The HUB Development Business Plan by DEV.fest (FINAL)

Development Business Planprovided by DEV.fest

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00 Table of Contents

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01 EXECUTIVE SUMMARY

What is “the hub?” Why create the hub? Wanna invest? Site Plan

02 PROPERTY DESCRIPTION

Location Project Objectives Project Amenities Urban Lifestyle Proposed Uses Current Zoning

03 DEAL ECONOMICS

Construction Budget Combined 10-Year Cash Flow Multi-Family Economics

04 FEASIBILITY STUDY

Population Growth Estimates in Davis County The Greater Wasatch Vision for 2040 Professional Perspectives Financing Parking Philosophy Davis County Economic Outlook Multi-Family Feasibility Retail Feasibility Office Feasibility

05 EXHIBITS

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01 Executive SummaryWHAT IS “THE HUB?”

“The HUB,” a mixed-use transit-oriented development, is the community of choice connecting you to your network. It is located adjacent to Layton City’s new transportation hub - where I-15, Layton Parkway, and Frontrunner converge (a.k.a. the center of the universe). The HUB’s proximity to Layton’s historic downtown and the future IHC community hospital, along with its quick access to the Wasatch Front, makes The HUB a very attractive development. These connections create the opportunity of a walkable master planned mixed-use development. The HUB creates an urban center for residents and neighbors through open space, recreation, and a vibrant mix of retail and commercial services.

WHY CREATE THE HUB?

A trifecta of shadow anchors exists around our site which has created a prime development opportunity.

WANNA INVEST?

The Hub is a rewarding development whose location will dictate high quality tenants and healthy profits for years to come. Dev.Fest is excited to deliver an exciting mixed-use, transit-oriented development. Stay connected.

• Unlevered IRR of 7.67%• Levered IRR of 15.02%• 10% Equity Partner needed for $3.16M• 83% Debt Financing• Stabilized NOI of $2.16M

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• Community Hospital• Destination location• Activity generator• Mutual development

benefit

• Already Zoned MU-TOD• Fulfills Layton City’s TOD

vision• Efficient tax base created by

greater density

• Need land for FrontRunner patron parking

• MU-TOD creates higher ridership

• Increases traffic counts to TOD

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02 Property DescriptionLOCATION

The HUB is a 20-acre mixed-use, transit-oriented development in Layton, Utah. The site is located within Layton City’s Downtown Plan and is described as the “West Field Area.” The site is west of the Layton FrontRunner station, south of Kay’s Creek, and bordered on the west by an existing neighborhood. The current owner is IHC Health Services Inc. c/o James F. Wood. Our development plan is focused on this MU-TOD 20 acre parcel.

PROJECT OBJECTIVES

1. Create a sense of community2. Provide convenient access to transportation3. Improve quality of life with health services and active lifestyle amenities4. Provide a return to our investors

PROJECT AMENITIES

• Live/work/shop amenities• Open space• Utopia Fiber Optic Internet Connection• Community Hospital• Close proximity to transportation

corridors• Kay’s Creek Trail and regional trail system• Close proximity to the freeway• FrontRunner access and parking• Close to Layton’s up and coming

downtown

The project has a healthy mix of residential, retail, office, and recreational uses. In addition to the internal project amenities, there are several neighborhood parks, local and regional trails, and public transit that add value to the development. Layton City plans to add a trail along Kay’s Creek and construct

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1/4 MILE RADIUS5-MINUTE WALK

1/2 MILE RADIUS10-MINUTE WALK

FUTUREGROCERY

STORE

ELEMENTARYSCHOOL

FUTURECOMMUNITY

HOSPITAL

DEVELOPMENT SITE:ZONED: MU-TOD

FRONTRUNNERSTATION

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S a l t L a k e C i t yS a l t L a k e C i t y

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O g d e nO g d e n

L a y t o nL a y t o n

R o yR o y

B o u n t i f u lB o u n t i f u l

K a y s v i l l eK a y s v i l l e

P l a i n C i t yP l a i n C i t y

C l i n t o nC l i n t o n

W e s t P o i n tW e s t P o i n t

S y r a c u s eS y r a c u s e

F a r m i n g t o nF a r m i n g t o n

W e s t H a v e nW e s t H a v e n

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F a r r W e s tF a r r W e s tN o r t h O g d e nN o r t h O g d e n

N o r t h S a l t L a k eN o r t h S a l t L a k e

C e n t e r v i l l eC e n t e r v i l l e

R i v e r d a l eR i v e r d a l e

M o r g a nM o r g a n

P l e a s a n t V i e wP l e a s a n t V i e w

S o u t h W e b e rS o u t h W e b e r

M a r r i o t t - S l a t e r v i l l eM a r r i o t t - S l a t e r v i l l e

W o o d s C r o s sW o o d s C r o s s

S o u t h O g d e nS o u t h O g d e n

H a r r i s v i l l eH a r r i s v i l l e

S u n s e tS u n s e t

W e s t B o u n t i f u lW e s t B o u n t i f u l

F r u i t H e i g h t sF r u i t H e i g h t s

U i n t a hU i n t a h

W a s h i n g t o n T e r r a c eW a s h i n g t o n T e r r a c e

H u n t s v i l l eH u n t s v i l l e

FrontRunner North0 5 102.5Miles

Existing LRT

Pleasant View

Woods Cross

Salt Lake Central

Ogden

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Clearfield

Layton

Farmington

Weber County

Davis County

Davis County

Salt Lake C

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Morgan County

H A F BH A F B

FrontRunner South(under construction)

Airport LRT(under construction)

a tunnel under the existing rail line linking the trail system and neighborhood to the UTA FrontRunner station. On the south side of Layton Parkway, IHC is planning to build a community hospital that will provide medical services to the surrounding community. Not only does The HUB have great access to the transportation network of the Wasatch Front, but it will also deliver its residents and businesses access to the world via a fiber optic network. Layton City is one of 13 cities in Utah to provide its citizens with internet access to Utopia’s Fiber Optic Network. The HUB is where people stay connected to life both virtually and physically.

Given its numerous and varied amenities, The HUB provides its residents with a greater quality of life. Picture waking up and walking to the local fitness center or taking a peaceful walk along Kay’s Creek trail to several nearby parks. Not your cup of tea? Walk over to the local café for your favorite brew and surf the web via Utopia’s fiber optic network. Found out you need to go into work? No problem. Jump on the nearby commuter rail and arrive downtown in no time. Long day at work? Take your family over to the local restaurant and enjoy dessert in the park. Need to get your kids out of the house? Take them on a bike ride along Kay’s creek trail to the nearby library or over to the community club house. The HUB keeps your life running smoothly.

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UTA PARKING

MEDICAL OFFICEBUILDINGS

HUB 1

HUB 2

HUB 3

HOTEL PAD

CLUBHOUSE

PARK

RESTAURANTPAD

RETAILPAD

IHC ADMINISTRATIONBUILDINGS

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URBAN LIFESTYLE

The HUB will provide its residents with an urban lifestyle. The project contributes to Layton’s overall downtown plan of creating a “District,” which is a place of distinguishing character. The development will attract more intense use by connecting walkable community places, open spaces, and providing aesthetically pleasing architecture.

The “American Dream” is shifting. Arthur C. Nelson, PH.D, FAICP, University of Utah, called it “A Decade of Changing Housing Demand.” The 40-year career, house in the suburbs, cheap gas, and all homes appreciate attitude has evolved. What is the “New American Dream?” Connections. Connections from home to friends, nature, recreation and technology. “Baby Boomers and Echo Boomers are looking for urban amenities.” The Ivory Institute, 2011. Convenience, connectivity, walk-ability, and efficiency are now associated with current housing demands.

PROPOSED USES

The proposed use is congruent with the current zoning. Our site plan will consist of mixed-use, transit-oriented development with residential, office, and retail. Layton City and UTA have proposed either a tunnel or sky bridge that will allow easy access to the FrontRunner station.

CURRENT ZONING

Mixed-Use, Transit-Oriented Development (MU-TOD). The land is currently zoned in accordance with our proposed use; therefore, no zoning changes will be required. “The purpose of the Transit-Oriented Development (TOD) Zone is to provide locations for developments near

transit centers that allow for concentrations of commercial, retail, and multiple-family residential uses that can take advantage of public transportation facilities. This zone also uses the demand for higher density development generated by mixed-use design to help accomplish Layton’s land preservation goals through the voluntary use of transfer of development rights.” Layton City Municipal Code 19.26 Mixed-Use/Transit Oriented Development (TOD)Zone, 19.26.010-Purpose and intent (July 8,2009).AA

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03 Deal Economics The HUB will be a community success and a financial one as well. Based upon the realistic assumptions given in the pro forma, the leveraged IRR for the project is 15% and unleveraged is 7.6%. Because of these attractive returns Dev.fest’s excitement for The HUB isn’t limited to the fee we will earn managing the project. We also want to participate in the cash flows of this project and will thus contribute our development fee as deferred equity. However this leaves another $3.1M that is required in additional equity. According to Stan Castleton, CEO, DDRM Development, it is easier to raise 100 million than 100 thousand dollars. Projects like The HUB illustrate this principle. An economist from AEW has shown that with today’s capital markets, institutional money can be crucial for large scale projects. Additionally, institutional money managers demand class A investments. We are confident that the appealing returns will attract the necessary joint venture partner(s).

CONSTRUCTION BUDGET

COMBINED 10-YEAR CASH FLOW

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

POTENTIAL GROSS REVENUEGross Income - - 2,057,344 4,239,998 4,412,743 4,592,525 4,779,631 4,974,361 5,177,024 5,387,944 5,607,457

Vacancy - - (2,070,570) (3,184,585) (1,709,042) (386,435) (355,758) (385,336) (417,375) (452,076) (489,663) EFFECTIVE GROSS REVENUE - - (13,226) 1,055,414 2,703,701 4,206,089 4,423,873 4,589,024 4,759,649 4,935,867 5,117,794

TOTAL OPERATING EXPENSES - - (735,872) (1,516,566) (1,578,353) (1,642,657) (1,709,582) (1,779,233) (1,851,722) (1,927,164) (2,005,679)

NET OPERATING INCOME - - (749,099) (461,152) 1,125,348 2,563,432 2,714,291 2,809,791 2,907,928 3,008,704 3,112,114

OPERATING CASH FLOW - - (749,099) (461,152) 1,125,348 2,563,432 2,714,291 2,809,791 2,907,928 3,008,704 3,112,114

ACQUISITION AND RESIDUAL SALELand Acquisition Cost (6,241,277) - - - - - - - - - - Construction Cost - (19,498,807) (10,045,315) - - - - - - - -

Land Sale for UTA Parking Lot 1,289,351 Land Sale for Hotel 593,180 Land Sale for Office Building 1,128,889 Land Sale for Restaraunts 1,086,709 Land Sale for Retail 251,216 Sales Price 4,349,344 - - - - - - - - 43,832,597 - Selling Costs (2% + Commissions) (330,550) - - - - - - - - (3,331,277) -

Unlevered IRRCASH FLOW BEFORE DEBT (2,222,483) (19,498,807) (10,794,414) (461,152) 1,125,348 2,563,432 2,714,291 2,809,791 2,907,928 43,510,023 7.67%

FINANCINGLoan Funding 16,362,628 9,800,251 Debt Serv. Payments/Payoffs - - (588,093) (1,411,423) (1,411,423) (1,411,423) (1,411,423) (1,411,423) (1,411,423) (24,516,786) -

Levered IRRCASH FLOW AFTER DEBT (2,222,483) (3,136,179) (1,582,256) (1,872,575) (286,075) 1,152,009 1,302,868 1,398,368 1,496,505 18,993,238 15.02%Cash on Cash Return -141.1% -71.2% -84.3% -12.9% 51.8% 58.6% 62.9% 67.3% 854.6%

Acres Feet Price/SF Total PriceLand Purchase from IHC 15.92 693,475 9.00 6,241,277 Land Sale to UTA 2.52 109,732 11.75 1,289,351 Land Sale to Hotel Developer 1.07 46,524 12.75 593,180 Land to Office Building Developer 2.07 90,311 12.50 1,128,889 Land to Restaurants 1.35 58,741 18.50 1,086,709 Land to Retail Developer 0.36 15,701 16.00 251,216 Remaining Land for Dev.fest 8.91 1,891,933

LAND ALLOCATION AND PRICING

Total Costs Land Value Dev Fee Addit EquityMulti-Family 31,521,541 3,929,811 2,200,000 3,158,662

31,521,541 3,929,811 2,200,000 3,158,662

CONSTRUCTION BUDGETUSES OF FUNDS Acres Size (SF) PSF Project Costs Loan Equity

Land Cost Minus Proceeds from Sales 8.9 388,167 n/a 1,891,933 Land Improvements 8.9 388,167 5 2,037,878 Multi-Family 340,600 71 25,391,730 26,162,879 Developer Fee 7.0% 2,200,000 2,200,000

Building Costs 27,591,730 Building Costs Incl. Land 31,521,541 Initial Equity 2,200,000 Additional Equity Needed 3,158,662 Uses of Funds 31,521,541 26,162,879 5,358,662

SOURCES OF FUNDSTotal

Bank FundingMaximum Loan Amount 26,162,879 83.0%

JV PartnerAdditional Cash Equity 3,158,662 10.0%

DevFest FundingDeferred Equity 2,200,000 7.0%

Total Sources 31,521,541 100%

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MULTI-FAMILY ECONOMICS

Units Leasable SF Total SF Lease Rate Inc/Unit/Mo StabilizedStudios 10% 40 350 14,000 1.27 442.75 212,520 1 Bed - 1 Bath 20% 80 600 48,000 1.11 666.60 639,936 2 Bed - 1 Bath 25% 100 860 86,000 0.87 747.34 896,808 2 Bed - 2 Bath 30% 120 1,020 122,400 0.87 886.38 1,276,387 3 Bed - 2 Bath 15% 60 1,170 70,200 0.79 926.64 667,181

400 340,600 3,692,832

Gross income 3,692,832 Less: MF Vacancy & Turnover5.8% ($212,338)Effective Gross Income 3,480,494

Operating Expenses: Cost Per YearAdministrative 146 Per Unit 58,320 Management 3% 261 Per Unit 104,415 Advertising 211 Per Unit 84,240 Turnover Cost 156 Per Unit 62,280 Repairs and Maintenance 338 Per Unit 135,000 Payroll 935 Per Unit 374,040 Utilities 593 Per Unit 237,240 Taxes 529 Per Unit 211,680 Insurance 134 Per Unit 53,640

Total Operating Expenses 3,302 Per Unit (1,320,855)NET OPERATING INCOME 2,159,639

MULTI-FAMILY PROJECT ECONOMICS

Total NOI 2,159,639

Cap Rate ValueMulti-Family 6.35% 34,010,068

Total Value 34,010,068

INCOME APPROACH TO VALUE

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04 Feasibility Study The Park Lane Village in Farmington is a reasonable comparable based upon the type of programing and proposed uses. The HUB’s rents are in line with other similar products in the surrounding area. Construction costs are based upon current industry standards for the type of construction.

POPULATION GROWTH ESTIMATES IN DAVIS COUNTY

GREATER WASATCH VISION FOR 2040

Wasatch Front Regional Council and Mountainland Association of Governments:• Average household transit use in 2040 45%

higher than today.• Walkable community: new homes are

twice as likely as today’s homes to have convenient access to places to work, shop, play and learn.

• More vertical development, less sprawl: by 2040 there will be 40% more vertical development.

Vision 2040• Utah is among the fastest growing states in

the nation. • More than 900,000 growth-related

residential units will be constructed by 2040.

• Nearly 1.9 billion square feet of new and rebuilt space will be needed to accommodate the projected 2.9 million jobs we’ll have by 2040.

• The Wasatch Front has limited land available for development, and building roads to serve widely dispersed populations will become increasingly impractical and expensive.

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PROFESSIONAL PERSPECTIVES

“IHC hospitals tend to generate lots of activity and become a destination.”Tom Uriona, IHC, Corporate Real Estate Director, CRE, MAI, CCIM

We do lease property, out of necessity, at the Layton Station for overflow parking. This will be going away in the next few months as development starts where we currently have the temp lot. The preference would be to capitalize the land and improvement costs once and not being subject to a lease that could expire, increase or terminate. Ryan McFarland, Manager, UTA, Transit Economic Development

Trails along Kay’s Creek would provide additional means of pedestrian circulation connecting to a future trail system across the city. These new circulation routes will open this area to greater development opportunities. Kay’s Creek would be developed as a pedestrian-friendly zone fronted by urban amenities such as nearby mixed-use buildings. Wasatch Front TOD Study: Layton Downtown- Proposed Commuter Rail Station

FINANCING

We plan to use the HUD-221-D4 Construction/Perm loan program to finance our multi-family project. Loan structure: 42 Year loan with 2 years Interest only that transitions into a 40 Term. This is a 100% Non-recourse loan with a fixed interest rate of 4.25%. The loan amount is based off the lesser of LTC/LTV at 83% + 7% Development fee + 3% Contractor fee. This type of financing is typical for multi-family financing right now.

“Approximately 80 percent of all units proposed to be built are planning on obtaining HUD financing.”2012 Commercial Real Estate Symposium, by Kevin M. Hart, Vice President ARA, West Region

DEBT UNDERWRITINGTest #1 Multi-FamilyMaximum Loan to Value 83%Maximum Loan based on LTV 28,228,357

Test #2Minimum Debt Service Coverage Ratio 1.17Annual Debt Payment Supported by NOI 1,845,846 Monthly Debt Payment Supported by NOI 153,820 Debt Variables: Term / Amortization (years): !" 40 Rate: 4.25%Maximum Loan Based on Debt Service PV 35,473,547

Test #3Maximum Loan to Cost 83%Maximum Loan Based on on LTC 26,162,879

Maximum Loan Amount 26,162,879

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PARKING PHILOSOPHY

Redevelopment Agency of Salt Lake, CitiVenture Associates LLC.

DAVIS COUNTY ECONOMIC OUTLOOK

The economic outlook for Davis County shows signs of growth. Davis County posted a 4.5 percent increase in jobs over the last 12 months. The Standard Examiner reports that the county had a net gain of about 4,600 jobs from November 2010 to November 2011.Source: 2012 Commercial Real Estate Symposium, pg. 75

MULTI-FAMILY FEASIBILITY

Potential Home Buyers Are Becoming Renters: Many would-be first-time home buyers are staying in the rental market. In many cases they cannot qualify for a home loan, and/or they simply don’t want a mortgage.Source: 2012 Commercial Real Estate Symposium, Kevin Hart, Vice President, ARA, West Region, pg. 54

The number of households is expected to continue to expand, which in turn will add even more demand to the rental market.2012 Commercial Real Estate Symposium, Source: Apartment Realty Advisors

Transit Oriented Developments typically command 10% higher rents than comparable properties.Bruce Jones, Chief Legal Counsel of UTA, presentation to NAIOP chapter meeting

2010’s will be a decade of increased rental demand. Arthur C. Nelson, PH.D., FAICP, Metropolitan Research Center

Multi-‐Family Vacancy Absorption Lease Rates Cap RateAvg. Class A 5.75%-‐6.25% 1% per year $927 8.28%Source: ARA January 2012

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RETAIL FEASIBILITY

Retail was a strong performer for 2011. Vacancy rates are slightly higher than last year at this time but are down from six months ago. Larger anchored centers enjoy higher levels of occupancy with an average vacancy rate at 9.32 percent. Source: 2012 Commercial Real Estate Symposium: Davis County-Robert Lindsey, Cushman & Wakefield, Commerce, pg. 75

OFFICE FEASIBILITY

Office Vacancy Absorption Lease Rates Cap RateClass A 14.35% 175,000 sqft $14.56 8.72%Source: NAI West 2012. Office, Davis and Weber Counties Market Overview

Retail Vacancy Absorption Lease Rates Cap Rate9.08% -‐25000 $15.43 6.35%

Source: NAI West 2012. Retail, Davis and Weber Counties Market Overview

Davis County Units Under Construction

Ridgeview Ph II 50 North Salt LakeEaglegate Apatments 220 North Salt LakeParklane Village Ph I 325 Farmington

Total Units Under Cons: 595

Davis County Proposed 2011/2012 ConstructionLegacy Crossing 160 CentervilleTuscany Villas 40 LaytonKays Crossing 156 LaytonRenaissance 110 Woods CrossEastgate at Greyhawk 110 LaytonEaglegate Lofts 215 North Salt LakeTo Be Determined 160 Layton

Total Proposed Units: 951

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05 Exhibits

Introduction

Layton City, in collaboration with the area merchants, stakeholders, residents, the Utah Department of Transportation and an Advisory Committee, has moved forward to create a plan focused on the Old Downtown and Fort Lane areas. This document is based on a foundation of ideas and the vision that many people have given to the project over the years. For the purposes of this plan document, downtown Layton refers to the 280-acre study area described on the map below. This Plan document was generated from planning committee meetings, advisory committee meetings, text from the Downtown Revitalization Study (2001), Envision Utah’s TOD Guidelines (2002, the Layton City RDA Plan (2004) and various other studies affecting the downtown area.

The key organizing compass that has emerged to guide the development and redevelopment of downtown Layton is the vision of a “district”. While urban development issues are by nature rather complex, this complexity does not have to confuse participants, especially when there is a very clear goal: a district. A district is an area or place with a “distinguishing character”. In order to be successful, this Plan will rely on the leadership and skills of all those who have interests in the area and a desire to implement the strategies outlined in this Plan.

LAYTON DOWNTOWN PLAN

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Map 1: Downtown Study Area, 280 Acres

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BuildingThe Future We Want

The Greater Wasatch Vision for 2040The Greater Wasatch is one region, stretching from Weber County south to Utah County and from Tooele County east

to the Wasatch Back. We compete economically with other regions, comprise one job and housing market, and share

the same air and water. Where and how we shape tomorrow’s neighborhoods, communities, and economic centers

within our region will dramatically affect the quality of our lives, including how much time and money we spend getting

around, the quality of the air we breath, and the choices we have available to live, work, shop, and play.

General Land Use Legend

Residential

Industrial

Special Use District

Commercial

Green Space

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Wasatch CHO ICE f o r 20 4 0

NOTE: The Wasatch Choice for 2040 (May 2010) is a vision illustrating how growth

could unfold. The map’s purpose is to guide the development of our regional

transportation plan. The vision map reflects the Regional Growth Principles

adopted by the Wasatch Front Regional Council (WFRC) and the Mountainland

Association of Governments (MAG). The map is not a general plan and has no

regulatory authority. WFRC/MAG encourages cities and counties to consider the

growth principles and the vision map as local plans are updated in order to keep

people and goods moving, our communities livable, and cities prosperous for

generations to come.

Challenge and OpportunityUtah is among the fastest growing states in the nation. Growth brings both benefits

and challenges:

• Two-thirds of the buildings that will exist in 2040 have not yet been built.

• Total investment in new development will approach $700 billion.

• More than 900,000 growth-related residential units will be constructed by 2040.

About 180,000 existing dwellings will be replaced, rebuilt or renovated.

• Nearly 1.9 billion square feet of new and rebuilt space will be needed to

accommodate the projected 2.9 million jobs we’ll have by 2040.

• If we continue current patterns of development, municipalities will soon find

that growth-related expenses exceed expected revenues.

• The Wasatch Front has limited land available for development, and building

roads to serve widely dispersed populations will become increasingly

impractical and expensive.

Source: Arthur C. Nelson, Presidential Professor of City and Metropolitan Planning, University of Utah (2009)

Envision Utah’s 3% StrategyWhat if we respond to market demand and allow one-third of our future homes,

jobs, and stores in walkable town centers and villages…and link them with a world-

class transportation system?

This approach, which would accommodate one-third of projected growth on just

3% of our region’s developable land, encourages targeted investment to create

exceptional places, maximize efficiency, keep the cost of living in check, and reduce

growth pressure on critical lands. Market analysts suggest that one-third of Utahns

will want to live in walkable neighborhoods, close to school, church, the grocery

store, and other services (Sources: RCLCO, Wasatch Front Development Trends,

Nov. 2007; Nelson, 2009). Declining household size, increasing housing and energy

costs, and a growing desire to trade commute time for family, service, work, and

recreation time will drive this demand for walkable living. Currently, the supply of

these neighborhoods lags behind demand, increasing their cost and reducing choice.

The 3% Strategy responds to this consumer demand, while preserving traditional

single-family neighborhoods for the majority who prefer suburban living.

How?• Focus growth in economic centers and along major transportation corridors.

• Create mixed-use centers throughout the region.

• Target growth around transit stations.

• Encourage infill and redevelopment to revitalize declining parts of town.

• Preserve working farms, recreational areas and critical lands.

Growth Principles for a Bright FutureWhen we plan together—understanding the local and regional impacts of our land

use and transportation decisions—we create thriving urban environments, friendly

neighborhoods, and a prosperous region. Our nine regional growth principles,

developed through extensive public input and adopted by elected officials, provide a

common framework and regional benefits:

1. Efficient InfrastructureMaximizing existing infrastructure and building more compactly

and contiguously conserves green space, saves taxpayer dollars, and

makes high-quality, lower-cost services available to us all.

2. Regional Mobility (Transportation Choice)With a balanced muti-modal transportation system, more

transportation options, and jobs and services closer to home, we

reduce the growth in per capita vehicles miles traveled, we spend

less time in traffic and have more time for friends, family, and doing

what we enjoy.

3. Coordinated PlanningLocal land use planning and regional transportation investments

impact one another. Coordination makes our communities healthy

and connected and our region vibrant.

4. Housing ChoiceEncouraging a variety of housing options, especially near transit

and job centers, addresses market demand and makes living more

affordable for people in all life stages and incomes.

5. Health and SafetyWhen our streets are walkable, interconnected, and safe, we lead

healthier lives by walking and biking more and driving less. These

streets also provide efficient access for emergency services. Trails

and access to nature provide healthy recreational opportunities.

6. Regional EconomyStrategic transportation investments and land use decisions can

encourage business investment and help secure jobs closer to home,

so we can provide for our families and keep our dollars in our

region.

7. Regional CollaborationBroad involvement, information sharing, and mutual decision making

preserve common values and encourage progress toward shared

goals.

8. Sense of CommunityLand use and transportation decisions that preserve our local

heritage while valuing diversity enrich our community life, keeping

our towns and cities beautiful and neighborly.

9. EnvironmentProtecting and enhancing air and water quality as well as critical

and working lands also protects our health, safety, and quality of life

for our kids and grand kids. Conserving water, energy, open space,

and other resources is good for the environment and our economy.

Coordinated trail systems will enhance access to areas of natural

beauty and recreation.

Growth Principles Come to Life

We protect local food production.

We live close to where we work.

We enjoy access to recreation and nature.

We enjoy walkable, bikeable streets. Transit connects

communities to job centers.

We save billions on infrastructure costs.

We cultivate vibrant urban centers for living, work and play.

We provide more housing options and preserve existing neighborhoods.

Vision Highlights

CorridorsThe Wasatch Choice for 2040 is our renewed vision, and it

informs our transportation investments. This “Choice” points

the way forward, focusing growth in a variety of activity

centers across the region, many of which are coordinated

with our existing and near-term transportation system:

freeways, rail lines, rapid busways and key boulevards. While

these centers are coordinated with today’s transportation

system, tomorrow’s transportation investments will enhance

service to these centers, including our region’s special

districts – like the Salt Lake International Airport, the

University of Utah, and Brigham Young University.

Commuter Rail / TRAX Freeways

Realizing The Wasatch Choice for 2040Why WFRC and MAG Developed a VisionOur cities and counties do a terrific job planning for their individual futures, but there are no groups better able to facilitate discussion about the collective future of our metro area than the Wasatch Front Regional Council (WFRC) and the Mountainland Association of Governments (MAG)—groups led by mayors and county commissioners. WFRC and MAG have developed the long-range regional transportation plans for our metro area for decades. With a visioning process called Wasatch Choices 2040 (facilitated by Envision Utah), which began with a huge citizen involvement effort, and its renewal, The Wasatch Choice for 2040, WFRC and MAG are also thinking about how growth patterns can help us maintain our quality of life for the coming decades.

Cities Should Explore What’s on the MapWFRC and MAG encourage cities to explore a mix of activities and walkable development to reduce the need for long drives and provide residents with what they want out of life: more time for what matters most, affordability, family, improved health, and the pride of living in a world-class region.

Regional Role Convergence Local RoleImplementationCapacity

Comprehensive

Plan

ning

Public Input

Fore

cast

s/Modeling Coordination

CentersCenters are historical and emerging regional destinations

of economic activity. The vision suggests that these centers

should expand to provide ever-broadening choices for

residents to live, work, shop and play; a mix of all of these

activities is welcome. Centers should work with the long-

term market, helping provide opportunities to residents who want to live close

to work, walk or bike to shop, and have both great transit and road access –

desperately needed as our population ages, gas prices and congestion increase, and

housing prices inch upward.

Downtown Salt Lake City is the metropolitan center, serving as the hub of business and cultural activity in the region. It has the most intensive form of development

for both employment and housing, with high-rise development common in the central business district. It will continue to serve as the finance, commerce, government, retail, tourism, arts, and entertainment center for the region. The metropolitan center benefits from pedestrian friendly streetscapes and an urban style grid network. Downtown Salt Lake is the central hub for public transportation in the region. Auto access is prevalent with access to several major highways and thoroughfares.

Metropolitan Center Floor Area Ratio 1 to 1020 to 200 Housing units per acre

Urban Centers are the focus of commerce and local government services benefiting a market area of a few hundred thousand people. Urban

Centers will be served by high-capacity transit and major streets. They are characterized by two- to four-story employment and housing options.

Urban Center Floor Area Ratio 0.75 to 420 to 100 Housing units per acre

Town centers provide localized services to tens of thousands of people within a two to three mile radius. One- to three-

story buildings for employment and housing are characteristic. Town centers have a strong sense of community identity and are well served by transit and streets.

Town Center Floor Area Ratio 0.5 to 1.510 to 50 Housing units per acre

Station Communities are geographically small, high-intensity centers surrounding high capacity transit stations. Each helps

pedestrians and bicyclists access transit without a car. Station Communities vary in their land use: some feature employment, others focus on housing, and many will include a variety of shops and services.

Station Community Floor Area Ratio 0.5 to 2.520 to 100 Housing units per acre

Main Streets are a linear town center. Each has a traditional commercial identity but are on a community scale with a strong sense of the immediate neighborhood. Main streets prioritize pedestrian-friendly features, but also benefit from good auto access and often transit.

Main Street Community Floor Area Ratio 0.5 to 1.510 to 50 Housing units per acre

A Boulevard Community is a linear center coupled with a transit route. Unlike a Main Street, a Boulevard Community may not necessarily have a commercial identity, but may vary between housing, employment, and retail along any given stretch. Boulevard Communities create a positive sense of place for adjacent neighborhoods by ensuring that walking and bicycling are safe and comfortable even as traffic flow is maintained.

Boulevard Community Floor Area Ratio 0.35 to 1.00 to 50 Housing units per acre

GreenspaceGreenspace rings our valleys, connects our cities, and

provides space for civic and social functions in our towns

and neighborhoods. The Wasatch Choice for 2040 affirms that

our natural resources and working lands provide immense

benefits. We should safeguard them to preserve our regional

food system, protect our water quality, and maintain our recreational opportunities.

These lands also provide needed wildlife habitat, help to clean our air, and provide

relief from our urban environment. Even closer to home, our parklands and

greenways provide critical gathering spaces, recreational amenities, and connection

to the natural world.

Regional Greenways The Bonneville Shoreline Trail, the Jordan River Parkway, and the Provo River Parkway

Regional Connections

Links between greenways and major population centers

Green Context The Wasatch Mountains, the Oquirrh Mountains, the Great Salt Lake, and Utah Lake.

Vision Benefits:The Wasatch Choice for 2040 is a vision for how growth should unfold in our region.

When compared with a baseline (a projection of current trends in the future),

The Wasatch Choice for 2040 exhibits distinct benefits:

• Walkable communities: new homes are about twice as likely as today’s homes to

have convenient access to places to work, shop, play and learn.

• More growing up, less growing out: 40% more of our growth – compared to

recent trends -- fills-in existing communities and revitalizes business districts.

This enables more biking, shorter commutes, better air quality, and makes the

most of existing infrastructure.

• Real options for commuters: Average household transit use in 2040 could

be 45% higher than today, making commuting more affordable and providing

residents with more ways to get around.

• More open land stays open: Over the next 30 years, 24 fewer square miles

convert to buildings and streets enabling us to have more green infrastructure

and open land, with benefits ranging from more places for families to play, more

local farmer’s market food, better water quality, and more wildlife habitat.

Choice for 2040

HEBERVALLEY

MIDWAY

CHARLESTON DANIEL

HEBER

SNYDERVILLE BASIN

NEW PARK

SNYDERVILLE

PARK CITY

MORGANVALLEY

MOUNTAIN GREEN

ENTERPRISE

MORGAN

BOXELDER

BRIGHAM CITY

PERRY

MANTUA

Brigham City Airport

OGDENVALLEY

EDEN

LIBERTY

HUNTSVILLE

PINEVIEW RESERVOIR

STANSBURYPARK

GRANTSVILLE

Tooele Army Depot

TOOELE

TOOELEVALLEY

I-84

I-15

I-80

I-80

UINTA NATIONAL

FOREST

WEST

MOUNTAIN

LAKE

MOUNTAINS

MOUNT TIMPANOGOS

WILDERNESS AREA

LONE PEAK

WILDERNESS AREA

OQUIRRH

MOUNTAINS

TWIN PEAKS

WILDERNESS AREA

WASATCH-CACHE

NATIONAL FOREST

WASATCH-CACHE

NATIONAL FOREST

WASATCH-CACHE

NATIONAL FOREST

FARMINGTON BAY

WATER FOWL

MANAGEMENT AREA

ANTELOPE

ISLAND

UINTA NATIONAL

FOREST

PINEVIEW

RESERVOIR

PLEASANT VIEW

NORTHOGDEN

FARRWEST

PLAINCITY

OGDEN

WESTHAVEN

MARRIOTT-SLATERVILLE

ROY

SUNSET

WESTPOINT

CLEARFIELD

LAYTON

SOUTHWEBER

UINTAH

KAYSVILLE

FRUITHEIGHTS

CENTERVILLE

WESTBOUNTIFUL

WOODSCROSS

NORTHSALT LAKE

MURRAY

MIDVALE

COTTONWOODHEIGHTS

HOLLADAY

SANDY

DRAPER

BLUFFDALE

RIVERTON

HERRIMAN

SOUTH JORDAN

WEST JORDAN

Salt LakeCounty

DavisCounty

WeberCounty

HOOPER RIVERDALE

WEST VALLEY

CLINTON

SALT LAKE CITY

Hill Air Force Base

Weber StateUniversity

University of Utah

Salt LakeInternational Airport

MunicipalAirport

CorrectionsFacility

SYRACUSE

CEDARHILLS

ALPINE

HIGHLAND

AMERICANFORK

PLEASANTGROVE

SARATOGASPRINGS

OREM

LINDON

SPRINGVILLE

MAPELTON

SPANISHFORK

SALEM

PAYSON

GENOLA

GOSHEN

FARMINGTON

BOUNTIFUL

EAGLEMOUNTAIN

PROVO

VINEYARD

UtahCounty

SLCCMain Campus

SOUTHSALT LAKE

TAYLORSVILLE

HARRISVILLE

SOUTHOGDEN

WASHINGTONTERRACE

McKay-DeeHospital

IMCHospital

ALTA

CampWilliams

Utah ValleyUniversity

Brigham YoungUniversity

Provo MunicipalAirport

OgdenAirport

GREAT SALT LAKE

UTAH LAKE

SANTAQUIN

215

80

15

15

15

15

84

84

215

80

80

15

15

16

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LLaayyttoonn PPrrkkwwyy

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222255EE

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117755EE

770000 SS

2255EE

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442255 SS

222255WW

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112255EE

440055 SS

885500SS 997755 SS

110000WW

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GGrreeeennDDrr

777755 SS

993355 SS

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LLaarrssoonn LLnn

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880000 SS

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HHaawwtthhoorrnnee DDrr

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CC rroo

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rrcchh

SS tt

990000

SS

990000 SS

CChh uu

rr cchh

SS tt

Fort

L ane

Antelope Dr

InterchangeMain Street Area²

500 0 500250Feet

SILL, JOHN S

Medical Campus

Layton City Mixed Use/ Transit-Oriented Development

FrontRunner Station

MedicalOffice

Pedestrian Tunnel

Layton Parkway

I-15

Downtown Housing

Mixed Use/ Office

17

18

19

13

afford a parking structure, either the quality of the building must be reduced, the rents must go up, outside funds must be received, or the project just won’t go forward. To the extent that market conditions cap rents, too often the building quality suffers. Increasingly communities are realizing that the initial burden of structured parking is a major deterrent to quality infill development, and are assisting with that expense. The parking challenge is somewhat alleviated by proximity to transit, especially transit that serves many destinations, including jobs. Extensive research in many markets, and recently validated by the new parking standards from the ITE (Institute of Transportation Engineers, widely acknowledged as the industry experts and the organization that sets transportation and parking standards used by most municipalities) shows much lower driving and parking usage than in non-‐transit settings. Evidence shows that when transit is located in mixed-‐use districts, parking requirements drop from 20-‐50% or more, depending on the site. This is due to normal turnover in the course of a day, the mix of building uses, and the phenomenon that people self-‐select to live and work in jobs where they have an opportunity to use transit. Accordingly, TOD parking ratios can be much lower than conventional suburban standards. If the Hub District is to become a national model for this type of high-‐quality development, an aggressive TOD parking strategy is recommended.

Parking Spaces / 1,000 SF of Building Development Typical TOD Hub District Residential 2 ½-‐1 Self-‐parks ion site Retail 3-‐15 1 ½-‐3 1 ½-‐ Office/Institutional 5-‐6 1 ½-‐3 1 ½-‐

The lower ratios work well but will require careful parking structure management, a strategic mix of uses to create the right day and night balance, and metered on-‐street parking with enforcement.

7. Parking Structure Cost: Parking structures cost anywhere between $14,000-‐$20,000/space for above-‐grade structures depending on whether they are at least 50% open air, simple concrete construction, or enclosed and “wrapped” with first floor retail, or upper floor development as well. (Below grade

20

Zone Regulation ChartTable 5-2

LOT SIZE:

Minimum Lot Area (Sq ft)

Setbacks: Lots

PRINCIPAL USES:

Minimum Front Yard

Minimum Side Yard (Int)

Minimum Side Yard (Street)

Minimum Rear Yard

Distance between structures onsame lot, " , ..'" i"" '0 '

ACCESSORY l.JSES:

Minimum Front Yard

Minimum Side Yard (Int)

Minimum Side Yard (Street)

IRear Yard

ADJACENT TORESIDENTIAL ZONES

Reart

SideS

HEIGHT

Principal Uses (Max)

Accessory Uses (Max)

Minimum Allowable, '.

LOT COVERAGE

Maximum for all BuildinlZ,s

Minimum Landscaping

B-RP

20,000

20'

10'

20'

10'

o, .'

SO'

10'

l'

10'

20+

20+

100'

20'

10'

40%

2S%

P-B

10,000

2S'

I'

0'

0'

o,

30'

1'

0'

l'

20'+

3S'

3S'

10'

50%

10%

CP-I

20,000

20'

0'

20'

0'

o

"

25'

1'

0'

1'

20'+

40'

40'

10'

40%

10%

CP-2

20,000

20'

0'

20'

0'

o

25'

1'

0'

l'

20'+

40'

40'

10'

50%

10%

CP-3

20,000

0'

0'

0'

0'

o

2S'

l'

0'

l'

20'+

60'

40'

10'

60%

10%

C-H

20,000

0'

0'

0'

0'

o

2S'

l'

0'

1'

3S''-

20'+

60'

40'

10'

60%

10%

M-I

o

0'

20'

0'

o

25'

l'

0'

l'

3S'+

20'+

60'

60'

10'

60%

M-2

o

30'

0'

30'

0'

25'

l'

0'

l'

35'+

20'+

100'

100'

10'

60%

MU

o

0'

0'

0'

0'

0'

• 0'

100%

MU- '*TOD

o

0'

0'

0'

0'

0'

100%

VThose numbets whICh include a plus (+J sIgn after tlieihltiOicate. that fOYevery fo'Otof1'1eight above 35' on principal' uso'~ructutes;;and lI!jove 2'0' on accessory structure~ an atfditionar one foot (l'!j' of sef15ackWltl be required?

f\Comrnercial uses adjaeertrto muIdI5te familyresidetiHal devetoI5rnents'oftwo (2)'$.tories onfiote may reduce the rear yard~setbaCk to a miniftiUlfl{jrzO'7 '

3 Each lot or parcel in the M-I zone shall have a front yard of not less than IS', In addition, any building having a height greaterthan twenty feet (20') shall have an additional foot offront yard for every foot of height above twenty feet (20').

21

3

Investment Utah Market Overview

NAI WEST Year End Report 2011© NAI WEST 2012. All Rights Reserved

Industrial InvestmentIndustrial activity increased 67% for the year with sales volume showing a positive 53% gain over 2010 numbers. Cap rates strengthened in most industrial sectors but vary widely depending on product type, length of lease and financial credit. Class A cap rates at 7.69% are at or near historic levels. The total sales volume reflects a severely supply constrained marketplace.

Multifamily InvestmentThe multifamily sector was the star performer for the year despite a scarcity of product. Activity remained the same as 2010 but the sales volume surged 128% for the year. Institutional sales accounted for more than half the total volume at cap rates generally below 6%. Experts believe the rental rates will steadily increase for at least two years until new product is added and the markets return to a more historical norm. The increased rental growth projections are signs that we are still faced with an anemic housing sector and perhaps a demographic shift away from home ownership. Demand will remain high for just about all product types. Large, class A and B product will command lower cap rates than the smaller 20-100 unit complexes.

Office InvestmentThe number of office investment transactions completed in 2011 rebounded sharply, up 64% with a percentage gain in total volume of 281% year over year. The sales figures were buoyed by an unusual number of large transactions. Office capitalization rates showed the disparity in product types with class A rates nearing 7% while the entire sector showed an overall average of 8.72%. Class A office fundamentals continued to improve, while B and C product saw little improvement with most sales valued well below replacement costs.

Retail InvestmentRetail sales volume increased 55.28% over 2010 thanks to a number of large shopping center transactions and numerous single credit tenant transactions. The majority of these sales were in the $1,000,000 to $2,000,000 range purchased with cash or favorable financing. Cap rates have continued to strengthen as competition for solid quality retail investments has driven pricing up.

8.00%

9.00%

10.00%

5.00%

6.00%

7.00%

Average Cap Rates

2007 2008 2009 2010 2011

Industrial 7.60% 7.89% 8.54% 8.38% 7.97%

Multifamily 6.17% 6.62% 7.63% 6.89% 6.35%

Office 8.11% 8.19% 8.43% 8.63% 8.72%

Retail 7.61% 7.85% 9.05% 8.67% 8.28%

22

19NAI WEST Year End Report 2011© NAI WEST 2012. All Rights Reserved

15.95%

15.50%

16.00%

16.50%

17.00%

13.99%

12.82%

14.39% 14.38% 14.35%

12.00%

12.50%

13.00%

13.50%

14.00%

14.50%

2006 2007 2008 2009 2010 2011

Vacancy Rate

15.00%50,000

100,000

150,000

200,000

250,000

(250,000)

(200,000)

(150,000)

(100,000)

(50,000)

‐

Net Absorption

Q1 2

01

0

Q2 2

01

0

Q3 2

01

0

Q4 2

01

0

Q1 2

01

1

Q2 2

01

1

Q3 2

01

1

Q4 2

01

1

$15.00

$17.00

$19.00

$21.00

$23.00

$5.00

$7.00

$9.00

$11.00

$13.00

2006 2007 2008 2009 2010 2011

Overall A B C

Actual Average Lease Rates (FS)

$105.00

$125.00

$145.00

$165.00

$185.00

$5.00

$25.00

$45.00

$65.00

$85.00

2006 2007 2008 2009 2010 2011

Overall A B C

Actual Average Sales Price PSF

50

60

70

80

90

0

10

20

30

40

2006 2007 2008 2009 2010 2011

Overall A B C

Number of Transactions (Lease & Sale)

2011 Stats by SF class

Product Type Average Lease Rates # of Deals Leased SF Average Sale Price PSF # of Deals Sold SF

Class A $16.54 10 26,412 $- 0 -

Class B $14.76 48 159,874 $100.76 10 59,143

Class C $11.11 10 17,182 $41.48 3 70,400

Property Name Buyer/Tenant Sf Type City Class

455 East 25th Street 455 25th Street LLC 57,556 sale Ogden C

Ogden City Plaza- Lot 1 TPUSA, Inc. 47,300 renewal Ogden B

Corporate Headquarters South Citicorp North America, Inc. 22,258 lease Roy B

CCI Building Weber State University 14,000 sale Clearfield B

Wasatch Building Main Street Investment, LLC 12,448 sale Bountiful B

Notable Transactions

Office Davis and Weber Counties Market Overview

* All lease rates are quoted as full service and are based upon completed lease, sublease and renewal transactions.

Quick Stats

2011 2010 Change

Vacancy 14.35% -0.03%

# of Leases 68 7.94%

Actual Lease Rates $14.56 -5.75%

Leased SF 203,468 10.80%

# of Sales 13 -7.14%

Actual Sales $PSF $87.08 -10.37%

Sold SF 129,543 -15.88%

23

29NAI WEST Year End Report 2011© NAI WEST 2012. All Rights Reserved

RetailDavis and Weber Counties Market Overview

9.34%

9.67%

8.94%

9.08%9.00%

9.50%

10.00%

7.67%

7.00%

7.50%

8.00%

8.50%

Direct Vacancy

20

07

20

08

20

09

20

10

20

11

80

100

120

0

20

40

60

Number of Transactions Lease & Sale

2008 2009 2010 2011

0.33% 0.48%0.63%0.48% 0.29%

0.34%

8.50%

9.00%

9.50%

10.00%

10.50%

8.94% 8.96% 9.08%

6.00%

6.50%

7.00%

7.50%

8.00%

Vacancy Overview

Q4 2010 Q2 2011 Q4 2011

Direct Vacancy Occupied Availability Sublease Availability

$18.42

$16.02

$17.00

$18.00

$19.00

$15.02 $15.32 $15.19

$12.00

$13.00

$14.00

$15.00

Actual Average Lease Rates (NNN)

$15.00$15.43

2008

2007

2006

2009

2010

2011

80,000

100,000

120,000

140,000

160,000

(60,000)

(40,000)

(20,000)

‐

20,000

40,000

Net Absorption

60,000

Q3

20

10

Q4

20

10

Q1

20

11

Q2

20

11

Q3

20

11

Q4

20

11

$152.77

$143.13

$161.52

$153.16$150.00

$160.00

$170.00

$124.05 $122.04

$100.00

$110.00

$120.00

$130.00

$140.00

2006

2007

2008

2009

2010

2011

Actual Average Sales Price PSF

2011 Stats by SF increment

SF Increments Lease Rate # of Deals Leased SF Sales $PSF # of Deals Sold SF

0 - 4,999 SF $18.15 66 120,678 $191.49 9 23,287

5,000 - 9,999 SF $11.93 12 80,216 $55.56 1 6,750

10,000 - 19,999 SF $14.20 5 56,534 0 -

20,000 - 39,999 SF $10.19 2 43,789 $90.32 1 25,466

40,000+ SF $6.41 1 40,295 1 57,556

Property Name Buyer/Tenant Deal Type City SF

Gateway Crossing Confidential Investment Sale Bountiful 198,000

El Toro Building 455 25TH STREET LLC sale Ogden 57,556

Cal Ranch CAL RANCH STORES lease Layton 40,295

Layton Crossing South Petsmart lease Layton 22,736

The Commons at Ogden Petsmart lease Ogden 12,259

Notable TransactionsQuick Stats

2011 vs 2010 Change

Vacancy 9.08% 0.14%

# of Leases 86 -10.42%

Actual Lease Rates $15.43 1.61%

Leased SF 341,512 39.49%

# of Sales 12 -14.29%

Actual Sales $PSF $153.16 -5.18%

Sold SF 113,059 13.56%

24

Concessions No Concessions

Rental Rate

Vacancy

0

2

4

6

8

10

500

600

700

800

Ren

Vaca

Ren

Vaca

Rat

y

Rat

y

11100908070605040302

$715

$630

$593

$592$606

$670

5.1

%

$701

$609

$701

$711

5.8

%

8.3

%

9.5

%

9.7

%

7.4

%

5.7

%

4.6

%

5.9

%

8%

Studio $440 $1.28 $444 $1.29 $395 $1.15

1 Bed 1 Bath $619 $1.00 $609 $0.98 $597 $1.01

2 Bed 1 Bath $672 $0.76 $689 $0.78 $678 $0.79

2 Bed 2 Bath $813 $0.84 $816 $0.86 $875 $0.86

3 Bed 2 Bath $834 $0.72 $857 $0.79 $841 $0.72

OVERALL $701 $0.81 $711 $0.84 $701 $0.84

Year-End2009

Year-End2010

Year-End2011

OVERALL

Studio $354 $0.99 $406 $1.22 $375 $1.03 $395 $1.15

1 Bed 1 Bath $550 $0.66 $568 $1.08 $621 $0.97 $597 $1.01

2 Bed 1 Bath $667 $0.70 $673 $0.80 $684 $0.81 $678 $0.79

2 Bed 2 Bath $749 $0.75 $782 $0.75 $920 $0.91 $875 $0.86

3 Bed 2 Bath $832 $0.73 $905 $0.64 $839 $0.73 $841 $0.72

OVERALL $733 $0.71 $628 $0.85 $736 $0.84 $701 $0.84

10-49

Units 50-99

Units

100+

Units Overall

PROPERTY

SIZE

53.8%62.22%

33.2%53.5%

Rental RateVacancy Rate

25

1 5 ARA • Multi-family Brokerage & Counseling Services • 801-531-1221 • www.ARAusa.comJanuary 2012

J a n u a r y 2 0 1 2

0

200

400

600

800

1000

1200

Studio 1 Bed 1 Bath

2 Bed 1 Bath

2 Bed 2 Bath

3 Bed 2 Bath

OVERALL

$1.1

5 (s

q. f

t.)$1

.25

$1.2

6

$1.2

9

$1.0

1 (s

q. f

t.)

$1.0

2

$0.8

2

$1.0

5

$0.7

9 (s

q. f

t.)$0

.85

$0.7

2

$0.8

8

$0.8

6 (s

q. f

t.)

$0.8

5

$0.7

3

$0.9

1

$0. 7

2 (s

q. f

t.)$0

.81

$0.7

1

$0.8

8

$0.8

4 (s

q. f

t.)$0

.88

$0.7

5

$0.9

4

$395

$581

$474 $5

15

$597 $6

54

$579

$685

$678

$678

$654

$758

$879

$829

$756

$910

$841 $9

03$8

07$1

,059

$701 $7

53$6

55$7

91Utah repeats this year as Forbes Best State for Business and Careers in their sixth annual look at the business climates of the 50 states. No state can match the consistent performance of Utah. It is the only state that ranks among the top 15 states in each of the six main cat-egories rated. Utah high-lights include energy costs 31% below the national avg. and employment growth that has averaged 0.6% the past fi ve years. Compare that to the U.S. as a whole where job growth has averaged negative 0.6% since 2005. Businesses are getting the message on Utah. Proctor & Gamble, ITT, Home Depot and Boeing all announced expansions in Utah this year. The Goldman Sachs offi ce in Salt Lake City is its second biggest in the Americas with more than 1,000 employees and signifi cant expansion expected over the next four years.Technology companies par-ticularly have had Utah on their radar as an affordable alternative to California with overall business costs in Utah 10% below the national average. Adobe Systems, eBay, Electronic Arts and Oracle have all expanded in Utah in recent years.Companies are also at-tracted by Utah’s population growth which is one of the fastest in the country and provides a burgeoning work-force. “Utah has a young, dynamic economy with a vi-brant high-tech sector,” says Mark Zandi, chief economist of Moody’s Analytics.Source: Forbes, Nov. 22, 2011

Wasatch FrontRents By Unit Type and Property Class

Wasatch FrontRents/Vacancies By County

Wasatch FrontRents by Unit Type

Davis County Utah County

Weber County Salt Lake County

County

Salt Lake

Davis

Utah

Weber

OVERALL

Year-end2009

Year-end2010

Avg Dollar/ VacRent Sq. Ft. Rate

$739 88¢ 8.6%

$701 81¢ 8.0%

$701 83¢ 7.0%

$639 73¢ 9.0%

$724 86¢ 8.5%


$755 89¢ 6.2%

$711 84¢ 5.1%

$716 84¢ 5.5%

$640 73¢ 6.8%

$738 87¢ 6.1%

Year-end2011


$791 94¢ 5.2%

$701 84¢ 5.8%

$753 88¢ 5.0%

$655 75¢ 6.5%

$769 91¢ 5.4%

Category Rent $/Ft Vac Rent $/Ft Vac Rent $/Ft Vac Rent $/Ft Vac

Studio N/A N/A N/A $482 $1.32 5.6% $435 $1.10 7.5% $481 $1.26 6.2%

1 Bed 1 Bath $815 $1.11 5.9% $646 $1.02 4.5% $553 $0.95 4.5% $672 $1.04 4.8%

2 Bed 1 Bath $831 $0.88 7.4% $747 $0.86 5.8% $633 $0.77 4.9% $720 $0.84 5.7%

2 Bed 2 Bath $1,019 $0.97 5.7% $842 $0.86 5.0% $708 $0.66 6.4% $893 $0.89 5.2%

3 Bed 2 Bath $1,178 $0.92 5.7% $935 $0.81 5.8% $764 $0.59 5.5% $973 $0.83 5.8%

OVERALL $927 $0.99 6.3% $753 $0.89 5.1% $615 $0.80 5.0% $769 $0.91 5.4%

CLASS A CLASS B CLASS C OVERALL

Note: All data is for traditional rental housing. Numbers do not include seasonally adjusted student housing properties.

The Best States For Business

26


J a n u a r y 2 0 1 2

After a low number of sales transactions during 2010 and the fi rst half of 2011 for 100+ unit communities, the sales volume during the fourth quarter of 2011 showed strong improvement.

1,800 units traded during the fourth quarter of 2011 for a total transaction volume of more than $185 Million. Notable transactions were Royal Farms (366 units), Royal Ridge (328 units), Irving Schoolhouse (232 units) and Alpine meadows (222 units).

Fannie Mae and Freddie Mac continue to be the main source of apartment lending. All of the fourth quarter transactions were fi nanced with new agency debt. The low interest rates and inter-est- only options make Fannie Mae and Freddie Mac the preferred lending option.

Cap rates have com-pressed over the last 12 months. The following is a basic outline of cap rates for the different as-set classes.

Class A -- 5.75% - 6.25%Class B -- 6.0% - 6.5%Class C -- 6.5% - 7.0%

LARGER PROPERTY REPORTSales of 100+ Unit Properties

SALT LAKE COUNTYAverage Cap Rate Average Price per Property/Sq FT

Average Property Age Average Price per Unit/Units Sold

Total Sales Volume/Number of Sales Salt Lake County Sales Summary

0

50

100

150

200

111009111009111009111009Overall Class A Class B Class C

$13,

650,

000

$192

,882

,758

$134

,150

,000

$94,

532,

000

$69,

125,

000

$87,

782,

758

$30,

700,

000

$105

,100

,000

(2 s

ales

)

(7 s

ales

)

(5 s

ales

)

(2 s

ales

)

(4 s

ales

)

(1 s

ale)

$80,

882,

000

(3 s

ales

)

Million

N/A

$34,

325,

000

(2 s

ales

)

N/A

(5 s

ales

)

(3 s

ales

)

0

50

100

150

200

111009111009111009111009OVERALL Class A Class B Class C

$192

,882

,758

$134

,150

,000

$94,

532,

000

N/A

$69,

125,

000

$13,

650,

000

$87,

782,

754

$30,

700,

000

$105

,100

,000

$34,

325,

000

1,92

8 u

nit

s (6

.2%

cap

)

1,55

6 u

nit

s

(7.2

% c

ap)

1,14

0 u

nit

s (6

.7%

cap

)

760

un

its

(7.5

% c

ap)

232

un

its

(7.8

% c

ap)

1,02

6 u

nit

s (6

.4%

cap

)

276

un

its

(6.2

% c

ap)

902

un

its

(6.0

% c

ap)

520

un

its

(7.5

% c

ap)

$80,

882,

000

908

un

its

(6.6

% c

ap)

Million

N/A

Sales of 100+ Unit Properties

0

10

20

30

40

50


19

17

14

2322

14

N/A

50

9

26

33

N/A

0

20

40

60

80

100

120


$82,

923

$100

,042

$86,

215

$90,

954

$89,

077

$85,

558

$111

,232

$

(1,1

40 u

nit

s)

(1,9

28 u

nit

s)

(1,5

56 u

nit

s)

(760

un

its)

(908

un

its)

(1,0

26 u

nit

s)(276

un

its)

$58,

836

(232

un

its)

$116

,518

$66,

010

(520

un

its)

Thousand

N/A

N/A

(902

un

its)

0

1

2

3

4

5

6

7

8


6.7%

6.2%

7.2%

6.0%

7.8%

6.4%

6.2%

N/A

6.6%

7.5%

7.5%

N/A

0

5

10

15

20

25

30

35

40


$18,

906,

400

$27,

554,

679

$26,

830,

000

$34,

562,

500

$26,

960,

667

$21,

945,

689

$30,

700,

000

$

$6,8

25,0

00

$87.

64 (p

er s

f)

$118

.35

(per

sf)

$102

.03

(per

sf)

$95.

38 (p

er s

f)

$89.

07 (p

er s

f)

$103

.17

(per

sf)

$125

.29

(per

sf)

$80.

04 (p

er s

f)

N/A

$17,

162,

500

$99.

48 (p

er s

f)

Million

N/A

$134

.93

(per

sf)

$35,

033,

333

27


DAVIS COUNTY

Bountiful

Clearfield

Layton

North Salt Lake

Year-End2009

Year-End2010

Avg$ AvgSF $/SF Vac

$780 956 $0.82 6.6%

$692 901 $0.77 9.0%

$670 788 $0.85 7.7%

$776 925 $0.84 9.4%

Year-End2011

Avg$ AvgSF $/SF Vac

$780 955 $0.82 4.8%

$702 895 $0.78 5.3%

$665 783 $0.85 5.4%

$825 942 $0.88 5.4%

Avg$ AvgSF $/SF Vac

$874 976 $0.89 4.4%

$956 1,381 $0.69 5.8%

$636 751 $0.85 6.3%

$767 874 $0.88 5.0%

SALT LAKE COUNTY

Cottonwood Heights

Draper

Holladay

Midvale

Murray

Riverton

Salt Lake City

Sandy

South Jordan

South Salt Lake

Taylorsville

West Jordan

Year-End2009

Year-End2010

Avg$ AvgSF $/SF Vac

$810 934 $0.87 12.4%

$939 963 $0.97 8.1%

$662 873 $0.76 10.7%

$781 857 $0.91 9.7%

$740 858 $0.86 9.1%

$859 1,004 $0.86 8.7%

$692 735 $0.94 6.7%

$842 869 $0.97 9.9%

$1,055 1,067 $0.99 8.5%

$604 737 $0.82 8.1%

$729 829 $0.88 11.8%

$771 903 $0.85 9.0%

Year-End2011

Avg$ AvgSF $/SF Vac

$824 940 $0.88 6.1%

$929 963 $0.96 6.8%

$654 877 $0.75 4.9%

$812 867 $0.94 7.0%

$752 813 $0.92 6.5%

$841 1,043 $0.81 8.2%

$718 726 $0.99 4.6%

$853 876 $0.97 7.3%

$1,060 1,057 $1.00 8.8%

$631 729 $0.87 6.7%

$730 829 $0.88 7.6%

$798 924 $0.86 6.2%

Avg$ AvgSF $/SF Vac

$872 916 $0.95 6.5%

$972 1,000 $0.97 4.0%

$756 983 $0.77 5.3%

$785 822 $0.95 6.7%

$818 925 $0.88 5.3%

$838 878 $0.95 5.2%

$763 712 $1.07 4.0%

$880 902 $0.98 6.2%

$1,100 1,078 $1.02 7.5%

$648 665 $0.97 5.0%

$694 781 $0.89 4.9%

$813 972 $0.84 5.3%

UTAH COUNTY

Orem

Pleasant Grove

Provo

Year-End2010

Year-End2011

Avg$ AvgSF $/SF Vac

$770 923 $0.83 5.5%

$819 945 $0.87 6.9%

$622 689 $0.90 5.6%

Avg$ AvgSF $/SF Vac

$814 907 $0.90 4.5%

$881 942 $0.94 5.1%

$623 713 $0.87 6.0%

Year-End2009

Avg$ AvgSF $/SF Vac

$760 918 $0.83 7.0%

$782 952 $0.82 9.8%

$606 703 $0.86 5.4%

WEBER COUNTY

Ogden

Roy

Washington Terrace

West Haven

Year-End2009

Year-End2010

Avg$ AvgSF $/SF Vac

$599 832 $0.72 9.1%

$720 948 $0.76 6.5%

$612 1,009 $0.61 8.4%

$790 933 $0.85 10.8%

Year-End2011

Avg$ AvgSF $/SF Vac

$603 854 $0.71 7.5%

$729 949 $0.77 7.0%

$630 1,009 $0.62 8.2%

$795 935 $0.85 6.4%

Avg$ AvgSF $/SF Vac

$619 830 $0.75 6.1%

$745 1,011 $0.74 6.5%

$677 1,049 $0.65 6.7%

$742 885 $0.84 4.3%

Rents & Vacancies in Utah Cities

SALT LAKE COUNTY

WEBER COUNTY

UTAH COUNTY

DAVIS COUNTY

J a n u a r y 2 0 1 2

28


J a n u a r y 2 0 1 2

LARGER PROPERTY REPORT

Operating Expenses (50+ Units)

Operating ExpenseComparison by Age of Construction

Operating ExpenseComparison by Property Class

% of Total Per Sq. Ft. Per Unit Variance

Expense1999& Older

Payroll Costs 29.9% 29.0% $1.22 $1.09 $1,039 $996 -$43 Utilities 15.5% 16.3% $0.63 $0.61 $537 $560 $23Property Taxes 13.8% 13.6% $0.56 $0.51 $478 $467 -$11Repairs & Maintenance 12.0% 8.7% $0.49 $0.33 $417 $298 -$119Management Fee 10.1% 10.9% $0.41 $0.41 $350 $374 $24Turnover Costs 5.5% 4.0% $0.22 $0.15 $190 $136 -$54Advertising 4.9% 4.7% $0.20 $0.18 $170 $162 -$8Administrative Costs 4.1% 9.0% $0.17 $0.34 $143 $309 $166Property Insurance 4.3% 3.9% $0.18 $0.15 $149 $136 -$13OVERALL 100% 100% $4.08 $3.77 $3,473 $3,438 -$35

Reserves $378 $262 -$116TOTAL EXPENSES $3,851 $3,700 -$151

2000& Newer

1999& Older

2000& Newer

1999& Older

2000& Newer

% of Total Per Sq. Ft. Per Unit

ExpenseClass

A

Payroll Costs 26.9% 30.6% 28.9% $1.14 $1.23 $1.10 $1,039 $1,037 $934 Utilities 17.1% 14.9% 19.3% $0.72 $0.60 $0.73 $659 $505 $622Property Taxes 15.3% 13.4% 13.6% $0.65 $0.54 $0.52 $588 $455 $437Repairs & Maintenance 13.4% 11.0% 12.3% $0.57 $0.44 $0.47 $517 $371 $397Management Fee 8.7% 10.6% 8.6% $0.37 $0.43 $0.33 $336 $360 $278Turnover Costs 4.5% 5.4% 4.6% $0.19 $0.22 $0.18 $173 $184 $149Advertising 6.1% 4.8% 3.8% $0.26 $0.19 $0.14 $234 $162 $121Administrative Costs 4.2% 4.8% 4.6% $0.18 $0.19 $0.17 $162 $163 $147Property Insurance 3.9% 4.4% 4.3% $0.16 $0.18 $0.16 $149 $148 $140OVERALL 100% 100% 100% $4.24 $4.02 $3.80 $3,857 $3,385 $3,225

Reserves $293 $375 $318TOTAL EXPENSES $4,150 $3,760 $3,543

ClassB

ClassC

ClassA

ClassB

ClassC

Class A

ClassB

ClassC

Prime Source Wholesale Distributors, a local whole-sale distributor of parts for recreational vehicles, is in the process of expand-ing from 5,000 to 20,000 sf. Selling to dealers and retailers, the new space will allow more room to stock product and accommodate increased business.

Woodbury Corporation in Salt Lake City has plans to break ground this spring for a 60,000 square foot offi ce and laboratory building in Research Park, Salt Lake City. Construction should take eight to 12 months. Fifty percent of the struc-ture has been pre-leased to Blackrock Microsystems which draws on high-tech innovation that began with Bionic Technologies, a spin-off from the University of Utah in 1997. Blackrock provides enabling tools for the neuroscience, neural engineering and neuropros-thetics research and clinical community worldwide.

Ereplacementparts.com,an online retailer of parts for items such as power tools and appliances, is slated to make a signifi cant expansion move. The Sandy-based fi rm is moving its warehouse from approxi-mately 10,000 sf to 115,200 sf in Midvale where 60 people will be immediately employed once the move is complete. Plans are to em-ploy more than 100 people at the Midvale warehouse within the next couple of years, and as many as 300 workers by the end of the fi rm’s seven-year lease.

Source: The Enterprise, Dec. 19-25,, 2012; Jan. 2-8, 2012

Expansion in the Market

29

© C o p y r i g h t 2 012 - A l l R i g h t s R e s e r v e dwww.comre.com

YEAR-END 2011 | MARKET REVIEW Davis County

R E T A I L M A R K E T O V E R V I E W – F O u R T H Q u A R T E R 2 0 1 1

Type Total Market SF Surveyed Available SF Vacancy

Overall Average Low Rate

Overall Average High Rate

Overall Average

CAMsRegional Mall 750,000 66,482 8.86% n/a n/a n/a

Regional Center 1,396,367 75,564 5.41% $18.50 $28.67 $4.00

Community Center 3,701,609 396,467 10.71% $9.75 $16.06 $3.58

Neighborhood Center 1,144,264 113,154 9.89% $10.78 $17.00 $3.49

Anchorless Strip 1,063,647 267,680 25.17% $11.05 $14.19 $3.76

Total 8,055,887 919,347 11.41% $11.03 $15.45 $3.64

R e t a i l M a r k e t

Retail: Retail was a strong performer for 2011. Davis County saw new retailers move in as well as the expansion of existing ones.

Station Park, west of I-15 near the TRAX station in Farmington, is Davis County’s new power center. It has received a lot of attention and is rapidly growing. A new XD Cinemark Theatre Complex recently opened. Other retailers that opened this year include Harmon’s (first Davis County location), Marshalls (first Utah location), TJ Maxx, Ulta (first Davis County location), Sports Authority, Ross, Sally Beauty, Tilly’s (first Utah location), Chase Bank, and Famous Footwear. Restaurants coming soon include Johnny Rockets (first Utah location), Settebello Pizzeria and Park Stone – Wood Kitchen & Bar.

The following companies also entered or expanded in Davis County in 2011:

Deseret Book opened a new store in Layton.•

PetSmart will be relocating to a new location in Layton.•

Dick’s Sporting Goods entered the Davis County •market with a new 46,500 sf location in the Layton Hills Mall.

Gold’s Gym opened in Syracuse filling the vacant •Ace Hardware space.

Happy Hashi, a new sushi restaurant, is opening •near the Layton Hills Mall.

C-A-L Ranch opened in Layton filling the vacant •Dick’s marketplace store. This is their first Davis County location.

A new 107 room extended stay hotel opened in Layton.•

Kneaders opened a new location in Layton.•

Ream’s closed a 47,000 sf grocery store in August. In October, Big Lots announced that it will be relocating from its current location next to Layton Hills Mall into part of the Ream’s space on Main Street. It has also been announced that DSW Shoes will be closing their Davis County location in Layton at the end of December. This space has already been leased to Shoe Carnival.

In general, landlords are still offering incentives for retailers as the market remains very competitive. Vacancy rates are slightly higher than last year at this time, but are down from six months ago. Anchorless Strip Centers continue to struggle with the highest level of vacancy at 25.17%, while the larger anchored centers enjoy higher levels of occupancy with an average vacancy rate at 9.32%. Lease rates remain stable with average lease rates running between $11 and $15 per sf with very little change from six months ago.

Total Inventory Surveyed (SF) 8,055,887

Overall Average Asking Lease Rates $11.03 - $15.45

Vacancy 11.41%

Overall Average CAMs $3.64

R E T A I L M A R K E T I n d I C A T O R S

Documents

The HUB Development Business Plan by DEV.fest (FINAL)