Strategic Market Analysis
Retail | Multifamily Residential | Office | Hotel
Urban | Downtown | Mixed-Use
The Challenge
The City of Sacramento was in a unique position with its existing landholdings – known as The Railyards project – which consisted of approximately 187 acres in the downtown neighborhood, and was seeking guidance in determining the strategic market absorption for the subject property as part of its CFD bond offering. Thus, the City engaged RCLCO to provide a third-party pricing and absorption evaluation of the Railyards to underpin the issuance of the proposed CFD bonds that would enable the construction of various public improvements relating to the third phase of the project. Specifically, the City was seeking an analysis of market demand for the planned mix of uses, and projections of achievable pricing and absorption for the space.
Solution
In carrying out this project, RCLCO first conducted a site analysis and evaluated the locational merits of the site, focusing on accessibility, visibility, quality of surrounding development, and so on. RCLCO also examined the short-term economic development trends for the Sacramento Metropolitan Statistical Area, evaluated the competitive market environment, analyzed the market demand for the planned mix of uses (including renter-occupied housing, owner-occupied housing, retail, office, and hotel uses), and ultimately translated these findings into development conclusions regarding achievable pricing and absorption, aiding in the City’s decision-making process.
Impact
Our findings were used by the City’s consultant team to underwrite the CFD bonds being issued to support the development of the new large-scale development immediately north of the existing Central Business District in Sacramento.