DOCSLIB.ORG

Steady Detroit Multifamily Report Fall 2018

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text

Load more

Steady Detroit Multifamily Report Fall 2018 Rent Growth Falls Below National Rate Development Activity Slows Following 2017 Surge Investors Target Suburban Communities DETROIT MULTIFAMILY Market Analysis Motor City Keeps Its Composure Fall 2018 Detroit is following national trends for rent growth and occupancy, as Contacts rates remained fairly stable against 2017’s surge of new stock. Investment Paul Fiorilla activity has waned, but the focus continues to be on suburban Class B and Associate Director of Research C assets, with acquisition yields going up to double digits. With no deliveries [email protected] in the first nine months, Detroit is bound to have a busier couple of quarters (800) 866-1124 x5764 due to the 4,800 apartments underway as of September. Jack Kern The metro added 28,000 jobs in the 12 months ending in July, more than Director of Research and Publications half of which were in the leisure and hospitality (11,200) and construction [email protected] (4,000) sectors. Both grew more than 5.0% year-over-year, the fastest (800) 866-1124 x2444 expansion across employment sectors. Detroit continues to attract auto suppliers and manufacturers, boosting demand for office and industrial Author space. General Motors is relocating the Cadillac headquarters to the Alexandra Pacurar metro’s suburbs and German auto supplier Kostal Kontakt Systems is Senior Writer planning a $58 million expansion in Rochester Hills. For the first time in the past couple of years, Detroit’s rent growth rate fell below the U.S. average, as the metro absorbed the 2017 supply surge. However, demand is expected to remain healthy during the ongoing resurrection of the city’s core, keeping rent growth roughly on par with the U.S. figure for the foreseeable future. Recent Detroit Transactions Fairlane Town Center Northville Woods City: Dearborn, Mich. City: Northville, Mich. Buyer: Forum Real Estate Group Buyer: M Group Purchase Price: $41 MM Purchase Price: $38 MM Price per Unit: $206,400 Price per Unit: $138,978 Village Green of Waterford Village on the Park City: Waterford, Mich. City: Southgate, Mich. Buyer: RESSCO Buyer: RESSCO Purchase Price: $31 MM Purchase Price: $24 MM Price per Unit: $77,695 Price per Unit: $65,642 On the cover: Photo by ehrlif/iStockphoto.com 2 2010 2011 2010 2012 Transactions: Price Per Unit (Detroit) 3.0% 2011 2013 $160,000 $140,000 2012 Transactions: Price Per Unit (Detroit) 2.5% 2014 $120,000 3.0% $100,000 2013 2015 $160,000 $140,000 2.0% $80,000 2.5% 2014 2016 $120,000$60,000 $100,000$40,000 2015 2017 1.5% $80,000$20,000 2.0% 2016 2018 $60,000 $40,000 1.0% 2017 1.5% $20,000 2018 2010 0.5% 1.0% 2011 2010 2012 0.5% Employment Growth: YoY 6mo-avg2011 (Detroit)Detroit 2013 2012 2014 Supply: Percentage of Stock (Detroit) Employment Growth: YoY 6mo-avg (Detroit)Detroit 2015 2013 National 2014 2016 Jul-16 Supply: Percentage of Stock (Detroit) 2015 2017 3.0% National 2016 2018 2.5% Jul-16 3.0% 2017 2.0% Oct-16 2018 2.5% 1.5% 2.0% Oct-16 1.0% 1.5% Jan-17 0.5% 1.0% Jan-17 0.0% 0.5% Apr-17 Detroit 0.0% Apr-17 Supply: Development Pipeline as of Sep 2018 (Detroit) Detroit Jul-17 2010 2011 2012 2013 2014 2015 2016 2017 2018 YTD National Supply: Development Pipeline as of Sep 2018 (Detroit) Jul-17 2010 2011 2012 2013 2014 2015 2016 2017 2018 YTD National Oct-17 Oct-17 Rent Trends Jan-18 Jan-18 Detroit rents rose 2.0% year-over-year through September, lagging the 3.0% national average. This is Apr-18 the first time in the last two years that the metro’s growth rate fell below the U.S. figure. The average monthly rent increased to $966, continuing to trail the $1,412 national rate. National Apr-18 The working-class Renter-by-Necessity segment led gains, with rents up 2.3% to $924. Growth in the Jul-18 National LifestyleTransactions: sector decelerated Total Volume (Detroit) quickly in 2018, entering negative territory4,504 Units in July and contracting by 1.3% year-over-year as of September, to $1,540. The drop is mainly due to last year’s supply boom, which Jul-18 $600 Detroit took its tollTransactions: as the Total new Volume stock, (Detroit) mostly upscale, was absorbed. 4,504 Units 4,023 Units Dearborn ($1,327$600 average rent), Bloomfield Hills\Birmingham ($1,343), Downtown Detroit ($1,283) Detroit and Troy ($1,256)$400 remain the metro’s most expensive submarkets. With rents up 13.3% to $1,056, 4,023 Units Detroit-East recorded the highest year-over-year hikePlanned as of September. 9,154 Units $400 The metro’s$200 growing economy is expected to attractPlanned more talent looking for modern units in urban areas, with good transit connections and attractive amenities. At the same time,9,154 Units company relocations Prospective and expansions$200 in suburban areas are likely to further fuel housing demand across Detroit’s outer submarkets. We expect rent growth to stay close to the U.S. average in the foreseeable future. $0 Prospective Detroit vs. National Rent Growth $0 Under Construction Rent: YoY vs National (Detroit) 2009 2010 2011 2012 2013 2014 2015 2016Under 2017 Construction 2018 Rent: YoY5.0% vs National (Detroit) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 4.0% 5.0% 3.0% 4.0% 2.0% 3.0% 1.0% 2.0% 0.0% Volume in Millions 1.0% 0.0% Volume(Sequential in Millions 3 Month, Year-Over-Year) Source: YardiMatrix Detroit Rent:Rent Lifestyle Growth vs RBN (Detroit) by Asset Class Number of Properties Rent: Lifestyle6.0% vs RBN (Detroit) Number of Properties 6.0%4.0% 60 4.0%2.0% 60 2.0%0.0% 40 -2.0% 0.0% 40 20 -2.0% Detroit 20 0 Source: YardiMatrix (SequentialDetroit 3 Month, Year-Over-Year) 0 National National Lifestyle Lifestyle Renter-by-Necessity Renter-by-Necessity Detroit Multifamily | Fall 2018 3 Economic Snapshot Detroit added 28,000 jobs in the 12 months ending in July for a 1.0% expansion, trailing the 1.9% national average. The employment growth rate remained flat throughout the year, with variations in the 10-basis-point range. Leisure and hospitality (11,200 jobs added) and manufacturing (7,900) accounted for more than two-thirds of total gains, followed by education and health services (4,200), construction (4,000) and trade, transportation and utilities (4,000). Fueling the city’s staple sector, auto companies continue to relocate or expand in Detroit. GeneralTransactions: Motors Price is Per moving Unit (Detroit) the Cadillac headquarters to the metro, while German auto supplier Kostal Kontakt$160,000 Systems is planning a $57.8 million expansion in Rochester Hills. $140,000 $120,000 Although professional and business services$100,000 and information lost a collective 3,600 jobs in the 12 $80,000 months ending in July, the city continues$60,000 to have a solid office pipeline. Detroit had 2.3 million square feet of office space underway as of mid-November,$40,000 almost three-quarters of it located in or very near $20,000 0 1 2 3 4 5 6 7 8 1 1 1 1 to downtown. This resurgence of the city core is closely01 mirrored01 01 by the multifamily pipeline: Almost 20 20 2 201 20 2 2 201 20 1,600 units came online within three miles of downtown since the beginning of 2016, with an additional Detroit National 1,550 units under construction. Although downtown Detroit’s rebound has been more of a mixed bag 0 1 2 3 4 5 6 7 8 during the1 past1 couple of years, the area remains one of the metro’s strong economic points. 01 01 01 01 01 01 2 20 2 20 2 201 2 2 2 Detroit vs. National Employment Growth (Year-Over-Year) Employment Growth: YoY 6mo-avg (Detroit) 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 6 7 7 8 8 -1 -16 -17 1 -1 -17 -1 1 -18 n r- n r- ct a ct a Jul O J Ap Jul O J Ap Jul Detroit National Sources: YardiMatrix, Bureau of Labor Statistics (not seasonally adjusted) Supply: Percentage of Stock (Detroit) 3.0% Detroit Employment Growth by Sector (Year-Over-Year) 2.5% Current Employment Year Change Code2.0% Employment Sector (000) % Share Employment % 701.5%Leisure and Hospitality 219 10.8% 11,200 5.4% 30 Manufacturing 253 12.5% 7,900 3.2% 1.0% 65 Education and Health Services 315 15.6% 4,200 1.4% 400.5%Trade, Transportation and Utilities 372 18.4% 4,000 1.1% 150.0%Mining, Logging and Construction 82 4.1% 4,000 5.2% 2010 2011 2012 2013 2014 2015 2016 2017 2018 YTD 55 Financial Activities 117 5.8% 400 0.3% 80 Other Services National 77 Detroit 3.8% - 0.0% 90 Government 174 8.6% -100 -0.1% Supply:50 DevelopmentInformation Pipeline as of Sep 2018 (Detroit) 27 1.3% -900 -3.2% 60 Professional and Business Services 389 19.2% -2,700 -0.7% Sources: YardiMatrix, Bureau of Labor Statistics 4,504 Units 4,023 Units Detroit Multifamily | Fall 2018 4 9,154 Units Planned Prospective Under Construction Transactions: Total Volume (Detroit) $600 60 $400 40 $200 20 $0 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Volume in Millions Number of Properties Rent: YoY vs National (Detroit) 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Detroit National Rent: Lifestyle vs RBN (Detroit) 6.0% 4.0% 2.0% 0.0% -2.0% Lifestyle Renter-by-Necessity Demographics Affordability The median home price in Detroit peaked this year at $156,720, up 7.0% over 2017 and roughly double the values of 2009 and 2010, when the market bottomed out.
Recommended publications
  • Living and Investing in The

    Living and Investing in The

    DETROIT BUSINESS MAIN 08-11-08 B 49 CDB 8/6/2008 12:58 PM Page 1 www.crainsdetroit.com Vol. 24, No. 32a Fall 2008 www.crainsdetroit.com Living and investing in the FillingD in the gaps ■ Catalysts for ■ Selling ■ New Detroit: mass neighborhood restaurants in transit, urban buying power Midtown, farming Corktown CDBmagazine.qxp 7/16/2008 11:08 AM Page 1 Together, we can change the future. All it takes is working harder — and smarter. Bank of America is proud to support Crain’s House Party for reaching out and making this community a better place for all of us. Visit us at www.bankofamerica.com. Bank of America, N.A. Member FDIC. Equal Housing Lender ~ © 2008 Bank of America Corporation. All rights reserved. SPN-71 DETROIT BUSINESS MAIN 08-11-08 B 1 CDB 8/6/2008 5:44 PM Page 1 Living and Investing intheD Vol. 24, No. 32a ON THE COVER: Table of Contents Counterclockwise from top left: Book Cadillac Mary Kramer building; Justin Mooter, Optimism amid turmoil. Detroit is making progress, Royal Container Inc. but it needs to fill its political leadership gap. Page 2. general manager and downtown renter; RiverWalk; Cindy The Corridors Warner, managing A development report from Woodward, Michigan and Gratiot partner of Northpointe avenues, and Detroit’s Page 8 Food Ventures, parent riverfront: new lofts, company of Zaccaro’s restaurants and collaborative Market. projects. Page 4. ABOUT THIS The Catalysts ISSUE: Tipping-point Detroit initiatives: urban farming, the Living and Investing Dequindre Cut recreation in the D was edited path, new retail and mass by Assistant transit.
  • Bill Clinton My Life

    Bill Clinton My Life

    Bill Clinton My Life ALFRED A. KNOPF NEW YORK 2004 To my mother, who gave me a love of life To Hillary, who gave me a life of love To Chelsea, who gave joy and meaning to it all And to the memory of my grandfather, who taught me to look up to people others looked down on, because we’re not so different after all PROLOGUE W hen I was a young man just out of law school and eager to get on with my life, on a whim I briefly put aside my reading preference for fiction and history and bought one of those how-to books: How to Get Control of Your Time and Your Life, by Alan Lakein. The book’s main point was the necessity of listing short-, medium-, and long-term life goals, then categorizing them in order of their importance, with the A group being the most important, the B group next, and the C the last, then listing under each goal specific activities designed to achieve them. I still have that paperback book, now almost thirty years old. And I’m sure I have that old list somewhere buried in my papers, though I can’t find it. However, I do remember the A list. I wanted to be a good man, have a good marriage and children, have good friends, make a successful political life, and write a great book. Whether I’m a good man is, of course, for God to judge. I know that I am not as good as my strongest supporters believe or as I hope to become, nor as bad as my harshest critics assert.
  • National Register of Historic Places

    National Register of Historic Places

    National Register of Historic Places Resource Name County Fort Schuyler Club Building Oneida Unadilla Water Works Otsego Smith-Taylor Cabin Suffolk Comstock Hall Tompkins Hough, Franklin B., House Lewis Teviotdale Columbia Brookside Saratoga Lane Cottage Essex Rock Hall Nassau Kingsland Homestead Queens Hancock House Essex Page 1 of 1299 09/26/2021 National Register of Historic Places National Register Date National Register Number Longitude 05/12/2004 03NR05176 -75.23496531 09/04/1992 92NR00343 -75.31922416 09/28/2007 06NR05605 -72.2989632 09/24/1984 90NR02259 -76.47902689 10/15/1966 90NR01194 -75.50064587 10/10/1979 90NR00239 -73.84079851 05/21/1975 90NR02608 -73.85520126 11/06/1992 90NR02930 -74.12239039 11/21/1976 90NR01714 -73.73419318 05/31/1972 90NR01578 -73.82402146 11/15/1988 90NR00485 -73.43458994 Page 2 of 1299 09/26/2021 National Register of Historic Places NYS Municipal New York Zip Latitude Georeference Counties Boundaries Codes 43.10000495 POINT (- 984 1465 625 75.23496531 43.10000495) 42.33690739 POINT (- 897 465 2136 75.31922416 42.33690739) 41.06949826 POINT (- 1016 1647 2179 72.2989632 41.06949826) 42.4492702 POINT (- 709 1787 2181 76.47902689 42.4492702) 43.78834776 POINT (- 619 571 623 75.50064587 43.78834776) 42.15273568 POINT (- 513 970 619 73.84079851 42.15273568) 43.00210318 POINT (- 999 1148 2141 73.85520126 43.00210318) 44.32997931 POINT (- 430 303 2084 74.12239039 44.32997931) 40.60924086 POINT (- 62 1563 2094 73.73419318 40.60924086) 40.76373114 POINT (- 196 824 2137 73.82402146 40.76373114) 43.84878656 POINT (- 420 154 2084 73.43458994 Page 3 of 1299 09/26/2021 National Register of Historic Places Eighth Avenue (14th Regiment) Armory Kings Downtown Gloversville Historic District Fulton Rest Haven Orange Devinne Press Building New York Woodlawn Avenue Row Erie The Wayne and Waldorf Apartments Erie Bateman Hotel Lewis Firemen's Hall Queens Adriance Memorial Library Dutchess Shoecroft, Matthew, House Oswego The Dr.
  • 37"? /I&Td W 9I

    37"? /I&Td W 9I

    37"? /i&td W 9i MAIL ORDER MUSIC: THE HINNERS ORGAN COMPANY IN THE DAKOTAS, 1879-1936 DISSERTATION Presented to the Graduate Council of the University of North Texas in Partial Fulfillment of the Requirements For the Degree of DOCTOR OF PHILOSOPHY By Allison A. Alcorn-Oppedahl, B.Mus., M.M. Denton, Texas August, 1997 37"? /i&td W 9i MAIL ORDER MUSIC: THE HINNERS ORGAN COMPANY IN THE DAKOTAS, 1879-1936 DISSERTATION Presented to the Graduate Council of the University of North Texas in Partial Fulfillment of the Requirements For the Degree of DOCTOR OF PHILOSOPHY By Allison A. Alcorn-Oppedahl, B.Mus., M.M. Denton, Texas August, 1997 CR Alcorn-Oppedahl, Allison Ann, Mail Order Music: the Hinners Organ Company in the Dakotas. 1879-1936. Doctor of Philosophy (Musicology), August, 1997, 559 pp., 6 tables, 2 maps, 173 plates, references, 266 titles. Founded in 1879 by John L. Hinners, the Hinners Organ Company developed a number of stock models of small mechanical-action instruments that were advertised throughout the Midwest. Operating without outside salesmen, the company was one of the first to conduct all of its affairs by mail, including the financial arrangements, selection of the basic design, and custom alterations where required. Buyers first met a company representative when he arrived by train to set up the crated instrument that had been shipped ahead of him. Tracker organs with hand-operated bellows were easily repaired by local craftsmen, and were suited to an area that, for the most part, lacked electricity. In all, tl e company constructed nearly three thousand pipe organs during its sixty years of open tion.
  • Dbra-Cac Regular Meeting Minutes

    Dbra-Cac Regular Meeting Minutes

    DETROIT BROWNFIELD REDEVELOPMENT AUTHORITY MINUTES OF THE REGULAR COMMUNITY ADVISORY COMMITTEE MEETING WEDNESDAY, JUNE 24, 2020 - 5:00 PM HELD VIA ZOOM COMMITTEE MEMBERS PRESENT: Simone Sagovac Kamal Cheeks Rick Blocker Brad Lutz Peter Rhoades Allen Rawls Rico Razo COMMITTEE MEMBERS ABSENT: Dr. Regina Randall Michelle Lee OTHERS PRESENT: Jennifer Kanalos (DEGC/DBRA) Brian Vosburg (DEGC/DBRA) Cora Capler (DEGC/DBRA) Malinda Jensen (DEGC) Ginny Dougherty (PM Environmental) Mike Abdulnoor (Downtown Hospitality Detroit) Mario Kiezi (Downtown Hospotality Detroit) John Hambrick (JGH Consulting) Ngozi Nwaesei (Lewis & Munday) Call to Order Mr. Cheeks, Chairperson, called the meeting to order at 5:02 p.m. Ms. Kanalos took a roll call of the CAC Members present. General Approval of Minutes Mr. Cheeks called for approval of the minutes of the June 23, 2020 (resolution) DBRA-CAC meeting, as presented. The Committee took the following action: Mr. Rawls made a motion approving the minutes of the June 23, 2020 Board meeting, as presented. Mr. Lutz seconded the motion. A roll call vote was conducted with the following result: Ayes: Mr. Blocker, Mr. Cheeks, Mr. Lutz, Mr. Rawls, Mr. Razo, Ms. Sagovac, Mr. Rhoades Nays: None. DBRA-CAC Resolution Code 20-06-02-152 was approved. Projects Brownfield Plan for the Royal Palm Detroit Mr. Vosburg presented the Brownfield Plan for the Royal Palm Detroit. Project Introduction Downtown Hospitality Detroit, LLC is the project developer (the “Developer”) for the Plan. The project is a planned rehabilitation of the existing 13-story historic Park Avenue House located at 2305 Park Avenue which was designed by Louis Kamper and constructed in 1924.
  • The Struggle Is Real

    The Struggle Is Real

    VOL. 7 / Issue 2 N 2 o 0 v 1 THE e 5 m b ME TRO e r POLITAN The Struggle is Real IG: themetdet / www.themetdet.com / dÉtroit EDITOR'S NOTE THE STRUGGLE IS REAL This issue, a simple thank you to those family and friends who have helped to make my life more interesting. Like everyone, I’ve been through some difficult moments and it’s good to know there are a few who will take the time to help me navigate. Many thanks to our staff, and to those contributors, who have helped to document the city and its people, or who have produced original pieces of work. I appreciate all of the effort from every writer, photographer, designer, distributor, model, stylist, and makeup artist. Each of you is valued beyond my means to express. Much appreciation to our advertisers, sponsors, and stockists, all of whom have helped to build The Metropolitan community. And, of course, I must offer my deepest appreciation to those of you who continue to pick up The Metropolitan in and around the Detroit area. It gives me a certain amount of satisfaction to hear business owners say that our independent publication moves faster than any other on their shelves. It’s also fun to stop into a coffee shop to see the stack of Metropolitans dwindling throughout the month. I’m left wondering who has picked it up, and what their thoughts are on the issue. I’m also thankful for the many emails we receive, our social media correspondence, and for those of you who take the time to stop me in the street to introduce yourself.