GREATER SALT LAKE AREA MULTIFAMILY MARKET REPORT · CBRE consistently leads the market, with...

2017GREATER SALT LAKE AREA MULTIFAMILY MARKET REPORT

Salt Lake • Utah • Davis • Weber

APRIL

CBRE is pleased to release the April 2017 Greater Salt Lake City Area Multifamily Market Report, the most current and comprehensive multifamily data available for the Salt Lake Area/Wasatch Front market. Produced by Patrick Bodnar and Eli Mills of CBRE, this report has been assembled to empower the decision making of all multifamily professionals interested in the Utah market.

This report has been prepared with current data sourced form a comprehensive survey of over 60,000 units along the Wasatch Front Area inclusive of Salt Lake, Utah, Davis and Weber counties. Minimum reporting requirements were identified for each city and county by class, type and size.

As the global leader in commercial real estate, CBRE understands the critical nature of transparency in a marketplace. In this report we have averaged the difference between 2014 and 2016 to establish the 2015 historical numbers as no data was collected for this year. Additionally, the data was compared to—and validated by—the most trusted local and national data sources.

Data contributions and validations to this publication were made by:

Whatever your multifamily data needs may be, please feel free to reach out to us. We have the most comprehensive data on the market and can provide information on a macro or micro level based on class, city, submarket, zip code, location, age, size, proximity to rail stops, and many other variations.

CBRE consistently leads the market, with multifamily investment sales totaling over $28.8 Billion in 2016 (Source: Real Capital Analytics). By consistently closing over double the volume of the nearest competitor, the network and exposure of CBRE is second to none. With 65 locations and over 300 multifamily professionals, including direct lending services, CBRE’s unparalleled multifamily platform has a competitive presence in Utah and an enhanced investment reach into the multifamily space here in the mountain west region, providing our clients with the greatest market exposure available.

We welcome your inquiries into the Utah multifamily market and encourage you to contact us with any questions.

Patrick Bodnar Eli Mills Senior Associate Senior Vice President

• CBRE Research• CBRE Econometric Advisors• Yardi Matrix• Axiometrics • Western States Multifamily

• Utah Department of Economics• University of Utah Bureau of Economics and Business Research • Equimark Properties (Historical Data)• Construction Monitor• CoStar

PREFACE

TAB

LE O

F CO

NTE

NTS

For a market analysis on your property or more information contact:

Patrick Bodnar Senior Associate +1 801 869 8053 [email protected]

Eli Mills Senior Vice President +1 801 869 8029 [email protected]

EXECUTIVE SUMMARY ............................... 4

MARKET ECONOMIC SUMMARY ......... 5

TRANSACTION VOLUME & CAP RATES .................................................. 22

DEBT MARKETS& THE CBRE DIFFERENCE ....................... 23

SALT LAKE/WASATCH FRONT Greater Salt Lake Area ............................................ 6 Supply vs. Demand and Absorption ......................... 7 Wasatch Front Summary .......................................... 8 Historical Rental Rates & Vacancy ............................. 9

Vacancy and Rent Growth ..................................... 10




Rental Rate Review ................................................ 10




Multifamily Housing Pipeline Map .......................... 17



Downtown vs. Suburban Multifamily Stats ............... 11 Historical Rental Rates by Unit Type ........................ 12 Multifamily Housing Pipeline Maps ....................13-15

1. SALT LAKE COUNTY

2. UTAH COUNTY

3. DAVIS COUNTY

4. WEBER COUNTY

© 2017 CBRE, Inc. 4

EXECUTIVE SUMMARY

The greater Salt Lake Market continued to be robust in 2016. Utah led the nation with population growth of over 2%, a net in-migration of 24,000 people and the fourth fastest growing employment rate in the U.S., adding over 40,000 jobs. This strong growth has caused vacancy rates along the Wasatch Front to drop by 130 basis points (bps) to 3.3%. Responding to high demand for the seventh year in a row, average lease rates climbed by 7%. These strong fundamentals have captured the attention of multifamily professionals across the nation who are anxious to invest, develop, manage and own multifamily assets in Utah. The increased national interest is raising the bar for overall quality of construction and amenities provided.

2017 is shaping up to continue the pattern of a healthy multifamily market. Investor and developer interest remains incredibly high. Already in the first quarter of 2017 we have had a significant sale transaction at a sub-5% cap rate. Current properties in lease-up are still meeting projected rents. Development activity continues to roll forward with 10,502 total units (market rate, affordable, senior & student) under construction.

The greater Salt Lake area is leading the nation with strong fundamental demographics and economics which will continue to support its stable and vibrant multifamily market.

HEADLINES TO KNOW

VACANCY

EMPLOYMENT

JOB GROWTH RATE2.8%40,000

NEW JOBS

RENT

1.70/SFDOWNTOWNCLASS A AVG RENT$ 7th

YEAROF RENT

GROWTH

24,000HIGHEST NETIN-MIGRATION

PEOPLE

LOOKING FORWARD

CAP RATESCAP RATES TO REMAIN STABLE NEXT 12 MONTHS

VACANCYVACANCY TO REMAIN STABLE IN CLASS B & C ASSETS

RE

NTE

RS

STRONGRENTER DEMAND S

ALE

S

INCREASED SALES TO OUT-OF-STATE INVESTORS P

IPE

LIN

E

CONTINUED PIPELINE GROWTH

2.9%CLASS B ASSETS TIGHT MARKET

3.3%130 BPS DROP FROM H1 2016

© 2017 CBRE, Inc. 5

GREATER SALT LAKE AREA MULTIFAMILY REPORT

2017APRIL

MARKET ECONOMIC SUMMARY

Utah’s economy registered healthy growth rates during the first quarter of 2017, while job growth remained near the state’s long-term average (in the low three-percent range). Looking ahead, the outlook for the state’s economy is positive. This favorable outlook will be reflected in property markets and will fuel demand during the coming quarters.

On a cyclical level, growth rates have moderated in recent months, but this is to be expected as the state’s economy is at—or very near—full employment. Even amid a strong job market, the labor economy should continue to expand at a rate of close to three percent. This outlook is underpinned by an improving economic environment on both the national and global levels. In addition, the potential for expansionary fiscal policy on the federal level could positively impact the state. Policies being debated, such as tax reform and increased spending on defense and infrastructure, maintain the potential to further boost the Utah economy. In addition to these factors, population growth—from both net migration and births—and a favorable economic outlook bode well for multifamily housing demand over the near term.

Long term, Utah’s strengths will continue to support strong growth levels. A diverse economy, significant infrastructure investments, a talented workforce, quality of life and a pro-business environment make up the area’s value proposition for businesses and talent alike. These characteristics will provide a foundation for future growth in the area’s economy which will continue to be reflected in property markets.

ECONOMIC DRIVERS OF DEMAND

Population, personal income, and most importantly, total employment are the primary economic drivers of apartment demand. The graph below shows the annual growth rates of these variables from 2004 through year-end 2016.

NAICS CATEGORY LEVEL LOCATION LAST 5 YEARS(X 1000) QUOTIENT METRO U.S.

Agriculture & Mining 3 0.67 0.6 -0.3

Construction 54 1.25 5.1 4.0

Manufacturing 87 1.08 1.9 1.1

Wholesale Trade 39 1.01 1.3 1.5

Retail Trade 101 0.98 3.0 1.8

Transportation & Warehousing 40 1.26 3.8 2.7

Information 20 1.12 1.8 0.7

Financial Activities 65 1.22 3.7 1.4

Prof. & Business Services. 148 1.14 4.5 3.2

Education & Health 109 0.75 3.3 2.2

Hospitality & Leisure 81 0.81 3.7 3.2

Other Services 27 0.74 2.6 1.2

Government 156 1.09 1.4 -0.1

Total 931 n/a 3.0 1.8

Source: Moody’s Economy.com, CBRE EA

EMPLOYMENT LEVELS AND GROWTH RATES: SALT LAKE AREA VS. U.S.LARGEST EMPLOYMENT SECTORS IN THE GREATER SALT LAKE AREA

Source: CBRE EA

EDUCATION & HEALTH

OTHER

RETAIL TRADE

PROF. & BUSINESS SERVICES MFG.

HOSP. & LEISURE

GOVT.

FINANCIAL ACTIVITIES

12%7%

17%

8%9%

16%

11%

20%

TOTAL EMPLOYMENT, POPULATION & REAL PERSONAL INCOME GROWTH

Source: CBRE EA

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

2004 2005 2006 2008 20092007 2010 2011 2012 2013 2014 2015 2016

TOTAL EMPLOYMENT POPULATION REAL PERSONAL INCOME

© 2017 CBRE, Inc. 6

GREATER SALT LAKE AREA (WASATCH FRONT)

The Greater Salt Lake area, also known as the Wasatch Front, consists of four counties—Salt Lake, Utah, Davis and Weber. Ogden City is located 45 minutes to the north of Salt Lake City, while Provo is located 45 minutes to the south of Salt Lake City. Approximately 2,262,207 people (80% of Utah’s population) live within this four-county area. The counties are connected via Interstate 15, the primary north-south freeway through Utah, around which the majority of development occurs. The Wasatch Front is also connected by FrontRunner—a high-speed passenger train-line that links with TRAX, a light rail system that runs throughout Salt Lake County. The Greater Salt Lake area population is growing by more than 200% of the national average.

MARKET TRENDS

The significant increase in total projects and units in Salt Lake County has put pressure on developers to enhance the overall renter experience. One such project, 4th West Apartments, has delivered an “urban resort” to the market, setting a new standard for renter expectations. Amenity packages in many new properties include:

• Resort-like environment

• Contemporary furnishings with sleek modern designs

• Social gathering areas: roof-top pool decks, barbeque areas and fire pit features

• Workout facilities that are keeping up with current fitness trends

THE WASATCH FRONT

GREATER SALT LAKE METRO 2016 POPULATION GROWTH

COUNTY POPULATION 2016 GROWTH % INCREASE

Salt Lake 1,108,872 14,223 1.3%

Utah 603,362 17,668 3.0%

Davis 342,645 6,555 2.0%

Weber 245,672 2,935 1.2%

Totals 2,300,551 41,381 2.0%

Source: Utah Population Estimates Committee, Governor’s Office

Source: U.S. Census Bureau

0.7%2.0%GREATER SALT

LAKE POPULATION GROWTH RATE

U.S. POPULATION GROWTH RATE

© 2017 CBRE, Inc. 7


2017APRIL

SUPPLY VS. DEMAND AND ABSORPTION

Utah, like much of the country, has enjoyed an expanding economic market for over seven years. The multifamily market has continued to produce new product with what seems to be an ever-increasing pipeline. However, Jim Wood of the Kem C. Gardner Policy Institute at the University of Utah identified that, for the first time in 40 years, the number of Utah households is outpacing growth in housing units. Since 2010 the number of households has grown by 109,321, while the number of housing units has increased by only 81,656.

The drop in overall vacancy to 3.3%, strong rent growth, and growing population trends continue to fuel construction for new apartments. As of March 2017, there were over 10,400 units under construction along the Wasatch Front, with approximately 12,457 units that could break ground over the next three years. Roughly 65% of the active and planned construction is occurring in Salt Lake County.

The Greater Salt Lake market shows its strength, as evidenced by a recent survey conducted by the CBRE Salt Lake City Multifamily group, which evaluated lease-up activity. The study charted all market-rate properties under construction that have deliverable units, but are not yet stabilized to 90% or greater. Of the deliverable units, 75% are already leased. As of March 2017, there were only 480 market-rate units available to rent along the Wasatch Front. There are 6,414 units nearing completion for a total of 8,321 expected over the next 18 months. With a net in-migration of approximately 24,000 people, the highest population growth in the country at 2%, and 34,000 college graduates annually, the supply is expected to quickly be filled in the near term. The effects of some oversupply may be realized in some select submarkets in the latter half of 2018 and into 2019.

COUNTY COMPLETED 2011 - CURRENT UNDER CONSTRUCTION POTENTIAL STARTS

Salt Lake 11,940 7,760 8,972

Utah 4,696 1,507 3,512

Davis 2,232 539 1,222

Weber 848 696 762

Totals 19,716 10,502 14,468

CONSTRUCTION SUMMARY

Source: Western States Multifamily

NOTABLE NEW DEVELOPMENTS

PROJECT STATUS TOTAL UNITS

Under construction – not leased - to complete next 18 months 6,854

Likely starts – next six months 2,889

50% of possible September 2017 or later starts 2,626

Estimated new deliveries over next 3 years 12,369

SALT LAKE COUNTY 3 YEAR PROJECTED SUPPLY ADDITIONS

Source: Western States Multifamily

4th West ApartmentsSalt Lake City

493 UNITSThe Park at City CenterSandy

330 UNITS

Parc West ApartmentsDraper

249 UNITSThe Aston at University PlaceOrem

478 UNITS

Parkway LoftsOrem

332 UNITS

Novi ApartmentsWest Jordan

267 UNITS

© 2017 CBRE, Inc. 8

WASATCH FRONT SUMMARY

Rental rates increased and vacancies decreased for the 7th year in a row in response to the continued, rising demand in 2016. The overall average monthly rental rate increased 7.0% year-over-year to $994 (or $1.11 per sq. ft.), though rents vary widely depending on geography, quality and size. The average rent for one-bedroom apartments, for example, ranges from $726 in Weber County to $923 in Salt Lake County, while the average monthly rate for a three-bedroom reached $1,314 in Salt Lake County. Vacancy was 4.0% or lower across all counties—3.3% on average—and was below 2% for new product. The most dramatic year-over-year shift in vacancy occurred in Weber County, which posted a vacancy rate of 2.3%.

2016

RENT SF $/SF VACANCY

$1,027 890 $1.15 3.2%

$1,041 914 $1.14 4.0%

$933 863 $1.08 3.4%

$810 945 $0.86 2.3%

$994 897 $1.11 3.3%

2014

WASATCH FRONT RENT SF $/SF VACANCY

Salt Lake $892 851 $1.01 4.9%

Utah $698 845 $0.97 4.2%

Davis $796 846 $0.92 4.7%

Weber $868 900 $0.75 6.0%

Wasatch Front $854 862 $0.97 4.9%

2015


$960 871 $1.08 4.1%

$869 880 $1.05 4.1%

$864 854 $1.00 4.0%

$839 922 $0.80 4.2%

$924 879 $1.04 4.1%

HISTORICAL RENTAL & VACANCY RATES

Source: CBRE, Inc.

BY CLASS CLASS A

CATEGORY RENT $/SF VACANCY

Studio $946 $1.86

1 Bed 1 Bath $1,092 $1.44

2 Bed 1 Bath $1,132 $1.23

2 Bed 2 Bath $1,300 $1.21

3 Bed 2 Bath $1,418 $1.10

Overall $1,217 $1.26 4.1%

CLASS B

RENT $/SF VACANCY

$636 $1.59

$853 $1.24

$913 $1.01

$1,065 $1.06

$1,176 $0.94

$967 $1.06 2.9%

CLASS C

RENT $/SF VACANCY

$556 $1.53

$730 $1.26

$808 $0.97

$858 $0.94

$973 $0.77

$773 $1.11 3.3%

WASATCH FRONT CURRENT RENTAL & VACANCY RATES

POPULATION

LOCATION RESIDENTS 5YR AVG. INCREASE

Salt Lake 1,107,314 1.5%

Davis 336,043 1.9%

Utah 575,205 2.3%

Weber 243,645 1.1%

Wasatch Front 2,262,207 1.7%

State of Utah 3,051,217 1.7%

OTHER INDICATORS

Source: U.S. Census BureauSource: CBRE, Inc.

RENTAL RATES BY COUNTY (AVERAGE MONTHLY AND PER SQUARE FOOT)

$0

Avg. Monthly Rent/Unit$1,200$1,100$1,000

$900$800$700$600$500$400$300$200$100

$2.00

$1.75

$1.50

$1.25

$1.00

$0.75

$0.50

$/SF

Source: CBRE Research, H2 2016.

UTAH COUNTY

$0.99 $1

.07 $1.14

$868$956

$1,041

2014 2015 2016DAVIS COUNTY

$0.88 $0

.98 $1.08

$796 $802

$933

2014 2015 2016WEBER COUNTY

$0.75

$0.75 $0

.79

$698 $740$810

2014 2015 2016WASATCH FRONT

$1.00 $1

.08 $1.11

$854$912

$994

2014 2015 2016SALT LAKE COUNTY

2014 2015 2016

$1.06 $1

.13

$1.15

$994

$1,102

$892

© 2017 CBRE, Inc. 9


2017APRIL

WASATCH FRONT HISTORICAL RENTAL RATES & VACANCY: SUMMARY TABLES BY COUNTY AND CITY

2014

WEBER COUNTY RENT SF $/SF VACANCY

Ogden $622 790 $0.79 5.6%

Roy $812 1,106 $0.73 3.3%

West Haven $756 885 $0.85 3.9%

Overall

2015


$684 826 $0.83 4.0%

$860 1,116 $0.77 2.6%

$707 903 $0.78 3.2%

2016


$745 863 $0.86 2.3%

$908 1,127 $0.81 1.9%

$659 922 $0.71 2.6%

$810 945 $0.86 2.3%

Source: CBRE, Inc.

2014

DAVIS COUNTY RENT SF $/SF VACANCY

Bountiful $839 960 $0.87 6.0%

Clearfield $723 898 $0.80 3.7%

Layton $789 898 $0.88 4.8%

North Salt Lake $907 924 $0.98 5.5%

Overall

2015


$900 945 $0.95 5.4%

$760 865 $0.88 3.4%

$839 855 $0.99 4.0%

$984 906 $1.09 4.7%

2016


$962 930 $1.03 4.8%

$796 833 $0.96 3.1%

$889 813 $1.09 3.1%

$1,062 888 $1.20 3.9%

$933 863 $1.08 3.4%

Source: CBRE, Inc.

2014

UTAH COUNTY RENT SF $/SF VACANCY

Orem $946 913 $1.04 5.3%

Pleasant Grove $921 946 $0.97 3.2%

Provo $685 714 $0.96 2.8%

Overall

2015


$997 907 $1.10 4.7%

$992 984 $1.00 3.6%

$700 683 $1.03 2.1%

2016


$1,049 901 $1.16 4.1%

$1,063 1,022 $1.04 3.9%

$715 653 $1.09 1.4%

$1,041 914 $1.14 4.0%

Source: CBRE, Inc.

2014

SALT LAKE COUNTY RENT SF $/SF VACANCY

Cottonwood Heights $961 918 $1.05 4.5%

Draper $978 964 $1.01 2.2%

Midvale $888 876 $1.01 4.8%

Murray $863 888 $0.97 4.0%

Riverton $918 1,043 $0.88 7.2%

Salt Lake City $886 782 $1.13 4.9%

Sandy $975 884 $1.10 5.5%

South Jordan $1,137 1,034 $1.10 6.9%

South Salt Lake $725 673 $1.08 6.0%

Taylorsville $817 812 $1.01 6.1%

West Jordan $861 832 $1.04 4.9%

West Valley City $750 791 $0.95 4.2%

Downtown $757 783 $1.26 5.4%

Overall

2015


$1,048 952 $1.10 4.0%

$1,055 970 $1.08 3.4%

$957 874 $1.09 3.6%

$922 897 $1.03 3.2%

$973 971 $1.01 4.7%

$974 771 $1.26 4.2%

$1,024 886 $1.15 4.5%

$1,268 1123 $1.13 6.2%

$818 756 $1.08 4.3%

$886 891 $1.00 4.4%

$965 902 $1.07 3.9%

$862 854 $1.01 4.6%

$962 782 $1.38 4.2%

2016


$1,135 986 $1.15 3.5%

$1,132 976 $1.16 4.7%

$1,025 871 $1.18 2.5%

$982 906 $1.08 2.5%

$1,028 898 $1.14 2.2%

$1,061 760 $1.40 3.4%

$1,073 888 $1.21 3.4%

$1,400 1,212 $1.15 5.5%

$912 840 $1.09 2.6%

$956 969 $0.99 2.7%

$1,068 971 $1.10 2.8%

$975 917 $1.06 5.0%

$1,166 781 $1.49 2.2%

$1,027 890 $1.15 3.2%

Source: CBRE, Inc.

© 2017 CBRE, Inc. 10

SALT LAKE COUNTY

BY CLASS CLASS A


Studio $946 $1.86

1 Bed 1 Bath $1,137 $1.49

2 Bed 1 Bath $1,129 $1.21

2 Bed 2 Bath $1,363 $1.25

3 Bed 2 Bath $1,491 $1.14

Overall $1,255 $1.30 3.9%

CLASS B

RENT $/SF VACANCY

$713 $1.69

$880 $1.28

$932 $1.02

$1,102 $1.10

$1,253 $1.01

$998 $1.10 2.8%

CLASS C

RENT $/SF VACANCY

$701 $2.06

$766 $1.34

$837 $1.02

$858 $0.94

$1,103 $0.81

$816 $1.12 3.8%

RENTAL RATE & VACANCY SUMMARY TABLES

CATEGORY RENT SF $/SF VACANCY

Studio $776 425 $1.83

1 Bed 1 Bath $923 686 $1.35

2 Bed 1 Bath $912 880 $1.04

2 Bed 2 Bath $1,193 1,032 $1.16

3 Bed 2 Bath $1,310 1,266 $1.03

Overall $1,027 890 $1.15 3.2%

BY UNIT TYPE

Source: CBRE, Inc. Source: CBRE, Inc.

BY SIZE 50 - 99 UNITS


Studio $726 $1.72

1 Bed 1 Bath $907 $1.32

2 Bed 1 Bath $813 $0.90

2 Bed 2 Bath $1,119 $1.06

3 Bed 2 Bath $1,146 $0.90

Overall $960 $1.01 2.7%

100+ UNITS

RENT $/SF VACANCY

$780 $1.84

$925 $1.35

$944 $1.08

$1,205 $1.17

$1,352 $1.07

$1,040 $1.18 3.3%

Source: CBRE, Inc.

BY YEAR 1990 - 1999


Studio N/A N/A

1 Bed 1 Bath $1,040 $1.38

2 Bed 1 Bath $1,002 $1.05

2 Bed 2 Bath $1,243 $1.18

3 Bed 2 Bath $1,244 $1.00

Overall $1,148 $1.16 3.5%

2000 - 2009

RENT $/SF VACANCY

$637 $1.16

$949 $1.29

$1,002 $1.12

$1,243 $1.17

$1,244 $1.09

$1,110 $1.19 3.4%

BUILT AFTER 2010

RENT $/SF VACANCY

$958 $1.99

$1,201 $1.58

$1,143 $1.26

$1,345 $1.29

$1,553 $1.17

$1,314 $1.34 4.0%

Source: CBRE, Inc.

VACANCY3.2%

RENT$1,027

RENT GROWTH (2016)5.7%

10.0%

9.0%

8.0%

7.0%

6.0%

5.0%

4.0%

3.0%

2.0%

1.0%

0.0% $300

$400

$500

$600

$700

$800

$900

$1,000

$1,100

OVERALL VACANCY AND RENT

Source: CBRE, Inc.2005 2006 2008 20092007 2010 2011 2012 2013 2014 2015 2016

VACANCY (%) RENT ($)

© 2017 CBRE, Inc. 11


2017APRIL

4TH WEST APARTMENTS

DOWNTOWN CLASS A

CATEGORY RENT $/SF

Studio $1,068 $2.15

1 Bed 1 Bath $1,242 $1.78

2 Bed 1 Bath $1,156 $1.95

2 Bed 2 Bath $1,608 $1.57

3 Bed 2 Bath $1,948 $1.63

Overall $1,389 $1.70

CLASS B

RENT $/SF

$728 $2.10

$1,026 $1.50

$1,010 $1.07

$1,353 $1.25

$1,369 $1.05

$1,069 $1.38

DOWNTOWN RENTAL RATE COMPARISON BY CLASS (A & B ONLY)

Source: CBRE, Inc.

SUBURBAN CLASS A

CATEGORY RENT $/SF

Studio $719 $1.54

1 Bed 1 Bath $939 $1.31

2 Bed 1 Bath $887 $0.99

2 Bed 2 Bath $1,171 $1.15

3 Bed 2 Bath $1,302 $1.03

Overall $1,227 $1.32

CLASS B

RENT $/SF

$678 $1.62

$872 $1.21

$914 $0.98

$1,090 $1.10

$1,220 $0.98

$996 $1.05

SUBURBAN RENTAL RATE COMPARISON BY CLASS (A & B ONLY)

Source: CBRE, Inc.

SQUARE FOOT & VACANCY COMPARISON BY LOCATION

820

800

780

760

740

720 0.0

5.0

10.0

15.0

20.0

25.0

SIZE (

SF)

VACANCY (%)

DOWNTOWN SUBURBAN

840

880

860

940

920

900

2.2%3.3%

Source: CBRE, Inc.

819 SF

925 SF

DOWNTOWN VS. SUBURBAN MULTIFAMILY STATS

For many, downtown Salt Lake City is the preferred place to live. People want an urban lifestyle. The walkability provided continues to be a huge driver for renters. External amenities, including trendy eateries, shopping and outdoor recreation areas are easily accessible downtown. The rental rates clearly validate the renter interest level with many units well above $2.00 per square foot. 2016 has certainly set new rental rate highs for several properties. The differential between suburban and urban rents will eventually put upward pressure on rents in some suburban submarkets. This dynamic is a trend being realized in larger markets across the U.S.

2017 is expected to remain very tight—particularly for downtown properties. However, data suggests we are in the seventh year of a seven to nine year economic expansion cycle, so there will be limits to rental rate hikes and softening in the market as select areas experience some over-supply late in 2018.

© 2017 CBRE, Inc. 12

$0

$200

$400

$600

$800

$1,000

$1,200

$1,600

$1,400

STUDIO 1 BED 1 BATH 2 BED 1 BATH 2 BED 2 BATH 3 BED 2 BATH OVERALL

HISTORICAL RENTAL RATES BY UNIT TYPE (AVERAGE MONTHLY AND PER SQ. FT. RATES)

$1.60

$1.50

$1.40

$1.30

$1.20

$1.10

$1.00

$0.90

$1.70

$1.90

$1.80

$704

$852

$1,105

$1,234

$955$878

$781$844

$1,017

$1,157

$886

$632

$776

$923 $912

$1,193$1,310

$1,023

$1.72

$1.28$1.21

$1.35

$1.02$0.99 $1.00

$0.97$1.03$1.09

$1.02

$1.22

$1.16

$1.04

$1.16

$1.28

$1.60

$1.83

OTHER INDICATORS

SALT LAKE COUNTY

ENCORE

POPULATION


Salt Lake County 1,108,872 1.5%

Salt Lake City 192,672 0.7%

West Valley 136,208 1.0%

State of Utah 3,051,217 1.7%

SINGLE FAMILY HOUSING

YEAR MEDIAN HOME PRICE

2013 $240,000

2014 $254,000

2015 $271,000

2016 $293,000

Source: WFR Multiple Listing ServiceSource: U.S. Census Bureau

Source: CBRE, Inc.

The last three years show rents on the rise across all unit types—a pattern that has been in place for seven years. The big question on everyone’s mind is how long will the growth last? A softening in rent growth is likely as real estate growth cycles are typically seven to nine years. Nationally, tier 1 markets are experiencing signs of market correction due to supply and affordability—particularly with luxury unit deliveries in select submarkets. The Central Business Districts (CBD) of these tier 1 markets have had the largest increase in inventory. However, Salt Lake City’s demand is presently outpacing supply. As of March 1, 2017, of the 5,967 market rate units that are under construction, 1,277 units have been delivered to the market—70% of which have been leased. This leaves a mere 387 units available spread throughout the entire County of Salt Lake. (2015 numbers in the bar chart above represent the average of 2014 and 2016, as no data was collected for 2015.)

2014 2015 2016

© 2017 CBRE, Inc. 13


2017APRIL

SALT LAKE COUNTY: COMPLETED MULTIFAMILY PROJECTS, 2011 - FEBRUARY 2017

641111

88

43 43

15

523

4382

3146

16 17

64 495

22 835

842

21

36

1433

27

72

66

60

50

30 26

80 55

81

57

67

83

73

58

4779

69

65

53

4840

41

54

2434

78

11

3275 68

1

6263

7413

56 76

29

70

51

10

12

77

9

7

19

45

44

25 18

37 38

MARKET 8,294 UnitsM AFFORDABLE

2,174 UnitsA STUDENT 0 UnitsSTSENIOR

1,472 UnitsS

# NAME UNITS TYPE

1 21st and View 29 M2 2550 South Main 112 M3 644 City Station 132 M4 9th East Lofts 68 A5 Aire Condominiums 30 M6 Alta Gateway 264 M7 Artspace Macaroni Flats 13 M8 Ball Park Apartments 61 S9 Beacon Hill 168 A

10 Birkhill 202 A11 Birkhill Seniors 105 S12 Brickgate 268 A13 Bridges at Citifront - Phase 2 91 M14 Bud Bailey 136 A15 Canyon Crossing at Riverwalk 180 A16 City Creek Landing 105 M17 Cityscape 122 M18 Drycreek at East Village 282 M19 East Village 271 M20 Eastside Apartments 173 M21 Element 31 at Brickyard 208 M22 Enclave 210 A23 Encore 189 M24 Florentine Villas 214 A25 Hills at Sandy Station 55 M26 Jordan Station 302 M27 Jordan Valley Seniors 72 S28 Kimpton Square 97 S29 Laporte 180 A30 Legacy Cottages 186 A31 Liberty Gateway 160 M32 Liberty Village 171 A33 Lionsgate at Fireclay 400 M34 Lofts at 7800 192 M35 Lotus Bluekoi 20 M36 Lotus Madrona 37 M37 Meadows at Park Avenue 121 M38 Meadows at Park Avenue - Phase 2 14 M39 Mercer 73 M40 Millcreek 9 27 M41 Millcreek Towers 38 M42 Newhouse 61 M

# NAME UNITS TYPE

43 North Sixth 115 A44 Novi at Jordan Valley Station 267 M45 Oquirrh Hills 288 M46 Paragon Station Lofts 38 M47 Parc at Day Dairy 228 M48 Pinnacle Highbury 290 M49 Prana Townhomes 21 M50 Promenade at the District 170 M51 Providence Place 125 M52 Rendon Terrace 70 S53 Residence at Fairbourne Station 225 M54 Residences at the District 258 M55 Rockledge at Quarry Bend 416 M56 Rockwell Village at Independence 60 M57 Rosegate 159 S58 Rosegate in Draper 277 S59 Sage Gate at Haynes Landing 278 M60 San Tropez - Phase II 84 M61 Seasons at City Creek 130 M62 Seasons at Library Square 119 M63 Seasons on the Boulevard 99 M64 SEG028 28 M65 Silvercrest 186 S66 Solameer at Herriman Towne Center 134 M67 South Ridge 145 M68 Sugar House Apartments 70 M69 Talavera at the Junction 252 M70 Taylor Gardens 112 S71 Taylor Springs 95 S72 Terrameer 174 M73 The Gardens 60 S74 The Lotus 84 M75 The Vue at Sugar House Crossing 211 M76 Triton Terrace 177 M77 Tuscany Villas 76 A78 ViA 80 M79 Victoria Woods - Draper 42 S80 Victoria Woods - Sandy 100 S81 Villas at Fern Circle 36 S82 West Station 145 M83 Willow Cove VII 72 M84 Wilmington Flats 105 M

11,940 Total Units

Source: Western States Multifamily. Maps as of February 2017.

39

42 23

28

59

71

2061

© 2017 CBRE, Inc. 14

AFFORDABLE 1,713 Units

MARKET 5,691 UnitsM

A STUDENT 0 UnitsST

SENIOR 356 UnitsS

418

SALT LAKE COUNTY: MULTIFAMILY DEVELOPMENT UNDER CONSTRUCTION - FEBRUARY 2017

# NAME UNITS TYPE1 360 Apartments 151 M2 4th and 4th 210 M3 4th West Apartments 493 M4 616 South State 274 A5 965 Central 50 M6 Artesian Springs 118 A7 Bodhi Salt Lake City 80 A8 Central 9th Studios 12 M9 Draper Village 181 M

10 Granary Place 134 A11 Greenprint 60 M12 Hardware Station East Village 195 A13 Hardware Station West Village 265 A14 Herriman Town Center 304 M15 Highland 40 Townhomes 40 M16 Hills at Sandy Station - Phase 2 146 M17 Liberty Boulevard 266 M18 Liberty Crest 177 M19 Little Cottonwood 264 M20 Metro at Fireclay 175 M21 Milagro Apartments 182 M22 North Temple Flats 168 A23 Paragon Station Lofts 38 M24 Parc West 249 M25 Park at City Center 330 M26 Park East 70 M27 Pinnacle Sandy 332 M28 Ritz Classic Multifamily 300 M29 Riverfront 288 M30 Rosegate in Herriman 298 S31 S-Line Townhomes 32 M32 Sagegate at Anthem 422 M33 Sharon Gardens 58 S34 Tenfifteen 54 A35 The Bonneville 158 M36 The Ridge 261 M37 The Station at Midvale - Phase 1 102 A38 The Station at Midvale - Phase 2 84 A39 Veranda 239 A40 Via - Phase 2 58 M41 Washington Street 5 M42 West Station - Phase II 145 M43 Zellerbach 292 M

7,760 Total Units

9

24

33

7

19

26

4

31

29

20

36

27

3032 14

25 16

13

118

6

3

11

38

37

35

28

15

345

2

402123

43


22

39

1017

1242

© 2017 CBRE, Inc. 15


2017APRIL

SALT LAKE COUNTY: POTENTIAL MULTIFAMILY STARTS AS OF FEBRUARY 2017

1212

303425

34

3160

1739

29 23

1

518

2

282752

954 47

26

387

48

56

10

22

43

18 5813

41

11

57

33

14

214519

15

42

4920

5

# NAME UNITS TYPE1 1701 South 1100 East 19 M2 21 By Urbana 126 M3 900 East Multifamily Project 39 M4 9th & 9th 28 M5 Artesian Springs - Phases 2 & 3 260 A6 C9 Flats 97 M7 Canyon Centre 123 M8 Central Ninth 43 M9 Central Station Senior Apartments 84 A

10 Cliffs at Jordan Station 237 M11 Daybreak Condos 180 M12 Diamond Ridge 54 M13 Draper South Point 119 A14 Flats at the District 120 M15 Flats on Richards 32 M16 Gladstone 187 M17 Hardison 77 M18 Independence 255 M19 Liberty Crossing 157 A20 Liberty on Main 120 A21 Liberty Place 69 M22 Liberty Pointe 100 M23 Liberty Square 138 M24 Liberty Uptown 109 A25 Little Diamond 146 A26 Locust Lane 10 M27 Lotus Calla 43 M28 Lotus Tapestry 43 M29 Magnolia 65 M30 Marmalade Flats 300 M31 Meadowbrook 145 A32 Metropolitan 74 M33 Murray Crossing 280 M34 North 4th Apartments 110 A35 North Temple Orange 364 M36 Novi at Jordan Valley Station - Phase II 181 M37 NW Pipeline 248 A38 Oquirrh Flats 96 A39 Orange Street 263 M40 Paxton 365 103 M41 Paytons Quarry of Herriman 124 M42 Pierpont 87 M43 Residences at Vista Station North 308 M44 Ritz Bowling Site 287 M45 Rockwell Lofts 21 M46 Salt Lake Costumes Site 19 M47 Spring Run Townhomes 54 M48 Station at Gardner Mill 272 M49 Sugarmont 435 M50 The Arcadia 211 A51 The East Village Phase 2 65 M52 The Hub of Opportunity 57 A53 The Lofts on Vine 264 M54 The Metro at Fireclay Phase II 165 M55 The Morton 137 M56 The Prestige 350 M57 The View at 5600 192 M58 Triton Point of View 320 M59 West Gateway Commons 100 M60 West Temple 260 M

8,972 Total Units

35

59

53


5036

12

16

MARKET 7,110 UnitsMAFFORDABLE 1,862 UnitsA STUDENT

0 UnitsST

SENIOR 0 UnitsS

640

3255

24

37

44

46

© 2017 CBRE, Inc. 16

8.0%

7.0%

6.0%

5.0%

4.0%

3.0%

2.0%

1.0%

0.0% $300

$400

$500

$600

$700

$800

$900

$1,100

$1,000

UTAH COUNTY

HISTORICAL RENTAL & VACANCY RATES

CURRENT RENTAL & VACANCY RATES

OTHER INDICATORS



Studio N/A N/A

1 Bed 1 Bath $727 $1.24

2 Bed 1 Bath $753 $1.03

2 Bed 2 Bath $1,090 $1.03

3 Bed 2 Bath $1,165 $1.07

Overall $816 $1.08 4.3%

100+ UNITS

RENT $/SF VACANCY

N/A N/A

$909 $1.24

$908 $1.11

$1,195 $1.15

$1,314 $1.07

$1,067 $1.15 4.0%

OVERALL

RENT $/SF VACANCY

N/A N/A

$885 $1.23

$881 $1.09

$1,193 $1.15

$1,301 $1.07

$1,041 $1.14 4.0%

BY YEAR 2014

CATEGORY RENT $/SF

Studio N/A N/A

1 Bed 1 Bath $755 $1.15

2 Bed 1 Bath $756 $0.88

2 Bed 2 Bath $959 $0.93

3 Bed 2 Bath $1,014 $0.92

Overall $820 $1.00

2015

RENT $/SF

N/A N/A

$820 $1.19

$818 $0.99

$1,076 $1.04

$1,158 $1.00

$930 $1.07

2016

RENT $/SF

N/A N/A

$885 $1.23

$881 $1.09

$1,193 $1.15

$1,301 $1.07

$1,041 $1.14

POPULATION


Orem 94,457 1.4%

Provo 118,148 0.5%

Utah County 603,362 2.3%

State of Utah 3,051,217 1.7%



2013 $229,000

2014 $243,000

2015 $265,000

2016 $283,000


THE ASTON AT UNIVERSITY PLACESource: CBRE, Inc.


2005 2006 2008 20092007 2010 2011 2012 2013 2014 2015 2016Source: CBRE, Inc.

Source: CBRE, Inc.

VACANCY4.0%

RENT$1,041



© 2017 CBRE, Inc. 17


2017APRIL

40

28

4733

15

4925

50

48

43

47

55

2924

32

42

58

21 5

51

53

26

27

4435

11

56

1637

14

38

3352

9

19

30

57

4

46

3

2218

8

7

34

59

2012

1

1310

54

UTAH COUNTY: MULTIFAMILY COMPLETED/PIPELINE, 2011- FEBRUARY 2017

17

236

41

45

6

2331

39

# NAME UNITS STATUS TYPE1 200 Cityview 139 Under Construction M2 63 Center 41 Completed M3 Aldara 240 Completed M4 Alloy at Geneva 324 Completed M5 Arbors on the Avenue 68 Potential Start M6 Avalon Senior Living 90 Completed S7 Avalon Senior Living - Phase 2 90 Under Construction S8 Bella Grace 24 Completed M9 Canyon View Crossing 180 Completed M

10 Cascade Gardens 42 Completed S11 Cedarview 25 Completed S12 Central Park Station 59 Under Construction A13 Cherry Hill 74 Completed M14 College Place Provo 71 Completed ST15 Concord at Geneva 304 Completed M16 Cresthaven 344 Completed M17 Eighty East 77 Potential Start M18 Grove Crest Villas 162 Completed S19 Lakeview Condos 44 Completed M20 Liberty Center 120 Under Construction A21 Lincoln Square 473 Potential Start M22 Lofts at Ivory Ridge 45 Completed M23 Meadows 142 Potential Start M24 Meadows at American Fork 270 Potential Start M25 Midtown 360 286 Completed M26 Midtown Village 225 Potential Start M27 Mill Pointe at Geneva 72 Under Construction M28 Mill Pointe at Geneva - Phase 2 396 Potential Start M29 Millpond 214 Potential Start M30 Outlook 260 Completed M31 Pacific Drive Apartments 26 Under Construction A32 Parc on 5th 252 Potential Start M33 Parc on Center 168 Completed M34 Parkway Lofts 332 Under Construction M35 Porter Ranch Townhomes 90 Potential Start M36 Red Sky 126 Potential Start M37 Residences at Mayfield 214 Completed M38 Residences at Montveal 132 Completed M39 Ridgeline Townhomes 85 Potential Start M40 River's Edge 246 Potential Start M41 Riverview 48 Completed M42 Rivulet 252 Under Construction M43 Rowland Heights 128 Potential Start ST44 Saratoga Springs 252 Potential Start M45 Savoy 121 Potential Start M46 Seasons at Traverse Mountain 440 Completed M47 Siena Villas 81 Completed M48 Startup Crossing 100 Completed A49 Sun Canyon Villas 84 Under Construction M50 The Aston at University Place 237 Completed M51 The Aston at University Place - Phase 2 241 Under Construction M52 The Boulevard 110 Completed M53 The Depot 120 Potential Start M54 The Old Chapel 15 Completed M55 Traverse Towns 92 Under Construction M56 Viewpointe 288 Completed M57 Village at South Campus 236 Completed ST58 Waters Edge 227 Potential Start M59 Woodland Heights 71 Completed ST

9,715 Total Units

Source: Western States Multifamily. Maps as of January 2017.

MARKET 8,495 UnitsM AFFORDABLE

305 UnitsA SENIOR 409 UnitsS STUDENT

506 UnitsST

Status/Type M A S ST TotalCompleted 3,899 100 319 378 4,696Under Construction 1,212 205 90 0 1,507Potential Start 3,384 0 0 128 3,512Total 8,495 305 409 506 9,715

© 2017 CBRE, Inc. 18

DAVIS COUNTY

OTHER INDICATORS

POPULATION


Bountiful City 43,784 0.6%

Layton City 74,143 2.0%

Davis County 342,645 1.7%

State of Utah 3,051,217 1.7%



2013 $219,000

2014 $227,000

2015 $242,000

2016 $263,000



Studio $450 $1.41

1 Bed 1 Bath $748 $1.29

2 Bed 1 Bath $772 $1.04

2 Bed 2 Bath $1,039 $1.09

3 Bed 2 Bath $775 $1.00

Overall $851 $0.88 2.8%

100+ UNITS

RENT $/SF VACANCY

$524 $1.25

$748 $1.07

$772 $0.84

$1,039 $0.99

$775 $0.61

$940 $1.12 3.5%

OVERALL

RENT $/SF VACANCY

$512 $1.39

$839 $1.27

$911 $1.04

$1,051 $1.09

$1,158 $1.00

$933 $1.08 3.4%



Source: CBRE, Inc.

RENTAL & VACANCY RATES

BY YEAR 2014

CATEGORY RENT $/SF

Studio $439 $1.05

1 Bed 1 Bath $721 $1.09

2 Bed 1 Bath $769 $0.83

2 Bed 2 Bath $827 $0.94

3 Bed 2 Bath $970 $0.82

Overall $796 $0.92

2015

RENT $/SF

$475 $1.22

$780 $1.18

$840 $0.94

$939 $1.01

$1,064 $0.91

$864 $1.00

2016

RENT $/SF

$512 $1.39

$839 $1.27

$911 $1.04

$1,051 $1.09

$1,158 $1.00

$933 $1.08

Source: CBRE, Inc.

VACANCY3.4%

RENT$933



9.0%

8.0%

7.0%

6.0%

5.0%

4.0%

3.0%

2.0%

1.0%

0.0% $300

$400

$500

$600

$700

$800

$1,000

$900

Source: CBRE, Inc.2005 2006 2008 20092007 2010 2011 2012 2013 2014 2015 2016


THE HILLS AT RENAISSANCE

© 2017 CBRE, Inc. 19


2017APRIL

DAVIS COUNTY: MULTIFAMILY COMPLETED/PIPELINE, 2011- FEBRUARY 2017

# NAME UNITS STATUS TYPE

1 Angels Landing Townhomes 24 Completed M

2 City Centre 123 Under Construction M

3 Clearfield Station 216 Potential Start M

4 Creekside Oaks 24 Completed M

5 Eaglewood Lofts 122 Completed M

6 Eastgate at Greyhawk 108 Completed M

7 Farmington Crossing 93 Completed M

8 Farmington Station 140 Under Construction M

9 Fernwood Place 74 Completed M

10 Greyhawk Townhomes 114 Under Construction M

11 Hampton Place 210 Completed M

12 Hills at Renaissance 107 Completed M

13 Huntington 70 Completed M

14 Kay’s Crossing 156 Completed M

15 Legacy Cottages 150 Completed S

16 Legacy Crossing 206 Completed M

17 Olson Apartments 112 Potential Start M

18 Orchard Farms 80 Completed M

19 Park Lane Village 324 Completed M

20 Residences at Station Parkway 431 Potential Start M

21 Ridgeview 122 Completed M

22 Seasons at Layton 164 Completed M

23 The Park at Legacy Trails 162 Under Construction M

24 Village at Church & Main 56 Completed M

25 Villas on Main 142 Completed M

26 West Square 149 Potential Start M

27 Woods Cross 242 Potential Start M

28 Woods Cross Townhomes 72 Potential Start M

3,993 Total Units

21

19

15

10

1

2

8

23

3

20

26 22

7

4

18

24

25

9

6

14

16

28

11

5

1217

1327


Status/Type M A S ST TotalCompleted 2,082 0 150 0 2,232Under Construction 539 0 0 0 539Potential Start 1,222 0 0 0 1,222Total 3,843 0 150 0 3,993

MARKET 3,843 UnitsMAFFORDABLE 0 UnitsA

SENIOR 150 UnitsS

ST STUDENT 0 Units

© 2017 CBRE, Inc. 20

10.0%

9.0%

8.0%

7.0%

6.0%

5.0%

4.0%

3.0%

2.0%

1.0%

0.0% $300

$400

$500

$600

$700

$800

$900

WEBER COUNTY


RENTAL & VACANCY RATES OTHER INDICATORS



Studio $469 $1.23

1 Bed 1 Bath $622 $0.84

2 Bed 1 Bath $668 $0.69

2 Bed 2 Bath $934 $0.82

3 Bed 2 Bath $1,081 $0.77

Overall $785 $0.77 3.2%

100+ UNITS

RENT $/SF VACANCY

$498 $1.30

$756 $1.03

$770 $0.84

$977 $0.90

$1,030 $0.78

$818 $0.91 2.1%

OVERALL

RENT $/SF VACANCY

$496 $1.30

$726 $0.99

$748 $0.81

$970 $0.88

$1,048 $0.78

$810 $0.86 2.3%

BY YEAR 2014

CATEGORY RENT $/SF

Studio $432 $1.11

1 Bed 1 Bath $653 $0.80

2 Bed 1 Bath $710 $0.76

2 Bed 2 Bath $826 $0.68

3 Bed 2 Bath $897 $0.66

Overall $698 $0.75

2015

RENT $/SF

$464 $1.20

$690 $0.89

$729 $0.78

$898 $0.78

$973 $0.72

$754 $0.80

2016

RENT $/SF

$496 $1.30

$726 $0.99

$748 $0.81

$970 $0.88

$1,048 $0.78

$810 $0.86

POPULATION


Ogden City 84,444 3.2%

Riverdale 8,666 2.8%

Weber County 243,672 1.0%

State of Utah 3,051,217 1.7%



2013 $160,000

2014 $165,000

2015 $179,000

2016 $197,000


Source: CBRE, Inc.

Source: CBRE, Inc.


VACANCY2.3%

RENT$810


Source: CBRE, Inc.2005 2006 2008 20092007 2010 2011 2012 2013 2014 2015 2016


OGDEN TOWER VIEW

© 2017 CBRE, Inc. 21


2017APRIL

MARKET 1,793 UnitsMAFFORDABLE 513 UnitsA

SENIOR 0 UnitsS

ST STUDENT 0 Units

11

9

18

14

1

6

20

1615

13

17

519

10

2

43

12

78

WEBER COUNTY: MULTIFAMILY COMPLETED/PIPELINE, 2011-FEBRUARY 2017

# NAME UNITS STATUS TYPE

1 Aderra 114 Under Construction M

2 Bouwhuis Apartments 216 Potential Start M

3 Claradon Village 192 Completed M

4 Claradon Village - Phase 2 108 Under Construction M

5 Colonial Court 73 Completed M

6 Garden City 61 Under Construction M

7 Imagine Jefferson 59 Completed A

8 Imagine Jefferson - Phase 2 113 Under Construction A

9 Lomond View 38 Under Construction A

10 Mountain View Townhomes 105 Completed M

11 Mountain View Townhomes - Phases 2&3 87 Under Construction M

12 Station at Pleasant View 144 Completed A

13 Station at Pleasant View - Phase 3 128 Potential Start A

14 Station Square 31 Under Construction A

15 The Cove at Pleasant View 88 Completed M

16 The Ranches 79 Potential Start M

17 The View on 20th 147 Completed M

18 Tower View Apartments 144 Under Construction M

19 View at the Junction 40 Completed M

20 Village at Prominence Point 339 Potential Start M

2,306 Total Units

Source: Western States Multifamily. Maps as of January 2017.

Status/Type M A S ST TotalCompleted 645 203 0 0 848Under Construction 514 182 0 0 696Potential Start 634 128 0 0 762Total 1,793 513 0 0 2,306

© 2017 CBRE, Inc. 22

SALES VOLUME & CAP RATES

Over $700 million of multifamily product sold during 2016—the highest level on record. Capitalization rates reached an overall average of 5.6%, with two properties recently trading at a sub-5% cap rate level. Investors have consisted largely of institutional entities, out-of-state investors and private real estate investment trusts (REITs). Additionally, an increasing number of high-net-worth family offices are interested in entering Utah’s apartment market.

The current strength of the market suggests sales volume in the coming year could once again push the upper levels of the historical high sales volume realized over the past two years. This will largely be due to owners seeking to cash out on price appreciation. Investors will also want to take advantage of organizing favorable financing on their own terms and establishing a loan product that will work best for their investment goals. In addition, many merchant developers will be incentivized to take advantage of appreciable growth in their properties by selling assets. As a growing trend responding to demand, these projects will uniquely be sold pre-stabilization. Mainstream lenders have programs to provide debt on these “pre-stab” deals.

MULTIFAMILY SALES VOLUME ($, MILLIONS)

Source: CBRE, Inc., Real Capital Analytics

2012 2013 2014 2015 2016

$800

$600

$500

$400

$300

$200

$100

$0

$703

$251

$464

$285

$644

Bridges at CitifrontSalt Lake City

295 UNITSFarmgate ApartmentsHerriman

496 UNITS

Encore ApartmentsSalt Lake City

189 UNITSMission MeadowbrookSalt Lake City

412 UNITS

Rockledge at Quarry BendSandy

416 UNITS

Sandlewood ApartmentsWest Valley City

278 UNITS

NOTABLE SALES TRANSACTIONS

2016 WASATCH FRONT MULTIFAMILY CAP RATES BY CLASS

4.75 - 5.25%CLASS A

5.25 - 5.75%CLASS B

5.75 - 6.50%CLASS C

MULTIFAMILY CAP RATES

Source: CBRE, Inc., Real Capital Analytics

2012 2013 2014 2015 2016

8%

7%

6%

5%

4%

3%

2%

1%

0%

6.5%6.1% 6.1% 6.0%

6.8%

5.9%6.1%

5.8% 5.7% 5.6%

WASATCH FRONTU.S.

© 2017 CBRE, Inc. 23


2017APRIL

DEBT MARKETS

Overall multifamily finance volume has risen for seven consecutive years, increasing by 433% between 2009-2016. Agency lenders (Fannie Mae, Freddie Mac and HUD) represented 88% of overall volume in 2009 vs. 51% in 2016, as the full range of capital sources has become increasingly active and competitive for multifamily assets.

$300

$275

$250

$225

$200

$175

$150

$125

$100

$75

$50

$25

$0

(% Change YoY)2012 2013

Up 16%2014

Up 6%2015

Up 25%2016

Up 3%

ESTIMATED MULTIFAMILY FINANCE VOLUME BY LENDER TYPE (BILLIONS)

$164

$191$203

$254 $261

Source: CBRE, Inc.

Fannie Mae

Freddie Mac

HUD

Banks & Credit Unions

Life Companies

CMBS

Other

LENDER TYPEMAX LTV

AMORTIZATION TERM10-YR

PRICINGRECOURSE

Fannie Mae 75-80% 30 years 5-12 yrs; 30/30 4.50 - 4.75% No

Freddie Mac 75-80% 30 years 5-10 yrs; 30/30 4.50 - 4.75% No

HUD 80-85% 35 years 35/35 4.25 - 4.50% No

Banks 70-75% 25 years 5-10 yrs 4.00 - 4.25% Yes

Credit Unions 70-75% 25 years 5-10 yrs 4.00 - 4.25% Yes

Life Companies 65-70% 25-30 years 5-10 yrs; 25/25 4.25 - 4.50% No

CMBS 70-75% 30 years 5-10 yrs 4.50 - 4.75% No

Source: Fannie Mae and Freddie Mac 10-Ks, American Council of Life Insurers (ACLI), FDIC, Trepp, Mortgage Bankers Association & Fannie Mae Multifamily Economic Research Group

CURRENT LENDING PARAMETERS

Source: Real Capital Analytics

2016 U.S. MULTIFAMILY INVESTMENT SALES VOLUME (BILLIONS)

$0.0

$15.0

$10.0

$5.0

$25.0

$20.0

$30.0TOTAL SALES VOLUME (BILLIONS)

CBRE2014 2015 2016 2014 2015 2016

MARCUS & MILLICHAP2014 2015 2016NEWMARK GRUBB

KNIGHT FRANK

2014 2015 2016HFF

2014 2015 2016BERKADIA

2014 2015 2016JLL

2014 2015 2016CUSHMAN & WAKEFIELD

2014 2015 2016EASTDIL SECURED

THE CBRE DIFFERENCE

Nationally, CBRE’s multifamily investment sales totaled $28.8 billion in 2016, with the nearest competitor closing less than half as much sales volume. With 65 locations and over 300 multifamily professionals, including direct lending services, CBRE has an unparalleled multifamily platform which provides clients with the greatest market exposure available.

With the powerful resources of CBRE’s national multifamily platform, along with the most comprehensive local market research, CBRE Multifamily in Salt Lake City is ready to help maximize the value of multifamily assets.

CAPITAL MARKETS

Patrick Bodnar Senior Associate +1 801 869 8053 [email protected]

Eli Mills Senior Vice President +1 801 869 8029 [email protected]

DEBT & STRUCTURED FINANCE

Doug Birrell First Vice President +1 801 869 8029 [email protected]

For a market analysis on your property or more information contact:

© Copyright 2017 CBRE Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to confirm independently its accuracy and completeness. This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission of the CBRE Global Chief Economist. CBRE and the CBRE logo are service marks of CBRE, Inc. and/or its affiliated or related companies in the United States and other countries. All other marks displayed on this document are the property of their respective owners.

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