Oklahoma City Multifamily Market Summary 2007 TABLE OF CONTENTS Multifamily Market Summary 1-2 Multifamily Submarket Map 3 Northwest Submarket 4-6 North-Central Submarket 7-9 South Submarket 10-11 Edmond Submarket 12-13 MWC / Del City Submarket 14-15 Mustang / Yukon Submarket 16-17 Moore / Norman Submarket 18-20 Student Housing 20 New Construction 20 Market Sales Data 21 Sales Summary Back Cover The information contained herein has been obtained from reasonably reliable sources. Price Edwards & Company makes no guarantee, either express or implied, as to the accuracy of such information. All data contained herein is subject to errors, omissions and changes. Reproduction in whole or in part, without prior written consent is prohibited. Oklahoma City 2007 Multifamily Market Summary elcome to the 2007 Price Edwards & Company Multifamily Market “In 2007, the Central Oklahoma Home Builders Association WSummary. This report has been a staple to investors, managers, and tracked 5,829 permits for new houses as compared to 6,478 consultants for the past 19 years. Our thanks to everyone who has responded in 2006.” to help make this the most complete survey possible. We appreciate your cooperation and comments. New construction of single-family homes continues to have an impact on the multifamily housing in the Metropolitan area. In 2007, the Central This and past surveys are available online on our website at: Oklahoma Home Builders Association tracked 5,829 permits for new houses www.priceedwards.com. as compared to 6,478 in 2006. This represents a decrease of 11%. As this trend continues and is augmented by more stringent loan underwriting, In 2007, the Multifamily Oklahoma City Multifamily Rental Rates first time home buyers, as well as certain other buying groups, may find $0.90 ($ per SF) Division of Price Edwards it increasingly difficult to finance a single family home and will therefore EFF 1 Bed 2 Bed 3 Bed & Company surveyed 233 choose to remain in rental housing. $0.80 multifamily properties containing 49,432 units in the Historically over the past 10 years, the Oklahoma City multifamily market has $0.70 Oklahoma City metropolitan absorbed around 1,000 new units per year; however, in 2006, only 575 new area. Aggregate rental units came online. In 2007, Oklahoma City saw approximately 1,031 new $0.60 rates for the Oklahoma City units with another 728 under construction and 622 in the planning stages. Metropolitan Statistical Area $0.50 '01 '02 '03 '04 '05 '06 '07 (MSA) showed an increase of “In 2007, Oklahoma City saw approximately 1,031 new units 3 percent on a per square foot with another 728 under construction and 622 in the planning basis from $0.62 in 2006 to stages.” $0.65 in 2007. This increase represents a five year trend of positive rental growth from $0.58 in 2003 to the $0.65 in 2007. At the same time, the New multifamily properties Oklahoma City Multifamily overall occupancy rate remained stable at 91 percent. Over the last five coming online in 2007 1200 New Units (Built/Planned in 2007) years, the occupancy has fluctuated between 90 and 91 percent. Measured were: Villas at Stonebridge, 1080 rental growth, coupled with a stable occupancy, characterizes the strength 248 units, located at 157 960 840 and to some extent the attraction of the Oklahoma City Metropolitan area Stonebridge Boulevard in 720 multifamily market. North Oklahoma City, east of 600 I-35; Phase 2 is still under 480 “...surveyed 233 multifamily properties containing 49,432 360 construction and in the pre- 240 units in the Oklahoma City metropolitan area.” lease stage. When completed, 120 0 it will have a total of 472 North CBD Edmond South As in the multifamily Oklahoma City Multifamily units. The 276 unit, Lincoln market, the Oklahoma City 100% Historical Occupancy at Central Park, located at 500 Metropolitan area posted 90% Central Park Drive, began leasing in 2007, and the former Citizens Tower positive gains in 2007. Total 80% office building located at 2200 N. Classen Boulevard was converted into 66 70% employment in the MSA 60% luxury apartment units and opened in 2007. grew 1.7 percent over 2006. 50% Oklahomans personal income 40% The Central Business District saw the 2007 opening of two apartment grew 1.8 percent, topping the 30% 20% properties, one new construction and the other a conversion of a 1957 office national rate of 1.4 percent, 10% building. The new 303 unit, mixed use, Legacy at Arts Quarter, located at 0% and the metropolitan area '03 '04 '05 '06 '07 Robert S. Kerr and Walker, came online in mid-summer. Also coming online again experienced a positive in mid-summer is the Park Harvey Apartments which are located at 200 N. in migration of 1.3 percent. Harvey. With 176 units, Park Harvey Apartments is a conversion of the 17 Area wide employment continues to be strong in the government, health, story, Park Harvey Center. The Sieber Apartment Hotel is another mid-town service and education sectors, as well as in the energy sector. According to conversion that is underway. The 6 story hotel was built in 1928 and when the most recent cost of living survey conducted by the American Chamber completed in 2008 will have 38 apartment units. of Commerce Researchers Association, Oklahoma City remains one of the most affordable major metropolitan areas in which to live. In the same Edmond has two new multifamily properties under construction. The vein, Places Rate Almanac cited Oklahoma City as one of the “Best Places to Enclave near the southwest corner of Covell and Kelly will have 150 units, Live in North America.” and Bryant Place Apartments at Bryant and Kickingbird will have 112 units. 1 Edmond also has two properties still in the planning stages. Summit Groves at 2nd and Western will have 140 units, and developers of Fountain Lake at Memorial and Boulevard plan 302 units. In south Oklahoma City, developers are planning a 180 unit apartment property, Summit Pointe Plaza, to be located at SW 89th Street and South Western Avenue. “...between 2007 and 2020, experts predict a rental housing boom unseen since the 1970s and 1980s.” Oklahoma City Multifamily Price Edwards & Company 20% Largest Renter Age Groups is bullish on the future of (% of Total Renters) multifamily housing in the 16% Metropolitan area. According 12% to national projections by the Joint Center for Housing 8% Studies at Harvard University, two million new households 4% will be formed between 0% Ages 25-34 Ages 35-44 Ages 45-54 2005 and 2015 in the United States. According to Leanne Lachman, an authority on real estate demographic trends, between 2007 and 2020 experts predict a rental housing boom unseen since the 1970s and 1980s. Feeding this growth is the group referred to as the Gen Y generation with estimates of 4 million Americans turning 18 in 2008. Young people, immigrants, and minorities make up the largest pool of renters. According to the 2000 census, 30% of all U.S. households rent; however, again according to the 2000 census, 40.55 percent of residents in the Oklahoma City Metropolitan area are renters with a median age of 34. Also, the Metro’s largest population group, 42.95 percent, is between the ages of 25 to 54 followed by 36.28 percent in the pre- twenty five age group, and the remaining 19. 77 percent falls into the 55 and over group. In looking at the demographics and the overall health of the local multifamily market, the Oklahoma City multifamily market may well be the bright spot in the local real estate economy. Total Estimated Average Rent/Sq Ft Submarket Units Occupancy EFF 1 Bed 2 Bed 3 Bed Edmond 2,975 96% $0.92 $0.74 $0.64 $0.68 Midwest City / Del City 5,850 92% $0.79 $0.64 $0.58 $0.58 Moore / Norman 6,511 94% $0.78 $0.72 $0.65 $0.63 Mustang / Yukon 1,878 96% $0.81 $0.64 $0.61 $0.59 North-Central OKC 11,216 91% $0.81 $0.71 $0.65 $0.64 Northwest OKC 13,380 86% $0.81 $0.65 $0.59 $0.58 South OKC 7,622 91% $0.76 $0.69 $0.62 $0.57 Market Totals 49,432 91% $0.80 $0.68 $0.62 $0.60 2 Submarket Map Submarket 3 Oklahoma City 2007 Multifamily Market Summary Northwest Oklahoma City Submarket Northwest -vs- Total Market The Northwest Submarket is defined by the Lake Hefner Parkway, the Kilpatrick Turnpike Loop on the west, NW 150th Street and Interstate 40. Several Vocational Education Centers as well as Oklahoma State University’s Oklahoma City Campus and Southern Nazarene University are situated here. With 13,380 units, this is one of 27% the largest submarkets in the Oklahoma City Market. Occupancy decreased 4% from 90% to 86%; however, rental rates showed increases across the board. 73% CurreNT MarKet • 13,380 Units Studied • Aggregate Vacancy is 14% Northwest Historical Occupancy • Aggregate available rental rates are: 100% 2001-2007 Efficiency $0.81 One Bedroom $0.65 90% Two Bedroom $0.59 Three Bedroom $0.58 80% 2008 Forecast '01 '02 '03 '04 '05 '06 '07 • Occupancies will struggle as owners continue to rehab older properties • Rental rates will continue to rise as owners complete renovations Northwest Rental Rates ($ per SF) and seek to reposition properties $0.90 EFF 1 Bed 2 Bed 3 Bed Northwest $0.80 $0.70 $0.60 $0.50 $0.40 '01 '02 '03 '04 '05 '06 '07 4 The Villas on Meridian Oklahoma City 2007 Multifamily Market Summary Northwest Oklahoma City Submarket Average Rent/Sq Ft Northwest OKC Year Built Units Occupied EFF 1 Bed 2 Bed 3 Bed 23rd Street Station - 5700 NW 23rd St, OKC 1971 259 70% $0.80 $0.64 $0.52 $0.58 Arbor Glen - 4638 NW 19th St, OKC 1976 158 87% n/a $0.56 $0.53 $0.50 Archway Villas - 7626 NW 10th St, OKC 1971 96 68% n/a $0.58 $0.55