rowlett state of the market - rowlett economic...
TRANSCRIPT
Rowlett State of the Market David Kahn, Senior Market Analyst
• D-FW Economic Outlook
• Multifamily
• Focus on Harmony
• Demographics & Retail
• Takeaways
Agenda
CoStar Research
1,600 Full-time Researchers
• 40 Market Analysts
• 200 Multifamily Researchers
• 40,000+ Properties On Electronic Feed
FIELD RESEARCH
130+ VEHICLES
400,000+ COMMUNITIES
VISITED
FIELD RESEARCH
AERIAL RESEARCH
$3 MILLION INVESTMENT
D-FW Economic Outlook
Employment Growth Still Outpacing U.S. Average
82
82
82
82
83
83
83
83
84
84
84
84
85
85
85
85
86
86
86
86
87
87
87
87
88
88
88
88
89
89
Sources: Moody's Analytics; CoStar Market Analytics As of 16Q4
(6%)
(5%)
(4%)
(3%)
(2%)
(1%)
0%
1%
2%
3%
4%
5%
04 05 06 07 08 09 10 11 12 13 14 15 16
D-FW United States
Employment Growth (Y/Y)
Job Growth By Industry Type
Current
Hard Copy
Sources: Moody's Analytics; CoStar Market Analytics As of 16Q4
117%122%
117%
127% 125%
108%
130%123%
75%
101%
64%
0
20,000
40,000
60,000
80,000
100,000
120,000
0%
20%
40%
60%
80%
100%
120%
140%
Tota
l N
onfa
rm
Offic
e U
sin
g
Tra
de
Busin
ess S
erv
ices
Edu
cation &
Health
Serv
ices
Govern
ment
Leis
ure
&H
ospitalit
y
Fin
ancia
l A
ctivitie
s
Manufa
ctu
rin
g
Co
nstr
uction
Info
rmation
Employment As A % Of Prerecession Peak Employment Growth Last 12 Months
Employment As A % Of Prerecession Peak Employment Growth (Y/Y)
D-FW By Age Cohort
Metro
San Diego
Austin
Charlotte
Columbus OH
Denver
Durham
Houston
Orlando
Raleigh
San Antonio
Tampa
US
San Diego
United States
Sources: Moody's Analytics; CoStar Market Analytics As of 16Q4
20%
26%
25%
28%
United States
65+ Years Older 50-64 Years Old 35-49 Years Old 20-34 Years Old
15%
25%
30%
30%
Dallas - Fort Worth
33%
17%
6%10%
21%
6%
-2%
6%
(5%)0%5%
10%15%20%25%30%35%
65+ Years Older 50-64 Years Old 35-49 Years Old 20-34 Years Old
2011-2016 Growth
Dallas - Fort Worth United States
Companies Are Expanding Throughout Dallas
Major Corporate Expansion And Relocation Map
Toyota, Liberty Mutual, Fannie Mae,
Capital One
Raytheon
AT&T, Omnitracs, The
Active Network, Jacobs
Engineering
CoreLogic
Relocation
Expansion
D-FW Is Affordable
Rank1
3
2
4
5
6
7
8
9
10
Sources: CoStar Market Analytics, Neustar As of 16Q4
0
2
4
6
8
10
12
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
Nation
al
Ga
rla
nd/R
ow
lett
Rockw
all/
Wyl
ie
Pla
no
Beth
esda (
DC
)
Sou
thea
st L
ake
Cou
nty
(C
HI)
Nort
hern
Na
ssau
(N
Y)
Waltham
/Arl
ingto
n/B
elm
on
t (B
OS
)
Redw
oo
d C
ity (
SF
)
Sou
th B
ay (
LA
)
Home Value to Income RatioCollin County Premier Suburban Submarkets
Home Value to Income RatioMedian Household Income
Housing Starts And Apartment Deliveries vs. Household Growth
138689901
11421851359395516
102628704
1442316542
318440396326
1286914591170221582221190
16322.95
-6311.5227717.2721178.29
Source: Moody's; CoStar Market Analytics As of 16Q4
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18
Housing Starts Household Growth Apartment Deliveries
Housing Starts vs Household Growth
DFW SFR Price Growth Outpacing MF Rent Growth
82
82
82
82
83
83
83
83
84
84
84
84
85
85
85
85
86
86
86
86
87
87
87
87
88
88
88
88
89
89
89
Source: CoStar Market Analytics As of 16Q4
(15%)
(10%)
(5%)
0%
5%
10%
15%
05 06 07 08 09 10 11 12 13 14 15 16
SFR Home Price Growth (Y/Y) Rent Growth (Y/Y)
SFR Home Price/Rent Growth
• Realize Rowlett 2020: 3,500 Acres of Undeveloped Land
• Median Household Income $83,000
• 30-45 Minute Commute to Downtown Dallas & Legacy West
• 800,000 SF Commercial Real Estate Built Since 2010
• 2.5 MSF Commercial Real Estate Under Construction/Proposed
• $1.5 Billion In Private Investment
Focus on Rowlett
Multifamily
Garland/Rowlett Submarket Apartment Fundamentals
Choose a Submarket:
12/31/199612/31/199712/31/199812/31/199912/31/200012/31/200112/31/200212/31/200312/31/200412/31/200512/31/200612/31/200712/31/200812/31/200912/31/201012/31/2011
Source: CoStar Market Analytics As of March 2017
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
0
200
400
600
800
1,000
1,200
10 11 12 13 14 15 16 17 18
0.1%
2.4% 2.3%
3.5%
4.2%
7.6%
5.5%
4.6%
2.5%
0%
1%
2%
3%
4%
5%
6%
7%
8%
10 11 12 13 14 15 16 17 18
Annual Change in Demand & Supply Vacancy & Vacancy Average
Annual Rent Growth
Rockwall/Wylie Submarket Apartment Fundamentals
Choose a Submarket:
12/31/199612/31/199712/31/199812/31/199912/31/200012/31/200112/31/200212/31/200312/31/200412/31/200512/31/200612/31/200712/31/200812/31/200912/31/201012/31/2011
Source: CoStar Market Analytics As of 16Q4
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
0
100
200
300
400
500
600
700
10 11 12 13 14 15 16 17 18
-0.8%
2.2%
3.2% 3.4% 3.4%
4.1%
0.7%
1.5%1.8%
(2%)
(1%)
0%
1%
2%
3%
4%
5%
10 11 12 13 14 15 16 17 18
Annual Change in Demand & Supply Vacancy & Vacancy Average
Annual Rent Growth
Apartments Under Construction By Metro
Rank1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Source: CoStar Market Analytics As of 16Q4
0%
2%
4%
6%
8%
10%
12%
14%
16%
0
10,000
20,000
30,000
40,000
50,000
60,000N
ew
York
Da
llas-F
ort
Wort
h
Los A
ngele
s
Ho
usto
n
Sea
ttle
Atlan
ta
Ch
icago
De
nver
Bosto
n
Pho
enix
Ora
ng
e C
ounty
Ch
arlotte
Mia
mi
Na
shvill
e
Austin
Co
llin C
ounty
San
An
tonio
San
Jose
Port
land O
R
Kan
sas C
ity
Washin
gto
n, D
C
San
Fra
ncis
co
San
Die
go
Completions As A % Of InventorySouth East Midwest West
New Supply (As % of Inventory)New Supply (Units)
Under Construction By Submarket
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Source: CoStar Market Analytics As of March 2017
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000F
risco
Pla
no
Ea
st
Dallas
Up
tow
n/P
ark
Citie
s
Allen
/McK
inney
No
rth
we
st F
ort
Wo
rth
Fa
rmers
Bra
nch/A
dd
ison
/Ca
rro
llton
La
s C
olin
as
Garla
nd/R
ow
lett
Arl
ing
ton
West
Da
llas
Da
llas C
BD
So
uth
we
st F
ort
Wo
rth
Oak C
liff
No
rth
Da
llas
Ro
ckw
all/W
ylie
Units Under Construction % Of Stock UC
% Stock ChangeNominal Stock Change (Units)
Focus on Harmony
• Built 2016
• 4 Story Mid-Rise
• $1.40/SF
• High-End Amenities
• 90% occupied
• 40 Unit/Month Lease-up!
• No Concessions
• 2nd Phase Starting Soon
Harmony Comps
Harmony Comps Continued
Harmony Daily Rent Trends
Rents On New Deliveries By Submarket
PID
8788713
94015479587920
1E+0793682009555631
1E+0799457379730304
9270417934773695326269296709938909096351159271150889285912853256554891840400589711229513985
Source: CoStar Market Analytics As of March 2017
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
Eastern Dallas Suburbs Dallas CBD East Dallas Frisco Plano Uptown/Park Cities
Asking Rent/SF
In The Pipeline
Bayside – 800+ Units
Terra Lago – 447 Units
Cypress Creek – 220 Units
Parc at Wylie – 158 Units
Heights at Campfire Crossing – 399 Units
Harmony II – 300+ Units
Domain at Firewheel – 299 Units
Carriage Homes II – 103 Units
705 W Avenue B – 200+ Units Village of Rowlett – 249 Units
Parc at Garland – 198 Units
Parc at Wylie – 158 Units
Heights at Campfire Crossing – 399 Units
Bayside – 800+ Units
Terra Lago – 447 Units
Cypress Creek – 220 Units Domain at Firewheel – 299 Units
Harmony II – 300+ Units
Carriage Homes II – 103 Units
705 W Avenue B – 200+ Units Village of Rowlett – 249 Units
Signature Gateway – 900+ Units
Spring Creek – 800+ Units
Demographics & Retail
Bayside - Demographics
Bayside – Daytime Employment
Bayside Legacy
Retail On Strong Footing
Key Takeaways
• Pricing Advantage On New Projects Leads To Strong Lease-Up
• Will Northern Path Of Job Growth Spillover To Here?
• Infrastructure!
• Softening in CRE to be expected at this point in the cycle
Outlook