Friday twofer on Seattle. First is Dupre+Scott’s entertaining and enlightening video on apartment building construction and property sales:
Mike has two nice charts showing apartment development numbers back to 1988 and sales volume back to 1981. Note that on the sales volume chart 2013 numbers are Continue reading The ‘Twin Peaks’ of Seattle Apartment Building Investment Plus MPF Research says rent growth holding strong there.
Dividend Capital’s Q3 Market Cycle Monitor Report is out and naturally I looked at the apartment building investment cycle chart first. Specifically these days I’m looking to see where the author, Glenn R. Mueller Ph.D. has placed the Seattle market in the cycle.
In this latest report you can see that it is listed at position 2 with only Norfolk listed lower at position 1. What does position 2 signify? According to the good Doctor, position 2 lies in the Phase 1 – Recovery Quadrant defined as having “No New Construction” and position 2 specifically having “Negative Rental Growth”. But how can this be? Continue reading Apartment Building Investment Cycle Analysis via Dividend Capital. Can this be right?
2/3rds of those are located in downtown, Capital Hill and Ballard. Owners of existing properties in those areas are about to have a bunch of new competition. With rent growth slowing to just about the national average what does that say about where we are in the apartment building investment cycle?
Click on the image to see the MPF Research video
My Exec Sum: Seattle apartment building investment results from Essex Property Trust Q1 call:
- Seattle demonstrated exceptional same-store NOI and revenue growth of 11.2% driven by very limited supplies of housing and job growth that exceeds national averages
- On operating expenses we expect a 2.3% increase for the second quarter ’12 over the second quarter in ’11
- Seattle rents were up 6.5% compared to the first quarter of 2011. So depending on the submarket, we are now 4% below to even with our prior rent peaks.
- renewal offers for June and July averaged +6% to 8% in Seattle
- As of April 30, its occupancy was 96.1% with a net availability of 5.1%.
- We view this turnover activity (50-55% YoY) as healthy because it provides us with more opportunity to grow rents. Additionally, we only saw a nominal increase in move-outs due to home purchases and affordability.
- Cap rates continue Continue reading Essex Prop. Trust on Seattle Apartment Building Investment: rents up 6.5%, NOI +11% but 10k new units coming