MID-ATLANTIC CLASS A APARTMENT MARKET - Delta Associates

142 Pages·2012·5.77 MB·English

mid -at lantic
class a apartme nt marke t r e port
tHird QUarter 2012
s p o n s o r e d B Y :

By Subscription Only
mid -at lantic
class a apartme nt marke t r e port
tHird QUarter 2012
Prepared For Exclusive Use of Subscribers
On September 30, 2012
© Delta Associates, 2012. All rights reserved.
You may neither copy nor disseminate this report. If quoted, proper attribution is required.
Delta Associates publishes reports on commercial real estate markets in the following metro areas:
Baltimore, Chicago, Dallas/Ft. Worth, Denver, Houston, and Washington, DC.
Please see www.DeltaAssociates.com for more information.
s p o n s o r e d B Y :

taBle of contents
1. state of tHe economY and WasHington/Baltimore
condominiUm market

The National Economy .................................................................................. 3
The Washington Area Economy ......................................................................... 13
The Baltimore Area Economy .......................................................................... 23
An Overview of the Washington/Baltimore Condominium Market ......................................... 29.
2. state of tHe mid-atlantic class a apartment market

A Snapshot of the Class A Apartment Market ............................................................ 32
State of the Mid-Atlantic Class A Apartment Market ...................................................... 33
Table A: Projected Third Quarter 2015 Class A Vacancy Rate – Washington Metro Area ..................... 45
Table B: NCREIF Return Index for Apartment Properties U.S. Apartment Income vs. Pricing ................. 46
The Lucky Apartment Renter .......................................................................... 47
Multifamily Projects: How Bridge Loans Fill the Gap. .................................................... 48
3. WasHington statistical report

Low-Rise MaRket indicatoRs
Table 3.1: Estimated Effective Rent and Stabilized Vacancy Rate for Washington Metro Area ................ 51
Table 3.2: Washington Metro Area ...................................................................... 52
Table 3.3: Northern Virginia – Close-In Submarkets ...................................................... 53
Table 3.4: Northern Virginia – Outer Submarkets ........................................................ 54

Table 3.5: Suburban Maryland – Close-In Submarkets .................................................... 55
Mid- & HigH-Rise MaRket indicatoRs
Table 3.6 Suburban Maryland – Outer Submarkets ....................................................... 56
Table 3.7: Washington Metro Area ...................................................................... 57
Table 3.8: Northern Virginia ........................................................................... 58
Table 3.9: Suburban Maryland ......................................................................... 59
absoRption suMMaRy
Table 3.10: District of Columbia. ....................................................................... 60

Table 3.11: New, Actively Marketing Projects ........................................................... 61
noRtHeRn ViRginia new constRuction pipeLine
Table 3.12: Recently Stabilized Projects ................................................................ 63
Table 3.13: Apartment Projects Under Construction and/or Marketing .................................... 65
Table 3.14: Planned Apartment Projects That Could Be Delivered within 36 months ....................... 67
Table 3.15: Longer Term Planned Apartment Projects ................................................... 69
mid-atlantic class a apartment market report | tHird QUarter 2012
taBle of contents
3. WasHington statistical report (continUed)
subuRban MaRyLand new constRuction pipeLine

Table 3.16: Apartment Projects Under Construction and/or Marketing .................................... 71
Table 3.17: Planned Apartment Projects That Could Be Delivered within 36 months ........................ 73
distRict of coLuMbia new constRuction pipeLine
Table 3.18: Longer Term Planned Apartment Projects .................................................... 75
Table 3.19: Apartment Projects Under Construction and/or Marketing .................................... 77
Table 3.20: Planned Apartment Projects That Could Be Delivered within 36 months ........................ 79
MuLtifaMiLy buiLding and Land saLes
Table 3.21: Longer Term Planned Apartment Projects ................................................... 81
Table 3.22: 2011 Apartment Building Sales ............................................................. 83
Table 3.23: 2012 Apartment Building Sales ............................................................. 84
Table 3.24: 2011 Land Sales ........................................................................... 85
Table 3.25: 2012 Land Sales ........................................................................... 86
4. Baltimore statistical report

MaRket indicatoRs
Table 4.1: Baltimore Metro Area ....................................................................... 89.
absoRption suMMaRy
Table 4.2: City of Baltimore ............................................................................ 9.0
Table 4.3: New, Actively Marketing Projects ............................................................. 9.1
baLtiMoRe MetRo aRea new constRuction pipeLine
Table 4.4: Recently Stabilized Projects .................................................................. 9.2
Table 4.5: Apartment Projects Under Construction and/or Marketing ..................................... 9.3
Table 4.6: Planned Apartment Projects That Could Be Delivered within 36 months ......................... 9.4
MuLtifaMiLy buiLding saLes
Table 4.7: Longer Term Planned Apartment Projects ..................................................... 9.5
Table 4.8: 2011 Apartment Building Sales .............................................................. 9.6
Table 4.9.: 2012 Apartment Building Sales .............................................................. 9.7
mid-atlantic class a apartment market report | tHird QUarter 2012
taBle of contents
5. pHiladelpHia statistical report

MaRket indicatoRs
Table 5.1: Philadelphia Metro Area .................................................................... 101
Table 5.2: Suburban Pennsylvania ..................................................................... 102
Table 5.3: Southern New Jersey ....................................................................... 103
Table 5.4: Center City Philadelphia .................................................................... 104
6. explanation of geograpHic coverage and metHodologY

Class A Apartments .................................................................................. 107
Apartment Submarket Maps .......................................................................... 109.
Photography Credits ................................................................................. 115
mid-atlantic class a apartment market report | tHird QUarter 2012
team
mUltifamilY practice team
condoMiniuM pRactice:
Senior Vice President, Condominium Practice Leader William E. L. Rich 703-535-3545
Senior Associate Steven Reilly
Associate Justin Donaldson
apaRtMent pRactice:
Senior Vice President, Apartment Practice Leader A. Grant Montgomery 703-535-3542
Senior Vice President Alyson Bode
Senior Associate Maeve Gallagher
Senior Associate Steven Reilly
editoR and cHief executiVe:
Gregory H. Leisch, CRE 703-836-5700
of counseL, econoMics:
Dr. Stephen S. Fuller 703-9.9.3-3186
mid-atlantic mUltifamilY team
MuLtifaMiLy saLes:
Senior Vice President, Director Dean Sigmon 301-89.6-9.089.
Senior Vice President, Director Robin Williams 301-89.6-9.070
Senior Associate Justin Shay 301-89.6-9.082
Mid-atLantic LeadeRsHip:
President Eric Mockler 202-775-7020
Senior Vice President David Popp 301-89.6-9.048
Managing Senior Vice President Ray Hite 301-89.6-9.023
Although the information contained herein is based on sources which Delta Associates (DA) and Transwestern (TW) believe to be reliable, DA
and TW make no representation or warranty that such information is accurate or complete. All prices, yields, analyses, computations, and
opinions expressed are subject to change without notice. Under no circumstances should any such information be considered representations
or warranties of DA or TW of any kind. Any such information may be based on assumptions which may or may not be accurate, and any such
assumption may differ from actual results. This report should not be considered investment advice.
mid-atlantic class a apartment market report | tHird QUarter 2012
QUarterlY reports availaBle
mUltifamilY market
Mid-atLantic cLass a apaRtMent MaRket RepoRt
Market Coverage: Washington Metro, Baltimore Metro, Philadelphia Metro
A comprehensive report on apartment market conditions, focusing on the following indicators:
• Analysis of the national and regional economies • For the Washington and Baltimore Metros additional data
include:
• Regional condo market summary
• Pipeline of planned projects and those under construction
• Key market statistics for 47 submarkets and
regional totals for: • Class A multifamily building and land sales
• Current rents and rent change
• Vacancy
• Concessions
Additional indicators analyzed in the First Quarter and Mid-Year reports:
• First Quarter Report: Market-maker survey on capitalization • Mid-Year Report: Comparison of median revenue, expense, and
rates, hard & soft development costs, investment posture, net operating income data for the USA and Washington MSA.
thoughts on the economy, and more.
wasHington MetRopoLitan aRea cLass b apaRtMent MaRket RepoRt
A comprehensive report on apartment market conditions, focusing on the following indicators:
• Analysis of the national and regional economies • Concessions
• Key market statistics for 30 submarkets and regional totals • Renovation information including budget and timetable
for: • Class B apartment building sales
• Current rents and rent change
• Vacancy
Additional indicators analyzed in the Year-End report:
• Year-End Report: Market-maker survey on capitalization rates, investment posture, thoughts on the economy,
and more.
wasHington/baLtiMoRe condoMiniuM MaRket RepoRt
Market Coverage: Washington Metro and Baltimore Metro
A comprehensive report on condominium market conditions, focusing on the following indicators:
• Analysis of the national & regional economies • Additional data include:
• Regional apartment market summary • Absorption pace
• Key market statistics for 12 submarkets and • Multifamily building and land sales
regional totals for:
• Sales trends for new and resale condos
• Historic condo price changes
• Pipeline trends
Additional indicators analyzed in the Mid-Year and Year-End reports:
• Mid-Year Report: Comparison of median condo expenses in • Year-End Report: Market-maker survey on capitalization
the USA and Mid-Atlantic region rates, investment posture, thoughts on the economy, and
more.
mid-atlantic class a apartment market report | tHird QUarter 2012
QUarterlY reports availaBle
commercial market
wasHington/baLtiMoRe office MaRket RepoRt
Market Coverage: Washington Metro and Baltimore Metro
A comprehensive quarterly report on office market conditions, focusing on the following indicators:
• Analysis of the national and regional economies • Additional data include:
• Metro-level and substate area (Northern Virginia, Suburban • Supply/demand analysis
Maryland, District of Columbia) office market summaries • Rental rate and tenant improvement data
• Key market statistics (All Space and Class A Space) for 49. • Gross leasing activity
submarkets and regional totals for:
• Deliveries
• Inventory
• Building and land sales
• Net absorption
• Investment returns
• Vacancy
• Cap rate trends
• Construction/renovation
Additional indicators analyzed in the Year-End report:
• Market-maker survey on capitalization rates, hard & soft • Development economics
development costs, investment posture, thoughts on the • Operating expenses
economy, and more
Special supplements to the report have included:
• Analysis of Federal bailout/stimulus spending
• Impact of stimulus spending on office leasing
• Office rent equilibrium zone study
wasHington/baLtiMoRe fLex/industRiaL RepoRt
Market Coverage: Washington Metro and Baltimore Metro; data is separated into flex/R&D, flex/warehouse, and bulk warehouse product types.
A comprehensive semi-annual report on flex/industrial market conditions, focusing on the
following indicators:
• Analysis of the national and regional economies • Additional data include:
• Regional, metro-level and substate area (Northern Virginia, • Supply/demand analysis
Suburban Maryland, Suburban Baltimore, Center Cities) • Rental rate data
flex/industrial market summaries
• Gross leasing activity
• Key market statistics (All Space and Newer Space, separated
• Deliveries
by product type) for 19. submarkets and regional totals for:
• Building and land sales
• Inventory
• Net absorption
• Vacancy
• Construction/renovation
Additional indicators analyzed in the Year-End reports:
• Market-maker survey on capitalization rates, investment posture, thoughts on the economy, and more
mid-atlantic class a apartment market report | tHird QUarter 2012