Somewhere Over the Rainbow

1
Somewhere Over the Rainbow 2008 Arlington Real
Estate Showcase
2
Dorothy Now which way do we go? Scarecrow
Pardon me, this way is a very nice way.
Scarecrow points both ways Of course, some
people do go both ways.
- Conversation on the economy
3
At Place EmploymentArlington
Source Virginia Employment Commission
4
Annual Job ChangeWashington MSA
Thousands
Source BLS Establishment Survey
5
(No Transcript)
6
Just because you own half the town doesn't mean
that you have the power to run the rest of us.
- Auntie Em Gale (to BRAC Commission)
7
(No Transcript)
8
(No Transcript)
9
(No Transcript)
10
Toto, I've got a feeling we're not in Kansas
anymore. -Dorothy
11
(No Transcript)
12
(No Transcript)
13
(No Transcript)
14
(No Transcript)
15
(No Transcript)
16
(No Transcript)
17
(No Transcript)
18
(No Transcript)
19
(No Transcript)
20
Permit Improvements

• Tenant permits can now be achieved on a 24-hour
  turn-around basis for single floors. This
  fast-track system has been in place since
  November on a trial basis but is now available
  for all but first floor or penthouse spaces.
• ISD will be moving into their new space early
  next year and will be able to substantially
  reduce processing time for new construction
  permits.

21
(No Transcript)
22
The Office Market

• Some price moderation rents will stabilize
  vacancy rates will increase slightly
• Fewer major portfolio sales less equity chasing
  product
• General weakening in demand not sure GMUs
  projection of 37,000 new jobs will hold
• Arlington market stronger than suburbs
• Crystal City still recovering from PTO USAir,
  now faced with BRAC
• Rosslyn rents will break new ground major
  projects are still likely in 2008/2009

23
National Trend
24
There's no place like home! -Dorothy
25
Mortgage Foreclosure Ratesby County or City,
March 27, 2008
Per 10,000 Housing Units
26
(No Transcript)
27
Condo Sales Trends, January 2004 to 2008 Northern
Virginia
Year-to-Year Change
Source Northern Virginia Association of Realtors
28
(No Transcript)
29
(No Transcript)
30
(No Transcript)
31
The Residential Market

• Prices have held, although sales are lighter
• New MF product delivering has done reasonably
  well, some conversions
• Expect some new construction to proceed in the
  Jefferson Davis Corridor
• Any increase in interest rates will have a
  serious negative impact on sales prices,
  especially in the condo market

32
We must be over the rainbow! - Dorothy
33
(No Transcript)
34
(No Transcript)
35
Visitor Services Pilots

• Visitor Services staff is now taking their
  services to the streets in Crystal City as a
  pilot project of AED and the Crystal City BID.
• AED is also piloting a new visitor information
  kiosk near the new Waterview complex in Rosslyn.

36
The Hotel Market

• Fuel prices leading to increased airfares will
  significantly affect travel - the first item to
  be reduced in corporate and consumer budgets in a
  softening market
• Arlington will likely see three new hotels break
  ground this year in Shirlington and Crystal City
  with CHP under construction

37
(No Transcript)
38
(No Transcript)
39
The Retail Market

• Arlington has added 431,170 square feet of new
  retail space in the past three years
• Some retail vacancies in new space exist in the
  Metro Corridors as absorption has been slow
• Higher credit card rates and tightening consumer
  credit will strongly impact retail sales
• Retail demand in Crystal City will actually
  decline during the BRAC transition period

40
Cumulative Assessment Growth by Property Type,
CY 2000 - CY2008
41
Comparative Tax Burden Residential vs.
Commercial Tax Base
42
Arlingtons Fiscal Condition

• With only minor decreases in residential
  assessments and strong growth in the commercial
  sectors, the real estate tax rate increased only
  slightly and is sustainable
• Arlington will remain competitive in the office
  market even with new tax districts for
  transportation and storm water
• Growth of other tax revenues will slow e.g. sales
  tax, meals tax transient occupancy
• Arlingtons AAA bond rating was affirmed in May
  by all three rating agencies

43
I don't know... But some people without brains do
an awful lot of talking... don't they? -Scarecrow
44
www.arlingtonvirginiausa.com