The Yardi Matrix Student Housing Report for January offers a glimpse into the health and future of the market. Data reveals solid performance and steady growth, particularly among Big Ten universities. Preleasing Yardi 200 ended the fall 2021 preleasing period on a high note. In September, the figures came in at 94.3%, a 5.2% increase from fall 2020 but 0.4% less below pre-pandemic fall 2019. Data shared by the National Student Clearinghouse Research Center in October 2021 suggests that postsecondary enrollment for the fall 2021 term was 2.6% lower than the previous year and 5.8% below 2019. The nation’s most selective schools and schools in markets with high costs of living have had the strongest leasing thus far. Universities in the Big Ten conference report 40% preleased bedrooms as well as the highest prelease growth of November at 18.7%. Preleasing for the fall 2022 term is already underway. In November, preleasing ended at 26.7%, up from 15.4% from the previous year. Rents The average rent per bedroom was $791 as of December, a 2.2% increase over the previous year and 0.3% over the previous month. That figure marks the highest average rent for off-campus dedicated student housing since the onset of the pandemic. Most notably, the University of California-Riverside reported annual rent growth above 15% and average monthly rent per bedroom at $1,004 as of December. Overall, spring is estimated to bring modest rent growth, particularly favorable for the most selective universities. Only seven of the Yardi 200 universities with four or more properties reported negative annual rent growth. Among them, the University of Alabama reported the steepest decline with -2.7% growth in December. Supply Though housing deliveries declined in 2021, supply is currently on the rise. Yardi 200 delivered about 19,000 bedroom as...

Wouldn’t it be terrific to predict the future of real estate performance? We’re not quite fortune tellers (yet), but analysts have optimized predictive analytics. Data gives us insights into major shifts, empowering real estate pros to navigate decision-making accordingly. Today, we’re taking a look forward into the hottest markets for real estate in 2022. No, growth isn’t dominated by the same old major metros For years, large cities like Los Angeles and New York reigned supreme on the hottest markets lists. High rents, low vacancies and a steadily growing interest in convenient urban living made major metros desirable destinations. While major metros still have their appeal, remote work has enabled significant portions of the population to work from anywhere in the nation. Their sights shifted to secondary and even tertiary markets as people sought a lower cost of living. In such markets, dollars go further and gain more square footage in both multifamily and single-family options. The 43rd Emerging Trends in Real Estate report issued by PricewaterhouseCoopers (PwC) ranks the following cities as the hottest markets in 2022: 1. Nashville2. Raleigh/Durham3. Phoenix4. Austin5. Tampa/St. Petersburg6. Charlotte7. Dallas/Fort Worth8. Atlanta9. Seattle10. Boston Who thought we would see the day when cities like Raleigh would usurp San Diego, or Charlotte to outpace New York? These are strange and exciting times. Is there anything standing in the way of ongoing growth for smaller markets? Sometimes, trends are just trends. They are blips on the radar that you can navigate with or around and emerge on the other side of history nonplussed. But are the hottest markets for 2022 a trend, or are they the beginning of an entirely new dynamic in real estate? The PwC report indicates that, “flexibility and convenience drive the next decade” in real...

Yardi Matrix has been honored as a leading real estate analytics provider by Proptech Outlook, an industry publication that annually recognizes companies that are at the forefront of providing real estate analytics solutions and transforming business. In a forthcoming article in the Proptech Outlook magazine, Matrix vice president Jeff Adler dissects the paradigm shifts that have occurred for the real estate industry due to the pandemic and how they may influence ongoing investment. Investors need comprehensive, verified, and reliable data to make decisions that go beyond guesswork, which is why Matrix has so much value for investment professionals. “Essentially, Yardi Matrix’s function is to bring more transparency in formerly opaque markets. We exist to save time and effort for investment professionals while also ensuring that they are making the right bets at the right time,” Adler told Proptech Outlook. Using Matrix, investors can directly get the relevant insights regarding the commercial real estate market and its subsectors, and easily benchmark, predict, and compare the potential value from various investment opportunities in lesser time and with more precision. “Beyond acquisition and underwriting, the insights provided by Yardi Matrix can also be leveraged for brokerage, loan origination, portfolio management and reassessment, and even property development,” observes Proptech Outlook. Matrix clients have been able to achieve significant returns on their investments, aided by analysis based on factors like location, migration patterns, employment and more. Matrix also offers biannual live webinars that help keep industry professionals informed on the latest trends. “As the impediments of the pandemic alleviate further and investment professionals revamp their efforts, we will be ready to equip them with the latest insights regarding the property market to make more accurate investment decisions,” Adler said. Read the interview with Jeff Adler in its entirety on...

The September jobs report clearly left something to be desired, adding just 194,000 jobs for the month. However, a brighter point is within that number: Nearly half of all of the jobs added in September were in the office-using sector. And, while many more jobs are needed to rebound to pre-pandemic levels, data from the CommercialEdge National Office Report is encouraging. Nationwide, office vacancy rates continued their slow trickle downward, falling 50 basis points (bps) in September to settle at 14.9%. Moreover, vacancy rates are still up 130 bps year-over-year. At the same time, the national average full-service equivalent listing rate for all office space dropped $0.10 over August figures. Even so, it still represents a 1.2% year-over-year increase. Specifically, 18 of the top 25 markets analyzed experience an increase in listing rates. They were led by Los Angeles and the Bay Area, which saw increases of 8.1% and 6.2% year-over-year, respectively, to $41.62 and $55.79. Meanwhile, listing rates in the Indianapolis office space market cooled ever so slightly over August figures, finishing the month at $21.09 — down 0.29% year-over-year. However, as the pandemic wanes and becomes more endemic, there are reasons to be optimistic regarding commercial real estate. In particular, big tech companies have been on a buying spree of large and high-profile office buildings. For instance, Google will exercise its purchase option at Hudson Yards in New York City for $2.1 billion; Apple purchased a trio of buildings in Cupertino, Calif., for $450 million; and Amazon continues construction on its $2.5-billion HQ2 headquarters in Northern Virginia. Notably, part of the motivation for purchasing commercial real estate is also driven by record levels of cash reserves at large technology companies. And, historically low interest rates combined with record profits means that commercial...

Single-family rentals (SFR) are currently thriving. Last year alone brought $8 billion in new investments, and activity through this year exceeds that pace. Activity is especially rapid around the metros of the southeast and interior U.S. The regions’ low taxes and high land availability attract developers while renters enjoy the low cost of living and a higher quality of life. But can the SFR market growth last as Americans return to the cities from which they fled? What caused the boom in single family rental popularity? The popularity of SFR is threefold. The industry has been steadily gaining momentum since the onset of the Great Recession. Empty nesters composed a significant demographic of early adapters. They aimed to downsize and decrease maintenance without losing the private space they’d grown to love. Millennial families with freelance jobs or with telecommuting options made up the second largest faction of renters in single-family homes. Fast forward about a decade and single-family rentals received another boost in demand. The pandemic served as a catalyst for the recent spike in interest as many Americans opted to leave congested cities for roomier suburbs. Small scale investors made up the bulk of property owners in 2018. By 2020, the landscape began to change. In addition to mom-and-pop operations, builders quickly gained interest in rental assets. Analysts estimated that the pandemic accelerated built-to-rent space by 5 to 7 years. About 10% of SFR are now built-to-rent properties and 12% of current single-family construction is designated for rentals. Trepp reports that 2020 was the most active year for SFR securitizations in U.S. history. New issuance topped $8.3 billion, about a 99% increase from 2019 and a 9% increase from 2018’s previous record-high. Into mid-2021, Trepp recorded $3.1 billion worth of newly securitized SFR...

Lately, most news seems to be centered around when workers will be returning to the office. But, according to the September CommercialEdge National Office Report, the U.S. office real estate market is also warming up again after cooling off of 2020. While August vacancy rates nationwide are still 210 basis points (bps) below their August 2020 levels, they’re also ticking steadily downward, sinking another 10 bps to 15.4% compared to July. Meanwhile, the national average full-service equivalent listing rate for all office space was $38.72 per square foot in August — an increase of 1.2% year-over-year. Even so, seven of the top 25 markets analyzed experienced a contraction in listing rates: Listings in Manhattan and Chicago fell 2.9% and 1.7%, respectively, while Seattle office space vacancy rates notched 6.8% higher — one of the largest year-over-year increases of the markets analyzed. Essentially, the life sciences sector is the only consistent bright point throughout the pandemic. In fact, it’s grown faster in the last 18 months than before the pandemic started. However, more than half of the office space in this sector is concentrated in just four markets: Boston, San Diego, San Francisco and the Bay Area. These markets are prime arenas for the life sciences industry due to the presence of top universities like Stanford, MIT and Harvard that provide not only research opportunities, but also a large talent pool, as well. Furthermore, Boston alone has 7.2 million square feet of lab space under construction, with another 11.6 million square feet currently in the planning and prospective stages — and that doesn’t even include planned conversions. Granted, office construction is slowing across the nation and, although deliveries are holding steady, new starts are slowing down in almost every market. But, Austin, Texas, is a...

Federal tax reform enacted in December 2017 reduced or eliminated capital gains taxes for investments directed toward multifamily, commercial and self storage real estate located in more than 8,700 low-income “opportunity zones.” This source of capital was expected to seed startups, accelerate business expansions, create jobs, improve housing options and revitalize built environments in areas where about 35 million Americans live. A Yardi Matrix white paper published in 2019 noted that the zones initially appealed to “a new base of largely untapped investors” and offered value-add opportunities in “new markets that were thought to be too small or risky as investment strategies.” Many policymakers touted opportunity zones as a way to create jobs and lift up underserved communities and minority-owned businesses. Critics assert that the program lacks transparency and mostly helps well-heeled investors and developers. A year-and-half since investors joined the program in earnest (many waited until final Treasury Dept. regulations were released in December 2019), has the opportunity zone initiative fulfilled its promise? Expert opinion is split. The White House Council of Economic Advisors, for example, reported in October 2020 that the program had attracted $75 billion in new investments to distressed American communities, $52 billion of which wouldn’t otherwise have entered the zones, and increased private property values within the designated areas by 1.1%. This infusion of capital represented “a powerful vehicle for bringing economic growth and job creation to the American communities that need them most,” holding the potential to “lift at least one million Americans out of poverty [and decrease] the poverty rate in opportunity zones by 11%,” U.S. Department of Housing and Urban Development official Denise Cleveland-Leggett said at the time. Michael Novogradac, managing partner of Novogradac, a San Francisco-based professional services organization, says the program “has seen notable...

Multifamily asking rents jumped an average of 6.3% year-over-year in June, the largest leap ever recorded by Yardi Matrix, a leading industry data tracker. The national average apartment rent increased $23 last month to $1,482, another record, and single-family home rents were up 11% year-over-year. “These are the largest year-over-year and monthly increases in the history of our data set,” said Jeff Adler, vice president of Yardi Matrix. Analysts point to increased household savings and government stimulus funding as factors that have kept the multifamily industry stable during the pandemic period, and now able to rebound as the economy improves. The newly released data is an economic indicator of post-pandemic recovery across the U.S. The largest increases were documented in the lifestyle apartment sector. Renters are also now returning to many gateway markets that saw outbound migration for most of the last year. A supercharged housing market is also pricing out some potential buyers, leading residents to remain in apartments. “Rent growth will not be able to continue at these levels indefinitely, but conditions for above-average growth are likely to persist for months,” Adler said. The increases reflect growth in what landlords are asking for unleased apartments. Renters renewing leases may also be seeing increased rents, but likely at lower levels. Migration is pushing up rents in Southwest and Southeast metros like Phoenix (17.0%), Tampa and California’s Inland Empire (both 15.1%), Las Vegas (14.6%) and Atlanta (13.3%). These metros were lower cost compared to larger gateway metros. Get more insight on the historic report. Yardi Matrix offers the industry’s most comprehensive market intelligence tool for investment professionals, equity investors, lenders and property managers who underwrite and manage investments in commercial real estate. Yardi Matrix covers multifamily, student housing, industrial, office and self storage property...

Is there a market for renters who want it all? Privacy, outdoor living space, a manicured lawn and financial flexibility are available to renters of single-family homes. Research reveals that interest in single family rentals has been growing since the Great Recession. The pandemic further ignited demand, as demonstrated by a surge in the construction of single-family rentals. As the market develops, specialized technology is necessary for smart growth. Industry powerhouses set their sights on single-family rentals   In mid-2020, the first wave of institutional buyers made their mark on the industry. During Q1 2021, they continued the trend by purchasing nearly 55,000 homes, according to Redfin data. Built-to-rent single family homes are also taking off. New York-based Trepp real estate analytics firm reports a 66% increase in single-family homes built to rent. Both homebuilders and apartment companies are entering the market. Builders such as Lennar Corp., the largest homebuilder in the nation by revenue, and multifamily behemoth Greystar Real Estate Partners are investing in single-family houses. Mike Clow, executive director at Greystar, aims to increase investment in the division by a noteworthy 1,566.66% percent by 2026. Operator Invitation Homes announced that it will spend $1 billion in single-family home acquisition in 2021, per an interview with Business Insider. While major players are pumping major dollars into the sector, small landlords still own the majority of single-family rentals. Only about 6% of new homes are built-to-rent.   Single-family rental data by Yardi Matrix The demand for single-family rentals is reflected in the strength of rents and occupancy. Yardi Matrix reporting now includes insights into built-to-rent single-family communities. Data is compiled from more than 90,000 units in 700 communities nationwide. Single-family rentals (SFR) thrived during the pandemic. The industry recorded a powerful 7.3% year-over-year (YoY) rent...

Emergency rental assistance funds are helping Connecticut residents maintain housing thanks to a successful launch of the UniteCT program. UniteCT is administered by the State of Connecticut Department of Housing and runs on technology from Yardi called Rent Relief. UniteCT is funded by $420 million in grants for rent and electricity payments for households impacted by the COVID-19 pandemic. Fifteen state, county and city government agencies use Rent Relief to administer more than $1 billion in emergency rental assistance funds. Over 158,000 users are registered on Rent Relief and have completed more than 57,000 applications. With Yardi Rent Relief, UniteCT accepts applications for assistance from residents and landlords using an online portal that is accessible from computers and mobile devices. The flexibility of Rent Relief paired with the efforts of the UniteCT team delivers assistance in areas that would have been otherwise been underserved. ”The UniteCT bus is an exciting new solution to combat the digital divide in communities who need additional support with technology. We are reimagining the rent relief application process by going to the individual and setting the precedent for other programs to come,” said Marina Marmolejo, program manager. (Bus pictured at right.) The success of Rent Relief’s implementation of UniteCT can be measured by how fast Yardi launched the online application portals and how quickly case review team members became trained to begin vetting fully submitted applications. Other signs of success include how many applicants have used Rent Relief thus far without major interruptions in service. Users created more than 10,000 accounts within the first few days of the applicant portal going live. “We continue to do a lot of multi-media outreach including radio, newspaper articles and social media.  We have created sixteen UniteCT Resource Centers throughout the state to...

As the U.S. economy continues to show recovery gains, multifamily housing follows suite. Several factors including prevalent industries, vaccination rates and employment create a distinction between markets with rapid growth and lagging gains. Need-to-know data, quick and easy Multifamily rents increased by 2.5% year-over-year (YoY) in May. This nearly reflects rent growth rates of March 2020, before the development of pandemic trends.  For the second consecutive month, all top 30 metros showed positive month-over-month (MoM) rent growth. An impressive 90% had MoM gains of 0.5% or more.Rents grew $12 in May to $1,428. That’s the largest one-month increase in Matrix history. The 0.8% MoM growth rate was the largest since June 2015.Rents increased nationally by 0.8% in May. Of our top 30 metros, 22 demonstrated positive YoY rent growth this month. Run, walk, and crawl: metros demonstrate growth at different rates Some rents grow at a sprint. YoY rent growth reached double digits in the Inland Empire for the first time in recorded history. Rent growth in the Inland Empire clocked in at 10.2% followed by at Phoenix 9.6% and Sacramento at 8.3%. Gateway markets have found a comfortable stride. Miami reports a respectable 6.0% growth, the strongest in the region. Others are crawling or have yet to budge, though all signs point to improvements soon. Chicago with 0.0% growth and Los Angeles at -0.1% are still better positioned than San Jose (-9.0%), New York (-8.8%) and San Francisco (-6.7%). Introducing single family rental data Matrix reporting now includes single-family rents within built-to-rent communities. Data is compiled from more than 90,000 units in 700 communities nationwide. Single-family rentals (SFR) thrived during the pandemic. The industry recorded a powerful 7.3% YoY rent growth as of May. This reflects an overall rent increase of about $14...

A new webinar outlined the continued success of the industrial real estate sector and ever-evolving picture for the office market. The May 13 presentation was hosted by Yardi Matrix and CommercialEdge. Insightful detail from the presentation is available on both CRE market segments as well as regional breakdowns. Find the full recording at yardimatrix.com Strong fundamentals continue for industrial Yardi Matrix vice president Jeff Adler had nothing but positives to share about the state of the U.S. industrial sector. Durable fundamentals for both supply and demand indicate that industrial will be a strong investment well into the future. “I’m really not concerned that this is some kind of bubble,” Adler noted, as the available supply and new development of industrial properties can barely keep up with current demand. As a result, rents are performing well, especially in coastal markets, and vacancy rates across the nation are low. E-commerce continues to be a major contributor to industrial’s success, but the backbone of the industry is general goods distribution and small-scale manufacturing. E-commerce won’t have the same double digit increase it did in 2020 due to pandemic activity constraints, but demand is expected to remain consistent. Consumers learned to rely on direct ordering during the pandemic, Adler noted, and can save time by continuing such shopping habits. Major ports and large population centers lead the industrial rent growth list, with California’s Inland Empire in the No. 1 spot and Sacramento at No. 2. But smaller markets have the highest percentages of industrial supply under construction, led by Amarillo, Little Rock and Albuquerque. Nationally, the amount of new industrial space in the pipeline is not expected to disrupt rent gains. Adler anticipates industrial has about three years of runway for its continued strong performance. Yardi Matrix data...

The multifamily market is rebounding from the pandemic at a rapid clip, and gateway markets are now seeing positive performance indicators for the first time in many months. The latest Yardi Matrix Multifamily National Report has much good news for owners and investors, including a 1.6 percent year-over-year rent bump. “That is the largest increase that we have seen since the beginning of the pandemic,” said Matrix analysts. Overall rents increased by $10 in April to $1,417. The last time overall rents increased by that amount in a month was June 2015. It was also the largest year-over-year jump since March 2020. Out of the top 30 markets Matrix reported on, 24 had month-over-month rent growth greater than 0.5%. Of particular significance were the gains in gateway markets. Miami leads the gateway markets with 0.8% rent growth on a trailing 3-month basis. All other gateways had positive trailing 3-month rent growth, with Chicago (0.5%) and Boston (0.4%) showing strong gains. Washington, D.C. (0.2%), New York, San Francisco and Seattle (all 0.1%) are further back in the recovery process. “We expect the gains in these markets to strengthen as we head into the summer,” states the report. Find more good news and in-depth analysis for multifamily from Yardi Matrix. Yardi Matrix offers the industry’s most comprehensive market intelligence tool for investment professionals, equity investors, lenders and property managers who underwrite and manage investments in commercial real estate. Yardi Matrix covers multifamily, student housing, industrial, office and self storage property types. Email matrix@yardi.com, call (480) 663-1149 or visit yardimatrix.com to learn...

Jeff Adler, vice president of Yardi Matrix, was recently featured as a guest panelist on an NMHC virtual forum. The April 20 focused on apartment investment, trends and economic factors affecting the industry. Adler appeared alongside Jim Costello, senior vice president at Real Capital Analytics, and Suzanne Mulvee, senior vice president of research and strategy at GID. The conversation was moderated by Dave Borsos, vice president of capital markets at NMHC. Markets like Portland, Oregon have seen an influx of residents as rising single family home sales over the last year. All three industry experts were bullish on the state of the multifamily industry, which is already well on its way to recovery from the impact of the COVID-19 pandemic. “As it relates to multifamily, it is game on,” said Adler. “(Investors) are out there buying and rents are up. There are pockets of weakness in the urban gateway but if you look south and west, there are a lot of people bidding with a lot of cheap (capital). There are a lot of people moving out of office investments and into industrial and multifamily.” The economy and inflation risk With many Americans flush with cash, both from saving during the pandemic and stimulus funds from the federal government, spending is rampant and economic growth is expected to be around 6.5 percent for 2021, Mulvee noted. But with those conditions comes a concern about potential inflation. “We know we are going to see a period of six months or so of inflationary pressures,” Adler said. “But we hope that in six to nine months, there will be enough deflationary counter pressures that it won’t get out of hand. That in my mind is the bigger issue.” Costello, who writes extensively on market conditions, tempered...

The economy is recovering quicky after severe impacts from pandemic shutdowns over the last year. That was the top line good news from Thursday’s webinar on the multifamily industry, presented by Jeff Adler, vice president of Yardi Matrix. The recovery timeline is expected to be around 18 months. “The economy is heating up as the job market strengthens,” said Adler. “A recovery in gross domestic product is clearly under way. I would liken this to a shot out of a cannon.” Inflation is a short-term concern, however. Hear the full analysis and insight in the webinar recording. Rents are on the rise across the country, and that’s a positive indicator for the industry and the economy at large. Multifamily rents increased by 0.6% on a year-over-year basis in March, with the national average rising by $6 to $1,407. Out of 134 markets surveyed, 114 had flat or positive YoY rent growth. Impacts vary, however, across states and cities. Gateway markets like Boston, Chicago, Miami, New York, San Francisco and Washington D.C. appear to have now hit bottom in rents and are positioned for gradual recovery. Leading the way in March’s rent increases were affordable cities and suburbs in the West, with the Inland Empire (8.3%), Sacramento (7.3%) and Phoenix (6.9%) leading national tallies in year-over-year rent growth. “It will take several years for gateway markets to recover, under the best of circumstances,” said Adler. “There has been just as much movement within metro areas at about a 30-40 mile radius. People are moving out of the urban core and into surrounding suburban areas. That’s a meaningful amount that will make coming back to the office problematic, but they aren’t detached from the metro area entirely.” Single family rentals and the build-to-rent sector have also...

Do you want to emerge from 2021 with a more efficient, agile and profitable organization? Discover insights to help you reach your goals during the National Apartment Association (NAA) Digital Studio Series! Stronger NOI in 2021 The April NAA Digital Studio, presented by Yardi, is a half-day event including deep dive and interactive sessions, industry panels, networking and more. This month’s theme is “Stronger NOI in 2021: Where do we grow from here?” Experts from leading multifamily companies across the country will discuss the many ways in which COVID-19 has impacted the real estate industry and, more specifically, apartment management. Each session features unique programming that tackles common industry challenges. Through the sessions, you can: Explore market changes and projected financial impacts to help you plan smarter in 2021 and beyond. Gain insights from multifamily leaders who will share new performance metrics they’re using to change the way they do business. Discover ways to improve net operating income beyond rent increases. Featured speakers include guests from Luma Residential, Bell Partners, BH Management Services, Cirrus and more. Industry professionals focused on operations, marketing, technology and related roles will walk away with practical, actionable items to strengthen your organization. Work + play The event kicks off with keynote speaker Jeff Adler, vice president of Yardi Matrix, offering an engaging look at the latest multifamily data. Examine changes in rent growth, occupancy, retention and renter preferences over the last 12 months. Learn how new demographic patterns have affected top and bottom markets. Attendees will also see rent and occupancy forecasts for a variety of property groups. Then, stick around for additional sessions that connect the market update to real-life experiences and plans to protect NOI going forward. End the day with a relaxing musical interlude. Leslie and...