TOP 10 SUBMARKETS - National Apartment Association · TOP 10 SUBMARKETS Donna Summers J Dt Gables...

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


*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.


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


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.


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


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.


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.


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%


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


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%


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


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


For More Information Please Contact:For More Information Please Contact:Meagan BoyleMarketing DirectorMarketing DirectorAxiometrics Inc.P 214 953 2242P: 214‐953‐2242E: [email protected]

#AptRevenue AptRevenue.com

TOP 10 SUBMARKETS - National Apartment Association · TOP 10 SUBMARKETS Donna Summers J Dt Gables...

Documents

Transcript of TOP 10 SUBMARKETS - National Apartment Association · TOP 10 SUBMARKETS Donna Summers J Dt Gables...