multi-family market · spokane!cap!rates!are!! 100150pointshigher!! (high6tolow!7) quarter average...

Presented by COLIN CONWAY, BROKER

KIEMLE & HAGOOD COMPANY

MULTI -FAMILY MARKET

M U LT I - FA M I LY M A R K E T

“One out of three Americans rent; One out of three renters lives in an apartment.

That’s 35 million residents.”

*Source: The Trillion Dollar Apartment Industry

KHCO.COM


Na:onal Apartment Associa:on and Na:onal Mul:-‐Family Housing Council partnered with Stephen Fuller and George Mason University’s Center for Regional Analysis to determine the economic impact of the 35 million resident of apartment communi:es.



In 2011, apartments and their residents generated an esRmated $1.1 trillion contribuRon to the naRonal economy and supported 25.4 million jobs.


As many as 7 million new renter households could be created this decade – about half of all new households likely to be formed.



*Source: US Census Bureau

62%

64%

66%

68%

70%

4Q2004

3Q2012

69.2%

65.5%

NaRonal Homeownership


*Source: US Census Bureau

Each percentage point decline in home ownership = approximately 1.1 million households to the rental market.


$650

$660

$670

$680

$690

$700

$710

$720

2010 2011 2012 2013

$665

$683 $678

$720

Spokane Average Rental Rates – All Units

*Source: Washington Center for Real Estate University of Washington


$0

$200

$400

$600

$800

$1,000

Studio 1bd/1ba 2bd/1ba 2bd/2ba 3bd/1ba 3bd/2ba

$539 $622

$700

$812 $769

$912

Spokane Market Rental Rates -‐ Unit Type

*Source: Washington Center for Real Estate University of Washington


According to Apartment Guide, what market currently has the highest rent in the naRon for a 700 square foot, 1 bedroom apartment? *Source: Apartment Guide and Spokesman

Review


$0

$500

$1,000

$1,500

$2,000

$2,500 $2,394

$622

Average Monthly Rent – 1 Bedroom


NaRonal Overall CapitalizaRon Rate Trends Spokane Cap Rates are 100-‐150 points higher (high 6 to low 7)

Quarter AverageChange

(Basis Points)1Q08 5.79% 42Q08 5.75% -‐43Q08 5.86% 114Q08 6.13% 271Q09 6.88% 752Q09 7.49% 613Q09 7.84% 354Q09 8.03% 191Q10 7.85% -‐182Q10 7.68% -‐173Q10 7.12% -‐564Q10 6.51% -‐611Q11 6.29% -‐222Q11 5.93% -‐363Q11 5.77% -‐164Q11 5.80% 31Q12 5.83% 32Q12 5.76% -‐73Q12 5.74% -‐24Q12 5.72% -‐21Q13 5.73% 12Q13 5.70% -‐33Q13 5.61% -‐94Q13 5.80% 19

Source: PwC Real Estate Investor Survey®

2Q11 is average of 3 reg ions3Q11 is average of 3 reg ions

Q4 2009 8.03%Q3 2013 5.61% -‐242

OVERALL CAPITALIZATION RATE TRENDS National Apartment Market

*Source: PwC Real Estate Survey©


5%

6%

7%

8%

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13

NaRonal Overall Cap Rate Trends

*Source: PwC Real Estate Survey©


ü  50% of U.S. Renters pay 1/3 or more of their income on rent

ü  Up 12% points from

a decade ago

30% Rent

*Source: Harvard University Joint Center for Housing Studies & Journal of Business

AFFORDABILITY

All Other Expenses


ü  27% of renters pay ½ of their income on rent. ü A decade ago it

was 19%.


50% Rent

All Other Expenses



“The shornall in the number of units affordable to extremely low-‐income renters in the U.S. – those earning no more that 30% of the area median – more than doubled from 1.9 million in 2001 to 4.9 million in 2011.”

2001

2011

1.9 million

4.9 million


MICRO UNITS ü  Trending in major

metropolitan areas ü  In response to limited

supply and increasing costs. ü  As small as 200 square feet ü  Targets the millennial

populaRon and empty nester.


DEMAND ü  NaRonally, mulR-‐family starts in 2009 hit

a low of 97,300 new units ü  The esRmated number of units needed

annually is 300,000 to meet new demand.


SPOKANE What is under construcRon right now?

M U LT I - FA M I LY M A R K E T Complete 2011The Reserve at Shelley Lake Spokane Valley 256 Permitted 2010, Complete 2011Pine Valley Ranch Spokane Valley 256 Permitted 2010, Complete 2011East Nora Northeast Spokane 14 Permitted 2010, Complete 2011Ridge at Midway North Spokane 180 Permitted 2010, Complete 2011Alki Street Cheney 16 Permitted 2011, Complete 2011North Sullivan Road Spokane Valley 12 Permitted 2011, Complete 2011

734Complete 2012Montrose Townhouses South Spokane 8 Permitted 2011, Complete 2012Affinity at South H ill ( 55+ ) South H ill 150 Permitted 2011, Complete 2012Affinity at Mill Road (62+ ) North Spokane 150 Permitted 2011, Complete 2012Eag le Point II Cheney 132 Permitted 2011, Complete 2012Copper H ill South Spokane 232 Permitted 2011, Complete 201255th Avenue on the South H ill* South Spokane 120 Permitted 2012, Complete 2012Father Bach Haven* CBD Spokane 51 Permitted 2012, Complete 2012Sylvan Place* North Spokane 15 Permitted 2012, Complete 2012

858Complete 2013Orchards Townhouses Spokane Valley 27 Permitted 2012, Complete 2013, lease-‐upHomestead Apartments (Phase I) Spokane Valley 120 Permitted 2012, Complete 2013, lease-‐upRiver House Apartments (Phase I) Spokane Valley 216 Permitted 2012, Complete 2013, lease-‐upCourtyard at River District Liberty Lake 47 Permitted 2012, Complete 2013, lease-‐upCanyon Bluff Apartments Southwest Spokane 48 Re-‐Permitted 2013, Complete 2013, lease-‐upSprague Union Terrace* CBD Periphery 37 Permitted 2012, Complete 2013, lease-‐upBridgeway Apartments CBD Periphery 84 Permitted 2012, Complete 2013, lease-‐upAlki Street Townhouses Cheney 16 Permitted 2010, Complete 2013, lease-‐upBroadWing Apartments* Liberty Lake 51 Permitted 2013, Complete 2013, lease-‐upC lare View Apartments* South Spokane 61 Permitted 2013, Complete 2013, lease-‐up

707Complete 2014 to-‐dateNorth C incinatti Street North Spokane 24 Permitted 2012, Complete 2014Appleway Court (Phase II)* Spokane Valley 24 Permitted 2013, Complete 2014

48Permitted/Under ConstructionCedar C rossing North Spokane 36 Permitted 2012, nearing completion Mirabolante Spokane Valley 234 Permitted 2013, g round work startedCottages at River Run (Phases I & II) Spokane 130 Permitted 2013, g round work startedWandermere Glen North Spokane 48 Permitted 2013, under constructionH ighline West Apartments CBD Periphery 56 Permitted 2013, inactive site workBroadway Villas Spokane Valley 42 Permitted 2013, g round work started (phased project)Homestead Apartments (Phase II) Spokane Valley 128 Permitted 2013, under constructionCopper Landing Apartments* Airway Heights 216 Permitting NOT required (Tribal Land), under constructionGranite Pointe (Phase II) Spokane Valley 236 Permitted 2013, inactive site work

1126Proposed, LikelyHomestead Apartments (Phase II) Spokane Valley 140 Proposed -‐ status unknown (Likely)River House Apartments (Phases II & III) Spokane Valley 120 Proposed -‐ status unknown (Likely)

260Proposed, OtherVistas at Beacon H ill East Spokane 256 Proposed -‐ status unknownCanyon Pointe West Spokane 144 Proposed -‐ status unknownNaccarato Project Airway Heights 216 Proposed -‐ project currently "shelved"Eag le Point Remainder Cheney 204 Proposed -‐ status unknown

820

Total 4,553* Subsidized/Low-‐ Income Ridpath Hotel CBD Spokane 200+ /-‐ Envisioned

Spokane County: New, Permitted and Proposed Apartment Construction

Completed and Under ConstrucRon Projects in Spokane 2011-‐2014

*Source: Valbridge Property Advisors


0

500

1000

1500

2011 2012

2013 2014

734 858 707

1174

Completed and Under ConstrucRon Projects (by Units)

*Source: Valbridge Property Advisors


Proposed and Under ConstrucRon Projects in Kootenai County

PROPOSED PROPERTIES - KOOTENAI COUNTY, IDAHO Units Anticipated

Completion Date Name Total Market Restricted Telerico Apartments 14 un 14 un Proposed Fall 2013 Proposed 20-Unit - Martin Lane 20 un 20 un Proposed Fall 2013 Riverview Apts, Phase 2, Seltice Way 94 un 94 un Under Construction Carrington at Waterford, Phase 1 60 un 60 un Rent-Up Carrington at Waterford, Phase 2 72 un 72 un Proposed Residence at Mill River 93 un 93 un Under Construction John O'Brien House 14 un 14 un Proposed Fall 2013 Fairway Meadows 80 un 80 un Under Construction Glacier Trail 30 un 30 un Proposed Riverstone Place 114 units Riverstone West III 38 un 8 un 30 un Under Construction Hudson Park Apartments 60 un 7 un 53 un Proposed Montrose Condos 18 un 18 un Proposed Affinity at CDA, Senior 102 un Proposed/Hold Totals 575 un 478 un 97 un


TRANSACTIONS OF NOTE Sale Date Property Address # of

Units Sale Price Price/Unit

2/2013 Park Place 916 N Ella Rd 60 $3,365,000 $56,083

2/2013 Amberwood 3030 S Clinton Rd 51 $2,672,000 $52,392

4/2013 Park Place (CDA)

3825 Ramsey Rd 150 $8,600,000 $57,333

6/2013 Willow Brook 12202 E Maxwell 110 $6,850,000 $62,273

7/2013 Whispering Pines

3002 E 30th Ave 55 $2,560,000 $46,545

10/2013 32 Pines 3010 S Pines Rd 72 $3,500,000 $48,6111

12/2013 Big Trout Lodge 22809 E Country Vista Rd

297 $29,819,000 $100,403


TRENDS ü  Apartments remain a stable

investment. ü  It will remain a seller’s market for the

next year.

THANK YOU

multi-family market · spokane!cap!rates!are!! 100150pointshigher!! (high6tolow!7) quarter average...

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