Web scraping has revolutionized data extraction in the multifamily industry, providing an easy way to obtain rent information for certain properties and floor plans.
A wave of multifamily maturities has been building for the better part of three years. Loans originated in late 2020 and 2021, held historically low initial interest rates, and experienced some of the fastest rent growth in history during their first year.
Closing ratio is a key metric that tracks the leasing efficiency of a property or multifamily market. The closing ratio is the number of leases signed per week compared to the traffic seen at a given property. Over the past few years, closing ratios have followed a two peak and two trough per year trend.
As multifamily fundamentals have been deteriorating nationwide, performance in the second largest U.S. city has been mediocre in recent months. While many key operating metrics declined over the past 12 months, Los Angeles is holding its own and its’ declines are modest L.A. is not growing like its Gateway peer markets in the Northeast and Midwest, yet it’s also not declining like San Francisco.
The Fed raised interest rates once again last week, bringing the benchmark short-term rate to a range of 5.25-5.50%. The change has had a very mild impact on capital markets, as major equity indices, commodity markets and long-term interest rates increased modestly.
Occupancy rates across the nation have been falling steadily for nearly two years after peaking in the fall of 2021. Some of the hardest hit markets include popular sunbelt markets with significant new development. Las Vegas, Atlanta, Phoenix and Salt Lake City have all seen their apartment fundamentals deteriorate in recent months, most notably occupancy and net effective rent.
Economists will be focused this week on monetary policy as well as the first release of Q2 GDP. The Fed will meet on Tuesday and Wednesday, and while most forecasters anticipate another 25-basis point increase in interest rates, expectations are mixed on whether or not the Federal Open Markets Committee will raise interest rates again after this week.
Revenue per available unit (RevPAU) is the most comprehensive single statistic to assess apartment performance over time. Taking into account both net effective rent and occupancy, RevPAU provides the most concise view of earning potential at a given property.