THE ECONOMY
THE NATIONAL ECONOMY Source: Delta Associates; October 2019.
AMAZON HQ2 How Will it Impact the Washington Metro Area? Source: Amazon, Delta Associates, October 2019.
PAYROLL JOB GROWTH Selected Large Metro Areas | 12 Months Ending August 2019 140 120 PAY R O L L J O B S ( T H O U S A N D S ) 100 80 60 40 33.6 20 0 NY DFW Hou LA Basin Phx Atl Bos Was Den Source: Bureau of Labor Statistics, Delta Associates; October 2019.
UNEMPLOYMENT RATE * Selected Large Metro Areas | July 2018 vs. July 2019 July 2018 July 2019 6% National Rate 5% 4.1% 4% 4.0% 3% 2% 1% 0% Bos Den SF Bay Was DFW S Fla Atl NY Hou Chi LA Phx YoY Basis Point ∆ -70 -50 0 -30 -40 -50 -40 -50 -10 -10 +50 -20 Source: Bureau of Labor Statistics, Delta Associates; October 2019. *Not seasonally adjusted .
PROJECTED JOB GROWTH Washington Metro Area | 2000 - 2021 140 120 PAY R O L L J O B S ( T H O U S A N D S ) 3-Year Projected 100 20-Year Annual Average = 41,400/Year Average = 27,800/Year 80 60 40 20 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 -20 -40 -60 District Sub. MD No. Virginia Source: Bureau of Labor Statistics, George Mason University Center for Regional Analysis, Delta Associates; October 2019.
PAYROLL JOB GROWTH Washington Metro Area | 12 Months Ending August 2019 Lei eisur sure/ e/Hospi spitality Profes essiona nal/Busi usines ness S s Ser ervices es Educa ducation/ n/Hea ealth Other S r Serv rvic ices 43, 43,700 700 Cons nstruct uction/Mini ning ng State a e and L nd Loca cal Go Gover ernm nment ent Tra ransport rtation on/U /Util ilit itie ies Feder Fe deral G Gover ernm nment ent Manuf nufactur uring ng Who holesa esale T e Trade de -10, 10,100 100 Inform ormation ion Fina Fi nanci ncial Act Activities Reta tail Tr Trad ade -10, 10,000 00 -6, 6,00 000 -2, 2,00 000 2,000 2, 000 6,000 6, 000 10,000 10, 000 14, 14,000 000 18, 18,000 000 J O B C H A N G E Source: Bureau of Labor Statistics, Delta Associates; October 2019.
PAYROLL JOB GROWTH Washington Metro Area | 12 Months Ending August 2019 Lei eisur sure/ e/Hospi spitality Profes essiona nal/Busi usines ness S s Ser ervices es Educa ducation/ n/Hea ealth Other S r Serv rvic ices 43, 43,700 700 Cons nstruct uction/Mini ning ng State a e and L nd Loca cal Go Gover ernm nment ent Tra ransport rtation on/U /Util ilit itie ies Feder Fe deral G Gover ernm nment ent Manuf nufactur uring ng Who holesa esale T e Trade de -10, 10,100 100 Inform ormation ion Fina Fi nanci ncial Act Activities Reta tail Tr Trad ade -10, 10,000 00 -6, 6,00 000 -2, 2,00 000 2,000 2, 000 6,000 6, 000 10,000 10, 000 14, 14,000 000 18, 18,000 000 J O B C H A N G E Source: Bureau of Labor Statistics, Delta Associates; October 2019.
PAYROLL JOB GROWTH Washington Metro Area | 12 Months Ending August 2019 Lei eisur sure/ e/Hospi spitality Profes essiona nal/Busi usines ness S s Ser ervices es Educa ducation/ n/Hea ealth Other S r Serv rvic ices 43, 43,700 700 Cons nstruct uction/Mini ning ng State a e and L nd Loca cal Go Gover ernm nment ent Tra ransport rtation on/U /Util ilit itie ies Feder Fe deral G Gover ernm nment ent Manuf nufactur uring ng Who holesa esale T e Trade de -10, 10,100 100 Inform ormation ion Fina Fi nanci ncial Act Activities Reta tail Tr Trad ade -10, 10,000 00 -6, 6,00 000 -2, 2,00 000 2,000 2, 000 6,000 6, 000 10,000 10, 000 14, 14,000 000 18, 18,000 000 J O B C H A N G E Source: Bureau of Labor Statistics, Delta Associates; October 2019.
THE WASHINGTON METRO AREA APARTMENT MARKET
LARGEST APARTMENT MARKETS Selected Metro Areas | 2017 3,000 2,500 U N I T S ( T H O U S A N D S ) 2,000 1,500 1,000 565 500 0 NY LA Basin Chi SF Bay DFW Hou Wash So FL Bos Atl Source: U.S. Census Bureau, Delta Associates; October 2019.
CLASS A APARTMENT ABSORPTION Washington Metro Area | 2006 - 2019 Annual Average Average Since 2014 = 10,502 ~ 9,000 Long-Term Average = 7,334 16,000 M A R K E T - R AT E U N I T S 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 06 07 08 09 10 11 12 13 14 15 16 17 18 19* 20 21 22 *12 months ending September 2019. Source: Delta Associates; October 2019.
CLASS A APARTMENT ABSORPTION Top 10 Submarkets in Washington Metro Area | 12 Months Ending September 2019 1,400 The District No VA Sub MD 1,200 1,000 800 U N I T S 600 400 200 0 Source: Delta Associates; October 2019.
ABSORPTION PACE Class A Projects in Initial Lease-Up | Washington Metro Area 20 85 Absorption Pace Number of Projects U N I T S P E R P R O J E C T P E R M O N T H 18 75 16 N U M B E R O F P R O J E C T S I N A C T I V E L E A S E U P 65 14 12 55 10 45 8 6 35 4 25 2 0 15 9/12 9/13 9/14 9/15 9/16 9/17 9/18 9/19 Source: Delta Associates; October 2019.
STABILIZED APARTMENT VACANCY RATES Major Apartment Markets | Second Quarter 2019 National Vacancy Rate = 4.7% 6% VA C A N C Y R AT E ( A L L C L A S S E S ) 4.8% 5% 4% 3% 2% 1% 0% LA Balt Phi NY Phx Wash Atl Chi DFW Hou Source: REIS, Delta Associates; October 2019.
ANNUAL EFFECTIVE RENT GROWTH Class A Apartments | Washington Metro Area | 2006 - 2019 10% 8% Long-Term Average Rent Growth = 3.9% 6% 4% 2.8% 2% 0% -2% -4% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019* *12 months ending September 2019. Source: Delta Associates; October 2019.
PROJECTS CURRENTLY UNDER CONSTRUCTION District of Columbia In Lease-up Not Yet Leasing Source: Delta Associates; October 2019.
APARTMENT DELIVERIES Washington Metro Area | 2016 - 2019 4,000 The District Sub MD No VA Class A Quarterly Absorption = 2,480 3,000 M A R K E T - R AT E U N I T S C L A S S A 2,000 1,000 0 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2016 2017 2018 2019 Source: Delta Associates; October 2019.
36-MONTH APARTMENT DEVELOPMENT PIPELINE* Washington Metro Area | 2006 - 2019 45,000 40,000 35,000 M A R K E T - R AT E U N I T S 30,000 25,000 20,000 15,000 10,000 5,000 0 *Market-Rate Units Planned and Under Construction After Attrition . Source: Delta Associates; October 2019. **As of Third Quarter.
APARTMENTS UNDER CONSTRUCTION IN OPPORTUNITY ZONES Washington Metro Area | Third Quarter 2019 2,500 2,000 M A R K E T - R AT E U N I T S 1,500 1,000 500 0 District of Columbia Prince George's Montgomery Prince William Source: Delta Associates; October 2019.
SHARE OF APARTMENTS U/C IN OPPORTUNITY ZONES Washington Metro Area Non-Opportunity Zone Opportunity Zone 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Prince George's Prince William District of Columbia Montgomery Source: Delta Associates; October 2019.
PROJECTED DELIVERIES Washington Metro Area | 2019 - 2021 The District Sub MD No VA 7,000 6,000 M A R K E T - R AT E U N I T S 5,000 Class A Projected Quarterly Absorption = 2,250 C L A S S A 4,000 3,000 2,000 1,000 0 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2019 2020 2021 Source: Delta Associates; October 2019.
36-MONTH APARTMENT DEVELOPMENT PIPELINE* Top 10 Submarkets in Washington Metro Area | Third Quarter 2019 8,000 The District No VA Sub MD 7,000 M A R K E T - R AT E U N I T S 6,000 C L A S S A 5,000 4,000 3,000 2,000 1,000 0 *Market-Rate Units Planned and Under Construction After Attrition . Source: Delta Associates; October 2019.
DEMAND AND SUPPLY PROJECTIONS Washington Metro Area Class A Apartments | 36 Months Ending September 2022 18 DEMAND MARKET-RATE UNITS (THOUSANDS) 16 Net Absorption: 14 9,000/Year = 27,000 12 SUPPLY 10 Planned and may 8 deliver by 9/22: 6 4,475 units 1 4 Under construction: 34,276 units 2 2 Total = 38,751 units 0 No VA Sub MD The District 1 Probable supply after projected attrition. 2 Includes unleased units at projects in lease-up . 4.5% 4.1% 5.0% Projected Stabilized Vacancy % at September 2022 4.5% Metro-Wide Source: Delta Associates; October 2019.
ANNUAL CLASS A APARTMENT EFFECTIVE RENT GROWTH Washington Metro Area | 2006 - 2022 10% Long-Term Average = 3.9% 8% 6% 4% 2% 0% -2% -4% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019* 2020 2021 2022 Source: Delta Associates; October 2019. * Annual rent growth at Second Quarter 2019 is 2.8%.
THE BALTIMORE METRO AREA APARTMENT MARKET
CLASS A APARTMENT ABSORPTION Baltimore Metro Area | 2010 - 2022 4,000 3,500 Annual Average M A R K E T - R AT E U N I T S 10-Year Average = 2,103 ~ 2,067 3,000 2,398 2,500 2,000 1,500 1,000 500 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019* 2020 - 2022 *12 months ending September 2019. Source: Delta Associates; October 2019.
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