The San Diego County Rental Market Boom

Transcription

1 The San Diego County Rental Market Boom Peter Dennehy, Senior Vice President Meyers Research, LLC

2 San Diego Employment Growth Employment History & Forecasts San Diego County, CA - Ten Year History Non-Farm Employment Total 1,291,58 1,311,3 1,319,683 1,311,858 1,245,242 1,236,175 1,245,98 1,279,28 1,312,433 1,344,593 Prior Year Change 22,95 2,242 8,383 (7,825) (66,617) (9,67) 9,733 33,3 33,225 32,16 Annual % Change 1.8% 1.6%.6% -.6% -5.1% -.7%.8% 2.7% 2.6% 2.5% Unemployment Rate 4.3% 4.% 4.6% 6.% 9.6% 1.6% 1.1% 8.9% 7.5% 6.3% 2

3 How Does San Diego Compare to National MF Market? Source: Marcus & Millichap 215 National Apartment Report 3

4 San Diego Capital Markets Trends Sales Price Smoothed Cap Rate Vacancy Rate Percent Change 7.% 6.% 5.% 4.% 3.% 2.% 6.% 5.% 4.% 3.% 2.% 1.% Smoothed Cap Rate Vacancy (%) 1.%.% Q3 214.% $26, $24, $22, $2, $18, $16, $14, Raw Price per Unit Annual Price Change 6.% 5.% 4.% 3.% 2.% 1.%.% -1.% $12, -2.% $1, Q % Source: CBRE Econometric Advisors 4

5 Carlsbad/ Encinitas/ Del Mar Chula Vista/ Imperial Beach Downtown San Diego/Coronado El Cajon/ Santee/Lakeside Escondido North San Diego I-15 Corridor La Jolla/ University City La Mesa/Spring Valley National City/ North & South Park Mission Valley/ Kearny Mesa Central San Diego Coastal Oceanside Vista/ San Marcos SAN DIEGO AVERAGE Vacancy Rate Q3 214 Trends by Submarket La Jolla/University City Carlsbad/Encinitas/Del Mar Mission Valley/Kearny Mesa Downtown San Diego/Coronado North San Diego I-15 Corridor SAN DIEGO AVERAGE Central San Diego Coastal Chula Vista/Imperial Beach Vista/San Marcos Oceanside La Mesa/Spring Valley El Cajon/ Santee/Lakeside National City/North & South Park Escondido Rent Price $1,161 $1,914 San Diego Average Rent: $1,548 $ $2 $4 $6 $8 $1, $1,2 $1,4 $1,6 $1,8 $2, 4.% Vacancy San Diego Vacancy: 2.7% 3.% 2.% 1.%.% Source: CBRE Econometric Advisors, Meyers Research 5

6 CBRE San Diego Submarket Map Legend 1 Downtown San Diego/Coronado 2 Northwest San Diego (Central San Diego Coast) 3 Northeast San Diego (Mission Valley/Kearny Mesa) 4 Mid-City/National City (National City/North & South Park/Logan Heights) 5 La Mesa/Spring Valley 6 Chula Vista/Imperial Beach 7 La Jolla/University City 8 Far North San Diego (North San Diego I-15 Corridor) 9 El Cajon/Santee/Lakeside 1 Carlsbad/Encinitas/Del Mar 11 Oceanside 12 Vista/San Marcos 13 Escondido Source: CBRE Econometric Advisors, Meyers Research 6

7 Q3 214 Trends by Submarket # of Units # of Units Carlsbad/ Encinitas/ Del Mar Carlsbad/ Encinitas/ Del Mar Chula Vista/ Imperial Beach Chula Vista/ Imperial Beach Downtown San Diego/Coronado Downtown San Diego/Coronado El Cajon/ Santee/Lakeside El Cajon/ Santee/Lakeside Escondido Escondido North San Diego I-15 Corridor North San Diego I-15 Corridor La Jolla/ University City La Jolla/ University City La Mesa/Spring Valley La Mesa/Spring Valley National City/ North & South Park National City/ North & South Park Mission Valley/ Kearny Mesa Mission Valley/ Kearny Mesa Central San Diego Coastal Central San Diego Coastal Oceanside Oceanside Vista/ San Marcos Vista/ San Marcos 6, 5, Inventory 5, ,237 total units in San Diego 4, 3, 2, 15,5 1, Completions vs Net Absorption (Q1 - Q3 214) 1,4 1,279 1,2 1, San Diego Net Absorption: 4, Source: CBRE Econometric Advisors, Meyers Research 7

8 San Diego Historical Rent Index Same-Store Rent Index (Avg $/unit) , , , , , , , , , , , , , , , , , , ,671 Rent Index History & Forecasts San Diego Metro Area - Ten Year History Baseline Five-Year Forecast Same-Store Rent Index $1,33 $1,343 $1,388 $1,433 $1,392 $1,393 $1,425 $1,456 $1,51 $1,56 $1,616 $1,67 $1,733 $1,793 $1,846 Prior Year Change (41) Annual % Change 3.6% 2.9% 3.3% 3.1% -2.9%.% 2.3% 2.2% 3.% 3.8% 3.4% 3.2% 3.6% 3.3% 2.9% 1,8 1,6 1,4 1,2 1, Source: CBRE Econometric Advisors Outlook Source: CBRE Econometric Advisors 8

9 Multi-Family Construction: San Diego Market # of Units # of Permits Issued 5, 4,5 4, 3,5 3, 2,5 2, 1,5 1, 5 Completions , 8, 7, 6, 5, 4, 3, 2, 1, Multi-Family Permits 14-Year Average: 4, Source: CBRE Econometric Advisors, Department of Housing and Urban Development 9

10 Building Permit Issuance San Diego County ( F) 1

11 Multi-Family Future Pipeline by Submarket Vista/San Marcos Oceanside Central San Diego Coastal Mission Valley/Kearny Mesa National City/North & South Park La Mesa/Spring Valley La Jolla/University City North San Diego I-15 Corridor Escondido El Cajon/Santee/Lakeside Downtown San Diego/Coronado Chula Vista/Imperial Beach Carlsbad/Encinitas/Del Mar Vista/San Marcos Oceanside Central San Diego Coastal Mission Valley/Kearny Mesa National City/North & South Park La Mesa/Spring Valley La Jolla/University City North San Diego I-15 Corridor Escondido El Cajon/Santee/Lakeside Downtown San Diego/Coronado Chula Vista/Imperial Beach Carlsbad/Encinitas/Del Mar Market Rate (Apartments/Mixed-Use) $2./SF $2.5/SF $1.75/SF $2. - $2.5/SF 5 1, 1,5 2, 2,5 3, 3,5 4, 4,5 Pre-Planning Planning Underway Completed 214 Subsidized/Mixed-Income Units $2.75- $3./SF , 1,2 1,4 Source: CBRE Econometric Advisors, Meyers Research 11

12 Distribution of Multi-Family Pipeline by Building Size # of Projects # of Projects Market-Rate Completed 214 Underway 2 1 Planning < 5 units 5-9 units 1-19 units 2-49 units 5 + units Pre-Planning Subsidized/Mixed-Income < 5 units 5-9 units 1-19 units 2-49 units 5 + units Completed 214 Underway Planning Pre-Planning Source: CBRE Econometric Advisors 12

13 The San Diego County Rental Market Boom Peter Dennehy, Senior Vice President Meyers Research, LLC