nashville | multifamily · jul-17 meadow brook 1830 spring branch dr nashville 88 2001 $5,900,000...
TRANSCRIPT
MARKET SURVEY RESULTS AND FORECASTS
Sequential Month Annual
4Q16 1Q17 2Q17 3Q17 Sep-17 2015 2016 2017F 2018F 2019F 2020F 2021F
EFFECTIVE RENT PER UNIT $1,123 $1,118 $1,137 $1,146 $1,149 $1,060 $1,119 $1,134 $1,158 $1,193 $1,241 $1,276
Per Sq. Ft $1.17 $1.17 $1.19 $1.20 $1.20 $1.11 $1.17 $1.18 $1.21 $1.25 $1.30 $1.33
Effective Rent Growth - Annually 3.9% 2.5% 1.2% 0.6% 0.8% 6.4% 5.6% 1.3% 2.1% 3.0% 4.0% 2.8%
Effective Rent Growth - Quarterly -1.3% -1.4% -1.2% 0.7%
OCCUPANCY RATE 95.5% 94.8% 95.3% 95.2% 95.0% 96.4% 96.1% 95.1% 95.0% 95.4% 95.9% 95.3%
Occupancy Change - Annually -1.0% -1.4% -1.2% -1.0% -0.8% 0.0% -0.4% -1.0% -0.2% 0.4% 0.6% -0.6%
Occupancy Change - Quarterly -0.7% -0.7% 0.5% -0.1%
ECONOMIC CONCESSIONS
Concession Value $-9.66 $-12.62 $-9.52 $-9.07 $-10.85 $-2.53 $-5.12
As a % of Asking Rent -0.8% -1.1% -0.8% -0.8% -0.9% -0.2% -0.5%
Research & Forecast Report
NASHVILLE | MULTIFAMILY3rd Quarter 2017
Source: AXIOMetrics, RCA, CoStar
RECENT SALES
Date Property Name Address City Units Year Built Price Price/Unit
Jul-17 IMT Cool Springs 201 Gillespie Road Franklin 474 1997 $97,500,000 $205,696
Sep-17 ALARA Cool Springs 100 Gillespie Dr Franklin 390 1997 $85,350,000 $218,846
Sep-17 Jefferson at Cool Springs 101 Gillespie Dr Franklin 386 1997 $85,350,000 $221,114
Aug-17 Stacks on Main 537 Main St Nashville 268 2016 $62,250,000 $232,276
Jul-17 Discovery At Mountain View Apartments 5000 Mountain Springs Rd Nashville 336 2009 $49,750,000 $148,065
Jul-17 500 Fifth Apartments 500 5th Ave N Nashville 170 1963 $27,300,000 $160,588
Sep-17 Newport 1901 Murfreesboro Pike Nashville 235 1985 $21,000,000 $89,362
Jul-17 Park West at Hillwood 6319 Charlotte Pike Nashville 102 1973 $13,075,000 $128,186
Jul-17 Meadow Brook 1830 Spring Branch Dr Nashville 88 2001 $5,900,000 $67,045
Jul-17 17th Street Apartments 2565 E 17th Ave Springfield 96 2004 $5,500,000 $57,292
Annual Effective Rent Growth Annual Occupancy Growth
*Bold text indicates a Colliers transaction.
2 Nashville Research & Forecast Report | 3Q 2017 | Multifamily | Colliers International
SUPPLY AND DEMAND
MARKET EMPLOYMENT AND PERMITTING
ANNUAL AUG-17 ANNUAL FORECAST
2014 2015 2016 Market National 2017F 2018F 2019F 2020F 2021F
EMPLOYMENT (000S) 880.2 914.6 949.6 983.2 146,541.0 979.9 1,000.7 1,016.4 1,034.9 1,052.7
Job Gain (000s) 34.1 34.4 35.0 28.7 2,100.0 30.3 20.7 15.8 18.4 17.8
Job Growth (%) 4.0% 3.9% 3.8% 3.0% 1.5% 3.2% 2.1% 1.6% 1.8% 1.7%
TOTAL RESIDENTIAL PERMITTING 14,829 17,810 18,557 15,923 1,120,198 18,133 14,190 14,740 15,472 14,550
Relative Change 26.9% 20.1% 4.2% -15.5% 6.1% -2.3% -21.7% 3.9% 5.0% -6.0%
Single Family Units Permitted 9,094 10,813 12,014 11,799 723,217
Relative Change 16.9% 18.9% 11.1% 11.6% 9.8%
Multifamily Units Permitted 5,635 6,881 6,395 3,959 364,705
Relative Change 54.8% 22.1% -7.1% -51.1% -1.0%
Multifamily as a % of Total 38.0% 38.6% 34.5% 24.9% 32.6%
DEMAND/SUPPLY RATIO
Job Gain / Total Residential Units Permitted 2.9 2.3 2.0 1.5 2.0 1.6 1.1 1.1 1.3 1.2
Job Gain / Single Family Units Permitted 4.4 3.8 3.2 2.7 3.2
Job Gain / Multifamily Units Permitted 9.4 6.1 5.1 3.5 5.7
MULTIFAMILY ABSORPTION AND SUPPLY
ANNUAL 3Q17 ANNUAL FORECAST
2014 2015 2016 Market National 2017F 2018F 2019F 2020F 2021F
TOTAL UNITS ABSORBED 2,904 4,780 4,254 7,657 350,478 8,249 4,443 3,914 3,248 1,111
NEW SUPPLY 3,275 4,514 5,856 8,951 387,002 9,089 5,319 3,127 2,394 3,034
INVENTORY GROWTH 2.6% 3.5% 4.3% 5.4% 1.5% 6.5% 3.5% 2.0% 1.5% 1.9%
According to the Bureau of Labor Statistics, job growth in Nashville-Davidson-Murfreesboro-Franklin, TN metro area was 3.0% in
August 2017, reflecting 28,700 jobs added during a 12-month period. The metro job growth figure was above the national number
of 1.5%. An August 2017 research study conducted by Avalanche Consulting reported that Nashville led the nation in employment growth from 2015 to 2016, showing the growth rate of employed residents increasing by 4% in that time frame. The MSA had the
strongest gain in the U.S., followed by Grand Rapids, Minnesota and Tucson, Arizona. The report credits the region’s strong economy.
Apartment demand has remained robust, as Nashville’s growth in employment and population have aided in the absorption of 3,800
units to 5,700 units annually. The market absorbed 7,657 units in the year ending 3Q 2017. Axiometrics forecasts Nashville’s 2018
job growth to be 2.1%, equivalent to 20,748 added jobs.
Annual Employment Growth MF Supply and Inventory Growth
3 Nashville Research & Forecast Report | 3Q 2017 | Multifamily | Colliers International
IDENTIFIED SUPPLY
SUBMARKET DELIVERY SCHEDULEPIPELINE DELIVERY SCHEDULE PIPELINE LEASE UP TREND
Units Absorbed Asking Rent Effective Rent
Top Submarkets 2015 2016 2017 Total Totals PPM Per Unit PSF Per Unit PSF
Brentwood/Williamson County 649 308 756 1,713 457 11 $1,515 $1.69 $1,14 $1.58
Downtown/West End/Green Hills 1,179 2,466 4,358 8,003 2,462 11 $1,944 $2.37 $1,721 $2.10
Murfreesboro Pike/Antioch 84 334 666 1,084 257 7 $1,382 $1.14 $1,351 $1.11
Murfreesboro/Smyrna 1,128 773 692 2,593 688 15 $1,159 $1.13 $1,112 $1.09
NE/Madison/Rivergate/Hendersonville 454 437 765 1,656 526 11 $1,481 $1.82 $1,361 $1.67
Other 955 1,280 1,570 3,805 1,110 14 $1,363 $1.47 $1,291 $1.38
Nashville-Davidson--Murfreesboro--Franklin, TN 4,449 5,598 8,807 18,854 5,500 12 $1,629 $1.87 $1,488 $1.70
*Based on 2017 deliveries *Trend based on a trailing 12 month period
Axiometrics identified 8,807 apartment total units scheduled for delivery in 2017. As of October 8, 2017, a total of 6,127 units have
completed. In comparison, 5,598 units delivered in 2016. Properties that delivered in the last 12 months have an average asking rent
of $1,621 per unit, or $1.86 per square foot. Effective rent for these properties has averaged $1,485, or $1.70 per square foot, resulting
in an average concession value of $-136.07. In comparison, existing properties in the Nashville MSA had an average asking rent of
$1,155 per unit ($1.21 per square foot), and concession averaged $-9.07.
Since 2015, Downtown/West End/Green Hills has accounted for 42% of the apartment deliveries in the market at 8,003 units.
Construction volume has nearly doubled in the Brentwood/WIlliamson County, Downtown/West End/Green Hills, Murfreesboro Pike/
Antioch, and NE/Madison/Rivergate/Hendersonville submarkets between 2016 and 2017. Axiometrics projects 18,854 units delivered
from Q1 2015 through Q4 2017.
Identified Unit Deliveries Lease Up Performance
4 Nashville Research & Forecast Report | 3Q 2017 | Multifamily | Colliers International
PIPELINE | CENTRAL NASHVILLE
# Property Name Address Developer Units Stories Finish1 The Finery 610 Merritt Ave, Core Development 490 4 04/18
2 LC Germantown 1226 2nd Ave N, Lifestyle Communities 411 6 08/18
3 Capitol View I 442 11th Ave N, Boyle Investment Company/Northwood Ravin LLC 378 6 12/18
4 The Gossett on Church 1201 Church St, Pollack Shores Real Estate Group 367 7 10/17
5 505 505 Church St, Giarratana Nashville LLC 350 45 04/18
6 Olmsted Nashville 501 5th Ave S, Llewellyn Development LLC/Cocke Finkelstein Inc 330 6 01/18
7 Solis North Gulch 600 11th Ave N, Terwilliger Pappas 271 5 03/18
8 The Monroe 1309 3rd Ave N, Price Development Group 244 5 02/18
9 Broadstone Gulch 777 8th Ave S, Alliance Residential Company 238 14 08/18
10 Millennium Music Row 70 Music Square W, The Dinerstein Companies 230 6 06/18
11 3rd & Madison 1212 3rd Ave N, Grove Park Land/Delray Ventures 101 5 04/18
12 Belcourt Park 1710 Belcourt Ave, GBT Realty Corp 76 4 11/18
13 1821 Jefferson 1821 Jefferson St, Titus Young Real Estate LLC 18 4 11/17
Source: MPF Research
3,504
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MARKET CONTACT:Janet Miller CEDC FMCEO & Market Leader+1 615 850 [email protected]
John M. AshleyMultifamily Advisory Group | East Region | Nashville Office+1 615 850 [email protected]
REGIONAL AUTHOR:Katie Barton CPRCDirector of Research+1 615 850 [email protected]
Colliers International | Nashville523 3rd Avenue Nashville, TN 37210
+1 615 850 2700 www.colliers.com/nashville