Rent and Operating Trends – Week of March 5th 2023

Key Takeaways – Data as of 03/05/2023

Traffic and Leases:

• Gateway markets remain split in terms of traffic. Chicago continues to post strong gains, once again leading all markets in week-over-week traffic increases. However, San Francisco, Boston, San Diego, Washington D.C. and New York, posted the worst week-over-week traffic performance, as tours dropped in each market. Not only is traffic declining, but the number of tours per week in these markets is also well below the national average.
• Leasing growth was led by secondary markets last week, with Dallas and Denver registering the fastest weekly gains in new leases signed. The popular migration hubs averaged 2.9 and 2.6 new leases signed per property last week.

Occupancy and ATR:

• Occupancy nationwide fell one basis point last week. The current national occupancy rate is 94.3%.
• Despite falling traffic numbers, Boston registered the strongest weekly occupancy gain. Occupancy was up 9 basis points last week. While occupancy is still down 65 basis points from this time last year, Boston ranks within the top 5 markets for best annual occupancy performance. For context, all Radix markets maintain lower occupancy rates than they did a year ago.
• ATR increased nationwide last week. As new supply continues to deliver ATR may drift slightly higher, even as other operating metrics strengthen.

Net Effective Rent:

• Nationwide NER was flat last week.
• Market level growth was geographically dispersed as Jacksonville, Seattle and Chicago led all markets with steady NER growth of 20 basis points or more.
• Salt Lake City, one of the better performing markets in 2022, has slipped thus far in 2023. Rents were down 40 basis points last week, and most other operating fundamentals were negative.