NATIONAL MULTIFAMILY REPORT
Sources: RealPage; Moody’s Analytics; Real Capital Analytics © 2023 Berkadia Real Estate Advisors LLC Berkadia® is a trademark of Berkadia Proprietary Holding LLC Commercial mortgage loan origination and servicing businesses are conducted exclusively by Berkadia Commercial Mortgage LLC and Berkadia Commercial Mortgage Inc. This website is not intended to solicit commercial mortgage loan brokerage business in Nevada. Investment sales and realestate brokerage businesses are conducted exclusively by Berkadia Real Estate Advisors LLC and Berkadia Real Estate Advisors Inc. For state licensing details for the above entities, visit: www.berkadia.com/legal/licensing.aspx The information contained in this flyer has been obtained from sources we believe to be reliable; however, we have not conducted any investigation regarding these matters and make no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. While we do not doubt its accuracy, we have not verified it and neither we, nor the Owner, make any guarantee, warranty or representation of any kind or nature about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example and do not necessarily represent past, current or future performance of the property. You and your advisors should conduct a careful and independent investigation of the property to determine to your satisfaction the suitability of the property and the quality of itstenancy for your records.
National Employment
National Deliveries & Absorption
Annual Inventory Growth
National Rent & Occupancy
Annual Effective Rent Change
National Sales
2023 | MIDYEAR
View Report
Total Jobs
Unemployment Rate
Source: Moody’s Analytics
Who's hiring?
Private education & healthcare INDUSTRY
IN THE NEWS
The U.S. economy exhibited resilience from the initial impact of the pandemic when payrolls contracted by more than 21.9 million jobs. By midyear 2022, the national workforce exceeded the pre-pandemic high. The pace of hiring decelerated in the last year as seasonally adjusted nonfarm employment grew by an average of 316,000 positions each month. Even with the moderation, job creation during the most recent year significantly outpaced the monthly average during the pre-pandemic growth cycle of approximately 186,700 hires. While every employment sector posted gains since mid-2022, more than 1 million private education and healthcare workers across the U.S. led all others. These in-demand occupations have seen annual wage growth on par with or higher than the national average. A competitive environment for workers contributed to strong salary increases across the U.S. Rising 5.6% annually through June 2023, the latest national wage growth was double the average during the pre-pandemic growth cycle. Continued higher and robust wage growth has been reflected in an increase in the Conference Board’s Consumer Confidence Index in June 2023. The positive economic conditions benefited the apartment market, especially at the start of this year. Apartment operators reported positive net absorption during the first six months of 2023, a reversal from the second half of last year.
Employment*
LAST 12 MONTHS 3,792,000
2.5%
Unemployment*
Mid-Year 2023 3.6%
0 BPS YOY
EMPLOYMENT
NATIONAL
HOME
EMPLOYMENT TRENDS
National Rent and Occupancy
PRIVATE EDUCATION & HEALTHCARE INDUSTRY
16% OF ALL JOBS IN THE U.S.
$96,800 AVERAGE ANNUAL SALARY
46%
400,000
JOBS
313,800
219,000
United Airlines plans to hire 50,000 workers through 2025
READ MORE
IRS to hire 30,000 staff over two years
Boeing to hire 10,000 in 2023
*Seasonally Adjusted
Jan-20
0
50
100
150
200
16%
12%
8%
4%
0%
Feb-20
Mar-20
Apr-20
May-20
Jun-20
Jul-20
Aug-20
Sep-20
Oct-20
Nov-20
Dec-20
Jan-21
Feb-21
Mar-21
Apr-21
May-21
Jun-21
Jul-21
Aug-21
Sep-21
Oct-21
Nov-21
Dec-21
Jan-22
Feb-22
Mar-22
Apr-22
May-22
Jun-22
Jul-22
Aug-22
Sep-22
Oct-22
Nov-22
Dec-22
3.5%
YTD
475,000
TRAILING 12 MONTHS
550,000
TOP PRIVATE EDUCATION AND HEALTHCARE EMPLOYERS
Jan-23
Feb-23
Mar-23
Apr-23
May-23
Jun-23
Millions
DELIVERIES & ABSORPTION
Please Hover OVER OR CLICK oN each module for further stats
Sources: RealPage; Moody’s Analytics; CoStar Group © 2023 Berkadia Real Estate Advisors LLC Berkadia® is a trademark of Berkadia Proprietary Holding LLC Commercial mortgage loan origination and servicing businesses are conducted exclusively by Berkadia Commercial Mortgage LLC and Berkadia Commercial Mortgage Inc. This website is not intended to solicit commercial mortgage loan brokerage business in Nevada. Investment sales and real estate brokerage businesses are conducted exclusively by Berkadia Real Estate Advisors LLC and Berkadia Real Estate Advisors Inc. For state licensing details for the above entities, visit: www. berkadia.com/legal/licensing. The information contained in this flyer has been obtained from sources we believe to be reliable; however, we have not conducted any investigation regarding these matters and make no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. While we do not doubt its accuracy, we have not verified it and neither we, nor the Owner, make any guarantee, warranty or representation of any kind or nature about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example and do not necessarily represent past, current or future performance of the property. You and your advisors should conduct a careful and independent investigation of the property to determine to your satisfaction the suitability of the property and the quality of its tenancy for your records.
UNCHANGED YTD
Cap Rate
5.0%
10 BPS 2023 FORECAST
EXCEEDING
CHANGE YTD
Employment
0.5%
0.7% 2023 FORECAST
exceeding
Absorption
19,243
UNITS
403,189 UNITS 2023 FORECAST
TRAILING
Deliveries
95,237
565,166 UNITS 2023 FORECAST
DOWN 40 BPS YTD
Occupancy
94.8%
-70 BPS 2023 FORECAST
Effective Rent
2022 UNITS
$1,782
3.3% 2023 FORECAST
DELIVERIES 382,835
2023 Units*
Delivered 502,375
Absorbed 376,276
After a historic year for leasing activity in 2021, apartment operators witnessed a significant downshift in net absorption during 2022. Many renters chose to stay in place, with an average lease renewal of 56%, up from the 52% average during the five years leading up to the pandemic. At the same time, other renters chose to live with roommates or family. These factors contributed to negative net absorption in 2022. The start of this year showed signs of a positive shift as economic conditions remained favorable. During the first half of 2023, renters moved into more than 98,800 units than moved out. Renters continued to show a preference for Sun Belt markets, with net absorption highest so far this year in Phoenix, Houston, and Dallas-Fort Worth. These markets benefitted from continued hiring and the cost of renting lower than the national average. Also facilitating leasing activity was an influx of new apartment inventory. As apartment builders work to fill a housing gap in recent years, completions are surging. The inflow of apartments was capped by more than 198,800 units coming online in the first half of 2023. Elevated activity is expected to continue through this year and beyond with more than 1.2 million units under construction at the midpoint of 2023.
Effective Rent Change
5.5%
Deliveries, Absorption, & Effective Rent Change
National Pipeline
Top 10 Market PIPELINES
2023 UNITS*
2024 Units*
Delivered 656,875
Absorbed 624,342
4.0%
-0.8%
15.6%
4.8%
8.9%
Source: RealPage
Lease-Up
364,535
UNDER CONSTRUCTION
1,229,291
Under Construction
*Projected
800,000
200,000
-200,000
20%
15%
10%
5%
-5%
Dallas-Fort Worth
Phoenix
New York
Austin
Northern New Jeresey
South Florida
Houston
Atlanta
Washington, D.C.
Charlotte
20,000
40,000
60,000
80,000
100,000
120,000
79,372
55,648
46,431
48,228
43,231
45,919
43,443
39,645
36,049
35,710
16,883
12,894
12,774
9,497
13,239
9,670
9,158
12,955
14,753
9,960
Hover over each bar for market information.
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
3.7%
6.2%
3.4%
4.2%
2.6%
2.8%
2.9%
3.0%
600,000
Annual Inventory Change
TOP 10 MARKETS
HOVER OVER THE MAP FOR MORE INFO
HOVER OVER THE MAP FOR MARKET RANKINGS
0.0% - 0.5%
0.6% - 1.5%
1.6% - 2.0%
2.1% - 3.0%
3.1% - 4.6%
SAN ANTONIO
2.1%
11.9%
01. Huntsville, AL
DETROIT
4.6%
09. AUSTIN, TX
5.3%
05. Charlotte, NC
10. RENO, NV
5.2%
06. BOISE, ID
03. Nashville, TN
6.7%
02. Pensacola, FL
5.4%
04. Jacksonville, FL
4.7%
08. Colorado Springs, CO
5.1%
07. Salt Lake CITY, UT
Boston
1.6%
Portland
1.4%
Minneapolis- St. Paul
0.7%
WEST MICHIGAN
0.8%
Northern New Jersey
2.0%
Philadelphia
1.7%
BALTIMORE
1.0%
Richmond
2.3%
Virginia Beach
Raleigh-Durham
4.4%
Greenville, SC
4.1%
Charleston, SC
ATLANTA
Tallahassee
0.1%
Orlando
3.6%
Tampa- St. Petersburg
Cleveland
0.9%
Columbus
Cincinnati
1.8%
Lexington
Ann Arbor
0.0%
Indianapolis
1.2%
Louisville
1.9%
Knoxville
0.4%
Chattanooga
Memphis
1.1%
Birmingham
1.3%
Mobile
Milwaukee
Madison
St. Louis
Little Rock
Baton Rouge
New Orleans
RANK: 68 | 0.5%
Kansas City
Des Moines
Omaha
2.4%
Wichita
0.6%
Tulsa
Oklahoma City
El Paso
Albuquerque
Denver
Seattle-Tacoma
Las Vegas
1.5%
Sacramento
San Jose
Ventura County
Inland Empire
0.3%
Los Angeles
San Diego
Tucson
ANNUAL INVENTORY GROWTH
Dallas- Fort Worth
Orange County, CA
Chicago
San Francisco-Oakland
HOUSTON
Annual inventory change: 2.0%
National Effective Rent
National Occupancy
94.6%
94.3%
95.4%
94.9%
National Effective Rent & Occupancy
MARKET (BY OCCUPANCY)
MARKET (BY RENT GROWTH)
U.S. apartment operators experienced a more competitive market as over 376,400 units came online in the last year. As a result, 13.1% of market-rate properties offered concessions to entice renters during the second quarter of 2023, up from an average of 7.6% one year prior. This move contributed to a positive swing in leasing activity across the country, especially in Houston. Approximately one out of every five properties in the market offered concessions as net apartment absorption nearly reached 5,000 units in the second quarter of 2023. While the share of apartments offering concessions across the nation increased year over year, the average concession amount dropped at the same time. At 4.5% of asking rent in the most recent quarter, concessions were down from 5.7% at mid-2022. Consequently, U.S. monthly effective rent averaged $1,809 in the second quarter of 2023. The 4.0% increase since mid-2022 decelerated significantly from the 16.9% increase during the year before. Apartment operators became more measured with rent increases as occupancy dropped to 94.7% in the second quarter of 2023 from 96.8% one year prior. Even so, the latest U.S. occupancy rate was on par with the pre-pandemic cycle average from 2010 to 2019.
Q2 2023 $1,809
OCCUPANCY
Q2 2023 94.7%
RENT & OCCUPANCY
4.0% YOY
210 BPS YOY
TOP PERFORMANCE
Madison Northern New Jersey New York Milwaukee Omaha San Diego West Michigan Knoxville Orange County, CA Ventura County, CA
98.2% 97.0% 97.0% 96.9% 96.7% 96.6% 96.5% 96.3% 96.2% 96.2%
Q2 2023 Occupancy
YOY (BPS)
Q2 2023 Effective Rent
YOY
-60 -120 -130 -80 -90 -170 -160 -220 -190 -130
$1,426 $2,587 $4,401 $1,504 $1,167 $2,829 $1,223 $1,439 $2,738 $2,686
11.2% 9.9% 5.8% 6.7% 7.7% 7.3% 3.6% 13.0% 2.4% 3.1%
Knoxville Madison Northern New Jersey Cincinnati Little Rock El Paso Louisville Tallahassee Indianapolis Omaha
96.3% 98.2% 97.0% 95.8% 94.3% 95.7% 94.5% 92.9% 94.2% 96.7%
-220 -60 -120 -200 -210 -180 -220 -310 -260 -90
$1,439 $1,426 $2,587 $1,338 $1,028 $1,050 $1,191 $1,391 $1,249 $1,167
13.0% 11.2% 9.9% 9.5% 8.3% 8.1% 8.1% 7.9% 7.7% 7.7%
$2,500
$2,000
$1,500
$1,000
$500
$0
Q1 13
Q1 14
Q1 15
Q1 16
Q1 17
Q1 18
Q1 19
Q1 20
Q1 21
Q1 22
Q1 23
Q1 24
Q1 25
Q1 26
Q1 27
98%
97%
96%
95%
94%
93%
92%
94.7%
95.2%
95.5%
97.5%
YOY Effective Rent Change
7.9%
08. TALLAHASSEE, FL
9.9%
03. Northern New jersey
11.2%
02. madison, wi
7.7%
10. Omaha, ne
13.0%
01. KNOXVILLE, TN
9.5%
04. Cincinnati, OH
8.3%
05. Little rock, AR
8.1%
06. EL PASO, TX
09. Indianapolis, IN
2.2%
3.3%
4.5%
BOISE
-3.3%
5.7%
6.6%
6.9%
RENO
-1.5%
Jacksonville
5.6%
7.2%
6.4%
Pensacola
HUNTSVILLE
Nashville
4.3%
5.8%
-0.1%
3.8%
3.1%
3.9%
7.3%
3.2%
-3.6%
-2.4%
7.1%
Salt lake city
6.3%
ANNUAL EFFECTIVE RENT CHANGE
(3.6%) - 0.0%
0.1% - 2.0%
2.1% - 4.0%
4.1% - 6.0%
6.1% - 7.3%
07. Louisville, KY
Colorado Springs
ANNUAL effective rent change: 4.0%
Top Buyers**
Top Sellers**
SALES
Buyer
Blackstone Starwood Capital Cortland Greystar TIAA
New York Miami Beach, FL Atlanta Charleston, SC New York
Location
2023 Year to Date*
VOLUME
$14,601,003,587
CAP RATE (AVG)
Price Per Unit (AVG)
$316,565
TRANSACTIONS
184
WHAT’S TRADING?*
BUILDINGS (AVG)
8
ACRES (AVG)
14.31
YEAR BUILT (AVG)
1999
UNITS (AVG)
318
**Past 24 Months Source: Real Capital Analytics
*$50M+
SELLER
Greystar AIG Brookfield Asset Management Alliance Residential Co. Crow Holdings
Charleston, SC New York Toronto, Canada Phoenix Dallas
LOCATION
$59.3B
