2016 Commercial Market Forecast | Multi-Family Update
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Transcript of 2016 Commercial Market Forecast | Multi-Family Update
www.CharlestonCommercialMarketForecast.com
MULTI-FAMILY REPORTRobert Morgan
A Fully Integrated Multifamily Service Provider
www.CharlestonCommercialMarketForecast.com
Multifamily Report
1 U.S. FUNDAMENTALS
2 CHARLESTON MARKET
3 OPPORTUNITIES
4 TRENDS
Daniel Island Village, 2008
www.CharlestonCommercialMarketForecast.com
Drivers of Multifamily Housing:
• Job growth / employment rate• Wage growth• Residential still undersupplied by historical
standards• Renters by choice
U.S. FUNDAMENTALS
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• Job growth approximately 2% annually since the Global Financial Crisis• Wage growth decelerating, but with full employment creates potential to rise
U.S. FUNDAMENTALS
Source: Bureau of Labor Statistics, Moody's Analytics
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• Demand-fueled recovery continues
U.S. FUNDAMENTALS
Permits in these calculations refer to LTM permits offset 4 quarters prior to the current quarter. This offset accounts for time of construction and is most historically reliable in predicting rent growth. Source: Bureau of Labor Statistics, US Census Bureau, Moody’s Analytics, Greystar
www.CharlestonCommercialMarketForecast.com
• Total residential supply is benign • If current MF building remains constant, 4.5 years to backfill debt of supply
U.S. FUNDAMENTALS
Source: US Census Bureau
www.CharlestonCommercialMarketForecast.com
• Rent growth continues but decelerates, still solid by historical standards
U.S. FUNDAMENTALS
Source: Axiometrics
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U.S. FUNDAMENTALS
34.1%
62.9%
69.1%
74.7%
77.9%
58.3%
HO Rate change since 4Q15
1.4%
0.5%
1.0%
1.0%
0.9%
Source: Moody’s Analytics, US Census Bureau
www.CharlestonCommercialMarketForecast.com
CHARLESTON MARKETSummerville: $1,230 $1.30 psf
• Top of Submarket Asking Rents: price per month & per square foot
N Charleston: $1,256 $1.21 psf
Daniel Island: $1,704 $1.90 psf
Downtown: $1,874 $2.15 psf
Mt Pleasant: $1,645 $2.17 psf
W Ash/James I: $1,738 $2.09 psf
W Ash (out): $1,557 $1.49 psf
www.CharlestonCommercialMarketForecast.com
• Peak conditions have already been achieved• Solid, but more normalized growth
CHARLESTON MARKET
Source: CoStar Market Analytics
www.CharlestonCommercialMarketForecast.com
• Peak conditions have already been achieved• Solid, but more normalized growth
CHARLESTON MARKET
Source: CoStar Market Analytics
www.CharlestonCommercialMarketForecast.com
• Peak conditions have already been achieved• Solid, but more normalized growth
CHARLESTON MARKET
Source: CoStar Market Analytics
www.CharlestonCommercialMarketForecast.com
OPPORTUNITIES
Charleston Neck 2016 (image courtesy of JLL)
Atlanta West Midtown 2003
www.CharlestonCommercialMarketForecast.com
OPPORTUNITIES
Charleston Neck 2013
Atlanta West Midtown 2016
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TRENDSLast Cycle:• Charleston: greenfield and suburban • Atlanta & Charlotte: urban infill mid-rise product, some mixed-use
Current Cycle:• Charleston: several class-A projects are now urban/suburban infill, assemblage
sites, high-density, and some mixed-use• Atlanta, Charlotte, Nashville, and Raleigh: extremely dense complex mixed-used
projects, as well as towers
Next Cycle:• The evolution to provide urban housing in desirable areas will continue• Dense multifamily housing will improve the viability of our cities and suburbs• Niche projects catering to evolving renter demands
www.CharlestonCommercialMarketForecast.com
TRENDS
Elan Midtown – Charleston, SC
Courier Square – Charleston, SC
Elan Westside – Atlanta, GA