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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 Shoals.

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Navigating the Narrow Shoals

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

  2. 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.

  3. 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

  4. Stuff Happens

  5. A Little Worse than Expected

  6. Stocks Tanked

  7. Soaring Profits Crashed

  8. Credit Crunched and Remains Tight

  9. Employers Took Action to Cut Costs

  10. Job Growth Turned South

  11. Unemployment Remains High

  12. Consumer Issues

  13. Consumers Have Been Shaken

  14. And, Consumers Remain Pinched

  15. Closed Wallets Are only Cautiously Opening

  16. Housing Market Issues

  17. Housing Markets Are In the Well

  18. Despite Attractive Pricing

  19. And, Despite Generationally Low Rates

  20. And, the Highest Affordability We Have Seen

  21. Commercial Property Dynamics

  22. “We may never go back to the kind of pricing and availability of debt we had…” -- PwC/Korpacz Real Estate Survey, 9/16/2010

  23. Job Cuts a Direct Hit on All Sectors

  24. 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

  25. Credit Remains Tight

  26. Transaction Activity has been Limited

  27. Commercial Properties Have Taken a Hit

  28. Commercial Property Pricing is off More than 40%

  29. Commercial Property Pricing is off More than 40%

  30. Apartment Fundamentals are Improving

  31. Apartment Rents Reflect Somewhat Better Times

  32. Concessions are Easing

  33. Distress is a Bit Lower, But…

  34. The Volume of Distressed Properties Has Not Subsided Source: Real Capital Analytics (www.rcanalyics.com)

  35. Apartment Transactions

  36. A Quick Look at the San Diego Economy

  37. San Diego took a Big Hit in 2009

  38. Growth Has Generally Outpaced the USBut the Contraction was Steeper

  39. Like Much of California, Joblessness Remains High

  40. Spending is Down Sharply

  41. Home Sales Have Improved

  42. Home Prices Have Struggled

  43. Never a Very Affordable Market

  44. Foreclosures Have Spiked to New Highs

  45. New Housing Stock Looks for a New Bottom

  46. The San Diego Apartment Market

  47. A Recent Employment Recovery has Contributed to “Stronger” Absorption

  48. Relatively Limited New Supply and Absorption has Begun to Recover

  49. Rents Begin to Recover

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