HUNTSVILLE APARTMENT MARKET OVERVIEW December 7, 2017 Presented by: David Wilson, MAI Berkadia Real Estate Advisors LLC Birmingham, Alabama
HUNTSVILLE MSA BY THE NUMBERS Huntsville has delivered an average of approximately 750 units per for the past two years and is on pace to deliver approximately 600 units for 2017. Huntsville generate Alabama s largest proportion of new job growth, outpacing the larger markets of Birmingham and Mobile in terms of total jobs gained and population increases (Huntsville s MSA averaged population growth of 4,700 persons per year over the three-year period ended 2016) The FBI is expected to relocate up to 7,000 direct jobs from the Washington DC area to Huntsville over the next 6-7 years moves are already occurring. 839 Unit Delivery 665 Units Planned 2,360 Units Under Construction 952 Units Under Lease-up 680 Avg. Rent - all properties $762 Greater Huntsville s population is projected to grow 19% between 2015 and 2030 adding nearly 85,000 new residents (5,600/year) 23% of Huntsville s population falls within the key renter age group (18-35) Job Growth 6,400 jobs were created in the Huntsville metro area over the last 12 months Unemployment rate 4.2%; down 120 bps YOY Occupancy 93.5% 2Q2017. Net absorption outpaced new deliveries by 240 units YTD 2015 2016 Avg. Rent per sf all props. $0.77 Average effective rent is $762; up 3.5% YOY
HUNTSVILLE RENT AND OCCUPANCY 2Q17 Most Recent Survey Attributes Total Properties 72 Total Units 17,015 Average Year Built 1993 Average Unit Size (SF) 995
HUNTSVILLE CONCESSIONS 2Q17 Most Recent Survey Attributes Total Properties 72 Total Units 17,015 Average Year Built 1993 Average Unit Size (SF) 995
HUNTSVILLE UNDER CONSTRUCTION / RECENTLY COMPLETED HUNTSVILLE AREA PIPELINE Apartments Under Construction or Recently Completed as of August 31, 2017 Property Name Submarket Completed/ Delivered Units Under Construction Future, Not Started Total Units at Completion Developer Limestone Creek West Huntsville 288 144 96 528 Edward Rose and Sons Addison Park West Huntsville 444 36 0 480 Gross Builders Bridges in Research Park West Huntsville 156 36 0 192 Jim Packard (Huntsville) Moderne at Providence West Huntsville 90 210 0 300 Bob Rohdie (New York) Heights at Monte Sano SE Huntsville - Big Cove 0 172 0 172 Sealy Development (Huntsville) Palladian at Promenade Madison - North 0 110 0 110 Morrison Avenue Capital Partners Watermark at Bridge Street West Huntsville 0 244 0 244 Watermark Residential TOTALS 978 952 96 2,026
HUNTSVILLE PLANNED DEVELOPMENTS HUNTSVILLE AREA PIPELINE Future Starts as of August 31, 2017 Property Name Submarket Units Developer Limestone Creek IV West Huntsville 96 Edward Rose & Son City Center Downtown 270 CRS City Center, LLC Constellation Downtown 222 Scott McLain MidCity Huntsville West Huntsville 250 RCP Companies Town Madison Madison - South 274 Tynes Development Corp Cottages at Watercress II West Huntsville 42 Watercress Development Legacy at Jones Farm II SE Huntsville 300 Jones Family Avondale West Huntsville 252 Sealy Development Group The Lakes at Perimeter West Huntsville 102 MEDS - Stan McCall Dry Creek Villas West Huntsville 182 Chicago company Name to be Determined East Huntsville 370 Edward Rose & Son Total 2,360
BRIDGES IN RESEARCH PARK Developer Address Jim Packard 201 Quality Circle NW Huntsville, Alabama Start Date 11/01/2014 Completion Date 09/30/2017 Units 192 Unit Mix Average Unit Size 1 x 1 2 x 2 1,006 sf Average Rent $918 Average Rent per SF Occupancy Common Area Amenities Interior Unit Amenities $0.91 Near 100% on occupied units Controlled Access Waterscape Fitness Center Business Center Detached Garages Stainless-look Appliances Microwave Patio / Balcony Walk-In Closets Full-Size Washer / Dryer Ceiling Fans Hardwood-style Flooring
THE MODERNE AT PROVIDENCE Developer Address Bob Rohdie (New York) 30 Gates Mill Street Huntsville, Alabama 35806 Start Date 11/01/2014 (1 st 90 units July 2017) Completion Date 12/01/2017 Units 300 Unit Mix Average Unit Size Average Rent Average Rent per SF Occupancy Common Area Amenities Interior Unit Amenities 1 x 1 2 x 2 3 x 2 998 sf $1,088 (no concessions) $1.09 8% on total units Clubhouse Swimming Pool Fitness Center Poolside Grills / Cabanas Yoga Pavilion Walking Trails Summer Kitchen Outdoor Fire Pit Hardwood-style Flooring 9 Ceilings Garden Tubs Large Walk-in Closets Pantry Stainless-look Appliances No Granite Countertops
MID CITY HUNTSVILLE Developer RCP Companies (Huntsville) Address SE Quadrant of Research Park Boulevard and University Drive Huntsville, Alabama Start Date Multifamily - 2018 Completion Date Units Average Rent per SF Common Area Amenities Comments Multifamily - 2019 Phase1-250 in core over retail Total Build-out 990 units To be Determined 140 acre town center anchored by TOPGOLF with numerous restaurants, retail, climbing wall, 8,500 seat amphitheater, 38 acre public park TOPGOLF underway 300,000 SF of retail 200,000 SF of office 3 hotels
TOWN MADISON Developer Tynes Development (Birmingham, AL) Address City of Madison South side I-565, between Zierdt Road and Wall Triana Start Date Phase1 - Late-2017 or Early-2018 Completion Date Units Average Rent per SF Comments Phase 1-2019 274 units Phase 1 Total Build-out 700+ To be Determined 500+ acre mixed-use development 2 miles of Interstate frontage New interstate ramps. Major retail, restaurants, hotels, parks, single-family
CONSTELLATION Developer Scott McLain master-developer Address SEC of Memorial Parkway & Clinton Avenue, immediately west of Von Braun Center Start Date 2018 Completion Date Summer 2019 Units 222 Average Rent per SF Common Area Amenities To be Determined Rooftop Deck Rooftop Swimming Pool Rooftop Courtyards Rooftop Dog Walking and Grooming Facilities Fitness Center Yoga Area Delivery Concierge Storage Compartments 72,000 sf of Retail Comments Part of a 19-acre mixed-use development that will feature a shared structured parking deck, numerous restaurants, retail, office and hotels.
HUNTSVILLE NEW CONSTRUCTION CONCLUSION Many of the new additions have been small-scale additions Trickle-effect of several large multi-year projects coming to an end 2017 will only have 1 large-scale new property delivered (The Moderne) Most of new additions in 2017 are Class A / B- Site work well underway for Palladian and Heights at Monte Sano Lack of new deliveries will allow occupancies and rent growth to climb PREDICTIONS: Only one mixed-use project could get started in 2017 (several in 2018) Elevator-product will become the new trend in the suburbs
HUNTSVILLE RECENT SALES APARTMENT SALES SUMMARY - HUNTSVILLE / MADISON, AL Sorted by Date of Sale Sales Since Sept 2016 Property Name Area Units Built Average Unit Size Date of Sale Sale Price Price Per Unit Price Per SF Cap Rate Madison 514 1985 1,050 08/24/17 Madison Landing (Carrington Cove) $33,850,000 $65,856 $62.71 n/a Meridian Gardens North 64 1964 826 06/13/17 $1,070,000 $16,719 $20.25 n/a Research Park Apartments West 43 1984 465 04/03/17 $1,300,000 $30,233 $65.00 n/a Belmont Hill West 181 1994 943 03/08/17 $10,750,000 $59,392 $62.99 n/a Reserve at Fairway Hills SE 180 1978 986 01/31/17 $9,000,000 $50,000 $50.70 n/a Lynnewood Garden SW 88 1965 912 01/26/17 $2,675,000 $30,398 $33.34 n/a Arch Street West 267 2009 962 01/17/17 $30,737,500 $115,122 $119.66 5.5% Magnolia Place North 60 1974 765 01/13/17 $1,900,000 $31,667 $41.39 n/a Hunters Ridge SE 192 1980's 1,144 12/15/16 $7,000,000 $36,458 $123.24 8.0% Wilshire Park North 65 1990 1,242 12/13/16 $2,750,000 $42,308 $34.07 7.0% Abbington Place SE 152 1987 1,071 12/07/16 $10,350,000 $68,092 $63.57 n/a Thomas Road SW 113 1960 s70's 1,000 11/11/16 $1,530,000 $13,540 $27.82 n/a Hillside Village & Twickenham Village West 376 1985 863 11/04/16 $9,925,000 $26,467 $30.57 5.5% Lily Flagg Station SE 386 1984 1,052 10/31/16 $26,600,000 $68,912 $65.50 n/a Summer Tree West 176 1974 714 09/28/16 $6,400,000 $36,364 $50.96 n/a TOTAL 2,857
SOLD - MADISON LANDING (FKA CARRINGTON COVE) LARGEST PROPERTY SALE OF THE YEAR Year Built 1985 Number of Units 514 Sale Price $33,850,000 Sale Price per Unit $65,856 Sale Price per SF $62.71 Date of Sale 08.24.17 Average Unit Size 1,050 sf Submarket Madison Seller Rohdie Group Buyer Freeman Webb
SOLD - ARCH STREET HIGHEST PRICE PER UNIT Year Built 267 Number of Units 209 Sale Price $30,737,500 Sale Price per Unit $115,122 Sale Price per SF $119.66 Date of Sale 01.17.17 Average Unit Size 962 sf Submarket Huntsville West Seller Rohdie Group Buyer Waypoint Residential
THE TEAM