Exclusive Investment Offering: Condominium Interest - Transwestern

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Market Overview
The Falls Church Retail Submarket
Ideally positioned between Washington D.C., Fairfax
County and Arlington County, the Falls Church
competitive market includes Seven Corners and
other areas outside of the City limits. The greater
Falls Church submarket has a retail inventory of 3.2
million square feet in approximately 177 buildings.
Nearly 59% of this inventory is comprised of shopping
centers verses 41% in freestanding or mixed-used
use complexes. The majority of this submarket was
developed in the 1960s, however experienced a
significant spike in construction starts in 2005, largely
influenced by the updates to the City’s Comprehensive
Plan. Today, Falls Church is a dynamic retail market
offering neighborhood conveniences from small
boutiques to large grocery stores, all serving the City’s
affluent residential population. Premier retailers within
a mile radius of The Broadway include Giant, Cosi,
Baja Fresh, Verizon, Starbucks and Panera Bread. It
is reported that the Panera Bread, located at 450 W.
Broad Street, is one of the company’s top performing
average vacancy of 2.7% over the last three years. New
projects are commanding above average rents in the
suburban metropolitan area at $40.00 to $45.00 triple
net, which are comparable to major economic nodes
such as Fairfax Center.
The overall competitive market has also exhibited
strong performance. The submarket is comprised of
over 3.2 million square feet of retail space with just
3.9% vacancy. Greater Falls Church has experienced
significant stability, having never exceeded 5.7%
vacancy over the last ten years. Year to date absorption
totals positive 8,350 square feet of retail space and is
backed by strong leasing in 2007 which saw 14 deals
inked year to date, compared to 12 in 2006. Rental rates
continue to see steady growth; the current average
direct rental rate is $36.00 and has increased 3.0% over
the last year and 7.0% average annual growth over the
past four years.
Deliveries and Development Pipeline
There were no retail projects delivered in the third
quarter of 2007, however the submarket gained 10,000
square feet in the first half of the year with the delivery
of The Byron. The project is directly across the street
from the Subject Property and is a similar mixed-used
format to The Broadway. The Byron has 2,600 square
feet of available space and includes notable tenants
Cosi and Verizon.
locations in the nation, with retail sales estimated at
over $500 per square foot.
Submarket Fundamentals
The City of Falls Church, occupying just 2.0 square
miles, currently registers a low 1.3% vacancy out of its
683,000 square foot inventory. The City has exhibited
high demand for upscale retail while maintaining a low
Currently there are two projects under construction
in the City of Falls Church, the Spectrum and Pearson
Square, scheduled to deliver a total of 58,400 square
feet in the first quarter of 2008. The Spectrum, also
developed by Waterford Development, will deliver
33,000 square feet of retail space, of which currently
70% of the retail tenancy is under lease negotiations
for $40.00 to $45.00 triple net. In addition, as detailed
in the preceding section, the City has additional 87,600
square feet of retail in planning to contribute to the
Nails Boutique at The Shops at The Broadway