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Summary of Market Findings-St. Anthony Redevelopment Senior Housing ■ • Independent Senior housing has now achieved relatively strong market acceptance across the Twin Cities and a full spectrum of senior housing products are currently available in the Twin Cities market. These housing products range from an age-restricted townhome unit across the service spectrum to service-intensive assisted living housing. The majority of the senior market still prefers housing with few services or no services at all. • The overbuilding situation that occurred in the 1980s has since dissipated and the Twin Cit- ies Metro has had more senior housing units added during the 1990s than during all of the 1980s, with vacancy rates remaining low, below 5% for most senior housing product types. • In the market area, demand has proven to be very strong for independent senior housing, as there are virtually no vacancies among the roughly 1,100 units we surveyed (670 and 430 ■ were built during the 1980s and 1990s, respectively). Our calculations revealed demand for more than 1,000 senior housing units in the market area. We project that the St. Anthony redevelopment areas could support between 230 and 280 units. r Off ce . • Overall employment in the St. Anthony Office Market Area increased by 10% during the 1990s, and is projected to increase by 11% over the next decade. This growth will result in demand for almost 3,000,000 additional square feet of office space in the market area over the next 10 years, since the overall office vacancy rate in the market area is about 10% (10% is normal for a health office market). • However, the subject properties' distance from the freeway network (location on a major ■ freeway is a must for most larger office tenants) will limit demand primarily to small to me- dium-size businesses (particularly those serving the general area). We project that the St. Anthony redevelopment site can attract 5.0% to 8.0% of the total demand, or 146,000 to 235,000 square feet of office space. ■ Retail • We find that residents of the St. Anthony Retail Market Area purchase a high percentage (about 50%) of their retail goods and services outside of the market area. This is due to the proximity of large shopping centers close to the St. Anthony Retail Market Area, particu- larly the Rosedale Shopping Center area. • Based on our analysis, we find that there is not a need for additional retail space in the mar- ket area, but there is a potential to reposition some of the existing centers (a total of about 275,000 square feet of retail space) to recapture expenditure to retailers outside the market area. We believe that the Apache Mall's location lends itself redevelopment, but with no more than 75,000 total square feet. Page 5