East Hayden Island Plan 
Market Study 
 
 
October 2007 
 9220 SW Barbur Blvd 
Portland, Oregon 97219 
503.636.1659 
www.marketekinc.com 
 
  
 
    Hayden Island Plan Market Study          
 
 
 
TABLE OF CONTENTS 
 
 
1.0  Target Market Analysis……………………………………..1 
 
 
2.0 Residential Market Analysis……………………………….8 
 
 
3.0  Retail Market Analysis……………………………………..18 
 
 
4.0  Office Market Overview…………………………………..26 
 
 
5.0  Industrial Market Overview……………………………….27
  
 
    Hayden Island Plan Market Study          Target Market Analysis 
 
Page 1
1.0 TARGET MARKET ANALYSIS 
 
 
Based upon the patronage of existing businesses, Hayden Island’s location within the 
region, its competitive assets and proposed redevelopment activity, the Hayden Island 
Market Area is a 12-mile radius from the I-5/Hayden Island Drive intersection, illustrated 
on the map below.  For comparative purposes, data is presented for the Portland-
Vancouver MSA, Hayden Island and the Market Area in the demographic, commercial 
and residential analyses that follow.  
 
Hayden Island Market Area 
 
 
  
 
    Hayden Island Plan Market Study          Target Market Analysis 
 
Page 2
EXHIBIT 1.01 
Population 
 
 
Hayden Island’s population of 2,155 (estimated 2007) is projected to grow at a modest 
rate compared to the larger Market Area and the Portland MSA overall. 
 
 
 
 1990 2007 Number Percent 2012 Number Percent
(Estimate) (Forecast)
Hayden Island
Population 1,883 2,155 16 0.85% 2,185 6 0.28%
Households 1,070 1,241 10 0.94% 1,256 3 0.24%
Avg. Household Size 1.76 1.74 1.74
Market Area
Population 779,086 1,043,794 15,571 2.00% 1,123,791 15,999 1.53%
Households 321,657 425,617 6,115 1.90% 456,982 6,273 1.47%
Avg. Household Size 2.38 2.41 2.42
Portland MSA
Population 1,523,741 2,162,868 37,596 2.47% 2,345,078 36,442 1.68%
Households 592,507 830,829 14,019 2.37% 899,164 13,667 1.64%
Avg. Household Size 2.53 2.56 2.57
Source:  ESRI BIS, Marketek, Inc.
Geographic Area
Avg. Ann. Change Avg. Ann. Change
1990-2007 2007-2012
Average Annual Population Growth Rates, 1990-2012
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
Hayden Island Market Area Portland MSA
1990-2007 Avg. Ann. Change 2007-2012 Avg. Ann. Change
 
 
 
 
 
 
 
  
 
    Hayden Island Plan Market Study          Target Market Analysis 
 
Page 3
 
EXHIBIT 1.02 
Age 
 
 
Hayden Island’s population is considerably older than the Market Area or MSA’s, with a 
median age of 51.5 years. 
 
 
 
 
Age Category Hayden Island Market Area Portland MSA
Under 5 2.5% 6.7% 7.0%
5-14 4.2% 12.5% 13.4%
15-19 2.5% 6.3% 6.7%
20-24 3.6% 6.8% 6.7%
25-34 10.5% 16.2% 14.5%
35-44 11.9% 15.2% 14.7%
45-54 25.1% 14.9% 15.2%
55-64 26.0% 11.0% 11.5%
65-74 8.0% 5.0% 5.1%
75-84 4.3% 3.6% 3.5%
85 and Older 1.4% 1.8% 1.7%
Total 2,155 1,043,794 2,162,868
Median Age 51.5 35.9 36.2
Source:  ESRI BIS, Marketek, Inc.
Age Distribution of the Population, 2007
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
Under 5 5-14 15-19 20-24 25-34 35-44 45-54 55-64 65-74 75-84 85 and
Older
Hayden Island Market Area Portland MSA
  
 
    Hayden Island Plan Market Study          Target Market Analysis 
 
Page 4
 
 
 
EXHIBIT 1.03 
Median Household Income 
 
 
Hayden Island households are less affluent than those of the Market Area and MSA. 
 
 
 
 
 
Income Hayden Island Market Area Portland MSA
Less than $15,000 12.3% 9.8% 8.3%
$15,000 to $24,999 9.9% 8.5% 7.7%
$25,000 to $34,999 11.3% 10.0% 9.1%
$35,000 to $49,999 16.2% 15.4% 14.9%
$50,000 to $74,999 19.4% 20.6% 21.3%
$75,000 to $99,999 11.0% 14.8% 15.4%
$100,000 to $149,999 13.5% 12.5% 14.1%
$150,000 to $199,999 4.9% 4.6% 5.1%
$200,000 and more 1.5% 3.8% 4.1%
Total 1,241 425,617 830,829
Median Household Income $50,260 $56,294 $60,579
Source:  ESRI BIS
Household Income Distribution, 2007
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Less than
$15,000
$15,000 to
$24,999
$25,000 to
$34,999
$35,000 to
$49,999
$50,000 to
$74,999
$75,000 to
$99,999
$100,000 to
$149,999
$150,000 to
$199,999
$200,000
and more
Hayden Island Market Area Portland MSA
  
 
    Hayden Island Plan Market Study          Target Market Analysis 
 
Page 5
 
 
 
EXHIBIT 1.04 
Lifestyle Characteristics 
 
 
The lifestyle characteristics of Hayden Island residents reflect the diversity of the 
population: mid-to-upper income empty nesters and retirees or pre-retirees who enjoy 
a simple, relatively quiet life.  By contrast, the 12-mile Market Area is significantly more 
varied with over a dozen different lifestyles, only the largest groups represented below. 
 
 
 
 
 
 
 
Market Segment Percent of Household Median Median Consumer
Households Type Age Income Purchases/Preferences
1
Senior Sun 
Seekers
52.7%
Married 
couples
51 $35,300
Retired or facing retirement, these households take car trips 
and invest time and money in improving their homes.  
Leisure activities include watching TV, renting videos and 
DVDs, playing bingo, gambling and fishing.
2
In Style 47.3%
Married 
couples 
without 
children
45 $67,800
Well-educated professional couples who may live in the 
suburbs but enjoy the amenities of the city.  They travel 
frequently for business and pleasure, own mutual funds and 
contribute to 401-K accounts.  Enjoy dining out and 
shopping at stores such as Anne Taylor and Nordstrom.
100.0%
Market Segment Percent of Household Median Median Consumer
Households Type Age Income Purchases/Preferences
1
Main Street, USA 19.1% Family Mix 36 $51,200
These fairly well-educated consumers tend to purchase 
software, savings certificates, home improvement iterms 
and prescription medication.  Civic-minded, they often 
attend public meetings and work as volunteers.
2
Old and 
Newcomers
8.2%
Single 
Persons/ 
Shared 
Households
37 $40,400
Households are often in transitional mode, either starting 
careers or retiring.  Older members consult with financial 
planners and are health-conscious.  Younger members 
typically enjoy movies and college football games.
3
Metro Renters 6.9% Singles 34 $52,300
A young market whose members spend primarily on 
themselves.  Purchases include ski/workout clothing, 
designer clothes and imported wine/beer.  Favorite stores 
are Bloomingdales, Banana Republic and Macy's.
4
Metropolitans 6.8%
Married 
couples/ 
Singles 
37 $57,600
Singles and childless couples with a busy, urban lifestyle.  Do 
yoga, listen to jazz and visit museums.  Travel frequently for 
business and pleasure. 
5
Aspiring Young 
Families
5.5% Family Mix 30 $47,200
Live in start up homes or town homes, nearly half are 
renters, spend their discretionary income on their children 
and homes.  Enjoy eating out, movies, and playing sports.
46.5%
Source:  ESRI BIS, Marketek, Inc.
Total
Hayden Island
Total
Hayden Island Market Area
  
 
    Hayden Island Plan Market Study          Target Market Analysis 
 
Page 6 
 
EXHIBIT 1.05 
Business and Employee Market 
 
 
An estimated 238 businesses operate on Hayden Island employing 2,952 persons.   The 
retail sector employs the majority of the island workforce, 1,654 or 56%.  Employees 
working on Hayden Island are an important captive market for retail and service 
businesses, as they come to the island on a daily basis throughout the year and are in 
close proximity to retail, restaurant and service establishments.  Market research 
conducted by the Building Owners and Managers Association of America demonstrates 
that office workers (as one segment of the workforce) spend between 10 and 15 
percent of their expendable income near their places of work.   
 
103
44
21
20
15
13
11
6
3
2
0 20 40 60 80 100 120
Retail Trade
Services
Transportat ion, Communicat ion, Ut ilit ies
Finance/ Insurance/Real Estate
Construct ion
Wholesale Trade
Other
M anufacturing
Government
Agriculture & M ining
Hayden Island Businesses by Indust ry
 
 
Source: ESRI BIS, InfoUSA, Marketek, Inc. 
 
 
 
 
  
 
    Hayden Island Plan Market Study          Target Market Analysis 
 
Page 7 
EXHIBIT 1.06 
Visitor Market 
 
 
Attractions near Hayden Island generate significant visitor traffic from throughout the 
metro area and well beyond as illustrated in attendance figures below.  The visitor 
market is an important contributor to retail, restaurant and service businesses on the 
island.  
 
 
Facility/Attraction Visitor/User Count Market Characteristics Needs/Interests
Portland Expo Center 500,000 attendees 25% out of metro area Transit connectivity
330,000 sq. ft. 150,000 exhibitors Restaurants
100 events/yr Adjacent quality hotels
225 event days/yr
Portland International Raceway 400,000 spectators 23% out of metro area*
86,000 seats 20,000 competitors 3.2 persons/party
135 events/yr $425 spending per visit
>400 event days/yr
Fort Vancouver Nat'l Historic Site 450,000 visitors Mixed market: families, 
couples, regional, 
national, international
Recreation, history, 
culture, dining
Hayden Island Marinas 2,932 boat slips** 85-90% metro area Convenience goods
70% annual occupancy 12 visits annually Restaurants
*PIR Economic Impact Analysis, 2005
**excluding floating homes
Source: Marketek, Inc. 
  
 
    Hayden Island Plan Market Study        Residential Market Analysis 
 
Page 8
 
2.0 RESIDENTIAL MARKET ASSESSMENT 
 
 
What follows is an overview of residential development opportunities and issues, a 
synopsis of existing housing on Hayden Island and an analysis of potential housing 
demand over the next decade. 
 
Residential Development 
Opportunities Issues 
Regional accessibility Family market impeded by price, perception 
of schools, lack of amenities/parks 
Rental properties are noticeably absent Lack of distinctive neighborhood/community 
identity 
Developers creating/proposing quality 
investments 
Noise overlay limits development locations 
Unique waterfront and view locations Rezoning needed for future development 
Attached units selling for below Portland 
market average; affordable 
Extremely limited supply of rental housing is a 
barrier to living on Hayden Island for many 
Mixed-income housing can be 
supported 
Varying housing types (e.g., floating homes, 
manufactured homes, condos) are tightly 
clustered, segmenting rather than unifying 
residents  
Geographic constraints have the 
potential to foster compact, small town 
atmosphere 
I-5 offers the only entrance/exit  
Diversity of existing housing types 
expand opportunities for variety of new 
development  
Abundance of manufactured/mobile homes 
  
 
    Hayden Island Plan Market Study        Residential Market Analysis 
 
Page 9
EXHIBIT 2.01 
Housing Tenure  
 
 
Most of the 1,241 occupied housing units on Hayden Island are owner-occupied, 
narrowing options for renters.  The restricted supply of rental product impacts Hayden 
Island’s ability to accommodate housholds who are not yet ready for ownership, and 
potentially limiting economic diversity on the island.  
Source:  ESRI Business Information Services 
Estimated Occupied Housing Units by  Tenure
Hayden Island : 2007
85%
15%
Owner Renter
  
 
    Hayden Island Plan Market Study        Residential Market Analysis 
 
Page 10
EXHIBIT 2.02 
Household Size 
 
 
 
A relatively high share of one- to two-person households supports Hayden Island’s 
image as an empty nester/retiree community. Average household size is estimated at 
only 1.74 persons, far below the Market Area’s estimated 2.41 persons per household. 
(See map on page 1.) Interviews for this research revealed that dissatisfaction with the 
school district and a shortage of recreation facilities are among the reasons why 
Hayden Island does not currently appeal to families with children.   In addition, many 
believe floating homes are not conducive to families with young children because of 
the risks of living on the water. 
47%
31%
40%
34%
13%
35%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
One Person Two Persons Three or More Persons
Households by Size
Hayden Island and Market 
Area
Hayden Island Market Area
Source:  ESRI Business Information Services 
  
 
    Hayden Island Plan Market Study        Residential Market Analysis 
 
Page 11
EXHIBIT 2.03 
Unit Type 
 
 
 
Attached product, manufactured homes and ‘other’ unit types (particularly floating 
homes) heavily dominate Hayden Island’s housing supply, clearly differentiating it from 
the surrounding Market Area.  The prevalence of manufactured homes on the Island – 
accounting for more than one-third of total occupied housing units – is a potentially 
challenging issue: supporting economic diversity among residents but consuming 
valuable land.  Reportedly, the occupancy at the Hayden Island Mobile Home Park is 
consistently high.   
 
16%
61%
14%
3% 2%
9% 8%
6%
9%
19%
37%
2%
13%
0%
0%
10%
20%
30%
40%
50%
60%
70%
Single Family
Det ached
Single Family
At t ached
2-4 Unit s 5-9 Unit s 10+ Unit s Manuf act ured
Homes
Ot her
Occupied Unit s by Unit s in St ruct ure
Hayden Island and Market  Area
2000
Hayden Island Market Area
  
 
    Hayden Island Plan Market Study        Residential Market Analysis 
 
Page 12
EXHIBIT 2.04 
Single Family and Attached Sales Transactions: 2002-2006 
Hayden Island 
 
 
 
Residential sales transactions on Hayden Island have been steadily increasing, 
averaging 42 sales annually between 2002 and 2006 (excluding sales of houseboats 
and manufactured homes). While attached product represents a vast majority (94%) of 
sales during this time, prices of detached single family homes were roughly three times 
that of attached product. In terms of price per square foot, however, single family and 
attached product are more closely aligned: $251 and $220 per square foot, 
respectively, in 2006.  Manufactured and floating homes are considered personal 
property and their sales are not recorded in the same manner as real estate. 
 
 
Note: Does not include mobile homes or houseboats. 
 
Source: Metro Data Resource Center – RLIS Lite February 2007 and E.D. Hovee & Company, LLC.  
 
 
 
 
$
5
6
0
,0
0
0
$
1
6
6
,8
8
0
$
1
7
8
,7
9
0
$
4
7
1
,0
0
0
$
1
4
9
,8
6
0
$
1
7
9
,0
5
0
$
5
4
5
,0
0
0
$
1
6
1
,3
0
0
$
1
8
3
,4
3
0
$
5
7
9
,7
5
0
$
1
8
6
,2
7
0
$
2
0
0
,5
8
0
$
6
5
9
,7
5
0
$
2
5
1
,2
5
0
$
2
8
2
,6
8
0
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
2002 2003 2004 2005 2006
Av erage Residential Sales Price
Hayden Island
2002-2006
Single Family Attached Total
  
 
    Hayden Island Plan Market Study        Residential Market Analysis 
 
Page 13
 
 
EXHIBIT 2.04a 
Summary Of Selected Condominium Projects  
Fall 2007 
Hayden Island 
 
 
Two significant waterfront condo developments have come on the Hayden Island 
market in the last year.  Salpare is effectively still under construction with a number of 
pre-sold units.  These top quality sites and projects appeal to a middle-upper to upper 
income market.  With the current oversupply of condominiums in the Portland market, 
sales have been slower than originally anticipated. 
 
Development (Year Opened) Total Price/SF
Unit Type Units
From To From To Total /Mo
Salpare Bay (2008) 204 $600,000 $2,250,000 950 3,488 $642 25 1.2
Tomahawk Island Drive
Mid-rise Concrete Structure
Mid-rise Building
Waterside Condominiums (2007) 84 $400,000 $1,100,000 1,600 2,300 $385 34 1.5
N Hayden Island Dr @N Janzen Dr
Mid-rise Building
Concrete and Wood Frame
Source:  Marketek, Inc.
First two of four phases are underway. Phase one is expected to be complete in 11 
to 12 months. Approximately 25 units have sold, primarily to persons in their 50's and 
60's.  Located on a 25-acre Columbia River site. Broke ground in 2005. One-, two- 
and three-bedroom units. Construction of the marina is almost complete, offering 
194 slips for boats 30' to 60' and a 100' super slip. Clubhouse, fitness center,  private 
beach, secure parking. A restaurant is planned for the project. 
Columbia River/Portland/Vancouver views. Prices based on orientation to water and 
level. All units have some water views. Eleven units are currently occupied. One-story 
suites. Unit amenities include: custom fireplaces, slate terraces, hardwood in kitchen 
and entry, triple pane windows and crown molding. 30' to 60' boat slips; side slips to 
accommodate 110' to 300' boats. Secure car and bike parking. Community room 
and fitness  center. 
Unit Price Range Unit Size Range Sales
 
 
 
EXHIBITS 2.05a-c 
Potential Demand: Methodology 
 
 
Statistical demand analyses were performed for the Market Area to estimate the 
potential market depth for market rate and affordable for-sale and rental product. The 
two main sources of demand for housing are new household growth and existing 
households in turnover. New households and households turning over are qualified by 
income and propensity to rent or own.  Households in turnover are also qualified by 
‘lifestyle’ characteristics to account for the share of Market Area households who would 
be most interested in Hayden Island’s unique setting.  The analyses use the average 
annual increase in population beginning with the 2007 estimated household base and a 
projected 2007-2017 average annual increase in new households.   
 
In estimating demand for for-sale product, affordable units are defined as households 
with incomes between 50% and 80% of Portland’s Family Median Income (FMI) 
  
 
    Hayden Island Plan Market Study        Residential Market Analysis 
 
Page 14
established by HUD.  See Exhibit 2.05a.  Households with incomes below 50% of FMI are 
unlikely to have sufficient income to qualify for home ownership programs. Market rate 
households include those with incomes above 80% of FMI.   See Exhibit 2.05b. 
 
Potential demand estimates for affordable rental product include households with 
incomes at or below 60% of the FMI. A large share of public subsidies to support 
affordable rental housing such as the Section 8 program and Low Income Housing Tax 
Credit (LIHTC) program target households with incomes below 60% of FMI.  Market rate 
households are defined as those with incomes above 60% of AMI, up to $70,000.  
 
Adjustments for income overlap and family size are accounted for in both the for-sale 
and rental demand analyses.  Even though these analyses use finite numbers, their end 
result (i.e., potential market capture) should be interpreted as an approximation of 
market depth that is balanced with the results of an analysis of the competitive supply. 
 
Efficiency:   
1 Person
Annual 1 Bedroom: 1.5 Persons
Income 2 Bedrooms: 3 Persons
3 Bedrooms: 4.5 Persons
4 Bedrooms: 6 Persons
% of FMI
50% of FMI
60% FMI
80% of FMI
Source: Department of Housing and Urban Development
$28,500 $32,600 $36,650 $40,750
$58,650
6 Person
$39,400
$63,000
$44,000 $47,300
$36,650
$38,000 $43,450 $48,900 $54,300
$23,750 $27,150 $30,550 $33,950
Household Size
1 Person 2 Person 3 Person 4 Person 5 Person
Exhibit 2.05a
2007 MAXIMUM INCOME LIMITS BY HOUSEHOLD SIZE
Portland-Vancouver-Beaverton MSA
FMI = $63,800
 
 
 
  
 
    Hayden Island Plan Market Study        Residential Market Analysis 
 
Page 15
50% to 80% FMI Market Rate
Annual New Households (1) 6,504 6,504
Owner Propensity (2) 66% 66%
Number 4,293 4,293
Income Qualified (3) 25% 60%
Number 1,073 2,576
Hayden Island Capture 0.5% 0.5%
Subtotal 5 13
Annual New Household Demand
50% to 80% FMI Market Rate
Total Households (1) 425,617 425,617
Owner Propensity (4) 60% 60%
Number 255,370 255,370
Income Qualified (5) 26% 57%
    Number 66,396 145,561
Turnover Rate (6) 12% 12%
    Number 7,968 17,467
Target Market Adjustment (7) 25% 25%
Number 1,992 4,367
Hayden Island Capture 0.5% 0.5%
Subtotal 10 22
Annual Demand from Turnover
TOTAL ANNUAL DEMAND
1. ESRI BIS
Sources:  Marketek, Inc.; Census 2000;  ESRI BIS
©  2007 by Marketek, Inc.
5.  Estimated proportion of Market Area households with annual incomes between 
$23,750 and $63,000 for "50% to 80% FMI units and above $38,000 for "Market Rate" 
units. Adjusted for overlap.
6. Estimate of the proportion of owner households that turnover within a 12 month 
period.
7. Based on Tapestry data, estimated proportion of existing Market Area 
households who would prefer to live in a more urban than rural setting.
50
2. Estimated proportion of housing units that are owner occupied in the 
Portland/Vancouver MSA.
3.  Estimated proportion of MSA households with annual incomes between $23,750 
and $63,000 for "50% to 80% FMI units and above $38,000 for "Market Rate" units. 
Adjusted for overlap.
4. Estimated proportion of Market Area housing units that are owner occupied.
New Household Demand
18
Demand from Turnover
32
Exhibit 2.05b
POTENTIAL ANNUAL DEMAND ANALYSIS FOR OWNER UNITS
Residential Market Area and Hayden Island
2007-2017
 
  
 
    Hayden Island Plan Market Study        Residential Market Analysis 
 
Page 16
Up to 60% FMI Market Rate
Annual New Households (1) 6,504 6,504
Renter Propensity (2) 34% 34%
Number 2,211 2,211
Income Qualified (3) 28% 29%
Number 619 641
Hayden Island Capture 0.5% 0.5%
Subtotal 3 3
Annual New Household Demand
Up to 60% FMI Market Rate
Total Households (1) 425,617 425,617
Renter Propensity (4) 40% 40%
Number 170,247 170,247
Income Qualified (5) 31% 29%
    Number 52,777 49,372
Turnover Rate (6) 48% 48%
    Number 25,333 23,698
Target Market Adjustment (7) 25% 25%
Number 6,333 5,925
Hayden Island Capture 0.5% 0.5%
Subtotal 32 30
Annual Demand from Turnover
TOTAL ANNUAL DEMAND
1. ESRI BIS
Sources:  Marketek, Inc.; Census 2000;  ESRI BIS; 
©  2007 by Marketek, Inc.
Demand from Turnover
2. Estimated proportion of housing units that are renter occupied in the 
Portland/Vancouver MSA.
68
4. Estimated proportion of Market Area housing units that are renter occupied.
61
5.  Estimated proportion of Market Area households with annual incomes less than 
$47,300 for "Up to 60% FMI" units; between $28,500 and $70,000 for "Market Rate" 
units. Adjusted for overlap.
New Household Demand
7. Based on Tapestry data, estimated proportion of existing Market Area 
households who would prefer to live in a more urban than rural setting.
Exhibit 2.05c
POTENTIAL ANNUAL DEMAND ANALYSIS FOR RENTER UNITS
Residential Market Area and Hayden Island
2007-2017
3.  Estimated proportion of MSA households with annual incomes less than $47,300 
for "Up to 60% FMI" units; between $28,500 and $70,000 for "Market Rate" units. 
Adjusted for overlap.
6. Estimate of the proportion of renter households that turnover within a 12 month 
period.
6
 
  
 
    Hayden Island Plan Market Study        Residential Market Analysis 
 
Page 17
EXHIBIT 2.06 
Potential Demand for For-Sale and Rental Units: 2007-2017 
 
 
 
Based on an evaluation of the surrounding housing market, planned and proposed 
physical improvements in and around Hayden Island, the potential of integrating a 
variety of uses within and adjacent to new housing development, we estimate that over 
the next ten years, approximately 500 affordable and market rate for-sale units and 676 
affordable and market rate rental units could be absorbed on Hayden Island.  This level 
of demand would entail a potential capture of only 0.5% of total Market Area demand 
for affordable and market rate for-sale and rental housing within the 2007-2017 period. 
Combined, there is potential demand for 1,176 for-sale and rental housing units on 
Hayden Island between 2007 and 2017, 43% ownership and 57% rental. 
 
 
 
35
33
15
35
0
10
20
30
40
50
60
70
Rental For Sale
Potential Annual Demand for For-Sale and Rental Units
2007-2017 
Affordable Market Rate
  
 
    Hayden Island Plan Market Study         Retail Market Analysis 
 
Page 18
 
3.0 RETAIL MARKET ASSESSMENT 
 
The Portland MSA retail market is comprised of approximately 43.8 million square feet 
(SF) of space in 580 regional, community and neighborhood shopping centers, (Source: 
CB Richard Ellis).  For perspective, Jantzen Beach SuperCenter is made up of 350,000 SF 
of enclosed mall space and is surrounded by 419,000 SF of freestanding big box tenants 
including Target, Home Depot and CompUSA to name a few.  There is roughly an 
additional 80,000 SF of retail/restaurant space on Hayden Island, the bulk of which 
focuses on dining and convenience goods such as grocery, coffee stands and gas.  
With about 850,000 SF of retail space, Hayden Island houses approximately 1.9% of total 
existing retail space in the metro area.  
 
Throughout the metropolitan area, retail construction underway will add another 1.3 
million square feet of space in 2007.  Among the major developments are Cascade 
Station at PDX (650,000 SF) and Bridgeport Village Center expansion in Tualatin. 
Vacancies are estimated at 5.2% with asking rents averaging $19.67/SF, (Marcus & 
Millichap).  Out-of-state investors are actively targeting single-tenant properties 
particularly for fast-food restaurants.  
 
In Vancouver, plans were recently halted for a $215 million lifestyle retail center on the 
former Evergreen Airport site due to major tenants withdrawing, among other factors.  
Some brokers believe that there is currently a general slow down in new retail 
construction that is expected to continue into 2008.  One exception that will draw from 
Hayden Island and beyond is the Fred Meyer shopping center in the Officers Row area 
slated for completion in spring 2008. The store is promoted as a cutting edge, more 
upscale center than any other the retailer has undertaken.  Adjacent to the 65,000 
square foot Fred Meyer center will be approximately 20,000 SF of restaurant, banking 
and related site pads.  Another Vancouver retail expansion underway is the $40 million 
Westfield center near I-205 and Rt. 500, upgrading to include an outdoor lifestyle district. 
 
In this section, competitive retail conditions are reviewed followed by an analysis of 
demand for retail space within the Hayden Island Market Area and on Hayden Island 
proper.   
 
 
 
Retail Development 
Opportunities Issues 
Jantzen Beach SuperCenter 
redevelopment: updated format, higher 
quality tenants, greater market 
penetration, enhanced attractor 
Highway interchange area only 
commercial focal point; additional nodes 
needed to attract tenants and create 
synergy 
Regional accessibility and regional retail 
hub 
At present, retailers/restaurants want 
highway exposure 
Growing local and visitor markets Small H.I. resident population limits 
community services and location of 
convenience retail  
Waterfront sites offer potential unique 
dining/retail experience 
Congestion directly impacts retail sales 
Unique, specialty retail gaps to be filled Limited community-serving retail 
  
 
    Hayden Island Plan Market Study         Retail Market Analysis 
 
Page 19
 
EXHIBIT 3.01 
Retail Supply/Demand Balance 2007:  Hayden Island 
 
 
A comparison of retail supply (estimated from actual retail sales) and potential demand 
based solely on the expected amount spent by residents of Hayden Island, indicates a 
surplus of sales in every retail category.  In essence businesses are ‘importing’ sales from 
shoppers who live beyond Hayden Island, including visitors, employees and other metro 
area residents.   While it is apparent that the Jantzen Beach mall and big box retailers 
draw from a large market (10-15 mile radius), the figures below serve to illustrate that 
restaurants and community-serving, convenience businesses are also highly dependent 
on a large market to succeed. 
 
 
 
 
Source: ESRI BIS, Marketek, Inc. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Demand Supply Difference
(Spending Potential) (Retail Sales) Leakage (Surplus)
Hayden Island
442:  Furniture & Home Furnishings Stores $1,002,552 $9,133,584 ($8,131,032)
443:  Electronics & Appliance Stores $883,152 $10,568,999 ($9,685,847)
444:  Building Materials, Garden Equip. & Supply Stores $1,009,390 $16,079,432 ($15,070,042)
445:  Food & Beverage Stores $6,048,624 $38,688,786 ($32,640,162)
446:  Health & Personal Care Stores $1,065,927 $3,024,063 ($1,958,136)
448:  Clothing & Clothing Accessories Stores $1,718,195 $7,105,577 ($5,387,382)
451:  Sporting Goods, Hobby, Book & Music Stores $529,302 $14,422,694 ($13,893,392)
452:  General Merchandise Stores $4,328,424 $40,365,755 ($36,037,331)
453:  Miscellaneous Store Retailers
(florist, office supplies, gift stores, etc.)
722:  Food Services & Drinking Places $4,251,244 $11,324,993 ($7,073,749)
Total Leakage $0
NAICS
$546,267 $4,180,523 ($3,634,256)
  
 
    Hayden Island Plan Market Study         Retail Market Analysis 
 
Page 20
EXHIBIT 3.01a 
Retail Hierarchy 
 
 
To further illustrate retail demand and location factors, two models of retail hierarchy 
are presented below comparing the relative size, geographic draw and market area 
requirements of common retail formats. 
 
 
Neighorhood Store Main Street Town Center
(Convenience Retail) (Convenience Center) (Neighborhood Center) (Regional Center) (Lifestyle Center) (Mall)
R
o
b
e
rt
 G
ib
b
s 
M
o
d
e
l
Size                                       
Total Number of Shops                       
Trade Area                                          
Population Needed                      
Neighborhoods Served                                 
Net Density Needed*
3,000 to 5,000 sf                  
1 shop                          
1/4 to 1/3 mile                            
750 homes                             
1                                             
6 du/acre
10,000 to 25,000 sf                              
5 to 6 shops                                        
1/2 to 1 mile                                     
1,500 homes                                  
3 to 4                              
3 du/acre
100,000 to 175,000 sf                         
varies                                   
2 to 3 miles                                    
5,000 homes                           
6                                        
0.62 du/acre
300,000 to 500,000 sf                             
varies                                
5 to 7 miles                                      
25,000 homes                                     
50                                          
0.5 du/acre
200,000 to 500,000 sf                       
varies                                    
5 to 7 miles                                 
250,000 homes                          
200                               
5 du/acre
1.0 to 1.5 million sf                               
varies                                       
10 to 15 miles                                   
125,000 homes                                    
250                                    
0.62 du/acre
S
e
th
 H
a
rr
y
 
M
o
d
e
l Size                                    
Siting                                    
Trade Area                     
Population Needed
800 to 5,000 sf                          
Local street                          
1/4 to 1 mile                              
500-2,000
15,000 to 25,000 sf                       
Arterials                                      
0.5 to 1.5 miles                      
1,000 to 3,000
40,000 to 100,000 sf                    
Arterials                               
1.5 to 3 miles                              
8,000 to 20,000
300,000 to 850,000 sf                       
Arterials                                  
5 to 15 miles                               
50,000 to 100,000
Typical Tenants Convenience Store Dry Cleaner                  
Shoe repair                      
Drugstore                  
Café                              
Real Estate                      
Pizza                           
Small market
Supermarket (essential)                    
Small hardware                    
Video
Home improvement                       
Department store            
"Lifestyle" retail                  
Ann Taylor                   
Pottery Barn                  
Banana Republic                     
Crate & Barrel                      
Borders                            
Abercrombie & Fitch                    
William Sonoma                             
Talbots
Department stores                      
Smaller tenants
*Net density includes all land within a geographic area, including non-residential space such as streets, schools, parks, industry, etc.
Shopping District
Source: Conference for New Urbanism; Marketek, Inc  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
    Hayden Island Plan Market Study         Retail Market Analysis 
 
Page 21
 
 
EXHIBIT 3.02 
Retail Supply/Demand Balance 2007:  Market Area 
 
 
In analyzing retail supply and demand for Hayden Island’s greater Market Area (12-mile 
radius), it is also evident that retailers are generally satisfying and exceeding potential 
demand from area residents. The result is a surplus of sales in all retail categories except 
building materials/garden supplies where a positive difference or a leakage of $32.4 
million in sales is evident, with demand outpacing supply.  Business opportunities may 
exist in this category within the Market Area.  Again, bear in mind this data only reflects 
potential spending from local shoppers. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Demand Supply Difference
(Spending Potential) (Retail Sales) Leakage (Surplus)
Hayden Island Market Area
442:  Furniture & Home Furnishings Stores $352,333,206 $371,315,790 ($18,982,584)
443:  Electronics & Appliance Stores $320,570,914 $408,338,706 ($87,767,792)
444:  Building Materials, Garden Equip. & Supply Stores $362,686,108 $330,217,614 $32,468,494
445:  Food & Beverage Stores $2,087,189,562 $2,095,936,087 ($8,746,525)
446:  Health & Personal Care Stores $321,514,153 $486,949,276 ($165,435,123)
448:  Clothing & Clothing Accessories Stores $567,402,015 $832,846,343 ($265,444,328)
451:  Sporting Goods, Hobby, Book & Music Stores $153,796,638 $492,224,321 ($338,427,683)
452:  General Merchandise Stores $1,993,627,434 $2,409,959,972 ($416,332,538)
453:  Miscellaneous Store Retailers
(florist, office supplies, gift stores, etc.)
722:  Food Services & Drinking Places $1,675,145,192 $1,761,298,231 ($86,153,039)
Total Leakage $32,468,494
Estimated Supportable Square Footage 231,918
Source: ESRI BIS; Marketek
NAICS
$165,582,100 $400,756,079 ($235,173,979)
  
 
    Hayden Island Plan Market Study         Retail Market Analysis 
 
Page 22
 
EXHIBIT 3.03 
Future Retail Opportunities: Greater Market Area 
 
 
Future population growth in the greater Hayden Island Market Area will generate 
increased demand for retail.  Potential sales and supportable square feet for the 2007 – 
2017 time frame are calculated below for key retail and service categories. By 2012, the 
net gain among all retail categories is 2.9 million square feet and by 2017, an additional 
3.1 million square feet can potentially be supported by population increases in the 
Market Area. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Per *Target 
Merchandise or Household Sales
Service Category Expenditure ($/SF) Sales Space (SF) Sales Space (SF) Sales Space (SF)
Apparel $2,416 $209 $1,028,141,706 4,919,338 $1,103,908,568 5,281,859 $1,185,257,998 5,671,091
Home Furnishings $1,630 $199 $693,891,907 3,486,894 $745,026,894 3,743,854 $799,929,551 4,019,746
Home Improvement $1,138 $140 $484,152,957 3,458,235 $519,831,648 3,713,083 $558,139,176 3,986,708
Misc. Specialty Retail $2,186 $216 $930,533,541 4,308,026 $999,107,363 4,625,497 $1,072,733,763 4,966,360
Shoppers Goods $3,136,720,111 16,172,493 $3,367,874,474 17,364,293 $3,616,060,487 18,643,906
Grocery $9,777 $390 $4,161,189,310 10,669,716 $4,467,839,897 11,456,000 $4,797,084,761 12,300,217
Health & Personal Care $1,121 $365 $477,184,756 1,307,355 $512,349,939 1,403,698 $550,106,123 1,507,140
Convenience Goods $4,638,374,066 11,977,072 $4,980,189,836 12,859,698 $5,347,190,884 13,807,357
Restaurants $3,819 $263 $1,625,610,082 6,181,027 $1,745,406,190 6,636,525 $1,874,028,978 7,125,585
Entertainment $465 $90 $198,001,285 2,200,014 $212,592,596 2,362,140 $228,259,008 2,536,211
Personal Services $1,092 $151 $464,596,424 3,076,798 $498,833,935 3,303,536 $535,594,095 3,546,981
Total $10,063,301,968 39,607,404 $10,804,897,031 42,526,193 $11,601,133,453 45,660,041
Five Year Net Gain $741,595,064 2,918,789 $796,236,422 3,133,848
* Target sales are based on the Urban Land Institute, "Dollars and Cents of Shopping Centers."  
Sources: ESRI BIS; Urban Land Institute; Marketek, Inc.
©  2007 by Marketek, Inc.
2007 2012 2017
Retail Potential Retail Potential Retail Potential 
  
 
    Hayden Island Plan Market Study         Retail Market Analysis 
 
Page 23
EXHIBIT 3.04 
Hayden Island Retail Opportunities 
 
 
Hayden Island’s ability to capture or absorb existing and new retail demand within the 
Market Area (Exhibit 3.02) is dependent on numerous factors including congestion relief, 
developable land, active marketing, the success of Jantzen Beach SuperCenter and 
changes in retail supply in other locations with the market area.   
 
The capture rates assigned in the exhibit below are conservative estimates that assume 
a positive development environment and also take into account Hayden Island’s 
existing share of retail and population within the Market Area.  Supportable square feet 
of demand are converted to an approximate number of stores in each 
merchandise/service category, using average store sizes provided by the Urban Land 
Institute. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Merchandise/Service 
Category
Capture Sq Ft Capture Sq Ft Capture Sq Ft Sq Ft Sq Ft Number
Shoppers Goods
Apparel NA 0 3% 10,876 4.5% 17,515 28,391 3,960 7
Home Furnishings NA 0 3% 7,709 4.5% 12,415 20,124 5,365 4
Home Improvement 1% 2,319 3% 7,645 4.5% 12,313 22,278 13,200 2
Misc. Specialty Retail NA 0 3% 9,524 4.5% 15,339 24,863 3,780 7
Subtotal 1% 2,319 3% 35,754 4.5% 57,583 95,656 19
Convenience Goods
Grocery NA 0 1.5% 11,794 2% 16,884 28,679 51,495 1
Health & Personal Care NA 0 1.5% 1,445 2% 2,069 3,514 10,920 0
Subtotal NA 0 1.5% 13,239 2% 18,953 32,193 1
Restaurants NA 0 5% 22,775 6% 29,344 52,119 3,025 17
Entertainment NA 0 5% 8,106 6% 10,444 18,551 21,250 1
Personal Services NA 0 2% 4,535 3% 7,303 11,838 1,800 7
Total 1% 2,319 3% 84,409 4% 123,627 210,356 45
Source: ESRI; Urban Land Institute; Marketek, Inc.
©  2007 by Marketek, Inc.
2007-2017
Supportable 
Space
Average 
Store Size
Supportable 
Stores
20172007
Existing Unmet 
Demand Demand Demand
Market Area Market Area
2012
  
 
    Hayden Island Plan Market Study         Retail Market Analysis 
 
Page 24
EXHIBIT 3.05 
Visitor Market Impacts: Multnomah County & Hayden Island, 2005 
 
 
In addition to demand from the Market Area population, the visitor market is an 
important contributor to Hayden Island’s business base.  Supporting out of town visitors 
are a total of 1,251 guest rooms at eight nearby lodging facilities:  Red Lion, Marriott 
Courtyard, Best Western, Holiday Inn Express, Days Inn, Motel 6, Oxford Suites and 
Portlander Inn.  This represents approximately 6.6% of the total rooms in the Portland 
market (18,694).   
 
Multnomah County’s tourism expenditures were estimated at $2.35 billion in 2005, 
according to Dean Runyan Associates.  Growth in County visitor spending has 
averaged 6.2% annually since 1991, above the state average of 5.8%.  Analysis of 
Multnomah County visitor spending by various commodities reveals that of total 
spending (excluding air travel and lodging), retail purchases comprise 17.4%; grocery 
spending accounts for 4.4%; eating out, 28%; and ground transportation/gas, 41%.  
 
Marketek estimates conservatively that Hayden Island may be able to capture 3% of 
total visitor spending county-wide in selected commodity categories:  retail sales, food 
& beverage and grocery.  It is estimated that Hayden Island can capture approximately 
1% of ground transportation/gas and arts, entertainment and recreation-related 
spending.  This estimate is based upon insights from existing business owners and EXPO 
Center and Portland International Raceway (PIR) managers, visitor counts, a 2005 PIR 
economic impact analysis and perceptions of visitor ‘pull.’  Over time, with increased 
commercial density, a renovated Jantzen Beach mall and additional restaurant/retail 
facilities, Hayden Island’s share of visitor market spending should increase. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commodity Purchased ($ Mil) % of Total Capture ($ Mil)
Food & Beverage $325 28.0% 3.0% $9.8
Food Stores $51 4.4% 3.0% $1.5
Ground Trans & Gas $477 41.1% 1.0% $4.7
Arts, Entertainment, Recreation $106 9.1% 1.0% $1.1
Retail Sales $202 17.4% 3.0% $6.1
Total Spending at Destination $1,161 100.0% $23.1
Source: Dean Runyan, Marketek, Inc.
Hayden Island
  
 
    Hayden Island Plan Market Study         Retail Market Analysis 
 
Page 25
 
EXHIBIT 3.06 
Hayden Island Visitor Retail Opportunities, 2007-2017 
 
 
Marketek prepared a straight line projection of Hayden Island’s potential visitor 
spending in selected categories using the county-wide 6.2% average annual rate of 
growth and the capture rates by commodity assigned in Exhibit 3.05.  With this 
assumption, visitor spending in restaurant, grocery and retail should total $19.6 million in 
2007, increasing to $26.4 million by 2012 and $35.8 million in 2017.  The commensurate 
demand for store and restaurant space is also projected over that time period with a 
total demand for an additional 57,776 square feet in these selected categories. This 
demand is above and beyond the potential demand generated during the same time 
period by the local market of 210,356 square feet, (Exhibit 3.04). 
 
 
 
Spending Space (SF) Spending Space (SF) Spending Space (SF)
Food, Beverages & Restaurants $327 $11,050,000 33,792 $14,930,000 45,657 $20,170,000 61,682
Grocery $390 $1,690,000 4,333 $2,290,000 5,872 $3,090,000 7,923
Retail $216 $6,880,000 31,852 $9,200,000 42,593 $12,560,000 58,148
Total $19,620,000 69,977 $26,420,000 94,122 $35,820,000 127,753
Five Year Net Gain $6,800,000 24,145 $9,400,000 33,631
2012 2017
Source:  Marketek, Inc., Urban Land Institute
Retail Category
Target 
Sales 
($/SF)
2007
  
 
    Hayden Island Plan Market Study         Office Market Overview 
 
Page 26
4.0 OFFICE MARKET OVERVIEW 
 
Within the five-county Portland Metro area, office market vacancies stood at 11.55% at 
the end of the 2nd quarter of 2007.  Vacancy rates are gradually trending upward as 
absorptions are down. Construction is moderate with addition of seven new office 
buildings, adding almost 500,000 SF to be completed in 2007 (Source: CB Richard Ellis.). 
As is true in metropolitan areas across the nation, Portland’s suburban vacancy rates 
(14.4%) are significantly higher than the central business district (8.5%).  The Lloyd Center 
market has a vacancy of 6.9% with average asking lease rates of $23.31.  Airport Way 
has a 10.5% vacancy rate and average asking rates of $16.69.  Another comparable of 
interest to Hayden Island is Vancouver, WA with vacancy of 13% and average lease 
rate of $20.49. 
 
Local brokers/management companies report that Hayden Island is a ‘tough sell’ for 
traditional office users such as professional service firms.  Traffic congestion is the 
number one barrier to office leasing.   Area realtors also note that most office prospects 
are looking for smaller spaces in the 500-1,000 SF range as well as moderate interest in 
small office suites.  No executive suites are available on Hayden Island. 
 
Hayden Island has one traditional office property, Hayden Island Plaza, a Class B 42,596 
SF property that is currently 97% occupied.  Rents average $17/SF with all services. 
Occupants are largely financial, insurance and real estate professionals, many of whom 
reside on the island.   A small amount of neighborhood commercial office space exists 
near the Safeway center.  In addition, Hayden Island Business Park has flex space 
buildings available for warehouse-office-light manufacturing or related uses. Thirty-one 
tenants operate a wide variety of businesses ranging from auto-related support and 
distribution to furniture-making and even a church. Five buildings on nearly ten acres 
offer 162,000 SF of space.  At present, five spaces are available (8.3% of total) ranging in 
size from 1,982 SF to 5,615 SF with rents from $12.12/SF (NNN) to $14.28/ SF (NNN). 
 
Future office expansion will be dependent on job growth, residential expansion, 
developable land, and the ultimate reduction of traffic congestion, making Hayden 
Island a convenient location to do business between Portland and Vancouver with easy 
airport access.  Assuming job growth and the ability to address key issues, Marketek 
estimated future office market demand.  Using Hayden Island’s current employment 
base of 2,952 and the Oregon Employment Department’s projected rate of average 
annual employment growth per sector (1.6%) for Multnomah County, a straight line 
projection was used to estimate possible future employment growth and potential 
office demand.   By 2012, Hayden Island’s job base could grow to 3,197 and could 
further expand to 3,461 by 2017.   Applying standard office space user ratios and the 
existing distribution of jobs on the island results in an estimated potential demand of 
18,920 SF of new office space by 2012 with an additional demand of 20,640 SF by 2017.  
 
Health care services/offices are noticeably absent from the business mix on Hayden 
Island and are keenly desired by local residents.   The American Dental Association 
estimates that one dentist per 1,712 population base can be reasonably supported.  The 
National Research Council estimates that a population of 2,257 persons is needed for 
every general practitioner physician.  Health care providers may well be a target 
business for the island particularly as the residential base expands.  However, a broader 
geographic market is likely needed to truly support these services as families have many 
influences on their choice of medical providers.  Additionally, doctors and specialists 
tend to cluster close together for the economic synergies and referrals allowed.  
  
 
    Hayden Island Plan Market Study         Industrial Market Overview 
 
Page 27
 
5.0 INDUSTRIAL MARKET OVERVIEW 
 
 
According to a July 2007 Grubb & Ellis report, the Portland industrial market is 
experiencing the lowest vacancy rate in twenty years.  By all accounts, there is 
substantial demand for industrial space in the Portland metro area with particular 
pressure on the central city where brokers and business are often willing to pay a 
premium for multi-modal access.   
 
The largest industrial sector, distribution/warehouse with over 100 million square feet of 
inventory, is also the most constrained with a vacancy rate of 4-5%.  Up to 2.0 million SF 
of new speculative industrial space will be completed in 2008, but is expected to be 
rapidly absorbed.   
 
Portland’s industrial market is closely linked to activity at the Port of Portland and global 
trade.  Even with a general economic slowdown expected, no surplus is anticipated in 
Portland due to the existing tight market and limited supply. 
 
In 2002 and 2004, a combined total of 4,000 acres was added to the Urban Growth 
Boundary and is rapidly being absorbed.  In June 2007 Metro completed an industrial 
land inventory identifying 1,905 tax lots with 9,294 buildable acres inside the Metro UGB.  
The overwhelming majority of lots are small, with a median size of 3.4 acres. 
 
East Hayden Island has one large industrial site, the 38-acre Portland Auto Auctions on 
the western edge adjoining the railroad line.  While over time the existing tenant may 
relocate, the site will likely be coveted for other light industrial uses—flex space, 
warehouse/distribution, business park or similar development.  The Columbia Crossings 
properties are also currently zoned industrial, totaling 21 acres of developable land.  
Because of their location in close proximity to residential and water-recreation uses, 
these sites are less likely to remain industrial over the long term.