WHY PEOPLE ARE CHOOSING TO RENT

THE NEW AMERICAN DREAM

Once upon a time, the American Dream looked something like this...

Not anymore

Today, more people are choosing to move out of their homes...

and into apartmentsToday, more people are choosing to move out of their homes...

Home ownership has reached a 19-year low

U . S . C E N S U S B U R E A U

In May 2014, the national apartment occupancy reached 95% for the first time in 6 years.

Nearly half of all renters are former homeowners. This percentage continues to grow despite record low home prices.

2012 2013 TODAY

33.6% 35.1%44.1%

So, what do we know about these new renters?

They are a new class of consumer who are…

Renting by Choice

Looking for Technology

Local Restaurants

Urban FeelWalkability

6 of 10people would sacrifice a bigger house

to live in a neighborhood that features a mix of residences, stores and businesses.

Millennials tend to place more value on amenities than on square footage.

Some Desirable Amenities Include…✓ Wi-Fi Connectivity ✓ Communal Spaces ✓ Walkable Locations ✓ High-End Fitness Center

This is a generation of online social networking and herding—or meeting at a social gathering in a moment’s notice.

Hey! We’re meeting at Starbucks in 5 mins.Want to join?

Sure! See you soon!

They value community, ideas, information and a healthy work/life balance.

Millennials who want to live in an urban environment

77%

They want to be within walking distance of peers, work, services and hangout spots.

Millennials are also waiting to get married, start families and buy homes.

Married adults ages 18-34 in 1983

46%

30%Married adults

ages 18-34 in 2013

Married couples ages 18-34 with children in 1983

39%

Married couples ages 18-34 with children in 2013

29%

36%Americans under age 35 who own a home, the lowest level on record

Millennials’ attitudes toward homeownership has changed because of the housing crisis and recession in the mid-2000s.

Many saw their parents lose a significant portion of their savings due to decreased home prices and have since lost confidence that homeownership is the way to develop wealth.

HOUSEFORECLOSED

The “Bank of Mom and Dad” is closed. Since their parents must rebuild their retirement portfolios, millennials are not getting the same down payment assistance that the generation before them received.

In addition, many 25- to 34-year-olds have taken on consumer and educational debt and are now unable to qualify for a mortgage.

Federal student loans outstanding have shot up 360% since the start of the recession, rising from $98 billion to $453 billion in just four years.

2007 2008 2009 2010

$98B

$453B

Rentership rates for households aged 30-64 are the highest they’ve been in 30 years.

Particularly among households in their thirties,

which is up by more than 9 percent in 8 years.

They are also baby boomers who are trading in their single-family suburban homes to be closer to urban centers.

100%Estimated increase in renters of the same age from 2010 to 2013

These are people who can affordto buy but choose to rent.

50%Over half of renters in U.S. metro areas could afford to own a home

Need more proof?

Look at the average person interested in renting at Haven, a luxury rental community at Avalon, a $600 million mixed-use development in Alpharetta, GA opening October 2014…

5%

29%

34%

23%

8%

51-65 26-35

Under 2566+

Interested Renters

by age

The majority of interested renters are between 36and 65 years old.

36-50

of prospects currently own their homes

47%

but are considering a move for amenities and the lifestyle luxury rentals offer.

HOUSE FOR SALE

The majority of interested renters have an average salary of $100,000. 18%

17%

14%28%

23%

Interested Renters by annual

income

No Answer$40K - $75K

$76K - $125K

$126K - $199K

$200K+

In many cases, people are abandoning “The American Dream” of homeownership and choosing luxury rentals because it’s more walkable and accessible to desirable amenities that high-end mixed-use developments offer.RICHARD MUNGER

PARTNER AND V.P. OF DEVELOPMENT

NORTH AMERICAN PROPERTIES

A shift in attitude and values is contributing to more renters entering the market.

The rental economy is part of a growing post-recession movement to value experiences over possessions.CLAIRE CAIN MILLERTHE NEW YORK TIMES

Homeowners are often anchored to their neighborhoods…

While renters have the ease of mobility as they enter different stages of life.

Renters are also free from some of the daily stresses plaguing homeowners.

They don’t have to worry about yard work, home repairs and unexpected maintenance expenses.

They can simply enjoy what’s

outside their front

door.

While homeownership may have its perks, it’s pretty hard to compete with this…

AVALON

PIKE & ROSE

MISORA AT SANTANA ROW

THE GROVE

THE AMERICANA AT BRAND

People pay a premium for this lifestyle.

AVERAGE APT.

SAN JOSE, CA

MISORA AT

SANTANA ROW

Studio

$905Studio

$1,775425 square feet500 square feet

AVERAGE APT.

ALPHARETTA, GA

HAVEN AT

AVALON

2B

$1,1622B

$2,3501,200 square feet1,244 square feet

As walkability increases in a community, so does property value.

$300per

month to apt.rents

$82per sq. ft. to

homevalues

$9per sq. ft. to

office rents

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$7per sq. ft. to retail rents

$$$$$$

$ $$$$$

$$$$

Size of new apartments in

U.S. fell to lowest square footage

since 2002, as leasing continues

to grow moreexpensive

square feet1,043

People are downsizing their living space…

… and opting for a sleeker, more

modern option.

Having to deal with inconveniences of everyday life.

Luxury properties offer a concierge,

exclusive services &benefits like valet.

Apartments are shrinking because when you live in a mixed-use community, what’s outside becomes an extension of your livable space. This is why developments like The Grove and Pike & Rose are achieving higher rents and higher occupancies.

MARK TORO

MANAGING PARTNER

NORTH AMERICAN PROPERTIES

prospects are on the waiting list for one of the 250 luxury rentals at Haven at Avalon

2,025

Here’s what they are lining up for…

Gigabit Community

Programmed Public Spaces

Urban FeelWalkability

Five-Star Concierge

best restaurantsIN YOUR BACKYARD

best retailersIN YOUR LIVING ROOM

Developers are optimistic this trend will continue, as multifamily starts have seen double-digit growth over the last few years to meet demand for rental units.

People will start considering a new version of The American Dream.

Haven at AvalonLIVE IT

November 2014MOVE IN

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Set Your Site in Greater Philadelphia by Jerome Rozen (image)Friends having fun outdoors by Svetlana Damjanac / iStock.com (image)Smartphone designed by George Agpoon / The Noun Project (icon) Footprint designed by Jule Steffen & Matthias Schmidt / The Noun Project (icon) City designed by Nicholas Menghini / The Noun Project (icon)Crowd of People Walking on the Street by Rafael Ramirez Lee / Shutterstock.com (image)Receiver by Sergey Krivoy / The Noun Project (icon)Coffee by Sam Ahmed / The Noun Project (icon)Car by Laura Beggs from The Noun Project (icon)Martini Glass by Stanislav Levin / The Noun Project (icon)Shopping Bag by Erin Standley from The Noun ProjectDumbbell by Ola Möller from The Noun ProjectMortar Board by Paul Souders from The Noun ProjectAnchor designed by Jeremy Elder / The Noun Project (icon)Airplane designed by misirlou / The Noun Project (icon)Pike and Rose Groundbreaking by Maryland GovPics / Flickr (image)Santana Row by Bruno Pinheiro / Flickr (image)The Grove in Los Angeles, from above, no. 12052203 by Eric E. Johnson / Flickr (image)The McMansion by Dean Terry / Flickr (image)Thumbs Up designed by Alv Jørgen Bovolden / The Noun Project (icon)US Open Parking Lot by alex92287 / Flickr (image)

Caulking window by kimkole / iStock.com (image)Cookie Cutter Houses by Ann Walsh / Flickr (image)Santana Row by Eric Fredericks / Flickr (image)Reception Bell designed by Catia Marsh Mallow / The Noun Project (icon) Footprint designed by Jule Steffen & Matthias Schmidt / The Noun Project (icon) City designed by Nicholas Menghini / The Noun Project (icon) Wireless designed by Edward Boatman / The Noun Project (icon)The Americana at Brand by Chris Yarzab / Flickr (image)

IMAGE SOURCES

Axiometrics | axiometrics.com/company/pressreleases/apartment-occupancy-hits-95Survey by Apartments.com | realestateeconomywatch.com/2014/01/nearly-half-of-all-renters-are-ex-homeowners/Survey by Trulia | magazine.good.is/articles/most-americans-want-a-walkable-neighborhood-not-a-big-houseNational Multi Housing Council (NMHC) | finance.yahoo.com/news/landmark-resident-survey-identifies-top-173400335.htmlNational Association of Realtors | realtor.org/articles/how-millennials-move-the-car-less-trendsU.S. Census Bureau | tampabay.com/news/business/realestate/pricey-posh-tiny-apartments-rule-tampa-bays-big-money-rental-boom/2189650 Urban Land Magazine | urbanland.uli.org/infrastructure-transit/housing-america-s-graying-population/ Harvard Joint Center for Housing Studies | harvard-cga.maps.arcgis.com/apps/StorytellingTextLegend/index.html?appid=7e85ff667f804fe0aaf10a5a27db9c39Hart Research | macfound.org/media/files/How_Housing_Matters_2014_FINAL_REPORT.pdfRent Comparison (San Jose, CA) | forrent.com/apartment-community-profile/1000059389.phpRent Comparison (Alpharetta, GA) | apartmentguide.com/apartments/Georgia/Alpharetta/The-Lex/259/Study by Brookings Institution | nytimes.com/2012/05/27/opinion/sunday/now-coveted-a-walkable-convenient-place.html?_r=1&U.S. Census Bureau | census.gov/construction/chars/pdf/mfu_medavgsqft.pdfU.S. Commerce Department | bloomberg.com/news/2014-07-10/renters-trading-size-for-frills-fuel-u-s-apartment-boom.html

http://www.nytimes.com/2014/08/30/upshot/is-owning-overrated-the-rental- economy-rises.html?_r=0

DATA SOURCES