Integra Realty Resources, Inc. irr.com 4747

MULTIFAMILY

Page 22

MULTIFAMILY

Pittsburgh Multifamily Market Timeline

EXPANSION

HYPERSUPPLY

RECESSION

2012, 2013, 2014

2015, 2016, 2017

RECOVERY

MultifamilyLocal Urban Markets by Vacancy

Las Vegas, NV – 0.85%Boise, ID – 2.0%Detroit, MI – 2.6%

Pittsburgh, PA 9.1%

Portland, OR – 14.8%Nashville, TN – 15.0%Birmingham, AL – 18.9%

TOP TH

REE

BOTTOM THRE

E

Local MarketClass A

9.1% (40th out of 59)

Multifamily Metro Pittsburgh Submarkets By Vacancy

SOURCE: REIS

TOP THREEMonroeville ‐ 2.3%

West ‐ 4.3%Southeast ‐ 4.4%

(McKeesport, Baldwin, Whitehall)

BOTTOM THREESouthwest ‐ 4.9%

North ‐ 5.1%City ‐ 6.1%

Class A Urban Apartment Cap Rate Trends

National Average Pittsburgh Average

SOURCE: Integra Realty Resources – Pittsburgh, 2017

NationalPittsburgh

20165.3%6.00%

20175.3%6.00%

Class A Suburban Apartment Cap Rate Trends

NationalPittsburgh

20165.5%6.0%

20175.45%6.0%

National Average Pittsburgh Average

SOURCE: Integra Realty Resources – Pittsburgh, 2017

SOURCE: Integra Realty Resources – Pittsburgh, 2017

Class A Multifamily Cap Rates

SOURCE: Integra Realty Resources – Pittsburgh, 2017

Class B Apartment Cap Rates

SOURCE: Integra Realty Resources – Pittsburgh, 2017

Pittsburgh Class A/B MultifamilyCap Rate Comparison

Overflowing Development PipelineUrban Markets• Continues to be significant urban development.• Newly delivered (1,806 units in 2016).

– Southside Works City Apartments– The Yards at Three Crossing– Bakery Living Blue– Skyvue– Eastside Bond

Projected 2017‐18 Deliveries ►1,741 units under construction►Heinz Lofts Expansion►The Empire►Former Schenley H.S.►The Vitmore on Baum►The Foundry at 41st

►Arsenal Terminal►Emerald on Centre►River Front Landing (Phase I)

Riverfront Landing

Overflowing Development PipelineUrban Market

Unit D

elivered

*Currently Under Construction

Apartment Forecast 2019And Beyond

►Planned 5,000+ units►Civic Arena Site►River Park►Produce Terminal►Station Square►North Shore►Macy’s Building►Former Penn Plaza Development

►Riverfront Landing (Phase II)

►OtherStation Square

Recent Suburban Deliveries

Ridge at Robinson

342 Units

West

1400 MainSouthpointe

376 Units

Ascent430

319 Units

Park PlazaAt

Meadowlands

206 Units

South North South

Apartment Forecast 2017Suburban Markets Under Construction

South Hills T‐Station SOUTHVillage of Cranberry Woods NORTHEden Square NORTHThe Kane at Gray’s Landing BEAVERCosmopolitan @ Ross Park NORTH

Apartment Forecast 2018+Suburban Markets ‐ Planned

Castle Shannon Station SOUTHNewbury Village SOUTH

Recent Absorption Data

• Absorption of new construction in urban markets has been in the range of 6 to 22 units per month.

• Average urban absorption has been approximately 15 units per month.

• Absorption of new construction in suburban markets has been in the range of 5 to 13 units per month.

• Average suburban absorption has been approximately 10 units per month.

• Best located• Best physical offerings•Market oriented unit mixes/unit sizes•Market oriented amenity packages

• Older/dated inventory• Secondary locations / poor access• Lack of amenities• Inefficient unit mix/unit sizes

Winners

Losers