MULTIFAMILY SILVESTRI REAL ESTATE 444 EAST MAIN ST STE 102 LEXINGTON, KY F A L L

Transcription

1 MARKET STUDY SILVESTRI REAL ESTATE 444 EAST MAIN ST STE 102 LEXINGTON, KY MULTIFAMILY REPORT F A L L

2 Table of Contents COMPANY INFO OUR TEAM ABOUT LEXINGTON, KENTUCKY MARKET DATA PROPERTIES SURVEYED RENTAL METRICS REDEVELOPMENT TRENDS NEW DEVELOPMENT SPOTLIGHT SUMMARY

3 Silvestri Real Estate Silvestri Real Estate is the leading apartment brokerage company in the Central KY Market having sold 3X more properties than our nearest competitor.* Our team has brokered over 2400 apartment units in the past 22 months. Silvestri Real Estate also has a proprietary database of the leading KY focused investors. This database is used to ensure our clients receive not only a targeted approach when both acquiring and disposing assets. Silvestri Real Estate has brokered some of the most well known properties in Lexington: Cedar Run, The Creeks on Tates Creek, Tarleton Crossings, The Meadows, Fairways and Pimlico Apartments, Fayette Crossing, Turfland 1 & 2 (now The Vue Lexington) and The Retreat at Hamburg, just to name a few. *According to CoStar based on the number of transactions brokered over the past 3 years. Silvestri Real Estate Corporate Office 444 East Main Street Suite 102 Lexington, KY

4 Lexington, KY Lexington, KY, known as the "Horse Capital of the world," is located in the heart of the Bluegrass Region. Lexington is home of the headquarters of major companies such as: Alltech, Big Ass Solutions, Tempur-pedic, and Valvoline. Amazon, IBM and Xerox also have large operations in the area. Combine the major corporate impact with a highly educated population(40% of Lexington's population holds a bachelor's degree or higher*) and you have a recipe for long lasting sustainability. The University of Kentucky is located near downtown Lexington and is home to just over 30,000 undergraduate and graduate students. This youthful population continues to reinforce the growth of Lexington, KY.

5 Lexington, KY #1 Chamber of the year -Associate of Chamber of Commerce Executives #5 Best Run City #31 Most livable -Wallethub US City - USA Today #5 Best Cost of doing business #7 Best City for new grads - Business Facilities -Associate of Chamber of Commerce Executives

6 Our Team Ken Silvestri As the Owner and Principal Broker of Silvestri Real Estate Ken is the marketing and sales specialist. Mr. Silvestri has been in real estate business for over 27 years and is one of the leading POWERBROKERS* in the central Kentucky multi-housing market. As an active member of the Greater Lexington Apartment Association, Ken has been a keynote speaker on The State of The Apartment Market. Ken is a native of Lexington with a deep network of relationships. He achieved the Eagle Scout designation in 1976 and has built the company s reputation on trustworthy results. Ken can be reached at or Ken@KenSilvestri.com Brandon Cutwright Brandon is the Vice President of Investments Sales for the Silvestri Apartment Group and is a specialist of real estate analytics and operations. Brandon has been involved in the successful closing of over 2,700 units during his 2 years with Silvestri Real Estate. Prior to joining Silvestri Real Estate, Brandon spent 5 years in the Property Management business working for both public (MAA - Top 3 REIT) and private companies (PRG Real Estate) prior to joining Silvestri Real Estate. Brandon is a licensed Certified Apartment Manager (CAM) and is the incoming 2018 President of the Greater Lexington Apartment Association Board. Brandon can be reached at or Brandon@KenSilvestri.com *CoStar Group

7 Lexington, KY Top 10 Employers (inlcudes counties adjacent to Fayette County) *Source: Greater Lexington Chamber of Commerce - "Major Regional Employer" **Located in Georgetown, KY ***Located in Richmond, KY ****Located in Georgetown, KY

8 Lexington, KY University Enrollment Sources: Free-4u.com * Google Response

9 Market Data In order to collect the data to support this study, a market survey of Lexington's Southeast and Southwest sub markets was conducted (see graph for location specifics). This quarter we conducted a phone/ survey to gather information regarding the total number of units, unit breakdown, unit size, current rental rates, and occupancy. Over 65 Lexington apartment communities were contacted for the survey. The data collected was compared to the numbers from last year at this time to give us an accurate representation of how the market have shifted this past year. Lexington Apartment Data (according to Costar): Total Communities (includes buildings with 4+ units) - 41,000 Units

10 Properties Surveyed Chevy Chase - Colts Run - Gleneagles - RM Lexington - Steeplechase -Avenue at Nicholasville - Autumn Park - Cove Lake - Grand Reserve at Pinnacle - Pinebrook - Stoney Brooke - Beaumont Farms - Creeks on Kirklevington - Hamburg Farms - Raintree - Treetops - Blvd at Hays - Creeks on Lansdowne - Harrods Point - Regency Manor - Tates Creek Village - Brandywine - Creeks on Tates Creek - Lakepointe - Reserve at Merrick - The Mansion - Breckenridge Court - Crescent at Shadeland - Lakewood Park - Resort at Lake Crossing - Park Bridle Creek - Cross Keys and Woodridge - Retreat at Hamburg Place - The Metropolitan - Brighton Downing Place Townhomes - Lighthouse Square - Richmond Commons - The Pines - Brookview - Triple Crown at Tates Creek - Man O War Crossing - Saddlebrook - The Racquet Club - Cabana Royal Arms - Fayette Crossing - Merrick Place - Shilito Park - The Veridian - Cedar Run - Forty 57 - Park Place - Shorelake - The Henry at Fritz Farm - The Village - The Vue - Valleyfield Apartments - Cedarwood - Fountains at Andover - Patchen Oaks - Spring House on the Park - Westminster Village - Chinoe Creek - Gate House - Patchen Place - Springs at Winchester - WaterStone - Whispering Hills

11 Rental Metrics Rent per SF $1.41 $1.058 Avg Rent per SF Eff/Studio - $1.41 1x1 - $1.05 2x1 - $0.87 2x2 - $0.89 3x2 - $0.88 $0.705 $0.353 $0 Eff/Studio 1x1 2x1 2x2 3x2

12 Rental Metrics Available units by Floor Plan 3x2 7% Eff/Studio 3% # of units Eff/Studio x1-6,103 2x1-2,350 2x2-4,612 3x x2 32% 1x1 42% 2x1 16%

13 Rental Metrics Rental Rates $1,300 $975 Avg Rental Rates Eff/Studio - $ x1 - $ x1 - $ x2 - $1, x2 - $1, $650 $325 $0 Eff/Studio 1x1 2x1 2x2 3x2

14 Rental Metrics Percentage of units by Year Built % Current 11% Pre % % # of units by Year Built Pre , , , , , Current - 1, % %

15 Rental Metrics Occupancy by Year Built - Stabalized assets only 100% 75% 50% Occupancy by Year Built Pre % % % % % Current - 95% 25% 0% Pre Current

16 Washer/Dryer Study Do properties with washers and dryers in unit do better than those without? What about if just the hook up is available? See our answers below: Washer/Dryer Setup Occupancy Community only 17% 100% Machines in unit 34% 75% 50% Select units 19% 25% Hook up only 31% 0% Community Only Select units Hook ups Community Only % Select Units % Hook ups % Machines in unit - 94% Machines in unit

17 Washer/Dryer Study Results Summary The occupancy variance between properties who have washer/dryer connections and those that do not is not significant. However, properties with the actual washers and dryers in the unit are the highest occupied out of those surveyed. Assets without washer/dryer connections are inherently older whereas units with the connections/machines are newer. As such, we are not surprised to see the occupancy similar to the numbers found in the 'occupancy by age' category.

18 Redevelopment Spotlight The Element (Formerly Cedar Run) Before After

19 Redevelopment Spotlight The Element (Formerly Cedar Run) Rental Rate Increases per SF 1 Bedroom Apartment Homes 2 Bedroom Apartment Homes 25% 34.5% $0.96 $1.20 $0.84 $1.13

20 New Development Spotlight The Henry at Fritz Farm Facts Built: 2017 (still in process) Units: 336 (At Completion) Owner: Arlington Properties Community Features: Resort Style Pool, Concierge, 24-hour Fitness Studio, Outdoor Kitchen with Gas Grills, Pet Spa, Cyber Cafe Apartment Features: - Granite Countertops, Stainless Steel Appliances, Full-size Washer & Dryer, 9' Ceilings, Premium 42'' cabinets Unit Mix: Bed Bath Sq ft Price $1,181 - $1, ,106 $1,345 - $1, ,452 $2,250 Photos provided by thehenryatfritzfarm.com

21 New Development Spotlight WaterStone at Hamubrg Facts Built: 2017 (still in process) Units: 264 (At Completion) Occupancy: 49.62% (as of ) Leased: 59.85% (as of ) Owner: Miller Valentine Community Features: Heated Saltwater Swimming Pool, Outdoor Bar with TV Lounge, Private Dog Park, Fitness Center/Yoga Room Apartment Features: - Stainless Steel Appliances, Quartz Countertops, Washer/dryer, Vinyl Plank Flooring. Unit Mix: Bed 1 1 w/den 2 3 Bath Sq ft ,069-1,198 1,359 Price $999 $1,168 $1,269 - $1,329 $1,529 Photos provided by

22 Summary Review Occupancy has remained strong but has slightly dropped since Rental rates, however, have continued to grow. Smaller apartments continue to have the highest rent per SF in This is a trend we see continuing for the near future. 3 bedroom apartments with only 1 bathroom are becoming obsolete. Very few remaining in the market and most of the ones that are will be converted to 2 bedroom 2 bathroom apartments or two separate 1 bedroom 1 bathroom apartments. New construction has continued to grow but is almost at the plateau. The Henry at Fritz Farm and WaterStone are knee deep in construction while The BLVD at Hays is wrapping up it's last phase. Redevelopment projects have continued in These include: The Element, The Vue, The August (formerly Pickway Manor), and The Wellington. Small scale renovations are also being conducted at numerous Lexington communities.

23 Additional Information Available Please contact us at or to receive detailed market data.

24 444 East Main Street Suite 102 Lexington, KY