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2007A Look at the Washington Metro Area
Apartment Market
January 26, 2011
2
APARTMENT VACANCY RATESSELECT METRO AREAS YEAR-END 2010
0%
2%
4%
6%
8%
10%
12%
NY Was Phi Balt LA Chi DFW Atl Phx Hou
National Rate: 6.6%
3.4%
Vac
ancy
Rat
e (A
ll A
part
men
t Cla
sses
)
Note: Mid-Year 2010 data except for Washington, Baltimore, and Philadelphia which are as of Year-End 2010.
Source: MPF, Delta Associates; January 2011.
3
0
5,000
10,000
15,000
20,000
DFW Atl LA Was Phx Hou
National Net Absorption: 400,617
CLASS A & B APARTMENT ANNUAL NET ABSORPTIONSELECT METRO AREAS 12 MONTHS ENDING DECEMBER 2010
Apa
rtm
ent
Uni
ts 12,529
Note: Mid-Year 2010 data except for Washington.Source: MPF, Delta Associates; January 2011.
4
CLASS A & B APARTMENT ANNUAL NET ABSORPTIONWASHINGTON METRO AREA 2007 – 2010
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Apa
rtm
ent
Uni
ts
Long Term Average Absorption= 5,339
12 months ending
2008 2009 20102007
Source: Delta Associates; January 2011.
Class A
Class B
5
RISE IN RENTER HOUSEHOLDSWASHINGTON METRO AREA
% o
f Tot
al H
ouse
hold
s
U.S. change = 130 Basis Point Increase
Washington Metro change = 450 Basis Point Increase
Source: Census Bureau, Delta Associates; January 2011.
6
0
2
4
6
8
10
12
14
16
18
20
22
2003 2004 2005 2006 2007 2008 2009 2010
Number of projects in initial lease-up
28 28 17 19 30 46 37 31
ABSORPTION PACE PER PROJECT PER MONTHWASHINGTON METRO AREA 2003 – 2010
Unit
s per
Month
Source: Delta Associates; January 2011.
7
ANNUAL RENT GROWTH CLASS A APARTMENTSWASHINGTON METRO AREA 2005 – 2010
-6%
-4%
-2%
0%
2%
4%
6%
8%
Eff
ect
ive R
ent
Gro
wth
2005 2006 2007 2008 2009 2010* 2010*
Washington Metro U.S. 1/
Long Term Average Rent Growth = 5.1%
1/ Preliminary Est.
7.8%
2.0%
Source: Delta Associates; January 2011.
Growth in Face Rent
8
0%
2%
4%
6%
8%
10%
12%
14%
16%
2003 2004 2005 2006 2007 2008 2009 2010
CONCESSIONS FOR PROPERTIES IN LEASE-UPWASHINGTON METRO AREA 2003 –2010
Con
cess
ion
as a
P
erce
ntag
e of
Fac
e R
ent
Source: Delta Associates; January 2011.
9
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
No VA Sub MD The District
36 MONTH DEVELOPMENT PIPELINEWASHINGTON METRO AREA 2000 – 2010
Mar
ket
Rat
e U
nits
Pla
nne
d &
U/C
Total: 36,291
Total: 16,606
Total: 23,880
Source: Delta Associates; January 2011.
10
0
500
1,000
1,500
2,000
2,500
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
APARTMENT CONSTRUCTION STARTSWASHINGTON METRO AREA 2008 – 2010
Apa
rtm
ent U
nits
2008 2009
Average Quarterly Starts Since 2000: 1,900
2010
Source: Delta Associates; January 2011.
11
0
2
4
6
8
10
12
PROJECTED APARTMENT DEMAND & DELIVERIESWASHINGTON METRO AREA 36 MONTHS ENDING DECEMBER 2013
Deliveries
Demand
Total = 23,880 units
Delivered and leasing: 3,671 units
Planned and may deliver by 12/2013: 13,735 units
= 6,000/Yr. = 18,000
District Sub. MD No. VA
Estimated Stabilized Vacancy Rate at 12/2013: 4.1% Region-Wide
5.0% 4.2% 3.9%
=
=
Cla
ss A
Mark
et
Rate
Unit
s in
Thousa
nds
U/C and not yet leasing: 6,474 units
=
Source: Delta Associates; January 2011.
12
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Per
cent
Effe
ctiv
e R
ent G
row
th
CLASS A APARTMENT RENT GROWTH PER YEARWASHINGTON METRO AREA 2000 – 2014
Long-Term Average = 5.1%
Source: Delta Associates; January 2011.
13Source: Delta Associates, January 2011.
CLASS B APARTMENT RENTAL AND VACANCY RATESWASHINGTON METRO AREA 2001 – 2010
Sta
biliz
ed V
acan
cy R
ate
Ave
rage
Effe
ctiv
e B
ase
Ren
t
14
Vac
ancy
Rat
e
Source: Delta Associates, January 2011.
CLASS B APARTMENT VACANCY RATESWASHINGTON METRO AREA 2003 – 2010
15Source: Delta Associates, January 2011.
CLASS B APARTMENT ANNUAL RENT GROWTHWASHINGTON METRO AREA 2009 vs. 2010
Per
cent
Effe
ctiv
e R
ent G
row
th
16
2007A Look at theWashington Metro Area
Apartment Market
January 26, 2011
