CBRE Research: Since 2010 population shifting towards urban but apartment building construction is outpacing growth in

… A number of major metros

CBRE Econometrics is out with a new report showing population growth trends in major US metros has shifted towards urban centers since 2010 but apartment building investors have been keeping pace (or exceeding it) with new construction.  Author Gleb Nechayev, Senior Managing Economist lays it out nicely in a series of charts:

First Population Growth Average Change 2000- 2010

Population Growth in major Apartment Markets 2000 t0 2010
source: CBRE Econometrics

Raleigh is the only metro with significant urban vs. suburban population growth. Note that one-county metros such as Continue reading CBRE Research: Since 2010 population shifting towards urban but apartment building construction is outpacing growth in

Back To The Future: A Brief History of Apartment Building Design

Mike Scott of Dupre+Scott Apartment Advisors gives a tour through the last hundred years or so of apartment building design. Plus ça change….

In the accompanying article (here) Mike talks with builders and developers about current trends in apartment design and amenities. Interestingly many of these changes provide a competitive advantage to Continue reading Back To The Future: A Brief History of Apartment Building Design

Apartment Building Permits Rise to Long-term Average while Vacancy Index Remains Low

In their latest apartment building permitting report Axiometrics says: “permitting increased 44.3% or 84,308 units from the January 2012 figure of 274,640 units.” This is very near the long term average of 280,000 units, see the chart:

Apartment Building Investment New Construction Permits

Note that single family permits are still Continue reading Apartment Building Permits Rise to Long-term Average while Vacancy Index Remains Low

SOMA (Survey of Market Absorption of Apartments) charted by apartment type from the Census Bureau

The NAHB was out with their weekly Eye on Housing report and this week’s edition took a look at the Q3 SOMA data from the Census Bureau. SOMA stands for Survey of Market Absorption of Apartments and overall things are looking pretty positive for developers. One interesting chart they had showed the types of properties that were being built since 2005:

Apartment Building Investment since 2005 by type

Condos and co-op deliveries are Continue reading SOMA (Survey of Market Absorption of Apartments) charted by apartment type from the Census Bureau

ULI: Seattle most attractive market for Apartment Building Investment but there are 36,000 units just completed, under way or in the pipeline.

Two quick links- you decide. From the Seattle Times: Urban Land Institute finds Seattle among most attractive real-estate markets and from Dupre + Scott ( The leading Seattle area apartment market research firm): Apartment development pipeline (video)

When I see this:

Seattle apartment building investment market: 36,000 new units

Q3 Apartment Building Investment Reports Now Available From Marcus & Millichap

M&M covers 39 major apartment building investment markets in the US and have just published their Q3 reports. Here’s a list of the metros they cover:

Marcus & Millichap Q3 2012 Apartment Building Investment Market ReportsThey also provide snapshots of the Office, Industrial, Retail and Self-storage sectors in many of those markets, accessible from the tabs on the page. Note this information requires registration at the website to view.

UPDATE: Top 10 US Submarkets for new apartment building units in the pipeline.

In May we posted an article Top 10 US Cities for new apartment building permits where Seattle came in sixth in new apartment building units permitted. Now a new list is out from Axiometrics with a breakdown by submarket and Seattle’s Downtown/Capitol Hill/Queen Anne submarket lands at number two with almost 4,000 units due to come on line in the near future.

Seattle number 2 in Top 10 most new apartment units in the pipeline

And that’s on top of nearly 6,000 units (3,500 in the last two years) that have already been delivered downtown since 2005. Plus there are several other hot neighborhoods such as Belltown and South Lake Union that Continue reading UPDATE: Top 10 US Submarkets for new apartment building units in the pipeline.

The Danger of Averages: Seattle Apartment Rents by Unit Type 2002-2012

A piece on Seattle apartment building rents over the last ten years by Matt Goyer  in his Urbnlivn blog really caught my eye. Matt looked at data from seattlerentals.com for four popular sub-markets and charted them out here. Naturally I wanted to see what that meant percentage-wise so I built a spreadsheet and added a percent change column. Here’s what that looks like:

Seattle Area Average Apartment Rents by Unit Type 2002-2012

 All within a stone’s throw of 45% growth in 10 years, not bad at about 3.8% annual compound rent growth. But let’s slice the data another way and look at the rent growth by sub-market:

Now we start to see some divergence with Queen Ann at 61% (4.86% compound) and Belltown with 57% (4.59%). Where the ‘average’ rent growth really looks good is when it’s compared to Capitol Hill with only 34% (3.01%) and in Bellevue with only 30% (2.42%). Mind you that is just the ‘average’ 10 year rent growth for these markets so it’s only an indication of what any particular property may have achieved. But here’s where the numbers get really interesting: Continue reading The Danger of Averages: Seattle Apartment Rents by Unit Type 2002-2012

Is the Decline in Cap Rates Coming to an End for Apartment Building Investments?

In a piece just out today from Reis Reports says that: “We have seen declining cap rates fueled by a variety of key factors such as declining interest rates, risk-aversion in the wake of the recession with investors training their sights on what they perceive to be a less-risky property type, and the improvement in property fundamentals, especially in the apartment sector.”

Cap rate stabilizing for apartment building investments

But: “With the sale of high-quality assets dominating the marketplace, this has fueled the ongoing disconnect in pricing between buyers and sellers, preventing many assets that are not of the highest quality from trading. With sellers taking their cues from current market statistics, they are being relatively aggressive regarding the prices that they are willing to accept to consummate a transaction. However, frustrated buyers feel that many assets should not command the same premium that the highest-quality assets currently command in the market and consequently buyers are unwilling to pay such vertiginous prices.”

What are you seeing in your markets?

 

Is Bellevue’s Spring District The Next South Lake Union? Apartment developers are saying yes-

A piece in the Seattle Real Estate BisNow is talking about the new mixed use development that will be starting up around the planned light rail station in the Bel-Red area. The area has now got a fancy new name too: The Spring District. Kevin Wallace, Pres. of Wallace properties compares it to South Lake Union (only with better, ok, less worse traffic if you ask me).

Mixed Use Development in Bellevue's Spring District

Also mentioned that downtown Bellevue’s office space is just a couple big tenants short of being full, full of tech tenants including game developers that is.