the economic backdrop - nmhc | home 10,000. 15,000. 20,000. 25,000. 30,000. 35,000. 1q11 2q11 3q11...

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  • The Economic Backdrop When will this cycle end?

  • 11

    35

    57

    72

    87

    91

    105

    119

    0 25 50 75 100 125

    Aug-80-Jun-81

    Dec-70-Oct-73

    Apr-75-Dec-79

    Dec-01-Nov-07

    Jul-09-????

    Dec-82-Jun-90

    Mar-61-Nov-69

    Apr-91-Feb-01

    Length of economic expansions (months)

    Ja n-

    17

    M ar

    -1 8

    M ay

    -1 9

    How far are we into the current economic expansion? Current expansion in 8th year; 4th longest since 1960

    Source: NBER and Moody’s Analytics with data through October 2016.

  • Macro economic trends

    Source: Moody’s Analytics, ECA, FRB, BLS, S&P Dow Jones Indices LLC, CoreLogic, Inc, FHFA, Freddie Mac, Fannie Mae

  • Labor market trends

  • Apartment Market Conditions Are we at an inflection point?

  • Head-to-Head Which market has the better outlook over the next 12 months?

  • 3Q-2015 3Q-2016 Chg 3Q-2015 3Q-2016 Chg Job growth (Y/Y) 58,200 65,800 13% 47,200 46,700 -1%

    3.2% 3.5% 30 3.5% 3.3% (15)

    Occupancy rate 95.8% 95.6% (20) 95.8% 94.9% (90)

    Rent growth (Y/Y) 7.9% 6.4% (152) 9.8% 2.2% (753)

    MF permits (T12M) 16,052 11,709 -27% 7,926 8,910 12% SF permits (T12M) 8,493 9,540 12% 8,573 9,934 16% Total permits (T12M) 24,545 21,249 -13% 16,499 18,844 14%

    SEATTLE DENVER

  • 3Q-2015 3Q-2016 Chg 3Q-2015 3Q-2016 Chg Job growth (Y/Y) 77,100 72,000 -7% 108,300 102,100 -6%

    3.1% 2.8% (29) 4.7% 4.2% (47)

    Occupancy rate 94.9% 94.9% 0 95.7% 95.6% (10)

    Rent growth (Y/Y) 6.8% 5.4% (140) 6.2% 4.7% (150)

    MF permits (T12M) 9,740 12,507 28% 19,962 21,532 8% SF permits (T12M) 19,276 21,998 14% 19,962 22,776 14% Total permits (T12M) 29,016 34,505 19% 39,924 44,308 11%

    ATLANTA DALLAS

  • 3Q-2015 3Q-2016 Chg 3Q-2015 3Q-2016 Chg Job growth (Y/Y) 83,800 58,200 -31% 65,400 42,800 -35%

    3.4% 2.3% (113) 3.5% 2.2% (129)

    Occupancy rate 95.8% 94.7% (110) 94.7% 94.7% 0

    Rent growth (Y/Y) 5.6% 3.0% (260) 7.4% 6.3% (110)

    MF permits (T12M) 12,565 14,069 12% 6,108 7,305 20% SF permits (T12M) 6,945 6,663 -4% 14,972 18,159 21% Total permits (T12M) 19,510 20,732 6% 21,080 25,464 21%

    SOUTH FLORIDA PHOENIX

  • 3Q-2015 3Q-2016 Chg 3Q-2015 3Q-2016 Chg Job growth (Y/Y) 83,800 58,200 -31% 65,400 42,800 -35%

    3.4% 2.3% (113) 3.5% 2.2% (129)

    Occupancy rate 95.8% 94.7% (110) 94.7% 94.7% 0

    Rent growth (Y/Y) 5.6% 3.0% (260) 7.4% 6.3% (110)

    MF permits (T12M) 12,565 14,069 12% 6,108 7,305 20% SF permits (T12M) 6,945 6,663 -4% 14,972 18,159 21% Total permits (T12M) 19,510 20,732 6% 21,080 25,464 21%

    SOUTH FLORIDA PHOENIX

  • 3Q-2015 3Q-2016 Chg 3Q-2015 3Q-2016 Chg Job growth (Y/Y) 42,900 31,100 -28% 32,300 31,900 -1%

    4.7% 3.2% (143) 3.7% 3.5% (17)

    Occupancy rate 95.6% 95.3% (30) 96.4% 96.1% (30)

    Rent growth (Y/Y) 5.4% 2.7% (270) 6.9% 5.4% (150)

    MF permits (T12M) 9,796 9,084 -7% 6,716 8,382 25% SF permits (T12M) 11,731 12,724 8% 10,395 11,614 12% Total permits (T12M) 21,527 21,808 1% 17,111 19,996 17%

    AUSTIN NASHVILLE

  • 3Q-2015 3Q-2016 Chg 3Q-2015 3Q-2016 Chg Job growth (Y/Y) 53,546 24,818 -54% 157,834 108,494 -31%

    5.3% 2.3% (297) 2.4% 1.6% (79)

    Occupancy rate 96.6% 95.7% (90) 97.0% 96.9% (10)

    Rent growth (Y/Y) 11.5% -1.8% (1,330) 4.1% -0.2% (430)

    MF permits (T12M) 4,544 4,513 -1% 59,398 28,926 -51% SF permits (T12M) 474 564 19% 6,472 6,501 0% Total permits (T12M) 5,018 5,077 1% 65,870 35,427 -46%

    SAN FRANCISCO NEW YORK

  • 3Q-2015 3Q-2016 Chg 3Q-2015 3Q-2016 Chg Job growth (Y/Y) 38,400 27,200 -29% 45,700 27,100 -41%

    3.6% 2.4% (112) 3.4% 1.9% (144)

    Occupancy rate 96.4% 95.4% (100) 95.7% 96.1% 40

    Rent growth (Y/Y) 14.8% 4.0% (1,080) 7.8% 5.3% (250)

    MF permits (T12M) 5,460 7,691 41% 4,391 8,273 88% SF permits (T12M) 6,532 7,561 16% 3,045 2,602 -15% Total permits (T12M) 11,992 15,252 27% 7,436 10,875 46%

    PORTLAND SAN DIEGO

  • 3Q-2015 3Q-2016 Chg 3Q-2015 3Q-2016 Chg Job growth (Y/Y) 46,900 53,900 15% 41,100 38,000 -8%

    4.2% 4.6% 43 3.4% 3.0% (36)

    Occupancy rate 96.1% 96.0% (10) 95.8% 95.6% (20)

    Rent growth (Y/Y) 7.7% 4.8% (290) 6.4% 5.7% (70)

    MF permits (T12M) 5,830 8,592 47% 5,627 5,626 0% SF permits (T12M) 10,978 13,989 27% 8,327 10,693 28% Total permits (T12M) 16,808 22,581 34% 13,954 16,319 17%

    ORLANDO TAMPA

  • 3Q-2015 3Q-2016 Chg 3Q-2015 3Q-2016 Chg Job growth (Y/Y) 49,600 12,100 -76% 63,700 81,400 28%

    1.7% 0.4% (128) 2.0% 2.6% 52

    Occupancy rate 94.7% 93.2% (150) 95.6% 95.7% 10

    Rent growth (Y/Y) 3.2% -2.7% (590) 1.8% 2.2% 40

    MF permits (T12M) 24,190 11,769 -51% 10,226 11,318 11% SF permits (T12M) 37,563 35,431 -6% 12,170 12,867 6% Total permits (T12M) 61,753 47,200 -24% 22,396 24,185 8%

    HOUSTON WASHINGTON, DC

  • 3Q-2015 3Q-2016 Chg 3Q-2015 3Q-2016 Chg Job growth (Y/Y) 77,100 63,700 -17% 97,100 76,100 -22%

    1.7% 1.4% (32) 2.3% 1.8% (54)

    Occupancy rate 95.6% 95.2% (40) 96.3% 96.0% (30)

    Rent growth (Y/Y) 3.8% 2.2% (160) 6.8% 3.9% (290)

    MF permits (T12M) 6,952 9,098 31% 16,747 14,923 -11% SF permits (T12M) 7,760 7,873 1% 4,519 4,779 6% Total permits (T12M) 14,712 16,971 15% 21,266 19,702 -7%

    CHICAGO LOS ANGELES

  • 3Q-2015 3Q-2016 Chg 3Q-2015 3Q-2016 Chg Job growth (Y/Y) 78,328 46,958 -40% 47,500 54,100 14%

    3.0% 1.8% (127) 1.7% 1.9% 20

    Occupancy rate 96.2% 95.9% (30) 95.7% 95.0% (70)

    Rent growth (Y/Y) 5.2% 2.4% (280) 4.1% 0.9% (320)

    MF permits (T12M) 7,884 7,555 -4% 5,297 4,864 -8% SF permits (T12M) 4,738 5,224 10% 6,374 6,809 7% Total permits (T12M) 12,622 12,779 1% 11,671 11,673 0%

    PHILADELPHIABOSTON

  • 3Q-2015 3Q-2016 Chg 3Q-2015 3Q-2016 Chg Job growth (Y/Y) 38,891 28,495 -27% 24,000 15,700 -35%

    3.6% 2.6% (107) 4.3% 2.7% (159)

    Occupancy rate 95.9% 95.9% 0 95.5% 95.6% 10

    Rent growth (Y/Y) 6.2% 4.1% (210) 6.1% 3.9% (220)

    MF permits (T12M) 6,639 7,023 6% 4,073 3,262 -20% SF permits (T12M) 11,567 12,654 9% 8,353 9,185 10% Total permits (T12M) 18,206 19,677 8% 12,426 12,447 0%

    RALEIGHCHARLOTTE

  • 3Q-2015 3Q-2016 Chg 3Q-2015 3Q-2016 Chg Job growth (Y/Y) 25,000 18,900 -24% 34,300 26,400 -23%

    3.8% 2.8% (104) 3.9% 2.9% (100)

    Occupancy rate 95.9% 95.9% 0 95.5% 95.6% 10

    Rent growth (Y/Y) 6.2% 4.1% (210) 6.1% 3.9% (220)

    MF permits (T12M) 2,786 2,930 5% 3,152 4,259 35% SF permits (T12M) 3,723 4,157 12% 7,560 8,409 11% Total permits (T12M) 6,509 7,087 9% 10,712 12,668 18%

    SALT LAKE CITY LAS VEGAS

  • Supply Are we building too much?

  • National Pipeline Activity October 2016 compared to one year ago

    Source: Axiometrics

    October 2015 October 2016

    Pipeline Phase Units Pipeline Phase Units

    Planned 805,228 Planned 1,009,844

    Under Construction 542,213 Under Construction 595,450

    Lease Up 131,751 Lease Up 159,545

    Grand Total 1,479,192 Grand Total 1,764,839

  • Top Markets for Projects Under Construction October 2016 compared to one year ago

    Source: Axiometrics

    Under Construction Units Under Construction Units New York, NY 36,629 New York, NY 44,382

    Dallas, TX 32,676 Dallas, TX 42,341

    Houston, TX 31,446 Houston, TX 32,740

    Washington, DC 21,430 Washington, DC 26,291

    Seattle, WA 20,295 Los Angeles, CA 23,689

    Los Angeles, CA 19,853 Atlanta, GA 21,897

    Atlanta, GA 19,314 Seattle, WA 18,312

    Denver, CO 16,707 Charlotte, NC 15,029

    October 2015 October 2016

  • High Rise Projects (9 floors or higher) Built Since 2000 by Year

    Includes conversions; Source: Axiometrics

    0

    20

    40

    60

    80

    100

    120

    N um

    be r o

    f P ro

    pe rt

    ie s

    Including these markets: 2015 • Baton Rouge, LA • Canton, OH • Greensboro, NC • Spartanburg, SC

    2016 • Des Moines, IA • Grand Rapids, MI • Madison, WI • South Bend, IN

  • How Unit Mixes Differ from Existing Stock

    Source: Axiometrics

    45%

    55%53% 47%

    0%

    10%

    20%

    30%

    40%

    50%

    60%

    Studio/One Two/Three