Rent and Operating Trends – Week of September 3rd 2023

Key Takeaways – Data as of 09/03/2023

Traffic and Leases:

• Traffic fell slightly, while leasing activity remained flat at the national level last week.
• Salt Lake City saw the largest increase in traffic last week, picking up almost a full tour per property last week alone.
• Only four markets registered an increase in traffic. In addition to Salt Lake City, Colorado Springs, Nashville, and Seattle all saw traffic rise modestly.
• Similarly, only four markets had an increase in leases signed last week. Portland led all MSAs, picking up nearly a third of a lease per property, while Salt Lake City, Las Vegas and New York all saw leasing increase by 0.1 new lease per property.
• Traffic fell the fastest in Denver last week, and leasing activity dropped the most in San Francisco.

Occupancy and ATR:

• Occupancy was flat last week, holding firm at 94.25% nationwide.
• Tucson had a strong week, picking up 35 basis points in occupancy. 13 of the market tracked by Radix Research gained occupancy last week.
• Charleston and Jacksonville were the weakest performing markets, as each market lost at least 14 basis points of occupancy.
• As we noted in this week’s Chart of the Week, new supply is heavily concentrated in the sunbelt and a few Gateway markets. Interestingly, five of the top ten markets for new supply are in the bottom 10 for overall occupancy, meaning places like Dallas, Houston, Austin and Atlanta, markets with low occupancy, have even more supply coming online in the next few months to contend with. Conversely, four of the top ten markets for new supply are in the top ten markets for occupancy. New York, Washington, D.C., Los Angeles and Seattle have a lot of new supply coming online but maintain healthy occupancy levels and may be able to better absorb the new deliveries.

Net Effective Rent:

• Net effective rent was flat last week at the nationwide level and remains down 1.5% on a year-over-year basis.
• Minneapolis led all markets as rents increased 40 basis points last week.
• New York was the weakest performing market with rents dropping 1.1% last week alone. The loss takes New York’s annual rent growth to 0%.
• The seasonal slowdown is impacting almost all markets. Tucson is the only market nationwide to register more than 3% rent growth on an annual basis. By contrast, 14 markets saw rents fall by more than 3% since last September.