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Page 12 <br />Prepared for: City of Eugene <br />Prepared by: PNW Economics, LLC <br />Market & Financial Analysis of Gordon Lofts MUPTE Program Application <br />• Among the seven highest asking retail lease rates in downtown for currently vacant space, the <br />Gordon Lofts retail lease rate would be 22% higher than vacant space at 630 E 13th Avenue, <br />which has the highest asking lease rate in the vicinity of downtown. <br /> <br />Retail Lease Rate Conclusions <br />As among the newest retail space to be developed in downtown Eugene, retail space on the ground <br />floor of Gordon Lofts should be expected to earn a premium for the following: <br />• New construction; <br />• Modern space for current tenant needs; <br />• Part of a mixed-use development supported by housing upstairs; <br />• Adjacent to a planned market space and nearby a planned, new hotel; <br />• Situated between a planned new hotel, Inn at the 5th Hotel, and part of a potential retail <br />corridor between the two. <br /> <br />On the other hand, PNW Economics finds that should the planned market space immediately adjacent <br />along 6th Avenue be developed, ground floor retail in the Gordon Lofts will entirely lack visibility from <br />6th Avenue and will be the least marketable retail space in the combined master-planned development <br />of the site as a result. Retail traffic will depend upon successful joint development of the hotel and the <br />market space and a coordinated marketing effort to move pedestrian retail traffic between the 5th <br />Street Public Market retail node through Gordon Lofts. 6th and 7th Avenues create a pedestrian traffic <br />discontinuity for retail from the south along Willamette and Oak Streets, compounded by the presence <br />of the Hult Center and the Hilton Eugene hotel. <br /> <br />We therefore conclude that $2.75 per square foot for retail space at the Gordon Lofts for the above <br />reasons is somewhat aggressive. For purposes of pro forma financial analysis in the next section of <br />this report, PNW Economics assumes retail space at Gordon Lofts earns halfway between lease rates at <br />5th Street Market and at the 630 E 13th Avenue comparable, in the $2.50 per square foot range. <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br />October 17, 2018, Work Session – Item 2