DOMINION BOULEVARD CORRIDOR STUDY | Chesapeake, Virginia
204 | Appendix
Critical Assumptions
Our conclusions are based on our analysis of the information available
from our own sources and from the client as of the date of this report.
We assume that the information is correct, complete, and reliable.
We made certain assumptions about the future performance of the
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As such, we recommend the close monitoring of the economy and the
marketplace, and updating this analysis as appropriate.
Further, the project and investment economics should be “stress
tested” to ensure that potential fluctuations in revenue and cost
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g o a , na ona , an oca economy an rea es a e mar e , an on
other factors similarly outside either our control or that of the client. We
analyzed trends and the information available to us in drawing these
conclusions. However, given the fluid and dynamic nature of the
economy and real estate markets, as well as the uncertainty
surrounding particularly the near-term future, it is critical to monitor the
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assump ons resu ng rom a erna ve scenar os regar ng e
economy and real estate market conditions will not cause failure.
In addition, we assume that the following will occur in accordance with
current expectations:
• Economic, employment, and household growth.
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economy an mar e s con nuous y an o rev s e a oremen one
conclusions periodically to ensure that they are reflective of changing
market conditions.
We assume that the economy and real estate markets will grow at a
stable and moderate rate to 2020 and beyond. However, stable and
moderate growth patterns are historically not sustainable over extended
•
er orecas s o ren s an emograp c an econom c pa erns,
including consumer confidence levels.
• The cost of development and construction.
• Tax laws (i.e., property and income tax rates, deductibility of
mortgage interest, and so forth).
• Availability and cost of capital and mortgage financing for real
estate developers owners and buyers
periods of time, the economy is cyclical, and real estate markets are
typically highly sensitive to business cycles. Further, it is very difficult to
predict when an economic and real estate upturn will end.
With the above in mind, we assume that the long term average
absorption rates and price changes will be as projected, realizing that
most of the time performance will be either above or below said
,
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• Competitive projects will be developed as planned (active and
future) and that a reasonable stream of supply offerings will satisfy
real estate demand.
• Major public works projects occur and are completed as planned.
Should any of the above change this analysis should be updated with
average rates.
Our analysis does not consider the potential impact of future economic
shocks on the national and/or local economy, and does not consider the
potential benefits from major "booms” that may occur. Similarly, the
analysis does not reflect the residual impact on the real estate market
,
,
the conclusions reviewed accordingly (and possibly revised).
and the competitive environment of such a shock or boom. Also, it is
important to note that it is difficult to predict changing consumer and
market psychology.
Dominion Boulevard | City of Chesapeake | April 11, 2014 | E4-11982.40
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