Payroll Job Growth United States | Month-to-Month 14.5 - - PowerPoint PPT Presentation

N E T J O B C H A N G E ( T H O U S A N D S )

• 1,000
• 800
• 600
• 400
• 200

200 400 600 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Payroll Job Growth

United States | Month-to-Month

14.5 MILLION JOBS ADDED SINCE THE RECESSION

75 CONSECUTIVE MONTHS OF POSITIVE JOB GROWTH

5

• 1,000
• 800
• 600
• 400
• 200

200 400 600 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

14.5 MILLION JOBS ADDED SINCE THE RECESSION

75 CONSECUTIVE MONTHS OF POSITIVE JOB GROWTH

N E T J O B C H A N G E ( T H O U S A N D S )

• 20%
• 15%
• 10%
• 5%

0% 5% 10% 15% 2008 2009 2010 2011 2012 2013 2014 2015 2016

C H A N G E I N M E D I A N P R I C E , S I N G L E - FA M I LY H O M E S

0% 1% 2% 3% 4% 5% 6% 7%

Effective Federal Funds Rate 10-Year Treasury 30-Year Treasury

0.24% 0.54 .54% 2.15% 2.45% 2.98% 3.03%

0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5%

2015 2016 2017

Effective Federal Funds Rate 10-Year Treasury 30-Year Treasury

Dec December 16, 16, 201 2015 Dec December 14, 14, 2016 2016

0% 1% 2% 3% 4% 5% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

2.6%

Average 20 2016 16

1 2 - M O N T H C H A N G E

3.1%

Average 20 2007 07 – 2009 2009

2.0%

Average 20 2010 10 – 2015 2015

• 10%
• 8%
• 6%
• 4%
• 2%

0% 2% 4% 6% Q1 07 Q3 07 Q1 08 Q3 08 Q1 09 Q3 09 Q1 10 Q3 10 Q1 11 Q3 11 Q1 12 Q3 12 Q1 13 Q3 13 Q1 14 Q3 14 Q1 15 Q3 15 Q1 16 Q3 16 Q1 17 Q3 17

A N N U A L C H A N G E

F O R E C A S T

2.2%

20 2017 17 Average

2.1%

Pos

• st-Recess

ssion Average

20 40 60 80 100 120 140 LA Basin NY DFW SF Bay Atl Was South FL Denver Bos Chi Phx Hou N E W J O B S ( T H O U S A N D S )

67K

• 5,000

5,000 10,000 15,000 20,000 25,000 30,000 Info formation Financial Activit itie ies Transp sportatio ion/Utilit itie ies Manufa facturing Const struction/Min ining Wholesale Trade Other Servic ices State and Local Government Retail T l Trade Federal Government Leisure/Hospitali lity Education/Healt lth Profe fess ssional/Business ss Servic ices 71,300

• 4,700

J O B C H A N G E

23,900

0% 1% 2% 3% 4% 5% 6% Bos Den DFW SF Bay Was Phx NY LA Basin Atl S Fla Hou Chi

November 2015 November 2016

• 50

50

• 50

50

• 40

40

• 170

170

• 10

10 +10 +10

• 80

80

• 20

20

• 90
• 10

10

• 40

40

• 10

10

13

Na Natio ional l Ra Rate

4.8%

Basis Point Change

4.5%

N E W J O B S ( T H O U S A N D S )

• 60
• 40
• 20

20 40 60 80 100 120 140 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

District Suburban MD Northern VA

F O R E C A S T

48,600

4-Year Average

43,400

20 20-Year Average

0% 0% 2% 2% 4% 4% 6% 6% 8% 8% 10% 10% 12% 12% 14% 14% 20 0 Ye Years 10 0 Ye Years 1 Y Year STOCKS S& S&P 500 500 RE REAL AL ESTATE NCRE REIF Property Ind ndex T-BILLS (90 (90 da day)

T O TA L A N N U A L A V E R A G E R E T U R N

0% 0% 2% 2% 4% 4% 6% 6% 8% 8% 10% 10% 12% 12% 14% 14% Retail Indust strial Apartment Offic ice

T O TA L A N N U A L R E T U R N

Washington US US

$0 $5 $10 $15 $20 $25 $30 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 TOTAL VOLUME (B (BILLIONS)

Office Multifamily Retail Flex/Industrial

4% 4% 5% 5% 6% 6% 7% 7% 8% 8% 9% 9%

6.3% 5.8% 5.4% 5.6%

Office Flex/ Industrial Grocery- Anchored Apartments

0% 10% 20% 30% 40% 50% Very Negative Somewhat Negative Neutral Somewhat Positive Very Positive Unclear/Don't Know

S H A R E O F R E S P O N D E N T S

St Stim imulu lus + Hig igher Defic icit its Hig igher In Infl flatio ion High igher In Interest Rates

Imm Immig igration Wall ll: $15B $15B? $40 $40B $28 $285B? In Infrastr tructure: $1T $1T over er 10 10 year ears?

War arehouse/Distrib ibution Por

• rts

ts of

• f En

Entry ry Ex Export-intensiv ive Metr tro Area eas

FINANCIAL INSTITUTIONS

Eased regulations Home mortgage underwriting Fannie Mae, Freddie Mac?

LOW INCOME HOUSING TAX CREDITS Lower tax rates ↓ Fewer affordable units WASHINGTON METRO AREA

Federal hiring freeze Defense spending vs. Other spending Federal agencies moved

• ut of region?

TOTAL FEDERAL

39.8% 60.2%

NON-FEDERAL

10.7% 10.0% 19.1%

TOTAL FEDERAL

27.2% 72.8%

NON-FEDERAL

7.7% 6.7% 12.8%

2010 2020

OTHER FEDERAL FEDERAL WAGES & SALARIES PROCUREMENT

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 1950 1960 1970 1980 1990 2000 2010 2016

38% 11%

45 46 47 48 49 50 51 52 53 54 2010 2011 2012 2013 2014 2015 2016

S Q UA R E F E E T ( M I L L I O N S ) 47

Aviation D Bridges C+ Dams D Drinking Water D Energy D+ Hazardous Waste D Inland Waterways D- Levees D- Public Parks and Recreation C- Rail C+ Roads D Schools D Solid Waste B- Transit D Wastewater D Ports C

Overall grade:

27.2 23.3 20.1 24.4 28.4 16 18 20 22 24 26 28 30

1999 2001 2003 2005 2007 2009 2011 2013 2015 Health Care Educational Transportation Power Plants, Lines Highways and Streets

Y E A RS

S H A R E O F G D P

0.50%

0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

$1.72 $0.74 $0.39 $0.79

$0.0 $0.5 $1.0 $1.5 $2.0

Surface Transportation Electricity Schools Other

Identified Funding Funding Gap

2 0 1 0 T R I L L I O N S

Total Funding Required: $3.6 trillion Total Funding Gap: $1.6 trillion

Surface Transportation Electricity Inland Waterways & Marine Ports Water/Wastewater Airports

Public Transportation Storm Water Drinking & Waste Water Public Buildings Roads Electric Bridges Gas

450,000 500,000 550,000 600,000 650,000 700,000 750,000 800,000 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

• 4%
• 2%

0% 2% 4% 6% 8% 2010 2011 2012 2013 2014 2015 Washington Metro New York Chicago San Francisco

54.3 19.7 31.2

10 20 30 40 50 60 District Northern Virginia Suburban Maryland

S Q UA R E F E E T ( M I L L I O N S ) Office Development Under Construction Within ½ Mile

• f a Metro Station:

93% of Total in Region

$2.3 $0.5 $0.4

$0.0 $0.5 $1.0 $1.5 $2.0 $2.5 DC Virginia Maryland

B I L L I O N S

Within 1/4 Mile Within 1/2 Mile Distance from Metrorail station:

28% of Total Area Tax Base

State & Local Funds Fares & Parking Federal Debt Other

Compared to FY 2017: $2.8B (+11%)

FY18 BUDGET GAP

FTA Grants $60M Management/Labor $50M Riders $50M District of Columbia $47M Maryland $44M Virginia $39M TOTAL $290M

MetroForward

$5 billion over 2014-2020 for safety and reliability improvements

SafeTrack

Intensive program to improve safety and reliability 3 years of work in 12 months (completion June 2017)

Back2Good

Safety Reliability Financial management Customer experience

Federal Transit Administration

Safety oversight (October 2015)

Proposals

• Overhaul the governance

structure

• Fix the funding problem
• Improve the Board’s

capabilities

• Put the Federal

Government in charge

Funding Needed

• $1 billion for regular life

cycle maintenance and replacement

• $600 million per year for

capacity improvements

• Annual operating deficits

0% 2% 4% 6% 8% 10% 12% 14% 16% 18% SF Bay Phil NY Bos LA Basin Was DFW Hou Atl Chi

O V E R A L L VA C A N C Y R AT E

14.1%

9.8%

National Ra Rate

2 4 6 8 10 12 14 16 18 20 NY SF Bay Was DFW LA Basin Phil Bos Chi Hou Atl C O N S T R U C T I O N ( M I L L I O N S O F S F )

11.3

• 10%
• 5%

0% 5% 10% 15% 20% 25% 30% 2001 to 2009 2010 to 2016 C H A N G E I N S F L E A S E D U P O N R E L O C AT I O N

O V E R A L L V A C A N C Y R AT E 0% 2% 4% 6% 8% 10% 12% 14% 16% 18%

14.8% 14.1%

• 5%

0% 5% 10% 15% 20% Change in Asking Rent Overall Vacancy Rate Natural Vacancy Rate F O R E C A S T

The ame amenities gam ame: what te tenants want. Old Older pr product: consid ider ren enovation or

• r con
• nversion.

Tenants to to target: whic ich industries s ar are e lea easing spa space? Tar arget su submarkets: sel select su submarkets will ill turn to to landlo lord.

0% 2% 4% 6% 8% 10% 12% LA Basin Det SF Bay NY Phi Hou Chi DFW Was/Bal Atl Bos O V E R A L L V A C A N C Y R AT E

7.6%

5.3% 5.3%

National Ra Rate

• 4
• 2

2 4 6 8 10 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 N E T A B S O R P T I O N ( M I L L I O N S O F S F ) Lon Long-Term Average

3.6 MSF

6.3

Retail Services Agri/Mining/Utilities Manufacturing Business Services Transportation Other Sectors

49% 49% 23% 23% 14% 14% 12% 12% 2% 2%

FLEX/INDUSTRIAL RETAIL SELF STORAGE MULTIFAMILY OFFICE

O V E R A L L V A C A N C Y R AT E 0% 2% 4% 6% 8% 10% 12% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

7.0% 7.6%

• 6%
• 4%
• 2%

0% 2% 4% 6% 8% 10% 12% Change in Asking Rent Overall Vacancy Rate Natural Vacancy Rate F O R E C A S T

Su Submarkets to to ou

• utp

tperfor

• rm?

Product types to to ou

• utp

tperform: da data ce centers, , retail dis distrib ibution, bio biotech, , an and sel self-storage. Un Undersupply ly of

• f ne

new inventory ry. .

V A C A N C Y R AT E ( A L L C L A S S E S ) 0% 1% 2% 3% 4% 5% 6% 7% NY LA Wash DFW Atl SF Bay Chi Phi Phx South FL Balt Hou

3.8%

4.2%

National Ra Rate

U N I T S 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 F O R E C A S T

6,806

Lon Long-Term Average

8,063

Average Sin Since 20 2008 08

2 4 6 8 10 12 14 16 No VA Sub MD The District M A R K E T - R AT E U N I T S ( T H O U S A N D S )

PROJECTED STABILIZED VACANCY AT DEC. 2019 Projected Stabilized Vacancy Rate at Dec. 2019: 3.9% % Me Metro-Wid ide

DE DEMAND

27,100 units

SUP SUPPLY*

33,649 units

Planned Under Construction 3.5% 3.5% 3.7% 3.7% 4.7% 4.7%

• 4%
• 2%

0% 2% 4% 6% 8% 10% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 E F F E C T I V E R E N T C H A N G E F O R E C A S T

4.0%

Lon Long-Term Average

Con Consid ider de develo loping sm smalle ller-scale bu build ldings in n the Di Distr trict. Dif Differentiate fr from

• m the com
• mpetit

ition. Con Convert ob

• bso

solete of

• ffic

ice bu buil ildings to to ap apartments. s. There ar are po pockets of

• f un

undersupply ly ar around the reg egio ion.

N U M B E R O F U N I T S 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Suburbs District 1,900

F O R E C A S T

• 6%
• 4%
• 2%

0% 2% 4% 6% 8% 10% 2005 2005 2006 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011 2011 2012 2012 2013 2013 2014 2014 2015 2015 2016 2016 2017 2017 P R I C E C H A N G E F O R E C A S T

A V E R A G E P R I C E P E R S F

$2 $2,799 $1 $1,275 $1 $1,213 $1 $1,204 $1 $1,150 $9 $920 $8 $802 $7 $731 $6 $678 $6 $665 $6 $638 $4 $411

$0 $400 $800 $1,200 $1,600 $2,000 $2,400 $2,800

2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 22,000 24,000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 N U M B E R O F U N I T S

2,566

M A R K E T - R AT E U N I T S 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 The Dis District No

• VA

Sub Sub MD

DE DEMAND

6,225 units

SUP SUPPLY*

5,016 units

Planned Under Construction

Be Be min indful l of

• f des

desig ign an and ame amenit ities de dependin ing on

• n the bu

buyer. Bu Build ild bo boutiq ique or

• r med

edium-sized condo pr projects. . Con Consid ider con

• nverting ob
• bso

solete of

• ffic

ice bu buildin ings s to to condos. Many de development op

• pportunitie

ies exis xist in n the ri right loc

• cations.

s.