HomeMy Public PortalAboutPavillion Tracy Cross 3.24.21
REAL ESTATE MARKET ANALYSIS
1375 E. WOODFIELD ROAD, SUITE 520
SCHAUMBURG, IL 60173
t 847.925.5400 f 847.925.5415
www.tcrossinc.com
PROFESSIONAL OPINION MEMORANDUM
-- PAVILLION --
PLAINFIELD, ILLINOIS
TO: Mr. Gene Kripak / Landmark Asset Partners
FROM: Mr. Erik A. Doersching / Tracy Cross & Associates, Inc.
DATE: March 25, 2021
At the request of Landmark Asset Partners, Tracy Cross & Associates, Inc. evaluated the market potential
residential development in the village of Plainfield, Will County, Illinois. Specifically focusing upon the
introduction of an amenity-enhanced, age-restricted (55 and older) master-planned community in the
village, this executive summary memorandum provides a professional opinion regarding the overall
marketability of the community.
THE SUBJECT PROPERTY AND PROPOSED DEVELOPMENT
The subject property consists of 65 vacant acres situated south of and contiguous to Renwick Road, directly
west of Illinois Route 59 in Plainfield, Illinois – a southwest suburb of Chicago. The subject property is
rectangular in shape and is surrounded by existing residential neighborhoods to the north, south and west.
Professional Opinion Memorandum
Landmark Asset Partners
Pavillion
Plainfield, IL
Page 2 TRACY CROSS & ASSOCIATES, INC.
As conceptualized by Landmark Asset Partners, the proposed development, Pavillion, will consist of an
amenity-enhanced/water-oriented master-planned community directed to consumers aged 55 and older. It
will contain 218 for sale housing units distributed among two separate product lines, complimented by a
major recreational complex. In addition, a commercial area along with a senior housing component are
planned for future phases:
The for sale housing products will consist of 124 attached ranch duplexes (duets) and 94 ranch single family
homes (solos). Closing prices within the community, after consumers selected their various options and
upgrades, are expected to cover a broad range extending, generally, from the low $300,000s to roughly
$500,000. Home sizes, in turn, will extend in size from approximately 1,200 to 2,400 square feet. Overall,
the typical closing price within the community will hover between $180 and $190 per square foot.
MARKET POTENTIAL
Based upon a review of the property and its location; an evaluation of the conceptualized community and
its product lines; and an examination of relevant economic, demographic, socio-economic and residential
trend data, it is our contention that the development of the proposed active adult community will be
extremely well-received by local area households aged 55 and older. This favorable conclusion is founded
on the basis of the following key factors:
First and foremost, the subject property’s location is considered excellent:
• With frontage on both Renwick Road and IL-59, the site is highly visible and easily
accessible. According to the Illinois Department of Transportation, some 32,000 vehicles
pass the property on a daily basis.
Professional Opinion Memorandum
Landmark Asset Partners
Pavillion
Plainfield, IL
Page 3 TRACY CROSS & ASSOCIATES, INC.
• The village of Plainfield is a highly desirable southwest suburb of Chicago. Its population
has nearly doubled in the last 20 years, from a base of 22,761 in 2000 to an estimated total
of 42,750 in 2020. In addition, the village supports household incomes at the upper end of
the spectrum. For example, the 2020 median household income in Plainfield stood at
$125,601, a level 66.5 percent higher than the $75,438 median noted for the 10-county
Chicago metropolitan region as a whole.
• Given the maturation of the Plainfield area over the last 20 years, future residents of the
subject property are within minutes of an abundance of “already in-place” daily consumer
services, shopping centers, restaurants, recreation/entertainment, localized employment
and healthcare.
Demand for the proposed Pavillion community is strong. In southwest suburban Chicago, which
includes Plainfield and other nearby municipalities, i.e., an approximate 10-mile radius from the
site, an average of 185 new construction, age-restricted, active adult for sale housing units could
be absorbed annually over the next five years, which translates to a total of 925 units during the
entire forecast period. As delineated Exhibit 1, this demand forecast is fully reconciled by applying
mobility, tenure, and lifestyle factors to the base of income-qualifying active adult households in the
market (i.e. those between the ages of 55 and 74 with incomes of at least $75,000 per annum
and/or net worth in excess of $300,000).
Not only is this demand base (in and of itself) more than sufficient to support the proposed 218-unit
Pavillion development, but upside potentials exist on the basis spillover from other areas, i.e. active
adults relocating to Plainfield to be closer to their children/grandchildren.
Unlike many other growth areas in suburban Chicago, the Illinois Route 59 corridor in Plainfield has
yet to witness the influx of an age-restricted, amenity-enhanced active adult community to serve its
mature population base. The proposed Pavillion community will help fill this void and stands to
benefit from the lack of direct competition. As such, the proposed community is expected to capture
its “fair share” of demand, and, in all likelihood, a disproportionate share.
In village of Plainfield alone, a sizeable base of active adult householders currently exists, yet there
are no amenity-enhanced new construction for sale communities to serve those desirous of living
in an age-restricted environment. Moreover, the expected gains in the number of households
between the ages of 55 and 74 will be significant over the next five years. As highlighted in the
following text table, the number of mature householders in Plainfield will increase from a 2020 base
of 3,912 to a total of 4,656 by 2025:
2,616 3,129
1,296 1,527
3,912 4,656
Source: Environics Analytics: 2020 Demographic Snapshot.
55-64
65-74
Total
HOUSEHOLDERS AGED 55-74
-- VILLAGE OF PLAINFIELD, ILLINOIS --
Age Range 2020 2025
32,248 21,639 34,018 24,66720,070 8,397 23,018 10,548@ 6 Percent1,204 504 1,381 633903 378 1,036 475@ 75 Percent587 246 673 309@ 65 Percent@ 50 Percent294 123 337 155@ 40 Percent118 49 135 62Source: Environics Analytics and Tracy Cross & Associates, Inc. Total Households Aged 55 - 74DERIVATION OF ANNUAL ACTIVE ADULT FOR SALE HOUSING DEMAND: 2020 - 2025-- SOUTHWEST SUBURBAN CHICAGO --2020 2025Householders Aged …. Householders Aged ….Attribute 55 - 64 65 - 74 55 - 64 65 - 74With Annual Incomes of $75,000 or More and/or(Net Worth in Excess of $300,000)Annual Propensity to Move Annual Propensity to Elect an Ownership AlternativeAnnual Propensity to Remain in AreaAnnual Propensity to Move to New Construction UnitTotal Annual Demand PotentialAnnual Propensity to Move into Age-Qualified Community- - - - - - - - - - - - - - - - 185 - - - - - - - - - - - - - - - -Average Annual Demand for Active Adult Development:2020 - 2025 PeriodHouseholders Aged 55 to 64 (Rounded) - - - - - - - - - - - - - - - - 130 - - - - - - - - - - - - - - - -Householders Aged 65 to 74 (Rounded) - - - - - - - - - - - - - - - - 55 - - - - - - - - - - - - - - - -1
Professional Opinion Memorandum
Landmark Asset Partners
Pavillion
Plainfield, IL
Page 4 TRACY CROSS & ASSOCIATES, INC.
From an empirical perspective, active adult communities in nearby areas are performing/have
performed well. For example, at Pulte’s 155-unit Liberty Green community is Bolingbrook, which
is the only age-restricted (55+) development in the southwest suburban area currently marketing
new construction units, 100 sales have been generated over the last 24 months – and at price
points generally similar to those expected at Pavillion. In addition, one only has to look at the
success of Del Webb’s Shorewood Glen community in nearby Shorewood to support the strength
of the active adult for sale housing sector. Shorewood Glen, which consisted of 765 total units
distributed among both duplex homes and single family residences, was generating a sustaining
sales pace of 85 units per year before reaching sellout in 2014. Moreover, among 28 resale
closings recorded within Shorewood Glen in the last 12 months, 18 homes sold in less than 10
days. For reference, the typical marketing time for a resale unit in suburban Chicago ranges from
72-90 days.
Elsewhere throughout the region, amenity-enhanced for sale housing communities directed to
couples and individuals aged 55+ have generated healthy sales volumes.…and continue to do so.
From Dell Webb’s large-scale Sun City community in Huntley to a wide variety of other
developments by Dell Webb, D.R. Horton, Pulte, among others, this development concept has
certainly found its place in the market. Over the past 20 years, age-restricted communities in
suburban Chicago, have averaged over 750 new home sales on an annual basis, despite the steep
market downtown that occurred in 2008 and still lingers today. At peak, between 2000 and 2006,
active adult (55+) new homes sales in the Chicago suburbs averaged over 1,500 units annually.
Landmark Asset Partners has successfully identified the demand for age-restricted, active adult for
sale housing in other parts of the region. Specifically, its planning efforts on the newly developed
Briargate community in Lindenhurst have provided Pulte Homes with the foundation for a very
successful endeavor. Briargate, which consists of 228 single family units, is moving at an initial
sales pace of 75 units on an annualized basis – at price points in the $300,000 to $450,000 range.
The differentiated product lines planned for Pavillion will allow for maximum market penetration. In
other words, the continuum of product represented by attached ranch duplexes (duets) and ranch
single family homes (solos) will allow the community to penetrate the broadest spectrum of the
market. As highlighted below, per series sales rates among ranch villas/duplexes and small lot
single family homes among larger-scale active adult developments have been historically strong in
both categories.
Attached Ranches (Villas/Duplexes)4,482 54
Small Lot Single Family Ranches 6,942 65
11,424 4.7
(1)
Source: Tracy Cross & Associates, Inc.
Lot
Includes Sun City-Huntley,Cambridge at Carillon-Plainfield,Carillon North-Grayslake,Carillon Lakes-
Crest Hill,Grand Haven-Romeoville,Shorewood Glen-Shorewood,Lago Vista-Lockport,Edgewater-
Elgin,Carillon Club-Naperville,Carillon at Cambridge Lakes-Pingree Grove,Bowes Creek-Elgin,
Carillon at Stonegate-Aurora and Grand Dominion-Mundelein.
NA
45' - 59'
---Total/Average
Product Type
SALES TRENDS BY PRODUCT TYPE
LARGE-SCALE ACTIVE ADULT DEVELOPMENTS:(1) SUBURBAN CHICAGO: 2000 - 2020
Average
(Per Individual
Annual
Sales Rate
Width Sales Product Series)
Total
Professional Opinion Memorandum
Landmark Asset Partners
Pavillion
Plainfield, IL
Page 5 TRACY CROSS & ASSOCIATES, INC.
With closing prices at Pavillion expected to extend, generally, from $300,000 to $500,000, this
overall price range will position the development within the threshold of existing single family
resales. For example, in Plainfield alone, a total of 553 single family homes were sold/closed in
2020 through the brokerage network (out of 1,342 total) at price points of $300,000 and above.
Representing the principal source of demand for active adult for sale product, the more mature
purchaser, i.e. empty-nester, moving from an existing single family home in the local area, will
typically move down, or, at best, laterally in price.
Finally, at anticipated closing prices, the Pavillion community is expected to mirror (and slightly
exceed) whole dollar home values among adjoining neighborhoods, and fully exceed values on a
price per square foot basis. For example, among 20 resale closings recorded within the Vintage
Harvest community to the south, Spanglers Farm to the north and Renwick Park to the east during
the last 12 months, prices ranged from $251,000 to $459,000, and averaged $128 per square foot.
As such, this community is expected to blend well with its neighbors.
In summary, the Pavillion active adult community (as planned) will be well received by active adult
consumers, i.e., those aged 55-74+. At estimated price points, this development should attain full sellout
within a 36-month period. In addition, as an age-restricted 55 and older community (with limited if any
school-age children), the average household size will stand at roughly 1.75 persons per dwelling unit, thus
resulting in a reduced impact on traffic volumes compared to a more conventional subdivision with a similar
total unit count.
65 4.9
325 24.2
399 29.7
234 17.4
145 10.8
74 5.5
47 3.5
53 4.0
1,342 100.0
Source: Midwest Real Estate Data, LLC
Number of SF Percent
SINGLE FAMILY RESALE CLOSINGS IN 2020
(EXCLUDES NEW CONSTRUCTION UNITS)
VILLAGE OF PLAINFIELD
2020
Median - - - - - $285,184 - - - - -
Total
of Total
Under $200,000
200,000 - 249,999
250,000 - 299,999
300,000 - 349,999
350,000 - 399,999
Price Range Closings
400,000 - 449,999
450,000 - 499,999
500,000 & Above