Deal Activity - - 2006 2006 7,000 $80,000 Deal Activity $70,000 - - PDF document

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Aug 23, 2023 484 likes •541 views

2007 Multifamily Market: Review and Assessment Aubrey L. Layne, Jr. President Great Atlantic Management GREAT ATLANTIC Deal Activity and Headlines Economic and Operating Environment Outlook HR Apartment Deal Volume and Price

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2007 Multifamily Market: Review and Assessment

Aubrey L. Layne, Jr. President Great Atlantic Management

GREAT ATLANTIC

Deal Activity and Headlines
Economic and Operating

Environment

Outlook

Deal Activity Deal Activity -

2006

2006

Unit Volume Down

Unit Volume Down

Core Pricing Flat

Core Pricing Flat

HR Apartment Deal Volume and Price

1,000 2,000 3,000 4,000 5,000 6,000 7,000 1998 1999 2000 2001 2002 2003 2004 2005 2006 volume in units $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 price in $ volume price Sources: Great Atlantic, Real Data

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2 Biggest Deal in 2006

Alta Cove Now Empirian Chesapeake
$63 Million and $168,000 Per Unit

Bonaventure Group Enters HR

702 Units in 2006
540 Units in 2005

Economic and Operating Environment

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Apartment Cap Rates, Interest Rates and Spreads

1% 2% 3% 4% 5% 6% 7% 8% 9% 2 1 2 2 2 3 2 4 2 5 2 6 2 7 50 100 150 200 250 300 350 400 450 spread (bps) 10-Year Treasury avg cap rate spread (bps)

cap rates interest rates

spread

Sources: Capital Analytics, Federal Reserve

Renter's Monthly Cash Flow Advantage

$0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 2000 2001 2002 2003 2004 2005 2006 Hom e P&I and Rent $0 $100 $200 $300 $400 $500 $600 $700 $800 Renter's Advantage home P&I avg rent renter savings Sources: ODU, Real Data

Home Owner Vacancy

In Dwellings With 2 or More Units 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 9 2 9 3 9 4 9 5 9 6 9 7 9 8 9 9 1 2 3 4 5 6 Source: US Census Dept.

Employment

Ford Plant Closing
BRAC – 2008, Mostly on Peninsula
2007 Unemployment 3.7%

HR Apartments Under Construction and Starts

500 1000 1500 2000 2500 3000 1 9 9 8 1 9 9 9 2 2 1 2 2 2 3 2 4 2 5 2 6 Apartm ent Units Under Construction Starts Source: Real Data

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HR Vacancy Rates and Rent Growth

0.0% 2.0% 4.0% 6.0% 8.0% 1 9 9 8 1 9 9 9 2 2 1 2 2 2 3 2 4 2 5 2 6 2 7 vacancy rent growth

Source: Real Data

HR Rent Growth and Core Inflation

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 1998 1999 2000 2001 2002 2003 2004 2005 2006 HR Rent Growth Core Inflation Sources: US Dept. of Labor, Real Data

Buyers: Competitive Market
Sellers: Relatively High Prices
Owners: Positive Operating Environment
Renters: More Choice and Modestly

Higher Rents

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