The Apartment Report
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TRANSWESTERN Q1.2012 Houston The Apartment Report Q1.2012 RENTS OCCUPANCY ABSORPTION SALES DEVELOPMENT SNAPSHOT Average effective rental Q1 occupancy rose to A total of 6,458 units 40 properties (10,872 31 communities (5,767 rates have increased 88.4% from 87.6% in Q4 absorbed in the first units) sold in the first units) have opened in 6.0% over the past three 2011. The market has quarter, the highest in quarter. The largest the past 12 months, with months and 3.1% over the posted an annualized the past nine quarters percentage of the 35 (8,396 units) under past twelve months (on an 2.8% increase in and 41% above the same properties sold (49% of construction and 52 annualized basis). occupancy in the past period last year. the total) were 1970s built proposed construction three months. or older. (16,134 units). RENTAL RATES • 1Q 2012 marked the ninth consecutive period of effective rental rate increases since 4Q 2009. • Average effective rents ended the quarter at $761 per unit ($0.875 per square foot) compared to $750 per unit ($0.875 per square foot) in the previous quarter. • Rental rates, on an annualized basis, have increased 6.0% over the past three months, 3.6% over the past six months and 3.1% over the past twelve months. ED CUMMINS • The submarkets registering the highest annualized rental rate growth, during Q1, are Heights (20.0%), Conroe/ Senior Vice President Montgomery (13.2%), Westchase (12.9%), Friendswood/Pearland (12.7%) and Inner Loop West/Greenway Plaza 713.272.1288 | direct (11.4%). [email protected] • Concessions were reported in 54% of the market with the average special offered at 6.6%. CLINT DUNCAN Vice President EFFECTIVE RENTS / UNIT - QUARTERLY 713.270.3316 | direct Rental rates shown are effective: net of concessions and electric utility adjustments [email protected] $770 $761 $760 LUPE OLIVARES $748 $750 $750 Senior Analyst $742 713.272.1290 | direct $740 $735 [email protected] $730 $723 $723 $720 $713 $715 $709 SUNJAY ARYA $710 Transaction Manager 713.272.1276 | direct $700 [email protected] $690 $680 4Q 2009 1Q 2010 2Q 2010 3Q 2010 4Q 2010 1Q 2011 2Q 2011 3Q 2011 4Q 2011 1Q 2012 We hope you find this report both useful and insightful. Please feel EFFECTIVE RENTS / SF - QUARTERLY free to contact us if we can assist with your property valuation, rent $0.880 $0.875 $0.870 or sales comparables analysis or $0.860 $0.862 any current market trends and $0.860 $0.853 information. $0.850 $0.845 $0.840 $0.832 $0.832 We look forward to working with $0.830 $0.823 you in the near future. $0.820 $0.820 $0.816 $0.810 $0.800 TRANSWESTERN $0.790 HOUSTON MULTIFAMILY GROUP $0.780 1900 West Loop South, Suite 1300 4Q 2009 1Q 2010 2Q 2010 3Q 2010 4Q 2010 1Q 2011 2Q 2011 3Q 2011 4Q 2011 1Q 2012 Houston, Texas 77027 713.270.7700 | telephone 713.271.8172 | facsimile transwestern.net The Apartment Report Q1.2012 Houston OCCUPANCY • Houston’s multifamily market averaged occupancy of 88.4% in the first quarter, extending the occupancy gains made during 2011. • During the past three months, the largest occupancy increases occurred in the following submarkets (figures shown are on an annualized basis): 1) FM 1960 East/ IAH Airport (13.8%) 3) Northshore/ Woodforest (10.3%) 2) Gulfgate/ Almeda Mall (10.7%) 4) Far East (9.8%) • Class “A” properties posted the highest occupancies, averaging 93.1%, followed by class “B” properties averaging 91.3%. • The top occupied submarkets during Q1 were Montrose/ Museum District (94.8%), Inner Loop West/ Greenway Plaza (94.5%), Medical Center/ Bellaire (94.3%), FM 1960 West/ Steeplechase (94.3%) and Fort Bend (94.1%). APARTMENT OCCUPANCY - QUARTERLY 89.0% 88.4% 88.0% 87.5% 87.6% 87.0% 87.0% 86.4% 86.1% 85.9% 86.0% 85.5% 85.0% 84.6% 83.9% 84.0% 83.0% 82.0% 81.0% 4Q 2009 1Q 2010 2Q 2010 3Q 2010 4Q 2010 1Q 2011 2Q 2011 3Q 2011 4Q 2011 1Q 2012 ABSORPTION • 2011 posted a combined 13,286 units of absorption. Q1 results posted an impressive 6,458 units, almost half of last year’s total in a single quarter. • The submarkets posting the highest absorption levels were: 1) Gulfgate/ Almeda Mall (520) 3) Alief (462) 2) FM 1960 West/ Champions (473) 4) Clear Lake (372) • Strong apartment demand fueled positive absorption in a majority (38) of Houston’s 41 submarkets. • The 6,458 units absorbed in the first quarter are an increase of 41% over the same period in 2010 and mark the highest quarterly absorption total in the past nine quarters. APARTMENT ABSORPTION - QUARTERLY 8,000 6,444 6,458 6,000 4,784 4,580 4,691 3,725 4,000 3,374 2,000 641 0 (478) (2,000) (4,000) (3,789) (6,000) 4Q 2009 1Q 2010 2Q 2010 3Q 2010 4Q 2010 1Q 2011 2Q 2011 3Q 2011 4Q 2011 1Q 2012 THE APARTMENT REPORT • HOUSTON • Q1.2012 2 The Apartment Report Q1.2012 Houston APARTMENT SALES • First quarter sales continued the positive trend exhibited in the second half of 2011 with a total of 40 properties (10,872 units) trading. • Q1 property trades represented all asset classes, as well as stabilized and distressed sales. • 28% of the units traded (10 deals, 3,068 units) were built in 2000 or newer, 10% (4 deals, 1,079 units) were 90s built, 13% (5 deals, 1,408 units) were 80s built and 49% (21 deals, 5,317 units) were built in the 70s or older. Property Submarket Units Built Sale Date Carrington at Green Trails Katy/ Far West 302 2009 Mar-12 The Marquis at Sugar Land (fka West End Ranch) Fort Bend 312 2009 Mar-12 Oaks of Cypress Station FM 1960 West/ Champions 292 1978 Mar-12 Westchase Creek (fka Camden Creek) Westchase 456 1984 Mar-12 Woodcreek Village Baytown 301 1974 Mar-12 Windswept Gardens Galleria 145 1970 Mar-12 The Club at Tranquility Lake Hwy 288/ South 212 2001 Mar-12 Villas at West Oaks Alief 342 2002 Mar-12 Marquis at the Woodlands (fka Alexan Woods) Woodlands/ Far North 280 2007 Mar-12 Villages of Briar Forest West Memorial/Briar Forest 240 1999 Mar-12 Briar Meadows Apartments West Memorial/Briar Forest 256 1992 Mar-12 Creekside Baytown 250 1979 Mar-12 Bristol, The Gulfgate/ Almeda Mall 856 1979 Mar-12 Bay House Clear Lake 190 1967 Mar-12 Windfern Pointe Inwood/ Northwest 200 1978 Mar-12 Ashford Park Alief 180 1982 Mar-12 Northpointe Village FM 1960 West/Champions 300 1980 Mar-12 Crescent Park Braeswood/ Fondren SW 436 1978 Mar-12 Arcadian Kirby Medical Center/ Bellaire 263 1999 Mar-12 St Andrews Hwy 288/ South 472 1999/2000 Mar-12 Shadowtree Sharpstown/ Westwood 428 1979 Feb-12 Summerfield Apartments Sharpstown/ Westwood 110 1976 Feb-12 Carroll at Shadow Creek Ranch (fka Carrington Place at SCR) Hwy 288/ South 360 2010 Feb-12 Cedar Glen Gulfton/ Bissonnet 211 1972 Feb-12 Cedars at Ellington (fka Windjammer) Clear Lake 200 1980 Feb-12 Tiffany Oaks Northline/Aldine 61 1968 Feb-12 Greenbriar Chateau Inner Loop West/ Greenway 145 1968 Feb-12 Fair Oaks Inner Loop East 122 1975 Feb-12 Breakers at Windmill Lakes Gulfgate/ Almeda Mall 174 2000 Feb-12 Mandalay at Shadowlake Alief 294 2005 Feb-12 Meyergrove Medical Center/ Bellaire 227 1969 Feb-12 Bennington Square (fka Oasis Village) Braeswood/ Fondren SW 313 1975 Feb-12 Pecan Park Richmond/ Rosenberg 272 1978 Feb-12 Buena Villa (fka Keegan's Mill) Braeswood/ Fondren SW 318 1979 Feb-12 Cypress Parc (fka Northwoods) FM 1960 West/ Champions 200 1979 Jan-12 The Villas Gulfgate/ Almeda Mall 196 1972 Jan-12 Memorial Springs Spring Branch 44 1964 Jan-12 Kenwood Club at the Park Katy/ Far West 320 1999 Jan-12 Woods of Inverness FM 1960 East/ IAH Airport 272 1981 Jan-12 Tiburon FM 1960 West/ Steeplechase 320 2008 Jan-12 THE APARTMENT REPORT • HOUSTON • Q1.2012 3 The Apartment Report Q1.2012 Houston CONSTRUCTION • 5,767 units, in 31 communities, have been delivered to the market in the past twelve months, of which 57% are conventional, 27% are senior housing developments and 16% are affordable. • 8,396 units (35 communities) are currently under construction, 88% of these units are conventional, the remainder - 6% are affordable and 6% are senior housing. • Proposed construction is currently at 16,134 units (52 communities) of which 61% is concentrated in the following four submarkets: 1) Montrose/ Museum District (3,525 infill units) 3) Katy/ Far West (2,377 suburban units) 2) Inner Loop West/ Greenway Plaza (2,670 infill units) 4) Galleria (1,299 infill units) Now Leasing Submarket Property Units Type Submarket Property Units Type Katy/ Far West Verona at the Reserve 356 Conventional Montrose/ Museum District Midtown Grove 51 Affordable Woodlake/ Westheimer The Ava 321 Conventional Pasadena/ Deer Park Hampshire Court 159 Conventional Inwood/ Northwest Chelsea 150 Senior Housing Lake Houston/ Kingwood Discovery Kingwood 324 Senior Housing Northline/ Aldine Northline 172 Affordable Katy/ Far West Green House Village 140 Senior Housing Hwy 288/ South Pearland Senior Village 124 Senior Housing Hwy 288/ South Residences Pearland Town Center II 172 Senior Housing Galveston/ Brazoria Jackson Village 96 Senior Housing Braeswood/ Fondren SW Floral Gardens 100 Senior Housing FM 1960 East/ IAH Airport Deerbrook Place 159 Senior Housing Katy/ Far West Park at Cinco Terrace 316 Affordable Katy/ Far West Palms at Cinco Ranch 200 Conventional Pasadena/ Deer Park Providence at Town Square 188 Conventional Friendswood/ Pearland Villas at El Dorado 159 Senior Housing Woodlands/ Far North Woodlands Lodge 300 Affordable Gulfgate/ Almeda Mall Villa del Prado 118 Affordable Lake Houston/ Kingwood Carrington at Park Lakes 252 Conventional Inner Loop East CityView Lofts 57 Conventional FM 1960 West/ Champions Waterstone 276 Senior Housing Lake Houston/ Kingwood Sierra