ECONOMIC INDICATORS National MSA Vacancy Rate Average Monthly Rent Q4 16 Q4 17* 12-Month Forecast GDP Growth 1.8% 2.3%* CPI Growth 1.8% 2.0%* Consumer Spending Growth 2.8% 2.6%* Retail Sales Growth 3.7% 4.3%* *Q3 values **Forecast by Cushman & Wakefield. Values represent year-over-year % change. Q4 16 Q4 17 Household Income $50,372 $51,764 Population Growth 0.37% 0.36% Unemployment 4.6% 4.1% Source: Moody s Analytics 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% $740 $720 $700 $680 $660 $640 $620 $600 12-Month Forecast 2012 2013 2014 2015 2016 Q4 17 2012 2013 2014 2015 2016 Q4 17 Economy s economic health generally tracks that of Arizona and the nation as a whole, which bodes well for our region. Personal income for the U.S. in November was up 3.8% over a year ago. This is good news because inflation over that period was up only about 2.0%. According to Eller College economists, the MSA job data preliminarily reported by the Bureau of Labor Statistics is likely understated by thousands of jobs, and once adjusted in the spring for actuals, will reflect what is felt in the marketplace: that employment has steadily grown every quarter since Q3 2015. Housing permit activity was up 16.7% year-overyear through November, while median home prices are up 12.2%, all trending very favorably after several years of limited growth. Market Overview The vacancy rate of conventionally-operated, stabilized units improved 0.21% from the last quarter, while improving 0.57% from one year ago to 6.30%. The lowest fourth quarter vacancy of 4.68% occurred in the Northeast submarket, followed by the 4.87% rate recorded in Catalina Foothills Submarket. The highest vacancy rate was 8.63% in the Southeast submarket. Eight of s 15 submarkets experienced improvement in vacancy, with the greatest declines occurring in Southeast (-1.49%) and South /Airport (-1.04%). Total absorption in fourth quarter 2017 increased by 212 units. North Central added the greatest number of units (72) while East suffered the largest decline of units (51). The average monthly gross apartment rent without utilities in Metropolitan was $729 per unit or $0.98 per square foot for the fourth quarter, representing a $11 or 1.53% increase from last quarter. There were a total of 6 arms-length transactions that occurred in the 4th quarter 2017 (over 40 units). The average sales price was $97,855 per unit or $112.75 per square foot. Investment Market Overview Sales velocity for 4 th quarter 2017 slowed down significantly. The slow down is due to a few factors including a widening of buyer and seller expectations along with limited inventory in the marketplace. Developers are encouraged with the improving rental market fundamentals and have begun developing projects outside the University and Downtown submarkets. Lending has been extremely encouraging throughout the 2017 calendar year. We are being approached by various banks about financing options for multi-family. Investor interest continues to far surpass the supply leading to a seller s market. Pricing has continued to be pushed due to the demand and lack of inventory. We see the apartment rental market continuing to improve; however, we see inventory levels to be constrained in 2018.
Historic Rents- Stabilized Projects (Unfurnished No Utilities) SUBMARKET 4Q 2016 1Q 2017 2Q 2017 3Q 2017 4Q 2017 AVG LAST 4 QTRS Oro Valley/Catalina $949 $942 $945 $932 $992 $953 Northwest $840 $838 $882 $880 $910 $878 Catalina Foothills $724 $731 $772 $789 $809 $775 Northeast $887 $868 $888 $906 $891 $888 East $662 $669 $677 $691 $693 $683 North Central $624 $630 $638 $647 $649 $641 Flowing Wells $591 $592 $602 $611 $614 $605 Foothills $787 $796 $812 $819 $825 $813 University $745 $745 $781 $845 $842 $803 South Central $602 $609 $612 $626 $623 $618 Pantano/Lakeside $634 $650 $657 $662 $672 $660 South/Airport $544 $550 $554 $562 $565 $558 Southwest $630 $637 $661 $665 $671 $659 Southeast $528 $528 $532 $533 $545 $535 Average $650 $652 $668 $678 $687 $671 Percentage Vacant (Stabilized Units) SUBMARKET 4Q 2016 1Q 2017 2Q 2017 3Q 2017 4Q 2017 AVG LAST 4 QTRS Oro Valley/Catalina 8.32 6.75 9.05 7.14 8.09 7.76 Northwest 6.39 5.24 5.45 5.46 5.86 5.50 Catalina Foothills 5.09 5.45 5.32 4.8 4.87 5.11 Northeast 5.23 5.54 5.18 5.23 4.68 5.16 East 5.81 5.50 5.85 5.96 6.58 5.97 North Central 7.83 7.32 7.29 6.70 5.95 6.82 Flowing Wells 5.30 5.69 6.58 5.82 4.96 5.76 Foothills 7.76 5.65 6.81 6.52 6.77 6.44 University 7.02 7.3 8.97 5.54 5.44 6.81 South Central 9.62 8.26 8.90 8.55 7.77 8.37 Pantano/Lakeside 6.25 7.21 7.94 8.15 7.73 7.76 South/Airport 8.87 6.78 6.91 7.96 6.91 7.14 Southwest 6.47 10.12 8.27 6.7 6.74 7.96 Southeast 19.35 17.56 6.25 10.12 8.63 10.64 Average 7.29 6.96 6.58 6.31 6.07 6.48, AZ 85711 amendelsberg@ dleibsohn@
Villas at San Dorado 10730 N. Oracle Rd $50,550,000 2014 A 274 325,000 $155,538 $155.54 Dasmen Residential Portfolio 4 locations $46,000,000 1975 B 305 574,454 $39,249 $80.07 Mission Palms 951 W. Orange Grove Rd $37,250,000 1979 B 360 372,928 $103,472 $99.89 The Condominiums at Williams 5400 E. Williams Blvd Centre $30,090,000 1995 B 343 242,151 $115,287 $124.26 The Condominiums at Williams 5400 E. Williams Blvd Centre $30,090,000 1995 B 261 244,220 $115,287 $123.21 Summit Vista 4701 W. Linda Vista Blvd $29,560,000 2008 A 288 285,302 $102,639 $103.61 Avilla Marana 4050 W. Aerie Dr $26,612,606 2013 B 284 170,033 $93,706 $156.51 The Ledges at West Campus Apartment 2162 W. Speedway Blvd $23,000,000 1997 B 205 269,000 $112,195 $85.50 The Enclave at the Foothills 7300 N. Mona Lisa Rd $21,800,000 1986 B 300 260,976 $72,667 $83.53 Crescent Ridge 3980 W. Linda Vista Blvd $21,534,191 2002 B 272 259,106 $79,170 $83.11 Las Villas De Kino 5515 S. Forgeus Ave $21,000,000 1998 B 348 258,844 $60,345 $81.13 Junction at Iron Horse 504 E. 9th St $19,320,221 2014 A 76 100,511 $257,603 $192.22 Avilla Marana II 4115 W. Aerie Dr $18,917,394 2014 B 284 120,000 $66,611 $157.64 La Entrada Apartments 255 N. Granada Ave $17,500,000 1985 A 186 186,738 $94,086 $93.71 Peaks at Redington 7700 E. Speedway Blvd $14,500,000 1980 B 301 217,382 $48,173 $66.70 Brookwood Apartment Homes 201 S. Kolb Rd $13,000,000 1973 B 272 206,784 $47,794 $62.87 Raintree Apartments 6450 E. Golf Links Rd $12,475,000 1983 B 364 173,680 $34,272 $71.83 Arches at Oracle Apartments 5921 N. Oracle Rd $12,400,000 1987 B 144 129,336 $86,111 $95.87 Canyon Heights 550 N. Pantano Rd $11,250,000 1982 B 196 127,900 $57,398 $87.96 Zona Village 2855 W. Anklam Rd $10,050,000 1965 B 183 98,366 $54,918 $102.17 Capistrano Apartments 2929 E. 6th St $8,600,000 1974 B 112 100,000 $76,786 $86.00 INDI 1920 N. 1st Ave $8,320,000 1972 B 89 97,818 $93,483 $85.06 Cordova Village 2020 S. Columbus Blvd $8,000,000 1975 B 318 125,446 $25,157 $63.77 Bella Vista 3201 E. Seneca St $7,610,000 1972 C 176 146,062 $43,239 $52.10 El Conquistador Apartments 1881 E. Irvington Rd $7,540,000 1982 B 201 81,074 $37,512 $93.00 The Commons on Stella 6534 E. Stella Rd $7,530,000 1963 B 200 181,200 $37,650 $41.56 Casa Madera 7374 N. Mona Lisa Rd $7,300,000 1995 B 80 94,080 $91,250 $77.59 Villa Pacifica 4650 E. 29th St $7,282,500 1986 B 176 112,749 $41,378 $64.59 Santa Cruz Vista, Riverview Villas, Westlake Village Sunflower Apartments Community 3 locations $7,050,000 1981 B 236 140,840 $29,873 $50.06 6502 E. Golf Links Rd $6,668,800 1983 B 144 78,400 $46,311 $85.06 Casa Loma 6639 E. Broadway Blvd $6,525,000 1990 B 135 104,513 $48,333 $62.43, AZ 85711 amendelsberg@ dleibsohn@
The Place at Ten50 1050 N Camino Seco Road $6,300,000 1986 B 120 74,664 $52,500 $84.38 Juniper Canyon 3055 N. Flowing Wells Rd $6,279,000 1985 C 140 79,407 $44,485 $78.43 Broadway Proper 7680 E. Broadway Blvd $6,000,000 1983 C 105 80,000 $57,143 $75.00 Rosemont Gardens* 5121 E. 29th Street $5,765,000 1979 C 92 53,348 $62,663 $108.06 Casa De Oro* 5171 E. 29th Street $5,765,000 1983 C 60 30,000 $96,083 $192.17 Sunpointe Gardens Apartments 2727 N. Oracle Rd $5,500,000 1978 C 164 70,280 $33,537 $78.26 El Dorado Apartments 2440 E. Glenn St $5,475,000 1973 B 96 61,535 $57,031 $88.97 The Place at Nine90 990 E. River Rd $5,100,000 1985 B 72 35,080 $70,833 $145.38 Sierra Pointe Apartments 2350 E. Water St $4,400,000 1972 B 84 83,750 $52,381 $52.54 University Manor Apartments 730 E. Lee St $4,250,000 1978 B 58 21,378 $73,276 $198.80 Georgetown 2510 N. Winstel Blvd $4,224,000 1972 C 96 71,659 $44,000 $58.95 Park Adams Apartments 1425 N. Park Ave $3,750,000 1965 C 46 34,532 $81,522 $108.59 Sahuaro Point Villas 2326-2366 N. 6th Ave $3,500,000 2005 B 20 34,960 $175,000 $100.11 Tuscany Apartment Homes 4399 E. Pima St $3,350,000 1963 C 80 88,372 $41,875 $37.91 Desert Palms 3125 N. Alvernon Way $3,100,000 1983 C 68 37,680 $45,588 $82.27 Catalina Vista 8550 E. Old Spanish Trl $2,980,000 1971 C 50 44,459 $59,600 $67.03 Montclair Apartments 811-835 N. Alvernon Way $2,400,000 1958 C 59 45,211 $39,344 $53.08 Loma Doroda Apartments 1402-1564 N. Craycroft Rd $2,300,000 1962 C 54 36,354 $42,593 $63.27 Malibu 3665-3703 N. 1st Ave $2,244,000 1972 C 65 33,760 $34,523 $66.47 Eastpointe Apartments 8477 E. Broadway Blvd $2,100,000 1981 B 49 21,217 $42,857 $98.98 Desert Tree 3450 N. Stone Ave $2,000,000 1975 C 74 48,704 $27,027 $41.06 Blacklidge Flats 3002 N. Mountain Ave $1,980,000 1978 C 34 34,000 $58,235 $58.24 Park Village Apartments 5290 S. Park Ave $1,925,000 1985 B 60 32,388 $32,083 $59.44 Arroyo Chico Apartments 1402 E. Manlove St $1,894,000 1962 C 61 47,216 $31,049 $40.11 Croftwood Apartments 1005 S. Craycroft Rd $1,870,000 1978 C 52 30,521 $35,962 $61.27 Villa Delano Apartments 123 W. Delano St $1,850,000 1980 B 33 29,182 $56,061 $63.40 Peachtree 840 N. Alvernon Way $1,725,000 1962 C 40 32,872 $43,125 $52.48 Palm Gardens 3727 E. 5th St $1,700,000 1960 C 45 30,060 $37,778 $56.55 Kelso Vista 450 W. Kelso St $1,700,000 1984 C 40 23,884 $42,500 $71.18 Villa Del Ray Apartments 4302 E. Fairmount St $1,555,000 1979 C 24 33,204 $64,792 $46.83 Belair Apartments 435 E. 18th Street $1,515,000 1963 C 33 17,270 $45,909 $87.72 Villa Delano 123 W. Delano St $1,500,000 1980 C 32 29,182 $46,875 $51.40 Baca Apartments 446 E. Pastime Rd $1,425,000 1981 C 30 35,000 $47,500 $40.71, AZ 85711 amendelsberg@ dleibsohn@
Pueblo Sands 51 W. Delano St $1,375,000 1985 B 29 20,300 $47,414 $67.73 Bellevue Street Apartments 4117-4125 E. Bellevue St $1,320,000 1987 B 27 29,396 $48,889 $44.90 Wildflower 2850 N. Alvernon Way $1,250,000 1977 B 28 16,488 $44,643 $75.81 Country Club Court 2152 N. Country Club Rd $1,205,000 1958 C 26 27,000 $46,346 $44.63 Mount Ridge Apartments 3002 N. Mountain Ave $1,195,000 1978 C 34 34,000 $35,147 $35.15 Vista De La Luna 4015 E. Monte Vista Dr $1,175,000 1978 C 32 14,080 $36,719 $83.45 Pima Gardens Apartment 4345-4397 E. Pima St $1,050,000 1967 C 27 20,000 $38,889 $52.50 Coronado Vista 4424 E. Bellevue St $1,025,000 1978 C 21 15,428 $48,810 $66.44 Pie Allen Apartments 824 E. 10th St $1,020,000 1962 C 20 11,189 $51,000 $91.16 2nd Street Apartments 3653 E. 2nd St $1,000,000 1978 C 39 46,648 $33,333 $21.44 Bellevue Apartments 3414 E. Bellevue St $965,000 1955 C 20 11,904 $48,250 $81.07 Thurber Apartments 557 W. Thurber Rd $965,000 1984 C 36 22,916 $26,806 $42.11 Bellevue Apartments 3414 E. Bellevue St $965,000 1955 C 20 11,904 $48,250 $81.07 Craig Apartments 1302-1350 N. Craycroft Rd $835,000 1962 C 23 18,000 $36,304 $46.39 Vista Del Sol Apartments 3810 E. Monte Vista Dr $832,000 1981 C 24 11,200 $34,667 $74.29 1340 North Country Club Road Apartments 1340-1390 N. Country Club Rd $824,000 1950 C 22 11,822 $37,455 $69.70 Palo Verde View Apartments 2438 N. Palo Verde Rd $730,000 1981 C 24 11,350 $30,417 $64.32 Sahuaro Arms Apartments 240 W. Sahuaro St $650,000 1963 C 20 8,620 $32,500 $75.41 The Lariat 3264 E. Benson Hwy $320,000 1950 C 25 21,250 $12,800 $15.06 TOTALS / AVERAGES A and B PROPERTIES $579,310,712 1987 7,613 6,199,169 $73,267 $92.78 Portfolio Sales C PROPERTIES $75,354,000 1971 2,087 1,475,816 $43,078 $64.12 ALL PROPERTIES $654,664,712 1979 9,700 7,674,985 $58,818 $79.16, AZ 85711 amendelsberg@ dleibsohn@