October 22, 2022 Weekly Investor Update

Life Bridge Capital Weekly Investor Update

October 22, 2022

The Latest in Commercial Real Estate (CRE), Economy & Markets




Mortgage Rate (30-Year Fixed): 6.94% (as of 10/20)


Existing Home Sales: -1.5% (September 2022)

New Residential Sales: +28.8% (August 2022)

Median Sales Price for New Houses Sold: $436,800 (August 2022)

Construction Spending: –0.7% MoM (August 2022)

New Residential Housing Starts: 1.52 million (August 2022)

New Residential Housing Completion: 1.34 million (August 2022)


Homeownership Rate: +65.4% (2Q22)

Rental Vacancy Rate: +5.4% (3Q22)


Sources: NAR, BLS, Federal Reserve Bank, MBA

Note: Rates listed are estimates and may not reflect actual rates depending on term, sponsor location, and other factors involved.



10. Jacksonville multifamily market remains healthy 

Rents in the ‘City on the Move’ went up 0.4% to $1,525 on a trailing three-month basis as of July, according to Yardi Matrix. This is below the 1.0% national rate. The price per unit was recorded at $138,737. A total of 1,590 apartments came online as of July, with an additional 9,365 units in the pipeline. Yardi Matrix forecasts a total of 3,788 units to come online by the end of year. Should it reach the target, this would be the highest level of deliveries in three years.


9. Multifamily housing construction permits and completions are higher

The Census Bureau reported that the total number of permits for multifamily properties with five or more units was up 8% in September, reaching 571,000. On the other hand, 48,000 permits were given in September for properties with 2 to 4 units, higher by 1,000 units from the total in August. On the other hand, completions for 5 or more units were up by 17% MoM.


8. Dallas tops list of cities with most number of multifamily units delivered

A total of 9,829 units or 1.2 percent of total stock was delivered in Dallas in 1H22, which earned the city the position of top market for multifamily deliveries. The number, however, represents a 27.7% decrease YoY. Meanwhile, another 49,670 units were in the pipeline as of June. According to Yardi Matrix data, the other metros in the top five include Houston, Washington, D.C., Miami and Phoenix.


7. Arlington local suburbs sustain apartment rent growth

In a new analysis by Apartment List that monitored 33 communities across the Washington DC region, including Virginia, suburbs in Arlington now command an 11.3% higher apartment-rental rate compared to pre-COVID levels. The area experienced a 13.2% drop in rental rates during the first year of the pandemic but has now rebounded. Apartment List’s report indicated that the increasing demand for suburban rentals from remote workers and the aging of the millennial population contributed to the increase in the number of renters.


6. CIM Group switching office plans in favor of apartments

Los Angeles developer CIM Group has already abandoned its plans of building a high-rise office tower, which it originally planned in 2018, in favor of a 596-unit apartment building in Downtown Oakland. The new building received approvals for two variations of the same general design: either a 250-foot or 450-foot tall tower. Office vacancy reached 33.1% in 3Q22 from only 3.1% in 2018. The developer believes that its switch to residential use would have a more profitable prospect in the market.


5. It can take more than 100 hours a week in work to afford NYC rent

Minimum wage earners in New York City need to clock in at least 111 hours a week to afford rent for a 1BR apartment, according to a United Way of the National Capital Area survey. With a minimum wage of $15 for a typical earner, many are struggling in the metro to meet soaring rent. But this is outpaced by San Jose, CA where workers need at least 141 hours of work with a minimum wage of $16.20. Other cities that require more than 100 hours to afford rent include Chicago (112 hours), Houston (104 hours), Philadelphia (110 hours), and Dallas (120 hours).


4. Mortgage delinquency rates for multifamily properties drop in 3Q

Delinquency rates for mortgages-backed multifamily properties dipped through 3Q22, according to the Mortgage Bankers Association‘s (MBA) latest CREF Loan Performance Survey. Of the balance in multifamily loans, 0.4% were delinquent in September, which is down from 0.6% compared to March 2022. Jamie Woodwell, MBA’s vice president of commercial real estate research, stated that commercial and multifamily mortgages continued to perform well through 3Q22.


3. Construction spending in NYC to reach $86 billion this year

The New York Building Congress in its 2022-2024 New York City Construction Outlook revealed that the city can spend as high as $86 billion this year in construction, up from $38 billion YoY. In addition, the report added that construction spending could reach a total of $270 billion over the next three years. This will include 30,000 units of housing set for delivery in 2025. However, the group opined that the supply is still being outpaced by current and future demand. It estimates that the city will need more than 560,000 new residential units by 2030.


2. Denver’s multifamily market registers steady gains

Denver’s multifamily market had sustained its healthy performance in 2022 with rents increasing 1.2% on a trailing three-month basis through July to $1,941, according to Yardi Matrix. Despite the occupancy rate dipping 30 basis points YoY to 95.4%, the amount of investment activity and solid construction have kept multifamily sales volume close to $2.9 billion, which is almost the same as the value it registered the previous year with unit prices hiking by 9.4%.


1. Lease renewals nearing all-time high

Data from RealPage reveals that across the country, many more renters are renewing their expiring leases than before. In August, almost 55% of renters signed renewals despite rents increasing at 11%. This also benefits operators and landlords since, according to the National Apartment Association, it can cost up to $5,000 per unit for every turnover.



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