Radix Weekly Data Report – June 3rd

At Radix, we’ve been keeping a close eye on both national and local performance data as the pandemic unfolds. As June arrives and the summer begins, I think we all wish we could just undo 2020 and start anew.

During the week ending on June 3, most of the major performance metrics were flat to slightly negative, according to our data.

Nationally, traffic was up on a week-over-week basis, and the metric has been making up for the ground it lost during the early stages of the pandemic. Leases were slightly down for the week, but now stand only 13.3% below versus the same time last year. If leasing pace continues to improve, we should be on par with last year in a few weeks. It will also be a strong sign of demand improvement from the low record hit during the first phase of the lockdowns.

While the national net effective rent dipped only by 0.4% WoW, the year-over-year gap has been increasing and now stands at -3.5%.

It is still too early to tell how much protests and riots have impacted traffic and leasing, but next week’s data should give us a better indication of the overall effect. This could be part of the explanation why markets that have opened and showed strong traffic and leases during the week ending on May 27 – such as Atlanta, Houston and Tampa – registered slight declines in this week’s data.

Here are some of the notable takeaways from the week ending on June 3:

  • Nationally, traffic was up 3.8% when compared to the preceding week, while leases were down 5.2% The metropolitan statistical areas (MSAs) with the biggest WoW traffic increase was Dallas (22.5%). The MSA with the largest WoW decline in leases was Los Angeles (-21.9%).
  • The national occupancy rate stood at 92.83%. That represents a dip of 0.01% from the preceding week and a decrease of 1.69% when compared to the same time last year. The MSA with the largest WoW decrease was Miami (-0.47%).
  • The national leased percentage rate was 94.59%. That’s a WoW decrease of 2 basis points and a YoY drop of 1.37%. The MSA with the biggest WoW decrease was San Antonio (-0.52%).
  • The national net effective rent was $1,744. That’s down 0.4% from the preceding week and down 3.5% from the same time last year. Chicago experienced the largest WoW decrease (-3.5%).

Radix Weekly Data Report – May 13th

Traffic and Leases Move Up From Pandemic Low

It’s been two months since the initial lockdowns started across the country. This week, we saw a number of other states start to open up, and our industry is showing some positive signs in terms of some leading indicators.

On a national basis, both traffic and leases were up during the week ending on May 13, according to data from Radix. Specifically, traffic and leases were up 8.7% and 6.6%, respectively, week over week. They were down 41.7% and 18.2%, respectively, year over year. On the plus side, the YoY deficits for these two metrics have been dropping in recent weeks. For example, leases were down more than 50% on a YoY basis just four to five weeks ago.

Nationally, the occupancy rate dipped 11 basis points to 92.85% during the seven days ending on May 13 (it was down 139 basis points YoY). However, that was the smallest WoW decline since the start of April.

The accordion effect of these leading indicators is now showing signs of more significantly impacting net effective rent (NER).

In the week of May 13, we saw the largest WoW drop in NER – 1.1% – since the pandemic began. And, for the first time since the coronavirus came to the U.S., we saw the YoY comparison dip into negative territory at -0.8%.

What could all this mean?

We could be seeing the first signs of demand stabilization as leading indicators are improving and stabilizing.

The slow but constant gains in traffic and leasing are encouraging and we are making up for the huge deficits we saw when the lockdowns started. Occupancy and leased percentage are, for now, also showing signs of slowing decline.

If this trend continues, operators might not see the need to be as aggressive with concessions and price decreases, thus stabilizing NER. But macroeconomics will play the key role, and for now we are seeing few signs of slowing job loss, which undoubtedly will have a negative impact.

Data from the week of May 13 revealed two other notable takeaways:

  • Four metropolitan statistical areas (Chicago, Las Vegas, Orlando and Tampa) experienced slight WoW increases in occupancy.
  • Over half of the 21 MSAs tracked by Radix showed positive WoW leased percentage trends.

Radix Weekly Data Report – April 22nd

Dear Radix Friends,

I hope this week finds you healthy and you are still managing through working from home and the new “normal.”  We are almost a month since most states started lockdowns and we are seeing reverberations across all markets. Also, leading indicators such as traffic and leases that declined precipitously have started stabilizing and indeed are slightly higher overall than last week. With occupancy and leased percentage trailing YoY trends, we have seen Net Effective Rents come down as well and erased the lead from the same time last year.

We are seeing an accordion effect with leading indicators slowing down quick and fast (traffic and leases) which are now indeed improving as different operators figure out ways to drive traffic and leases virtually. NER declines were more gradual, but are likely to persist as macroeconomic headwinds are very strong with continued lockdowns and unemployment increasing to record levels.

Please let me know if you have any questions or feedback.

Thanks and stay healthy,

Blerim