Navigating the Narrow Shoals - PowerPoint PPT Presentation

Navigating the narrow shoals
1 / 67

  • Uploaded on
  • Presentation posted in: General

Navigating the Narrow Shoals. Recession, Recovery & The Apartment Market Peter C. Burley, CRE SDCAA/CCIM - San Diego - September 30, 2010. Navigating the Narrow Shoals.

I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.

Download Presentation

Navigating the Narrow Shoals

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.

- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript

Navigating the narrow shoals

Navigating the Narrow Shoals

Recession, Recovery

& The Apartment Market

Peter C. Burley, CRE

SDCAA/CCIM - San Diego - September 30, 2010

Navigating the narrow shoals1

Navigating the Narrow Shoals

Opinions expressed herein are those of the speaker and do not reflect those of any organization, vendor, data provider, partner, colleague, friend, or spouse. No statement should be construed as an offer or solicitation. Except as noted as source material, the speaker is solely responsible for the content herein.

Navigating the narrow shoals2

Navigating the Narrow Shoals

Data, consultation, and support graciously provided by:Moody’s

Reis, Inc.

Axiometrics Inc.

Real Capital Analytics

The Counselors of Real Estate

Stuff happens

Stuff Happens

A little worse than expected

A Little Worse than Expected

Stocks tanked

Stocks Tanked

Soaring profits crashed

Soaring Profits Crashed

Credit crunched and remains tight

Credit Crunched and Remains Tight

Employers took action to cut costs

Employers Took Action to Cut Costs

Job growth turned south

Job Growth Turned South

Unemployment remains high

Unemployment Remains High

Consumer issues

Consumer Issues

Consumers have been shaken

Consumers Have Been Shaken

And consumers remain pinched

And, Consumers Remain Pinched

Closed wallets are only cautiously opening

Closed Wallets Are only Cautiously Opening

Housing market issues

Housing Market Issues

Housing markets are in the well

Housing Markets Are In the Well

Despite attractive pricing

Despite Attractive Pricing

And despite generationally low rates

And, Despite Generationally Low Rates

And the highest affordability we have seen

And, the Highest Affordability We Have Seen

Commercial property dynamics

Commercial Property Dynamics

Navigating the narrow shoals

“We may never go back to the kind of pricing

and availability of debt we had…”

-- PwC/Korpacz Real Estate Survey, 9/16/2010

Job cuts a direct hit on all sectors

Job Cuts a Direct Hit on All Sectors

Job cuts a direct hit on all sectors1


Absorption 2010

-13.6m sf

Vacancy Rate:

Q2:10 –16.7%

Q2:11 – 17.0%


2010: -2.7%

2011: -2.1%


Absorption 2010

-31.7m sf

Vacancy Rate:

Q2:2010 – 14.1%

Q2:2011 – 13.7%


2010: -5.4%

2011: -4.7%


Absorption 2010

-2.3m sf

Vacancy Rate:

Q2:2010 – 13.1%

Q2:2011 – 13.1%


2010: -2.6%

2011: -0.1%

Job Cuts a Direct Hit on All Sectors

Source: NAR, August 26, 2010

Credit remains tight

Credit Remains Tight

Transaction activity has been limited

Transaction Activity has been Limited

Commercial properties have taken a hit

Commercial Properties Have Taken a Hit

Commercial property pricing is off more than 40

Commercial Property Pricing is off More than 40%

Commercial property pricing is off more than 401

Commercial Property Pricing is off More than 40%

Apartment fundamentals are improving

Apartment Fundamentals are Improving

Apartment rents reflect somewhat better times

Apartment Rents Reflect Somewhat Better Times

Concessions are easing

Concessions are Easing

Distress is a bit lower but

Distress is a Bit Lower, But…

The volume of distressed properties has not subsided

The Volume of Distressed Properties Has Not Subsided

Source: Real Capital Analytics (

Apartment transactions

Apartment Transactions

A quick look at the san diego economy

A Quick Look at the San Diego Economy

San diego took a big hit in 2009

San Diego took a Big Hit in 2009

Growth has generally outpaced the us but the contraction was steeper

Growth Has Generally Outpaced the USBut the Contraction was Steeper

Like much of california joblessness remains high

Like Much of California, Joblessness Remains High

Spending is down sharply

Spending is Down Sharply

Home sales have improved

Home Sales Have Improved

Home prices have struggled

Home Prices Have Struggled

Never a very affordable market

Never a Very Affordable Market

Foreclosures have spiked to new highs

Foreclosures Have Spiked to New Highs

New housing stock looks for a new bottom

New Housing Stock Looks for a New Bottom

The san diego apartment market

The San Diego Apartment Market

A recent employment recovery has contributed to stronger absorption

A Recent Employment Recovery has Contributed to “Stronger” Absorption

Relatively limited new supply and absorption has begun to recover

Relatively Limited New Supply and Absorption has Begun to Recover

Rents begin to recover

Rents Begin to Recover

Concessions are off their highs

Concessions are Off Their Highs

San diego is sometimes a tale of two markets occupancy

San Diego is Sometimes A Tale of Two Markets (Occupancy)

San diego is sometimes a tale of two markets rents

San Diego is Sometimes A Tale of Two Markets (Rents)

San diego is sometimes a tale of two markets rents1

San Diego is Sometimes A Tale of Two Markets (Rents)

Transactions are down sharply

Transactions are Down Sharply

Transactions on the floppy bottom

Transactions on the “Floppy Bottom”

Private investors reits dominate buyers pensions reits privates the sellers



Private Investors, REITs Dominate BuyersPensions, REITs, Privates the Sellers

Source: Real Capital Analytics (

New pricing realities

New Pricing Realities ?

An outlook

An Outlook

Navigating the narrow shoals

“We're still in a recession. We're not gonna be out of it for a while, but we will get out.”

-- Warren Buffett

Stuff could still happen

Stuff Could Still Happen

Stuff could still happen an alternate scenario

Stuff Could Still Happen(An Alternate Scenario)

The focus is on jobs

The Focus is on Jobs

The focus is on jobs in san diego too

The Focus is on Jobs in San Diego Too

Balance first improvement later

Balance First, Improvement Later

Photo www sandiegocoastlife com


  • Login