What's Happening Next in Multifamily? Explore 3Q 2020 earnings sound bites from AvalonBay Communities (AVB).
AvalonBay 3Q Soundbites – 10/29/20
“National migration – residents moving 150+ miles – in NYC, jumped from 17% of move-outs in 3Q19 to 30% this year. In San Fran from 23% to 27%.”
“Over the next 2-3 quarters, we expect continued same-store revenue declines to be increasingly pressured by rental rates as we saw effective rates fall by ~6% in 3Q.”
“For the first time in 4+ years vacate notices increased meaningfully yoy, with 3Q notices up roughly 17% yoy primarily as a result of spiking lease terminations in urban submarkets.”
“Urban vacate notices increased 40% yoy in 3Q, driven by ~70% increase in lease terminations, leading to a 340 bps decline in occupancy from 2Q to 90% and a double-digit decline in rent.”
“We are starting to see a remarkable recovery in the transaction market. As of today, we have six deals under contract or with LOIs at very attractive pricing with capex averaging 4.4%.”
“We continue to be cautious in deploying new capital, particularly for new development, where economics are challenging and construction cost has not abated in any material way.”
“Regional migration – residents moving 50-150 miles – in NYC, jumped from 6% of move-outs in 3Q19 to ~20% this year. In San Fran from 7% to 10%.”
“In the Mid-Atlantic, we experienced increased turnover in D.C. and other urban or quasi-urban submarkets like the Ballston and Tysons Corner submarket in Northern Virginia.”
“In NorCal, annualized turnover during 3Q was 85% driven by elevated turnover across San Fran, San Jose, and the East Bay but was most in San Fran and Mountain View.”
“On a positive note, turnover was relatively flat in New England, which is a testament to our primarily suburban Boston portfolio.”
“Post COVID, demographics, affordability, and work from home flexibility all support increased demand for infill suburban housing.”
