|By Business Wire||
|January 3, 2013 11:44 AM EST||
Effective rents for new leases in the U.S. apartment sector climbed 3.0 percent during 2012, according to MPF Research, an industry-leading market intelligence division of RealPage, Inc. (NASDAQ: RP). The annual rent growth pace slowed throughout the year, after the rate of increase reached 4.8 percent in 2011. MPF Research analysts highlight the nation’s latest apartment rent growth statistics as well as other key performance indicators that include a big jump in the number of units that will be delivered over the course of the near term in a discussion found at www.realpage.com/MPFQ4-2012-Report.
Rent growth over the past year remained a bit above the long-term norm of 2.5 percent recorded during the past two decades. An increase of 3.0 percent is similar to the average results posted during past periods when occupancy was sustained at strong and generally stable levels, according to MPF Research. Comparable annual price increases registered most recently from 2005 through the middle of 2008, and before that in the middle to late 1990s.
While U.S. apartment rents declined on average by a little more than 4 percent during the recession, they now have been moving upward for three full years. Late 2012 pricing topped the rates recorded in late 2009 by 10.5 percent.
“Property owners and operators generally aren’t pushing rents quite as hard as they were a year or so ago,” said Greg Willett, MPF Research vice president. “Many on the operations side of the apartment industry have focused on sustaining their very tight occupancy levels during a period when job growth and new household formation have been fairly sluggish at the same time that renter movement has begun to inch up from the unusually low levels experienced in the previous few years.”
More renter movement in the apartment sector mainly reflects households opting for one apartment over another, according to the MPF Research analysis. Loss of renters to purchase in the now-improving for-sale housing market is having only a very small impact on apartment sector fundamentals, the firm’s research shows. “While the number of apartment renters opting to buy is rising a little, it remains far below the levels apartment operators were accustomed to prior to the recession,” Willett said. “Families that have been renting single-family homes, rather than apartments, comprise a big portion of the first wave of homebuyers seen in the cycle. By far the biggest component of the apartment resident base, particularly within large urban areas, consists of young singles living alone or young-couple households. Single-family homes just aren’t the right housing option for many of them, regardless of shifts in the pricing relationship.”
Locations experiencing the biggest jumps in the loss of apartment renters to purchase, in fact, tend to be places where the apartment sector’s overall performance is running above the national norm. The MPF Research analysts cite Texas, the Carolinas, Nashville and Denver as key examples. “The most pronounced comebacks in the for-sale housing market are seen in spots where the overall economy is doing the best,” according to Willett. “That means job additions and new household creation volumes are strong enough to quickly replace any apartment renters lost to purchase. The locations where people are buying homes are the same locations where recent college graduates are getting jobs and young adults who have been at home with their parents are now able to move out and live on their own.”
Average occupancy of 94.9 percent registered in U.S. apartments at the end of 2012, up a tiny bit from the reading of 94.7 percent recorded at the end of 2011. End-of-year occupancy backtracked from the third quarter level of 95.4 percent, reflecting normal seasonality in the performance. When the nation’s apartment occupancy rate bottomed during the recession, the late 2009 figure was 92 percent.
Demand for 112,900 apartments was posted across the country’s 100 largest metros in 2012, according to the MPF Research data. That product absorption figure mildly surpassed completions totaling 91,500 units but was a little less than half of 2011’s demand total and just a bit more than a third of 2010’s unusually strong absorption result.
“It’s not a coincidence that demand eased to levels near the delivery numbers in 2012 for the nation as a whole and across most individual metros,” Willett said. “With the existing stock basically full almost everywhere, the only net absorption of units that could occur in many areas was limited to the demand that came from getting still-limited new supply through the initial lease-up process.”
Among large individual metros, the three Bay Area markets of San Francisco, San Jose and Oakland ranked as the country’s rent growth leaders in 2012. Effective prices for new leases jumped an even 8.0 percent in San Francisco, while upturns proved nearly as strong at 7.7 percent in San Jose and 7.1 percent in Oakland.
With pricing up 5.9 percent, the Denver-Boulder area was the nation’s next-best performer, followed by Nashville and New York which each saw rents jump 5.1 percent. Rents climbed 4.8 percent in Houston, 4.6 percent in Charlotte, 4.4 percent in Portland, and 4.3 percent in Seattle-Tacoma.
Rent Growth Leaders in 2012
|5 (tie)||New York||5.1%|
Markets just missing the cut-off point to rank as top 10 rent growth performers were Detroit, West Palm Beach, Austin and Orange County. Pricing rose 3.7 to 4.1 percent in each of those locales.
Las Vegas was the country’s sole large market that completely missed out on rent growth in 2012, as prices were cut 1.7 percent. Sizable spots with rent change barely in positive territory were Virginia Beach-Norfolk, New Orleans, Riverside-San Bernardino and Atlanta.
While apartment deliveries in 2012 remained fairly limited by past standards, construction starts did accelerate rapidly throughout the course of the year. The number of apartments under construction at the end of 2012 climbed to 224,000 units across the nation’s 100 largest metros. Some 149,800 of those units are in properties where building is scheduled to wrap up in 2013. The number of units under construction now nearly matches the historical norm maintained from the mid-1990s to 2008. However, the distribution of the future supply is far different from the typical pattern, according to the MPF Research analysis.
- Markets across Florida plus Atlanta, Phoenix, Las Vegas and Riverside-San Bernardino haven’t fully recovered from the downturns experienced during the recession. Thus, building remains appropriately restrained and well below historical norms in those locales. Those markets, which accounted for just over a fourth of all apartment construction that occurred in the nation’s top 100 metros prior to the recession, now represent just 13 percent of ongoing building.
- It’s largely business-as-usual in the nation’s comparatively fast-growing economies where barriers to construction traditionally have been moderate to minimal. Building activity is very similar to pre-recession norms across most spots in Texas, the Carolinas, Tennessee and Denver.
- Very early in the cycle, developers pounced on quite a few places traditionally thought of as the nation’s most difficult building environments, so near-term completions now are scheduled to come in at levels well above the historical norms in places such as New York, the Washington, D.C. area, San Francisco, San Jose, Orange County and the urban cores of Seattle, Chicago and Boston.
Looking beyond what’s under construction now, the backlog of projects in the planning stages is very large, according to the MPF Research analysis. “It wouldn’t be surprising to see starts come in at 250,000 or more units in the country’s biggest metros during 2013,” Willett said. “By the end of this year then, ongoing construction, inclusive of the 74,000 or so units now underway that won’t finish until 2014, probably will be getting close to the high-water mark posted during the past couple of decades.” That earlier cyclical peak was 357,000 units under construction across the nation’s 100 largest markets as of late 1999.
Although MPF Research has some concerns about a brief supply-related bump in the road for the apartment market’s performance during 2014 and perhaps 2015, look for 2013’s performance to prove similar to the 2012 results. “Most places are starved for new product right now, so properties that will complete over the coming year appear likely to do incredibly well, generally without hurting the results for the existing stock,” Willett said. Just having product moving through initial lease-up will translate to a tiny slide in overall occupancy, but the market should remain essentially full.
The firm expects rent growth to again register at about 3 percent, with the potential there that the number could prove a bit higher. “Operator attitudes will influence the final number,” Willett said. “Increasing deliveries will stimulate more leasing activity, and an upturn in the number of people coming through the front door can trigger more confidence on the part of property managers, even if overall occupancy rate isn’t moving in a meaningful way. Also, even the moderately stronger job growth volumes that most leading economists are anticipating during the second half of the year could help alleviate the uncertainty about future demand prospects that some apartment operators exhibited when setting prices over the past year.”
Located in Carrollton, Texas, a suburb of Dallas, RealPage provides on-demand (also referred to as “Software-as-a-Service” or “SaaS”) products and services to apartment communities and single family rentals across the United States. Its on-demand product lines include OneSite® property management systems that automate the leasing, renting, management and accounting of conventional, affordable, tax credit, student living, senior living and military housing properties; LeaseStar™ multichannel managed marketing that enables owners to originate, syndicate, manage and capture leads more effectively and at less overall cost; YieldStar® asset optimization systems that enable owners and managers to optimize rents to achieve the overall highest yield, or combination of rent and occupancy, at each property; Velocity™ billing and utility management services that increase collections and reduce delinquencies; LeasingDesk® risk mitigation systems that are designed to reduce a community’s exposure to risk and liability; OpsTechnology® spend management systems that help owners manage and control operating expenses; and Compliance Depot™ vendor management and qualification services to assist a community in managing its compliance vendor program. Supporting this family of SaaS products is a suite of shared cloud services including electronic payments, document management, decision support and learning. RealPage’s MyNewPlace® subsidiary is one of the largest lead generation apartment and home rental websites, offering apartment owners and managers qualified, prospective residents through subscription, pay-per-lead and LeaseMatchTM pay-per-lease programs. Through its Propertyware subsidiary, RealPage also provides software and services to single-family rentals and low density, centrally-managed multifamily housing. For more information, call 1-87-REALPAGE or visit www.realpage.com.
The 3rd International Internet of @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that its Call for Papers is now open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
Nov. 28, 2014 09:00 AM EST Reads: 1,700
"We help companies that are using a lot of Software as a Service. We help companies manage and gain visibility into what people are using inside the company and decide to secure them or use standards to lock down or to embrace the adoption of SaaS inside the company," explained Scott Kriz, Co-founder and CEO of Bitium, in this SYS-CON.tv interview at 15th Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Nov. 27, 2014 07:00 PM EST Reads: 1,875
15th Cloud Expo, which took place Nov. 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA, expanded the conference content of @ThingsExpo, Big Data Expo, and DevOps Summit to include two developer events. IBM held a Bluemix Developer Playground on November 5 and ElasticBox held a Hackathon on November 6. Both events took place on the expo floor. The Bluemix Developer Playground, for developers of all levels, highlighted the ease of use of Bluemix, its services and functionalit...
Nov. 27, 2014 07:00 PM EST Reads: 1,969
The 4th International DevOps Summit, co-located with16th International Cloud Expo – being held June 9-11, 2015, at the Javits Center in New York City, NY – announces that its Call for Papers is now open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the world's large...
Nov. 27, 2014 06:00 PM EST Reads: 2,318
Some developers believe that monitoring is a function of the operations team. Some operations teams firmly believe that monitoring the systems they maintain is sufficient to run the business successfully. Most of them are wrong. The complexity of today's applications have gone far and beyond the capabilities of "traditional" system-level monitoring tools and approaches and requires much broader knowledge of business and applications as a whole. The goal of DevOps is to connect all aspects of app...
Nov. 27, 2014 06:00 PM EST Reads: 1,734
SAP is delivering break-through innovation combined with fantastic user experience powered by the market-leading in-memory technology, SAP HANA. In his General Session at 15th Cloud Expo, Thorsten Leiduck, VP ISVs & Digital Commerce, SAP, discussed how SAP and partners provide cloud and hybrid cloud solutions as well as real-time Big Data offerings that help companies of all sizes and industries run better. SAP launched an application challenge to award the most innovative SAP HANA and SAP HANA...
Nov. 27, 2014 05:00 PM EST Reads: 1,707
When an enterprise builds a hybrid IaaS cloud connecting its data center to one or more public clouds, security is often a major topic along with the other challenges involved. Security is closely intertwined with the networking choices made for the hybrid cloud. Traditional networking approaches for building a hybrid cloud try to kludge together the enterprise infrastructure with the public cloud. Consequently this approach requires risky, deep "surgery" including changes to firewalls, subnets...
Nov. 27, 2014 04:45 PM EST Reads: 1,942
Want to enable self-service provisioning of application environments in minutes that mirror production? Can you automatically provide rich data with code-level detail back to the developers when issues occur in production? In his session at DevOps Summit, David Tesar, Microsoft Technical Evangelist on Microsoft Azure and DevOps, will discuss how to accomplish this and more utilizing technologies such as Microsoft Azure, Visual Studio online, and Application Insights in this demo-heavy session.
Nov. 27, 2014 04:45 PM EST Reads: 1,691
DevOps is all about agility. However, you don't want to be on a high-speed bus to nowhere. The right DevOps approach controls velocity with a tight feedback loop that not only consists of operational data but also incorporates business context. With a business context in the decision making, the right business priorities are incorporated, which results in a higher value creation. In his session at DevOps Summit, Todd Rader, Solutions Architect at AppDynamics, discussed key monitoring techniques...
Nov. 27, 2014 04:30 PM EST Reads: 1,856
Cultural, regulatory, environmental, political and economic (CREPE) conditions over the past decade are creating cross-industry solution spaces that require processes and technologies from both the Internet of Things (IoT), and Data Management and Analytics (DMA). These solution spaces are evolving into Sensor Analytics Ecosystems (SAE) that represent significant new opportunities for organizations of all types. Public Utilities throughout the world, providing electricity, natural gas and water,...
Nov. 27, 2014 04:00 PM EST Reads: 1,946
The security devil is always in the details of the attack: the ones you've endured, the ones you prepare yourself to fend off, and the ones that, you fear, will catch you completely unaware and defenseless. The Internet of Things (IoT) is nothing if not an endless proliferation of details. It's the vision of a world in which continuous Internet connectivity and addressability is embedded into a growing range of human artifacts, into the natural world, and even into our smartphones, appliances, a...
Nov. 27, 2014 04:00 PM EST Reads: 2,046
How do APIs and IoT relate? The answer is not as simple as merely adding an API on top of a dumb device, but rather about understanding the architectural patterns for implementing an IoT fabric. There are typically two or three trends: Exposing the device to a management framework Exposing that management framework to a business centric logic Exposing that business layer and data to end users. This last trend is the IoT stack, which involves a new shift in the separation of what stuff happe...
Nov. 27, 2014 03:00 PM EST Reads: 2,050
The Internet of Things is tied together with a thin strand that is known as time. Coincidentally, at the core of nearly all data analytics is a timestamp. When working with time series data there are a few core principles that everyone should consider, especially across datasets where time is the common boundary. In his session at Internet of @ThingsExpo, Jim Scott, Director of Enterprise Strategy & Architecture at MapR Technologies, discussed single-value, geo-spatial, and log time series dat...
Nov. 27, 2014 03:00 PM EST Reads: 2,212
An entirely new security model is needed for the Internet of Things, or is it? Can we save some old and tested controls for this new and different environment? In his session at @ThingsExpo, New York's at the Javits Center, Davi Ottenheimer, EMC Senior Director of Trust, reviewed hands-on lessons with IoT devices and reveal a new risk balance you might not expect. Davi Ottenheimer, EMC Senior Director of Trust, has more than nineteen years' experience managing global security operations and asse...
Nov. 27, 2014 01:00 PM EST Reads: 2,109
The Internet of Things will greatly expand the opportunities for data collection and new business models driven off of that data. In her session at @ThingsExpo, Esmeralda Swartz, CMO of MetraTech, discussed how for this to be effective you not only need to have infrastructure and operational models capable of utilizing this new phenomenon, but increasingly service providers will need to convince a skeptical public to participate. Get ready to show them the money!
Nov. 27, 2014 11:00 AM EST Reads: 1,915
SYS-CON Media announced that Centrify, a provider of unified identity management across cloud, mobile and data center environments that delivers single sign-on (SSO) for users and a simplified identity infrastructure for IT, has launched an ad campaign on Cloud Computing Journal. The ads focus on security: how an organization can successfully control privilege for all of the organization’s identities to mitigate identity-related risk without slowing down the business, and how Centrify provides ...
Nov. 27, 2014 10:00 AM EST Reads: 1,776
The Internet of Things will put IT to its ultimate test by creating infinite new opportunities to digitize products and services, generate and analyze new data to improve customer satisfaction, and discover new ways to gain a competitive advantage across nearly every industry. In order to help corporate business units to capitalize on the rapidly evolving IoT opportunities, IT must stand up to a new set of challenges. In his session at @ThingsExpo, Jeff Kaplan, Managing Director of THINKstrateg...
Nov. 27, 2014 10:00 AM EST Reads: 1,930
"SAP had made a big transition into the cloud as we believe it has significant value for our customers, drives innovation and is easy to consume. When you look at the SAP portfolio, SAP HANA is the underlying platform and it powers all of our platforms and all of our analytics," explained Thorsten Leiduck, VP ISVs & Digital Commerce at SAP, in this SYS-CON.tv interview at 15th Cloud Expo, held Nov 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Nov. 27, 2014 08:15 AM EST Reads: 1,638
One of the biggest challenges when developing connected devices is identifying user value and delivering it through successful user experiences. In his session at Internet of @ThingsExpo, Mike Kuniavsky, Principal Scientist, Innovation Services at PARC, described an IoT-specific approach to user experience design that combines approaches from interaction design, industrial design and service design to create experiences that go beyond simple connected gadgets to create lasting, multi-device exp...
Nov. 27, 2014 08:00 AM EST Reads: 1,888
Enthusiasm for the Internet of Things has reached an all-time high. In 2013 alone, venture capitalists spent more than $1 billion dollars investing in the IoT space. With "smart" appliances and devices, IoT covers wearable smart devices, cloud services to hardware companies. Nest, a Google company, detects temperatures inside homes and automatically adjusts it by tracking its user's habit. These technologies are quickly developing and with it come challenges such as bridging infrastructure gaps,...
Nov. 27, 2014 07:45 AM EST Reads: 2,031