages us to help them figure out what they should do with their property – use type, density, sizes, rents, etc.
What are some interesting or unique projects you have worked on regarding your specialty practice area?
Hotel Site Analysis: The Town of Bel Air, county seat of Harford County, MD, has no lodging opportunities at present. Traditional hotel site selection has been at highway interchanges in suburban markets. The town does have a vibrant restaurant and entertainment streetscape as well as a business climate. Historically they have commissioned third-party economic studies for Main Street and the town in general, which all tacitly concluded there was insufficient demand for hotel keys in the town. We leveraged personal relationships with the town Manager and Economic Development director to take a different approach and determine what type of hotel/lodging would fit in the town (among others in the county) and then also to determine where said lodging could be well located. We found there are new boutique-style lodging options under major brand flags that will fit well and we tested a variety of sites, developing a scoring tool for various factors including ownership, zoning, access, visibility, compatibility, and professional opinion. A report was generated for the town leaders to consider for the purposes of a deeper study, negotiations with property owners, and also to attract vendors.
Somerset – Residences at 420 N. Aisquith: This project is a core product of our office, performing market analysis for Low Income Housing Tax Credit (LIHTC) affordable housing. In this case, the community is a redevelopment of a significant area of East Baltimore known as the Perkins Somerset Old Town Transformation Plan, which spans the area from Johns Hopkins Hospital to Fells Point to Little Italy. Perkins Homes is a public housing community dating to the 1940s and the Somerset/Old Town Mall site was also public housing at one time but razed for redevelopment a decade ago. The development team hired Valbridge to perform several market studies on phases of development of Somerset, which is under construction as a state-of-the-art mixed-use property with structured parking, ground floor retail, and affordable apartments. We performed an analysis to test the market for demand and supply of affordable housing as well as quantified the pool of qualified households and projected capture, penetration, and absorption. This development is being developed in concert with Perkins Homes nearby, where current residents are being transferred to this site and then given a choice on where to live when Perkins is redeveloped. The project also includes a new elementary school.
How does the client benefit from having this specialty team working on an appraisal project? What kinds of things can be missed if you don’t have this specialty expertise?
Clients engage my services to ensure that the concepts they want to employ in development will be successful and help to prove to lenders and investors that the proposed risk is sound.
Although many developers do a “back of the napkin” analysis on their own, their investors want to see independent analysis. In many cases, the developments will not be funded or approved without market analysis.
Additionally, many governments require a market analysis. Simply put, we are part of the critical path to development, much like an architect or engineer.
On the other hand, if a developer is unsure of the best path forward, we have the unique ability to model and test the market and different land uses to make recommendations for future development.
What geographical area do you cover?
From home I cover Maryland, southeastern PA, northern VA, Delaware, and DC. However, my specialty and expertise can be utilized virtually anywhere, and I have coordinated projects in other states as well. The affordable housing studies are state-regulated, and some states require pre-approval of the market analyst, which can be a limiting factor, or at least another hurdle to jump. The state of New Jersey has its own planning certification that limits my roles in that state as well.
Generally, I work with other offices to coordinate local reconnaissance and legwork to develop studies in foreign locations.
Anything else we need to know?
We love the challenge of the unknown or uncharted. The most fun projects are those we have not done before or the ones with the most confusing sets of parameters. Can land next to a landfill be developed? How do we convert a historic office building into a hotel and apartments?
How many hotel rooms of what type can be absorbed into a community? How to convert an upscale hotel and conference center into a mixed-use apartment building? What is the best site for a TopGolf style entertainment venue?
Since I have a long background in planning and site design, I can work with the developer, lawyers, engineers, and architects to create a viable site use and also justify the components of the site with market insights.
Appraisers, engineers, architects, landscape architects all have a unique perspective on development, that complements each other (when they work together). Generally, appraisers are very late in the development timeline, after a site has been approved for development or even developed, to help with financing and tax appeals. In my role, I can be involved at the concept stage of development and help to shape the site and community and further the vision of the developer, landowner, and municipality. The best place in the timeline for this market analyst is before the site has been engineered so that I can help define the most viable use and also guide the site design to make that use be the most viable.