Research & Forecast Report HARTFORD Q1 2017 Multifamily Accelerating success. Source: AXIOMetrics. RCA, CoStar Market Survey Results and Forecasts Sequential Month Annual 2Q16 3Q16 4Q16 1Q17 Mar-17 2015 2016 2017F 2018F 2019F 2020F 2021F Effective Rent Per Unit $1,293 $1,286 $1,279 $1,284 $1,280 $1,275 $1,279 $1,303 $1,339 $1,391 $1,433 $1,465 Per Sq. Ft $1.39 $1.38 $1.37 $1.38 $1.38 $1.37 $1.37 $1.40 $1.44 $1.49 $1.54 $1.57 Effective Rent Growth - Annually -0.1% -0.2% 1.3% 2.3% 1.9% 2.1% 0.3% 1.9% 2.8% 3.9% 3.0% 2.3% Effective Rent Growth - Quarterly 3.0% -0.5% -0.6% 0.4% Occupancy Rate 95.1% 95.5% 94.8% 95.0% 95.3% 95.4% 95.0% 94.9% 95.2% 95.9% 95.7% 95.2% Occupancy Change - Annually -1.3% 0.2% 0.3% 0.6% 1.0% -0.8% -0.5% -0.1% 0.3% 0.7% -0.2% -0.5% Occupancy Change - Quarterly 0.7% 0.3% -0.7% 0.2% Economic Concessions Concession Value $-14.00 $-14.82 $-16.50 $-18.18 $-13.41 $-16.44 $-17.92 As a % of Asking Rent -1.1% -1.1% -1.3% -1.4% -1.0% -1.3% -1.4% RECENT SALES Date Property Name Address City Units Year Built Price in $ $/Units Mar-17 Brookside Apartments 149 Union St Bristol 78 1961 7,000,000.00 89,744 Feb-17 The Wilcox Apartments 305 S Main St Middletown 81 1907 7,000,000.00 86,420 Feb-17 Flanders West 1 Darling St 2S Southington 145 1978 19,400,000.00 133,793 Jan-17 Gateway Estates 229 Ellington Rd East Hartford 97 1973 6,700,000.00 69,072 Jan-17 Elms Apartment House 1078 New Britain Ave West Hartford 72 1967 5,750,000.00 79,861 Dec-16 Rivers Bend Apartments 1 Phaeton St Windsor 373 1973 44,500,000.00 119,303 Nov-16 Windshire Terrace 72 Forest Glen Cir Middletown 226 1999 31,700,000.00 140,265 Nov-16 Knollwood Apartments 101 S Eagleville Rd Storrs 136 1960 11,220,000.00 82,500 Oct-16 Stonegate Apartments 1431-1439 Willard Ave Newington 60 1971 6,850,000.00 114,167 Oct-16 Coachlight Village 30 Hillside St East Hartford 213 1967 6,584,425.00 30,913
SUPPLY AND DEMAND According to the Bureau of Labor Statistics, job growth in Hartford-West Hartford-East Hartford, CT Metro Area was 0.3% in February 2017, reflecting 1,700 jobs added during a 12-month period. Axiometrics forecasts Hartford-West Hartford-East Hartford, CT Metro Area s job growth to be 0.9% in 2018, with 4,931 jobs added. Job growth is expected to average 0.9% from 2019 to 2021, with an average of 5,238 jobs added each year. On the supply side, permits for 974 multifamily units were issued in the 12 months ending in February 2017, down -176 units from the prior year s sum. In terms of total residential housing, 1,885 units were permitted in the 12 months ending February 2017, a decrease of -169 units from the prior year s total. Market Employment and Permitting Annual February-17 Annual Forecast 2014 2015 2016 Market National 2017F 2018F 2019F 2020F 2021F Employment (000s) 563.5 568.5 569.8 565.5 144,271.0 572.9 577.8 584.3 589.7 593.5 Job Gain (000s) 5.7 5.0 1.3 1.7 2,352.0 3.1 4.9 6.5 5.4 3.8 Job Growth (%) 1.0% 0.9% 0.2% 0.3% 1.7% 0.5% 0.9% 1.1% 0.9% 0.7% Total Residential Permitting 1,148 1,658 2,054 1,822 1,101,437 2,757 3,761 2,771 2,149 3,054 Relative Change -5.1% 44.4% 23.9% 11.6% 0.3% 34.2% 36.4% -26.3% -22.5% 42.1% Single Family Units Permitted 670 792 841 817 702,275 Relative Change -20.7% 18.2% 6.2% 7.6% 9.0% Multifamily Units Permitted 422 744 1,150 948 368,649 Relative Change 31.5% 76.3% 54.6% 23.3% -12.8% Multifamily as a % of Total 36.8% 44.9% 56.0% 52.0% 33.5% Demand/Supply Ratio Job Gain / Total Residential Units Permitted 4.7 4.3 0.8 1.0 2.1 1.5 1.8 1.7 1.9 1.8 Job Gain / Single Family Units Permitted 6.7 7.4 1.7 2.2 3.7 Job Gain / Multifamily Units Permitted 17.6 11.7 1.8 2.2 5.6 Multifamily Absorption and Supply Annual 1Q17 Annual Forecast 2014 2015 2016 Market National 2017F 2018F 2019F 2020F 2021F Total Units Absorbed 839 (797) 917 1,281 264,921 873 1,182 1,147 129 419 New Supply 287 463 707 1,013 350,515 1,059 731 481 651 753 Inventory Growth 0.3% 0.5% 0.7% 0.7% 1.4% 1.1% 0.8% 0.5% 0.7% 0.8% COLLIERS INTERNATIONAL www.colliersmultifamilyeast.com MULTIFAMILY ADVISORY GROUP P. 2
IDENTIFIED SUPPLY As of April 16, 2017, Axiometrics has identified 855 apartment units scheduled for delivery in 2017, of which, 254 have been delivered. As a comparison, there were 555 apartment units delivered in 2016. Properties delivered to the market in the last 12 months have achieved an average asking rent of $1,750 per unit, or $1.77 per square foot. Effective rent has averaged $1,685, or $1.70 per square foot, resulting in an average concession value of $-64.75. As a comparison, existing properties in the market had an average asking rent of $1,302 per unit ($1.40 per square foot) and an average effective rent of $1,284 per unit, or $1.38 per square foot, in 1Q17. Concessions for existing properties averaged $-18.18. Submarket Delivery Schedule Pipeline Delivery Schedule Pipeline Lease Up Trend Units Absorbed Asking Rent Effective Rent Top Submarkets 2015 2016 2017 Total Totals PPM Per Unit PSF Per Unit PSF City of Hartford 611 36 132 779 130 10 $1,637 $1.92 $1,575 $1.85 Middlesex County / Other 63 123 186 34 5 $1,789 $1.81 $1,634 $1.65 North/West Hartford 216 193 261 670 165 5 $1,846 $1.69 $1,787 $1.63 South Hartford/North Middlesex 144 339 483 149 7 $1,763 $1.78 $1,723 $1.74 Other 309 119 428 108 21 $1,573 $1.56 $1,477 $1.47 Hartford-West Hartford-East Hartford, CT *Based on 2017 deliveries 1,136 555 855 2,546 586 8 $1,769 $1.76 $1,699 $1.69 *Trend based on a trailing 12 month period COLLIERS INTERNATIONAL www.colliersmultifamilyeast.com MULTIFAMILY ADVISORY GROUP P. 3
PIPELINE # Name Status Owner Address Market Units 1 Windsor Station Lease Up Lexington Partners LLC 55-69 Mechanic St Blooield/Windsor 130 2 The Arbors at Brighton Park Lease Up Rohdie Group 627 Brighton Park Way Blooield/Windsor 69 3 Capitol Lofts Lease Up Dakota Partners, Inc. 390 Capitol Ave Frog Hollow 112 4 Capewell Lofts Lease Up Corporation for Independent Living 57 Charter Oak Ave Sheldon Charter Oak 72 5 Tempo Evergreen Walk Lease Up Northeast Retail Leasing & Management Co. LLC 6 The Arbors at Brighton Park - Phase II 50 Andrews Way South Windsor 70 Under Construction Rohdie Group 627 Brighton Park Way Blooield/Windsor 63 7 700 Bloomfield Ave Under Construction Post Road Residential Inc. 700 Bloomfield Ave Blooield/Windsor 215 8 The Glastonbury Mews Under Construction Continental Properties 347-349 381 Hebron Ave Outer Glastonbury/Marlbor 145 9 Highcroft Apartment Homes Phase II Under Construction TRIO Properties 1100 Highcroft Pl Outlying Simsbury/Granby 96 10 Aspen Green Under Construction Garden Homes 20 Hopmeadow St Outlying Simsbury/Granby 384 11 Tempo Evergreen Walk - Phase II Under Construction Northeast Retail Leasing & Management Co. LLC 12 47 Main St Under Construction New England Management Corporation 13 Residences at Steele Road Phase II Source: CoStar 50 Andrews Way South Windsor 130 47 Main St Vernon 86 Under Construction Metro Realty Group, Ltd. 243 Steele Rd West Hartford 80 14 Great Pond Village Proposed Winstanley Enterprises LLC 2000 Day Hill Rd Blooield/Windsor 320 15 Great Pond Proposed Winstanley Enterprises LLC 2002 Day Hill Blooield/Windsor 600 16 101-111 Pearl St Proposed Lexington Partners LLC 101-111 Pearl St Downtown 201 17 Ann Uccello St - Phase III Proposed Centerplan Development Ann Uccello St Downtown 208 18 Main St - Phase I Proposed City Of Hartford Main St Downtown 237 19 Trumbull St - Phase II Proposed Centerplan Development Trumbull St Downtown 228 20 243 Talcottville Rd Proposed Gould & Co. 243 Talcottville Rd Vernon 300 Total Units 3,746 15 14 9 2 1 20 7 10 12 5 11 13 18 3 6 19 16 4 17 8 Key Lease-Up Under Construction Proposed COLLIERS INTERNATIONAL www.colliersmultifamilyeast.com MULTIFAMILY ADVISORY GROUP P. 4
WE CAN HELP WHO WE ARE One of the largest and most experienced teams of multifamily specialists in the industry 50 MORE THAN Dedicated Multifamily Professionals & Advisors 20 COVERING OVER STATES Expansive geographic footprint As an investor in multifamily properties, you need a firm that provides experience, broad reach and the ability to market an asset no matter how challenging the economic environment. You need a team that specializes in your market you need The East Region Multifamily Advisory Group. Colliers International has one of the largest and most experienced teams in the industry, strategically located in key markets throughout North America. Our combination of market dominance, expertise, and singular focus, make us uniquely successful in helping our clients achieve their disposition objectives. How are we able to bring together the skills and tools necessary to complete challenging assignments? Our East Region Multifamily Advisory Group is connected by purpose and focus. Our team is dedicated to sharing information on market opportunities, capital sources and buyers/sellers to achieve the best results for our clients. 33,500 MORE THAN Units sold since 2011 $2.3B Group gross transaction value in since 2011 COLLIERS INTERNATIONAL www.colliersmultifamilyeast.com MULTIFAMILY ADVISORY GROUP P. 5
Bob Pagani, SIOR PRINCIPAL HARTFORD Eric Blumenthal ASSOCIATE HARTFORD Will Mathews PRINCIPAL EAST REGION Payton Herschberger ASSOCIATE EAST REGION bob.pagani@colliers.com DIR +1 860 616 4024 eric.blumenthal@colliers.com DIR +1 860 249 6521 INSTITUTIONAL CLIENT GROUP will.mathews@colliers.com DIR +1 404 877 9285 payton.herschberger@colliers.com DIR +1 404 574 1061 AT YOUR SERVICE To learn more, scan this with a QR code reader or visit: www.colliersmultifamilyeast.com