demographic drivers & real estate trends 2.9.11 presentation.pdffeb 01, 2011 · • f l t d f...

Demographic Drivers & Real Estate Trends

F b 9 2011February 9, 2011

Victor Calanog PhDVP Research & Economics

Copyright © 2011 Reis Inc. All Rights Reserved. No part of this content or the data or information included therein may be reproduced, republished or redistributed without the prior written consent of Reis, Inc.

VP, Research & EconomicsReis, Inc

Agenda

• Macroeconomic and demographic developments in recent • Macroeconomic and demographic developments in recent

years; effect on different property types.

S f f th t t d i f d t l f • Summary of fourth quarter trends in fundamentals for

multifamily, office and retail sectors.

• Review of 2009 and 2010, and outlook for 2011 and 2012.

Given demographic trends, what can we expect in the

near-term?


2

Economic Growth Gathers Steam

3.0 3.22.3

2.9

1 6

5.03.7

1 72.6

3.24.0

6.0Source: Bureau of Economic Analysis

0.9

-0.7

0.6

-4.0-4.9

-0.7

1.6 1.7

-6 0

-4.0

-2.0

0.0

2.0

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2006 2007 2008 2009 2010

GDPPercentage Change at Annual Rate

-6.8-8.0

6.0

Personal

2.79

1.641.08 1.2 0.98

1.41

0 691.33 1.54 1.67

3.04

2

3

4

Personal Consumption Expenditures

0.98

-0.54

0.08

-2.46 -2.26

-0.34

-1.12

0.69

-3

-2

-1

0

1

Contribution of Residential

0.25

-0.02

-0.32

0.55

0.080

1


3

Investment

-1.18-0.91

-0.62

-1.24-1.43

-1.23

-0.53

-0.84

-1.18 -1.22

-0.54-0.75

-2

-1

Still a Bumpy Ride for Job Growth

1,000

1,500

thl t

0

500

Tho

usan

ds

Monthly Net Job Change 1970-Present

-1,000

-500

197

0

197

1

197

2

197

3

197

4

197

5

197

6

197

7

197

8

197

9

198

0

198

1

198

2

198

3

198

4

198

5

198

6

198

7

198

8

198

9

199

0

199

1

199

2

199

3

199

4

199

5

199

6

199

7

199

8

199

9

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

120

130

140

150 72-80?

32 Months to Previous Peak


Nonfarm

80

90

100

110

Mill

ions 28 Months to

Previous Peak

Employment Levels 1970-Present



60

70

80

4Source: Bureau of Labor Statistics

The Macroeconomic Scene

• US economic growth seems to be gathering steam; • US economic growth seems to be gathering steam;

consensus forecasts place 2011 growth at 3.5-4.0%.

St t & l l t tb k ill i d • State & local government cutbacks will remain a drag on

growth. The fate of residential housing remains

t i E t l tilit i thl j b buncertain. Expect volatility in monthly job numbers.

• TIPS anyone? Interest rates will remain low for most of

the year, but watch out for inflationary pressures that

may manifest later in the year.


5

National Apartment MarketQuarterly and Annual Market Conditions

Year QtrAsking Rent

Percent Change

Effective Rent

Percent Change

Vacancy Rate

2003 4 $902 0.5% $848 0.2% 6.9%

2004 1 $903 0 2% $848 0 0% 7 2%

YearAsking Rent

Percent Change

Effective Rent

Percent Change

Vacancy Rate

2001 $879 3.4% $852 1.2% 4.7%

2002 $889 1.1% $844 -0.9% 6.3%2004 1 $903 0.2% $848 0.0% 7.2%2004 2 $909 0.7% $854 0.7% 6.9%2004 3 $917 0.8% $862 1.0% 6.7%2004 4 $921 0.5% $865 0.4% 6.7%

2005 1 $925 0.4% $869 0.4% 6.6%2005 2 $929 0.5% $874 0.6% 6.4%2005 3 $938 0.9% $885 1.2% 5.8%

2002 $889 1.1% $844 0.9% 6.3%2003 $902 1.5% $848 0.4% 6.9%2004 $921 2.1% $865 2.1% 6.7%2005 $944 2.5% $891 3.0% 5.7%

2006 $982 4.0% $930 4.4% 5.8%2007 $1,025 4.4% $973 4.7% 5.7%2008 $1,050 2.4% $993 2.0% 6.7%$ $

2005 4 $944 0.6% $891 0.7% 5.7%

2006 1 $951 0.8% $899 0.9% 5.9%

2006 2 $962 1.1% $909 1.2% 5.6%

2006 3 $974 1.3% $922 1.4% 5.5%

2006 4 $982 0.8% $930 0.9% 5.8%

2007 1 $990 0 9% $939 0 9% 6 0%

2009 $1,026 -2.3% $964 -2.9% 8.0%

2010 $1,043 1.6% $986 2.3% 6.6%

2011 $1,078 3.4% $1,025 4.0% 6.0%2012 $1,113 3.3% $1,063 3.7% 5.7%2013 $1,145 2.9% $1,098 3.2% 5.6%2014 $1 185 3 5% $1 137 3 6% 5 5%

• Sharp decline in vacancy in 4Q. • Tight supply in 2011 will continue to

d d

2007 1 $990 0.9% $939 0.9% 6.0%

2007 2 $1,002 1.2% $951 1.3% 5.8%

2007 3 $1,015 1.3% $964 1.4% 5.7%2007 4 $1,025 1.0% $973 1.0% 5.7%

2008 1 $1,035 0.9% $982 0.8% 6.0%2008 2 $1,045 1.0% $992 1.0% 6.1%2008 3 $1 051 0 6% $998 0 6% 6 2%

2014 $1,185 3.5% $1,137 3.6% 5.5%2015 $1,233 4.1% $1,185 4.2% 5.6%

pressure vacancy downwards. Some submarkets will show rent growths above 10%.

• 2011 will be a great year for ltif il Will th t b t i bl i

2008 3 $1,051 0.6% $998 0.6% 6.2%2008 4 $1,050 -0.2% $993 -0.4% 6.7%

2009 1 $1,044 -0.5% $983 -1.1% 7.4%2009 2 $1,039 -0.5% $974 -0.9% 7.7%2009 3 $1,033 -0.5% $971 -0.3% 7.9%2009 4 $1,026 -0.7% $964 -0.7% 8.0%

2010 1 $1 027 0 1% $967 0 3% 8 0%


6Source: Reis; 79 of 169 Apartment Markets

multifamily. Will that be sustainable in 2012?

2010 1 $1,027 0.1% $967 0.3% 8.0%2010 2 $1,032 0.4% $974 0.7% 7.8%2010 3 $1,037 0.5% $981 0.7% 7.1%2010 4 $1,043 0.5% $986 0.6% 6.6%

Empirical Evidence for ‘Doubling Up’

16

18

+ 11.6%

14

16

2008 Current Population Survey

2010 Current Population Survey

10

12

lions

6

8Mil

+ 11.4%

+ 8.4%

2

4


0

Multifamily Households Related Subfamilies Aged 25 to 34 Living with Parents

7Source: U.S. Census Bureau, Current Population Survey, 2008 and 2010 Annual Social and Economic Supplements.

Homeownership & Unemployment Rates

80%

100%2006 Homeownership Rate

2009 Homeownership rate

40%

60%

0%

20%

Less than 25 25 to 29 30 to 34 35 to 44 45 to 54 55 to 64 65 and over

20%

15%

20%

2006 Unemployment Rate

2009 Unemployment Rate

5%

10%


8Source: Bureau of Labor Statistics

0%

Less than 25 25 to 29 30 to 34 35 to 44 45 to 54 55 to 64 65 and over

Winners and LosersYear-Over-Year Comparisons for the Fourth Quarter of 2010

16%

Metro Average Submarket Minimum Submarket Maximum

Effective Revenue Per Unit, Percent Change 2009Q4-2010Q4

9.2%10%

12%

14%

7.3% 7.1% 6.7%6.4%

6%

8%

3.9%

1.9% 1.8% 1.7%1.0%

0.4%

0%

2%

4%

-4%

-2%


-6%Greenville Charleston Columbia Denver Nashville US

AggregateSalt Lake

CityCentral New

JerseyColumbus Los Angeles Las Vegas

9Source: Reis

Greater NY Metro Apartment MarketsVacancy Rate Trends & Forecast 2000-2014

6%Northern New Jersey Forecast

5%

New HavenFairfield County

4%

3%

ManhattanLong Island

Central New Jersey

1%

2%

Forecast


2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Central New Jersey Fairfield County Long Island Northern New Jersey New Haven Manhattan

10Source: Reis, Inc.

National Office MarketQuarterly and Annual Market Conditions

2003 4 6.2 $23.89 -0.5% $19.98 -0.7% 17.0%

2004 1 0.5 $23.76 -0.5% $19.84 -0.7% 16.9%

Percent Change

Vacancy Rate

Effective Rent

Year QtrAsking Rent

Percent Change

Net Absorption

2001 -113.5 $26.01 -3.7% $22.67 -7.4% 13.7%

2002 -37.8 $24.76 -4.8% $21.05 -7.1% 16.0%

YearPercent Change

Vacancy Rate

Asking Rent

Percent Change

Effective Rent

Net Absorption

2004 1 0.5 $23.76 0.5% $19.84 0.7% 16.9%2004 2 6.0 $23.70 -0.3% $19.77 -0.4% 16.9%2004 3 10.3 $23.70 0.0% $19.76 -0.1% 16.7%2004 4 23.7 $23.70 0.0% $19.76 0.0% 16.4%

2005 1 11.9 $23.80 0.4% $19.87 0.6% 16.1%2005 2 21.8 $23.94 0.6% $20.01 0.7% 15.5%2005 3 12.4 $24.11 0.7% $20.19 0.9% 15.1%

2002 37.8 $24.76 4.8% $21.05 7.1% 16.0%2003 -12.1 $23.89 -3.5% $19.98 -5.1% 17.0%2004 40.6 $23.70 -0.8% $19.76 -1.1% 16.4%2005 67.7 $24.29 2.5% $20.39 3.2% 14.7%

2006 57.2 $26.00 7.0% $22.21 8.9% 13.4%2007 53.7 $28.50 9.6% $24.55 10.5% 12.6%2008 -41.7 $29.18 2.4% $24.61 0.2% 14.5%

2005 4 21.7 $24.29 0.7% $20.39 1.0% 14.7%

2006 1 15.9 $24.64 1.4% $20.80 2.0% 14.2%

2006 2 16.9 $25.02 1.5% $21.23 2.1% 13.9%2006 3 11.9 $25.47 1.8% $21.72 2.3% 13.5%2006 4 12.5 $26.00 2.1% $22.21 2.3% 13.4%2007 1 11.2 $26.65 2.5% $22.84 2.8% 13.1%

2009 -79.1 $27.79 -4.8% $22.43 -8.9% 17.0%

2010 -14.5 $27.53 -0.9% $22.09 -1.5% 17.6%2011 29.5 $27.75 0.8% $22.31 1.0% 17.1%2012 46.8 $28.18 1.5% $22.78 2.1% 16.6%2013 54.9 $28.76 2.1% $23.47 3.0% 16.0%2014 68.4 $29.52 2.6% $24.37 3.8% 15.1%

• Vacancies flat for the latter half of 2010. First instance of positive

2007 2 18.1 $27.38 2.7% $23.56 3.2% 12.8%

2007 3 16.5 $27.98 2.2% $24.11 2.3% 12.5%2007 4 7.9 $28.50 1.9% $24.55 1.8% 12.6%

2008 1 -1.5 $28.97 1.6% $24.93 1.5% 12.9%2008 2 -3.8 $29.24 0.9% $25.07 0.6% 13.2%2008 3 -16.2 $29.37 0.4% $25.01 -0.2% 13.8%

2015 72.8 $30.45 3.2% $25.41 4.3% 14.3%

pabsorption since the end of 2007.

• Asking and effective rents have finally posted positive growth in 4Q

• Properties in CBDs continuing to

2008 4 -20.3 $29.18 -0.6% $24.61 -1.6% 14.5%

2009 1 -25.5 $28.78 -1.4% $24.04 -2.3% 15.2%2009 2 -20.2 $28.39 -1.4% $23.39 -2.7% 16.0%2009 3 -19.3 $28.11 -1.0% $22.87 -2.2% 16.6%2009 4 -14.1 $27.79 -1.1% $22.43 -1.9% 17.0%

2010 1 -11.7 $27.57 -0.8% $22.25 -0.8% 17.3%2010 2 1 6 $27 53 0 1% $22 07 0 8% 17 4%


Properties in CBDs continuing to outperform properties in suburban office markets.

11

Source: Reis; 79 of 132 Office MarketsNet Absorption figures are in millions of square feet.

2010 2 -1.6 $27.53 -0.1% $22.07 -0.8% 17.4%2010 3 -3.6 $27.50 -0.1% $22.04 -0.1% 17.6%2010 4 2.5 $27.53 0.1% $22.09 0.2% 17.6%

CBDs Versus Suburban Office Markets

14.5%

15.0%

2

4

eet)

CB

D

13.5%

14.0%

6

-4

-2

0

Vac

ancy

Rat

e

n (M

illio

ns o

f Sq

uare

Fe

12.5%

13.0%

-10

-8

-6

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10

Abs

orpt

ion

Net Absorption Vacancy

an

18.5%

19.0%

19.5%

-6

-4

-2

0

2

tequar

e Fe

et)

Su

bu

rb

16 5%

17.0%

17.5%

18.0%

-14

-12

-10

-8

6

Vac

ancy

Rat

bsor

ptio

n (M

illio

ns o

f S


12Source: Reis

16.0%

16.5%

-18

-16

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10

Ab


The Resurgence of Cities in the US

5500

Property Crime vs. CBD & Suburban Vacancies

Property Crime CBD Vacancy Suburban Vacancy

18.0%

20.0%

5000

e

Property Crime CBD Vacancy Suburban Vacancy

14.0%

16.0%

4000

4500

Va

can

cy R

ate

s p

er

100

,00

0 P

eo

ple

10.0%

12.0%

3500

V

# R

ep

ort

ed

Off

en

ses

6.0%

8.0%

2500

3000

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008


13Source: Reis, FBI Uniform Crime Reporting Program.

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Poverty vs. Vacancies

Changes in City and Suburban Poverty Trends, 1999-2009 (95 Metro Areas)

Percentage 1999 2009 Point 2000 2009 % Change

Change

Nation: 12.4 14.3 2.0 33,899,812 42,868,163 26.5%

Poverty Rate % Number of Poor

Cities……………………. 18.0 19.5 1.5 10,387,549 12,121,247 16.7%

Suburbs……………….. 8.5 10.4 1.9 9,991,292 13,728,687 37.4%

Changes in CBD and Suburban Office Market Trends 1999-2009

Percentage 1999 2009 Point 2000 2009 % Change

Change

Vacancy Rate % Available Space

Changes in CBD and Suburban Office Market Trends, 1999 2009

Nation: 9.1 17.0 7.9 311,775,000 690,594,000 121.5%

CBD……………………… 8.8 14.5 5.7 101,058,000 202,874,000 100.8%

Suburban…………….. 9.3 18.3 9.0 210,717,000 487,720,000 131.5%


14

Source: Reis Inc., Brookings Institution

CBDs Versus Suburban Office MarketsGreater NY Metros Office Market

12%

0

8

et)

CB

D

8%

10%

-16

-8

Vac

ancy

Rat

e

(Mill

ions

of

Squa

re F

ee

4%

6%

-32

-24

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

V

Abs

orpt

ion


an 15%

17%

19%

2

4

6

8

equar

e Fe

et)

Su

bu

rb

9%

11%

13%

-4

-2

0

2

Vac

ancy

Rat

sorp

tion

(Mill

ions

of

Sq


15Source: Reis

7%

9%

-8

-6

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Abs


Poverty in Cities and Suburbs

City and Suburban Poverty Rates, 2007 to 2009

Poverty Rate % Percentage Point Change

Primary Cities Suburbs

2007 2008 2009 2007 2008 2009

95 Metro Area Total…………..... 18.0 18.2 19.5 9.1 9.5 10.4 1.4 1.2

Primary Cities Suburbs

Poverty Rate % Percentage Point Change

2007 to 2009

New York / Newark………….. 18.7 18.5 18.9 6.8 7.2 7.8 0.2 0.9

New Haven……….………………. 22.1 27.3 26.7 7.7 8.6 9.8 4.6 2.1

Central NJ / Philadelphia…. 23.8 24.1 25.0 7.4 7.4 7.3 1.2 -0.1

CBD and Suburban Vacancy Rates, 2007 to 2009

CBDs Suburbs

2007 2008 2009 2007 2008 2009 2007 to 2009

Vacancy Rate % Percentage Point Change

CBDs Suburbs

National…………........................... 10.5% 11.8% 14.5% 13.8% 15.9% 18.3% 4.0 4.5

New York / Long Island….... 5.7% 8.1% 11.6% 10.0% 11.4% 12.0% 5.9 2.0

New Haven……….………………. 10.0% 9.6% 11.4% 18.0% 20.2% 22.1% 1.4 4.1

New Jersey………………………. 11.3% 12.9% 12.8% 14.4% 15.7% 18.1% 1.5 3.7


16

Source: Reis, Inc., Brookings Institution

Winners and LosersTop & Bottom Markets for the Fourth Quarter of 2010

10%

Metro Average Submarket Maximum Submarket Minimum

Effective Revenue Per Square Foot, Percent Change 2009Q4-2010Q4

4.0% 3.8% 3.7%

2 0% 2 0%

5%

2.0% 2.0%

-2.2%

0%

2.2%

-4.9%

-6.0% -6.2%-6.6%

-5%

-8.3%

-10%


-15%Pittsburgh New Haven ChattanoogaNew Orleans Tacoma US

AggregateSan Jose Oakland-

East BayPalm Beach Phoenix Orange

County

17Source: Reis

Manhattan Office MarketAnnual Market Trends

YearPercent Change

Vacancy Rate

Asking Rent

Percent Change

Effective Rent

Net Absorption

2000 6.9 $50.33 23.3% $45.01 25.2% 3.8%2001 -29.6 $49.54 -1.6% $43.40 -3.6% 8.1%2002 -6.2 $45.60 -8.0% $39.37 -9.3% 9.6%2003 2 8 $42 93 5 9% $36 52 7 2% 10 5%

gg

2003 -2.8 $42.93 -5.9% $36.52 -7.2% 10.5%

2004 2.9 $42.20 -1.7% $35.78 -2.0% 10.2%

2005 3.7 $44.30 5.0% $37.88 5.9% 8.9%2006 4.9 $51.42 16.1% $44.79 18.2% 7.3%2007 5.2 $63.58 23.6% $56.32 25.7% 5.7%

2008 -8.7 $64.40 1.3% $55.73 -1.0% 8.0%2009 -11.5 $55.14 -14.4% $44.69 -19.8% 11.6%2010 2 4 $54 74 0 7% $44 35 0 8% 11 4%2010 2.4 $54.74 -0.7% $44.35 -0.8% 11.4%

• Job formation will be insufficient to generate net absorption exceeding an annual average of 3.0 million square feet through 2014.

• As a result, the Manhattan vacancy rate is not expected to fall below 9.2% over the next


18

Source: Reis, Inc. Net Absorption figures are in millions of square feet.

As a result, the Manhattan vacancy rate is not expected to fall below 9.2% over the next four years, limiting annual increases in effective rent growth.

National Retail MarketQuarterly and Annual Market Conditions

Neighborhood and Community Shopping Centers

2003 4 12.48 $17.14 0.9% $15.62 1.0% 7.2%

$ $

Effective Rent

Percent Change

Vacancy Rate

Year QtrAsking Rent

Percent Change

Net Absorption

2001 39.4 $15.89 4.1% $14.88 4.6% 6.4%

$ $

YearNet

AbsorptionPercent Change

Vacancy Rate

Asking Rent

Percent Change

Effective Rent

2004 1 4.32 $17.22 0.5% $15.71 0.6% 7.2%2004 2 8.89 $17.33 0.6% $15.82 0.7% 7.1%2004 3 7.85 $17.49 0.9% $15.97 0.9% 7.0%2004 4 11.48 $17.62 0.7% $16.08 0.7% 7.0%

2005 1 5.68 $17.74 0.7% $16.18 0.6% 7.0%2005 2 11.09 $17.88 0.8% $16.31 0.8% 6.7%2005 3 7 24 $18 06 1 0% $16 45 0 9% 6 8%

2002 19.5 $16.31 2.6% $15.10 1.5% 7.1%2003 27.4 $16.68 2.3% $15.27 1.1% 7.3%2004 28.6 $17.14 2.8% $15.62 2.3% 7.2%2005 35.4 $17.62 2.8% $16.08 2.9% 7.0%

2006 22.1 $18.92 3.8% $17.16 3.4% 7.1%2007 23.7 $19.46 2.9% $17.57 2.4% 7.5%2008 6 7 $19 52 0 3% $17 39 1 0% 8 9%2005 3 7.24 $18.06 1.0% $16.45 0.9% 6.8%

2005 4 11.38 $18.22 0.9% $16.60 0.9% 6.8%

2006 1 5.07 $18.35 0.7% $16.70 0.6% 6.9%

2006 2 6.33 $18.50 0.8% $16.84 0.8% 6.9%2006 3 4.62 $18.73 1.2% $17.01 1.0% 7.0%2006 4 6.09 $18.92 1.0% $17.16 0.9% 7.1%

2007 1 5 01 $19 08 0 8% $17 30 0 8% 7 2%

2008 -6.7 $19.52 0.3% $17.39 -1.0% 8.9%2009 -21.9 $19.12 -2.0% $16.75 -3.7% 10.6%

2010 -3.4 $18.99 -0.7% $16.51 -1.4% 10.9%2011 3.8 $18.96 -0.2% $16.41 -0.6% 11.4%2012 19.1 $19.09 0.7% $16.52 0.7% 11.3%2013 32.0 $19.33 1.3% $16.83 1.9% 10.6%

2014 36 7 $19 80 2 4% $17 36 3 1% 10 0%

Regional/Super Regional Malls

$

Vacancy Rate

Year QuarterAsking Rent

Percent Change

2007 1 5.01 $19.08 0.8% $17.30 0.8% 7.2%2007 2 2.95 $19.23 0.8% $17.43 0.8% 7.3%

2007 3 5.69 $19.33 0.5% $17.50 0.4% 7.3%2007 4 10.09 $19.46 0.7% $17.57 0.4% 7.5%

2008 1 -0.58 $19.54 0.4% $17.59 0.1% 7.7%2008 2 -2.03 $19.60 0.3% $17.57 -0.1% 8.1%2008 3 -1 89 $19 59 -0 1% $17 54 -0 2% 8 4%

2014 36.7 $19.80 2.4% $17.36 3.1% 10.0%2015 38.4 $20.35 2.8% $17.93 3.3% 9.3%

2000 4Q $34.95 5.0% 5.0%2001 4Q $37.14 6.3% 6.8%2002 4Q $36.85 -0.8% 6.1%2003 4Q $37.93 2.9% 5.6%2004 4Q $37.89 -0.1% 5.3%2005 4Q $38.27 1.0% 5.5%2006 4Q $39 51 3 2% 5 4%

2008 3 -1.89 $19.59 -0.1% $17.54 -0.2% 8.4%2008 4 -2.26 $19.52 -0.4% $17.39 -0.9% 8.9%2009 1 -7.82 $19.40 -0.6% $17.20 -1.1% 9.5%

2009 2 -7.18 $19.27 -0.7% $17.01 -1.1% 10.0%2009 3 -4.46 $19.21 -0.3% $16.89 -0.7% 10.3%2009 4 -2.45 $19.12 -0.5% $16.75 -0.8% 10.6%

2010 1 -2 29 $19 06 -0 3% $16 61 -0 8% 10 8%


19Source: Reis; 77 of 140 Retail MarketsNet Absorption figures are in millions of square feet

2006 4Q $39.51 3.2% 5.4%2007 4Q $40.37 2.2% 5.8%

2008 4Q $40.48 0.3% 7.1%2009 4Q $39.03 -3.6% 8.8%2010 4Q $38.79 -0.6% 8.7%

2010 1 2.29 $19.06 0.3% $16.61 0.8% 10.8%2010 2 -1.88 $19.01 -0.3% $16.53 -0.5% 10.9%2010 3 0.42 $19.01 0.0% $16.53 0.0% 10.9%

2010 4 0.32 $18.99 -0.1% $16.51 -0.1% 10.9%

National Retail MarketSupply and Demand Trends

12%

60

70

Forecast

10%

11%

40

50

60

8%

9%

20

30

cy P

erce

nt

et (

in M

illio

ns)

6%

7%

0

10

Vac

anc

Squ

are

Fee

5%-20

-10


4%-30

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013

Completions Net Absorption Vacancy Percent (48 of 140 US Retail Markets)

20Source: Reis

The Growth of E-Commerce

4 5%

5.0%

65%

75%

4.0%

4.5%

55%

65%

les

Retail Sales - Year-Over-Year % Change

E-Commerce - Year-Over-Year % Change

E-Commerce - % of Total Retail Sales

3.0%

3.5%

35%

45%

% o

f T

otal

Ret

ail

Sal

ear

Per

cent

Cha

nge

2.0%

2.5%

15%

25%

E-C

omm

erce

as

a

Yea

r-O

ver-

Ye

1.0%

1.5%

-5%

5%


0.5%-15%

4Q00 3Q01 2Q02 1Q03 4Q03 3Q04 2Q05 1Q06 4Q06 3Q07 2Q08 1Q09 4Q09 3Q10

21Source: U.S. Commerce Department

Top and Bottom Retail MarketsMSA versus Submarket Comparisons

4%

Effective Revenue Per Square Foot, Percent Change 2009Q4- 2010Q4

1.8%1.1%

0.8% 0.5%0.5%

0%

2%

-1.8%-2%

-4.0% -4.1%-4.5% -4.5%

-5.2%

-6%

-4%

-8%

Metro Average Submarket Minimum Submarket Maximum


-10%Hartford Little Rock Long Island Pittsburgh Chattanooga US

AggregateOrlando Las Vegas Providence Suburban

MarylandColoradoSprings

22

Source: Reis

Greater NY Metro Retail MarketsVacancy Rate Trends & Forecast 2000-2014

16%

New Haven

Forecast

12%

14% New Haven

8%

10%Central New Jersey

4%

6%

Long IslandFairfield County

0%

2%Northern New Jersey

Forecast


2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Central New Jersey Fairfield County Long Island Northern New Jersey New Haven

23Source: Reis, Inc.

Summary and Conclusions

• Accelerating rent growth for apartments; record g g p ;additions to occupied stock. 2011 will be a great year for multifamily given recent economic and demographic trendsdemographic trends.

• Pockets of recovery manifesting for office and retail properties.

• Several markets have bottomed and some are on the way to a healthy recovery. 3.5-4.0% GDP growth for 2011 will benefit commercial properties in general2011 will benefit commercial properties in general.

• Risks remain in markets where new supply come online while recovery in demand is still fragile.


y g

24

Demographic Drivers & Real Estate Trends

F b 9 2011February 9, 2011

Victor Calanog PhDVP Research & Economics


VP, Research & EconomicsReis, Inc

demographic drivers & real estate trends 2.9.11 presentation.pdffeb 01, 2011 · • f l t d f...

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