JLL Q4 2018 Multifamily Overview
- 2. Houston Multifamily fundamentals Source: JLL Research, Apartment Data Services Demand Pricing Highlights Vacancy Q4 2018 Net Absorption: -1,448 units (down 3,689 units from Q3 2018) Inventory: 647,941 units Occupancy: 89.6% (down 40 bps from Q3 2018) Leverage Average Asking Rents: $1,022 per unit (down from $1,030 per unit in Q3 2018) + Houston saw more units absorbed than added to the market for the second year in a row + A new construction cycle is gaining momentum with many land sites under contract for multifamily development + Strong job growth is expected in 2019; sustained demand will lead to increased asking rates in near future TenantLandlord
- 3. Houston Multifamily observations By year-end, Houston has absorbed more units than it added to the market • Having only 6,800 units of new inventory added in 2018 has helped balance the market in a year in which nearly 8,000 units were absorbed • Modest absorption totals in 2018 can partially be attributed to apartment tenants moving back into their repaired homes in the aftermath of Hurricane Harvey 1 Houston multifamily market saw an ongoing boost from Hurricane Harvey in 2018 • The natural disaster helped increase occupancy, absorption, and asking rents • Occupancy at year-end stands as 89.6 percent, down 30 basis points from the end of the third quarter, while the average asking price dipped to $1,022 2 With the heightened demand comes a renewed interest in construction • A great deal of land is currently under contract in Houston as both developers and investors are ramping up plans to capitalize on the growing regional economy and robust multifamily market • Investor demand has increased for 1990s and 2000s value-add plays 3 Source: JLL Research, Apartment Data Services
- 4. Houston Multifamily occupancy Market-wide occupancy and rents continue to tick upward as sector fully realizes supply and demand implications one year after Hurricane Harvey $700 $800 $900 $1,000 $1,100 87% 88% 89% 90% 91% 92% 2013 2014 2015 2016 2017 2018 Occupancy Rents Source: JLL Research, Apartment Data Services
- 5. © 2017 Jones Lang LaSalle IP, Inc. All rights reserved. The information contained in this document is proprietary to JLL and shall be used solely for the purposes of evaluating this proposal. All such documentation and information remains the property of JLL and shall be kept confidential. Reproduction of any part of this document is authorized only to the extent necessary for its evaluation. It is not to be shown to any third party without the prior written authorization of JLL. All information contained herein is from sources deemed reliable; however, no representation or warranty is made as to the accuracy thereof. Thank you Eli Gilbert Research Director, JLL Houston eli.gilbert@am.jll.com Rachel Alexander Research Manager, JLL Houston rachel.alexander@am.jll.com Reid Watler Senior Research Analyst, JLL Houston reid.watler@am.jll.com Roman Rodriguez Senior Research Analyst, JLL Houston roman.rodriguez@am.jll.com