Rent and Operating Trends – Week of January 29th 2023

Key Takeaways – Data as of 01/29/2023

Traffic and Leases:

• Traffic growth was led by Chicago and Charlotte, as tours per property increased by 1.7 and 1.3 respectively. There were 5 markets in which average traffic increased by more than 1 tour per property.
• On an annual basis, traffic continues to perform well, with Riverside and Nashville registering more than 2 tours per property per week compared to this time last year.
• Leasing is also improving in almost every market in the country, however the overall average growth at the national level is not quite as strong as the traffic growth. With only 2.2 leases signed on average last week, compared to 7.5 tours per property, the national average conversion ratio fell to 29%.

Occupancy:

• Occupancy fell 1 basis point nationwide last week, but the national average ATR dropped as well. Occupancy has seemingly found a bottom in the past month, and declining ATR indicates new leases are being signed with move in dates coming soon.
• Gateway markets and heavily supplied secondary markets saw their occupancy rates increase last week, another strong sign for areas that were hit particularly hard last year. San Jose, Riverside, Chicago, Phoenix and Nashville rank in the top 5 for occupancy growth last week.

Net Effective Rent:

• NER nationwide increased 10 basis points last week. I expect rent performance will remain fairly flat for the next few weeks and then begin increasing at a stronger pace in March.
• 3 California markets, San Jose, Riverside and San Francisco led the nation, as rents in each market jumped by 50 basis points or more last week.