Transcript Rutledge - An Institutional Real Estate Investment Perspectivex

What Are 20 Indicators Everyone Should Know?
An Institutional Real Estate Investment Perspective
C2ER’s 52nd Annual Conference
Oklahoma City
June 7, 2012
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Summary: Market Selection Road Map
1) Screening for Qualified Markets
2) Key Drivers of Local Real Estate Fundamentals
3) Relative Market Performance
Screening for Qualified Markets
 Large, diverse employment base
• Data: Total and major industry employment
• Source: BLS data via Moody’s Analytics
 Availability of real estate fundamentals data
• Data: Market and submarket-level supply, demand, occupancy rates and rents
• Sources: CBRE – Econometrics Advisors and Axiometrics
 Sizeable inventory by property type
 Sizeable market value representation in the NCREIF Property
Index
• Data: Aggregate value of institutional real estate investor holdings
• Source: National Council of Real Estate Investment Fiduciaries
Invesco Real Estate Qualified Market Map
Seattle
Minneapolis
Fairfield County
Portland
Chicago
Denver
Philadelphia
San Francisco
Oakland
Edison
Baltimore
Washington DC
San Jose
Los Angeles
Boston
New York
Newark
Riverside
Orange County
San Diego
Phoenix
Ft. Worth
Dallas
Atlanta
Austin
Houston
Orlando
San Antonio
Tampa
West Palm Beach
Fort Lauderdale
Miami
Note: Markets shown not necessarily qualified for investment in all property types.
Key Drivers of Tenant Demand and Rent Growth
All Property Types
•Metro job growth (BLS)
•Metro GDP growth (BEA/Moody’s Analytics)
•Metro inflation (BLS)
Apartment
•Net migration as a share of metro
population (BOC)
•Metro housing affordability index (NAR)
•Metro existing median home price
growth (NAR)
Industrial
•Metro industrial GDP growth (Moody’s
Analytics)
•US industrial production growth (Federal
Reserve Board)
Office
•Metro office-using job growth (BLS/
Moody’s Analytics)
Retail
•Metro retail sales growth (BOC/
Moody’s Analytics)
•Metro disposable personal income
growth (BOC/Moody’s Analytics)
•Metro retail output growth (BEA/
Moody’s Analytics)
•US household net worth (Federal
Reserve Board)
Relative Performance Indicators
 Total returns by market/property type (NCREIF)
 Current value capitalization rates by property type (NCREIF)
 Occupancy rates by market/property type (CBRE - Econometric
Advisors)
 Construction by market/property type (CBRE- Econometric
Advisors)
 Underwritten apartment capitalization rates (ACLI)
Thank You