2016 Commercial Market Forecast | Multi-Family Update
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The Multi-Family Market update from Robert Morgan with Greystar from the 2016 Charleston Commercial Market Forecast, hosted by the Charleston Association of Realtors' Commercial Investment Division in Charleston, South Carolina on September 22, 2016.
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2016 Commercial Market Forecast | Multi-Family Update
- 1. www.CharlestonCommercialMarketForecast.com MULTI-FAMILY REPORT Robert Morgan A Fully Integrated Multifamily Service Provider
- 2. www.CharlestonCommercialMarketForecast.com Multifamily Report 1 U.S. FUNDAMENTALS 2 CHARLESTON MARKET 3 OPPORTUNITIES 4 TRENDS Daniel Island Village, 2008
- 3. 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
- 4. www.CharlestonCommercialMarketForecast.com • 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
- 5. www.CharlestonCommercialMarketForecast.com • 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
- 6. 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
- 7. www.CharlestonCommercialMarketForecast.com • Rent growth continues but decelerates, still solid by historical standards U.S. FUNDAMENTALS Source: Axiometrics
- 8. www.CharlestonCommercialMarketForecast.com 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
- 10. www.CharlestonCommercialMarketForecast.com CHARLESTON MARKET Summerville: $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
- 11. www.CharlestonCommercialMarketForecast.com • Peak conditions have already been achieved • Solid, but more normalized growth CHARLESTON MARKET Source: CoStar Market Analytics
- 12. www.CharlestonCommercialMarketForecast.com • Peak conditions have already been achieved • Solid, but more normalized growth CHARLESTON MARKET Source: CoStar Market Analytics
- 13. www.CharlestonCommercialMarketForecast.com • Peak conditions have already been achieved • Solid, but more normalized growth CHARLESTON MARKET Source: CoStar Market Analytics
- 15. www.CharlestonCommercialMarketForecast.com OPPORTUNITIES Charleston Neck 2016 (image courtesy of JLL) Atlanta West Midtown 2003
- 16. www.CharlestonCommercialMarketForecast.com OPPORTUNITIES Charleston Neck 2013 Atlanta West Midtown 2016
- 17. www.CharlestonCommercialMarketForecast.com TRENDS Last 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
- 18. www.CharlestonCommercialMarketForecast.com TRENDS Elan Midtown – Charleston, SC Courier Square – Charleston, SC Elan Westside – Atlanta, GA
- 19. www.CharlestonCommercialMarketForecast.com TRENDS Overture Crabtree – Raleigh, NC Overture Lindbergh – Atlanta, GA