We are updating the Hedgeye apartment rental rate tracker (link below) for September numbers just published. Some key takeaways:
- Every key U.S. REIT market showed sequential improvement with the exception of Spokane, WA (-1.8%), led by Jersey City (+4.3%), San Diego (+4%), and Miami/Orlando (each up +3.9%)
- San Francisco, Oakland, Los Angeles, and Washington, D.C. remain laggards on a y/y RoC basis, but given the sequential RoC acceleration are all flashing green while at the same time being in the earlier innings of recovery vs. the Sunbelt names
- Of note below in the Chart of the Day, San Francisco rents remain below pre-Covid nominal levels by a mid-teens percentage as measured by the 2-year RoC, so plenty of room to run. Let it run!
- Numbers remain supportive of Best Idea Longs AVB and EQR, where consensus estimates are still far too low, reported results are poised to accelerate well-into FY22 on easy comparisons + accelerating rental rates, and shorter lease duration/cyclical growth are favorable factor exposures in Quad 2
Rental Rate Tracker File: HERE
Chart of the Day: 2-Year Change in SF 1-BR Apartment Rents
Source: Apartmentlist.com
Please call or e-mail with any questions.
Rob Simone, CFA
Managing Director
Twitter: @HedgeyeREITs
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