According to Yardi-Matrix’s report on September rental trends, the apartment markets in the Triad, Charlotte, and Raleigh continue to be in the top tier of year-to-year rent growth in the country. The two tables below tell the story:
According to this piece on NAA’s website, the Piedmont Triad’s annual rent growth in July was in the top five in the country:
The leaderboard of rent growth leaders shuffled slightly, but the markets remained about the same. Las Vegas took the top spot for annual rent growth in July at 8.4%. Phoenix (8.3%), Sacramento (5.2%), Raleigh/Durham (5.1%) and Greensboro/Winston-Salem (5.0%) rounded out the top five. Austin, Nashville, Riverside, Charlotte, Atlanta, Milwaukee and Cincinnati all saw between 4.0% and 4.8% annual rent growth.
The article also points out that national occupancy rates hit 96.2% in July, the highest they’ve been in 20 years:
Strong leasing activity in this year’s peak season has continued to cause apartment vacancies to drop, with July’s occupancy rate reaching 96.2 percent. That rate, the highest rate since 2000, was up 0.4 points year-over-year.
As usual, occupancy was tightest in the Northeast region, at 97 percent. The West and Midwest were 96.5 percent and 96.4 percent occupied, respectively. Occupancy landed at 95.7 percent in the South. Those rates were up 0.2 points to 0.5 points from a year ago.
Of the nation’s 150 largest apartment markets, 91 meet or exceed the national norm for occupancy and 135 hit the effectively full mark of 95 percent. Only four markets register occupancy below 94 percent, including some supply challenged Texas markets like College Station and Lubbock.
Real Data just released their March, 2019 survey report for the Piedmont Triad and the results show that the apartment market continues to be very strong here in the Piedmont Triad. They report that the average vacancy rate is 3.7%, down from 5.5% in March of 2018, and average rent is $898 ($0.943/SF) versus $842 ($0.888) this time last year. From their market summary:
The Triad apartment market continues to tighten with an average vacancy rate at just 3.7%. Over the last year demand has been strong with 2,595 units absorbed, easily offsetting the 1,487 units added to the supply over the same time period.
The development pipeline included 2,081 units under construction and another 4,462 units proposed. Guilford County is the most active with 1,183 units under construction and an average vacancy rate at 3.3%.
The region has posted strong rent growth of 4.5% over the past twelve months…
With demand expected to remain strong, the average vacancy rate should hold close to 4.0% over the next year. Rents will continue to grow an an annual rate of 4% to 4.5%.
You can buy a copy of Real Data’s full report here.
Carlisle Residential Properties announced this week that Kevin Thompson will be joining the company as Chief Marketing Officer. From an article in Multifamily Pro:
Carlisle Residential Properties, a leading apartment management and investment company throughout the Carolinas, announced today that it has hired Kevin Thompson as Chief Marketing Officer (CMO). Thompson, who joins the Company effective August 1st, will oversee all corporate and community-level Marketing, Branding, Communications, and Public Relations. Thompson will report directly to Matthew Rankin, Carlisle’s President and CEO.
Rankin stated, “We’re very pleased to welcome Kevin to our senior team. Our communications and marketing needs have steadily increased with our growing portfolio and strategic direction. Kevin, with his considerable experience both inside and outside the apartment industry, brings the strategic leadership we need to move to the next level in our Company’s development.”
…For the last six years, Thompson served as Senior Vice President of Marketing at Bell Partners, Inc. He is a member of the Zillow Advisory Board, Vice-Chairman of the National Multihousing Council’s Branding Subcommittee, and a frequent speaker and panelist at industry conferences.
A newly-formed investment group in Winston-Salem is finding some happy hunting for apartment communities…in Burlington. From an article in the Triad Business Journal:
Luke Chung and his new Winston-Salem-based VIP Syndicate have purchased the first of what he hopes will be several multifamily communities in the Triad.
Chung started in the city where he hopes to acquire many more properties: Burlington. VIP paid $4.48 million for Clifton Place Apartments at 2575 Eldermont St. to a Burlington LLC managed by Jason DeBoer and Jeffrey Gabriel.
“I’m looking to buy as much as I can in that area,” Chung told Triad Business Journal. “I’m very bullish on the Burlington market. I think there’s potential for a boom there in the near future.”
As the article points out, Burlington is one of the highest growth areas for apartments in the Triad. In fact, according to Real Data’s latest report (Oct, 17) Alamance-Burlington has more units under construction (628) than any other sub-market in the Triad. The next two closest are downtown Greensboro (372) and downtown Winston-Salem (344). With it’s proximity to both the Triad and the western edge of the Triangle market, Alamance-Burlington is uniquely positioned for immediate growth.
The National Apartment Association (NAA) and National Multifamily Housing Council (NMHC) recently commissioned a study by Hoyt Advisory Services on the housing market in the Piedmont Triad and concluded that almost 19,000 new apartment units will need to be constructed by 2030 in order to meet the region’s housing needs. The study also found that this new construction will require all types of apartments at all price points.
The study found that the Piedmont Triad currently has an estimated 101,020 apartments with residents of all ages and income levels. Of those units, 66% were built before the year 2000, which is a key factor in addressing housing affordability; as new housing units are built they free up older housing stock for workforce housing.
While multiple factors contribute to the need for new apartments, including shifting lifestyle preferences, such as delayed homebuying, as well as the aging American population, a critical component to increased demand for all housing in the Triad is an influx of 25,000 new residents from other parts of the country.
Here’s a link to a PDF version of an overview of the study results for the Triad. Metro MF Overview Piedmont Triad 3-Nov-17
You can also find results at the weareapartments.org website.
Real Data’s October, 2017 market report for the Piedmont Triad was just published and the trends look good. Here are the highlights:
- Vacancy rate: 5.2% (was 5.6% in October, 2016)
- Average rent/SF: $0.876 (was $0.843 in October, 2016)
- # of units: 67,560 (was 64,196 in October, 2016)
- 1,814 units have been absorbed in the last year
- 2,646 units are under construction, and another 1,870 are proposed
Real Data expects vacancies to remain around 5.0% over the next year.
Also of interest is how the various submarkets are performing. Most notable:
- Highest rent per SF: Guilford-Central ($1.131) and Forsyth-Central ($1.056)
- Lowest vacancy rate: Guilford-High Point (3.3%)
- Highest vacancy rate: Guilford-Southwest (7.8%)
- Most units under construction, as a percentage of all units surveyed: Alamance-Burlington (10.79%)
To get a full copy of Real Data’s Triad market report visit www.aptindex.com
According to a report from Marcus & Millichap, rents in the Triad have risen over the past four quarters thanks in part to investors looking for fertile territory after the Charlotte and Raleigh markets became a bit saturated. From the Triad Business Journal:
Rent for apartments increased 7.7 percent in the improving Triad market over the past four quarters, according to a Third Quarter 2017 report released by Marcus & Millichap (NYSE: MMI), a California-based, commercial real estate firm that provides research and advisory services in the U.S. and Canada.
The effective rent — the remaining cash after paying operating expenses — for landlords in the market was up 8.3 percent to $811. The vacancy rate dropped from nearly 6 percent to 4.5 percent over the past year.
By comparison, effective rents in Charlotte averaged $1,090 and in Raleigh they averaged $1,109
By now most of us have heard about how the demographic changes we’re experiencing are (generally positively) impacting the apartment market, but some new data shows that when you dig into the numbers there’s more nuance than you might have otherwise expected to find. From an article on the National Real Estate Investor site:
One of the more interesting findings in this expansion can be found in the demographic statistics. Data on households shows that non-family households have grown at a disproportionately faster rate than family households. Non-family households include singles, roommates and any kind of cohabitation arrangement that does not include marriage or children. The graph below clearly shows that this divergence started when the housing market collapsed, but it continued throughout the subsequent eight years. This chart illustrates the common notion that Millennials have put off starting a family and buying a home. It also explains why the apartment market has thrived over the last 10 years, expanding by 12 percent from 2007 to 2016.
Looking at the metros shows a somewhat consistent pattern: those with the highest non-family household growth had some of the highest occupancy growth rates. These include Austin, Greensboro/Winston-Salem, N.C., Houston, San Antonio and Charlotte, N.C. Apartment occupancy in these metros grew by 20 percent or more from 2007 through 2015. However, these metros saw high overall growth rates in population and households as well, so occupancy growth was not necessarily driven by the non-family household growth trend.
The question that then emerges is: do metros that have disproportionately higher growth in non-family households show strong rent and/or occupancy growth patterns? The data suggests that the answer to this question is no. The two North Carolina metros—Charlotte and Greensboro/Winston-Salem—both have disproportionately higher non-family household growth than family household growth rates, as well as high occupancy growth. Charlotte’s rent growth was just above the U.S. average, but Greensboro’s rent growth is below the U.S. average rate. Moreover, other metros with wide gaps between non-family household and family household growth rates include Birmingham, Ala., New Haven, Conn., New Orleans, Wichita, Wis. and Richmond, Va.—none of which have posted strong apartment rent growth rates…
Thus, one could conclude that rents are driven more by economics—job and income growth—than demographics, which still drives occupancy. In short, the demographic shift that we have seen these last few years—fewer families and more “non-families” has changed the urban landscape dramatically. Nevertheless, the property markets are still ruled by economics, which may or may not move in step with the demographic changes.
What they’re saying in a nutshell is that the apartment market here in the Triad has a strong occupancy rate due to demographics (growth in households) but rents are suppressed due to economics (our local job and income growth is weak). Bottom line? Until we have more and better paying jobs here in the Triad our rents will remain low relative to the rest of the country.
Real Data released their October, 2016 market update for the Piedmont Triad and the numbers were good. Here are the basics:
- Vacancies – 5.6%, down from 7.5% in March
- Average rent per square foot – $0.843, up from $0.813 in March
- Same-store rent change – 2.5%, up from 0.7% in March
The sub-market with the lowest vacancy rate was Guilford-High Point at 3.8% and the sub-market with the highest was Forsyth-East at 8.4%. Highest average rent per square foot was found in Guilford-Central at $1.072 (followed closely by Forsyth-Central at $1.071) and the lowest was found in Guilford-High Point at $0.697.
In general the Piedmont Triad apartment market remains strong and Real Data expects it to continue in the near future. From the report:
“The average vacancy rate will approach 5.0% over the next year. Rents growth should remain strong over the next year as occupancies reach historical highs.”
To get a full copy of the report, including extensive data on sub-markets and the surveyed apartment communities, you can visit www.aptindex.com.