philadelphia class a apartment market report

64 Pages·2014·4.18 MB·English

F IR S T Q UA R T ER 2 014
D E LTA A S S O C I AT E S
P H I L A D E L P H I A
M E N T
C L A S S A A PA R T
M A R K E T R E P O R T
SPONSORED BY

By Subscription Only
Prepared For Exclusive Use of Subscribers
On March 31, 2014
F IR S T Q UA R T ER 2 014
D E LTA A S S O C I AT E S
P H I L A D E L P H I A
M E N T
C L A S S A A PA R T
M A R K E T R E P O R T
SPONSORED BY
© Delta Associates, 2014. All rights reserved.
You may neither copy nor disseminate this report. If quoted, proper attribution is required.
Please see www.DeltaAssociates.com for more information on our reports.

TABLE OF CONTENTS
1. STATE OF THE ECONOMY

The National Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
The Philadelphia Area Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2. STATE OF THE MID-ATLANTIC CLASS A APARTMENT MARKET

State of the Mid-Atlantic Class A Apartment Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Table 2 .1: NCREIF Return Index for Apartment Properties U .S . Apartment Income vs . Pricing . . . . . . . . . . . . 24
3. PHILADELPHIA STATISTICAL REPORT

MARKET INDICATORS
Table 3 .1: Philadelphia Metro Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Table 3 .2: Suburban Pennsylvania . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Table 3 .3: Southern New Jersey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Table 3 .4: Center City Philadelphia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ABSORPTION SUMMARY
Table 3 .5: New, Actively Marketing Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Table 3 .6: Recently Stabilized Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
CITY CENTER PHILADELPHIA NEW CONSTRUCTION PIPELINE
Table 3 .7: Apartment Projects Under Construction and/or Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Table 3 .8: Planned Apartment Projects That Could Be Delivered within 36 months . . . . . . . . . . . . . . . . . . . . . 34
Table 3 .9: Longer Term Planned Apartment Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
MULTIFAMILY BUILDING SALES
Table 3 .10: 2012 Apartment Building Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Table 3 .11: 2013 Apartment Building Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
4. EXPLANATION OF GEOGRAPHIC COVERAGE AND METHODOLOGY

Class A Apartments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Philadelphia Area Apartment Submarket Map . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
DELTA ASSOCIATES | PHILADELPHIA CLASS A APARTMENT MARKET REPORT | Q1 2014 | NOT FOR REDISTRIBUTION
TEAM
MULTIFAMILY PRACTICE TEAM
APARTMENT PRACTICE:
Senior Vice President, Apartment Practice Leader A . Grant Montgomery 703-535-3542
Associate Justin Donaldson
Associate Luke Gelber
CONDOMINIUM PRACTICE:
Senior Vice President, Condominium Practice Leader William E . L . Rich 703-535-3545
Associate Luke Gelber
EDITOR AND CHIEF EXECUTIVE: Gregory H . Leisch, CRE 703-836-5700
OF COUNSEL, ECONOMICS: Dr . Stephen S . Fuller 703-993-3186
Although the information contained herein is based on sources which Delta Associates (DA) believe to be reliable, DA makes 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 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.
DELTA ASSOCIATES | PHILADELPHIA CLASS A APARTMENT MARKET REPORT | Q1 2014 | NOT FOR REDISTRIBUTION
AVAILABLE REPORTS FROM DELTA ASSOCIATES
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
• Regional condo market summary
• Key market statistics for 47 submarkets and regional totals for:
• Current rents and rent change
• Vacancy
• Concessions
• Class A apartment building sales
Additional indicators analyzed in the Mid-Year and Year-End reports:
• Mid-Year Report: Comparison of median revenue, • Year-End Report: Market-maker survey on capitalization
expense, and net operating income data for the USA rates, investment posture, thoughts on the economy,
and Washington MSA . 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 • Renovation information including budget and timetable
• Key market statistics for 30 submarkets and regional totals for: • Class B apartment building sales
• Current rents and rent change
• Vacancy
• Concessions
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 .
PHILADELPHIA CLASS A APARTMENT MARKET REPORT
An executive summary-style report on apartment market conditions, focusing on the following indicators:
• Analysis of the regional economy
• Regional apartment market summary
• Key market statistics for all major submarkets and regional totals for:
• Current rents and rent change
• Vacancy
• Concessions
• Class A apartment building sales
DELTA ASSOCIATES | PHILADELPHIA CLASS A APARTMENT MARKET REPORT | Q1 2014 | NOT FOR REDISTRIBUTION
AVAILABLE REPORTS FROM DELTA ASSOCIATES
MULTIFAMILY MARKET
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 and regional economies • Additional data include:
• Regional apartment market summary • Absorption pace
• Key market statistics for 12 submarkets and regional totals for: • Multifamily building and land sales
• Sales trends for new and resale condos
• Historic condominium price changes
• Pipeline trends
Additional indicators analyzed in the Mid-Year and Year-End reports:
• Mid-Year Report: Comparison of median condo expenses • Year-End Report: Market-maker survey on
in the USA and Mid-Atlantic region capitalization rates, investment posture, thoughts
on the economy, and more .
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 all • Average lease terms and operating expenses
major submarkets and regional totals for: • Delivered, proposed, and planned SF
• Net absorption • Building and land sales
• Vacancy • Investment returns
• Construction • Cap rate trends
Additional indicators analyzed in the Year-End report:
• Market-maker survey on capitalization rates, hard & soft development costs, investment posture, thoughts on the economy,
and more
• Development economics
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
DELTA ASSOCIATES | PHILADELPHIA CLASS A APARTMENT MARKET REPORT | Q1 2014 | NOT FOR REDISTRIBUTION
AVAILABLE REPORTS FROM DELTA ASSOCIATES
WASHINGTON/BALTIMORE FLEX/INDUSTRIAL REPORT
Market Coverage: Washington Metro and Baltimore Metro; data is separated into flex/R&D and warehouse/distribution 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, and Suburban Baltimore) flex/ • Rental rate and tenant improvement data
industrial market summaries • Average lease terms and operating expenses
• Key market statistics for all major submarkets and • Delivered, proposed, and planned SF
regional totals for:
• Building sales
• Inventory
• Investment returns
• Net absorption
• Cap rate trends
• Vacancy
• Construction
Additional indicators analyzed in the Year-End reports:
• Market-maker survey on capitalization rates, investment posture, thoughts on the economy, and more
FREE REPORTS
Delta Associates publishes free reports on the economy and real estate market, including:
• Washington, DC Metro Retail Outlook (quarterly)
• Washington Metro Area Housing Outlook (quarterly)
• Understanding the Economy (periodic)
• Washington TrendLines (annual)
• Houston TrendLines (annual)
Delta Associates also publishes occasional white papers on areas of interest . To view sample reports or to subscribe,
please visit www .DeltaAssociates .com .
DELTA ASSOCIATES | PHILADELPHIA CLASS A APARTMENT MARKET REPORT | Q1 2014 | NOT FOR REDISTRIBUTION