2017
Triad Apartment Market
Overview and Outlook
Triad Transaction Trends
Sale Price/SF
Historical Transaction Volume
$66.00
$700,000,000
$576.4 M
$600,000,000
$592.7 M
$64.00
$62.00
$500,000,000
$60.00
$400,000,000
$340.8 M
$58.00
$300,000,000
$56.00
$200,000,000
$54.00
$100,000,000
$52.00
$0
$50.00
2014
2015
2016
*Includes sales $1 million and greater
Sources: Marcus & Millichap Research Services, CoStar
2014
2015
2016
2016 Triad Sale Data
Price per Unit by Class
Average Cap Rate by
Class
$86,379
7.63%
$57,281
5.91%
6.59%
$35,448
Class "A"
Class "B"
Class "C"
Class "A"
Sale Distribution by County
Alamance
11%
Forsyth
32%
*Includes sales $1 million and greater
Sources: Marcus & Millichap Research Services, MPF Research, CoStar
Guilford
57%
Class "B"
Class "C"
Triad Apartment Construction Trends
2002-2014
2015
2016
Completions (000s of Units)
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
Triad
* Forecast
Sources: Marcus & Millichap Research Services, MPF Research
2017*
Apartment Vacancy Rate Trends
2002-2014
2015
2016
2017*
Average Vacancy Rate
12%
9%
6%
3%
0%
Triad
Triangle
* Forecast
Sources: Marcus & Millichap Research Services, MPF Research
Charlotte
U.S.
North Carolina Apartment Vacancy Trends by Class
Class A
Class B
Class C
Average Vacancy Rate
12%
9%
6%
3%
Trailing 12-month average
North Carolina includes Greensboro/Winston-Salem, Raleigh-Durham-Chapel Hill, and Charlotte
Sources: Marcus & Millichap Research Services, MPF Research
20
16
20
15
20
14
20
13
20
12
20
11
20
10
20
09
20
08
20
07
20
06
20
05
20
04
20
03
20
02
0%
Average Effective Rent Growth Trends
2008-2014
2015
2016
2017*
8%
+6.1%
+6.0%
Y-O-Y Percent Change
+5.2%
+3.8%
4%
0%
-4%
-8%
Triad
Triangle
* Forecast
Sources: Marcus & Millichap Research Services, MPF Research
Charlotte
U.S.
Apartment Pricing Trends
2002-2014
2015
2016
Average Price per Unit (000s)
$160
+38%
$120
$80
+58%
+6%
+10%
$40
$0
Triad
Triangle
Charlotte
Includes sales $1 million and greater
Sources: Marcus & Millichap Research Services, CoStar Group, Inc., Real Capital Analytics
U.S.
Commercial Real Estate Avg. Yield vs.
10-Yr. Treasury – Spread Indicates “Buy” Window
Commercial Real Estate
10-Year Treasury Rate
12%
3%
380 bps
200 bps
580 bps
480 bps
480 bps
6%
440 bps
9%
430 bps
Average Rate
Cap Rate Long-Term Avg.
10-Yr Treasury Long-Term Avg.
19
9
19 0
9
19 1
9
19 2
9
19 3
9
19 4
9
19 5
9
19 6
9
19 7
9
19 8
9
20 9
0
20 0
0
20 1
0
20 2
0
20 3
0
20 4
0
20 5
0
20 6
0
20 7
0
20 8
0
20 9
1
20 0
1
20 1
1
20 2
1
20 3
1
20 4
1
20 5
16
0%
Includes all apartment, office, retail and industrial sales $1 million and greater
Sources: Marcus & Millichap Research Services, CoStar Group, Inc., Real Capital Analytics
2017
Triad Apartment Market
Overview and Outlook