Multi-Family Market Summary: Spring 2015

Transcription

1 Tallahassee, FL Multi-Family Market Summary: Spring 2015

2 Contents TALLAHASSEE Introduction Introduction 2 Market Commentary 3 Economic Overview 4 Sales Transactions 5 Development Pipeline 7 Why Choose Capstone? 8 Legacy Suites Arbor Landing at Lake Jackson CAPSTONE APARTMENT PARTNERS prides itself on the continual value contributions we are able to offer our industry; thus, we produce periodic Multi-Family Market Summaries to further inform the clients and industry we serve. Capstone believes this market snapshot will benefit current owners, operators, investors, and other industry professionals who are active in the Tallahassee MSA, as well as others who are looking to break into this market. FLORIDA TEAM Orlando Office 111 N. Orange Ave. Suite 1125 Orlando, FL Tampa Office 208 N. Armenia Ave. Suite B Tampa, FL Enon Winkler Partner [email protected] Deucie Bies Investment Advisor [email protected] Jad Richa Investment Advisor [email protected] Brian Hunsicker Investment Advisor [email protected] 2

3 Economic & Multi-Family Fundamentals The Tallahassee MSA experienced terrific job gains over the past 24 months, with more than 8,500 jobs introduced market-wide according to the Bureau of Labor Statistics. As of December 2014, the unemployment rate reached a pre-recession level of 5.0%. The region s economic base is mostly education and health-related, with top employers including the state government, Florida State University, Leon County Schools, and Tallahassee Memorial Healthcare. The occupancy rate in Tallahassee has improved to 92.7% over the past year, which is a six-year high for the region. Continued high demand for apartments has resulted in the positive absorption of 789 units over the last year, with an average rent of $1,056. Rent growth is gaining momentum with same-unit increases of 1.7% in 2014, compared to only 0.8% in 2013 and a decline in Development in the area has also remained active over the last twelve months with the completion of 1,112 new units, which are primarily located in the Southwest quadrant of the city. The majority of planned development is student housing and located near Florida State University. Throughout the next months, Capstone anticipates the occupancy rate will continue to improve and rent growth to increase at a pace of 2.5%-3.0% annually. Apartment Comparison by Class Class Units Vacancy Rate Avg. Sq. Ft. Avg. Rent Avg. Rent/Sq. Ft. Lease-up 1, % 1,122 $1,714 $1.53 A (1-5 Years in Age) 1, % 1,218 $1,820 $1.49 B (6-15 Years in Age) 5, % 1,249 $1,212 $0.97 C (16-30 Years in Age) 6, % 1011 $941 $0.93 C- (30+ Years in Age) 7, % 845 $770 $0.91 Stabilized Averages 20, % 1,030 $1,018 $0.99 Totals/Averages 21, % 1,035 $1,056 $1.02 MARKET COMMENTARY 3

4 Employment ECONOMIC OVERVIEW Recent Economic Announcements The Tallahassee region has added more than 8,500 jobs over the past two years. The largest area employer is Florida State University. The most recent enrollment at Florida State University s main campus was 39,563, compared to 35,572 in 2009; thus representing a student population growth of 11% over the past five years. Florida State University has recently launched the public phase of a $1 billion dollar fundraising campaign. The goal for the Raise the Torch campaign is to improve the student experience and continue to facilitate economic growth in the region. This is an ongoing effort that will end by June of Past fundraising campaigns have exceeded their financial goals. Wages & Population In December 2014, the Tallahassee MSA experienced its lowest unemployment rate since May 2008 at 5.0%. The MSA s average is lower than both the state average of 5.7%, as well as the national unemployment rate of 5.6%. 10 Largest Employers in Richland County Rank Company Industry Employment 1 Florida State University Education 6,119 2 Leon County Schools Education 4,550 3 Tallahassee Memorial HealthCare Healthcare 3,190 4 City of Tallahassee Government 8,820 5 Publix Supermarket Grocery 2,102 6 Florida A&M University Education 1,923 7 Walmart Stores Retail 1,300 8 Capital Regional Medical Center Healthcare Capital City Bank Group Financial Century Link Communications 278 There are 156,530 employees in the MSA who earn a mean hourly wage of $19.93 and an average annual income of $41,450. In comparison, the state s yearly income average is lower at $41,140 and the national annual salary mean is a tad higher at $46,440. Historical Population Tallahassee 160, , , , , , , , , ,254 Tallahassee (MSA) 336, , , , , , , , , ,255 Florida 17,375,259 17,783,868 18,088,505 18,277,888 18,423,878 18,537,969 18,846,054 19,083, ,207,490 19,552,860 Source: U.S. Census Bureau 4

5 Sales Transactions: 2014 to Present Community YOC City Sale Date Units Sale Price Price Per Unit Oak Pointe 1993 Tallahassee 1/15/ $9,600,000 $52,174 Tanglewood 1974 Tallahassee 10/1/ $5,250,000 $46,875 Chapel Terrace 1975 Tallahassee 7/31/ $5,800,000 $51,327 Park at Midtown 2000 Tallahassee 7/31/ $8,628,800 $51,362 Osceola Ridge 1991 Tallahassee 7/31/ $6,501,200 $34,398 Park at Forest Ridge 1999 Tallahassee 7/31/ $13,119,100 $45,552 University Heights 2001 Tallahassee 7/31/ $13,119,900 $40,494 Reserve at Heritage Oaks 2001 Tallahassee 7/31/ $36,947,700 $83,216 Silverleaf East 1990 Tallahassee 7/23/ $2,000,000 $31,250 Landmark 1968 Tallahassee 7/23/ $4,475,000 $34,961 Enclave at Huntington Woods 1997 Tallahassee 5/22/ $11,650,000 $63,315 Oasis at Tallahassee 5/22/ $18,600,000 $66,429 West Tallahassee 5/21/ $40,050,000 $128,365 University Trails 2003 Tallahassee 5/1/ $24,250,000 $103,632 Pebble Hill 1991 Tallahassee 4/8/ $4,900,000 $45,370 Mission West 1983 Tallahassee 2/12/ $2,980,000 $26,140 Legacy Suites 2008 Tallahassee 1/29/ $15,337,700 $106,512 U Club on Woodward West 10 SALES TRANSACTIONS 5

6 Average Transaction Sales Price Average Price Per Unit $25,000,000 $23,055,683 $90,000 $85,597 $80,000 SALES TRANSACTIONS $20,000,000 $15,000,000 $13,129,965 $9,481,471 $10,000,000 $4,626,250 $5,000,000 $0 Class A Class B Class C AVERAGE Average # of Units Per Transaction $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $ $59,493 $48,355 $39,826 Class A Class B Class C AVERAGE Average Year of Construction Class A Class B Class C AVERAGE 1960 Class A Class B Class C AVERAGE Class A represents properties built from and renovated assets, Class B includes properties constructed from , and Class C signifies properties constructed in 1984 or earlier. 6

7 Communities Proposed (100 Units and Above) Developer Community Units Road/Intersection Submarket 1 Arbor Properties Arbor Landing at Lake Jackson Monroe St. Northwest 2 American Realty Advisors Apalachee Point 200 Southwood Plantation Rd. Southeast 3 Evergreen Residential Evergreen at Southwood 280 Orange Ave. Southeast 4 Campus Acquisitions Onyx College Ave. Southwest Communities Under Construction (100 Units and Above) Developer Community Units Road/Intersection Submarket 5 American Campus Communities U Club on Woodward West Brevard St. Northwest DEVELOPMENT PIPELINE 7

8 Carolinas Georgia Virginia Tennessee Kentucky Alabama Florida West Virginia The People Sell the Deal WHY CHOOSE CAPSTONE? Capstone s Southeast & Mid-Atlantic Investment Sales Team is among the market leaders within our industry sector and respective region. We place client service above all else, and can guarantee that no one else will work smarter and harder in achieving the highest level of results for our clients. We don t rely on a logo to sell the deal, but rather utilize the industry expertise and investment acumen, tremendous drive and work ethic, and unbeatable salesmanship of the team members assigned to each project. At the end of the day, it s the individuals that drive value and sell the deal, and we know the capabilities of our individual team members are second to none. Market Expertise & Product Niche Capstone sits atop the private capital sector of multi-family investment sales for multiple reasons. Our deliberate and concentrated focus and expertise in not just the primary markets of the Southeast & Mid-Atlantic, but also the secondary and tertiary markets within our region, identifies us as the ideal candidate for such assignments. Capstone s investment sales team has completed a multitude of transactions across the primary, secondary, and tertiary markets of the Southeast & Mid-Atlantic, and our track record of success can be attributed to our comprehensive coverage and expertise among these markets, as well as our relationships with the owners and investors who remain active in this environment. National Exposure via Cutting Edge Technology Capstone has developed and maintains industry leading national databases, expansive information delivery methodologies, and various proprietary activity tracking systems. These tools are utilized daily by the investment sales team, analysts, and back-office support staff allowing for optimal operational efficiency. This enables Capstone s investment brokerage team to spend nearly all of its time servicing clients, interacting with industry players and active asset traders, and promoting transactions. Reputation and Results Capstone prides itself on its impeccable industry reputation and the core values and behaviors of the firm that drive daily operations. The firm possesses an unblemished reputation and track record industry-wide, and, as such, the firm s trusted relationships among the apartment investment community continue to facilitate seamless, fluid, and successful sales transactions. ** Information in this report has been provided by the following resources: The Tallahassee Data Report October 2014, REIS Report, Costar, Business Journals, Loopnet, Bureau of Labor Statistics, county tax records, and various multi-family industry contacts. Area images provided by Jackson Myers (pg. 1) via and Zverzver (pg. 3) via Wikimedia Commons. 8