Post on 23-Aug-2020
in this issue...
2 NatioNal overview
4 realFacts Meyers iNdex
8 realFacts Meyers Market coverage
9 about us
R e nRental trendsReal estate maRket insight foR the multi -family industRy
2 012J u l y
Monthly Multi-FaMily RepoRtu.S. MaRket update
A R e A l fA c t s & M e y e R s l l c P u b l i c At i o n
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Ave
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National Average Rent
Rent % Change Source: RealFacts
90.0%
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National Occupancy Rate
Occupancy Rate Source: RealFacts
the u.s. multi-family market’s average national rent (for markets covered by Realfacts) reached an all-time high
of $1,008 in the first quarter of 2012, which is an increase of 4.0% from a year ago. The new peak surpasses the
previous high of $985 set in 2001 that was fueled by low vacancies and the frenzy of the dot com era. Today,
there is a new tech boom but demand fundamentals point to better longevity for the market, including a low
supply of new apartments and a sizable Gen Y demographic looking to rent.
In spite of the bump up in rents, the average national occupancy rate held steady at 93.4% in the first quarter.
Occupancy levels remain below levels seen the in the late 1990s, and we anticipate it will edge higher given low
levels of new rental product added to the existing stock. This year, rental growth is forecast to increase another
3.5% as demand fundamentals point to increased demand for apartments.
National Market review
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Source: Bureau of Labor Statistics
1,731 13%
2,196 17%
8,955 70%
Existing Properties by Class
Class A
Class B
Class C
90.5%
91.0%
91.5%
92.0%
92.5%
93.0%
93.5%
94.0%
$925
$935
$945
$955
$965
$975
$985
$995
4Q20
09
1Q20
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2Q20
10
3Q20
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4Q20
10
1Q20
11
2Q20
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3Q20
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4Q20
11
1Q20
12
Ave
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National Quarterly Trends
Rent Occupancy
Source: RealFacts
Source: RealFacts
Source: RealFacts
1,731 13%
2,196 17%
8,955 70%
Existing Properties by Class
Class A
Class B
Class C
$851 $874 $921
$1,156 $1,245 $1,299
$1,455
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
Studio 1 Bed/1 Bath 2 Bed/1 Bath 2 Bed/2 Bath 2 Bedroom Townhome
3 Bed/2 Bath 3 Bedroom Townhome
Average Asking Rent by Bed/Bath
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Across the country, the rental market grows stronger. Consequently, RealFacts Meyers created an investment
index to help track 28 metro areas throughout the United States. Eleven indicators including rental increases,
occupancy, absorption, job growth, multi-family permit levels, and estimated cap rates for stabilized properties
were compiled and measured against historical averages. The subsequent weighted investment index offers a
benchmark of the apartment industry for each metro area from a standpoint of an investor looking at ground up
development. The United States scored a 5.2 on the scale, ticking upward from our yearend analysis. All but two
of the areas (Las Vegas and Jacksonville) saw an annual increase in rents, and two-thirds of the markets analyzed
saw occupancy levels hold steady or increase from last year.
“Gateway cities” characterize the top tier markets, which saw rents trend 6% higher from a year ago. Occupancy
rates in these markets hover around 95%, and high investment interest keep CAP rate levels near or below 5%. Not
surprising, the top six markets have a heavy tech influence, a sector that hires a younger than average workforce
that is generally well paid and highly mobile. The most significant ground-up activity (based on multi-family permit
Apartment developers and investors were more active last year, pulling 36% more permits compared to the
previous year. In the twelve months ending April 2012, multi-family permits have stayed above the 200,000 mark.
Despite the new frenzy, issuances remain below historical averages. Permit activity for multi-family dwelling is
highest in New York, Houston, Dallas, Los Angeles and Austin market. The aging stock of apartments and the influx
of the even larger Gen Y demographic cohort will propel multi-family and reshape the apartment industry over
the next decade. Our forecast shows a strong resurgence for apartments that will reach the historical average
but still remain below peak levels since the 1970’s.
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Multi-Family Permit Issuances (1959 - 2019F)
Multi-Family
realFacts Meyers index
Multi-family Permit issuances
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levels) can be found in San Francisco, Washington DC, Austin and San Diego. These markets have seen permit
levels more than double from a year ago.
the middle tier markets saw rents tick up 3% and occupancy levels are 94% on average. CAP rates in these
markets are in the low to mid 5% range. Investment activity is focused on new ground up construction near
employment cores as well as value-add plays. Walkability or access to mass transportation and proximity to jobs
are key factors for these markets. Development activity will increase significantly over the next 2 years, but timing
of market entry and exit will be more critical.
The two bottom tier metros, Las Vegas and Jacksonville, both saw no rent appreciation or a small decline in rents
from 2011. The average occupancy in these two markets is 91%. Jacksonville fell into the bottom tier after a loss of
700 jobs in the last year. These two markets saw a significant ramp up in new for-sale housing during the previous
housing cycle and are now hard hit by foreclosures and short sales. The glut of newly built distressed housing
that is affordably priced competes directly with the rental market. The rent to mortgage payment ratio ranges
from 1.68X to 1.97X in these markets. Qualifying for mortgages, however, remains difficult for most and the rental
market can expect to recapture many of these previous homeowners, particularly younger singles and couples.
6.9 San Jose 5.6 New York/New Jersey 3.8 Las Vegas6.5 Austin 5.5 Orange County 3.7 Jacksonville6.5 San Francisco 5.4 Portland6.2 Boston 5.3 Denver6.2 Los Angeles 5.2 United States6.3 Seattle 5.2 Phoenix6.1 Charlotte 5.2 San Diego6.2 Dallas 4.8 Chicago6.1 Washington D.C. 4.6 Inland Empire5.8 Miami 4.5 Tampa5.9 Houston 4.5 Sacramento5.8 Minneapolis 4.4 Atlanta5.7 Baltimore 4.0 Detroit5.7 Oakland
Top Tier Bottom TierMiddle Tier
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RealFacts Meyers MF Investment IndexApartment Metrics Supply Demand
Metro Area1Q 2012
RentAnnual % Change
1Q 2012Occupancy
Annual % Change
% of Class A
2011 Units Absorbed
Rents vs. Mortgage Payment
Annualized MF Permits % Change
MF % of Total Permits Job Growth
Jobless Rate
Job Postings Per
Capita% of
RentersInvestment
IndexSan Jose $1,857 13% 96% 0% 12% 815 1.08x 4.00 - 5.00 2,524 20% 74% 29,900 9.3% 175 40.1% 6.9
Austin $905 6% 93% 0% 29% 2,199 1.30x 5.00 - 5.25 12,556 212% 64% 19,600 6.0% 71 45.7% 6.5
San Francisco $2,247 15% 96% 0% 12% 960 1.05x 4.00 - 5.00 884 -62% 78% 28,900 7.7% 84 45.3% 6.5
Boston $2,046 3% 94% 0% 28% 68 1.82x 4.50 - 5.25 4,284 65% 58% 18,400 5.7% 91 34.8% 6.2
Los Angeles $1,688 3% 96% 2% 22% 1,135 1.51x 4.00 - 4.75 10,756 40% 82% 36,700 11.8% 33 33.1% 6.2
Seattle $1,121 6% 94% -1% 17% 468 1.17x 4.00 - 4.75 6,560 27% 50% 40,400 7.9% 81 40.1% 6.3
Charlotte $723 4% 95% 1% 2% 170 1.02x 5.00 - 6.25 5,204 302% 47% 9,900 9.6% 75 43.5% 6.1
Dallas $806 5% 93% 1% 10% 6,466 1.50x 4.75 - 6.00 15,304 47% 50% 72,400 7.0% 57 37.4% 6.2
Washington D.C. $1,627 3% 94% 0% 17% -74 1.44x 4.00 - 5.25 5,016 -48% 34% 37,900 5.5% 133 33.0% 6.1
Miami $1,243 4% 95% 0% 15% 300 1.89x 5.25 - 6.25 9,232 182% 68% 34,000 8.4% 31 36.9% 5.8
Houston $810 3% 92% 2% 13% 5,432 1.47x 4.75 - 6.00 11,944 47% 32% 83,800 7.0% 55 36.7% 5.9
Minneapolis $1,096 4% 94% -1% 0% -19 2.06x 5.00 - 5.50 2,700 94% 45% 20,800 6.1% 77 32.0% 5.8
Baltimore $1,302 2% 93% -1% 0% 30 1.65x 4.00 - 5.25 4,020 97% 53% 17,500 7.1% 97 33.0% 5.7
Oakland $1,519 7% 96% 0% 11% 768 1.31x 6.00 - 6.50 904 -33% 47% 15,400 9.8% 84 44.0% 5.7
New York/New Jersey $2,366 3% 94% -2% 33% 61 1.80x 3.75 - 5.50 15,300 1% 73% 118,600 8.9% 43 50.2% 5.6
Orange County $1,578 5% 95% 0% 15% 513 1.09x 4.00 - 5.00 3,364 33% 65% 24,900 8.1% 33 38.5% 5.5
Portland $912 4% 95% -1% 11% 825 1.21x 4.75 - 5.75 1,944 -5% 33% 11,700 8.3% 57 36.2% 5.4
Denver $954 7% 94% -1% 22% 1,303 1.17x 4.75 - 5.50 2,252 -22% 35% 28,700 8.2% 79 38.1% 5.3
United States 2/ $1,008 4% 93% 0% 15% 37,785 1.76x 4.75 - 5.75 237,792 27% 38% 1,952,000 8.2% 12 34.6% 5.2
Phoenix $739 1% 92% 1% 17% 4,322 1.57x 4.75 - 5.50 2,956 82% 23% 40,000 7.5% 61 35.8% 5.2
San Diego $1,406 1% 95% 0% 14% 798 1.08x 4.25 - 4.75 3,176 2% 66% 7,300 9.5% 55 44.3% 5.2
Chicago $1,189 4% 94% -1% 11% 92 2.09x 4.75 - 5.50 2,348 -35% 39% 41,700 9.0% 51 33.1% 4.8
Inland Empire $1,102 2% 94% 0% 22% 427 1.75x 5.00 - 6.00 2,492 84% 44% 11,300 12.7% 22 33.5% 4.6
Tampa $846 2% 93% 0% 9% 532 1.77x 5.25 - 6.00 2,948 61% 37% 19,900 8.9% 59 32.3% 4.5
Sacramento $955 1% 94% 0% 14% 457 1.60x 5.25 - 6.00 1,828 196% 74% -1,400 11.6% 50 42.1% 4.5
Atlanta $848 2% 92% -1% 23% 211 2.67x 5.00 - 6.00 6,360 159% 45% 28,700 8.7% 64 36.8% 4.4
Detroit $867 2% 94% 0% 21% 5 4.59x 6.75 - 7.75 316 -37% 11% 26,900 9.6% 54 27.2% 4.0
Las Vegas $743 -2% 92% 0% 15% 872 1.68x 5.50 - 6.50 2,140 76% 33% 4,400 12.1% 51 45.7% 3.8
Jacksonville $812 0% 90% -1% 13% 296 1.97x 5.25 - 5.75 1,000 50% 21% -700 8.3% 59 33.5% 3.7
SOURCE: RealFacts; Census; NAHB, Bureau of Labor Statistics; Indeed.com
1/Estimated Cap rate from a survey of brokers (CBRE, Marcus & Millichap) for stabilized properties.
2/United States rental stats reflect data collected by RealFacts, which includes coverage of 96 MSAs in 14 states.
Class AEst. Cap Rate 1/
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RealFacts Meyers MF Investment IndexApartment Metrics Supply Demand
Metro Area1Q 2012
RentAnnual % Change
1Q 2012Occupancy
Annual % Change
% of Class A
2011 Units Absorbed
Rents vs. Mortgage Payment
Annualized MF Permits % Change
MF % of Total Permits Job Growth
Jobless Rate
Job Postings Per
Capita% of
RentersInvestment
IndexSan Jose $1,857 13% 96% 0% 12% 815 1.08x 4.00 - 5.00 2,524 20% 74% 29,900 9.3% 175 40.1% 6.9
Austin $905 6% 93% 0% 29% 2,199 1.30x 5.00 - 5.25 12,556 212% 64% 19,600 6.0% 71 45.7% 6.5
San Francisco $2,247 15% 96% 0% 12% 960 1.05x 4.00 - 5.00 884 -62% 78% 28,900 7.7% 84 45.3% 6.5
Boston $2,046 3% 94% 0% 28% 68 1.82x 4.50 - 5.25 4,284 65% 58% 18,400 5.7% 91 34.8% 6.2
Los Angeles $1,688 3% 96% 2% 22% 1,135 1.51x 4.00 - 4.75 10,756 40% 82% 36,700 11.8% 33 33.1% 6.2
Seattle $1,121 6% 94% -1% 17% 468 1.17x 4.00 - 4.75 6,560 27% 50% 40,400 7.9% 81 40.1% 6.3
Charlotte $723 4% 95% 1% 2% 170 1.02x 5.00 - 6.25 5,204 302% 47% 9,900 9.6% 75 43.5% 6.1
Dallas $806 5% 93% 1% 10% 6,466 1.50x 4.75 - 6.00 15,304 47% 50% 72,400 7.0% 57 37.4% 6.2
Washington D.C. $1,627 3% 94% 0% 17% -74 1.44x 4.00 - 5.25 5,016 -48% 34% 37,900 5.5% 133 33.0% 6.1
Miami $1,243 4% 95% 0% 15% 300 1.89x 5.25 - 6.25 9,232 182% 68% 34,000 8.4% 31 36.9% 5.8
Houston $810 3% 92% 2% 13% 5,432 1.47x 4.75 - 6.00 11,944 47% 32% 83,800 7.0% 55 36.7% 5.9
Minneapolis $1,096 4% 94% -1% 0% -19 2.06x 5.00 - 5.50 2,700 94% 45% 20,800 6.1% 77 32.0% 5.8
Baltimore $1,302 2% 93% -1% 0% 30 1.65x 4.00 - 5.25 4,020 97% 53% 17,500 7.1% 97 33.0% 5.7
Oakland $1,519 7% 96% 0% 11% 768 1.31x 6.00 - 6.50 904 -33% 47% 15,400 9.8% 84 44.0% 5.7
New York/New Jersey $2,366 3% 94% -2% 33% 61 1.80x 3.75 - 5.50 15,300 1% 73% 118,600 8.9% 43 50.2% 5.6
Orange County $1,578 5% 95% 0% 15% 513 1.09x 4.00 - 5.00 3,364 33% 65% 24,900 8.1% 33 38.5% 5.5
Portland $912 4% 95% -1% 11% 825 1.21x 4.75 - 5.75 1,944 -5% 33% 11,700 8.3% 57 36.2% 5.4
Denver $954 7% 94% -1% 22% 1,303 1.17x 4.75 - 5.50 2,252 -22% 35% 28,700 8.2% 79 38.1% 5.3
United States 2/ $1,008 4% 93% 0% 15% 37,785 1.76x 4.75 - 5.75 237,792 27% 38% 1,952,000 8.2% 12 34.6% 5.2
Phoenix $739 1% 92% 1% 17% 4,322 1.57x 4.75 - 5.50 2,956 82% 23% 40,000 7.5% 61 35.8% 5.2
San Diego $1,406 1% 95% 0% 14% 798 1.08x 4.25 - 4.75 3,176 2% 66% 7,300 9.5% 55 44.3% 5.2
Chicago $1,189 4% 94% -1% 11% 92 2.09x 4.75 - 5.50 2,348 -35% 39% 41,700 9.0% 51 33.1% 4.8
Inland Empire $1,102 2% 94% 0% 22% 427 1.75x 5.00 - 6.00 2,492 84% 44% 11,300 12.7% 22 33.5% 4.6
Tampa $846 2% 93% 0% 9% 532 1.77x 5.25 - 6.00 2,948 61% 37% 19,900 8.9% 59 32.3% 4.5
Sacramento $955 1% 94% 0% 14% 457 1.60x 5.25 - 6.00 1,828 196% 74% -1,400 11.6% 50 42.1% 4.5
Atlanta $848 2% 92% -1% 23% 211 2.67x 5.00 - 6.00 6,360 159% 45% 28,700 8.7% 64 36.8% 4.4
Detroit $867 2% 94% 0% 21% 5 4.59x 6.75 - 7.75 316 -37% 11% 26,900 9.6% 54 27.2% 4.0
Las Vegas $743 -2% 92% 0% 15% 872 1.68x 5.50 - 6.50 2,140 76% 33% 4,400 12.1% 51 45.7% 3.8
Jacksonville $812 0% 90% -1% 13% 296 1.97x 5.25 - 5.75 1,000 50% 21% -700 8.3% 59 33.5% 3.7
SOURCE: RealFacts; Census; NAHB, Bureau of Labor Statistics; Indeed.com
1/Estimated Cap rate from a survey of brokers (CBRE, Marcus & Millichap) for stabilized properties.
2/United States rental stats reflect data collected by RealFacts, which includes coverage of 96 MSAs in 14 states.
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realFacts geographic Footprint
For more information on RealFacts, contact Nick Grotjahn at 415.884.2480 x:2
realFacts database Facts ■ Database of 12,861 Properties ■ 2.8 Billion Square Feet of Apartments ■ 92 Consecutive Quarterly Updates of Rents & Occupancy ■ 96 MSA’s in 16 States ■ More than 3,300,000 Units ■ 136 Individual Search Criteria Used Alone or Combined ■ Over 4,800 Sales Transactions Recorded in the Past Eight Years ■ 95% of the Database Resurveyed Each Quarter ■ 19 Year History for Individual Complexes ■ 23 Years of Experience 1989-2012
A R e A l f A c t s & M e y e R s l l c P u b l i c A t i o n
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Meyers llc advisory services & analytics ■ Multi-family feasibility studies ■ Highest and best use analysis ■ consumer research ■ Portfolio strategy ■ Cash flow analysis ■ Planning and entitlements ■ Mitigation management ■ Project management and development
ta lREALFACTS is the original apartment data source….the source behind the source. We are trusted by our clients for good reason. Our data is always reliable, always dependable. We conduct surveys that are 100% primary research. All the data we publish is collected, updated and maintained in our own office by our highly trained and competent staff.
To learn more about RealFacts visit www.realfacts.com or contact us at 415.884.2480 x 2.
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Meyers LLC has extensive experience in the real estate development industry, advising a long list of national and local apartment developers and financial institutions. We understand the challenges our clients face, and can apply our expertise in research, analysis and capital sourcing to ensure they prosper—today and in the future.
To learn more about Meyers visit www.meyersllc.com
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