May 4-6, 2015 - CoreLogic€¦ · Office - CBD Office - Suburban Multifamily Multifamily San...

©2015 CoreLogic, Inc. All rights reserved. Proprietary and Confidential.

Wednesday, May 6, 2015

©2015 CoreLogic, Inc. All rights reserved. Proprietary and Confidential. ©2015 CoreLogic, Inc. All rights reserved. Proprietary and Confidential.

Velocity of Change in Multifamily:

Demographics / Acquisitions

John Wilhoit, Jr.

2


If our universe started 14 billion years ago…

And if 14 billion years were converted to 14 years

3

Then man has been on earth for 6 minutes


Speed of Due Diligence and Risk for Investors

“As the number of potential buyers increases, so does the market

demand for fast "go hard" decisions…. we are seeing timelines as

short as five to seven days for a buyer to either complete their due

diligence or waive contingencies. ”

-Richard West CBRE (NREI Online)

4


Every Property Has “Personality”

5


…some more than others

6


…some built to look back at you.

7


Focusing on the Speed of Change…

Technology - Smart Phones / Body wear (Fitbit, Apple watch)

Advertising mediums – Craigslist (staying on page 1)

Demographics – neighborhoods can change in 2-years

Acquisitions Due Diligence

M-R Turn times

…and how this impacts the way you run your business. Many

aspects of business have shorter and shorter cycles. For example:

8


Pedro and Vinny’s – Arlington, VA (Penrose)

•$1,433 average Rents

•$94,180 average HH Income

•13,664 persons per square mile

9


LETS TALK DEMOGRAPHICS!

10


Correlating Office Rents to Multifamily Rent Growth

Highest Priced Markets for office Space Rent Growth YOY

Office - CBD Office - Suburban Multifamily-CBD Multifamily -Suburban

NYC - Manhattan San Francisco Oakland Denver

NYC - Midtown San Jose San Jose Oakland San Francisco Los Angeles Denver San Francisco

Washington DC San Diego San Francisco San Jose

NYC - Upper Midtown Fairfield, CT Atlanta Portland Boston Seattle Portland Atlanta

Houston Miami Miami - Palm Beach Miami-Palm Beach Miami Oakland Sacramento Sacramento Chicago Washington DC Seattle Fort Worth

Los Angeles Houston Los Angeles Los Angeles

Colliers International Whitten Advisors NREI Online MPF Q4 2015 Q4 2015

11


Correlating Office Rents to Multifamily Rent

Highest Priced Markets for office Space Rent Growth YOY

Office - CBD Office - Suburban Multifamily Multifamily

San Francisco Miami Los Angeles




Colliers International Whitten Advisors NREI Online MPF

Q4 2015 Q4 2015

12


Demographic Changes in 2030

Your Resident Today Your Resident Tomorrow

13

socyberty.com

Jon Furness Invision AP

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0CAYQjB0&url=http://socyberty.com/people/beyonce-the-most-beautiful-women-in-the-world-2012/&ei=NrYlVY-sFofEggSZsIDYAQ&bvm=bv.90237346,d.b2w&psig=AFQjCNHqqOEZOG3Q2TFD_uJN4BQ7SzsRGg&ust=1428621192415600


From the Center for Joint Housing Studies”

“Strong Growth in Minority Renters Has

Offset the Dramatic Decline in Younger

Renters”

*Change in Renter Households, 1995–2005 (Thousands)

Center for Joint Housing Studies –Harvard University

14


Wealth by Race, Educational Attainment

15


Renters for Life?

16


Which Quartile does your product type serve?

17


In a study using 50 metropolitan-area markets:

…between 40% and 50% of a property’s overall

performance is explained by sub-market factors

while only 10% is explained by metropolitan factors (Submarkets Matter! Applying Market Information to Asset-Specific Decisions- Real Estate Finance Fall 2000).

DEMOGRAPHICS DETERMINES THE

OUTCOMES. BUT WHERE?????

18


Submarkets Sub-markets are the boundaries

that define where a property must

compete and where property

comparisons begin.

19


Can You Answer these Questions

What is the average Age of the Resident Base?

What is their average income?

What is the average household size?

What is the primary cultural norm?

Total number of units?

Unit mix?

With respect to YOUR portfolio:

20


Can You Answer these Demographic Questions

What is the average Age of your Resident Base?

What is their average income as compared to the submarket?

What is the average household size? Is this changing?

What is the primary cultural norm for the submarket?

Is the cultural norm shifting?

Total number of units in the submarket?

Unit mix for the submarket?

With respect to YOUR portfolio:

21


Annual Apartment Rents with 3.5% Rent Growth

22

13,572

14,047

14,538

15,047

15,573

2014 2015 2016 2017 2018


Rent as a Percentage of Median HH Income

23

2015, 25.59%

2015, 25.96%

2016, 26.34%

2017, 26.73%

2018, 27.66%

2013 2014 2015 2016 2017 2018 2019


Let’s Talk Acquisitions!

24


…between 40% and 50% of a property’s overall

performance is explained by sub-market factors

while only 10% is explained by metropolitan factors (Submarkets Matter! Applying Market Information to Asset-Specific Decisions- Real Estate Finance Fall 2000).

25

Sub-Markets


Creating quality data…layer by layer

26


Sub-markets are the boundaries that define where a

property must compete and where property

comparisons begin.

27


Highland Park, Texas - drive-time analysis

28


2015

12,389

40.4

$98,735

47.4%

40.1%

$845,592

*55.8% (2010)

*38.9% (2010)

38.4% (2015)

34.5% (2015)

2019

13,252

40.2

$121,239

47.5%

40.6%

$917,616

Highland Park, Texas (Sub-Market)

2.37 Miles, 88.8% White Collar (Management, Business, Financial)

29

Population

Median Age

HH Income

Own

Rent

Home Value

1-Person HH

2-Person HH

Bachelor Degree

Masters Degree


Household growth

Units in pipeline

Vacancy rates

Substandard housing

conditions

Unit replacement

Absorption levels

Market balance

Market segmentation

Source: Vogt Santer

Number of potential income

qualified households

Unit distribution

AMI distribution

Turnover

Affordability

Housing Choice Vouchers

Market saturation

Location

Proposed rents

Selecting Submarket Layers

Factor to Consider in Analyzing Demand

30


Five Submarket Yield Determinants

Own versus rent Percentage

Unit counts- yours

Vacancy

Housing Absorption levels

Unit distribution

31


Acquisitions: How to Stay Out of the Weeds

32


Los Angeles – Non-actionable Data

33


Los Angeles: Actionable Data

-458 Square miles -114 Neighborhoods

34


Takeaways…Velocity of Change in Multifamily for

Acquisitions

How do you prepare your acquisition strategy for economic shifts in

neighborhoods? Submarket pre-selection with quality and detailed

demographic profiling focused on shifts in population and income.

What is the key demographic component to forecasting rent growth?

Educational attainment.

Where do you find performance that converts to Funds From

Operations (FFO)? Submarkets.

35


Wilhoit Investment Network, LLC

3610 Buttonwood Drive Suite 200

Columbia, MO 65201

573-886-8992

[email protected]

http://www.multifamilyinsight.com

http://www.multifamilyinsight.net

http://www.win-rei.com

http://www.powerhourleadershipacademy.com/pm

John Wilhoit, Presenter

36

mailto:[email protected]



http://www.multifamilyinsight.com/

http://www.multifamilyinsight.net/

http://www.win-rei.com/



http://www.powerhourleadershipacademy.com/pm/

Date post:	10-Jul-2020
Category:	Documents
Upload:	others
View:	0 times
Download:	0 times

May 4-6, 2015 - CoreLogic€¦ · Office - CBD Office - Suburban Multifamily Multifamily San...

Documents