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--� Ms. Sangeeta Kurupillai Apri129, 1997 Page 8 � highway just a mile away in the Study Area sold for prices between $1.20/SF and $7.00/SF respectively. Two tracts with income-generating retail buildings show similaz results. The one in the Study Area sold a 16.5% capitalization rate (cap rate) while the one in the Control Area sold on a 12.5°/a cap rate (the higher the rate the lower the value). This difference in rates can be directly attributed to the additional risk factors reflected by the area. The difference between the two yields reflects a 25% drop in property prices near the concentration of SOBs. In our interviews with real estate professionals, we ]eamed that some properties had been on the market next to or across the street from SOBs for over 10 years. Interest in these sites historically has come from the same small �oup of users which includes: other SOBs, pawn shops, liquor stores, night clubs, tanning salons, and certain restaurants. These users have found that the SOBs clientele will patronize their businesses; therefore, they tend to congregate neaz SOBs. We learned that retail space neaz SOBs is more difficult to lease because the type of tenant who will locate there tends to be limited to those listed above. As a result, these properties take much longer to mazket. Also, a comparison of lease rates between the Study Area and the Control Area showed lower asking rates neaz the SOBs operating as adults cabazets. Most owners and agents that we interviewed who have holdings in either the Study Area or Control Area West believe that should the Study Area be rid of the SOBs, more investment in new restaurant and retail properties would quickly follow. This is due to the high tr�c count along Northwest Highway, the density of surrounding developments and the demand generated from the surrounding business and residential neighborhoods. Many others we talked to echoed these sentiments and believed that owners would make significant investments in nearby apartments if the SOBs were gone. Crime As part of our comparison of these areas, we collected crime statistics for the Study Area and compazed them to the two Control Areas. We found that sex-related crimes were over five times higher in the Study Area than in Control Area West and neazly three times higher than in Control Area West. Sex Crimes, as defined by the FBI, include: rape, prostitution/commercial vice and sex offenses. (See Exhibit A attached). The results of this compazison show crime in three similaz cr�mmercial corridors along Northwest Highway. The Study Area had 396 sex crime arrests during the 50 months period through Mazch 1997 while Control Area East and West had 133 and 77 respectively. Contro] Area West is less than a mile from the Study Area along the same highway; yet, it had five times fewer sex crime arrests. 06/12/97 ]5:30 TX/RX N0.559t P. 9