Rent and Operating Trends – Week of September 10th 2023

Key Takeaways – Data as of 09/10/2023

Traffic and Leases:

• Traffic dipped below 8 tours per property nationwide last week for the first time since February.
• Only two markets, Minneapolis and Colorado Springs, registered increases in traffic, but both markets maintain average traffic well below the national average.
• The slowdown is taking place even in the strongest trafficked markets. Houston and Dallas have long been the leaders in traffic, but both markets now average fewer than 11 tours per property per week.
• The number of leases signed also fell at the national level last week.
• Tucson was the only market to see an increase in leasing activity.

Occupancy and ATR:

• Occupancy dipped one basis point nationwide last week and the national occupancy rate is 94.24%.
• High supply markets continue to struggle with occupancy as Salt Lake City and San Antonio have both lost more than 2% in occupancy over the past twelve months. Atlanta is not far behind and maintains one of the lowest overall occupancy rates in the nation.
• Denver and Chicago are holding their own, as their annual occupancy has only dipped 25 and 27 basis points respectively. While their occupancy rates are below 95%, their steady performance will likely bode well in the coming months, before we start a new leasing season next year.

Net Effective Rent:

• Net effective rents fell 10 basis points nationwide last week.
• The split between outperforming and underperforming markets continues to widen. Of the ten metros that have seen rents grow year-over-year, four of those metros saw rents increase last week. On the contrary, of the 24 metros where rents are falling on an annual basis, only one market experienced week-over-week rent growth.
• Some of the weakest performing markets on an annual basis, including Austin, Raleigh, Colorado Springs and Orlando, also saw rent declines of 40 basis points or more last week.