SAMPLE Los Angeles Apartment Market Report 2 quarter 2010 Los Angeles
SAMPLE Los Angeles Apartment Market Report 2nd quarter 2010 Los Angeles Charts & Tables Los Angeles Metro Spotlight Submarket 1: Intown Los Angeles Submarket 8: Santa Clarita Valley Methodology About MPF 2 30 42 49 53 59 compiled exclusively for Maintenance Warehouse This sample includes a limited selection of the available Los Angeles submarket reports that are included in a subscription to MPF Research Apartment Market Reports. MPF Research 4000 International Parkway Carrollton, TX 75010 (877) 284-4938 www.mpfresearch.com Los Angeles Apartment Report 2nd Quarter 2010 | July 19, 2010 Preliminary Data Apartment Market Snapshot Los Angeles Area 2Q 2010 2Q 2011 Forecast Existing Apartment Units Sampled Apartment Units % of Existing Units Quarterly Apartment Unit Demand Annual Apartment Unit Demand Quarterly Apartment Unit Completions Annual Apartment Unit Completions Annual Apartment Removals Annual Net Inventory Change Net Inventory Change Rate Overall Occupancy Quarterly Change (points) Annual Change (points) Average Effective Monthly Rent Quarterly Same-Store Rent Change Annual Same-Store Rent Change Annual Apartment Unit Demand Annual Apartment Unit Completions Average Overall Occupancy Annual Change (points) Annual Same-Store Rent Change 1,029,621 135,576 13.2% -2,210 14,280 1,856 4,369 0 4,369 0.4% 94.0% -0.4 1.0 $1,478 0.2% -1.1% 8,100 3,897 94.4% 0.4 1.3% 4000 International Parkway Carrollton, TX 75007 (972) 820-3100 www.mpfresearch.com ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 2 Los Angeles Apartment Report Economy Employment Change (Annual Change by Quarter) 100k Los Angeles Area Jobs 50k 0k -50k -100k -150k -200k -250k -300k 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 05 05 06 06 07 07 08 08 09 09 10 Los Angeles Area Employment Change by Industry (Annual Change in Non-Agricultural Wage and Salary Jobs in 000s) Total Services Trade Govt Mfg Fin Info TU Const 4Q 2009 -238.6 -65.8 -44.8 -14.1 -48.5 -14.1 -8.4 -12.5 -30.4 1Q 2010 -122.2 -30.6 -24.3 -20.7 -29.3 -8.9 22.7 -7.1 -24.0 2Q 2010 -69.5 -21.5 -15.2 -9.3 -22.4 -4.9 26.2 -4.9 -17.5 Total Jobs 3,790.1 1,557.3 573.5 604.8 371.0 215.6 214.5 147.9 105.5 % of Total 100% 41.1% 15.1% 16.0% 9.8% 5.7% 5.7% 3.9% 2.8% National % 100% 41.8% 15.3% 17.8% 8.9% 5.9% 2.1% 3.6% 4.5% Source: MPF Research calculations based on data from the U.S. Bureau of Labor Statistics. 2 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 3 Los Angeles Apartment Report Demand Apartment Absorption 40k Los Angeles Area Units 20k 0k -20k -40k Quarterly Annual -60k 1Q 05 3Q 05 1Q 06 3Q 06 1Q 07 3Q 07 1Q 08 3Q 08 1Q 09 3Q 09 1Q 10 ANNUAL APARTMENT ABSORPTION BY SUBMARKET July 2009 - June 2010 Submarket 1 Intown Los Angeles New Supply Net Inventory Units Removals Change Absorbed 1,129 0 1,129 2,850 2 Hollywood 608 0 608 4,320 3 West Los Angeles 413 0 413 890 49 0 49 620 4 South Bay Cities 5 Long Beach 0 0 0 2,500 6 Tri Cities 261 0 261 740 7 San Fernando Valley 947 0 947 2,710 8 Santa Clarita Valley 220 0 220 430 0 0 0 950 664 0 664 -1,890 78 0 78 150 4,369 0 4,369 14,280 9 San Gabriel Valley 10 East Los Angeles 11 Antelope Valley LOS ANGELES AREA * Submarket totals may not add to area total because of rounding. 3 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 4 Los Angeles Apartment Report Apartment Absorption Los Angeles Area 40k Units 20k 0k -20k -40k Quarterly -60k Annual Forecast 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 05 05 06 06 07 07 08 08 09 09 10 10 11 ANNUAL APARTMENT ABSORPTION FORECAST BY SUBMARKET July 2010 - June 2011 Submarket 1 Intown Los Angeles 2 Hollywood Units Absorbed 1,520 1,300 3 West Los Angeles 930 4 South Bay Cities 290 5 Long Beach 450 6 Tri Cities 1,070 7 San Fernando Valley 1,380 8 Santa Clarita Valley 110 9 San Gabriel Valley 390 10 East Los Angeles 11 Antelope Valley LOS ANGELES AREA 610 50 8,100 * Submarket totals may not add to area total because of rounding. 4 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 5 Los Angeles Apartment Report Supply Existing Apartment Units Los Angeles Area Units 1,100k 1,000k 900k 800k 700k 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 05 05 06 06 07 07 08 08 09 09 10 Apartment Completions 10k Los Angeles Area Units Quarterly Annual 8k 6k 4k 2k 0k 1Q 05 3Q 05 1Q 06 3Q 06 1Q 07 3Q 07 1Q 08 3Q 08 1Q 09 3Q 09 1Q 10 5 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 6 Los Angeles Apartment Report ANNUAL APARTMENT COMPLETIONS BY SUBMARKET July 2009 - June 2010 Sub Apartment Community Address Developer Start Finish Units 1 Ardmore 959 S Ardmore Ave, Los Angeles Private Developer 03/08 10/09 1 The Brick Lofts 652 Mateo St, Los Angeles Western Imperial 2000 LLC 01/07 10/09 48 21 1 WaterMarke Tow er * 705 W Ninth St, Los Angeles Meruelo Maddux Properties 01/07 10/09 214 1 Bonnie Brae Village 208 S Bonnie Brae, Los Angeles Enhanced Affordable 10/08 12/09 92 Development LLC 1 Factory Place Arts Complex II 1330 Factory Pl, Los Angeles Private Developer 06/07 12/09 53 1 Mindanao 1800 W Temple St, Los Angeles Advanced Development 11/08 12/09 26 Investment Inc. 1 2121 Lofts * 2121 E 7th Pl, Los Angeles Concerto Development 10/07 01/10 78 1 Miramar Village 240 S Westlake Ave, Los Angeles Enhanced Affordable 12/08 02/10 114 Development LLC 1 SB Tow er * 600 S Spring St, Los Angeles SB Properties 12/07 04/10 250 1 700 North Hill 700 N Hill Pl, Los Angeles Private Developer 02/07 05/10 29 1 Jew elry Trades Building 220 W 5th St, Los Angeles Fifth Street Funding Inc. 09/07 06/10 62 1 The Spring Arcade Building 541 S Spring St, Los Angeles Fifth Street Funding Inc. 06/03 06/10 142 2 11807 Laurelw ood Drive 11807 Laurelw ood Dr, Los Angeles Private Developer 02/08 07/09 24 2 Mariposa Place 5030 Santa Monica Blvd, Los Angeles Hollyw ood Community 01/08 07/09 58 12 Housing Corp. 2 5625 Farmdale Avenue 5625 Farmdale Ave, Los Angeles Private Developer 01/08 09/09 2 811 Fedora Street 811 Fedora St, Los Angeles Private Developer 04/09 10/09 6 2 1600 Vine 1600 Vine St, Los Angeles Legacy Partners Inc. 10/07 11/09 375 2 Studio Villas 12020 Guerin St, Los Angeles Private Developer 02/08 01/10 32 2 Sunset Vine Tow er * 1480 Vine St, Los Angeles CIM Group 01/06 03/10 63 2 Villa del Rey 4241 N Cahuenga, Los Angeles Private Developer 02/09 03/10 26 2 Woodbridge * 12504 Woodbridge St, Los Angeles Private Developer 06/08 03/10 12 3 1331 Amherst Avenue * 1331 Amherst Ave, Los Angeles Private Developer 10/08 08/09 32 3 1600 South Westgate Avenue 1600 S Westgate Ave, Los Angeles Private Developer 05/08 08/09 32 3 12449 Louise Avenue 12449 Louise Ave, Los Angeles Private Developer 03/08 08/09 25 3 LuXe@1539 1539 4th St, Santa Monica NMS Properties 04/08 09/09 62 3 Superior at Venice 1107 Venice Blvd, Los Angeles Private Developer 12/07 09/09 38 3 LuXe@1759 1759 Beloit Ave, Los Angeles NMS Properties 07/08 10/09 61 3 1842 Purdue Avenue 1842 Purdue Ave, Los Angeles Private Developer 06/08 01/10 25 3 Ashton Westw ood * 10700 Wilshire Blvd, Los Angeles Hanover Co. 09/08 01/10 58 3 1625 South Granville Avenue 1625 S Granville Ave, Los Angeles Private Developer 03/09 04/10 18 3 Metro Art Brentw ood 11771 W Montana Ave, Los Angeles BW Brody 04/09 04/10 62 4 Brisa 8614 Saran Dr, Los Angeles Private Developer 02/09 03/10 49 6 Glendale City Lights 3673 San Fernando Rd, Glendale Advanced Development 12/08 12/09 68 Investment Inc. 6 Gardens on Garfield 303 E Garfield Ave, Glendale Thomas Safran & Associates 01/09 03/10 6 Paragon at Old Tow n 700 S Myrtle Ave, Monrovia Urban Housing Group 12/08 04/10 30 163 (Continued on next page) 6 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 7 Los Angeles Apartment Report ANNUAL APARTMENT COMPLETIONS BY SUBMARKET July 2009 - June 2010 Sub Apartment Community Address Developer Start Finish Units 7 9001 Burnet Avenue 9001 Burnet Ave, Los Angeles Private Developer 01/08 10/09 43 7 Asturias Senior 9628 Van Nuys Blvd, Panorama City Meta Housing Corp. 10/08 10/09 69 7 Saticoy Village 20227 Saticoy St, Winnetka Private Developer 03/08 11/09 91 7 IMT on the Boulevard 6940 N Sepulveda Blvd, Van Nuys Private Developer 08/08 12/09 98 7 Enclave at Warner Center 5710 N Variel Ave, Los Angeles Western National Group 12/08 04/10 195 7 Carabella 6300 N Variel Ave, Los Angeles Fairfield Residential 06/08 05/10 224 7 4462 Woodman Avenue * 4462 Woodman Ave, Los Angeles Private Developer 10/08 06/10 39 7 Andalucia 15305 W Lanark St, Los Angeles Private Developer 12/08 06/10 79 7 Ivy Terrace 13751 W Sherman Way, Los Angeles Abode Communities 03/09 06/10 52 7 Vincennes 18434 W Vincennes St, Los Angeles Private Developer 05/08 06/10 57 8 The Vistas of West Hills 24015 Copper Hill Dr, Valencia LNR Property Corp. 01/08 08/09 220 10 Rittenhouse Square 1100 E 33rd St, Los Angeles Thomas Safran & Associates 04/08 08/09 100 10 1011 Adams 1011 E Adams Blvd, Los Angeles Meta Housing Corp. 09/08 02/10 10 McCoy Plaza 9315 S Firth Blvd, Los Angeles Private Developer 03/09 06/10 64 10 University Gatew ay 3335 S Figueroa St, Los Angeles Urban Partners LLC 08/08 06/10 420 11 Palo Verde Terrace 38235 10th St E, Palmdale AMCAL Multi-Housing Inc. 01/09 01/10 78 LOS ANGELES AREA 80 4,369 * Originally planned or started as a for-sale condominium property but sw itched to rental during construction. Hanover Co.’s Ashton Westwood completed final-unit construction in 1st quarter 2010. 7 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 8 Los Angeles Apartment Report New Supply Ranked July 2009 - June 2010 Submarket Intown Los Angeles San Fernando Valley East Los Angeles Hollywood West Los Angeles Tri Cities Santa Clarita Valley Antelope Valley South Bay Cities Long Beach San Gabriel Valley Units 1,129 units 947 units 664 units 608 units 413 units 261 units 220 units 78 units 49 units 0 units 0 units Multifamily Permits 18k Los Angeles Area Quarterly Annual 12k 6k 0k 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 05 05 06 06 07 07 08 08 09 09 10 *two-month total, year-ending May 2010 8 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 9 Los Angeles Apartment Report Apartment Completions 10k Los Angeles Area Units Quarterly Annual 8k 6k 4k 2k 0k 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 05 05 06 06 07 07 08 08 09 09 10 10 11 Scheduled Apartment Completions by Quarter Los Angeles Area 2k Units 1k 0k 3Q 10 4Q 10 1Q 11 2Q 11 Later 9 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 10 Los Angeles Apartment Report Apartment Development Leaders Ongoing Construction as of July 2010 Developer G H Palmer Associates Sares-Regis Group Dinerstein Cos. Lyon Realty Advisors Casden Properties Inc. JPI Multifamily Inc. Wood Partners John Laing Homes Legacy Partners Inc. Symphony Development Units 545 units 480 units 438 units 291 units 276 units 270 units 218 units 180 units 163 units 161 units Forecast New Supply Ranked Ongoing Construction as of July 2010 Submarket Hollywood Intown Los Angeles Tri Cities San Fernando Valley Long Beach East Los Angeles West Los Angeles South Bay Cities Antelope Valley San Gabriel Valley Santa Clarita Valley Units 1,201 units 938 units 828 units 781 units 337 units 161 units 113 units 34 units 0 units 0 units 0 units 10 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 11 Los Angeles Apartment Report FORECAST APARTMENT COMPLETIONS BY SUBMARKET July 2010 - June 2011 Sub Apartment Community Address Developer Start Finish Units 1 The Blackstone 901 S Broadw ay, Los Angeles Neighborhood Effort 07/08 07/10 82 1 The Medallion 334 S Main St, Los Angeles Private Developer 01/08 12/10 192 1 Orsini III 606 N Figueroa St, Los Angeles G H Palmer Associates 11/08 12/10 210 1 Factory Place Arts Complex III 1300 Factory Pl, Los Angeles Private Developer 01/09 01/11 35 1 The Metropolitan Building 315 W 5th St, Los Angeles Private Developer 10/07 02/11 84 2 5550 West Wilshire * 5550 W Wilshire Blvd, Los Angeles Legacy Partners Inc. 07/08 07/10 163 2 Kenmore Tow ers 540 S Kenmore Ave, Los Angeles Private Developer 03/08 07/10 42 2 La Belle at Hollyw ood Tow er 6142 Franklin Ave, Los Angeles Alliance Residential Co. 12/08 07/10 146 2 Jefferson at Hollyw ood 1724 N Highland Ave, Los Angeles JPI Multifamily Inc. 06/08 08/10 270 2 1751 North Las Palmas Avenue † 1751 N Las Palmas Ave, Los Angeles Private Developer 04/07 12/10 24 2 Alta Hollyw ood * 1714 N McCadden Pl, Los Angeles Wood Partners 12/08 12/10 218 2 NoHo Collection/Gangi 5241 Vineland Blvd, Los Angeles JSM Cos. 01/07 12/10 158 2 1633 North La Brea * 1633 N La Brea Ave, Los Angeles John Laing Homes 01/07 03/11 180 3 LuXe@1548 1548 6th St, Santa Monica NMS Properties 01/10 08/10 50 3 Santa Monica Plaza * 1508 Federal Ave, Los Angeles Wiseman Development 11/09 03/11 63 4 Mirandela Crestridge Rd & Crenshaw Blvd, AMCAL Multi-Housing Inc. 02/10 02/11 34 Rancho Palos Verdes 5 gallery421 Lyon Realty Advisors 06/08 08/10 291 5 Long Beach and Burnett Apartments 2355 Long Beach Blvd, Long Beach 421 W Broadw ay, Long Beach Meta Housing Corp. 01/10 10/10 46 6 Vassar City Lights Advanced Development 08/09 08/10 72 3685 San Fernando Rd, Glendale Investment Inc. 6 Empire Landing * 1901 N Buena Vista St, Burbank Casden Properties Inc. 01/09 12/10 276 6 Westgate 231 S De Lacey Ave, Pasadena Sares-Regis Group 12/07 02/11 480 7 IMT Encino 5501 N New castle, Los Angeles Private Developer 11/08 12/10 120 7 Legado Encino 16710 Ventura Blvd, Encino The Legado Cos. 12/09 03/11 125 7 The Millennium at Warner Center 6701 N Variel Ave, Los Angeles Dinerstein Cos. 04/09 03/11 438 7 Montecito Terraces 14726 Blythe St, Panorama City AMCAL Multi-Housing Inc. 06/10 06/11 98 LOS ANGELES AREA 3,897 * Originally planned or started as a for-sale condominium property but sw itched to rental during construction. † Project on hold. FORECAST APARTMENT COMPLETIONS BY SUBMARKET July 2011 or Later Sub 1 Apartment Community Piero II 10 West 27th Place LOS ANGELES AREA Address Developer Start Finish Units 609 St Paul Ave, Los Angeles G H Palmer Associates 06/10 10/11 335 2700 S Figueroa St, Los Angeles Symphony Development 03/10 07/11 161 496 11 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 12 Los Angeles Apartment Report Occupancy Apartment Occupancy Los Angeles Area 100% 95% 90% 85% 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 05 05 06 06 07 07 08 08 09 09 10 Occupancy Ranked 2nd Quarter 2010 Apartment Occupancy By Age of Community Los Angeles Area 100% 2Q 09 95% 90% 2Q 10 ∆ 2.0 ∆ 0.7 1990s 1980s ∆ 1.9 ∆ 1.3 1970s Pre-1970 ∆ (0.1) Submarket Long Beach Hollywood San Gabriel Valley West Los Angeles San Fernando Valley South Bay Cities Tri Cities East Los Angeles Antelope Valley Intown Los Angeles Santa Clarita Valley Occupancy 95.6% 95.2% 95.1% 94.7% 94.1% 93.8% 93.7% 93.3% 92.3% 92.0% 91.4% 85% 2000+ 12 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 13 Los Angeles Apartment Report AVERAGE GROSS OCCUPANCY BY BEDROOM TYPE 2nd Quarter 2010 Submarket Total Eff One Two 1 Intown Los Angeles 92.0% 93.9% 91.9% 90.9% 2 Hollywood 95.2% 94.0% 95.1% 95.7% 3 West Los Angeles 94.7% 95.6% 95.0% 94.3% 4 South Bay Cities 93.8% 92.9% 94.6% 93.5% 5 Long Beach 95.6% 96.4% 96.2% 95.1% 6 Tri Cities 93.7% 95.7% 93.4% 93.2% 7 San Fernando Valley 94.1% 92.9% 94.0% 94.0% 8 Santa Clarita Valley 91.4% 100.0% 92.3% 91.0% 9 San Gabriel Valley 95.1% 97.0% 94.6% 95.3% 10 East Los Angeles 93.3% 89.6% 95.8% 91.3% 11 Antelope Valley 92.3% 92.6% 93.2% 91.9% LOS ANGELES AREA 94.0% 94.2% 94.4% 93.6% 1 2 3 4 5 6 7 8 9 10 11 Three 95.7% 92.8% 94.1% 91.8% 90.6% 97.5% 96.2% 90.5% 96.3% 92.6% 91.8% 93.6% AVERAGE GROSS OCCUPANCY BY YEAR COMPLETED 2nd Quarter 2010 Submarket Total 2000+ 90-99 80-89 70-79 Intown Los Angeles 92.0% 88.6% 97.0% 97.6% 95.1% Hollywood 95.2% 88.6% 96.5% 95.4% 97.2% West Los Angeles 94.7% 91.1% 96.1% 96.7% 95.2% South Bay Cities 93.8% 88.8% 92.3% 91.9% 96.8% Long Beach 95.6% 96.6% 97.4% 96.4% 93.7% Tri Cities 93.7% 88.6% 95.2% 95.4% 95.8% San Fernando Valley 94.1% 88.5% 96.7% 94.5% 95.3% Santa Clarita Valley 91.4% 90.9% 90.0% 92.1% 100.0% San Gabriel Valley 95.1% 98.0% 95.1% 91.8% 96.0% East Los Angeles 93.3% 70.1% n.a. 96.5% 96.5% Antelope Valley 92.3% n.a. 95.1% 92.2% 91.1% LOS ANGELES AREA 94.0% 89.2% 94.9% 94.0% 95.8% Pre-70 96.1% 96.7% 96.3% 94.4% 95.6% 95.2% 95.6% 100.0% 96.6% 93.3% n.a. 95.7% 13 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 14 Los Angeles Apartment Report Historical Apartment Occupancy Comparison 100% Los Angeles Area West Region* US* 98% 96% 94% 92% 90% 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 05 05 06 06 07 07 08 08 09 09 10 * 2Q 10 preliminary data Historical Apartment Occupancy by Bedroom Type Los Angeles Area 100% Efficiency Two Bedroom 98% One Bedroom Three Bedroom 96% 94% 92% 90% 1Q 05 3Q 05 1Q 06 3Q 06 1Q 07 3Q 07 1Q 08 3Q 08 1Q 09 3Q 09 1Q 10 14 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 15 Los Angeles Apartment Report Historical Apartment Occupancy by Age of Community Los Angeles Area 100% 95% 90% 85% 2000+ 1970s 80% 1Q 05 3Q 05 1Q 06 1990s Pre-1970 3Q 06 1Q 07 3Q 07 1Q 08 1980s 3Q 08 1Q 09 3Q 09 1Q 10 Occupancy Distribution by Property 200 Los Angeles Area 179 Number of Properties 162 163 150 111 100 50 55 36 9 54 18 0 <85% 85%- 87%- 89%- 91%- 93%- 95%- 97%- 99%86% 88% 90% 92% 94% 96% 98% 100% 15 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 16 Los Angeles Apartment Report Apartment Occupancy Los Angeles Area 100% 95% 90% 85% 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 05 05 06 06 07 07 08 08 09 09 10 10 11 *forecast FORECAST OCCUPANCY BY SUBMARKET 2nd Quarter 2011 Occ. Forecast Forecast Change 1 Intown Los Angeles 93.4% 1.4 2 Hollywood 95.3% 0.1 3 West Los Angeles 95.3% 0.6 4 South Bay Cities 94.2% 0.4 5 Long Beach 95.7% 0.1 6 Tri Cities 94.0% 0.3 7 San Fernando Valley 94.5% 0.4 8 Santa Clarita Valley 92.0% 0.6 9 San Gabriel Valley 95.8% 0.7 10 East Los Angeles 93.7% 0.4 11 Antelope Valley 92.5% 0.2 94.4% 0.4 Submarket LOS ANGELES AREA 16 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 17 Los Angeles Apartment Report Rents Annual Same-Store Rent Change Los Angeles Area 10% 5% 0 0% -5% -10% 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 05 05 06 06 07 07 08 08 09 09 10 Annual Same-Store Rent Change Comparison 10% Los Angeles Area West Region* US* 5% 0% -5% -10% 1Q 05 3Q 05 1Q 06 3Q 06 1Q 07 3Q 07 1Q 08 3Q 08 1Q 09 3Q 09 1Q 10 * 2Q 10 preliminary data 17 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 18 Los Angeles Apartment Report Annual Same-Store Rent Change by Age of Community Los Angeles Area 1% 0% -1% -2% -3% 2000+ 1990s 1980s 1970s Pre-1970 SAME-STORE RENT CHANGE 2nd Quarter 2009 - 2nd Quarter 2010 Submarket 2Q 2010 Avg Monthly Rent % Change 1 Intown Los Angeles $1,635 -1.7% 2 Hollywood $1,557 -2.8% 3 West Los Angeles $2,148 2.5% 4 South Bay Cities $1,577 2.1% 5 Long Beach $1,373 -2.2% 6 Tri Cities $1,547 -3.9% 7 San Fernando Valley $1,379 -2.3% 8 Santa Clarita Valley $1,413 2.6% 9 San Gabriel Valley $1,177 -2.8% $1,197 -2.1% $821 -5.2% $1,478 -1.1% 10 East Los Angeles 11 Antelope Valley LOS ANGELES AREA 18 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 19 Los Angeles Apartment Report Current Apartment Monthly Rent by Age of Community Los Angeles Area $2,000 $1,800 $1,600 $1,400 $1,200 2000+ 1990s 1980s 1970s Pre-1970 Monthly Apartment Rent Comparison $1,800 Los Angeles Area West Region* US* $1,600 $1,400 $1,200 $1,000 $800 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 05 05 06 06 07 07 08 08 09 09 10 * 2Q 10 preliminary data 19 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 20 Los Angeles Apartment Report AVERAGE MONTHLY RENT BY BEDROOM TYPE 2nd Quarter 2010 Submarket Total Eff One Two 1 Intown Los Angeles $1,635 $1,174 $1,491 $2,024 2 Hollywood $1,557 $1,057 $1,370 $1,961 3 West Los Angeles $2,148 $1,393 $1,756 $2,636 4 South Bay Cities $1,577 $1,268 $1,426 $1,710 5 Long Beach $1,373 $1,060 $1,196 $1,570 6 Tri Cities $1,547 $1,111 $1,363 $1,794 7 San Fernando Valley $1,379 $877 $1,186 $1,602 8 Santa Clarita Valley $1,413 $834 $1,185 $1,467 9 San Gabriel Valley $1,177 $769 $1,009 $1,278 10 East Los Angeles $1,197 $832 $1,078 $1,283 11 Antelope Valley $821 $608 $720 $835 LOS ANGELES AREA $1,478 $1,103 $1,307 $1,649 AVERAGE MONTHLY RENT BY YEAR COMPLETED 2nd Quarter 2010 Submarket Total 2000+ 90-99 80-89 1 Intown Los Angeles $1,635 $1,883 $1,363 $1,432 2 Hollywood $1,557 $2,089 $1,522 $1,460 3 West Los Angeles $2,148 $2,677 $2,125 $2,121 4 South Bay Cities $1,577 $2,071 $1,310 $1,438 5 Long Beach $1,373 $1,798 $1,371 $1,282 6 Tri Cities $1,547 $2,003 $1,648 $1,597 7 San Fernando Valley $1,379 $1,843 $1,384 $1,455 8 Santa Clarita Valley $1,413 $1,599 $1,325 $1,301 9 San Gabriel Valley $1,177 $1,279 $1,313 $1,247 10 East Los Angeles $1,197 $1,401 n.a. $1,171 11 Antelope Valley $821 n.a. $819 $825 LOS ANGELES AREA $1,478 $1,979 $1,480 $1,314 70-79 $1,077 $1,323 $1,943 $1,555 $1,234 $1,259 $1,160 $986 $1,123 $1,163 $780 $1,320 Three $1,791 $2,302 $4,124 $2,156 $1,745 $1,827 $2,076 $1,760 $1,547 $1,509 $1,017 $1,985 Pre-70 $1,158 $1,529 $1,960 $1,470 $1,443 $1,120 $1,206 $922 $1,185 $1,213 n.a. $1,438 20 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 21 Los Angeles Apartment Report 1 2 3 4 5 6 7 8 9 10 11 1 2 3 4 5 6 7 8 9 10 11 AVERAGE RENT PER SQUARE FOOT BY BEDROOM TYPE 2nd Quarter 2010 $ Per Square Foot Submarket Total Eff One Two Intown Los Angeles $2.000 $2.194 $2.070 $1.925 Hollywood $1.945 $2.290 $1.948 $1.903 West Los Angeles $2.338 $2.850 $2.366 $2.266 South Bay Cities $1.789 $2.315 $1.957 $1.640 Long Beach $1.681 $2.134 $1.855 $1.563 Tri Cities $1.876 $2.163 $1.957 $1.798 San Fernando Valley $1.630 $1.964 $1.693 $1.558 Santa Clarita Valley $1.489 $1.619 $1.649 $1.444 San Gabriel Valley $1.400 $1.725 $1.511 $1.344 East Los Angeles $1.453 $2.554 $1.603 $1.371 Antelope Valley $0.967 $1.286 $1.071 $0.939 LOS ANGELES AREA $1.736 $2.255 $1.863 $1.629 Submarket Intown Los Angeles Hollywood West Los Angeles South Bay Cities Long Beach Tri Cities San Fernando Valley Santa Clarita Valley San Gabriel Valley East Los Angeles Antelope Valley LOS ANGELES AREA AVERAGE RENT PER SQUARE FOOT BY YEAR COMPLETED 2nd Quarter 2010 $ Per Square Foot Total 2000+ 90-99 80-89 $2.000 $2.216 $1.648 $1.764 $1.945 $2.329 $1.891 $1.950 $2.338 $2.666 $2.193 $2.276 $1.789 $2.034 $1.921 $1.562 $1.681 $1.877 $1.910 $1.614 $1.876 $2.251 $1.864 $1.834 $1.630 $1.896 $1.641 $1.622 $1.489 $1.576 $1.508 $1.393 $1.400 $1.804 $1.422 $1.447 $1.453 $1.825 n.a. $1.371 $0.967 n.a. $0.890 $0.973 $1.736 $2.109 $1.725 $1.533 Three $1.634 $1.781 $2.384 $1.570 $1.389 $1.667 $1.632 $1.430 $1.334 $1.253 $0.925 $1.571 70-79 $1.693 $1.801 $2.166 $1.788 $1.650 $1.551 $1.515 $1.304 $1.386 $1.405 $0.946 $1.636 Pre-70 $1.635 $1.848 $2.319 $1.719 $1.660 $1.826 $1.513 $1.178 $1.354 $1.490 n.a. $1.744 21 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 22 Los Angeles Apartment Report Historical Monthly Apartment Rent by Bedroom Type Los Angeles Area $2,250 $2,000 $1,750 $1,500 $1,250 $1,000 $750 Efficiency Two Bedroom One Bedroom Three Bedroom 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 05 05 06 06 07 07 08 08 09 09 10 Historical Monthly Apartment Rent by Age of Community Los Angeles Area $2,250 $2,000 $1,750 $1,500 $1,250 $1,000 2000+ 1970s 1990s Pre-1970 1980s 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 05 05 06 06 07 07 08 08 09 09 10 22 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 23 Los Angeles Apartment Report Monthly Apartment Rent Distribution by Property 150 Los Angeles Area 149 Number of Properties 125 100 75 89 87 82 69 64 73 67 58 49 50 25 0 <$999 $1000 - $1100 - $1200 - $1300 - $1400 - $1500 - $1600 - $1800 - $2000 $1099 $1199 $1299 $1399 $1499 $1599 $1799 $1999 + 23 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 24 Los Angeles Apartment Report Submarkets HISTORICAL APARTMENT DATA BY SUBMARKET 2nd Quarter 2008 - 2nd Quarter 2010 Submarket 1 Intown Los Angeles 2 Hollywood 3 West Los Angeles 4 South Bay Cities Date 2008/06 2008/09 2008/12 2009/03 2009/06 2009/09 2009/12 2010/03 2010/06 2008/06 2008/09 2008/12 2009/03 2009/06 2009/09 2009/12 2010/03 2010/06 2008/06 2008/09 2008/12 2009/03 2009/06 2009/09 2009/12 2010/03 2010/06 2008/06 2008/09 2008/12 2009/03 2009/06 2009/09 2009/12 2010/03 2010/06 Rents Per Per Sq Ft Month $2.202 $1,773 $2.122 $1,734 $2.262 $1,836 $2.191 $1,786 $2.068 $1,699 $2.073 $1,707 $1.928 $1,654 $2.051 $1,762 $2.000 $1,635 $2.210 $1,771 $2.131 $1,703 $2.108 $1,704 $1.992 $1,638 $1.994 $1,608 $1.995 $1,614 $1.973 $1,619 $2.028 $1,659 $1.945 $1,557 $2.461 $2,204 $2.500 $2,219 $2.458 $2,243 $2.440 $2,229 $2.304 $2,095 $2.237 $2,049 $2.289 $2,089 $2.347 $2,142 $2.338 $2,148 $1.992 $1,771 $1.959 $1,721 $1.861 $1,648 $1.781 $1,568 $1.760 $1,525 $1.769 $1,541 $1.737 $1,546 $1.768 $1,562 $1.789 $1,577 Occupancy Gross 86.2% 85.1% 85.5% 89.7% 90.0% 90.5% 95.5% 94.7% 92.0% 94.6% 93.9% 92.4% 93.1% 93.5% 95.1% 95.1% 94.6% 95.2% 95.9% 93.0% 92.6% 92.3% 94.5% 95.4% 94.7% 95.3% 94.7% 96.3% 95.4% 93.0% 93.4% 93.2% 91.5% 92.1% 92.7% 93.8% Annual Units Absorbed 2,850 4,320 890 620 24 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 25 Los Angeles Apartment Report HISTORICAL APARTMENT DATA BY SUBMARKET 2nd Quarter 2008 - 2nd Quarter 2010 Submarket 5 Long Beach 6 Tri Cities 7 San Fernando Valley 8 Santa Clarita Valley Date 2008/06 2008/09 2008/12 2009/03 2009/06 2009/09 2009/12 2010/03 2010/06 2008/06 2008/09 2008/12 2009/03 2009/06 2009/09 2009/12 2010/03 2010/06 2008/06 2008/09 2008/12 2009/03 2009/06 2009/09 2009/12 2010/03 2010/06 2008/06 2008/09 2008/12 2009/03 2009/06 2009/09 2009/12 2010/03 2010/06 Rents Per Per Sq Ft Month $1.747 $1,450 $1.813 $1,487 $1.691 $1,396 $1.688 $1,380 $1.715 $1,401 $1.642 $1,372 $1.652 $1,380 $1.726 $1,383 $1.681 $1,373 $2.050 $1,696 $2.058 $1,732 $2.070 $1,732 $1.992 $1,655 $1.965 $1,631 $1.997 $1,665 $1.995 $1,676 $1.941 $1,628 $1.876 $1,547 $1.780 $1,483 $1.737 $1,440 $1.715 $1,443 $1.698 $1,402 $1.660 $1,396 $1.651 $1,379 $1.619 $1,351 $1.611 $1,360 $1.630 $1,379 $1.582 $1,495 $1.574 $1,461 $1.496 $1,406 $1.431 $1,355 $1.459 $1,372 $1.424 $1,325 $1.457 $1,389 $1.458 $1,381 $1.489 $1,413 Occupancy Gross 96.6% 96.1% 94.5% 94.9% 92.6% 93.1% 93.0% 93.7% 95.6% 95.7% 95.6% 94.2% 93.2% 93.4% 95.7% 95.2% 95.2% 93.7% 94.7% 94.5% 92.7% 92.1% 93.0% 94.5% 94.6% 95.4% 94.1% 95.1% 93.9% 90.7% 90.7% 90.4% 91.7% 91.5% 91.4% 91.4% Annual Units Absorbed 2,500 740 2,710 430 25 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 26 Los Angeles Apartment Report HISTORICAL APARTMENT DATA BY SUBMARKET 2nd Quarter 2008 - 2nd Quarter 2010 Submarket 9 San Gabriel Valley 10 East Los Angeles 11 Antelope Valley LOS ANGELES AREA Date 2008/06 2008/09 2008/12 2009/03 2009/06 2009/09 2009/12 2010/03 2010/06 2008/06 2008/09 2008/12 2009/03 2009/06 2009/09 2009/12 2010/03 2010/06 2008/06 2008/09 2008/12 2009/03 2009/06 2009/09 2009/12 2010/03 2010/06 2008/06 2008/09 2008/12 2009/03 2009/06 2009/09 2009/12 2010/03 2010/06 Rents Per Per Sq Ft Month $1.555 $1,309 $1.542 $1,302 $1.492 $1,262 $1.453 $1,238 $1.414 $1,194 $1.393 $1,182 $1.383 $1,190 $1.439 $1,220 $1.400 $1,177 $1.548 $1,260 $1.552 $1,295 $1.560 $1,288 $1.501 $1,223 $1.484 $1,212 $1.470 $1,186 $1.481 $1,217 $1.417 $1,156 $1.453 $1,197 $1.101 $931 $1.117 $949 $1.073 $902 $1.066 $910 $1.014 $859 $1.020 $870 $1.000 $842 $0.973 $828 $0.967 $821 $1.878 $1,592 $1.861 $1,573 $1.849 $1,580 $1.802 $1,535 $1.763 $1,498 $1.748 $1,484 $1.731 $1,488 $1.767 $1,514 $1.736 $1,478 Occupancy Gross 95.0% 95.7% 93.2% 93.6% 93.6% 94.5% 94.3% 95.1% 95.1% 96.4% 96.6% 94.2% 94.5% 95.2% 95.2% 93.5% 94.9% 93.3% 92.8% 93.5% 89.8% 90.8% 91.9% 92.5% 90.9% 92.4% 92.3% 94.7% 94.1% 92.2% 92.6% 93.0% 93.9% 93.9% 94.4% 94.0% Annual Units Absorbed 950 -1,890 150 14,280 26 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 27 Los Angeles Apartment Report Methodology 1 2 3 4 5 6 7 8 9 10 11 1 2 3 4 5 6 7 8 9 10 11 SAMPLE DISTRIBUTION BY SUBMARKET BY BEDROOM TYPE 2nd Quarter 2010 Percent Total Total of Base Bedroom Type Submarket Existing Sampled Sampled Eff One Two Intown Los Angeles 70,598 9,920 14.1% 1,748 4,296 3,605 Hollywood 179,446 20,748 11.6% 2,343 10,533 7,238 West Los Angeles 140,204 15,904 11.3% 1,043 8,401 5,802 South Bay Cities 74,370 10,008 13.5% 780 4,443 4,023 Long Beach 70,795 7,202 10.2% 303 3,452 3,212 Tri Cities 120,118 7,172 6.0% 305 3,672 2,574 San Fernando Valley 131,316 22,364 17.0% 1,289 10,950 9,068 Santa Clarita Valley 17,254 10,589 61.4% 66 3,196 5,994 San Gabriel Valley 52,075 16,789 32.2% 264 6,750 8,892 East Los Angeles 155,535 7,942 5.1% 48 3,550 3,981 Antelope Valley 17,910 6,938 38.7% 68 1,828 4,336 LOS ANGELES AREA 1,029,621 135,576 13.2% 8,257 61,071 58,725 Three 234 334 648 622 235 446 1,031 1,333 883 363 706 6,835 SAMPLE DISTRIBUTION BY SUBMARKET BY YEAR COMPLETED 2nd Quarter 2010 Percent Total Total of Base Year Completed Submarket Existing Sampled Sampled 2000+ 90-99 80-89 70-79 Intown Los Angeles 70,598 9,920 14.1% 5,842 1,254 1,401 287 Hollywood 179,446 20,748 11.6% 3,418 1,643 4,349 4,181 West Los Angeles 140,204 15,904 11.3% 3,746 1,580 1,372 5,254 South Bay Cities 74,370 10,008 13.5% 1,621 661 1,203 3,303 Long Beach 70,795 7,202 10.2% 698 387 2,239 1,758 Tri Cities 120,118 7,172 6.0% 1,828 793 1,773 1,748 San Fernando Valley 131,316 22,364 17.0% 3,937 2,281 5,838 7,833 Santa Clarita Valley 17,254 10,589 61.4% 4,255 2,305 3,699 130 San Gabriel Valley 52,075 16,789 32.2% 150 1,028 3,993 8,355 East Los Angeles 155,535 7,942 5.1% 575 n.a. 1,377 2,860 Antelope Valley 17,910 6,938 38.7% n.a. 304 5,971 663 LOS ANGELES AREA 1,029,621 135,576 13.2%- 26,070 12,236 33,215 36,372 Pre-70 1,136 7,157 3,952 3,220 2,120 1,030 2,475 200 3,263 3,130 n.a. 27,683 27 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 28 Los Angeles Apartment Report Sample Distribution by Bedroom Type 80k Units Los Angeles Area 60k 40k 20k 0k Efficiency One Bedroom Two Bedroom Three Bedroom Sample Distribution by Year Completed 40k Units Los Angeles Area 30k 20k 10k 0k 2000+ 1990s 1980s 1970s Pre-1970 28 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 29 Los Angeles Apartment Report M2nd Quarter 2010 | July 23, 2010 LA Records Net Move-Outs and Declining Occupancy in 2010’s 2nd Quarter, But Quarterly Rent Change Turns a Corner Like other Southern California metros, Los Angeles saw apartment demand stumble during 2nd quarter. However, annual absorption remained above completion volumes, so occupancy tracked upward on a year-over-year basis. Thanks to a small quarterly increase in pricing, annual rent reductions are being reined in. Mild improvements seem likely for both occupancy and rents during the coming year. Metro Los Angeles Suffered Its First Net Move-Outs Since Late 2008 in 2nd Quarter 20k Units quarterly demand 10k 0k Demand Hits a Snag in 2010’s 2nd Quarter Apartment demand in the Los Angeles area faltered during the April-June time frame, falling short of the metro’s performance posted over the previous couple of quarters and running counter to the substantial absorption tallies realized in most other locales across the country during 2nd quarter. The metro’s large supply of older inventory, which had been capturing a significant share of new leases, recorded substantial net move-outs in 2nd quarter. And, since this resident loss occurred at the same time that another wave of new supply was completed, occupancy slipped a bit. The lone bright spot in the performance results seen specifically during 2nd quarter was in rent change. After seven quarters of flat or declining prices, rental rates actually increased during the quarter, reducing annual backtracking for effective rents to a fairly small number. Taking a closer look at recent absorption figures in Los Angeles, the occupied apartment count fell by 2,210 units during the April-June period, sliding after five quarters of positive results. Earlier demand still left absorption on the plus side at 2,880 units during 2010’s first half and at 14,280 apartments during the year-ending June. Unlike the pattern seen for all product, demand in Los Angeles’ stock of units built since 2000 proved slightly positive during 2nd quarter. Apartment renter households -20k absorbed 450 units during the April-June time frame, mostly reflecting leasing activity 4Q 2008 2Q 2009 4Q 2009 2Q 2010 at recent completions, taking demand in that 2000+ product age niche to 3,850 units for the year-ending June. Older units, then, suffered net move-outs for 2nd quarter, specifically, but they realized substantial demand on an annual basis. -10k 4000 International Parkway Carrollton, TX 75007 (972) 820-3100 www.mpfresearch.com ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 30 Los Angeles Apartment Report A large block of the metro’s annual demand tally registered in the Hollywood, Intown LA, San Fernando Valley and Long Beach submarkets. These four neighborhoods combined to absorb 12,380 units during the year-ending mid-2010, accounting for nearly 90 percent of the metro’s total demand. Most other locales recorded demand for about 600 to 1,000 apartments. The only submarket that experienced apartment resident loss during the past year was East Los Angeles, which saw net move-outs from 1,890 units. Apartment demand results in metro LA during the year-ending mid-2010 was influenced by three general story lines that focus on the return of renters from the shadow market, shifting conditions in the for-sale sector, and rent cuts. The return of households from the shadow market is a pattern being seen nationwide, reflecting that numerous households who opted for alternative rentals have ended up in product that fell into foreclosure or was sold in late 2009/early 2010 and that others have missed the superior levels characteristic of apartment product under professional management. In addition, traditional apartments are likely benefiting to at least a small degree from households leaving foreclosed homes and moving directly into apartments. Furthermore, the price cuts seen throughout most of greater Los Angeles’ locales up through the beginning of 2nd quarter have helped position apartments favorably relative to other housing options. Also obviously impacting what has happened in the apartment sector is the condition of the local job market. Preliminary figures from the Bureau of Labor Statistics (BLS) showed that greater Los Angeles lost 69,500 jobs in the year-ending May. Recent layoffs translated to a 1.8-percent contraction of the metro’s job base. However, encouraging month-to-month statistics show positive employment change returning to LA. As of May, the job count was up by 69,500 positions from the bottom point seen in January. (Temporary Census Bureau positions and other jobs in the Federal Government sector accounted for about 20 percent of these additions.) Looking at annual job change by category in Los Angeles during the year-ending May, downsizing proved particularly pronounced in the Manufacturing, Construction, Trade, and Professional and Business Services sectors. In contrast, meaningful growth was recorded in the Information sector, due to a big bump in the Motion Picture subcategory. Single-family home sales in the Los Angeles area have shown some momentum recently. According to information from DataQuick, sales across the metro during the year-ending June 2010 topped 82,600 units, up 14 percent from the total seen in the year-ending June 2009. Increased home sales numbers are a double-edged sword for the apartment sector. For right now, the overall impact seems to be positive, since sales are decreasing the inventory of shadow market rentals, leaving fewer alternatives to conventional apartment product. Over time, however, the impact of increased sales should turn negative, as the number of apartment renters lost to purchase will exceed the block of households returning from the shadow market option to traditional apartments. While single-family home prices in LA have made some progress recently, they still register notably under the levels seen before the housing bust. The National Association of Realtors reported that the local median single-family home price as of 1st quarter 2010 came in at 2 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 31 Los Angeles Apartment Report $331,400. While up 9 percent from the level recorded in 1st quarter 2009, prices as of mid2010 were 44 percent lower than the standard price of nearly $600,000 in 2007. Typical pricing in Los Angeles as of early 2010 remained well above the rates for the West region of the country ($210,200) and the nation as a whole ($166,100). Builders appropriately continue to cut back on the number of single-family home starts in LA. Permits were issued for only 2,219 new single-family homes during the year-ending May 2010, with that figure 4 percent below the tally recorded in the year-ending May 2009. Quarterly Additions Account for About 40 Percent of Annual Deliveries The Annual Supply Tally in LA During Mid-2010 Was Similar to the 1Q 2010 Level 10k Units quarterly completions annual completions 8k 6k 4k 2k 0k 2Q 05 4Q 05 2Q 06 4Q 06 2Q 07 4Q 07 2Q 08 4Q 08 2Q 09 4Q 09 2Q 10 New apartment additions in the Los Angeles area totaled 1,856 units during 2010’s 2nd quarter. This quarterly tally brought completions for the first six months of the year to 2,501 apartments and took additions during the year-ending June to 4,369 units. Annual deliveries as of mid-2010 were only about half as much as the peak seen in the most recent cycle – just over 9,200 units as of early 2009. The annual apartment sum was set to drop even further, but condo projects that changed course to become rentals came into play: nearly 20 percent of metro Los Angeles’ new apartment units finished during the past year were initially slated to be for-sale product. For some regional perspective, Los Angeles received 33 percent of the roughly 13,300 units delivered in Southern California during the year-ending June 2010. Also contributing to the region’s new apartment tally, Orange County added approximately 4,000 units, the Inland Empire received about 2,500 new apartments, and San Diego’s apartment stock expanded by roughly 2,300 units. Looking at Los Angeles’ submarkets, nearly 50 percent of the apartments delivered during the year-ending mid-2010 came online in the neighboring trio of Intown Los Angeles (1,129 units), Hollywood (608 apartments) and West Los Angeles (413 units). New deliveries in the greater LA area during the past 12 months translated to a 0.4percent inventory growth rate, with this increase bringing the existing unit base to 1,029,621 units as of June. This annual expansion was slightly less than the average yearly growth pace of 0.5 percent posted in LA over the past five years. 3 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 32 Los Angeles Apartment Report Apartment Occupancy Stumbled in Recent Months As of mid-2010, occupancy in metro Los Angeles’ apartment market registered at 94 percent, 0.4 points lower than the rate seen in early 2010. Progress seen earlier, however, brought the 2nd quarter 2010 occupancy reading a slight 0.1 point above the late 2009 showing and a full percentage point ahead of the June 2009 figure. Apartment Occupancy in Greater Los Angeles Remained Below The Historical Average 100% overall occupancy 98% 96% 94% 92% 90% Apartment occupancy was pretty tightly clustered across most of Los Angeles’ various product age sectors as of mid-2010. Older communities built during the 1970s and before 1970 recorded June occupancy rates of 95.8 percent and 95.7 percent, respectively. Not far behind was the 94.9 During 2Q 2010, Apartment Occupancy in percent occupancy in the 1990s-era product Los Angeles Slipped Slightly line. Meanwhile, the 2nd quarter occupancy reading in 1980s-generation properties quarterly occupancy change (points) landed at 94 percent. Lastly, the block of units built since 2000 was only 89.2 percent full. This age niche registered as the metro’s occupancy laggard and was the 0 only product age niche to see occupancy slip meaningfully (2.5 points) during the quarter, while most other product age categories saw occupancy improve slightly between March and June. And, unlike other product age sectors, LA’s newest age niche actually saw occupancy decrease a tiny bit during the year-ending mid-2010. 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q Occupancy in projects built since 2000 05 05 06 06 07 07 08 08 09 09 10 slipped 0.1 point between June 2009 and June 2010, while all other product age groups recorded occupancy improvements of roughly 1 to 2 percentage points. New apartment developments that wrapped up construction during the past year seem to be struggling with the lease-up process of late, with the average occupancy rate in these communities registering at about 55 percent as of 2nd quarter. 1 0 -1 -2 4Q 05 2Q 06 4Q 06 2Q 07 4Q 07 2Q 08 4Q 08 2Q 09 4Q 09 2Q 10 0 2Q 05 2 June 2010 occupancy in Los Angeles topped the rates recorded for the U.S. as a whole (93.4 percent) and matched the West region norm (94 percent). (National and regional results are preliminary readings, but with nearly 5 million units included in the country’s preliminary findings, final results are unlikely to shift to a meaningful degree.) Compared to the mid-2010 occupancy showings of its immediate neighbors, LA’s performance was just below the 94.2 percent rate seen in both the Inland Empire and Orange County and more significantly under San Diego’s 95.4 percent occupancy figure. On a submarket level, June occupancy topped the 95 percent mark in a trio of neighborhoods: Long Beach (95.6 percent), Hollywood (95.2 percent) and the San Gabriel Valley (95.1 4 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 33 Los Angeles Apartment Report percent). Recording occupancy between roughly 94 and 95 percent were the West Los Angeles, San Fernando Valley, South Bay Cities, and Tri Cities submarkets. At the bottom end of the performance spectrum, occupancy stood at 91.4 percent in the suburban Santa Clarita Valley area. Occupancy shifts in Los Angeles’ submarkets were quite widespread for the quarterly as well as on a year-over-year basis. Looking at quarterly change, the Long Beach and South Bay Cities areas recorded notable improvements in occupancy between March and June. In Long Beach, the mid-2010 rate came in 1.9 points higher than the early 2010 figure, while the South Bay Cities submarket recorded a quarterly bump of 1.1 points. On the flip side, a few spots saw occupancy ease at least during the three-month time span, with the downturns proving most pronounced in the Intown Los Angeles (2.7 points), East Los Angeles (1.6 points) and Tri Cities (1.5 points) locales. Annually, Long Beach logged the region’s most improvement. Occupancy in this submarket climbed 3 points between June 2009 and June 2010. Occupancy increases of roughly 2 points were seen in the Intown LA, Hollywood and San Gabriel Valley locales. Only East Los Angeles posted a year-over-year drop in occupancy, with the rate sliding 1.9 points. With Rents on the Rise a Bit Recently, Annual Price Cuts Have Eased LA's Annual Rent Cut as of June Was Its Slightest Since Prices Began Falling 10% 5% 0 0% -5% Rent cuts certainly played a part in getting apartment demand back on track in Los Angeles during 2009 and the first few months of 2010, and the fact that rents went back into growth mode during the April-June time frame may have had some influence on the net move-outs that suddenly emerged again. Looking at specific results, effective rents in the metro ticked up by 0.2 percent during 2nd quarter. This quarterly bump reduced LA’s annual pace of rent decline to 1.1 percent, lots better than yearover-year loss that got as deep as 9.4 percent in fall 2009. annual same-store rent change -10% Looking across Southern California, San Diego’s June 2010 effective rents were just 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q barely under year-earlier prices (down 0.3 05 05 06 06 07 07 08 08 09 09 10 percent), while the rates of decline were at 1.5 percent in the Inland Empire and 1.8 percent in Orange County. Effective rents in the West region as a whole declined 1.6 percent during the year-ending mid-2010, with that loss proving a little steeper than the 0.9-percent reduction posted on the national front. In comparison, the price of goods and services in the Los Angeles area increased by 0.9 percent between June 2009 and June 2010, as reported by the Bureau of Labor Statistics. The consumer price index as of mid-2010 for the U.S. as a whole registered at 1.1 percent. Not surprisingly, the use of rent giveaways remained significant as of late in Los Angeles. Discounts were reported for 44 percent of the apartment product surveyed by MPF Research in 2010’s 2nd quarter, with this figure up from the 34 percent level reported a year earlier. The typical concession in the marketplace reduced effective rent achievement by roughly 10 percent. 5 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 34 Los Angeles Apartment Report Similar to the SoCal Norm, Rent Cuts Moderate in LA 5% 2Q 2009 annual same-store rent change 2Q 2010 annual same-store rent change 0% -5% -10% Rent decreases were recorded in almost all of Los Angeles’ product age niches during the year-ending mid-2010. Effective rates faltered by 2.6 percent in apartments built prior to 1970, while a 1.7-percent drop was seen in the top-tier stock constructed since 2000. Price cuts of about 1 percent were logged in the 1990s-generation product (0.9 percent) and the 1980s-era units (0.6 percent). Meanwhile, the 1970s-vintage communities saw rental rates edge up by the smallest of margins, 0.1 percent. Annual rent reductions registered in all but three of Los Angeles’ submarkets, with the pace of decline ranging between about 2 and 5 percent. The Antelope Valley logged Los Angeles Inland Orange San Diego the steepest drop in rental rates (5.2 Empire County percent), while notable rent cuts were also seen in the Tri Cities (3.9 percent), the San Gabriel Valley (2.8 percent) and Hollywood (2.8 percent). On the flip side, price increases were recorded in the Santa Clarita Valley (2.6 percent), West Los Angeles (2.5 percent) and the South Bay Cities (2.1 percent). Rents for all existing product in Los Angeles averaged $1,478 per month, or $1.736 per square foot, as of June 2010. 6 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 35 Los Angeles Apartment Report ANNUAL APARTMENT COMPLETIONS BY SUBMARKET July 2009 - June 2010 Sub Apartment Community Address Developer Start Finish Units 1 Ardmore 959 S Ardmore Ave, Los Angeles Private Developer 03/08 10/09 1 The Brick Lofts 652 Mateo St, Los Angeles Western Imperial 2000 LLC 01/07 10/09 48 21 1 WaterMarke Tow er * 705 W Ninth St, Los Angeles Meruelo Maddux Properties 01/07 10/09 214 1 Bonnie Brae Village 208 S Bonnie Brae, Los Angeles Enhanced Affordable 10/08 12/09 92 Development LLC 1 Factory Place Arts Complex II 1330 Factory Pl, Los Angeles Private Developer 06/07 12/09 53 1 Mindanao 1800 W Temple St, Los Angeles Advanced Development 11/08 12/09 26 Investment Inc. 1 2121 Lofts * 2121 E 7th Pl, Los Angeles Concerto Development 10/07 01/10 78 1 Miramar Village 240 S Westlake Ave, Los Angeles Enhanced Affordable 12/08 02/10 114 Development LLC 1 SB Tow er * 600 S Spring St, Los Angeles SB Properties 12/07 04/10 250 1 700 North Hill 700 N Hill Pl, Los Angeles Private Developer 02/07 05/10 29 1 Jew elry Trades Building 220 W 5th St, Los Angeles Fifth Street Funding Inc. 09/07 06/10 62 1 The Spring Arcade Building 541 S Spring St, Los Angeles Fifth Street Funding Inc. 06/03 06/10 142 2 11807 Laurelw ood Drive 11807 Laurelw ood Dr, Los Angeles Private Developer 02/08 07/09 24 2 Mariposa Place 5030 Santa Monica Blvd, Los Angeles Hollyw ood Community 01/08 07/09 58 12 Housing Corp. 2 5625 Farmdale Avenue 5625 Farmdale Ave, Los Angeles Private Developer 01/08 09/09 2 811 Fedora Street 811 Fedora St, Los Angeles Private Developer 04/09 10/09 6 2 1600 Vine 1600 Vine St, Los Angeles Legacy Partners Inc. 10/07 11/09 375 2 Studio Villas 12020 Guerin St, Los Angeles Private Developer 02/08 01/10 32 2 Sunset Vine Tow er * 1480 Vine St, Los Angeles CIM Group 01/06 03/10 63 2 Villa del Rey 4241 N Cahuenga, Los Angeles Private Developer 02/09 03/10 26 2 Woodbridge * 12504 Woodbridge St, Los Angeles Private Developer 06/08 03/10 12 3 1331 Amherst Avenue * 1331 Amherst Ave, Los Angeles Private Developer 10/08 08/09 32 3 1600 South Westgate Avenue 1600 S Westgate Ave, Los Angeles Private Developer 05/08 08/09 32 3 12449 Louise Avenue 12449 Louise Ave, Los Angeles Private Developer 03/08 08/09 25 3 LuXe@1539 1539 4th St, Santa Monica NMS Properties 04/08 09/09 62 3 Superior at Venice 1107 Venice Blvd, Los Angeles Private Developer 12/07 09/09 38 3 LuXe@1759 1759 Beloit Ave, Los Angeles NMS Properties 07/08 10/09 61 3 1842 Purdue Avenue 1842 Purdue Ave, Los Angeles Private Developer 06/08 01/10 25 3 Ashton Westw ood * 10700 Wilshire Blvd, Los Angeles Hanover Co. 09/08 01/10 58 3 1625 South Granville Avenue 1625 S Granville Ave, Los Angeles Private Developer 03/09 04/10 18 3 Metro Art Brentw ood 11771 W Montana Ave, Los Angeles BW Brody 04/09 04/10 62 4 Brisa 8614 Saran Dr, Los Angeles Private Developer 02/09 03/10 49 6 Glendale City Lights 3673 San Fernando Rd, Glendale Advanced Development 12/08 12/09 68 Investment Inc. 6 Gardens on Garfield 303 E Garfield Ave, Glendale Thomas Safran & Associates 01/09 03/10 6 Paragon at Old Tow n 700 S Myrtle Ave, Monrovia Urban Housing Group 12/08 04/10 30 163 (continued on next page) 7 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 36 Los Angeles Apartment Report ANNUAL APARTMENT COMPLETIONS BY SUBMARKET July 2009 - June 2010 Sub Apartment Community Address Developer Start Finish Units 7 9001 Burnet Avenue 9001 Burnet Ave, Los Angeles Private Developer 01/08 10/09 43 7 Asturias Senior 9628 Van Nuys Blvd, Panorama City Meta Housing Corp. 10/08 10/09 69 7 Saticoy Village 20227 Saticoy St, Winnetka Private Developer 03/08 11/09 91 7 IMT on the Boulevard 6940 N Sepulveda Blvd, Van Nuys Private Developer 08/08 12/09 98 7 The Enclave at Warner Center 5710 N Variel Ave, Los Angeles Western National Group 12/08 04/10 195 7 Carabella 6300 N Variel Ave, Los Angeles Fairfield Residential 06/08 05/10 224 7 4462 Woodman Avenue * 4462 Woodman Ave, Los Angeles Private Developer 10/08 06/10 39 7 Andalucia 15305 W Lanark St, Los Angeles Private Developer 12/08 06/10 79 7 Ivy Terrace 13751 W Sherman Way, Los Angeles Abode Communities 03/09 06/10 52 7 Vincennes 18434 W Vincennes St, Los Angeles Private Developer 05/08 06/10 57 8 The Vistas of West Hills 24015 Copper Hill Dr, Valencia LNR Property Corp. 01/08 08/09 220 10 Rittenhouse Square 1100 E 33rd St, Los Angeles Thomas Safran & Associates 04/08 08/09 100 10 1011 Adams 1011 E Adams Blvd, Los Angeles Meta Housing Corp. 09/08 02/10 10 McCoy Plaza 9315 S Firth Blvd, Los Angeles Private Developer 03/09 06/10 64 10 University Gatew ay 3335 S Figueroa St, Los Angeles Urban Partners LLC 08/08 06/10 420 11 Palo Verde Terrace 38235 10th St E, Palmdale AMCAL Multi-Housing Inc. 01/09 01/10 LOS ANGELES AREA 80 78 4,369 * Originally planned or started as a for-sale condominium property but sw itched to rental during construction. 8 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 37 Los Angeles Apartment Report In the Year-Ending June 2011, LA Likely Will Record Meaningful Demand for Apartments, Improved Occupancy, and Positive Revenue Change MPF Research Forecast An improving job production picture in Los Angeles should help apartment demand come in at a solid level during the year-ending 2nd quarter 2011. At the same time, deliveries will be moderate, similar to the addition volume seen over the past year. This supply/demand outlook points to upturns in both occupancy and rents, though the anticipated pace of Apartment Demand Should Remain Positive recovery isn’t exactly stellar. in Los Angeles During the YE June 2011 25k Units annual apartment absorption 0k -25k -50k 2Q 06 4Q 06 2Q 07 4Q 07 2Q 08 4Q 08 2Q 09 4Q 09 2Q 10 2Q 11* *forecast The Pace of New Completions in Los Angeles Should Slow Considerably in 2Q 2011 2k Units scheduled quarterly additions One factor that is likely to influence apartment demand during the coming year is employment change, and the region’s economic outlook should be nowhere near as discouraging as the job base contraction logged in the year-ending June 2010. In fact, the metro, which is currently gaining jobs on a month-to-month basis, is expected to see the annual job change figure in the coming year work its way into positive territory. Looking at the forecasts from various economic experts, MPF Research is assuming that by mid-2011, the job count in LA tops the mid-2010 figure by some 30,000 to 40,000 positions. Similar to the story seen during the past 12 months, apartment demand in the yearending June 2011 should be helped by the continued bounceback of renters from shadow market condos, townhomes and single-family rental homes. Residents will also likely be drawn to traditional apartments by pricing that looks fairly appealing relative to the rates for LA's other housing choices. Taking these factors into account, MPF Research anticipates that apartment absorption in the Los Angeles metro will register at 8,100 units during the yearending 2nd quarter 2011. 1k 0k 3Q 10 4Q 10 1Q 11 2Q 11 Later This apartment demand forecast takes into account that the metro’s single-family home market should see stabilized to rising sales activity during the coming year, perhaps pushing up the loss of apartment renters to home purchase to a small degree. 9 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 38 Los Angeles Apartment Report Looking at apartment stock growth, new completions in the Los Angeles area are slated to come in at a fairly moderate level in the next year, with roughly 3,900 units under construction as of July 2010. (That’s pretty similar to the 4,400 or so apartments were delivered in the yearending June 2010.) This block of new supply will grow the metro’s existing apartment stock by 0.4 percent during the next 12 months. In addition, there are currently 496 apartments under construction with completion slated in the last half of 2011. The bulk of the scheduled apartment deliveries in the year-ending mid-2011 are slated to come online in a handful of locales. Nearly 90 percent of the next year’s supply in metro LA will be delivered in the Hollywood (1,201 units), Tri Cities (828 units), San Fernando Valley (781 units) and Intown Los Angeles (603 units) submarkets. Looking beyond the product already underway in metro Los Angeles, there appears to be basically nothing else at the starting gate. MPF Research hasn’t identified any planned properties with start dates announced for the immediate future. However, when market conditions began to deteriorate dramatically and financing availability froze during the past cycle, developers put construction on hold for some 1,600 units that MPF Research was tracking through the planning process, and it’s certainly possible that some of those projects could resurface as market conditions reach firmer ground. Multifamily permits across LA in 2010’s April-May time period registered at just 484 units, 57 percent below the volume authorized during the same two-month time period in 2009. For the year-ending May 2010, authorizations totaled 2,852 multifamily units, trailing the year-earlier figure by 48 percent. The LA Metro Area Should Record Mild Rent Growth Through June 2011 10% annual same-store rent change 5% With apartment demand capacity expected to top scheduled new completions during the year-ending June 2011, occupancy in the Los Angeles area is anticipated increase modestly. Occupancy in the metro is forecast to improve 0.4 points over the 12-month period to land at a mid-2011 rate of 94.4 percent. 0 0% -5% -10% 2Q 06 Each of LA’s individual submarkets is projected to record at least a slight uptick in occupancy during the year-ending 2nd quarter 2011. On the high side of the scale, occupancy is forecast to climb 1.4 points in the Intown LA area. Occupancy is anticipated to improve by nearly 1 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 2Q percentage point in the San Gabriel Valley 06 07 07 08 08 09 09 10 11* (0.7 points), West Los Angeles (0.6 points) *forecast and the Santa Clarita Valley (0.6 points). Elsewhere in the metro, occupancy increases of less than a half of a percentage point seem likely. These anticipated occupancy shifts will result in June 2011 occupancy registering around 95 percent or better in a handful of LA’s neighborhoods. Leading the way, the San Gabriel Valley is projected to be 95.8 percent full as of mid-2011. Occupancy should register at a similar 95.7 percent in Long Beach. Additionally, rates should come in around the 95 percent mark in Hollywood (95.3 percent), West Los Angeles (95.3 percent) and the San Fernando Valley (94.5 percent). At the bottom end of the performance spectrum, occupancy is expected to register at 92 percent in the Santa Clarita Valley. 10 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 39 Los Angeles Apartment Report Given these tightened occupancy rates, apartment operators likely will be able to raise rents a little, though the forecast occupancy performance does remain too low for much more than slight pricing increases. MPF Research anticipates that rental rates for LA apartments will increase 1.3 percent during the coming year. Combining the shifts forecast for occupancy and rent production, apartment revenues in Los Angeles should move up by an average of 1.7 percent during the year-ending June 2011. Apartment Market Snapshot Los Angeles Area 2Q 2010 2Q 2011 Forecast Existing Apartment Units Sampled Apartment Units % of Existing Units Quarterly Apartment Unit Demand Annual Apartment Unit Demand Quarterly Apartment Unit Completions Annual Apartment Unit Completions Annual Apartment Removals Annual Net Inventory Change Net Inventory Change Rate Overall Occupancy Quarterly Change (points) Annual Change (points) Average Effective Monthly Rent Quarterly Same-Store Rent Change Annual Same-Store Rent Change Annual Apartment Unit Demand Annual Apartment Unit Completions Average Overall Occupancy Annual Change (points) Annual Same-Store Rent Change 1,029,621 135,576 13.2% -2,210 14,280 1,856 4,369 0 4,369 0.4% 94.0% -0.4 1.0 $1,478 0.2% -1.1% 8,100 3,897 94.4% 0.4 1.3% 11 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 40 Los Angeles Apartment Report FORECAST APARTMENT COMPLETIONS BY SUBMARKET July 2010 - June 2011 Sub Apartment Community Address Developer Start Finish Units 1 The Blackstone 901 S Broadw ay, Los Angeles Neighborhood Effort 07/08 07/10 82 1 The Medallion 334 S Main St, Los Angeles Private Developer 01/08 12/10 192 1 Orsini III 606 N Figueroa St, Los Angeles G H Palmer Associates 11/08 12/10 210 1 Factory Place Arts Complex III 1300 Factory Pl, Los Angeles Private Developer 01/09 01/11 35 1 The Metropolitan Building 315 W 5th St, Los Angeles Private Developer 10/07 02/11 84 2 5550 West Wilshire * 5550 W Wilshire Blvd, Los Angeles Legacy Partners Inc. 07/08 07/10 163 2 Kenmore Tow ers 540 S Kenmore Ave, Los Angeles Private Developer 03/08 07/10 42 2 La Belle at Hollyw ood Tow er 6142 Franklin Ave, Los Angeles Alliance Residential Co. 12/08 07/10 146 2 Jefferson at Hollyw ood 1724 N Highland Ave, Los Angeles JPI Multifamily Inc. 06/08 08/10 270 2 1751 North Las Palmas Avenue † 1751 N Las Palmas Ave, Los Angeles Private Developer 04/07 12/10 24 2 Alta Hollyw ood * 1714 N McCadden Pl, Los Angeles Wood Partners 12/08 12/10 218 2 NoHo Collection/Gangi 5241 Vineland Blvd, Los Angeles JSM Cos. 01/07 12/10 158 2 1633 North La Brea * 1633 N La Brea Ave, Los Angeles John Laing Homes 01/07 03/11 180 3 LuXe@1548 1548 6th St, Santa Monica NMS Properties 01/10 08/10 50 3 Santa Monica Plaza * 1508 Federal Ave, Los Angeles Wiseman Development 11/09 03/11 63 4 Mirandela Crestridge Rd & Crenshaw Blvd, AMCAL Multi-Housing Inc. 02/10 02/11 34 Rancho Palos Verdes 5 gallery421 Lyon Realty Advisors 06/08 08/10 291 5 Long Beach and Burnett Apartments 2355 Long Beach Blvd, Long Beach 421 W Broadw ay, Long Beach Meta Housing Corp. 01/10 10/10 46 6 Vassar City Lights 3685 San Fernando Rd, Glendale Advanced Development 08/09 08/10 72 6 Empire Landing * 1901 N Buena Vista St, Burbank Casden Properties Inc. 01/09 12/10 276 6 Westgate 231 S De Lacey Ave, Pasadena Sares-Regis Group 12/07 02/11 480 7 IMT Encino 5501 N New castle, Los Angeles Private Developer 11/08 12/10 120 7 Legado Encino 16710 Ventura Blvd, Encino The Legado Cos. 12/09 03/11 125 7 The Millennium Warner Center 6701 N Variel Ave, Los Angeles Dinerstein Cos. 04/09 03/11 438 7 Montecito Terraces 14726 Blythe St, Panorama City AMCAL Multi-Housing Inc. 06/10 06/11 98 Investment Inc. LOS ANGELES AREA 3,897 * Originally planned or started as a for-sale condominium property but sw itched to rental during construction. † Project on hold. FORECAST APARTMENT COMPLETIONS BY SUBMARKET July 2011 or Later Sub 1 Apartment Community Piero II 10 West 27th Place LOS ANGELES AREA Address Developer Start Finish Units 609 St Paul Ave, Los Angeles G H Palmer Associates 06/10 10/11 335 2700 S Figueroa St, Los Angeles Symphony Development 03/10 07/11 161 496 12 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 41 Los Angeles Apartment Report Intown Los Angeles | 2nd Quarter 2010 1 Intown Los Angeles Snapshot 2Q 2010 Existing Apartment Units Sampled Apartment Units % of Existing Units Quarterly Apartment Unit Demand Annual Apartment Unit Demand Quarterly Apartment Unit Completions Annual Apartment Unit Completions Annual Apartment Removals Annual Net Inventory Change Net Inventory Change Rate Overall Occupancy Quarterly Change (points) Annual Change (points) Average Effective Monthly Rent Quarterly Same-Store Rent Change Annual Same-Store Rent Change Current Trends Demand Submarket Metro 70,598 1,029,621 9,920 135,576 14.1% 13.2% -1,240 -2,210 2,850 14,280 483 1,856 1,129 4,369 0 0 1,129 4,369 1.6% 0.4% 92.0% 94.0% -2.7 -0.4 2.0 1.0 $1,635 $1,478 -2.9% 0.2% -1.7% -1.1% Intown Los Angeles recorded its second consecutive quarter of move-outs recently. The locale’s apartment market lost 1,240 apartment renter households, on net, during the April-June time frame, taking the demand tally for the first half of 2010 to about -1,600 units. However, recent losses weren’t enough to completely erase the positive absorption recorded in 2009’s final six months, as the locale reported demand for 2,850 apartments in the year-ending mid-2010. Unlike the top-tier stocks in most other submarkets, Intown LA’s newest block of units built since 2000 saw notable leasing activity during the past year. This age niche gained nearly 1,300 apartment residents during the year-ending 2nd quarter 2010. A struggling economy appears to have prompted layoffs at a handful of corporations in the Intown Los Angeles neighborhood during the year-ending June 2010. Most notably, investment management firm The Capital Group Cos. pink-slipped 174 employees at its Los Angeles location in July 2009. U.S. Bank eliminated roughly 170 local positions over the course of 2010’s first six months. California Sportservice Inc., which provides food service at Dodger Stadium, laid off 112 workers during 2nd quarter 2010. Additionally, during 2010’s 1st quarter, The Los Angeles Times trimmed its workforce by nearly 70 jobs. Supply The Intown Los Angeles area witnessed the delivery of 483 new apartments during After almost three years of construction, the Jewelry Trades Building the April-June time frame, with this new has been transformed into 62 apartments. supply bringing apartment additions for the first six months of 2010 to 675 units. In the year-ending June, deliveries totaled 1,129 apartments. Notably, about one-third of Intown Los Angeles’ apartment completions during the past year began the construction process as forsale product. Intown LA’s annual delivery volume grew the locale’s apartment inventory by 1.6 percent, bringing the existing unit base to 70,598 units as of mid-2010. 1| Intown Los Angeles ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 42 Los Angeles Apartment Report Apartment deliveries in 2nd quarter consisted of four projects, three of which came online in LA’s Historic Core. SB Tower, Intown Los Angeles’ largest quarterly completion, reached finalunit build-out in April. Located at the corner of Spring and 6th Streets, this 20-story high-rise by SB Properties is situated within blocks of a few of the developer’s other apartment communities – SB Spring, SB Lofts and SB Manhattan. SB Tower, which is the renovated 1959 Grosse building that formerly housed the First Interstate Bank, contains 250 apartments and 8,000 square feet of ground-floor retail space. Amenities include glass balconies in each apartment, a rooftop deck with panoramic views, and concierge service. Of note, SB Properties initially planned for SB Tower to be a condo development, but recent market dynamics prompted a switch to apartments. Moving just half a block northeast of SB Tower on Spring Street, the Spring Arcade Building was delivered in June. Fifth Street Funding Inc.’s renovation of the 12-story 1924 Mercantile Arcade Building contains 142 loft-style apartments situated above three stories of retail mall space. SB Tower is the latest addition to SB Properties’ downtown portfolio. Construction wrapped up in 2nd quarter. Across the street from the Spring Arcade Building at the junction of Broadway and 5th Street, another rehabilitated property by Fifth Street Funding, the Jewelry Trades Building, reached final-unit construction in June. This nine-story, 62-unit development houses a Rite-Aid on its ground floor and sits catty corner from the Metropolitan Building, another apartment renovation project currently in process. Also completing construction during 2010’s 2nd quarter was one small apartment community totaling 29 units. 2| Intown Los Angeles ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 43 Los Angeles Apartment Report Occupancy Apartment occupancy in the Intown Los Angeles area took a tumble in recent months. As of mid-2010, apartments in the Intown LA neighborhood recorded an overall occupancy rate of 92 percent, 2 points under the figure posted by the Los Angeles metro as a whole. Occupancy in the Intown Los Angeles area slid 2.7 points during 2nd quarter and 3.5 points over the Overall Occupancy course of 2010’s first six months. However, this recent loss still left the mid-2010 occupancy figure 2 points ahead of the yearearlier rate, reflecting the gains seen in the last half of 2009. 100% 95% 90% 85% 80% Looking at the locale’s product age categories with sizable sample, occupancy was strongest in the 1980s-era units at 97.6 percent, while the 1990s-generation communities were 97 percent occupied. Product built before 1970 reported occupancy at a healthy 96.1 percent. Meanwhile, the sample of apartments from 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q the 2000s recorded a mid-2010 occupancy 08 08 08 09 09 09 09 10 10 reading of 88.6 percent. When factoring out Intown Los Angeles Los Angeles Area results for new completions working their way through the initial leasing phase, however, occupancy in this 2000+ age niche came in a little higher at 91.2 percent. During 2nd quarter, occupancy declined in almost every product age segment with sizable sample, with the steepest drop of 4.6 points occurring in Intown LA’s 2000s-era communities. On an annual basis, however, occupancy increased by around 3 to 4 points in product from the 2000s, 1990s and 1980s. Rents After implementing a small rent reduction during 2010’s first three months, Intown Los Angeles’ property owners and operators continued to cut prices in 2nd quarter. Between March and June, same-store rental rates dropped 2.9 percent. Effective prices as of June 2010 were 1.7 percent below the rates reported as of June 2009. This rent cut was the Los Angeles Annual Same-Store Rent Change metro’s smallest annual price decline on a submarket level in 2nd quarter. 10% 5% Looking at rent change during the yearending mid-2010 in product age categories with meaningful sample, the 1990s-era units logged a 4.2-percent contraction in rental rates. Prices declined by 0.9 percent in projects built since 2000. Meanwhile, rents for the 1980s-generation properties increased by 1 percent. 0% -5% -10% -15% -20% 2Q 08 3Q 08 4Q 08 1Q 09 Intown Los Angeles 2Q 09 3Q 09 4Q 09 1Q 10 Los Angeles Area 2Q 10 Prices for all existing product in the Intown Los Angeles neighborhood averaged $1,635 per month, or $2.00 per square foot, as of June. Intown’s monthly rents rank as the second most expensive in metro LA. 3| Intown Los Angeles ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 44 Los Angeles Apartment Report MPF Research Forecast 1 Intown Los Angeles Forecast 2Q 2011 Annual Apartment Unit Demand Annual Apartment Unit Completions Net Inventory Change Rate Later Apartment Unit Completions Overall Occupancy Annual Change (points) Submarket 1,520 603 0.9% 335 93.4% 1.4 Metro 8,100 3,897 0.4% 496 94.4% 0.4 Though not as notable as the performance recorded in the year-ending mid-2010, demand in the Intown Los Angeles neighborhood should register in positive territory during the coming year. The neighborhood is anticipated to gain 1,520 apartment renter households in the yearending June 2011. The forecast apartment demand showing more than doubles the 603 units scheduled to come on stream during the year-ending June 2011. These new communities are expected to grow Intown Los Angeles’ apartment base by 0.9 percent in the year ahead. A little farther down the construction pipeline, one 335-unit property is slated for delivery in late 2011. Of note, roughly 20 percent of Intown LA’s apartment units currently in process consist of repositioned condo product. Looking at apartment construction in the Intown Los Angeles locale, a particularly active building pocket has emerged in downtown’s Historic Core district. Beginning at the intersection of Main and West Third Streets, The Medallion is in process. The seven-story development is being built from the ground up and will feature 192 apartments, 203,000 square feet of ground-level retail space and more A brand new apartment project, The Medallion will offer almost 200 units than 700 parking spaces. The project will in several buildings in downtown’s Historic Core district. also include an outdoor plaza and an amphitheater. Final-unit build-out of The Medallion is anticipated in late 2010. Moving a few blocks southwest to the corner of Fifth Street and Lindley Place, the 10-story Metropolitan Building is being transformed to include 84 rental units and ground-floor retail space. Residences will comprise the top six floors of the building, with floor plans ranging from studio lofts to penthouses. Department store retailer Fallas Paredes is operating in the circa 1912 building’s first three floors. Completion of the Metropolitan Building is expected in early 2011. Of note, the Metropolitan Building sits diagonally from the recently renovated Jewelry Trades Building. Additionally, the nearby 12-story Chester Williams Building is slated to receive a renovation that will include the construction of 88 apartment units. A development start date for that project has not been announced yet. Potentially representing some shadow market leasing competition for these projects, the completed Rowan condo development is located just a couple of blocks away near the corner of Fifth and Spring Streets. In early 2009, 63 units in the 206-unit project were auctioned off at below-market prices. At the very southern edge of the Historic Core, right next to the border of downtown LA’s South Park district, is a project dubbed The Blackstone. Neighborhood Effort is transforming the circa 1916 Blackstone department store into 82 loft units and ground-floor retail space. The project will feature the high ceilings typical of loft units, but without the exposed utilities, and restored 4| Intown Los Angeles ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 45 Los Angeles Apartment Report historic crown molding. The developer anticipates that The Blackstone will be ready for full occupancy in 2010’s 3rd quarter. Looking farther down the development pipeline in the Intown Los Angeles area, five apartment projects previously identified in the planning stages for the Intown Los Angeles submarket have now been placed on hold. In addition, the Brockman Building, a 12-story, 80-unit building at Seventh Street and Grand Avenue that was originally conceived as condominiums but switched to rentals during the construction process, is essentially complete but sits vacant as its developer undergoes bankruptcy proceedings. Foreclosure appears imminent. With Intown Los Angeles’ forecast demand volume coming in well ahead of scheduled new supply, occupancy in this neighborhood is anticipated to increase 1.4 points during the yearending 2nd quarter 2011. While this is the largest improvement predicted on a submarket level across the metro, Intown LA’s forecast June 2011 occupancy rate of 93.4 percent still trails the result anticipated for the metro as a whole by a full percentage point. The Metropolitan Building is being converted to include 84 apartments on top of a Fallas Paredes store. 5| Intown Los Angeles ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 46 Los Angeles Apartment Report ANNUAL APARTMENT COMPLETIONS BY SUBMARKET July 2009 - June 2010 Sub Apartment Community Address Start Finish 1 Ardmore 959 S Ardmore Ave, Los Angeles Private Developer Developer 03/08 10/09 Units 1 The Brick Lofts 652 Mateo St, Los Angeles Western Imperial 2000 LLC 01/07 10/09 21 1 WaterMarke Tow er * 705 W Ninth St, Los Angeles Meruelo Maddux Properties 01/07 10/09 214 1 Bonnie Brae Village 208 S Bonnie Brae, Los Angeles Enhanced Affordable 10/08 12/09 92 48 Development LLC 1 Factory Place Arts 1330 Factory Pl, Los Angeles Private Developer 06/07 12/09 53 1 Mindanao 1800 W Temple St, Los Angeles Advanced Development 11/08 12/09 26 1 2121 Lofts * 2121 E 7th Pl, Los Angeles Concerto Development 10/07 01/10 78 1 Miramar Village 240 S Westlake Ave, Los Angeles Enhanced Affordable 12/08 02/10 114 1 SB Tow er * 600 S Spring St, Los Angeles SB Properties 12/07 04/10 250 1 700 North Hill 700 N Hill Pl, Los Angeles Private Developer 02/07 05/10 29 1 1 Jew elry Trades Building The Spring Arcade Building 220 W 5th St, Los Angeles 541 S Spring St, Los Angeles Fifth Street Funding Inc. Fifth Street Funding Inc. 09/07 06/03 06/10 06/10 62 142 Investment Inc. Development LLC INTOWN LOS ANGELES 1,129 * Originally planned or started as a for-sale condominium property but sw itched to rental during construction. FORECAST APARTMENT COMPLETIONS BY SUBMARKET Sub Apartment Community July 2010 - June 2011 Address Developer Start Finish 1 The Blackstone 901 S Broadw ay, Los Angeles Neighborhood Effort 07/08 07/10 Units 82 1 The Medallion 334 S Main St, Los Angeles Private Developer 01/08 12/10 192 1 Orsini III 606 N Figueroa St, Los Angeles G H Palmer Associates 11/08 12/10 210 1 Factory Place Arts 1300 Factory Pl, Los Angeles Private Developer 01/09 01/11 35 315 W 5th St, Los Angeles Private Developer 10/07 02/11 Complex III 1 The Metropolitan Building INTOWN LOS ANGELES 84 603 FORECAST APARTMENT COMPLETIONS BY SUBMARKET July 2011 or Later Sub 1 Apartment Community Piero II INTOWN LOS ANGELES Address 609 St Paul Ave, Los Angeles Developer G H Palmer Associates Start Finish 06/10 10/11 Units 335 335 6| Intown Los Angeles ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 47 Los Angeles Apartment Report July 2009 – June 2010 July 2010 – June 2011 July 2011 or later 1 Intown: 90006, 90012, 90013, 90014, 90015, 90017, 90021, 90026, 90057 and 90071. 7| Intown Los Angeles ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 48 Los Angeles Apartment Report Santa Clarita Valley | 2nd Quarter 2010 8 Santa Clarita Valley Snapshot 2Q 2010 Existing Apartment Units Sampled Apartment Units % of Existing Units Quarterly Apartment Unit Demand Annual Apartment Unit Demand Quarterly Apartment Unit Completions Annual Apartment Unit Completions Annual Apartment Removals Annual Net Inventory Change Net Inventory Change Rate Overall Occupancy Quarterly Change (points) Annual Change (points) Average Effective Monthly Rent Quarterly Same-Store Rent Change Annual Same-Store Rent Change Current Trends Demand Submarket Metro 17,254 1,029,621 10,589 135,576 61.4% 13.2% 0 -2,210 430 14,280 0 1,856 220 4,369 0 0 220 4,369 1.3% 0.4% 91.4% 94.0% 0.0 -0.4 1.0 1.0 $1,413 $1,478 3.0% 0.2% 2.6% -1.1% As of June, the occupied unit count in the Santa Clarita Valley submarket matched the March level and essentially mirrored the December tally as well. Annually, however, absorption in this locale registered at 430 units, on net, thanks to gains recorded during 2009’s 3rd quarter. Demand for apartments in the 2000s-era stock registered at some 150 units during the past year. Some jobs were lost in the Santa Clarita Valley area during the year-ending 2nd quarter 2010. Most notably, Precor Inc. recently decided to move its manufacturing operations from California to North Carolina. As a result, the maker of fitness equipment shed almost 100 local positions over the course of 2010’s first six months. Supply While the Santa Clarita Valley area didn’t receive any new apartment additions in 2010’s first half, the submarket did receive 220 units during the year-ending June. This annual new supply volume grew the submarket’s apartment inventory by 1.3 percent, bringing the existing unit base to 17,254 units as of mid-2010. 1 | Santa Clarita Valley ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 49 Los Angeles Apartment Report Occupancy As of June, the Santa Clarita Valley area landed at the bottom of the barrel in terms of apartment occupancy. The mid-2010 rate in this neighborhood came in at 91.4 percent, 2.6 points below the metro Los Angeles norm. The 2nd quarter occupancy rate matched the 1st quarter reading. Despite a 0.1-point dip in occupancy between late 2009 and midOverall Occupancy 2010, the June 2010 showing did register 1 point higher than the June 2009 figure. 100% 95% 90% 85% 80% 2Q 08 Looking at occupancy in Santa Clarita Valley’s product age niches with ample sample, the 2nd quarter reading was weakest in the 1990s-era communities at 90 percent. Faring not much better were apartments built since 2000, which were 90.9 percent full. Meanwhile, the sample of 1980s-generation product registered occupancy at 92.1 percent. Between March and June, occupancy dipped 0.1 point in top-tier developments constructed in the 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2000s and 1990s, while properties from the 08 08 09 09 09 09 10 10 1980s saw a 0.1-point uptick in occupancy. Santa Clarita Valley Los Angeles Area On an annual basis, occupancy improved 2 points in the 1980s-era product, while the top-tier units from the 2000s saw occupancy falter by roughly 1 point. Rents In the Santa Clarita Valley locale, effective rental rates actually increased by 3 percent between early 2010 and mid-2010, with this change measured on a same-store basis. With moderate price increases also recording in 2009’s final six months, the annual rent change figure registered in positive territory at 2.6 percent. This was the biggest price increase on a Annual Same-Store Rent Change submarket basis recorded in the Los Angeles metro during the year-ending June 2010. 4% 2% Looking at annual rent change by product age niche, a 5.2-percent price hike was recorded in the 1980s-era units. Meanwhile, the stock of apartments built since 2000 saw prices climb 1.7 percent, while the 1990sgeneration stock recorded a mild rent increase of 0.5 percent. 0% -2% -4% -6% -8% -10% 2Q 08 3Q 08 4Q 08 1Q 09 Santa Clarita Valley 2Q 09 3Q 09 4Q 09 1Q 10 2Q 10 Rents for all existing product in Santa Clarita Valley averaged $1,413 per month, or $1.489 per square foot, as of June. Los Angeles Area 2 | Santa Clarita Valley ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 50 Los Angeles Apartment Report MPF Research Forecast 8 Santa Clarita Valley Forecast 2Q 2011 Annual Apartment Unit Demand Annual Apartment Unit Completions Net Inventory Change Rate Later Apartment Unit Completions Overall Occupancy Annual Change (points) Submarket 110 0 0.0% 0 92.0% 0.6 Metro 8,100 3,897 0.4% 496 94.4% 0.4 In the suburban Santa Clarita Valley locale, the occupied apartment count is projected to rise by 110 units during the year-ending 2nd quarter 2011. With no new supply set to come online in the next 12 months, this forecast demand tally will serve to backfill existing vacancies. Consequently, occupancy is expected to increase by 0.6 points between June 2010 and June 2011. However, the resulting occupancy rate of 92 percent would still register as the lowest in the Los Angeles area, trailing the projected metro average by 2.4 points. ANNUAL APARTMENT COMPLETIONS BY SUBMARKET July 2009 - June 2010 Sub 8 Apartment Community The Vistas of West Hills Address 24015 Copper Hill Dr, Valencia Developer LNR Property Corp. Start Finish 01/08 08/09 SANTA CLARITA VALLEY Units 220 220 FORECAST APARTMENT COMPLETIONS BY SUBMARKET July 2010 - June 2011 Sub Apartment Community Address Developer Start Finish 8 n.a. n.a. n.a. n.a. n.a. SANTA CLARITA VALLEY Units n.a. 0 FORECAST APARTMENT COMPLETIONS BY SUBMARKET July 2011 or Later Sub 8 Apartment Community n.a. SANTA CLARITA VALLEY Address n.a. Developer n.a. Start n.a. Finish n.a. Units n.a. 0 3 | Santa Clarita Valley ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 51 Los Angeles Apartment Report July 2009 – June 2010 July 2010 – June 2011 July 2011 or later 8 Santa Clarita Valley: 91321, 91342, 91350, 91351, 91354, 91355, 91381, 91387 and 91390. 4 | Santa Clarita Valley ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 52 Los Angeles Apartment Report Methodology MPF Research reports assess recent general conditions in the apartment market and forecast market fundamentals for the coming year. Analysis focuses on investment opportunities and obstacles at the submarket level. Data in this report represent the best information available at publication time. Statistics will be similar to, but not necessarily identical to, information published in previous reports, as MPF Research continually updates its database and sometimes revises historical performances if information deemed more accurate becomes available. Identification of near-term opportunities is not a blanket endorsement of activity within any submarket. Even in submarkets that appear promising overall, investment prospects are not uniformly favorable. Conversely, pockets of opportunity may exist in submarkets that are not positioned favorably overall. Investment decisions should be based on market research tailored to the unique potential of each property. Key components of the MPF Research methodology include the following. Universe/Property Characteristics: The MPF Research apartment survey examines trends in rental properties that are attached dwellings with five or more units. For the most part, these are traditional apartment communities. Units within projects that were built as for-sale properties (condominiums or townhomes) can be included if a sizable block of product is being leased through a central marketing source. Individual units purchased for investment purposes and now offered for lease on a one-off basis are not tracked. Existing unit stock is estimated starting with rental communities featuring five or more units, according to the 2000 Census, and then adding in subsequent completions and properties that convert from subsidized to market-rate product, and subtracting units taken out of the rental pool for condominium conversion or demolition. Thus, net inventory change does not solely reflect new construction. Affordable housing properties generally are included in the stock, even if there are restrictions on resident incomes, as long as residents are paying their own rent. Public housing developments where the properties are owned by government agencies or where government agencies pay resident rents are excluded. College dorms likewise are excluded. Privately-owned student housing is included in the inventory count, since the presence of these properties often impacts the performances of traditional communities. Most of the property-level information that goes into the analysis presented in this report is provided by owners and managers with significant unit stocks. Thus, while five units is the minimum size for a property to be included in the analysis, survey respondents generally are owners or managers with the market’s larger projects. Typical project size for the communities that MPF Research surveys each quarter hovers at 220 to 230 units nationally. Los Angeles’ typical property size is smaller, usually 160 to 180 units. Sample/Survey Process: Quarterly performance statistics in this report were calculated based on information provided for 135,576 apartment units (about 13 percent of all existing units in the Los Angeles area) during June 2010. The survey area includes Los Angeles County. The table at the end of this section shows the distribution of survey response by submarket, as well as the percentage of existing units represented by the current sample. Most of the information in the MPF Research quarterly survey is collected through mail questionnaires that are completed by apartment community owners or managers. Where response by mail is not adequate to produce statistically reliable information on the submarket level, additional properties are shopped by telephone and/or by site visits. 13 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 53 Los Angeles Apartment Report Information is collected for each property’s individual floor plans (e.g., one-bedroom units sized at 750 square feet), not by general floor plan category (e.g., one-bedroom units sized at 600 to 875 square feet). In a floor plan that includes a den, the den is counted as a bedroom. Computerized record-keeping allows MPF Research to compare current and historical information on an individual property. If more accurate information becomes available, historical data may be recalculated to reflect these revisions, allowing for meaningful comparison of the current performance to the historical trend. For the most part, revisions that occur reflect that a property’s new owner or manager reports a different completion date for the project or a set of floor plans that is different from the information in the data record established initially. For the most part, modification of historical information for an individual property does not meaningfully impact overall submarket or metro-level results reported previously, as sample size is large enough to prevent an individual property from notably skewing overall performance results. Submarkets: The submarkets established by MPF Research generally reflect areas featuring similar properties that compete within the same pool of resident prospects. Submarket boundaries are established considering logical obstacles like freeways as well as shifts in general neighborhood character. Key firms active in the apartment market of a given metro are consulted when determining initial submarket boundaries. To the extent possible, submarket boundaries follow zip code boundaries to facilitate placement of a property within a specific submarket. Absorption/Demand: MPF Research defines absorption, or demand, as the increase in physically occupied units (existing units multiplied by the occupancy rate) from one period to another. Absorption calculations in this report exclude preleasing to avoid double-counting residents now occupying units and simultaneously preleasing other units. Absorption calculations are impacted by changes in existing inventory. Net move-outs can occur simply because the size of the existing inventory shrinks due to conversions of product from rental stock to condominiums or due to demolitions. Thus, occupancy actually can rise at the same time that net demand is negative. Absorption of New Completions: Frequently, management of apartment communities under construction will begin leasing units as they are finished out. For consistency purposes, units are not counted as absorbed until the period that the entire property is completed. Thus, absorption will tend to be somewhat undercounted in the periods preceding completion of the property. This effect is most pronounced when a large number of units are under construction. Absorption Forecasts: A macro-to-micro approach is used in forecasting the number of units to be absorbed in a submarket. That is, absorption is forecast for the entire metro area and then is distributed among submarkets on the basis of the anticipated capture rate of each submarket. Primary variables in the mathematical formula used to forecast absorption in any metro include local economic growth (annual job gain) and recent trends in apartment absorption vs. available supply (vacant existing apartments plus units under construction). Past trends suggest that future absorption will be a function of these variables. For each submarket, the ratio of units absorbed vs. available in supply in recent historical periods is applied to current available supply. The resulting weighted factors are summed and each submarket’s share of total area absorption is calculated. This share is then multiplied by the expected metro area absorption to obtain forecasts for each submarket. This forecasting model does not reflect non-quantifiable factors such as zoning, new road networks, new employment centers, etc. As a result, this methodology provides a sound objective basis for comparing submarkets. However, if unique market factors exist, such subjective factors may need to be considered when evaluating a specific submarket. 14 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 54 Los Angeles Apartment Report Completions: MPF Research collects construction permit data each quarter from all of the municipalities across a metro. Developers or contractors are called to verify the number of units and the month when all units are expected to be completed. These completion dates are updated as development proceeds to maintain a continuing record of ongoing construction. All units in a property generally are counted as new supply during the quarter when the last apartments in the project are finished. Occasionally, units in an extremely large property will be brought into the existing unit count at periodic intervals as construction proceeds: such exceptions to MPF Research’s standard methodology will be noted in the supply discussion of the report. Occupancy: Occupancy reflects the share of the existing stock physically occupied at any point in time. Preleased units are not part of the occupancy calculation. Rental Rates: The rental rates presented by MPF Research reflect a property’s rent structure at the point of time of the survey, rather than the property’s actual revenues (which would be shaped by rents in place when ongoing leases were signed). Furthermore, rents represent the rates for whatever sort of product is offered in the individual market in the way that the individual owners/managers package it. Thus, no adjustments are made for utilities or for specific amenities (e.g., parking will be included if that is the way the rent is presented to the consumer: it will be excluded if it’s an extra cost feature). At a project where rents are dramatically outside the mainstream for whatever reason (e.g., the units are furnished, apartment sizes are substantially different from the norm, etc.), the community simply is excluded from rent calculations, so that the rents presented by MPF Research reflect the rates for a “normal” project in that particular market. Unless noted otherwise, all rents presented in MPF Research publications are effective rates, to the degree possible. Thus, the impact of concessions that include free rent periods or discounts over the term of the lease, are calculated into the rent structure. Values of leasing incentives that don’t entail free or discounted rents cannot be accurately measured and, thus, are not taken into consideration in MPF Research rent figures. For the most part, concession information presented to MPF Research will reflect the rent structure established by a company’s regional operations. Many firms give on-site personnel authorization to offer deeper discounts to close specific leases. Thus, it is not unusual for the concession information provided to MPF Research to understate actual discounts given in the marketplace. Rents are calculated for each property’s individual floor plans (e.g., one-bedroom units sized at 750 square feet), not by general floor plan category (e.g., one-bedroom units sized at 600 to 875 square feet). In a floor plan that includes a den, the den is counted as a bedroom. Rent Change: All rent change figures presented in MPF Research publications are same-store, rather than total sample, calculations. This measure compares rents for the same specific group of properties between two points in time, thus gauging the typical performance for an apartment community operating during that time frame. Examination of same-store rent change eliminates the misrepresentation of market conditions that can result from sampling differences in two reporting periods. 15 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 55 Los Angeles Apartment Report 1 2 3 4 5 6 7 8 9 10 11 1 2 3 4 5 6 7 8 9 10 11 SAMPLE DISTRIBUTION BY SUBMARKET BY BEDROOM TYPE 2nd Quarter 2010 Percent Total Total of Base Bedroom Type Submarket Existing Sampled Sampled Eff One Two Intown Los Angeles 70,598 9,920 14.1% 1,748 4,296 3,605 Hollywood 179,446 20,748 11.6% 2,343 10,533 7,238 West Los Angeles 140,204 15,904 11.3% 1,043 8,401 5,802 South Bay Cities 74,370 10,008 13.5% 780 4,443 4,023 Long Beach 70,795 7,202 10.2% 303 3,452 3,212 Tri Cities 120,118 7,172 6.0% 305 3,672 2,574 San Fernando Valley 131,316 22,364 17.0% 1,289 10,950 9,068 Santa Clarita Valley 17,254 10,589 61.4% 66 3,196 5,994 San Gabriel Valley 52,075 16,789 32.2% 264 6,750 8,892 East Los Angeles 155,535 7,942 5.1% 48 3,550 3,981 Antelope Valley 17,910 6,938 38.7% 68 1,828 4,336 LOS ANGELES AREA 1,029,621 135,576 13.2% 8,257 61,071 58,725 Three 234 334 648 622 235 446 1,031 1,333 883 363 706 6,835 SAMPLE DISTRIBUTION BY SUBMARKET BY YEAR COMPLETED 2nd Quarter 2010 Percent Total Total of Base Year Completed Submarket Existing Sampled Sampled 2000+ 90-99 80-89 70-79 Intown Los Angeles 70,598 9,920 14.1% 5,842 1,254 1,401 287 Hollywood 179,446 20,748 11.6% 3,418 1,643 4,349 4,181 West Los Angeles 140,204 15,904 11.3% 3,746 1,580 1,372 5,254 South Bay Cities 74,370 10,008 13.5% 1,621 661 1,203 3,303 Long Beach 70,795 7,202 10.2% 698 387 2,239 1,758 Tri Cities 120,118 7,172 6.0% 1,828 793 1,773 1,748 San Fernando Valley 131,316 22,364 17.0% 3,937 2,281 5,838 7,833 Santa Clarita Valley 17,254 10,589 61.4% 4,255 2,305 3,699 130 San Gabriel Valley 52,075 16,789 32.2% 150 1,028 3,993 8,355 East Los Angeles 155,535 7,942 5.1% 575 n.a. 1,377 2,860 Antelope Valley 17,910 6,938 38.7% n.a. 304 5,971 663 LOS ANGELES AREA 1,029,621 135,576 13.2%- 26,070 12,236 33,215 36,372 Pre-70 1,136 7,157 3,952 3,220 2,120 1,030 2,475 200 3,263 3,130 n.a. 27,683 16 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 56 Los Angeles Apartment Report Submarket Zip Codes Listed below are the zip codes for the submarkets listed in the Los Angeles Apartment Report. 1 Intown: 90006, 90012, 90013, 90014, 90015, 90017, 90021, 90026, 90057 and 90071. 2 Hollywood: 90004, 90005, 90010, 90019, 90020, 90027, 90028, 90029, 90036, 90038, 90039, 90046, 90068, 91601, 91602, 91604, 91605, 91606 and 91608. 3 West Los Angeles: 90024, 90025, 90034, 90035, 90048, 90049, 90064, 90066, 90067, 90069, 90073, 90077, 90094, 90095, 90210, 90211, 90212, 90263, 90265, 90272, 90291, 90292, 90401, 90402, 90403, 90404 and 90405. 4 South Bay Cities: 90045, 90245, 90250, 90254, 90260, 90266, 90274, 90275, 90277, 90278, 90293, 90304, 90501, 90502, 90503, 90504, 90505, 90710, 90717, 90731 and 90732. 5 Long Beach: 90701, 90703, 90712, 90713, 90715, 90716, 90744, 90745, 90746, 90747, 90755, 90802, 90803, 90804, 90805, 90806, 90807, 90808, 90810, 90813, 90814, 90815, 90822 and 90840. 6 Tri Cities: 90031, 90032, 90041, 90042, 90065, 91006, 91007, 91010, 91016, 91020, 91024, 91030, 91040, 91101, 91103, 91104, 91105, 91106, 91107, 91108, 91123, 91201, 91202, 91203, 91204, 91205, 91206, 91207, 91208, 91352, 91501, 91502, 91504, 91505, 91506, 91521, 91522, 91523, 91731, 91732, 91775, 91776, 91780, 91801 and 91803. 7 San Fernando Valley: 90290, 91301, 91302, 91303, 91304, 91306, 91307, 91311, 91316, 91324, 91325, 91326, 91330, 91331, 91335, 91340, 91343, 91344, 91345, 91356, 91364, 91367, 91371, 91401, 91402, 91403, 91405, 91406, 91411, 91423, 91436 and 91607. 8 Santa Clarita Valley: 91321, 91342, 91350, 91351, 91354, 91355, 91381, 91387 and 91390. 9 San Gabriel Valley: 90601, 90602, 90603, 90604, 90605, 90606, 90631, 90638, 90639, 90650, 90670, 91702, 91706, 91711, 91722, 91723, 91724, 91740, 91741, 91744, 91745, 91746, 91748, 91750, 91765, 91766, 91767, 91768, 91773, 91789, 91790, 91791 and 91792. 10 East Los Angeles: 90001, 90002, 90003, 90007, 90008, 90011, 90016, 90018, 90022, 90033, 90037, 90040, 90043, 90044, 90047, 90056, 90058, 90059, 90061, 90062, 90063, 90201, 90202, 90220, 90221, 90222, 90230, 90232, 90240, 90241, 90242, 90247, 90248, 90255, 90262, 90270, 90280, 90301, 90302, 90303, 90305, 90506, 90640, 90660, 90706, 91733, 91754, 91755 and 91770. 11 Antelope Valley: 91001, 91011, 91023, 91042, 91043, 91046, 91214, 91310, 91384, 93243, 93510, 93532, 93534, 93535, 93536, 93543, 93544, 93550, 93551, 93552, 93553, 93563 and 93591. 90023, 90089, 90249, 90723, 17 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 57 Los Angeles Apartment Report Los Angeles Area 18 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 58 Los Angeles Apartment Report About MPF Research Successful real estate investments require having the right product in the right market at the right time. And MPF Research can provide the apartment market intelligence and decision-making tools needed to determine what product, market and timing are right for you. MPF Research’s product suite helps you make the decisions that maximize the value of your apartment investments. Tools guide you through smart development or acquisition choices, effective operations, and appropriate disposition strategies. These solutions offer sophisticated and timely support to ensure that valuable opportunities don’t slip through the cracks. At the heart of MPF Research’s operations, the company’s database of individual apartment community performances is the largest in the industry. For the most recent quarter, occupancy and rent results were tracked for 23,000 apartment communities with roughly 5.3 million units. Also, ongoing construction is monitored on a project-by-project basis in many cities. Publications MPF Research’s quarterly U.S. Apartment Market Report examines occupancy and rent trends on the metro level. Beginning with 1st quarter 2009 data, coverage expands to 64 markets with the additions of Baton Rouge, Colorado Springs, Fort Myers/Naples, Hartford, New Orleans, New York and Ventura County. Local apartment reports that take the trend analysis down to the neighborhood level are available for the following markets: Atlanta, Austin, Bay Area (San Francisco, Oakland, San Jose), Boston, Charlotte, Chicago, Dallas/Fort Worth, Denver, Houston, Inland Empire, Jacksonville, Kansas City, Las Vegas, Los Angeles, Nashville, Orange County, Orlando, Phoenix, Portland, Raleigh, Sacramento, San Antonio, San Diego, Seattle, South Florida (Miami, Fort Lauderdale, West Palm Beach), Tampa Bay and Washington, DC. 19 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 59 Los Angeles Apartment Report Multi-Housing Outlook Multi-Housing Outlook, which MPF Research produces in conjunction with Boston-based CBRE Econometric Advisors (formerly Torto Wheaton Research), is an interactive forecast of market fundamentals that examines the outlooks for 60 metros and more than 530 submarkets. Multiple scenarios assuming different economic conditions are provided. Apartment Markets Conferences MPF Research Apartment Markets Conferences update you on trends in performance fundamentals and help you form profitable business strategies necessary to sustain a competitive edge. These one-day seminars are packed with sessions that focus on a particular region of the country, plus a working lunch and great opportunities to network with the presenters and other attendees. The Southeast Apartment Markets Conference covers the Atlanta, Charlotte, Nashville, Orlando, Raleigh, South Florida and Tampa areas. The Texas/Southwest event highlights the Austin, Dallas/Fort Worth, Denver, Houston, Las Vegas, Phoenix and San Antonio markets. MPF Research 4000 International Parkway Carrollton, TX 75007 972.820.3100 www.mpfresearch.com 20 ©2010 MPF Research. The Los Angeles Apartment Report is published quarterly by MPF Research. Material in this report is for the sole and exclusive use of subscribers and may not be reprinted, resold, or recorded in any manner, in whole or in part, without the specific written permission of MPF Research. Any infringement will be subject to legal redress. 60
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