2016 MultiFamily Presentation

2016
PRESENTED BY
BEAU BOURQUE
Van Eaton & Romero
NAI Latter & Blum
NATIONAL MARKET PERFORMANCE
SUPPLY - 306,000 units were completed in 2015; the most in a single year since
1989
PERFECT STORM OF DEMAND
Source: Freddie Mac Multifamily Outlook 2016
2016
Space Markets
Annual Renter & Owner Household Formations & Homeownership Rate
Source: Freddie Mac Multifamily Outlook 2016
2016
NATIONAL MARKET PERFORMANCE
SUPPLY - 306,000 units were completed in 2015; the most in a single year since
1989
PERFECT STORM OF DEMAND
Space Markets
Capital Markets
Occupancies and Rent Growth
remained strong. This coupled
with another year of historically
low interest rates continued to
reign in investment capital,
keeping average Cap Rates
around 6% or lower and
yielding investors a satisfactory
return.
Source: Freddie Mac Multifamily Outlook 2016
2016
PRODUCT TYPES
Lafayette Parish
Class A
Class B
Class C
Mobile Home Park
Senior & Assisted Living
Student Housing
2016
SCOPE OF RESEARCH
Lafayette Parish | Class A & B | 50+ Unit Complexes
Class A
Characteristics
• Less than 15 years old
• Trendy Design
• High-Income Earning Tenants
• Resort-style amenities
• Upgraded appliances
• 1 and/or 2 car garages
• Demand the highest rent
• Little or no deferred maintenance
• Trade at lowest CAP Rates
Complexes: 15
Total Units: 3,038
Sample Size: 2,422
Class B
Characteristics
• More than 15 years old
• Middle-Income Earning Tenants
• Fitness Center(s)/Pools(s)/Tennis Complexes: 30
Court(s)
Total Units: 6,594
• Older / Basic Appliances
Sample Size: 5,998
• Common Laundry Facilities
• Lower rents than Class A w/some
deferred maintenance issues
• Trade at higher CAP Rates than
Class A
2016
SUPPLY
# of Existing Units
Owner vs. Renter Occupied
Housing Units
Total Units
(50+ Unit A & B Complexes)
A
2,958
9,136
36,303
57,543
B
6,178
Owner
2016
Renter
SUPPLY
# of New Units
(according to permits issued)
1,045
1262
476
266
280
242
268
173
2006
2016
2007
2008
2009
2010
2011
2012
2013
2014
2015
DEMAND
UNEMPLOYMENT RATE
(Low Unemployment = Low Vacancy)
12.0
10.0
Percent
8.0
6.0
4.0
2.0
0.0
2006
2016
2007
2008
2009
2010
2011
2012
2013
National Unemployment
State Unemployment
Lafayette Unemployment
Lafayette Vacancy Rate
2014
2015
OCCUPANCY RATES
(Class A & B)
99%
97%
96%
95%
95%
94%
95%
94%
90%
89%
2006
2016
2007
2008
2009
2010
2011
2012
2013
2014
2015
CLASS A RENTS
1, 2, and 3 Bedroom
($/month)
$1,600
$1,400
$1,200
$1,000
$800
$600
$400
$200
$0
2012
2013
1 Bedroom
2016
2014
2 Bedroom
3 Bedroom
2015
CLASS B RENTS
1, 2, and 3 Bedroom
($/month)
$1,200
$1,000
$800
$600
$400
$200
$0
2012
2013
1 Bedroom
2016
2014
2 Bedroom
3 Bedroom
2015
SUBMARKETS
Units / Avg. Occupancy Rate
North Lafayette (720/90%)
Downtown (0)
Midtown (2511/90%)
Ambassador at Johnston (2,255/91%)
Vermillion to Verot (2,759/88%)
Verot to Hwy 89 (808/88%)
Youngsville/Broussard (397/93%)
2016
NEW DEVELOPMENT
La Veranda
•
•
•
•
•
•
2016
228 Apartment Units
Units Feature built-in desks,
stainless steel appliances,
granite countertops, walk-in
closets, and wood flooring
throughout
Clubhouse w/conference room
game room and theatre
Target Market – Young Managers
and Executives earning b/t
$40,000 and $90,000 per year
Dog Park / Pet Center
Children’s Playground / Rec BBQ
and Picnic Area
NEW DEVELOPMENT
Robley Place
• 248 Apartment Units
• High-end appliances
and finishes
• Clubhouse w/ game
room and business
room
• Pool & Fitness Center
• Washer & Dryer
hook-ups in each unit
2016
TRANSACTION ACTIVITY
•
•
•
•
•
•
•
•
•
2016
Class B
384
12.4 acres
Two-Story Buildings
Brick & Siding Exterior
Sale Price - $22,075,000
$57,487 / unit
Value-Add Opportunity
Ownership currently
undergoing a multitude
of upgrades
CONCLUSION
•
476 new Class A Units completed by the end of 2016, with
another 650 units permitted and set for completion in 2017
• Unemployment Increase + New Supply => Another Slight
Decrease in Overall Occupancy Rates by end of 2016
• Understanding Tapestry Segmentation and offering amenities to
the target market will help owners attract the pool of tenants
that exist in our current market
• Capitalization Rates bottomed out in 2015 and should increase
at least 50 basis points in our market, as investors associate
lower occupancy rates with higher risk
2016