inland empire update - berkadia empire update - february... · source: berkadia; axiometrics....

a Berkshire Hathaway and Leucadia National company

Senior Director951.506.2512

[email protected] BRE License #00908461

Margie Molloy Senior Director949.303.8688

[email protected] BRE License #01269912

Spencer Scott

41391 Kalima Street | Suite 140Murrieta, CA 92562

951.506.2787

inland eMpire office

INLAND EMpIRE UpDAtE feBrUary | 2016

california

4.0%

4.5%

5.0%

5.5%

$1,200

$1,300

$1,400

$1,500

2012 2013 2014 2015* 2016**

the local economic revitalization that began in 2012 continued in 2015. Employers augmented payrolls 3.7% year over year in Riverside and San Bernardino counties with the creation of 48,300 jobs. the largest contributor to this growth was the trade, transportation and utilities sector, gaining 10,000 workers, an increase of 3.1%. A significant portion of expansion in the sector was attributed to hundreds of jobs created among retail operators Smart & Final Extra! in Moreno Valley, the Fresh Market in palm Desert and Mountain Grove Citrus plaza in Redlands. Brisk job growth enabled multifamily operators to boost asking rents 6.5% to $1,390 per month by year-end. Robust rent appreciation occurred despite a 20-basis-point rise in vacancy to a still-healthy 4.5%. Completions numbering 1,690 units were the highest-recorded annual total since 2009, a factor in the uptick in vacancy. Long-term planning activity remained elevated as developers requested permits for 2,830 apartments.

2015 review

An additional 35,200 job seekers will procure employment this year, equating to a 2.6% gain. Logistics expansion in the two-county area will be a key contributor to overall growth. Australian-based Goodman Group has more than 4.9 million square feet of light-industrial space in various stages of development that, when completed, will provide space for numerous logistics companies, creating thousands of jobs. In the manufacturing industry, Fisker Automotive Inc. will open an assembly plant in Moreno Valley, hiring 150 workers. Economic expansion will sustain apartment demand with 1,300 additional units occupied by year-end. During this time, builders will deliver 1,760 rentals, more than 80% of which will be concentrated in the western portion of the metro. With the short-term supply imbalance, vacancy is forecast to edge up 20 basis points to 4.7%. Despite the upturn in vacancy, multifamily operators are expected to raise asking rents 5.2% this year to $1,462 per month. Meanwhile, effective rents will appreciate 4.9% to $1,455 per month as concessions rise from 0.2% to 0.5% of average asking rents.

2016 preview

Market factS

popUlation4,526,400

MedianHoUSeHold

incoMe$56,000

HoUSeHoldS1,405,200

rentSHare ofwallet29.8%

-80,000

-40,000

0

40,000

80,000

2007 2008 2009 2010 2011 2012 2013 2014 2015* 2016**

aSking rentS and vacancy

*Estimate; **Forecast | Source: Berkadia, Moody’s Analytics

$0

$40,000

$80,000

$120,000

5.0%

5.5%

6.0%

6.5%

2011 2012 2013 2014 2015*

cap rate | price per Unit

*Estimate | Source: Berkadia, CoStar Group

0

100

200

300

2011 2012 2013 2014 2015*

SaleS activity indeX

*Estimate | Source: Berkadia, CoStar Group

ye 2015 1.3% yoy ye 2015 2.4% yoy ye 2015 1.6% yoy

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ye

ar

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2015 perforMance HigHligHtS

3.7% yoy

eMployMent48,300

6.5% yoy

aSking rentS$1,390

20 BpS yoy

vacancy4.5%

30.0% yoy

conStrUction1,690 Units

-150 BpS yoy

UneMployMent rate6.1%

-30 BpS yoy

conceSSionS0.2%

ye 2015 140 BpS yoy

*Estimate; **Forecast | Source: Berkadia, Axiometrics, Moody’s Analytics

0

1,000

2,000

3,000

4,000

2012 2013 2014 2015* 2016**

*Estimate; **Forecast | Source: Berkadia, Axiometrics, Moody’s Analytics

perMitS and deliverieS

inland eMpire | ca

eMployMent cHange

Data and images pertaining to employment, income, permits, population, rents, single-family housing and vacancy are year-end figures. Absorption, construction and apartment sales figures are full-year totals. Numbers for 2015 are estimated values, while 2016 figures are forecast projections. The sales information represents transactions of apartment properties with 20 or more units and sales price of $1 million or more. Apartment market data criteria and methodologies vary by market.

inland eMpire | ca pipeline report

naMe city Zip UnitS Stage developerOak Springs Ranch Widomar 92563 312 Complete GLJ partners

Vineyards at paseo Del Sol temecula 92592 288 Complete the Dinerstein Companies

Homecoming at the preserve Chino 91708 799 Under Construction Lewis Group of Companies

palisades Sierra Del Oro Corona 92882 288 Under Construction turner Real Estate Invesments

Circa 2020 Redlands 92374 306 Under Construction transcoast Financial

Capriana at Chino Hills Chino Hills 91706 284 Under Construction Fairfield Residential Company, LLC

Encanto at Dos Lagos Corona 92883 354 Under Construction REXCO Development

Main Street Metro Corona 92880 464 Under Construction Watermarke properties Inc

Vistara Ontario 91764 298 Under Construction picerne

Avalon Chino Hills Chino Hills 91709 331 Under Construction Avalon Bay Communities

the Metro Corona 92882 464 Under Construction the Watermarke prop. / Wermers prop.

Arrow Station Montclair 91763 99 Under Construction Hutton Development Co

Vernola Marketplace Apartments Mira Loma 91752 397 permitting Vernola trust

the Crossings at Redlands Redlands 92374 340 permitting UCR Group

palazzo at Rio Vista Cathedral City 92234 149 planning Forum Real Estate Group

Green Desert Apartments Hesperia 92345 84 planning

Hillsborough Apartments III Chino 91710 68 planning Komar Investments

Cajalco and temescal Canyon Dev Riverside 92503 102 planning

palm Canyon Apartments palm Springs 92262 91 planning Wessman Development Company

Rialto Airport Redevelopment Rialto 92376 planning Lewis Group of Companies

Indio plaza Luxury Apartments Indio 92201 69 planning Charlie Knickerbocker; thermal Land, LLC

Cathedral City Mixed Use Cathedral City 92234 69 planning

Fairfield Ranch Commons Chino Hills 91709 346 planning turner Real Estate Invesments

Vista Bella Chino Hills 91709 65 planning Vista Bella Investment properties, LLC

the Santa Barbara Chino Hills 91709 324 planning Lewis Group of Companies

Vista park Chino Chino 91710 40 planning Western American properties

Rialto Apartments Rialto 92376 104 Bidding BM properties

New Haven Ontario 91761 173 Bidding Brookfield properties

Partial Map of Inland Empire | CALocations of Pipeline Developments (Approx.)

nUMBer of UnitS By Stage

coMplete600

planning1,470

perMitting737

Under conStrUction

3,687Bidding

277

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inland eMpire | ca SaleS coMparaBleS 2015Q4watercreSt at tHe polo fieldS46745 Monroe StreetIndio, CA 92201

coe: 12/24/2015

Buyer:Investment Concepts

Seller:Amber Capital, Inc. & FountainManagement, LLC

UNItS BUILtpRICE /

UNItpRICE /

SF SALE pRICECAp RAtE

226 1986 $31,369 $32.76 $7,089,500 n/a

loMa viSta2575 Steele RoadSan Bernardino, CA 92408

coe: 12/16/2015

Buyer:UCR Group

Seller:Loma Vista Investors LLC

UNItS BUILtpRICE /

UNItpRICE /


70 1981 $97,943 $147.44 $6,856,000 5.00%

avana canyon creSt5880 Lochmoor DriveRiverside, CA 92507

coe: 12/08/2015

Buyer:Blackstone Real Estate Advisors

Seller:Greystar Real Estate partners

UNItS BUILtpRICE /

UNItpRICE /


158 2004 $215,905 $250.82 $34,112,940 n/a

aMBerwood12957 Ramona AvenueChino, CA 91710

coe: 12/24/2015

Buyer:Robert t. & Jane McCaffrey

Seller:Asher Investments

UNItS BUILtpRICE /

UNItpRICE /


198 1986 $154,040 $181.10 $30,500,000 5.20%

SUMMerwind2055 Central AvenueHighland, CA 92346

coe: 11/10/2015

Buyer:Robert t. & Jane McCaffrey

Seller:Asher Investments

UNItS BUILtpRICE /

UNItpRICE /


180 1990 $95,278 $112.88 $17,150,000 6.20%

viSta SpringS21550 Box Springs RoadMoreno Valley, CA 92557

coe: 10/30/2015

Buyer:providence Capital Group

Seller:pICOA Inc.

UNItS BUILtpRICE /

UNItpRICE /


212 1989 $130,189 $158.29 $27,600,000 5.50%

tHe reServe at rancHo Belago15100 Moreno Beach DriveMoreno Valley, CA 92555

coe: 10/20/2015

Buyer:Bridge Investment Group

Seller:Bristol Brokerage Company, Inc.

UNItS BUILtpRICE /

UNItpRICE /


176 2005 $171,023 $172.43 $30,100,000 5.20%

aSante villaS23925 Bay AvenueMoreno Valley, CA 92553

coe: 10/15/2015

Buyer:Laguna point properties LLC

Seller:Silverstone Investments

UNItS BUILtpRICE /

UNItpRICE /


120 1984 $101,667 $119.02 $12,200,000 n/a

tHe vintage1349 Circle City DriveCorona, CA 92879

coe: 09/11/2015

Buyer:Southpark Company

Seller:Veritas Development, Inc.

UNItS BUILtpRICE /

UNItpRICE /


62 2005 $184,274 $227.59 $11,425,000 4.69%

proMenade terrace451 Wellesley DriveCorona , CA 92879

coe: 09/03/2015

Buyer:Bridge Investment Group

Seller:Equity Residential

UNItS BUILtpRICE /

UNItpRICE /


330 1989 $237,479 $217.96 $78,368,000 4.75%

inland empire update - berkadia empire update - february... · source: berkadia; axiometrics....

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