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Transcript of NCHMA 2012 Annual Meeting - NH&RAservices.housingonline.com/nhra_images/Jonathan Bartlett.pdf ·...
September 6-7, 2012 | Conrad Hotel | Chicago, IL
NCHMA 2012
Annual Meeting Alternative Analysis: Market
Insight from REITs, Developers, and Brokers
Jonathan Bartlett, Reznick Group
Garry Benson, Garrison Partners
September 6-7, 2012 | Conrad Hotel | Chicago, IL
Session Overview:
• What is the current landscape for
market rate, multifamily development?
• How do conventional developers
approach market analysis?
• What analytical approaches can be used
to forecast the potential performance of
a luxury multifamily deal?
September 6-7, 2012 | Conrad Hotel | Chicago, IL
Introductions
• Jonathan Bartlett, Senior Manager
Reznick Group Real Estate
Development Advisory
– Top 20 CPA firm specializing in real estate
– Much more than tax credits
– Merging with NY based J.H. Cohn
September 6-7, 2012 | Conrad Hotel | Chicago, IL
Introductions
• Garry Benson, CEO
Garrison Partners
– 30 years of Real Estate Consulting
– Marketing and Sales
– Full suite of development and management
services through allied companies
September 6-7, 2012 | Conrad Hotel | Chicago, IL
Building Permit Activity
1,798
491 575
299
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
Jan-0
0
Jun-0
0
Nov-
00
Apr-
01
Sep-0
1
Feb-0
2
Jul-02
Dec-
02
May
-03
Oct
-03
Mar
-04
Aug-
04
Jan-0
5
Jun-0
5
Nov-
05
Apr-
06
Sep-0
6
Feb-0
7
Jul-07
Dec-
07
May
-08
Oct
-08
Mar
-09
Aug-
09
Jan-1
0
Jun-1
0
Nov-
10
Apr-
11
Sep-1
1
Feb-1
2
Jul-12
Single Family MultifamilySource: Moody’s, Census
September 6-7, 2012 | Conrad Hotel | Chicago, IL
Top 10 Development Markets*
• Washington, DC
• NYC
• San Francisco
• Austin
• San Jose
• Houston
• Seattle
• Boston
• Dallas
• LA
*As reported in Fall 2011 for ULI’s Emerging Trends in Real Estate for 2012.
September 6-7, 2012 | Conrad Hotel | Chicago, IL
Pipeline Concerns? See
Previous Slide!
MSA
Submarket
Units in Pipeline
Houston-Baytown-Sugar Land, TX Montrose/River Oaks 4,055
Seattle-Bellevue-Everett, WA Downtown/Capitol Hill/Queen Anne 3,936
Washington-Arlington-Alexandria,
DC-VA-MD-WV Anacostia/Northeast DC 3,258
Dallas-Plano-Irving, TX Plano/Allen/McKinney 2,958
San Jose-Sunnyvale-Santa Clara, CA Northeast San Jose 2,881
New York-Wayne-White Plains, NY-
NJ Midtown West 2,564
San Francisco-San Mateo-Redwood
City, CA South of Market 2,526
Washington-Arlington-Alexandria,
DC-VA-MD-WV Downtown/Logan Circle 2,337
Baltimore-Towson, MD Central Baltimore City 2,051
Santa Ana-Anaheim-Irvine, CA Irvine 2,021
Source: Axiometrics
September 6-7, 2012 | Conrad Hotel | Chicago, IL
Top Rent Growth Markets
Current
MSA Name
Rent
YTD ERG Growth Occupancy
Rank YTD May
‘12 ‘12
1 San Jose, CA 8.4 % 96.6 %
2 Boulder, CO 6.7 % 96.5 %
3 San Francisco, CA 6.3 % 96 %
4 Seattle, WA 6.1 % 95.5 %
5 Nashville, TN 5.8 % 95.7 %
6 Louisville, KY 5.6 % 96 %
7 Charlotte, NC 5.3 % 94.5 %
8 Hartford, CT 5.2 % 96.4 %
9 Salt Lake City, UT 5.1 % 96.2 %
10 Cape Coral, FL 4.9 % 94.2 %
National 3.3 % 94.3 %
Source: Axiometrics through May 2012
September 6-7, 2012 | Conrad Hotel | Chicago, IL
Bottom Rent Growth Markets
Current
MSA Name
Rent
YTD ERG Growth Occupancy
Rank YTD May
‘12 ‘12
79 Tulsa, OK 1.5 % 91.9 %
80 Winston-Salem, NC 1.1 % 92.7 %
81 Tucson, AZ 1 % 91.4 %
82 Phoenix, AZ 1 % 92.7 %
83 Tacoma, WA 0.9 % 92.8 %
84 Virginia Beach, VA 0.7 % 92.9 %
85 Las Vegas, NV 0.7 % 92 %
86 Albuquerque, NM 0.2 % 93.4 %
87 Detroit, MI 0.1 % 94 %
88 Palm Bay, FL -0.6 % 92.2 %
National 3.3 % 94.3 %
Source: Axiometrics through May 2012
September 6-7, 2012 | Conrad Hotel | Chicago, IL
Top 10 MF Developers
Rank Company 2011 Units Built
1 Wood Partners 3,732
2 Alliance Residential 3,600
3 Wermers Cos. 3,200
4 AvalonBay
Communities 3,071
5 Irvine Company 3,047
6 Clark Builders Group 2,956
7 AMLI Residential 2,777
8 The NRP Group 2,692
9 Mill Creek
Residential Trust 2,662
10 Camden Property
Trust 2,190
Source: MFE
September 6-7, 2012 | Conrad Hotel | Chicago, IL
State of the Market
• What’s driving demand for new MF?
– The usual suspects:
• Gen Y
• Can’t buy
• Housing near job cores
– Niche opportunities; infill locations
• Higher end finish expectations
September 6-7, 2012 | Conrad Hotel | Chicago, IL
State of the Market
• What’s driving demand for MF market
analysis?
– Equity requirements
– You’re a nice guy, but…
– I don’t want to get burned again
– Pioneering product
– Pioneering submarket