new nashville | multifamily · 2018. 2. 27. · axiometrics forecasts middle tennessee’s job...
TRANSCRIPT
Research & Forecast Report
NASHVILLE | MULTIFAMILY4th Quarter 2017
MARKET SURVEY RESULTS AND FORECASTS
Sequential Month Annual
1Q16 2Q17 3Q17 4Q17 Dec-17 2015 2016 2017 2018F 2019F 2020F 2021F
EFFECTIVE RENT PER UNIT $1,125 $1,145 $1,154 $1,132 $1,132 $1,067 $1,127 $1,139 $1,149 $1,180 $1,226 $1,263
Per Sq. Ft $1.18 $1.20 $1.20 $1.18 $1.19 $1.11 $1.18 $1.19 $1.20 $1.23 $1.28 $1.32
Effective Rent Growth - Annually 2.5% 1.2% 0.6% 0.1% 0.7% 6.4% 5.6% 1.1% 0.9% 2.7% 3.9% 3.0%
Effective Rent Growth - Quarterly -0.5% 1.8% 0.8% -1.9%
OCCUPANCY RATE 94.7% 95.2% 95.2% 94.6% 94.4% 96.4% 96.0% 94.9% 94.9% 95.3% 95.9% 95.3%
Occupancy Change - Annually -1.4% -1.2% -1.0% -0.8% -0.3% 0.0% -0.4% -1.1% -0.1% 0.4% 0.7% -0.6%
Occupancy Change - Quarterly -0.7% 0.5% -0.1% -0.6%
ECONOMIC CONCESSIONS
Concession Value $-12.62 $-9.52 $-9.06 $-11.07 $-17.11 $-2.53 $-5.12
As a % of Asking Rent -1.1% -0.8% -0.8% -1.0% -1.5% -0.2% -0.5%Source: AXIOMetrics, RCA, CoStar
RECENT SALES
Date Property Name Address City Units Year Built Price Price/Unit
Oct-17 Hickory Chase 510, 515, and 600 Heritage Drive Madison 346 1973 $30,400,000 $87,861
Dec-17 Cortland Bellevue 7461 Charlotte Pike Nashville 322 2016 $69,552,000 $216,000
Nov-17 Carillon 1000 5th Ave North Nashville 306 2017 $76,350,000 $249,510
Nov-17 Century Autumn Wood Apartments 630 Saint Andrews Drive Murfreesboro 288 2017 $43,215,000 $150,052
Nov-17 Richland Falls 526 Dill Lane Murfreesboro 276 2012 $29,779,239 $107,896
Nov-17 Audubon Park 600 Whispering Hills Drive Nashville 256 1968 $25,400,000 $99,219
Oct-17 Duet 31 31st Ave N And Burch Avenue Nashville 219 2016 $16,600,000 $75,799
Nov-17 The Metropolitan 101 Brixworth Lane Nashville 216 1984 $37,875,000 $175,347
Nov-17 Cantare At Indian Lake Village 120 Cinema Drive Hendersonville 206 2013 $35,900,000 $174,272
Nov-17 Millwood Manor 305 Millwood Drive Nashville 202 1976 $13,450,000 $66,584
Oct-17 The Village at Elam Farms 2945 Elam Road Murfreesboro 144 2016 $22,700,000 $157,639
ANNUAL EFFECTIVE RENT GROWTH ANNUAL OCCUPANCY GROWTH
2 Nashville Research & Forecast Report | 4Q 2017 | Multifamily | Colliers International
SUPPLY AND DEMAND
MARKET EMPLOYMENT AND PERMITTING
ANNUAL NOV-17 ANNUAL FORECAST
2014 2015 2016 Market National 2017 2018F 2019F 2020F 2021F
EMPLOYMENT (000S) 880.2 914.6 949.6 997.6 148,507.0 979.9 1,001.6 1,020.2 1,040.7 1,059.0
Job Gain (000s) 34.1 34.4 35.0 25.1 2,114.0 30.3 21.7 18.6 20.5 18.3
Job Growth (%) 4.0% 3.9% 3.8% 2.6% 1.4% 3.2% 2.2% 1.9% 2.0% 1.8%
TOTAL RESIDENTIAL PERMITTING 14,829 17,810 18,557 18,259 1,155,517 19,933 14,684 14,740 15,472 14,550
Relative Change 26.9% 20.1% 4.2% 5.5% 6.3% 7.4% -26.3% 0.4% 5.0% -6.0%
Single Family Units Permitted 9,094 10,813 12,014 11,781 756,569
Relative Change 16.9% 18.9% 11.1% 6.7% 10.2%
Multifamily Units Permitted 5,635 6,881 6,395 6,322 366,148
Relative Change 54.8% 22.1% -7.1% 3.4% -1.3%
Multifamily as a % of Total 38.0% 38.6% 34.5% 34.6% 31.7%
DEMAND/SUPPLY RATIO
Job Gain / Total Residential Units Permitted 2.9 2.3 2.0 1.5 1.9 1.6 1.1 1.3 1.4 1.2
Job Gain / Single Family Units Permitted 4.4 3.8 3.2 2.3 3.1
Job Gain / Multifamily Units Permitted 9.4 6.1 5.1 4.1 5.7
MULTIFAMILY ABSORPTION AND SUPPLY
ANNUAL 4Q17 ANNUAL FORECAST
2014 2015 2016 Market National 2017 2018F 2019F 2020F 2021F
TOTAL UNITS ABSORBED 2,902 4,778 4,250 7,561 367,785 7,086 5,321 3,843 2,912 587
NEW SUPPLY 3,275 4,514 5,856 8,680 365,158 8,680 5,654 2,727 2,047 2,643
INVENTORY GROWTH 2.6% 3.5% 4.3% 5.8% 1.5% 6.2% 3.8% 1.8% 1.3% 1.7%
According to the Bureau of Labor Statistics, job growth in the Nashville-Davidson-Murfreesboro-Franklin, TN, metro area was 2.6% in
November 2017, reflecting 25,100 jobs added during a 12-month period. The metro job growth figure was above the national number
of 1.4%. Axiometrics forecasts Middle Tennessee’s job growth to be 2.2% in 2018, with 21,711 jobs added. Job growth is expected to
average 1.9% from 2019 to 2021, with an average of 19,106 jobs added each year.
Apartment demand has remained robust, as Nashville’s growth in employment and population has aided in the absorption of 3,800
units to 5,700 units annually. The market absorbed 7,561 units in 2017, an increase over 2016’s total of 4,250 units absorbed.
Axiometrics forecasts annual increases of 3.8% in 2018, 1.8% in 2019 and 1.3% in 2020.
ANNUAL EMPLOYMENT GROWTH MF SUPPLY AND INVENTORY GROWTH
3 Nashville Research & Forecast Report | 4Q 2017 | Multifamily | Colliers International
IDENTIFIED SUPPLY
SUBMARKET DELIVERY SCHEDULEPIPELINE DELIVERY SCHEDULE PIPELINE LEASE UP TREND
Units Absorbed Asking Rent Effective Rent
Top Submarkets 2015 2016 2017 Total Totals PPM Per Unit PSF Per Unit PSF
Brentwood/Williamson County 649 308 690 1,647 536 14 $1,482 $1.68 $1,387 $1.57
Downtown/West End/Green Hills 1,179 2,466 3,825 7,470 2,655 11 $1,948 $2.39 $1,732 $2.13
Murfreesboro Pike/Antioch 84 334 470 888 302 7 $1,396 $1.15 $1,369 $1.13
Murfreesboro/Smyrna 1,128 772 619 2,519 551 14 $1,176 $1.14 $1,127 $1.09
NE/Madison/Rivergate/Hendersonville 454 437 738 1,629 542 10 $1,499 $1.89 $1,336 $1.68
Other 955 1,280 1,376 3,611 1,147 13 $1,395 $1.45 $1,331 $1.37
Nashville-Davidson--Murfreesboro--Franklin, TN 4,449 5,597 7,718 17,764 5,733 12 $1,656 $1.91 $1,512 $1.73
*Based on 2017 deliveries *Trend based on a trailing 12 month period
Axiometrics identified 7,718 apartment total units that delivered in 2017, a 38% increase over deliveries in 2016. Properties that
delivered in the last 12 months have an average asking rent of $1,649 per unit, or $1.90 per square foot. Effective rent for these
properties has averaged $1,504, or $1.73 per square foot, resulting in an average concession value of $-144.39. In comparison, existing
properties in the Nashville MSA had an average asking rent of $1,143 per unit ($1.19 per square foot), and concession averaged $-11.07.
Since 2015, Downtown/West End/Green Hills has accounted for 42% of the apartment deliveries in the market at 7,470 units. Nearly
half of the total deliveries in 2017 were located in this submarket, followed by Madison/Rivergate/Hendersonville (738 units),
Brentwood/Williamson County (690 units), and Murfreesboro/Smyrna (619 units). Axiometrics reports 17,764 units delivered from
Q1 2015 through Q4 2017, putting Nashville in the top 10 list of cities with the most apartment units constructed in that time frame.
IDENTIFIED UNIT DELIVERIES LEASE UP PERFORMANCE
4 Nashville Research & Forecast Report | 4Q 2017 | Multifamily | Colliers International
PIPELINE | CENTRAL NASHVILLE
# Property Name Address Developer Units Stories Finish1 Capitol View I 1100 Charlotte Avenue Boyle Investment Company/Northwood Ravin LLC 378 6 Sep-19
2 The Gossett on Church 1201 Church Street Pollack Shores Real Estate Group 367 7 Feb-18
3 Madison Flats 1212 -1214 3rd Avenue North Grove Park Land/Delray Ventures 101 5 May-18
4 LC Germantown 1226 2nd AvenueNorth Lifestyle Communities 450 6 Nov-18
5 The Monroe 1300 4th Avenue North Price Development Group 244 5 Feb-18
6 Belcourt Park 1710 Belcourt Avenue GBT Realty Corp 76 4 Jun-18
7 The Duke of Nashville 281 Cumberland Bend The Giddings Group 251 4 Feb-18
8 Olmsted Nashville 501 5th Avenue South Llewellyn Development LLC/Cocke Finkelstein Inc 329 6 Jun-18
9 505 Nashville 505 Church Street Giarratana Nashville LLC 350 45 Feb-18
10 Solis North Gulch 600 11th Ave North Terwilliger Pappas 271 5 Jun-18
11 Fifth + Broadway 601 Commerce Street Undisclosed 360 34 Jan-20
12 The Finery 610 Merritt Avenue Core Development 490 3 Apr-18
13 Millennium Music Row 70 Music Square West The Dinerstein Companies 230 7 May-18
14 Broadstone South Gulch 803 Division Street Alliance Residential Company 238 14 May-18
15 The Morris 818 19th Avenue South Lennar Corp 344 19 Feb-18
16 Ballpark Apartments 963 3rd Avenue North Undisclosed 360 6 Dec-18
Source: MPF Research
4,839
Copyright © 2017 Colliers International.
The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.
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John M. AshleyMultifamily Advisory Group | East Region | Nashville Office+1 615 850 [email protected]
REGIONAL AUTHOR:Katie Barton CPRCDirector of Research+1 615 850 [email protected]
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