Sacramento Multifamily Summary Apartment A DVISORY T EAM PRESENTED - - PowerPoint PPT Presentation
Sacramento Multifamily Summary Apartment A DVISORY T EAM PRESENTED BY: John Shaffer Brian Nelson Nicole Parrish (916) 563-3035 (916) 830-2576 (916) 563-3091 John.shaffer@colliers.com Brian.nelson@colliers.com
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ADVISORY TEAM
Apartment
PRESENTED BY: John Shaffer Brian Nelson Nicole Parrish (916) 563-3035 (916) 830-2576 (916) 563-3091
John.shaffer@colliers.com Brian.nelson@colliers.com Nicole.parrish@colliers.com
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Overall Market Occupancy …………….…… 96.4% 96.5% Average Market Rent ……………..………… $1,415 $1,495 Total Net Absorption …………..……………. (80) 61 Total Unit Completions ……………………... 365 671 Total M-F Permits Issued …………………... 181 891 Units Under Construction …………………. 3,103 3,839
2018 2019
Source: MPF (Includes Properties of 5+ units in Sacramento, Placer, El Dorado, and Yolo Counties)
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$897 $906 $934 $964 $978 $1,031 $1,123 $1,247 $1,351 $1,415 $1,495
$600 $700 $800 $900 $1,000 $1,100 $1,200 $1,300 $1,400 $1,500 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Average Rent
Average Market Rent
Rents have grown at an average annual rate of 5.24% from 2010 - 2019, and 5.7% during 2019.
Dec Source: MPF (Includes Properties of 5+ units in Sacramento, Placer, El Dorado, and Yolo Counties)
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92.7% 94.3% 94.1% 94.2% 95.2% 96.1% 96.1% 96.1% 96.5% 96.4% 96.5%
90% 92% 94% 96% 98% 100% $600 $700 $800 $900 $1,000 $1,100 $1,200 $1,300 $1,400 $1,500 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Average Rent Average Occupancy
Average Market Occupancy
Dec
Average Market Rent
Source: MPF (Includes Properties of 5+ Units in Sacramento, Placer, El Dorado, and Yolo Counties)
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Source: Bureau of Labor Statistics (Includes Sacramento, Placer, El Dorado, and Yolo Counties)
0.0% 2.0% 4.0% 6.0%
Year-Over-Year Change
1.5%
3.31% 4.13% 3.51% 2008 2012 MSA employment peaked in June 2007, and then proceeded to bottom in January 2011 after losing 110,000 jobs. The pre-recession level was once again reached in October 2015, almost 5 years after bottoming. 2009 2010 2011 2013 2014 2015 2016 2017 2018 2019
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Source: Bureau of Labor Statistics (Includes Sacramento, Placer, El Dorado, and Yolo Counties)
0.00% 1.00% 2.00% 3.00% 4.00% 5.00% Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
Year-Over-Year Change
3.10% 1.5%
2018 2019
November 2018 Employment Level: 1,017,000 November 2019 Employment Level: 1,032,100 Jobs Gained: 15,100 (1.5% Increase in 12 Mo.)
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Source: CoStar Sales Comparable for properties 10 units or greater in the 4-county region
126 Transactions 9,076 Units
190 Transactions 13,137 Units
2019 2018
Sacramento MSA Sales Activity Comparison
$148,178
$138,489
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1000 2000 3000 4000 5000 6000
Unit Count
Average: 2,539 Units # Units Under Construction
Source: CoStar, MPF
Q4 2019 Total: 3,839 Units
Note: Totals above based on multifamily construction in four-county Sacramento region.
4,375 units
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as of January 1, 2020.
effect September 13, 2019.
applies to properties in the City, and the State Law applies to all
initiated state statue on November 3, 2020. This is a “second bite at the apple” to repeal the Costa-Hawkins Act.
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1.0% 3.1% 3.2% 1.5% 5.4% 8.9% 11.0% 8.3% 4.7% 5.7%
0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% 11.0% 12.0% 13.0% 14.0% 15.0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Rent Growth %
% Rent Growth
Local ordinance in effect 9/13/2019. State law AB-1482 in effect 1/1/2020. This is when the recent rent control discussion first began.
Dec Source: MPF (Includes Properties of 5+ units in Sacramento, Placer, El Dorado, and Yolo Counties)
Actual average rent growth rate is 5.24% Market dynamics do work. They will correct themselves if left alone. Allowable rent growth rate per rent control is 8.34%
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June 2017, and has now updated the white paper to reflect changes in this issue since that date.
Please email the following for a copy: john.shaffer@colliers.com
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Adjusted Sacramento Apartment Cycle Line Sacramento Today
Market Statistics
2017 Rent Growth: 8.3% 2018 Rent Growth: 4.7% 2019 Rent Growth: 5.7% 5-YR Rent Growth: 7.7% Q4 2016 Vacancy: 3.9% Q4 2017 Vacancy: 3.5% Q4 2018 Vacancy: 3.6% Q4 2019 Vacancy: 3.5% (Supply constraints will result in an extended market cycle peak period.)
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Next 3 Months Next 12 Months
Employment Growth N/A 2.00% New Apt. Unit Supply 601 2,004
Neutral Negative Occupancy Rate 96.5% 96.2% Rent Growth 1.1% 5.4% Rent Concessions Insignificant Insignificant
Strong Strong
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$897 $906 $934 $964 $978 $1,031 $1,123 $1,247 $1,351 $1,415 $1,495 $1,512 $1,533 $1,555 $1,575
$700 $800 $900 $1,000 $1,100 $1,200 $1,300 $1,400 $1,500 $1,600 09 10 11 12 13 14 15 16 17 18 19 20 20 20 20
Average Market Rent
Dec Source: MPF (Includes Properties of 5+ units in Sacramento, Placer, El Dorado, and Yolo Counties)
Q1 Q3 Q4 Q2
FORECAST
Rents forecast to increase 1.1% over the next 3 months, and increase 5.4% over the next 12 months.
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92.7% 94.3% 94.1% 94.2% 95.2% 96.1% 97.0% 96.1% 96.5% 96.4% 96.5% 96.5% 96.4% 96.3% 96.2%
90% 92% 94% 96% 98% 100% $700 $800 $900 $1,000 $1,100 $1,200 $1,300 $1,400 $1,500 $1,600 09 10 11 12 13 14 15 16 17 18 19 20 20 20 20
Average Rent Average Occupancy
Average Market Occupancy
FORECAST Dec
Average Market Rent
Source: MPF (Includes Properties of 5+ Units in Sacramento, Placer, El Dorado, and Yolo Counties)
Q1 Q2 Q3 Q4 Occupancy forecast to remain steady
decline 30 basis points over the next 12 months.
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1,020,200 1,037,000 1,058,100 1,070,800
600,000 700,000 800,000 900,000 1,000,000 1,100,000 1,200,000 2018 2019 2020 2021
Projected Employment Base
University Of The Pacific Predicts a Slowdown in CA Economy
Source: University Of The Pacific and Bureau of Labor Statistics
(Actual)
(1.7%) (2.0%) (1.2%)
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Q3 2019 Forecast Q3 2019 Actual
Employment Growth 1.80% 1.90% New Apt. Unit Supply 2,200 1,575 Occupancy Rate 96.2% 96.9% Average Rent $1,487 $1,495
Strong Strong
($1.7B)
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