Rent and Operating Trends – Week of May 14th 2023

Key Takeaways – Data as of 05/14/2023

Traffic and Leases:

• Traffic continues to expand in larger secondary markets including Miami, Dallas and Denver. All three markets maintain average traffic well above the national average of 8.9 tours per property per week. The growth in traffic, however, has yet to lead to an increase in leasing in these markets. Denver’s leasing activity was unchanged from last week, while Miami and Dallas registered minor increases.

• Houston, San Antonio, Boston and Charlotte led the nation in leasing growth last week, and with the exception of Boston, these markets also rank near the top in overall new leases signed per week. Sunbelt markets continue to sign the most leases each week, indicating continued strong demand despite the significant new supply entering the markets.

Occupancy and ATR:

• Nationwide occupancy fell one basis point last week but sits firmly at 94.3% as it has for the past few months.

• Minneapolis and Charleston continue to lead the nation in occupancy gains, as both markets recover from the low 93% range in recent months.

• The average property nationwide has 19 units available to rent. While that number has remained steady since the beginning of the year, it reflects a 9% increase from this time last year. Softening demand and continued supply will keep ATR elevated in many markets.

• Leading the nation for fewest average apartments available to rent are New York, Seattle and Albuquerque. While these markets may not have too many attributes in common, one factor they do share is their limited new supply pipeline. Either because of regulatory hurdles or limited demand, these markets have not seen the robust deliveries that other markets in the south and west have, and that is one reason their ATR has remained low. Austin and Dallas, two markets with massive new supply pipelines, lead the nation in ATR.

Net Effective Rent:

• NER was flat nationwide last week, and the average net effective rent is $1,881. On a year-over-year basis rents are up 60 basis points for our same store sample.

• Albuquerque and Charleston topped last week’s NER growth rankings, as rents went up 60 basis points and 50 basis points respectively. They also lead our annual rent growth rankings as both markets have seen NERs increase 5.7% from a year ago.

• Studios are once again the fastest growing units from a rent perspective, as rents were up 20 basis points last week and 1.7% year-over-year.

• While all unit types have seen limited growth, smaller units have been outpacing larger units in rent growth recently.