One Click HQ2 One Click HQ2 - Page 118

Exhibit 2: Orange County Housing Costs by City O u t s i d e ​ ​o f ​ ​O r a n g e ​ ​C o u n t y, ​ ​t h e​ ​ increasingly​ ​amenitized​ ​Inland​ ​Empire​ ​is​ ​ a​ ​cost-​effective​ ​o ption, offering​ ​a nother​ ​ 1.5M​ ​t otal​ ​h ousing​ ​u nits​ ​a nd​ ​i mplying​ ​ HQ2​ ​e mployee​ ​h ousing​ ​s tock​ ​o ptions more​ ​t han​ ​d ouble.​ ​M edian​ ​h ome​ ​values​ ​ of​ ​$340K​ ​are​ ​a​ ​50%​ ​discount​ ​to​ ​Orange​ ​ County​ ​a nd​ ​t he region​ ​p rovides​ ​a ​ ​d irect​ ​ freeway​ ​path​ ​to​ ​I rvine​ ​S pectrum​ ​v ia​ ​t he​ ​ CA-241​ ​toll​ ​road. 11 For​ ​those​ ​who​ ​prioritize​ ​proximity​ ​to​ ​work​ ​ (as​ ​w ell​ ​a s​ ​b each​ ​a ccess /​recreation),​ ​ highly amenitized​ ​p roduct,​ ​a nd​ ​o ne​ ​o f​ ​ the​ ​l eading​ ​p ublic​ ​e ducation​ ​s ystems​ ​ in​ ​t he​ ​country,​ ​​I rvine​ ​i tself may​ ​p rove​ ​a​ ​ compelling​ ​living​ ​option.​​ ​Although​ ​home​ ​ values​ ​i n​ ​t he​ ​c ity​ ​represent​ ​a ​ ​p remium relative​ ​to​ ​broader​ ​Orange​ ​County​ ​costs,​ ​ they​ ​a re​ ​d riven​ ​by​ ​t he​ ​s trength​ ​o f​ ​t he​ ​ city’s​ ​K-12​ ​p ublic education​ ​system,​ ​i ts​ ​ thoughtfully​ ​master-planned​ ​villages,​ ​and​ ​ its​ ​incomparable​ ​preserved​ ​open spaces.​ ​​ Irvine​ ​S pectrum​ ​i s​ ​o nly​ ​1 0​ ​m iles​ ​f rom​ ​ Laguna​ ​B each,​ ​yet​ ​h ome​ ​p rices​ ​a re​ ​h alf​ ​ the cost​ ​and​ ​residents​ ​of​ ​b oth​ ​l ocations​ ​ enjoy​ ​the​ ​same​ ​sand. FOR-SALE OPTIONS RENTAL OPTIONS $690K Median Home Price $2,100 Average Rent / Month 22 OC​ ​Housing​ ​Breakdown:​ ​Rental​ ​Market Rentals​ ​a ccount​ ​for​ ​4 5%​ ​of​ ​total​ ​stock,​ ​ with​ ​current​ ​asking​ ​rents​ ​roughly​ ​$2,100/​ month​ ​for institutional-quality​ ​product,​ ​in- line​ ​with​ ​Seattle​ ​market​ ​rents. 12 ​ ​Unit​ ​mix​ ​ implies​ ​1-bedroom​ ​and 2-bedroom​ ​options​ ​ largely​ ​categorize​ ​the​ ​market​ ​(90%​ ​of​ ​mix),​ ​ ideal​ ​for​ ​a​ ​workforce​ ​skewing younger​ ​in​ ​ age​ ​and​ ​more​ ​likely​ ​to​ ​choose​ ​apartment- style​ ​living​ ​than​ ​home ownership. Importantly,​ ​s ix​ ​rental​ ​m arkets​ ​w ithin​ ​ Orange​ ​County​ ​are​ ​20​ ​minutes​ ​away​ ​from​ ​ Irvine​ ​and​ ​offer monthly​ ​rents​ ​up​ ​to​ ​20%​ ​ below​ ​t he​ ​I rvine​ ​a verage. 13 ​ ​B roadening​ ​ commute​ ​times​ ​to​ ​30​ ​minutes implies​ ​23​ ​ OC​ ​cities​ ​are​ ​covered​ ​with​ ​average​ ​rents​ ​ at​ ​an​ ​even​ ​greater​ ​30%​ ​discount. Walk​ ​or​ ​Bike​ ​to​ ​Work:​ ​Housing​ ​Options​ ​in​ ​Irvine​ ​Spectrum Source: CoreLogic (July 2017); Axiometrics More than 2,000 for-sale homes are located in Irvine Spectrum, with another 5,000 planned for the nearby Orange County Great Park neighborhoods. 14 There are also 7,000 existing apartment units,​ ​w ith​ ​a nother​ ​1 ,800​ ​e ntitled​ ​u nits​ ​ slated​ ​for​ ​completion​ ​well​ ​within​ ​the​ ​next​ ​ five​ ​years. 15 12 11 ​ ​Corelogic Amazon​ ​already​ ​houses​ ​1,200​ ​employees​ ​ (predominantly​ ​c omprising​ ​h igh-wage software​ ​engineers)​ ​in​ ​its​ ​Irvine​ ​Spectrum​ ​ office​ ​s pace.​​ ​At​ ​a ​ ​m inimum,​ ​20%​ ​of​ ​t he​ ​ local employee​ ​b ase​ ​i s​ ​k nown​ ​t o​ ​l ive​ ​ in​ ​I rvine​ ​a partments​ ​( v.​ ​o ther​ ​a reas​ ​o f​ ​ Orange​ ​County),​ ​and 10%​ ​live​ ​specifically​ ​ in​ ​​Irvine​ ​Spectrum. 16 ​ ​This​ ​implies​ ​​there​ ​is​ ​ decent​ ​demand​ ​from Amazon​ ​employees​ ​ ​ ​​Axiometrics​ ​(2Q17), 13 ​ ​ESRI​ ​(Commute​ ​times​ ​based​ ​on​ ​travel​ ​time​ ​to​ ​the​ ​Irvine​ ​Spectrum​ ​on​ ​a​ ​Tuesday​ ​at​ ​8AM), 14 ​ ​​Irvine​ ​Company;​ ​Zelman​ ​&​ ​Associates​ ​Five​ ​Points​ ​Analyst​ ​Coverage, 15, 16 ​ ​​Irvine​ ​Company, 17 ​ ​ACS​ ​2016​ ​1yr​ ​estimates 23