Rent and Operating Trends Week of April 11th 2021

This week, there was a slight slowdown in the recent streak of strong week-over-week gains as some of the metrics, especially leading indicators such traffic and leases per week, are on pause from the increase from last week. Meanwhile, occupancy and lease rates are holding steady and NER is posting more modest increases this week. Overall though, as we compare YoY performance, it is clear we are seeing some big leaps forward across all metrics. As we have mentioned previously, while the market performance is definitely improving, it is also caused by kinks in the data considering the speed and scale of the pandemic impact from a year ago. It is worth noting that a year ago we saw traffic decline by 75% in a couple of weeks, which no doubt it is not surprising now showing triple-digit growth. NER is the only metric still behind YoY, but it is improving every week.

Key Takeaways – Data as of 4/11:

Traffic and Leases:

• National traffic and leases per week experienced a slight decline from the recent highs, each falling about 6%. These dips were enough to wipe out all last month’s gains, with leases per week now dropping 4.1% month-over-month to 3.36 signed leases on average. o Riverside, CA is this week’s big winner in these categories with a 32% bump in traffic and a 45% bump in signed leases, leading both categories by wide margins. o Four other metros (San Jose, Salt Lake City, Washington, DC, and Tampa) reported positive gains WoW in leases signed, while the rest of the nation retreated from last week’s recent high.

Occupancy and Leased Percentage:

• Occupancy and leased percentages held firm week over week, reporting 94.77% and 96.07% respectively. MoM, occupancy is up 40 bps while leased percentages are up 50 bps. o Chicago leads the pack in occupancy this week with a WoW jump of 50 bps and is reporting a smaller but significant 20 bp jump in leased percentage. o Orlando and Jacksonville’s big gains in leases signed in recent weeks are translating to gains in leased percentage, with Orlando moving up 40 bps and Jacksonville moving up 30 bps.

Net Effective Rent:

• Every single-tracked metro area posted positive gains in average NER this week. Notably, a significant number of our tracked metros are now reporting positive year-over-year numbers within the last couple of weeks. We expect this trend to continue over the coming weeks with another tranche of metros on the cusp of this transition, especially as this year’s upward trend in NER continues to intersect with the downward trend witnessed in the YoY comparison period. o Austin posted the largest gains in NER this week, with a gain of 1.2% to $1322 average NER. Austin’s 2-bedroom floor plans are driving this charge, with a posted increase of 1.6% this week. o Tampa, another strong performer this week, gained 1% WoW. Tampa’s average NER is now a full 11% higher YoY and is the nation’s second-strongest performer this past year behind Riverside, which has posted 14% increases YoY.