Rent and Operating Trends – Week of October 1st 2023

Key Takeaways – Data as of 10/01/2023

Traffic and Leases:

• Traffic nationwide dipped to 7.3 tours per property last week, while leasing fell to 2.4 new leases signed.
• There was modest growth ins San Jose, Las Vegas and San Antonio last week, which is notable especially for Las Vegas and San Antonio. Both markets are among the weakest performing markets from a rent and occupancy perspective, so any uptick in traffic will be warmly welcomed in those markets. Las Vegas traffic is above the national average, while San Antonio’s is just below, yet weekly and annual traffic in San Antonio are both up.
• Leasing is down in almost all markets nationwide as we enter the fourth quarter. Traditionally Q4 is the slowest period for leasing each year.

Occupancy and ATR:

• Nationwide occupancy fell 4 basis points to 94.1%.
• All markets maintain lower occupancy rates than they did a year ago. Seattle and Charleston have the best annual occupancy performance, with rates down only four and five basis points respectively.
• Yet Atlanta and San Antonio occupancy rates are down more than 1.5% in the last 12 months.
• ATR remained unchanged from last week, and the average property has 15 units available to rent over the next 60 days.

Net Effective Rent:

• Same store net effective rent fell another 10 basis points last week and rents are down 1.7% nationwide since last year.
• Nashville and Los Angeles saw slight rent increases last week, but both maintain negative annual growth rates. Nashville rents are down nearly 4% year-over-year.
• Austin, Salt Lake City and Las Vegas continue to lag all markets, as rents have fallen more than 5% in each market since last year. As of last week, 9 of the 33 markets tracked by Radix Research registered rent declines of 4% or more.

Revenue Per Available Unit:

• With both rents and occupancy rates falling, it’s no surprise that RevPAU is down. Nationwide, same store RevPAU has fallen 2.5%.
• Markets that are already struggling with supply pressure like Austin, Salt Lake City and Las Vegas, are feeling the impact more intensely as RevPAU has fallen 6.7% or more in each market.
• Yet, the metric works in both ways, and markets like Boston and Charleston continue to report strong results. Both markets are among the leaders in occupancy change and rent growth and as such recorded annual increases in RevPAU of 2.0% and 3.4% respectively last week.