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

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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 Economy.com

Reis, Inc.

Axiometrics Inc.

Real Capital Analytics

The Counselors of Real Estate













Closed wallets are only cautiously opening

Closed Wallets Are only Cautiously Opening








“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 sectors1

Office

Absorption 2010

-13.6m sf

Vacancy Rate:

Q2:10 –16.7%

Q2:11 – 17.0%

Rent:

2010: -2.7%

2011: -2.1%

Industrial

Absorption 2010

-31.7m sf

Vacancy Rate:

Q2:2010 – 14.1%

Q2:2011 – 13.7%

Rent:

2010: -5.4%

2011: -4.7%

Retail

Absorption 2010

-2.3m sf

Vacancy Rate:

Q2:2010 – 13.1%

Q2:2011 – 13.1%

Rent:

2010: -2.6%

2011: -0.1%

Job Cuts a Direct Hit on All Sectors

Source: NAR, August 26, 2010











The volume of distressed properties has not subsided

The Volume of Distressed Properties Has Not Subsided

Source: Real Capital Analytics (www.rcanalyics.com)





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









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




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)




Private investors reits dominate buyers pensions reits privates the sellers

Buyers

Sellers

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

Source: Real Capital Analytics (www.rcanalytics.com)




“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)






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