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TOP 10 SUBMARKETSD S J D tDonna SummersGables ResidentialVice President ‐ REIT
Jay DentonAxiometrics Inc.Vice President ‐ Research
September 23‐25, 2013Turnberry Isle Miami
U.S. Apartment DeliveriesMore Than 60k Units Will Deliver By EOY
Apartment Units Delivered Nationally By Quarter
60,000
70,000
40,000
50,000
10 000
20,000
30,000
S A i t i I
0
10,000
1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13
Source: Axiometrics Inc.
Delivery schedule is based on individual properties tracked by Axiometrics.
Submarkets With The Most New ConstructionConstruction
Maps of Pipeline Properties Show Heavy Concentration in the Urban Core
Houston DenverSeattle
S A i t i ISource: Axiometrics Inc.
Pipeline status as of August 2013. Shading is based on submarket boundaries.
Most New ConstructionDelivery Schedule By Submarket
Units Delivered 3-YearMSA Submarket Grade 2012 2013 2014* TotalHOU Montrose/River Oaks A 260 3,812 6,153 10,225SEA Downtown/Capitol Hill/Queen Anne A- 1,366 3,394 3,098 7,858SJO N th t S J B 914 2 205 1 934 5 053SJO Northeast San Jose B 914 2,205 1,934 5,053ATL Atlanta/Fulton A- 103 1,730 3,161 4,994DEN Denver-Downtown A 432 1,659 2,901 4,992DAL Oaklawn A+ 433 1 393 2 549 4 375DAL Oaklawn A+ 433 1,393 2,549 4,375NY Kings County B+ 281 1,490 2,561 4,332MINN Minneapolis A- 575 1,618 2,079 4,272WDC Anacostia/Northeast DC B+ 1 069 1 334 1 788 4 191WDC Anacostia/Northeast DC B+ 1,069 1,334 1,788 4,191DAL Plano/Frisco/McKinney B+ 1,269 1,691 1,056 4,016U.S. Total 86,653 180,880 191,095 458,628
S A i t i ISource: Axiometrics Inc.
*The 2014 total only includes properties that have already started construction.
Student Housing ConstructionDeliveries Have Been Escalating Since the LateDeliveries Have Been Escalating Since the Late
1990s; Watch out for Competing Supply!Beds Units
25,000
30,000
50,000
60,000
15,000
20,000
30,000
40,000
5 000
10,000
10 000
20,000
0
5,000
0
10,000
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
*
Total Beds Total Units
*The 2014 total only includes properties that have already started construction.
Source: Axiometrics Inc.
Student Housing Map of Student and ConventionalMap of Student and Conventional
Properties Near CampusAustin - University of Texas Tucson - University of ArizonaAustin University of Texas Tucson University of Arizona
S A i t i ISource: Axiometrics Inc.
Property status as of July 2013.
Student Housing ConstructionDeliveries Within Conventional SubmarketsDeliveries Within Conventional Submarkets
2013/2014 and 2014/2015 School Years
AdjustedAdjustedMSA Submarket University Beds Units Units*LA Central LA UCLA 3,648 943 2,432TUC Central Tucson/Univ-North Arizona 2,980 986 1,987ORL Northeast/436/551 Central Florida 2,213 585 1,475AUS San Marcos Texas State 2,141 890 1,427AUS Central Texas 2,089 1,316 1,393CHAR Harris Blvd/Mallard Crk Church UNC - Charlotte 1,598 731 1,065PHO North Tempe Arizona State 1,537 548 1,025ATL Marietta Kennesaw State 1,483 492 989LEX N th Ci l K t k 1 298 428 865LEX North Circle Kentucky 1,298 428 865MINN Minneapolis Minnesota 1,255 631 837
S A i t i I
*Adjusted units divides the bed count by 1.5 to closer replicate the equivalent number of conventional units potentially impacted.
Source: Axiometrics Inc.
Effective Rent Growth TrendsREITS Outperform the Nation for Several ReasonsREITS Outperform the Nation for Several Reasons,
Including: Being in the Right MSAs, Right Submarkets, and Using Revenue Management
4.0%
6.0%
8.0%
0.0%
2.0%
-6.0%
-4.0%
-2.0%
National REIT
-10.0%
-8.0%
l-09
p-09
v-09
n-10
r-10
y-10 l-1
0
p-10
v-10
n-11
r-11
y-11 l-1
1
p-11
v-11
n-12
r-12
y-12 l-1
2
p-12
v-12
n-13
r-13
y-13 l-1
3
Ju Sep
Nov Jan
Mar
May Ju Sep
Nov Jan
Mar
May Ju Sep
Nov Jan
Mar
May Ju Sep
Nov Jan
Mar
May Ju
Source: Axiometrics Inc.
Top and Bottom Performing MSA f Eff ti R t G thMSAs for Effective Rent Growth
Top 10 Bottom 10Top 10 Bottom 10Annual Annual
MSA ERG Occ MSA ERG Occ
Cape Coral, FL 11.0% 94% Winston-Salem, NC 0.6% 92%
Oakland, CA 10.2% 97% Little Rock, AR 0.4% 90%
Naples, FL 9.8% 97% Hartford, CT 0.2% 96%
Boulder, CO 9.0% 95% Philadelphia, PA 0.1% 94%
San Francisco CA 8 0% 96% Washington DC -0 2% 95%San Francisco, CA 8.0% 96% Washington, DC 0.2% 95%
Corpus Christi, TX 8.0% 96% Albuquerque, NM -0.2% 94%
Denver, CO 7.6% 96% Chattanooga, TN -0.3% 93%
North Port, FL 7.6% 96% Mobile, AL -0.4% 92%
Seattle, WA 6.9% 96% Montgomery, AL -1.3% 92%
Portland, OR 6.7% 97% Augusta, GA -1.3% 93%
Source: Axiometrics Inc.Based on July 2013 data..
Best Effective Rent GrowthOakland, Denver, and Cape Coral
Submarkets Dominate the ListSubmarket MSASubmarket MSA
MSA Submarket Grade ERG Occ ERG OccOAK East Alameda B+ 13% 97% 10% 97%OAK North Alameda B+ 13% 96% 10% 97%CAPE FORT MYERS B- 13% 94% 11% 94%DEN Aurora-South B 11% 95% 8% 96%DEN Aurora-Central-Southeast B- 10% 96% 8% 96%OAK S R /W l t C k B 10% 97% 10% 97%OAK San Ramon/Walnut Creek B+ 10% 97% 10% 97%CHI The Loop A- 10% 95% 3% 96%DEN Denver-Far Southeast B 10% 96% 8% 96%CAPE SOUTHERN LEE COUNTY B+ 10% 94% 11% 94%CAPE SOUTHERN LEE COUNTY B 10% 94% 11% 94%CAPE Fremont/Newark/Union City B 10% 97% 10% 97%U.S. Weighted Average 3.4% 94.8% 3.4% 94.8%
S A i t i IThese submarkets have a combined nine properties with 2 004 units Source: Axiometrics Inc.These submarkets have a combined nine properties with 2,004 units under construction.Based on July 2013 data.List is only based on submarkets with at least 10 same store properties.
Lowest Effective Rent GrowthSix of the Bottom 10 are inSix of the Bottom 10 are in
Washington, DCSubmarket MSASubmarket MSA
MSA Submarket Grade ERG Occ ERG OccWDC Woodley Pk./Cleveland Pk. A- -2% 95% 0% 95%WDC Rosslyn/Ballston A- -3% 95% 0% 95%WDC SE Fairfax County B -3% 96% 0% 95%PHI Torresdale/Bensalem B- -3% 95% 0% 94%MINN Minneapolis A- -4% 98% 3% 97%WDC Columbia Pike/Shirlington B+ 4% 95% 0% 95%WDC Columbia Pike/Shirlington B+ -4% 95% 0% 95%WDC Pentagon City/Crystal City A- -4% 95% 0% 95%LSV University C -4% 92% 2% 92%CHAT South B+ -6% 93% 0% 93%WDC Old Town B+ -7% 93% 0% 95%U.S. Weighted Average 3.4% 94.8% 3.4% 94.8%
These submarkets have a combined 34 properties with 7 438 units under S A i t i IThese submarkets have a combined 34 properties with 7,438 units under construction.Based on July 2013 data.List is only based on submarkets with at least 10 same store properties.
Source: Axiometrics Inc.
Largest ERG Variance from MSATop 10 (Plus Two) Outperform MSA by 4%;Top 10 (Plus Two) Outperform MSA by 4%;
Not All is Terrible in Washington, DCSubmarket MSA ERG
MSA Submarket Grade ERG Occ ERG Occ DiffCHI The Loop A- 10% 95% 3% 96% 7%NY Westchester/Putnam B- 9% 98% 3% 97% 6%PHO Central Phoenix North B 9% 92% 4% 93% 6%PHO Central Phoenix North B 9% 92% 4% 93% 6%CHAT North B 4% 94% 0% 93% 5%LA Wilshire District B- 8% 96% 4% 95% 5%WDC Landover B- 4% 95% 0% 95% 5%RICH Hanover County B 6% 96% 1% 93% 4%PHO Deer Valley B- 8% 93% 4% 93% 4%WDC Howard U./Mt. Pleasant B+ 4% 96% 0% 95% 4%MEM Downtown/Midtown B+ 5% 94% 1% 93% 4%MEM Downtown/Midtown B+ 5% 94% 1% 93% 4%WDC Tysons Corner/Fairfax City B+ 4% 96% 0% 95% 4%AUS Far North Central C 9% 96% 5% 95% 4%
Based on July 2013 data.List is only based on submarkets with at least 10 same store properties.
Source: Axiometrics Inc.
What Makes a Class A Submarket?
Map of Properties by Effective Rent Level
HoustonAtlanta Washington, DC
Source: Axiometrics IncProperty Effective Rent Groupings (MSA Asset Class Grade) Source: Axiometrics Inc.Property Effective Rent Groupings (MSA Asset Class Grade)
Based on July 2013 rent levels.Shading based on submarket boundaries.
Most Desirable SubmarketsA Look at Long-Term Rent and Occupancyg p y
By Submarket in Washington, DC$1,900 Occ > Metro
Historical Avg Eff Rent
Brookland/Ft. Totten
Downtown/Logan Circle
Dupont Circle/Adams Morgan
F B ttNW DC/Georgetown
Pentagon City/Crystal city
Rosslyn Ballston
Woodley Pk./Cleveland Pk.
Rockville
$1,700
Prince George'sCapitol Hill/SW
Columbia Pike/ShirlingtonFallas Church/Annandale
Foggy Bottom
Howard U./Mt. Pleasant
g
Old Town
Tyson Corner/Fairfax City
Western Fairfax Co
$1,300
$1,500
Eff Rent > Metro
Landover
Charles Co.
College Park
District Heights
Fallas Church/Annandale
Forest Heights/Oxon Hill
Laurel
Loudoun Co.NE Alexandria/Glebe Rd
Prince William Co.
SE Fairfax
Seminary Rd/Landmark
Takoma Park
Western Fairfax Co
$1,100
Anacostia/NC DC
Fredricksburg Hyattsville
Laurel
SpotsylvaniaStafford
$700
$900
93 0% 93 5% 94 0% 94 5% 95 0% 95 5% 96 0% 96 5% 97 0% 97 5% 98 0%
Source: Axiometrics Inc.93.0% 93.5% 94.0% 94.5% 95.0% 95.5% 96.0% 96.5% 97.0% 97.5% 98.0%
Historical Avg OccBased on data from 1996-2013
Most Desirable SubmarketsBased on Relative Difference in Eff Rent
Level to MSA AverageEffective Rent Submarket Premium
MSA Submarket Submkt MSA $ %AUS Central $1,948 $1,029 $919 89.3%LA Santa Monica $3 411 $1 837 $1 574 85 7%LA Santa Monica $3,411 $1,837 $1,574 85.7%DAL Oaklawn $1,672 $946 $726 76.7%HOU Montrose/River Oaks $1,668 $984 $684 69.5%WDC Foggy Bottom $2,731 $1,614 $1,117 69.2%BOS Central City/Back Bay/Beacon Hill $3,427 $2,095 $1,332 63.6%CHI Gold Coast/River North $2,122 $1,326 $796 60.1%CHAR Downtown $1,377 $868 $509 58.6%FOT Fort La derdale $2 022 $1 303 $719 55 2%FOT Fort Lauderdale $2,022 $1,303 $719 55.2%NASH Downtown/West End/Green Hills $1,410 $912 $497 54.5%
Source: Axiometrics Inc.
Only submarkets with > 1,000 units were considered.Based on July 2013 data.
Map of Properties Based on Pricing TypePricing Type
Areas with a lot of Blue Dots Typically Have More Class B- and C Properties
DallasAtlanta Washington, DC
Source: Axiometrics Inc.
Pricing type as of August 2013.Shading based on submarket boundaries.
Highest Usage of Revenue Management SoftwareManagement SoftwareBased on Number of Properties
Properties RevManMSA Submarket RevMan Traditional ShareMSA Submarket RevMan Traditional ShareDAL Plano/Allen/McKinney 80 73 52%ATL Atlanta/Fulton 68 69 50%DAL Far North 47 63 43%DAL N th I i 51 52 50%DAL North Irving 51 52 50%HOU Montrose/River Oaks 50 49 51%DAL Oaklawn 48 27 64%WDC Western Fairfax County 46 19 71%HOU Briar Forest/Ashford 45 61 42%ALT North DeKalb 45 46 49%SEA Bellevue/Issaquah 43 23 65%WDC Downtown/Capitol Hill/Queen Anne 41 50 45%RAL Northwest Raleigh 37 20 65%PHO South Tempe/Ahwatukee 33 33 50%RICH Far West End 32 10 76%
Source: Axiometrics Inc.
Property counts based on institutional-quality product.Pricing type as of August 2013.
Performance Comparison for the Atlanta/Fulton Submarket
Revenue Management and Traditional Pricing
135
Revenue Index$1 350
Effective Rent
105110115120125130135
$1 000$1,050$1,100$1,150$1,200$1,250$1,300$1,350
Occupancy Rate
95100105
Dec
09M
ar10
Jun1
0S
ep10
Dec
10M
ar11
Jun1
1S
ep11
Dec
11M
ar12
Jun1
2S
ep12
Dec
12M
ar13
Jun1
3 $900$950
$1,000
Jan1
0A
pr10
Jul1
0O
ct10
Jan1
1A
pr11
Jul1
1O
ct11
Jan1
2A
pr12
Jul1
2O
ct12
Jan1
3A
pr13
Jul1
3
Days of Free Rent
93%94%95%96%97%
Occupancy Rate
30405060
Days of Free Rent
90%91%92%93%
Jan1
0A
pr10
Jul1
0O
ct10
Jan1
1A
pr11
Jul1
1O
ct11
Jan1
2A
pr12
Jul1
2O
ct12
Jan1
3A
pr13
Jul1
3
01020
Jan1
0A
pr10
Jul1
0O
ct10
Jan1
1A
pr11
Jul1
1O
ct11
Jan1
2A
pr12
Jul1
2O
ct12
Jan1
3A
pr13
Jul1
3
Source: Axiometrics Inc.RevMan Traditional
Performance Comparison for the Plano/Allen/McKinney SubmarketPlano/Allen/McKinney SubmarketRevenue Management and Traditional Pricing
Revenue Index Effective Rent
115
125
135
145
$850$900$950
$1,000$1,050
95
105
Dec09
Mar10
Jun1
0Sep1
0De
c10
Mar11
Jun1
1Sep1
1De
c11
Mar12
Jun1
2Sep1
2De
c12
Mar13
Jun1
3 $700$750$800
Jan1
0
Apr10
Jul10
Oct10
Jan1
1
Apr11
Jul11
Oct11
Jan1
2
Apr12
Jul12
Oct12
Jan1
3
Apr13
Jul13
95%96%97%98%
Occupancy Rate
40
50
60
Days of Free Rent
90%91%92%93%94%
n10
r10
ul10 t10
n11
r11
ul11 t11
n12
r12
ul12 t12
n13
r13
ul13
0
10
20
30
n10
r10
l10
t10
n11
r11
l11
t11
n12
r12
l12
t12
n13
r13
l13
Source: Axiometrics Inc.RevMan Traditional
Jan
Ap Ju Oc Jan
Ap Ju Oc Jan
Ap Ju Oc Jan
Ap Ju Jan
Ap Ju Oct Jan
Ap Ju Oct Jan
Ap Ju Oct Jan
Ap Ju
Revenue Index for Other Top RevMan SubmarketsRevMan Submarkets
145
HOU: Montrose/River Oaks125
WDC: Western Fairfax County
105
115
125
135
100
105
110
115
120
95
Dec09
Mar10
Jun1
0
Sep1
0
Dec10
Mar11
Jun1
1
Sep1
1
Dec11
Mar12
Jun1
2
Sep1
2
Dec12
Mar13
Jun1
3
95
100
Dec09
Mar10
Jun1
0
Sep1
0
Dec10
Mar11
Jun1
1
Sep1
1
Dec11
Mar12
Jun1
2
Sep1
2
Dec12
Mar13
Jun1
3
SEA: Bellevue/Issaquah RAL: Northwest Raleigh
125
135
145
155
SEA: Bellevue/Issaquah
110115120125130
RAL: Northwest Raleigh
95
105
115
Dec09
Mar10
Jun1
0
Sep1
0
Dec10
Mar11
Jun1
1
Sep1
1
Dec11
Mar12
Jun1
2
Sep1
2
Dec12
Mar13
Jun1
3
95100105110
Dec09
Mar10
Jun1
0
Sep1
0
Dec10
Mar11
Jun1
1
Sep1
1
Dec11
Mar12
Jun1
2
Sep1
2
Dec12
Mar13
Jun1
3
Source: Axiometrics Inc.RevMan Traditional
For More Information Please Contact:For More Information Please Contact:Meagan BoyleMarketing DirectorMarketing DirectorAxiometrics Inc.P 214 953 2242P: 214‐953‐2242E: [email protected]
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