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TRANSCRIPT
HISTORICAL APARTMENT OCCUPANCY
US SOUTH RALEIGH-DURHAM
MARKET REPORTRALEIGH-DURHAM
www.colliers.com/raleighdurham
MARKET INDICATORS
Q1 2014OUTLOOK
VACANCY
CONCESSIONS
RENTS
TRANSACTIONS
PRICE PER UNIT
CAP RATES
Q4 2013 | MULTI-FAMILY
HISTORICAL APARTMENT RENTS
90%
91%
92%
93%
94%
95%
96%
2011
2012
2013
Source: MPF Research $400$500$600$700$800$900$1,000$1,100$1,200
2011
2012
2013
Source: MPF Research
US SOUTH RALEIGH-DURHAM
Rent Growth Slows Amid New SupplyResearch Triangle Park (“RTP”) has been a major economic driver in Raleigh-Durham’s growth for years. Accompanied by three large nearby universities, a well-educated labor pool and more than $2 billion invested annually in research and development, RTP is one of the world’s most renowned research and technology parks. Many corporate users continue to have RTP on their shortlist for expansion and relocation possibilities. To foster even more growth and attract residents, Raleigh is in the process of revitalizing the downtown neighborhood to a “lively business-by-day, entertainment by- night venue” concept. The revitalization will bring new retail businesses and new jobs, and as a result, the apartment communities nearby will attract younger renters who prefer an urban lifestyle.
Raleigh’s occupancy rates have consistently bounced between 94.5% and 95.5% the past eleven quarters. 2013’s 4th quarter saw occupancy drop 90 basis points to finish off the year at 94.4%; this figure is down 40 basis points on an annual basis and is slightly below the national average of 95.0% but slightly above the regional average of 94.2%. After three consecutive quarters of effective rent growth, the dip in occupancy seems to have reversed this trend as effective rents dropped 1.8% in the 4th quarter. Year over year the metro area experienced 1.8% growth in rents which is well below the 4% annual growth seen in Raleigh over the past 3 years. Owners of 2000 vintage assets or newer increased effective rents by only 40 basis points in 2013 due to struggles with new competition in the market.
According to REIS, Raleigh experienced six multifamily sales in the 4th quarter of 2013 totaling $164.2 million at an average price per unit of $104,000. Cap rates for these 6 transactions averaged 6.4%, an expansion of 40 basis points from the 12-month rolling cape rate of 6.0%.
There were 15 projects totaling 3,317 market-rate units that completed construction in 2013. According to REIS, 17 projects encompassing 4,370 units are slated for completion in 2014, while another 10 projects encompassing 3,098 units are under construction with no projected completion dates available at this time. Despite the influx of new supply projected in the coming years, demand figures remain strong and should be in-line or even outpace new deliveries to the market.
Updated May 2012
RON CAMERON WILL MATHEWS
UNITED STATES:
Southeast Multi-FamilyInvestment ServicesPromenade | Suite 8001230 Peachtree Street, NEAtlanta, Georgia, 30309TEL +1 404 888 9000FAX +1 404 870 2845
482 offices in 62 countries on 6 continentsUnited States: 140Canada: 42Latin America: 20Asia Pacific: 195EMEA: 85
• $2 billion in annual revenue
• Over 1.1 billion square feet under management
• Over 13,500 professionals
This market report is a research document of Colliers International. Information herein has been deemed reliable and no representation is made as to the accuracy thereof. Colliers International-Atlanta, Inc., and certain of its subsidiaries, is an independently owned and operated business and a member firm of Colliers International Property Consultants, an affiliation of independent companies with over 480 offices throughout more than 62 countries worldwide.
www.colliers.com/raleighdurham
Accelerating success.Accelerating success.
TOP EMPLOYERS
COMPANY # EMPLOYEES
State of North Carolina 24,700
Wake County Board of Education 17,500
North Carolina State University 7,700
WakeMed Health & Hosptials 7,600
Rex Healthcare 5,200
Wake County 4,200
Progress Energy 3,000
WORLD CLASS UNIVERSITIES, COLLEGES
UNIVERSITY CITY # STUDENTS
N.C. State University Raleigh 32,872
Wake Tech. Comm. College Raleigh 14,747
Duke University Durham 14,060
N.C. Central University Durham 8,035
Durham Tech. Comm Coll. Durham 5,417
Shaw University Raleigh 2,702
Meredith College Raleigh 2,250Source: raleigh4u.com Source: Education Portal
Jordan Lake
Raleigh-DurhamInternational Airport
DUKE
UNC
Falls LakeDurham
TheResearchTriangle Park
Raleigh
Chapel Hill
NCSU
70
70
15
15
64
64
1
1
401
501
40
40
40
40
85 85
540
540440
54
54
50
55
147
STEVEN PEDEN
Triangle Multi-Family Investment Team702 Oberlin Road | Suite 400Raleigh, North Carolina 27605TEL +1 919 832 1110FAX +1 919 834 4488
MARKET REPORT | Q4 2013 | MULTI-FAMILY | RALEIGH