multifamily trends & predictions from axiometrics

Multifamily Trends & Predictions from Axiometrics

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Axiometrics Inc.

Apartment Data and Analytics Provider

• Tracks Properties Monthly Across More Than400 U.S. Metropolitan Statistical Areas (MSAs)

• Collects Asking Rents, Concessions, and Effective Rents at the Floor Plan Level; Occupancy at Property Level

• Reports at Property, Comp Set, Submarket, MSA, and Portfolio Levels

• Properties Tracked From Planning through Stabilization

• Also Tracks Student Housing

https://twitter.com/axiometrics

CURRENT MARKET TRENDS

• National Effective Rent Growth is Good, No Longer Great; Occupancy Rates are Very Strong

• Key Economic Drivers – Job Growth Steady, New Deliveries Increasing

• NorCal, TX, and CO are Among Top Performing MSAs; DC is Weakest of Major MSAs

• Class A Rent Growth is Slowing

• The Threat of Oversupply is the Hottest Topic

Source: Axiometrics Inc.©2013 AXIOMETRICS INC. ALL RIGHTS RESERVED

NATIONAL MONTHLY TRENDS

Source: Axiometrics Inc.

May

-09

Jun-

09Ju

l-09

Aug

-09

Sep

-09

Oct

-09

Nov

-09

Dec

-09

Jan-

10F

eb-1

0M

ar-1

0A

pr-1

0M

ay-1

0Ju

n-10

Jul-1

0A

ug-1

0S

ep-1

0O

ct-1

0N

ov-1

0D

ec-1

0Ja

n-11

Feb

-11

Mar

-11

Apr

-11

May

-11

Jun-

11Ju

l-11

Aug

-11

Sep

-11

Oct

-11

Nov

-11

Dec

-11

Jan-

12F

eb-1

2M

ar-1

2A

pr-1

2M

ay-1

2Ju

n-12

Jul-1

2A

ug-1

2S

ep-1

2O

ct-1

2N

ov-1

2D

ec-1

2Ja

n-13

Feb

-13

Mar

-13

Apr

-13

May

-13

-8%

-6%

-4%

-2%

0%

2%

4%

6%

90.0%

91.0%

92.0%

93.0%

94.0%

95.0%

96.0%

Annual Effective Rent Growth Occupancy Rate

Rent Growth Occ Rate

THE NATIONAL OCCUPANCY RATE CONTINUES TO IMPROVE, BUT EFFECTIVE RENT GROWTH HAS BEEN MODERATING SINCE JULY 2011

©2013 AXIOMETRICS INC. ALL RIGHTS RESERVED

ANNUAL EFFECTIVE RENT GROWTH


May

-09

Jun-

09Ju

l-09

Aug

-09

Sep

-09

Oct

-09

Nov

-09

Dec

-09

Jan-

10F

eb-1

0M

ar-1

0A

pr-1

0M

ay-1

0Ju

n-10

Jul-1

0A

ug-1

0S

ep-1

0O

ct-1

0N

ov-1

0D

ec-1

0Ja

n-11

Feb

-11

Mar

-11

Apr

-11

May

-11

Jun-

11Ju

l-11

Aug

-11

Sep

-11

Oct

-11

Nov

-11

Dec

-11

Jan-

12F

eb-1

2M

ar-1

2A

pr-1

2M

ay-1

2Ju

n-12

Jul-1

2A

ug-1

2S

ep-1

2O

ct-1

2N

ov-1

2D

ec-1

2Ja

n-13

Feb

-13

Mar

-13

Apr

-13

May

-13

-14%

-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

Houston, TX Las Vegas, NV

Washington, DC National

WASHINGTON, DC WAS ONE OF THE STRONGEST MSAS EARLY IN THE CYCLE, BUT ITS GROWTH IS NOW ONE OF THE WEAKEST IN THE U.S.; HOUSTON RECENTLY PEAKED; LAS VEGAS IS IMPROVING


U.S. JOB GAIN AND GROWTH

1Q89 1Q91 1Q93 1Q95 1Q97 1Q99 1Q01 1Q03 1Q05 1Q07 1Q09 1Q11 1Q13 1Q15F 1Q17F-7,000

-5,000

-3,000

-1,000

1,000

3,000

5,000

-6%

-5%

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

Job Gain ('000) Job Growth (%)

Sources: Axiometrics Inc., BLS

EXPECT JOB GAIN TO PEAK IN 2014 AND 2015 DURING THIS CYCLE


U.S. JOB AND RENT GROWTH

Eff. Rent Growth Job Growth

Sources: Axiometrics, BLS

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

-5%

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%Rent Growth Job Growth


HISTORICAL JOB AND RENT GROWTH TRENDS BY MSA


Rent Growth Job Growth

Annual Eff Rent Growth Annual Job Growth

Rent Growth

Rent Growth Rent Growth

Job Growth

Job Growth Job Growth

2Q96

1Q97

4Q97

3Q98

2Q99

1Q00

4Q00

3Q01

2Q02

1Q03

4Q03

3Q04

2Q05

1Q06

4Q06

3Q07

2Q08

1Q09

4Q09

3Q10

2Q11

1Q12

4Q12

-15%

-10%

-5%

0%

5%

10%

15%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

Los Angeles

2Q96

1Q97

4Q97

3Q98

2Q99

1Q00

4Q00

3Q01

2Q02

1Q03

4Q03

3Q04

2Q05

1Q06

4Q06

3Q07

2Q08

1Q09

4Q09

3Q10

2Q11

1Q12

4Q12

-15%

-10%

-5%

0%

5%

10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

Atlanta

2Q96

1Q97

4Q97

3Q98

2Q99

1Q00

4Q00

3Q01

2Q02

1Q03

4Q03

3Q04

2Q05

1Q06

4Q06

3Q07

2Q08

1Q09

4Q09

3Q10

2Q11

1Q12

4Q12

-15%

-10%

-5%

0%

5%

10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

Dallas

2Q96

1Q97

4Q97

3Q98

2Q99

1Q00

4Q00

3Q01

2Q02

1Q03

4Q03

3Q04

2Q05

1Q06

4Q06

3Q07

2Q08

1Q09

4Q09

3Q10

2Q11

1Q12

4Q12

-15%

-10%

-5%

0%

5%

10%

15%

20%

-4%

-2%

0%

2%

4%

6%

Washington, DC


TEXAS HAS FOUR OF THE TOP 13 (AUSTIN)

Source: BLS

*Absolute job growth in thousands..

Annual Absolute Change* Annual Relative Change

Rank MSA Apr-11 Apr-12 Apr-13 Apr-11 Apr-12 Apr-13

1 Houston, TX 63.6 85.8 111.2 2.5% 3.3% 4.2%

2 New York, NY 94.6 79.3 98.6 1.8% 1.5% 1.9%

3 Los Angeles, CA 11.3 57.7 76.5 0.3% 1.5% 2.0%

4 Dallas, TX 50.7 51 67.7 2.5% 2.5% 3.2%

5 Atlanta, GA 41.6 36.8 48.2 1.8% 1.6% 2.1%

6 Boston, MA 31.7 27.5 47.3 1.3% 1.1% 1.9%

7 Chicago, IL 48.9 46.5 47.3 1.4% 1.3% 1.3%

8 Phoenix, AZ 22.4 33.3 42.8 1.3% 1.9% 2.4%

9 Fort Worth, TX 23.2 23.2 37.2 2.8% 2.7% 4.2%

10 Tampa, FL 20.5 26.5 35.4 1.8% 2.3% 3.1%

National 1,509 2,121 2,094 1.2% 1.6% 1.6%

ABSOLUTE JOB GROWTH BY MSA


MULTIFAMILY PERMITTING HAS BEEN STEADILY INCREASING SINCE THE BEGINNING OF 2010; TOTAL UNITS PERMITTED IS STILL LESS THAN HALF OF WHAT IT WAS IN 2005 WHEN IT EXCEEDED 2 MILLION UNITS

Source: Census

Permitting numbers represent the trailing 12-month total.

Units PermittedSingle-family Multifamily Total Residential

Jan

-10

Ap

r-1

0

Jul-

10

Oct

-10

Jan

-11

Ap

r-1

1

Jul-

11

Oct

-11

Jan

-12

Ap

r-1

2

Jul-

12

Oct

-12

Jan

-13

Ap

r-1

3

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1,000,000

NATIONAL RESIDENTIAL PERMITTING TRENDS


RESIDENTIAL PERMITTING BREAKDOWN BY MSA

Source: Census

Permitting numbers represent the trailing 12-month total.

Units Permitted

Units Permitted

Units Permitted

Units Permitted

Single-family Multifamily Total Residential

Jan-

10

Apr-1

0

Jul-1

0

Oct-1

0

Jan-

11

Apr-1

1

Jul-1

1

Oct-1

1

Jan-

12

Apr-1

2

Jul-1

2

Oct-1

2

Jan-

13

Apr-1

30

4,000

8,000

12,000

16,000

20,000

Atlanta

Jan-

10

Apr-1

0

Jul-1

0

Oct-1

0

Jan-

11

Apr-1

1

Jul-1

1

Oct-1

1

Jan-

12

Apr-1

2

Jul-1

2

Oct-1

2

Jan-

13

Apr-1

30

5,000

10,000

15,000

20,000

25,000

30,000

Dallas

Jan-

10

Apr-1

0

Jul-1

0

Oct-1

0

Jan-

11

Apr-1

1

Jul-1

1

Oct-1

1

Jan-

12

Apr-1

2

Jul-1

2

Oct-1

2

Jan-

13

Apr-1

30

2,0004,0006,0008,000

10,00012,00014,00016,000

Charlotte

Jan-

10

Apr-1

0

Jul-1

0

Oct-1

0

Jan-

11

Apr-1

1

Jul-1

1

Oct-1

1

Jan-

12

Apr-1

2

Jul-1

2

Oct-1

2

Jan-

13

Apr-1

30

4,000

8,000

12,000

16,000

20,000

Washington, DC


STRONGEST MSAS FOR RENT GROWTH FOR MAY 2013

Results are only displayed for MSAs where Axiometrics tracks 10 or more properties.



WEAKEST MSAS FOR RENT GROWTH FOR MAY 2013




ANNUAL EFFECTIVE RENT GROWTH BY MSA FOR MAY 2013




MSAS WITH OCCUPANCY RATES ABOVE 95% FOR MAY 2013




MSAS WITH OCCUPANCY RATES BELOW 92% FOR MAY 2013




OCCUPANCY RATE BY MSA FOR MAY 2013




THE TOP 11 MSAS FOR EFFECTIVE RENT GROWTH

Source: Axiometrics, Inc.

Rank is based on May 2013 annual effective rent growth compared to the top 88 MSAs.

Annual Eff Rent Growth Occupancy Rate

Rank MSA May-11 May-12 May-13 May-11 May-12 May-13

1 Oakland, CA 7.6% 5.9% 10.1% 96.1% 95.8% 96.4%

2 Boulder, CO 9.2% 5.3% 10.0% 95.8% 95.3% 95.7%

3 Corpus Christi, TX 2.7% 5.5% 8.9% 94.6% 95.4% 95.6%

4 Palm Bay, FL 2.2% 0.1% 8.4% 90.1% 92.2% 94.9%

5 Cape Coral, FL 8.6% 4.0% 8.4% 93.3% 94.2% 94.7%

6 San Jose, CA 13.7% 8.3% 7.4% 97.4% 96.6% 96.4%

7 San Francisco, CA 10.2% 14.9% 7.3% 96.0% 96.2% 95.9%

8 Denver, CO 6.8% 7.2% 6.9% 95.3% 95.1% 95.6%

9 North Port, FL 5.0% 4.9% 6.8% 95.6% 96.1% 95.1%

10 Houston, TX 4.3% 6.1% 6.0% 91.1% 93.1% 94.4%

11 Seattle, WA 8.7% 5.3% 5.8% 95.7% 95.4% 96.0%

National 5.0% 4.1% 3.3% 94.0% 94.3% 94.8%


CURRENT PERFORMANCE OF OTHER MSAS

Source: Axiometrics, Inc.

Rank is based on May 2013 annual effective rent growth compared to the top 88 MSAs.

Annual Eff Rent Growth Occupancy Rate

Rank MSA May-11 May-12 May-13 May-11 May-12 May-13

15 Miami, FL 4.4% 5.7% 4.5% 95.8% 96.5% 96.3%

16 Austin, TX 9.4% 6.5% 4.4% 95.1% 95.1% 95.3%

19 Charlotte, NC 6.3% 7.4% 4.2% 93.9% 94.8% 95.0%

22 Dallas, TX 6.8% 5.7% 4.0% 93.7% 94.4% 95.0%

23 Atlanta, GA 4.4% 3.3% 4.0% 91.4% 91.9% 93.3%

36 Los Angeles, CA 2.0% 4.4% 3.4% 94.7% 95.1% 95.0%

39 Boston, MA 7.9% 7.0% 3.4% 96.6% 96.0% 96.3%

51 San Diego, CA 2.3% 2.3% 3.2% 95.6% 95.2% 96.0%

62 Las Vegas, NV -1.3% -1.0% 1.0% 92.1% 92.1% 92.5%

79 Washington, DC 5.7% 3.1% 0.4% 95.7% 95.4% 95.1%

National 5.0% 4.1% 3.3% 94.0% 94.3% 94.8%


POLLING QUESTION

Which asset class is performing

the best in you market(s)?

NATIONAL ASSET CLASS PERFORMANCE


Dec

09M

ar10

Jun1

0S

ep10

Dec

10M

ar11

Jun1

1S

ep11

Dec

11M

ar12

Jun1

2S

ep12

Dec

12M

ar13

88%

90%

92%

94%

96%

98%

Occupancy Rate

ABC

Dec10

Mar

11

Jun1

1

Sep11

Dec11

Mar

12

Jun1

2

Sep12

Dec12

Mar

130%

1%

2%

3%

4%

5%

6%

Effective Rent

A

B

C

Dec

09

Mar

10

Jun1

0

Sep

10

Dec

10

Mar

11

Jun1

1

Sep

11

Dec

11

Mar

12

Jun1

2

Sep

12

Dec

12

Mar

13

0

10

20

30

40

Concession Value

A

B

C

Days of Free Rent

Dec

10F

eb11

Apr

11Ju

n11

Aug

11O

ct11

Dec

11F

eb12

Apr

12Ju

n12

Aug

12O

ct12

Dec

12F

eb13

Apr

13

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

Occupancy Growth

A

B

C

CLASS A PROPERTIES WERE LEADERS EARLY IN THE RECOVERY, BUT CLASS C PROPERTIES CURRENTLY HAVE THE BEST GROWTH


ANNUAL EFFECTIVE RENT GROWTH BY ASSET CLASS


A

B

C

Dec

10

Feb

11

Apr

11

Jun1

1

Aug

11

Oct

11

Dec

11

Feb

12

Apr

12

Jun1

2

Aug

12

Oct

12

Dec

12

Feb

13

Apr

13

0%1%2%3%4%5%6%7%

Atlanta

Dec

10

Feb

11

Apr

11

Jun1

1

Aug

11

Oct

11

Dec

11

Feb

12

Apr

12

Jun1

2

Aug

12

Oct

12

Dec

12

Feb

13

Apr

13

0%

2%

4%

6%

8%

10%

12%

Austin

Dec

10

Feb

11

Apr

11

Jun1

1

Aug

11

Oct

11

Dec

11

Feb

12

Apr

12

Jun1

2

Aug

12

Oct

12

Dec

12

Feb

13

Apr

13

0%1%2%3%4%5%6%7%

Baltimore

Dec

10

Feb

11

Apr

11

Jun1

1

Aug

11

Oct

11

Dec

11

Feb

12

Apr

12

Jun1

2

Aug

12

Oct

12

Dec

12

Feb

13

Apr

13

-2%

0%

2%

4%

6%

8%

10%

Charlotte




Dec

10

Feb

11

Apr

11

Jun1

1

Aug

11

Oct

11

Dec

11

Feb

12

Apr

12

Jun1

2

Aug

12

Oct

12

Dec

12

Feb

13

Apr

13

-2%

0%

2%

4%

6%

8%

10%

Dallas

Dec

10

Feb

11

Apr

11

Jun1

1

Aug

11

Oct

11

Dec

11

Feb

12

Apr

12

Jun1

2

Aug

12

Oct

12

Dec

12

Feb

13

Apr

13

0%

2%

4%

6%

8%

10%

Denver

Dec

10

Feb

11

Apr

11

Jun1

1

Aug

11

Oct

11

Dec

11

Feb

12

Apr

12

Jun1

2

Aug

12

Oct

12

Dec

12

Feb

13

Apr

13

-6%

-2%

2%

6%

10%

Houston

Dec

10

Feb

11

Apr

11

Jun1

1

Aug

11

Oct

11

Dec

11

Feb

12

Apr

12

Jun1

2

Aug

12

Oct

12

Dec

12

Feb

13

Apr

13

-4%

-2%

0%

2%

4%

6%

8%

Los Angeles

A

B

C




Dec

10

Feb

11

Apr

11

Jun1

1

Aug

11

Oct

11

Dec

11

Feb

12

Apr

12

Jun1

2

Aug

12

Oct

12

Dec

12

Feb

13

Apr

13

-6%

-2%

2%

6%

10%

New York

Dec

10

Feb

11

Apr

11

Jun1

1

Aug

11

Oct

11

Dec

11

Feb

12

Apr

12

Jun1

2

Aug

12

Oct

12

Dec

12

Feb

13

Apr

13

0%

2%

4%

6%

8%

10%

Raleigh

Dec

10

Feb

11

Apr

11

Jun1

1

Aug

11

Oct

11

Dec

11

Feb

12

Apr

12

Jun1

2

Aug

12

Oct

12

Dec

12

Feb

13

Apr

13

-4%-2%0%2%4%6%8%

10%

Washington, DC

Dec

10

Feb

11

Apr

11

Jun1

1

Aug

11

Oct

11

Dec

11

Feb

12

Apr

12

Jun1

2

Aug

12

Oct

12

Dec

12

Feb

13

Apr

13

0%

2%

4%

6%

8%

10%

Seattle

A

B

C


POLLING QUESTION

Will your property or portfolio be

impacted by new supply this year?

WHAT IS OVERSUPPLY? DEFINITIONS FROM THE WEB

Merriam-Webster

“The state or an instance of going beyond what is usual, proper, or needed.”

Investopedia

“An excessive amount of a good or other substance. Oversupply results when demand is lower than supply, thus resulting in a surplus.”

“There are many reasons why oversupply may occur. If there is demand for a specific product that meets a certain need, then that product might become oversupplied if a new and improved product is introduced that makes the older product obsolete. Oversupply can also occur in situations where the price of the good or service is too high, or above equilibrium.”

Sources: www.Merriam-Webster.com; www.Investopedia.com

WHAT DOES OVERSUPPLY LOOK LIKE IN THE APARTMENT MARKET?


Properties Currently Under Construction or in Lease-up Within 20 Miles of the Center of Washington, DC


LEASE-UP AND UNDER CONSTRUCTION UNITSSHADING REPRESENTS % LEASE-UP AND UNDER CONSTRUCTION UNITS WHEN COMPARED TO EXISTING STOCK BY STATE

Not all units under construction have begun to deliver.The chart is based on data as of May 2013.

Sources: Axiometrics Inc., Census


PLANNED UNITSSHADING REPRESENTS % OF PLANNED UNITS WHEN COMPARED TO EXISTING STOCK BY STATE.

Not all planned properties will reach the construction stage.The chart is based on data as of May 2013.



LARGE AMOUNT OF PLANNED PROPERTIES IN THE SUBURBS

Atlanta, GA

Boston, MA

Austin, TX

Charlotte, NC




Dallas, TX

Nashville, TN

Houston, TX

NY/Northern NJ





Orlando, FL

Tampa, FL

Raleigh/Durham, NC

Washington, DC



SEATTLE, WA

NORTHERN CALIFORNIA

SOUTHERN CALIFORNIA

DENVER

PHOENIX



EXPECT SUPPLY TO PEAK DURING 2014 IN THIS CYCLE


1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

F

2014

F

2015

F

2016

F

2017

F0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

1.6%

1.8%

New Supply Inv GrowthWhy would construction activity slow?-Construction costs rising quickly-Effective rent growth slowing, especially with Class A-Already concerns of oversupply in urban core of some MSAs; More construction is needed in the suburbs to maintain elevated construction totals

U.S. NEW SUPPLY AND INVENTORY GROWTH


APARTMENT UNITS STARTED NATIONALLY


The pace of new starts increased rapidly in 2011 and early 2012, but it began to level-off in the summer of 2012.

These statistics are based on conventional apartment properties tracked in Axiometrics’ pipeline database.

Jan-

10

Apr

-10

Jul-1

0

Oct

-10

Jan-

11

Apr

-11

Jul-1

1

Oct

-11

Jan-

12

Apr

-12

Jul-1

2

Oct

-12

Jan-

13

Apr

-13

0

5,000

10,000

15,000

20,000

25,000

Monthly Starts

Jan-

10

Apr

-10

Jul-1

0

Oct

-10

Jan-

11

Apr

-11

Jul-1

1

Oct

-11

Jan-

12

Apr

-12

Jul-1

2

Oct

-12

Jan-

13

Apr

-13

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Trailing 3 Month-StartsJa

n-10

Apr

-10

Jul-1

0

Oct

-10

Jan-

11

Apr

-11

Jul-1

1

Oct

-11

Jan-

12

Apr

-12

Jul-1

2

Oct

-12

Jan-

13

Apr

-13

0

50,000

100,000

150,000

200,000

250,000

Trailing 12 Month-Starts


APARTMENT UNITS STARTED BY MSA(SUM OF THE TRAILING 12-MONTH)


Jan-

10

Apr

-10

Jul-1

0

Oct

-10

Jan-

11

Apr

-11

Jul-1

1

Oct

-11

Jan-

12

Apr

-12

Jul-1

2

Oct

-12

Jan-

13

Apr

-13

02,0004,0006,0008,000

10,00012,00014,00016,00018,00020,000

Washington, DC

Jan-

10

Apr

-10

Jul-1

0

Oct

-10

Jan-

11

Apr

-11

Jul-1

1

Oct

-11

Jan-

12

Apr

-12

Jul-1

2

Oct

-12

Jan-

13

Apr

-13

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Dallas

Jan-

10

Apr

-10

Jul-1

0

Oct

-10

Jan-

11

Apr

-11

Jul-1

1

Oct

-11

Jan-

12

Apr

-12

Jul-1

2

Oct

-12

Jan-

13

Apr

-13

0

2,000

4,000

6,000

8,000

10,000

12,000

HoustonJa

n-10

Apr

-10

Jul-1

0

Oct

-10

Jan-

11

Apr

-11

Jul-1

1

Oct

-11

Jan-

12

Apr

-12

Jul-1

2

Oct

-12

Jan-

13

Apr

-13

0100020003000400050006000700080009000

10000

Seattle


TOP 10 MSAS FOR APARTMENT CONSTRUCTION

*Delivery schedule is only based on identified properties that have started construction. The 2014 total will be higher as planned properties begin construction.**Not all planned properties will reach the construction stage.Note: The delivery schedule is dynamic and changes as construction timelines change on individual properties. The chart is based on data as of June 2013.


Deliveries By Year

MSA Total UC 2012 2013 2014* Planned**

Washington, DC 21,756 6,209 11,509 13,077 106,415

Dallas, TX 14,110 5,882 10,514 6,235 30,068

Houston, TX 15,403 4,522 8,632 6,983 15,199

New York, NY 21,483 4,147 8,198 6,629 51,255

Seattle, WA 10,421 2,821 7,419 5,901 40,098

Austin, TX 10,528 2,763 7,058 6,409 26,567

Atlanta, GA 7,100 1,537 5,207 3,749 26,118

Denver, CO 8,239 2,242 5,100 5,488 20,934

Los Angeles, CA 10,403 781 5,038 7,042 25,800

Raleigh, NC 5,815 688 4,993 3,309 10,016

National 382,587 87,205 185,063 145,523 1,040,329

MORE THAN ONE-FOURTH OF THE NATION’S 2013 DELIVERIES WILL BE IN DC, DALLAS, NY, HOUSTON, SEATTLE, AND AUSTIN


WHICH MSAS ARE AT RISK FOR OVERSUPPLY IN 2013?


April 2013 Job Growth/2013 FY Identified Deliveries

May

201

3 Re

venu

e G

row

th

0.0 5.0 10.0 15.0 20.0 25.00.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

ATL AUS

1.6%

BOS

CHAR

4.0%

DAL

DEN

FOT

FTW

HOU

5.5%

3.3%

MIA

NASHNY

9.8%

ORL

1.4%

PHO

5.8%

RAL RICH

4.0%

6.7%

6.8%

3.5%

6.0%

TMP

WASH-DC

WPB

Above U.S. average revenue growth and more than 6 jobs for each new unit delivered

Risk of slowing revenue growth if job growth does not improve

Supply exceeds de-mand Potential for improved revenue growth

because demand is outpacing supply


TOP 10 SUBMARKETS FOR DELIVERIES IN 2013


*Delivery schedule is only based on identified properties that have started construction. The 2014 total will be higher as planned properties begin construction.**Not all planned properties will reach the construction stage.Note: The delivery schedule is dynamic and changes as construction timelines change on individual properties. The chart is based on data as of June 2013.

Deliveries by Year

MSA Submarket 2012 2013 2014+* Planned**

Houston, TX Montrose/River Oaks 260 3,952 4,757 4,283

Seattle, WA Downtown/Capitol Hill/Queen Anne 1,396 3,493 2,677 18,307

San Jose, CA Northeast San Jose 994 2,435 959 8,131

San Antonio, TX Bexar County/Other 875 2,127 714 2,049

Baltimore, MD Central Baltimore City 397 2,010 691 10,564

Atlanta, GA Atlanta/Fulton 103 1,965 2,839 8,044

Chicago, IL Gold Coast/River North 406 1,904 698 4,499

Minneapolis, MN Minneapolis 594 1,865 1,598 4,813

Dallas, TX Plano/Allen/McKinney 1,269 1,845 902 3,118

Dallas, TX North Irving 570 1,733 526 3,716


CURRENT PERFORMANCE FOR LEASE-UP PROEPRTIES

*Average absorption per property March 2013 – May 2013


Current Lease Ups Existing Product

MSA Submarket Props Units Abs* Erent PSF Erent PSF

HOU Montrose/River Oaks 9 1,583 23 $1,742 $1.91 $1,634 $1.67

SEA Downtown/Capitol Hill/Queen Anne 12 2,407 28 $2,068 $2.95 $1,797 $2.33

SJO Northeast San Jose 5 1,963 32 $2,501 $2.85 $2,185 $2.39

SAZ Bexar County 6 2,259 21 $1,302 $1.35 $1,065 $1.06

BAL Central Baltimore City 5 1,441 13 $2,126 $2.31 $1,525 $1.75

ATL Atlanta/Fulton 4 1,237 24 $1,724 $1.97 $1,177 $1.22

CHI Gold Coast/River North 4 1,658 27 $3,051 $3.18 $2,163 $2.65

MINN Minneapolis 8 1,516 12 $1,906 $2.22 $1,502 $1.75

DAL Plano/Allen/McKinney 5 1,527 25 $1,227 $1.35 $1,006 $1.07


U.S. METROS FORECAST: 2013 JOB GROWTH AND RENTAL REVENUE


2013 Revenue Growth

2013 Job Growth

JG Rate > U.S.

Rev Growth > U.S.

1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0%1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

2.2%

3.6%

1.9% 1.9%

2.5%

1.4%

2.9%2.8%

3.6%

2.2%

1.9%

1.6%

1.6%

3.4%

1.4%

2.5%

2.1%

2.9%

2.7%

2.1%

2.5%

3.5%

3.7%

2.0%

3.1%

2.5%

1.3%


Disclaimer Notice

Disclaimer Notice. All advice, consultations, queries, data and reports (collectively referred to as the “Reports”) provided herein are prepared from data believed reliable without verification or investigation and are not guaranteed or warranted by AXIOMETRICS INC., its directors, officers, employees, and contractors and do not purport to be complete or error free or useful for any purpose. The facts and opinions contained herein are not guaranteed or warranted to be complete or error free or useful for any purpose. The opinions expressed in such information are subject to change without notice. AXIOMETRICS, its directors, officers, employees, and contractors assume no liability for or from its advice, consultations, queries, and reports provided HEREIN. Please use such information at your own risk. This material is the property of Axiometrics, Inc. and may not be reproduced, copied, or otherwise distributed without the explicit written consent of Axiometrics, Inc.

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