H1 2020 Mid-Atlantic Multifamily Market - Trends in the - CBRE
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H1 2020
Trends in the
Mid-Atlantic
Multifamily Market
District of Columbia
Northern Virginia
Suburban Maryland
Baltimore
THE WOODLEY
1
PREFACE
CBRE is pleased to release the H1 2020 Mid-
Atlantic Multifamily Report, highlighting the
most current and comprehensive data available
for the region. Produced by the Washington DC
Multifamily Investment Properties Team, this
report has been assembled by local experts to
empower the decision making and inform those
interested in multifamily in the Mid-Atlantic.
This report compiles research from a variety of
in-house and third-party data sources to explain
the market at a granular level.
Data contributions and validations to this
publication were made by:
• CBRE Research
• CBRE Econometrics Advisors
• Claritas
• Yardi Matrix
• Axiometrics
• Delta Associates
• Bureau of Labor Statistics
• CoStar
This Washington DC Investment Properties Team
has access to the most comprehensive data on
the market and has a deep understanding of the
metrics involved.
CBRE Multifamily consists of more than 300
dedicated professionals nationally specializing in
all aspects of multifamily real estate brokerage
and finance, providing investment and advisory
services to meet the needs of investors across the
multifamily investment spectrum. With offices in
65 cities across every major U.S. market, our
Team also maintains a strong global presence,
with offices on nearly every continent offering
strategic advice and execution for residential
and multifamily assignments worldwide.
We welcome any inquiries you may have and
encourage you to contact our Team with any
questions.
2
Executive Summary PG 4
TABLE OF CONTENTS
Resilience Proven in
PG 5
Prior Recessions
Outlook PG 6
The District PG 8
Northern Virginia PG 12
Suburban Maryland PG 16
Baltimore PG 20
Contacts PG 24
3
MID-ATLANTIC MULTIFAMILY MARKET
EXECUTIVE SUMMARY
The Mid-Atlantic region began 2020 on a great note—positive rent growth across all markets, prolific development activity,
and high transaction volumes. All of a sudden, in mid-March, COVID-19 shook the nation. We are now experiencing the Mid-Atlantic
effects of the pandemic on multifamily operations and transaction velocity. However, several early signs indicated that the Resilience
Mid-Atlantic would fare well compared to other large metros, and indeed it has. Historically, the Washington DC metro is
recognized as the most risk-averse employment base due to its low employment rates in industries such as Leisure & Hospitality
and Retail. Additionally, the federal government and local federal spending has provided a unique degree of insulation to the
regional economy. Intellectual capital has also been rich within the region: a large supply of highly educated talent bolsters
Risk-Averse
the strong cyber security, biotech, bio-sciences, defense, and technology industries in the Mid-Atlantic. Employment Base
While the Mid-Atlantic multifamily market was impacted by the pandemic, it has shown its continued resilience in the face of
Urban to Suburban
unprecedented market volatility. In Q2 2020, across national Tier II markets, the Baltimore metro was ranked first and second
in the nation in terms of rent growth and lowest vacancy change, respectively. Vacancy in the Baltimore metro increased by
Migration
only 80 bps and rent growth held steady. Across national Tier I markets, the Washington DC metro experienced similar success
as it ranked fourth in the nation in terms of rent growth and lowest vacancy change. The Washington DC metro experienced a
90 bps increase in vacancy and a 2.3% decrease in overall rents, which, compared to the rest of the nation, is quite favorable.
Net absorption in the Washington DC metro as a percentage of total inventory was the second highest in the nation across
large metros, and the only gateway market to make it to the top 20 across all national markets.
Although job losses across the country were substantial, the Baltimore and Washington DC metros fared well on a national
scale. The Washington DC metro saw fewer job losses than any other large metro in the country, likely due to federal
government activity in response to the pandemic. In June, out of 51 MSA’s, Baltimore ranked 8th in the nation for the
lowest unemployment rate at 8.0%, and Washington DC followed close behind in 10th place at 8.4% unemployment. In
recent years, the Mid-Atlantic economy has become more diversified with tech, education, and private business on the rise.
Additionally, while sequestration reduced the footprint of the federal government and its presence in the region, it has grown
in recent months and played an integral role in keeping workers employed and stimulating the economy.
The Washington DC metro will continue to see an influx of supply, with an estimated 15,150 units delivering in the next 12
months. Construction has not slowed since the start of the year, and over 3,300 units began construction in the second
quarter of 2020.
As a result of the pandemic, data suggests that renters are now favoring properties in lower density areas. In the Washington
DC metro, rent growth in low-rise apartments outperformed rent growth in high-rise apartments by 2.1%. In the Baltimore
metro, the lower-density suburbs saw only a slightly negative growth rate of 10 bps, while Baltimore City rents fell 3.0%.
MID-ATLANTIC MULTIFAMILY MARKET
BALTIMORE
SUBURBAN MARYLAND
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NORTHERN VIRGINIA
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4
MID-ATLANTIC MULTIFAMILY MARKET
RESILIENCE PROVEN IN PREVIOUS RECESSIONS
During previous recessions, the Mid-Atlantic, anchored by Washington DC and Baltimore, proved to be the most resilient region in the country due to
its diversified economy, strong market drivers, and the presence of the nation’s largest employer—the federal government. The stability and dynamism
of the region’s economy underpins its resilient multifamily real estate market fundamentals.
EXECUTIVE SUMMARY
• Minimal Vacancy Change: DC and Baltimore were ranked #3 and #5, respectively, in terms of least amount of change in vacancy across the
country during the 2008 recession at an average increase of only 150 bps.
• Most Stable Rents in the Nation: Baltimore and DC ranked #1 and #2, respectively, for least impacted rent growth in the nation and recovered
in just six quarters, compared to a national average of 12 quarters. The region’s peak-to-trough rent change was a mere 2% during the previous
recession—lower than the nearly 6% national average.
• Prolific Investment Market: Since recovery in 2010, DC’s and Baltimore's per unit increased by an average of 6% and 4%, respectively, as
investors remain bullish on the region as a powerhouse center of the East Coast.
• Durability of Employment Base: DC and Baltimore have historically lower unemployment rates compared to the U.S. The strong and prominent
labor markets of “Eds and Meds,” biotech, and government are some of the most resilient industries through recessions. Tech has also proven to
be a pillar of the economy, with significant future growth centered around the establishment of Amazon’s new HQ2. Washington is ranked #1
for lowest percentage of at-risk employment segments in the current downturn.
These strong economic drivers will bolster the multifamily market, drive demand, and lead the region towards future growth.
METRO MARKET RENT & VACANCY CHANGE IN LAST DOWNTURN DC METRO YOY AVERAGE RENT GROWTH
0 Class A Class B Class C National
Least Severe Baltimore
-2 10%
Downturn Washington, D.C.
Philadelphia
-4 Minneapolis 8%
Detroit St. Louis
-6 San Diego Long Island Boston 6%
Rent Change (%)
Tampa Chicago
YoY Rent Growth
Miami Dallas/Ft. Worth 4%
-8 Houston
Orlando Los Angeles Denver
Inland Empire U.S. 2%
Orange County
-10 New York City
Oakland 0%
San Francisco
-12 Atlanta
-2%
-14 Seattle Most Severe -4%
-16
Phoenix Downturn ClassQ1
A Q3 Class
Q1 B Q3 Class CQ3
Q1 Q1 National
Q3
2008 2008 2009 2009 2010 2010 2011 2011
100 150 200 250 300 350 10%
Vacancy Change (Bps)
8%
BALTIMORE METRO YOY AVERAGE RENT GROWTH
WASHINGTON, DC & BALTIMORE METROS’ VACANCY
6%
7%
YoY Rent Growth
10
6% 4%
5% 8
Vacancy
4% 6 Recession 2%
3% 4 Washington DC
2% 0%
2
1% Baltimore
0% 0
-2%
-4%
Tech Post Global Financial Crisis Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3
Tech Bust Post 9/11 Recession Forecast
Boom Recovery
2008 2008 2009 2009 2010 2010 2011 2011
CLICK HERE TO READ THE FULL REPORT ON CBRE’S
RESEARCH GATEWAY
5
MID-ATLANTIC MULTIFAMILY MARKET
MID-ATLANTIC H1 2020 ACCOLADES
• Washington DC metro saw fewer YoY job losses than any other • Across Tier I markets, Washington DC ranked fourth in the
large metro in the country nation in terms of rent growth and lowest vacancy change
•B altimore (8.0%) and Washington DC (8.4%) are ranked 8th •Washington DC ranked #1 most risk-averse metro for
and 10th for lowest unemployment rate across the largest 51 employment base in the recent downturn
U.S. metros •W ashington DC ranked second in the nation in CBRE’s Scoring
•W ashington DC’s net absorption as a percentage of total Tech Talent report and has seen 10% industry growth since
inventory was the second highest in the nation for large metros 2015
•A cross Tier II markets, Baltimore ranked first and second in
the nation in terms of rent growth and lowest vacancy change
OUTLOOK
The Mid-Atlantic is a booming market for millennials, empty nesters, and many others to live, work, and play in. There are some
challenges for developers, investors, and property managers in the short-term, but the long-term future is bright. The region’s
economy has strong fundamentals, bolstered by the largest employer in the nation, the federal government.
ADVANTAGES AND CHALLENGES FOR THE MULTIFAMILY INVESTOR/DEVELOPER
ADVANTAGES: CHALLENGES:
Growing Tech Talent
Significant Pipeline
Washington DC has risen to the No. 2 spot on CBRE’s
The Mid-Atlantic region will continue to see an influx
annual tech talent report, coming in as the runner-up to
of supply over the next few years. Washington DC will
the San Francisco Bay Area. Washington has over 263,000
experience an estimated increase of 15,150 units in the
tech workers and has experienced 10% growth since 2015.
next 12 months. Construction has not slowed since the
However, Washington DC’s average apartment asking rate
start of the year, and over 3,300 units began construction
is ranked 8th in the nation, indicating that it is one of the
in the second quarter of 2020. In Baltimore, 2,437 units
most affordable areas with the highest concentration of
delivered in H1 2020 and 6,906 units are on track to
tech talent in the nation. This growing labor market in high
deliver in the next 36 months. Developers are optimistic
paying industries will continue to drive wages up and increase
about future deliveries in 2021 with an expected market
demand for Class-A and Class-B multifamily product.
recovery that will renew demand.
Click here to read CBRE’s July 2020 Tech Talent Report
Vacancy Increases
The Success of Virtual Tours While the Mid-Atlantic has performed at the top of the
Virtual tours have become the new normal for leasing nation, overall vacancy has increased in Washington DC
offices in the Mid-Atlantic. The per-project lease up rate in and Baltimore by 90 bps and 80 bps, respectively, since
Washington DC is 14 units per month, down only one unit Q2 2019. Unemployment and increased work from home
from Q2 2019. In the Baltimore metro, there are currently flexibility have caused residents to consider alternative
18 projects in lease up with an average absorption rate of housing to save money on rent.
15 units per project per month.
Eviction Moratoriums
High Rent Collections
The Washington DC Council’s emergency measures to
Rent collections across the nation have been substantially
respond to the pandemic’s economic impacts included
higher than expectations in H1 2020. The National
a freeze on evictions and a prohibition on rent increases
Multifamily Housing Council reported that 93.0% and
through October 2020. In Northern Virginia, eviction
92.2% of residents paid rent across the nation in May and
freezes were extended to September 8, 2020. In Maryland
June, respectively. Approximately 94.0% of Washington
there are currently no eviction restrictions.
DC residents paid rent in April, and 89.2% of Baltimore
residents paid rent in May.
6
MID-ATLANTIC MULTIFAMILY MARKET
STRENGTH OF MULTIFAMILY INVESTMENTS
DEBT MARKETS
Debt for multifamily investments is available at historic levels. Interest rates are at all-time lows and offer multi-year interest-only periods. These
low-rate, interest-only loans allow investors to achieve as high cash-on-cash leveraged returns as they have ever been able to achieve in the
multifamily market, and have helped to maintain low cap rates. Currently, attractive debt is available and equity is plentiful, which typically means
that private capital buyers have strong appetites. There is a consensus among investors that multifamily, as a need-based asset type, remains a
safe investment, given the ubiquitous need for housing.
While the CMBS markets have shown some distress, the agency loan market has remained active. Through the COVID-19 pandemic, the GSEs
have stepped up to fulfill their mission of providing liquidity to the multifamily market. While their rates are at historically low levels, they have
increased their reserve requirements to protect themselves against current of future renter’s inability to make rent payments as a result of the
pandemic. These reserve requirements are sized to six months and are released to the owner once the property has maintained certain occupancy/
rental income requirements for a period post-closing and, in the case of Freddie Mac, once the emergency declarations and/or stay at home
orders have been lifted at the federal and local level. These reserves typically amount to between 3% to 6% of the loan amount and most borrowers
are willing to accept these requirements given the benefit of locking in sub 3% interest only, long term debt. As conditions stabilize or if a borrower
is seeking relatively low leverage, the requirement for debt service escrow is likely to mitigate or go away.
AMAZON HQ2
Amazon’s HQ2 is a generational market catalyst for employment and rent growth. The new headquarters in Crystal City is slated to create
37,000+ direct jobs over the next 14 years. Amazon HQ2 is expected to occupy over 4M SF of office space accounting for 33% of Crystal City’s
existing office inventory. The expected average annual salaries of $150,000 for Amazon employees could support apartment rents of more than
$3,750 per month. As of Q2 2020, Amazon has already hired over 1,000 employees. It is estimated that Amazon will bring 1,200 employees in
2020 and an additional 2,000 employees in 2021. By 2023, when the two-million square foot campus near Pentagon City opens, Amazon will
employ over 5,000 employees at HQ2. The second phase of construction will continue for several years, with a full build-out of over 4M SF in the
newly termed submarket “National Landing.” Amazon has received approximately $7.52M in subsidies for job creation from the state of Virginia
and Arlington County. Multifamily communities proximate to HQ2 are already experiencing significant rent growth. As residents are priced out of
Arlington County, increased demand will radiate throughout Northern Virginia as residents seek a discount to in-fill Northern Virginia.
The Amazon “Multiplier Effect”
Amazon will not only draw entrepreneurs to the area, but will also serve as a hub for startups and a magnet for venture capital within the greater
DC MSA. An infusion of new jobs to any region creates what economists call the “multiplier effect”. The multiplier effect implies that Amazon’s
37,000 employees could increase to as many as 185,000+ indirect jobs and “multiply” outwards.
Demand for an additional 40,000- THE DISTRICT
60,000 rental units as a result of the
“Amazon Effect”
NORTHERN
VIRGINIA
25,000-35,000 new STEM degrees
over the next 20 years from the new
$1B Virginia Tech Innovation Campus
SUBURBAN
MARYLAND
7
WASHINGTON, DC H1 2020
THE DISTRICT
WASHINGTON, DC OVERVIEW
The District is experiencing negative effects of the COVID-19 pandemic with drops in rent, absorption, and rising vacancy throughout the apartment
market. The average monthly Class-A rent fell 3.5% YoY to a monthly average of $2,561 per unit per month or $3.27/SF. The average Class-B
rent fell 2.7% to an average of $2,067/unit/month or $2.74/SF.
Just over 3,000 units across the city delivered in the first half of 2020, and 12,969 units are currently under construction. Capitol Riverfront emerged
as the leading submarket in terms of development activity with a 1,475-unit increase with the delivery of The Estate, The Kelvin, Parc Riverside Phase
I, Meridian on First, and The Maren. Multifamily capital markets finished H1 2020 with $292,860,000 sold throughout the District over 9 sales.
The COVID-19 pandemic has slowed investment activity significantly as investors weather the storm of economic volatility. Comparatively, in the
first half of 2019 over $685,000,000 transacted over 30 sales.
8
WASHINGTON, DC H1 2020
2020 DELIVERIES MAP
WASHINGTON, DC 2020 MID ATLANTIC MULTIFAMILY DELIVERIES
e 16th St NW
NW NE
Br ya nt St Av e
1 nd MULTIFAMILY DELIVERY
9 de
Isla
o
Rh
W
13th St NW
1. The Wren
N
U St NW 10 50 50
Av
Leased:
% 28%
Leased: 28% Units: 433
Nor t h C a p itol St
9th S
re
hi
Developer: JBG Smith/MRP Realty
ps
15th St NW
m
t
Flo
11
Ha
NE
R St NW e N
W rid
aA 2. Avec
Av
ew
ve
nd NW Leased: 43%
Isla % Leased: 43% Units: 420
N
Q St NW Mt
o de Ol
Rh ive
tR Developer: Rappaport/WC Smith/EB5
dN
E 3. The Estate
Leased:
% 39%
Leased: 39% Units: 320
Flo
M St NW
Ma
ssa
rid
aA
Developer: Brookfield Properties
chu v
set eN
ts
Av
e N
L St NW
395
E 4. The Kelvin
W
6th St NW
7th St NW
K St NW Leased:
% 36%
Leased: 36% Units: 310
NE
Developer: Jair Lynch/MacFarlane Partners
6th St NE
ve
2
aA hA
17th St NW
H St NE
5. Parc Riverside Phase II
E
H St NW
N
14th St NW
19th St NW
t
or
ve
4th St NE
lw
Leased:
% 11%11%
Leased: Units: 308
9th St NW
ni
B
e nn
NE
Ke
sot
ing Rd NE
Developer: Toll Brothers
13th St NE
3rd St NW
t NE
ve
NE
dA
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e
in
11th St NE
21 s t S 6. Meridian on First I
Av
Vi Pen ns y lv r
M
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ee
in Av e
ia
Leased:
% 6%6%
Leased: Units: 273
ss
NW
2nd St NE
Av C S t NE
ne
e 22
NW Developer: Paradigm Development
n
Te
nd S
Constitution Ave NW
7. The Maren
t NE
WASHINGTON E Capitol St SE
E Capitol St NE
Leased:
% 7%7%
Leased: Units: 264
SE E
ve tS
Developer: FRP Development/MRP Realty
A B S
14th St SW
Independence Ave SW Independence Ave SE
ol ina 295
12th St SE
r
Ca 8. Blackbird
Ke
12th S t SW
7th St SW
rth
nt
No
6th St SE
uc
D St SE
D St SW Leased:
% 23%
Leased: 23% Units: 167
Ri
Pe
ky
4th St SE
nn
dg
syl Developer: CAS Riegler/EB5
St SW
Av
eR
va
SE
nia SE
e
8th St SE
ve
9th St SE
d
SE
Av A
ve
395
eS ac 9. 901W A
SE
1S
tom as
11th St SE
E
9 th
Po Te x
S-
M
ai Leased:
% 17%17%
Leased: Units: 161
U
1
N ne
I St SE
8
S- A
ve Developer: JBG Smith
5 6
U
South Capi tol St
E
SW
10. J Linea e
S
M St SW M St SE Av
a
Leased:
% 4%
Leased: ot
4 695 e s 4% Units: 132
i nn
Developer: Jefferson Apt Group/Stars Investment
Bra nch Av
M
3
395 11. 1714-1716 14th Street NW
Leased:
% 42%
Leased: 42% Units: 8
7
e SE
¹
Developer: Coba
0 0.13 0.25 0.5
Miles
© 2020 CBRE, Inc. All rights reserved. This information has been obtained from sources believed reliable, but has not been verified for accuracy or completeness. You should conduct a careful, independent investigation of the property and verify all information. Any reliance on this information is
solely at your own risk. CBRE and the CBRE logo are service marks of CBRE, Inc. All other marks displayed on this document are the property of their respective owners, and the use of such logos does not imply any affiliation with or endorsement of CBRE. 382274
THE DISTRICT DELIVERIES
Over 3,000 units delivered to the District in H1 2020, accounting for a 2.1% increase to the total multifamily housing inventory. The pipeline
continues on a steady upward trend and will not slow until late 2022. There are currently 12,696 units under construction that will increase the
total multifamily inventory by 8.8% over the next two years.
NoMa, H Street Corridor, Union Market, and Capitol Riverfront are the most active submarkets in terms of development activity. These growing
areas continue to deliver Class-A luxury apartment buildings in areas that are also seeing retail and office space developments.
9
WASHINGTON, DC H1 2020
D.C. BY THE NUMBERS DEVELOPMENT
STABILIZED VACANCY Units Washington, DC Summary Vacancy
Delivered
6.1% 7,000
7,000 Forecast 9.0%
8%
8.0%
6,000 6,000 7%
7.0%
5,000 5,000 6%
6.0%
CLASS A AVG. RENTS 4,000 4,000 5%
5.0%
$2,561
Vacancy
Units
3,000
4%
4.0%
PER UNIT PER MONTH 3,000
$3.27 2,000
2,000
3%
3.0%
2.0%
PER SF PER MONTH 2%
1,000
1,000 1.0%
1%
0 0.0%
CLASS B AVG. RENTS 0 2013 2014 2015 2016
2013 2014 2015 2016 2017 2018 2019
2017 2018 2019 H1 2020 H2 2020
H1 H2 2021 2022
2021 2022 0%
$2,067 Deliveries Net Absorption Vacancy
2020 2020
PER UNIT PER MONTH
$2.74 Year
PER SF PER MONTH
Deliveries Net Absorption Vacancy
PIPELINE
Recent deliveries in the District were concentrated primarily in the Capitol Riverfront and H
3,004 UNITS Street submarkets. NoMa and Union Market also remain top submarkets for development
DELIVERED IN 2020
activity with around 3,483 units under construction, on-track to deliver in the next 24
12,696 UNITS months. Annual absorption in the District was 25% lower than a year ago as 2,003 units
UNDER CONSTRUCTION
absorbed in the first half of the year. Q2 stabilized vacancy rate in the District is 6.1%, a
18,907 UNITS 250 bps increase from the previous year. The average lease-up pace of new product in the
36-MONTH PIPELINE
District is 14 units per month, and concessions average 1.5 months free rent.
Source: CBRE Research and Delta
Associates EMPLOYMENT
As of: June 30, 2020 Job2020
Growth
Q2 DCYoY
Employment
State/Local Government
Federal Government
Other Services
CAPITAL MARKETS Leisure and Hospitality
Education and Health Services
Professional and Business Services
Financial Activities
Information
$292,860,000 Retail Trade
SALES IN H1 2020 Wholesale Trade
Trade, Transportation, and Utilities
Manufacturing
Mining, Logging, and Construction
-60,000 -50,000 -40,000 -30,000 -20,000 -10,000 0 10,000
-50,000 -40,000 -30,000 -20,000 -10,000 0 10,000
845 UNITS Insulated by the federal government, Washington DC has fared favorably thus far in the
SOLD IN H1 2020 downturn compared to other large metros across the nation. The District experienced
9 PROPERTIES
67,000 job losses, which represents an 8% YoY loss in employment. Leisure and Hospitality
suffered the biggest job loss as 60% of the workforce was laid off or furloughed. Promisingly,
government, information, and other services were the only industries to experience job
growth, albeit small.
10WASHINGTON, DC H1 2020
RENTAL RATES WASHINGTON, DC HOME PRICES
Avg $/Unit/ Avg. $/SF/
Class A High-Rise Vacancy YoY Rent Change
Mo. Mo. DC Home Prices
Upper NW $2,810 $3.47 5.0% -0.6% $600,000
$600,000
Central $2,822 $3.45 5.1% -4.6%
$500,000
$500,000
Columbia Heights/Shaw $2,663 $3.63 6.4% -2.1%
$400,000
$400,000
NoMa/H Street $2,290 $3.02 8.2% -5.7%
$300,000
Capitol Hill/Riverfront/Southwest $2,583 $3.25 7.7% -3.3%
$300,000
$200,000
Northeast $2,092 $2.66 8.5% -0.7% $200,000
$100,000
Upper Georgia $2,183 $2.81 5.3% 0.6% $100,000
$0
Class B Mid-and High-Rise
Avg $/Unit/ Avg. $/SF/
Vacancy YoY Rent Change
2014
2014 2015
2015 2016
2016 2017
2017 2018
2018 2019
2019 2020
2020
Mo. Mo.
Upper Northwest $2,104 $2.58 4.3% -2.6%
Mount Vernon Square, NW $1,925 $2.91 7.6% -7.4%
The current average home value in the District is
Southwest $2,085 $2.89 3.0% -0.4%
$586,000. While home values grew in 2020—seeing
an average annual increase of 7.0%—home values in
The District experienced broad rent decreases across almost all submarkets, with the
the District have increased on average 3.0% YoY since
exception of Upper Georgia. The Northeast and NoMa/H Street submarkets have
2015.
the highest Class-A High-Rise vacancy at 8.5% and 8.2%, respectively. This is, in
part, due to an influx of new deliveries to those markets. Class-B vacancy currently
stands at 4.5% and concessions are at 3.0% of face rent. The Mount Vernon Square
submarket has the highest Class-B Mid and High-Rise vacancy at 7.6%, and the
highest decline in rent growth at -7.4%. Class-A and Class-B apartments rents fell
by a total of 3.3%.
LARGEST SALES
DC MULTIFAMILY SALES VOLUME
Property Year Built Price Sold Units $/Unit
DC Sales Volume The Woodley 2014 $180,250,000 01/08/20 212 $850,235
$2,000,000,000
$2,000,000,000
Skyline Apartments 1965 $58,700,000 03/01/20 398 $147,487
$1,500,000,000
$1,500,000,000
Glenwood Apartments 1942 $13,700,000 01/30/20 90 $152,222
$1,000,000,000
$1,000,000,000
The Waring 1909 $8,400,000 06/30/20 24 $328,947
$500,000,000
$500,000,000
The Regent 1937 $8,450,000 06/30/20 12 $228,378
$0
$0
2013 2014 2015 2016 2017 2018 2019 H1 2020
2013 2014 2015 2016 2017 2018 2019 H1 2020
A total of $292.9M multifamily sales transacted in the District
in nine sales in the first two quarters of 2020. Core/Core-Plus
transactions made up for 71% of transactions, and Value-Add
transactions made up for the remaining 29% of total sales volume.
The highest sales in terms of price per unit were The Woodley, a
212-unit property in Woodley Park at $850,235 per unit and The
Shelby, a 24-unit property in Dupont Circle at $350,000 per unit,
both of which were brokered by CBRE. The Woodley was also the
THE SHELBY
largest sale in H1 2020 across the District at $180.25M.
11NORTHERN VIRGINIA H1 2020
DC Home Prices
$600,000
$550,000
$500,000
$450,000
$400,000
2014 2015 2016 2017 2018 2019
NORTHERN VIRGINIA
NORTHERN VIRGINIA OVERVIEW
Northern Virginia continues to be the fastest growing region in the DC metro. The region’s economic future has been bolstered by Amazon’s
decision to build its HQ2 in National Landing. Amazon selected Northern Virginia because of its inherently strong fundamentals, including a
rich pipeline of talent provided by numerous universities in the area. Amazon has subsequently begun the first phase of its hiring process and
build-out at National Landing, including hiring over 1,000 white-collar employees and moving into 300,000 SF of office space. The delivery
of HQ2 is expected to add 40,000 to 60,000 units of additional apartment demand to the area in the next decade. A typical Amazon HQ2
worker will make $150,000 per year, which allows for up to $3,750 in monthly rent. Additionally, Virginia Tech is moving forward with its
plans to build the $1 Billion Innovation Campus in Potomac Yard. The introduction of these two strong economic drivers will continue to further
diversify the job base and incentivize more businesses to move to all areas of the DC metro, where a pipeline of talent awaits.
12NORTHERN VIRGINIA H1 2020
2020 DELIVERIES MAP
NORTHERN VIRGINIA 2020 MID ATLANTIC MULTIFAMILY DELIVERIES
CALVERTON
270
MULTIFAMILY DELIVERY
STERLING BELTSVILLE
1. Foundry at Carlyle
NORTH BETHESDA
POTOMAC Leased:
95 21%
% Leased: 21% Units: 525
295
Developer: Perseus
495 Realty/ELV/Four Points
495
ADELPHI
2. The Waycroft GREENBELT
BETHESDA Leased:
% 34%34%
Leased: Units: 490
GLENN DALE
Developer: Saul Centers REIT (Northwestern Mutual Life Insurance)
COLLEGE PARK
COLLEGE PARK AIRPORT
267 HERNDON 3. The Trove
RESTON EAST RIVERDALE LANHAM BOWIE
Leased:
% 12%12%
Leased: Units: 401
HYATTSVILLE
Developer: Washington Real Estate Investment Trust
WASHINGTON
DULLES INT'L FREEWAY
WOLF TRAP
AIRPORT MCLEAN 4. Scout on the Circle
50 AIRPORT
TYSONS CORNER WASHINGTON Leased: 7%* Units: 400
201 Combined Properties
Developer:
28
VIENNA 6 29 5. Centro
295 Arlington
IDYLWOOD Leased:
% 65%
Leased: 65% Units: 366
CHANTILLY 495 KETTERING
FALLS CHURCH Developer: Orr Partners
OAKTON 2 1 0 AMAZON 110
12 HQ2 695 6. The Sur
CORALat HILLS
National Gateway
66 4 JEFFERSON RONALD REAGAN
5 3 WASHINGTON Leased:
% 5%5%
Leased: Units: 360
11 NAT'L ARPT Developer: Erkiletian Development/PCCP
495 395
FAIRFAX 7 FORESTVILLE
CENTREVILLE 9 7. The Clark
HILLCREST HEIGHTS
ANNANDALE VIRGINIA TECH
INNOVATION CAMPUS
Leased:
% 22%
Leased: 22% Units: 342
LINCOLNIA CAMP SPRINGS
Developer: Praedium Group
8 8. Cameron Square
FAIRFAX STATION 1
BURKE Leased:
% 20%
Leased: 20% Units: 302
301
Developer: Novare Group, Mulberry Development Group
SPRINGFIELD
WEST SPRINGFIELD 9. Array at West Alex
MANASSAS PARK GROVETON
Leased:
% 25%
Leased:CLINTON
25% Units: 278
95
ROSARYVILLE
MANASSAS Developer:
POTOMAC Abramson Properties / Weingarten Realty / AHDC
AIRFIELD 5
NEWINGTON 10. 4040 Wilson
FORT HUNT
Leased:
% 49%
Leased: 49% Units: 244
Developer: Shooshan Co. / Brandywine Realty Trust
LORTON
11. Mission Lofts
381
Leased:
% 17%17%
Leased: Units: 157
LAKE RIDGE Developer: Novus
¹
12. Preserve at Westfields - Phase I
0 1 2 4 Leased:
% 40%
Leased: 40% Units: 132
WOODBRIDGE
Miles Developer: Elm Street Development/Northwood Ravin
* Source: Axiometrics, 2020
© 2020 CBRE, Inc. All rights reserved. This information has been obtained from sources believed reliable, but has not been verified for accuracy or completeness. You should conduct a careful, independent investigation of the property and verify all information. Any reliance on this information is
solely at your own risk. CBRE and the CBRE logo are service marks of CBRE, Inc. All other marks displayed on this document are the property of their respective owners, and the use of such logos does not imply any affiliation with or endorsement of CBRE. 382274
NORTHERN VA DELIVERIES
Just under 4,000 new units delivered in H1 2020 across Northern Virginia, accounting for a 1.6% increase in total volume. There are currently
10,135 units under construction, which will add 4% to the inventory over the next 24 months. The largest deliveries in the region include Perseus
Realty’s The Foundry, a 525-unit property in Alexandria, Saul Centers’ Waycroft, a 490-unit property in Ballston/Virginia Square, Wash REIT’s
The Trove, a 401-unit property in Columbia Heights, Arlington, and Combined Properties’ Scout on the Circle, a 400-unit property in Fairfax.
13NORTHERN VIRGINIA H12020
DEVELOPMENT
NoVA BY THE NUMBERS Units
Delivered Northern Virginia Summary Vacancy
9000 0.06
STABILIZED VACANCY 10,000 Forecast
8000 5%
0.05
8,000
7000
4.3% 4%
6000 0.04
6,000
Vacancy
5000 3%
Units 0.03
CLASS A AVG. RENTS 4000
4,000
$1,992 3000 0.02 2%
PER UNIT PER MONTH
2000
$2.17 2,000 0.01 1%
PER SF PER MONTH 1000
CLASS B AVG. RENTS 00 0 0%
2014
2014 2015
2015 2016
2016 2017
2017 2018
2018 2019
2019 H1 H1
2020 H2 H2
2020 2021
2021 2022
2022
$1,746 2020
2020 Vacancy
PER UNIT PER MONTH Deliveries Net Absorption
Year
$1.94 Deliveries Net Absorption Vacancy
PER SF PER MONTH
Just under 4,000 units delivered in H1 2020 which equates to a 1.0% increase in total
PIPELINE inventory throughout the year. Arlington accounted for 59% of new deliveries and Alexandria
accounted for 27%. The average lease-up pace for properties in Northern Virginia is currently
3,997 UNITS
DELIVERED IN 2020 21 units per month, compared to 24 units per month in January 2020. Northern Virginia’s
current stabilized vacancy is 4.3%, a 70 bps YoY increase.
10,135 UNITS
UNDER CONSTRUCTION
14,567 UNITS
36-MONTH PIPELINE
Source: CBRE Research and Delta
Associates
EMPLOYMENT Job Growth H1
YoY2020
as of NoVa Employment
June 2020
As of: June 30, 2020 State/Local Government
Federal Government
Other Services
Leisure and Hospitality
Education and Health Services
Professional and Business Services
CAPITAL MARKETS Financial Activities
Information
Retail Trade
Wholesale Trade
$494,500,000 Trade, Transportation, and Utilities
Manufacturing
SALES IN H1 2020
Mining, Logging, and Construction
-70,000 -60,000 -50,000 -40,000 -30,000 -20,000 -10,000
-70,000 -50,000 -30,000 -10,000 00 10,000
10,000
Northern Virginia experienced the YoY employment decline of 134,700 jobs. Leisure and
Hospitality fared the worst, with the loss of 64,500 jobs and Education and Health Services
1,823 UNITS with the loss of 32,100 jobs. However, there was growth in Information and Financial Activities
SOLD IN H1 2020 industries. At the start of the year, unemployment was at 2.5% and it currently stands at 8.6%.
9 PROPERTIES
As of June 2020, Amazon has already hired 1,000 employees. It is estimated that Amazon
will bring 1,200 employees in 2020 and an additional 2,000 employees in 2021.
14NORTHERN VIRGINIA H1 2020
RENTAL RATES NoVA HOME PRICES
Avg $/Unit/ Avg. $/SF/ YoY Rent
Class A High-Rise
Mo. Mo.
Vacancy
Change NoVANoVA
Average
AverageSold HomePrice
Sold Home Price
Alexandria $2,124 $2.43 5.4% -3.3% $660,000
$650,000
$620,000
$640,000
Rosslyn/Ballston Corridor $2,490 $3.00 3.6% -2.7%
$625,000
$620,000
$600,000
Crystal City/Pentagon City $2,356 $2.68 7.4% -7.2% $600,000
$600,000
$580,000
South Arlington $2,024 $2.32 4.5% 0.0% $580,000
$560,000
$575,000
$560,000
Tysons $2,264 $2.52 7.8% -13.4% $540,000
Reston/Herndon $2,106 $2.26 9.5% -7.1% $550,000
$540,000
$520,000
$500,000
$525,000
$520,000
Falls Church/Merrifield $2,117 $2.34 5.5% -7.0%
2014 2015 20162016 2017 20172018 2018
Avg $/Unit/ Avg. $/SF/ YoY Rent
2014
2014 2015
2015 2016 2017 2018 2019
2019 2020
2020
2019
Class B Mid-and High Rise Vacancy
Mo. Mo. Change
Falls Church/North Arlington $2,264 $2.49 5.4% 0.7%
Homes values in Northern Virginia continue to see
impressive growth as demand significantly outweighs supply
South Arlington $1,674 $1.98 2.1% -0.1%
in 2020. New listing inventory was down by 35% this year
Arlandria $1,662 $2.20 1.6% 1.1%
and prices continue to climb. Homes are on the market for
West Alexandria $1,666 $1.83 5.4% -0.4%
an average of 3.5 weeks before selling. The current median
Crystal City $2,226 $2.06 6.2% -6.0% home value in Northern Virginia is $641,002, which is a
Northern Virginia experienced rent decreases compared to H1 2019, with the 4.4% YoY increase across the region. Alexandria is the
exception of Class-A product in South Arlington and Class-B product in Falls Church/ fastest growing housing market in the nation with 20.2%
North Arlington and Arlandria. Class-A rents fell by 4.1% to $1,992/unit/month or YoY median sale value growth. Arlington County currently
$2.17 per square foot. Class-A vacancy in Northern Virginia is currently 4.9% and maintains the highest home value in Northern Virginia and
concessions are at 5.0% of face rent. Reston/Herndon and Tysons have the highest experienced an 11% YoY increase. The high cost of home
Class-A vacancy at 9.5% and 7.8%, due in most part to increased deliveries in those buying in Northern Virginia will likely drive multifamily
submarkets. Class B rents fell 1.6% YoY to $1,746/unit/month or $1.94 per square demand as renters are priced out of the for sale housing
foot. Class-B vacancy is currently 3.9% and concessions are 2.0% of face rent. market.
Crystal City has the highest Class-B vacancy at 6.2%. Class-A and Class-B rents fell
by a total of 2.5% YoY.
NoVA MULTIFAMILY SALES VOLUME LARGEST SALES
NoVA Sales Volume
$5,000,000,000
Property Year Built Sold Price Units $/Unit
$5,000,000,000
$4,000,000,000
$4,000,000,000 The Emerson 2019 01/27/20 $117,000,000 355 $329,577
$3,000,000,000
$3,000,000,000 Avana Alexandria 1991 01/30/20 $106,000,000 326 $325,153
$2,000,000,000
$2,000,000,000 Ravensworth Towers 1973 04/11/20 $59,000,000 219 $269,406
$1,000,000,000
$1,000,000,000 The Bradley 2015 01/20/20 $57,666,667 165 $349,495
$0
$0 Monroe Place 2008 03/26/20 $56,950,000 202 $281,931
2013
2013 2014
2014 2015
2015 2016
2016 2017
2017 2018
2018 2019
2019 H1 2020
H1 2020
A total of $494.5M multifamily sales transacted in Northern
Virginia in nine properties in the first half of 2020. Value-add
sales accounted for 77% of transactions and Core/Core-Plus
sales made up the remaining 23% of total investment volume. The
highest price per unit sales were The Bradley, a 165-unit property
in Alexandria which sold at $349,500 per unit and The Emerson,
a 355-unit property in Herndon which sold at $329,600 per unit.
JEFFERSON FAIR OAKS
15SUBURBAN MD H1 2020
SUBURBAN MARYLAND
SUBURBAN MARYLAND OVERVIEW
Suburban Maryland fared the best in terms of rent growth, absorption, and transaction volume compared to the other markets in Washington DC.
Its lower density setting may be, in part, responsible for its recent resilience as residents choose to relocate out of higher density, urban areas.
Suburban Maryland is one of the most prominent areas in the region for the Life Sciences sector and is home to the headquarters of the National
Institute of Health, Department of Energy, the Food and Drug Administration, and the National Institute of Standards and Technology. The presence
of biotech in the I-270 Corridor, in particular, has greatly benefited the commercial real estate market in office, industrial, and multifamily. Life
Sciences buildings have significantly lower vacancy rates than that of other commercial office buildings. As of 2019, laboratory vacancy sits at
around 5.0% on average while office vacancy rate in Suburban Maryland is nearly 19%. Montgomery and Prince George’s counties continue to
be largely unique in their growth of biotech because they remain suburban areas, in comparison to Life Sciences hubs such as Boston, New York,
and San Francisco that continue to grow as urban areas.
Although investment activity slowed down considerably across the region, Suburban Maryland is an outlier. Over $1.2B transacted in H1 2020,
which is more than H1 2019 when $893M transacted.
16SUBURBAN MD H1 2020
2020 DELIVERIES MAP
SUBURBAN MARYLAND 2020 MID ATLANTIC MULTIFAMILY DELIVERIES
REISTERSTOWN
15
MULTIFAMILY DELIVERY
2 MAYS CHAPEL
1. Bainbridge Lake Linganore
40 1 Leased: 9% 9%
% Leased: 1 322
Units:
ELDERSBURG 95
Developer: Bainbridge Companies
TOWSON
695 PERRY HALL
PARKVILLE
BALLENGER CREEK 2. Bottling Plant
PIKESVILLE
NOTTINGHAM
OVERLEA
340 70 Leased: 60%60%
% Leased: Units: 86
Developer: NV83Commercial / BrickROSEDALE
Lane
LOCHEARN
MARTIN STATE
3. Artisan 4100
WOODLAWN
AIRPORT
Leased:
% 20%
Leased: 20% Units:
ESSEX 84
Developer: Landex Development
BALTIMORE
DAMASCUS
CATONSVILLE 395 DUNDALK
270 95
ARBUTUS
29 895
15 195
COLUMBIA
LINTHICUM HEIGHTS 695
GERMANTOWN 100 FERNDALE
MONTGOMERY VILLAGE BALTIMORE
95 WASHINGTON GLEN BURNIE
INT'L AIRPORT
OLNEY 295 RIVIERA BEACH
GAITHERSBURG NORTH LAUREL SEVERN
SOUTH GATE
PASADENA
LAUREL
7
TIPTON
NORTH POTOMAC ROCKVILLE ASPEN HILL AIRPORT ODENTON 97
COLESVILLE SEVERNA PARK
SOUTH LAUREL
WHEATON-GLENMONT
WHITE OAK
270 BELTSVILLE
267 STERLING 3 ARNOLD
NORTH BETHESDA
POTOMAC
495 CROFTON
ADELPHI GREENBELT 301
SILVER SPRING
BETHESDA
TAKOMA PARK
ANNAPOLIS
HERNDON
CHILLUM LANHAM BOWIE
RESTON HYATTSVILLE
ANNAPOLIS NECK
WASHINGTON
DULLES INT'L
WOLF TRAP MCLEAN WASHINGTON 3 LEE AIRPORT
AIRPORT TYSONS CORNER 201
¹
50
0 1.5 3 6 VIENNA
IDYLWOOD
Miles 66 301
© 2020 CBRE, Inc. All rights reserved. This information has been obtained from sources believed reliable, but has not been verified for accuracy or completeness. You should conduct a careful, independent investigation of the property and verify all information. Any reliance on this information is
solely at your own risk. CBRE and the CBRE logo are service marks of CBRE, Inc. All other marks displayed on this document are the property of their respective owners, and the use of such logos does not imply any affiliation with or endorsement of CBRE. 382274
SUBURBAN, MD DELIVERIES
Deliveries slowed in Suburban Maryland with an addition of 492 units across three projects in H1 2020. The deliveries were Bainbridge’s
Bainbridge Lake Linganore, a 322-unit property in Frederick, NV Commercial/ Brick Lane’s The Bottling Plant, a 86-unit property in Outlying
Frederick County and Landex Development’s Artisan 4100, an 84-unit property in Brentwood. There are currently 6,441 units under construction
which will add a total of 3.5% to total inventory over the next 24 months. Bethesda has the highest concentration of development activity with just
over 1,900 units delivering in the next 36 months. Unlike other markets in the DC metro, Suburban Maryland’s vacancy, which currently stands at
3.6%, was not largely impacted in the past six months.
17SUBURBAN MD H1 2020
SUBURBAN MD BY DEVELOPMENT
THE NUMBERS Units
Delivered Suburban MD Summary Vacancy
STABILIZED VACANCY 5,000
4,500 6.0%
Forecast 6%
4,000
4,000 5.0%
5%
3.6% 3,500
3,000 4.0%
4%
3,000
Vacancy
2,500
Units
3.0%
2,000 3%
2,000
CLASS A AVG. RENTS 1,500 2.0%
2%
$1,905 1,000
1,000
PER UNIT PER MONTH 1.0%
500 1%
$2.03
00 0.0%
PER SF PER MONTH
2014 2015 2016 2017 2018 2019 H1 H2 2021 2022
0%
2014 2015 2016 2017 2018 2019 H1
2020 H2
2020 2021 2022
CLASS B AVG. RENTS Deliveries 2020
Net Ab so rption
2020 Vacan cy
$1,591
PER UNIT PER MONTH Year
$1.73 Deliveries Net Absorption Vacancy
PER SF PER MONTH
As the most affordable option for residents in Washington DC, Suburban Maryland
PIPELINE continues to provide job opportunities and relatively affordable living. Just under 500
492 UNITS units delivered in H1 2020 and 100 units have been absorbed so far this year. Suburban
DELIVERED IN 2020
Maryland’s current stabilized vacancy is 3.6%, down 30 bps from last year.
6,441 UNITS
UNDER CONSTRUCTION
EMPLOYMENT
13,773 UNITS H1 2020 SubMD
Job Growth YoY Employment
36-MONTH PIPELINE
State/Local Government
Federal Government
Source: CBRE Research and Delta
Associates Other Services
Leisure and Hospitality
As of June 30, 2020
Education and Health Services
Professional and Business Services
Financial Activities
Information
CAPITAL MARKETS Retail Trade
Wholesale Trade
Trade, Transportation, and Utilities
Manufacturing
$1.2 BILLION Mining, Logging, and Construction
SALES IN H1 2020 -45,000 -40,000 -35,000
-35,000 -30,000 -25,000
-25,000 -20,000 -15,000
-15,000 -10,000 -5,000
-5,000 00 5,000
10,000
Suburban Maryland experienced the YoY loss of 111,400 jobs. The most impacted industries
were Leisure and Hospitality with a 40% decrease in employment and Education and Health
Services with a loss of 15% of employees. Trade and Transportation also lost just under
5,006 UNITS 20,000 jobs. The Federal Government saw a growth of 1,000 employees. Unemployment in
SOLD IN H1 2020 Montgomery and Prince George’s counties is currently 8.0% and 9.9%, respectively, up from
14 PROPERTIES 2.8% and 3.6%, respectively, in January 2020.
18SUBURBAN MD H1 2020
RENTAL RATES SUBURBAN MD HOME PRICES
Sub MD Median Home Sales Price
Avg $/Unit/ YoY Rent $400,000
Class A High Rise Avg. $/SF/Mo. Vacancy $400,000
Mo. Change $390,000
Bethesda $2,670 $2.93 7.2% 3.1% $380,000
$380,000
$370,000
N Bethesda/ Rockville $2,047 $2.23 6.0% 2.2%
$360,000
$360,000
Silver Spring/ Wheaton $2,012 $2.42 3.5% 1.8% $350,000
$340,000
$340,000
Hyattsville/ College Park $1,867 $2.06 4.6% N/A
$330,000
Avg $/Unit/ YoY Rent $320,000
$320,000
Class B Mid-and High-Rise Avg. $/SF/Mo. Vacancy
Mo. Change $310,000
Silver Spring $1,622 $1.69 9.20% -1.90% 2014
2014 2015
2015 2016
2016 2017
2017 2018
2018 2019
2019 2020
2020
Bethesda/Chevy Chase $1,982 $2.17 5.20% -5.30%
Home prices have dropped slightly in Suburban Maryland
Rockville $1,709 $1.84 4.30% 4.50%
after four consecutive years of positive growth. The current
median home sale price is $393,000. The robust effect of
Although no markets saw overall positive rent growth over the past year, Suburban
the Amazon announcement has spilled over into Suburban
Maryland was the least negatively impacted region in the metro in terms of rental
Maryland’s housing market as a desirable and often
rates. Class-A rents declined by 1.3% YoY to an average of $1,905/unit/month
more affordable option than Northern Virginia. Much of
or $2.03 per square foot. Class-A vacancy currently stands at 4.5%. Class-B
Suburban Maryland multifamily properties remain within
rents declined 1.0% to an average of $1,591/unit/month or $1.73 per square
the ideal 30-minute commute from large employment
foot. Class-B vacancy currently stands at 3.1%. Overall, Class-A and Class-B
drivers such as Amazon HQ2 and parts of Washington,
apartment rents fell by a total of 1.1% YoY to an average of $1,697/unit/month
DC.
or $1.83 per square foot.
SUBURBAN MD MULTIFAMILY LARGEST SALES
SALES VOLUME
Sub MD Sales Volume Property Year Built Sold Price Units $/Unit
$3,000,000,000
$3,000,000,000
$2,500,000,000
$2,500,000,000 4701 Willard 1969 06/29/20 $276,500,000 525 $526,667
$2,000,000,000
$2,000,000,000 The Varsity 2011 03/27/20 $146,022,026 258 $565,977
$1,500,000,000
$1,500,000,000 Gallery on New Hampshire 1960 02/28/20 $117,000,000 675 $173,333
$1,000,000,000
$1,000,000,000 Montgomery Paint Branch 1984 06/12/20 $113,206,000 529 $214,000
$500,000,000
$500,000,000
Jefferson at Inigo's Crossing 2008 01/13/20 $109,000,000 473 $230,444
$0
$0
2013
2013 2014
2014 2015
2015 2016
2016 2017
2017 2018
2018 2019 H1
2019 H1 2020
2020
Investment activity was highest in Suburban Maryland as
$1,222,570,000 traded in 13 sales in the first half of 2020.
Value-Add product made up a majority of transaction volume at
61%, while Core/Core-Plus accounted for the remaining 39%.
4017 Willard was the highest sale in terms of total volume and
price per unit at $267,500,000 and $526,667 per unit.
4701 WILLARD
NORTHLAKE
BETHESDA ROW
19BALTIMORE METRO H1 2020
BALTIMORE METRO
BALTIMORE METRO OVERVIEW
While the Baltimore metro is performing well compared to other metros across the country, the region has seen the effects of the COVID-19
pandemic with impacts to employment, transaction volume, rent growth, and absorption rates. Over 172,000 jobs were lost in greater Baltimore
since Q2 2019, which is a 12% decrease in total nonfarm employment. The June 2020 unemployment rate in the Baltimore metro is 8.0%, which
is a 450 bps increase from January 2020. Baltimore, however, is considered to be better positioned than other regions to weather the current
economic downturn due to its impressive resilience in previous recessions. In the Global Financial Crisis, Baltimore ranked sixth in terms of GDP
growth and ninth in payroll job growth across the nation.
Just over 2,400 units delivered in the Baltimore metro in H1 2020 and 2,532 units are currently under construction. The average rent in Baltimore
is $1,759/unit/month or $1.85 per square foot. An aggregate of $506M in sales transacted across 13 sales. CBRE brokered two of the three
largest transactions in H1 2020 across the Baltimore metro.
20BALTIMORE METRO H1 2020
2020 DELIVERIES MAP
BALTIMORE 2020 MID ATLANTIC MULTIFAMILY DELIVERIES
24
83
REISTERSTOWN
MULTIFAMILY DELIVERY
JOPPATOWNE 924
1. Juniper - Merriweather District
MAYS CHAPEL
Leased: 36%
% Leased: 36%JOPPA EDGEWOOD Units: 380
Developer: Howard Hughes
8 OWINGS MILLS 1
2. Alta Brewers Hill
Leased: 7%7%
% Leased: Units: 371
3
695 7 CARNEY 95 Developer: Wood Partners
PERRY HALL
3. Avalon Towson
PARKVILLE
PIKESVILLE Leased: 35%
% Leased: 35% Units: 371
4 Developer: AvalonBay Communities/Retail Properties
RANDALLSTOWN OVERLEA
83
4. Avenue Grand
MILFORD MILL
5 ROSEDALE Leased: 4%4%
% Leased: Units: 324
LOCHEARN ROSSVILLE
Developer:
MIDDLE RIVER Chesapeake Realty Partners
MARTIN
STATE
The Woodberry
5.AIRPORT
WOODLAWN
Leased: 34%* Units: 284
ESSEX Developer: Klein Enterprises/Manekin LLC
9
70 10
6 BALTIMORE 6. Center/West- Phase 1A
Leased: 40%
% Leased: 40% Units: 262
395 2 Developer: La Cite
ELLICOTT CITY CATONSVILLE DUNDALK
95
7. Elan Towson
ARBUTUS
Leased: 19%** Units: 208
Developer: Greystar
29 895
195 8. The View at Mill Run Phase II
Leased: 45%
% Leased: 45% Units: 157
Developer: Sid Emmer
1 ELKRIDGE
LINTHICUM HEIGHTS
9. 9 E. Mount Royal Street
295 Leased:
% 10%
Leased: 10% Units: 65
95 100 FERNDALE Developer: Zahlco
BALTIMORE
WASHINGTON
INT'L AIRPORT 10. The Morrison
GLEN BURNIE
Leased: 67%
% Leased: 67% Units: 15
¹
Developer: Atlantic Realty
97 RIVIERA BEACH
0 0.75 1.5 3
GREEN HAVEN * Source: Yardi Matrix, 2020
Miles SEVERN ** Source: Axiometrics, 2020
© 2020 CBRE, Inc. All rights reserved. This information has been obtained from sources believed reliable, but has not been verified for accuracy or completeness. You should conduct a careful, independent investigation of the property and verify all information. Any reliance on this information is
solely at your own risk. CBRE and the CBRE logo are service marks of CBRE, Inc. All other marks displayed on this document are the property of their respective owners, and the use of such logos does not imply any affiliation with or endorsement of CBRE. 382274
BALTIMORE, METRO DELIVERIES
Deliveries picked up in Baltimore throughout 2020 with the addition of 2,437 units throughout the metro, equating to a 1.2% increase in total
inventory. More units delivered in the first half of 2020 than were delivered in all of 2019. The largest deliveries were Howard Hughes’ Juniper, a
380-unit property as part of the Merriweather District in Columbia, Wood Partners’ Alta Brewers Hill, a 371-unit property in Baltimore City, and
Avalonbay Communities’ Avalon Towson, a 371-unit property in Towson. There are currently 2,532 units under construction that are expected to
deliver in the next 24 months. The average lease-up pace for properties in Baltimore is 15 units per month.
21BALTIMORE METRO H1 2020
BALTIMORE METRO BY DEVELOPMENT
THE NUMBERS Units
Delivered Baltimore Metro Summary Vacancy
STABILIZED VACANCY 10,000
10000
Forecast
7 7%
5.00% 6 6%
8,000
8000
5 5%
6,000
6000
TOTAL AVG. RENTS
$1,759 4 4%
Vacancy (%)
PER UNIT PER MONTH 4,000
Units
4000
$1.85 3 3%
PER SF PER MONTH
2,000
2000
2
2%
RENT GROWTH
0.9% 00 0%
1
NORTHERN SUBURBS
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
-0.10% -2000 0
SOUTHERN SUBURBS Year
Rentable Completions
Deliveries Net Absorption
Net Absorption VacancyVacancy Rate
(Units) (Units) (Avg %)
PIPELINE
Deliveries in Baltimore picked up with an additional 2,437 units in H1 2020. Just under
2,437 UNITS 2,000 units were absorbed in the past 12 months, most of them before the beginning of
DELIVERED IN 2020
2020, which has caused vacancy to increase in H1 2020. Across the Baltimore metro,
2,532 UNITS vacancy increased 80 bps to 5.0%. In the Baltimore Suburbs, vacancy stands at 4.4%, up
UNDER CONSTRUCTION
10 bps YoY and in Baltimore city, vacancy is 6.6%, up 290 bps YoY.
6,906 UNITS
36-MONTH PIPELINE
EMPLOYMENT H2 Job
2020 Baltimore
Growth YoY Employment
Source: CBRE Research, Axiometrics, and
Delta Associates State/Local Government
Federal Government
As of June 30, 2020
Other Services
Leisure and Hospitality
Education and Health Services
Professional and Business Services
Financial Activities
CAPITAL MARKETS Information
Retail Trade
Wholesale Trade
$506,028,000 Trade, Transportation, and Utilities
Manufacturing
SALES IN H1 2020 Mining, Logging, and Construction
-70,000 -60,000 -50,000
-50,000 -40,000 -30,000
-30,000 -20,000 -10,000
-10,000 00 10,000
10,000
During the recent downturn, Baltimore experienced a loss of 172,500 jobs. The most
impacted sector was Leisure and Hospitality, in which 45% of employees were furloughed
2,913 UNITS or laid off. Education and Health Services also took a loss of 30,800 jobs. Federal
SOLD IN H1 2020
Government and Mining, Logging, and Construction were the only industries to see job
14 PROPERTIES
growth with an increase of 800 employees and 3,300, respectively. The spike in Mining,
Logging, and Construction may have been the result of the emergency expansion of
Baltimore’s hospitals and uninterrupted construction at existing development sites. At the
start of 2020, Baltimore’s unemployment rate was 3.5% and is currently 9.5%. There are
currently 1,253,600 nonfarm employees in the Baltimore metro.
22BALTIMORE METRO H1 2020
RENTAL RATES - ALL PRODUCT TYPES
Submarket Avg $/Unit/Mo. Avg. $/SF/Mo. Vacancy
BALTIMORE METRO HOME PRICES
BaltimoreBaltimore
Metro Metro Median SaleSale
Median Price Price
Annapolis $1,749 $1.98 4.9%
$255,000
$250,000
$255,000
Baltimore City East $1,434 $1.79 5.5% $250,000
$245,000
$250,000
$245,000
Baltimore City North $1,095 $1.35 6.9% $240,000
$245,000
$240,000
$235,000
$235,000
Baltimore City West $996 $1.25 4.1% $240,000
$230,000
$230,000
Columbia/North Laurel $1,643 $1.70 4.4% $235,000
$225,000
$225,000
Downtown Baltimore $1,548 $1.89 8.5% $220,000
$220,000
$220,000
$215,000
Ellicott City/Elkridge $1,609 $1.67 4.7% $205,000
$215,000
$210,000
2014
2014
2014 20152015
2015 2016 2016 2017
2016 2017 20172018
2018 2018
2019
2019 2019
2020
2020
Far North Baltimore Suburbs $1,310 $1.36 2.9%
Northeast Anne Arundel County $1,374 $1.57 4.2%
Home values in the Baltimore metro increased 2.0% YoY,
Northwest Anne Arundel County $1,720 $1.72 5.1% up slightly from the five-year average growth rate of 1.5%.
Owings Mills/Pikesville/Randallstown $1,365 $1.32 4.5% The current median sales price in the Baltimore metro is
Parkville/Carney/Perry Hall $1,164 $1.35 3.6% $251,000. Single-family homes in Baltimore County
Southeast Baltimore County $1,097 $1.32 3.8% posted a 10-year high median sale price of $330,000.
Southwest Baltimore County $1,172 $1.31 4.5% This is a 6% YoY increase from June 2019. Homes in
Towson/Hunt Valley $1,390 $1.40 5.3% Baltimore City also posted a 10-year high median sale
price of $238,000. Of note, Owings Mills experienced a
Rent growth in the Baltimore metro remained largely flat since June 2019. 27% YoY increase in median home value for an average
The Northern Baltimore Suburbs experienced 0.9% rent growth, the Southern of $415,000.
Baltimore Suburbs experienced a drop of 0.1% rent growth, and Baltimore City
rents fell by 3.0%. The Baltimore suburbs outpaced Baltimore City in terms of rent
growth and absorption. Current vacancy in the Baltimore metro is 5.0%, with the
highest vacancies in Downtown Baltimore at 8.5%, Baltimore City North at 6.9%,
and Baltimore City East at 5.5%. According to Delta Reports, the Howard County/
Columbia submarket fared the best in the metro with 2.7% YoY rent growth.
BALTIMORE METRO MULTIFAMILY LARGEST SALES
SALES VOLUME
Balitmore Metro Sales Volume Property Year Built Sold Price Units $/Unit
$3,000,000,000
$3,000,000,000 Townes at Holly Station 1985 04/23/20 $115,000,000 510 $225,490
$2,500,000,000
$2,500,000,000 Chatham Gardens 1980 04/17/20 $83,280,000 414 $201,159
$2,000,000,000
$2,000,000,000
The Point at Elkridge 1988 03/27/20 $72,500,000 312 $232,372
$1,500,000,000
$1,500,000,000
BLVD at White Springs 1977 04/08/20 $61,099,000 459 $133,113
$1,000,000,000
$1,000,000,000
Old Orchard 1986 04/17/20 $33,179,940 180 $184,333
$500,000,000
$500,000,000
$0
$0
2013
2013 2014
2014 2015
2015 2016
2016 2017
2017 2018
2018 2019 H1
2019 H12020
2020
Investment activity reached $506M in the Baltimore metro during
the first two quarters of 2020 in 14 transactions. All but one
sale was value-add product. The highest sales in terms of price
per unit were Point at Elkridge, a 312-unit property in Elkridge
which sold for $232,400 per unit and Townes at Holly Station, a
510-unit property in Waldorf, which sold for $225,500 per unit. TOWNES AT HOLLY STATION
CBRE brokered both sales.
23FOR SALES OR FINANCING INFORMATION
CONTACT:
Investment Sales & Brokerage
William S. Roohan Michael E. Muldowney Robert G. Dean III Jonathan M. Greenberg
Vice Chairman Executive Vice President Senior Vice President Senior Vice President
(O) +1 410 244 3122 (O) +1 410 244 3144 (O) +1 202 585 5766 (O) +1 703 734 4772
(M) +1 443 690 6967 (M) +1 443 250 3144 (M) +1 202 578 6941 (M) +1 202 423 6655
bill.roohan@cbre.com mike.muldowney@cbre.com robert.dean@cbre.com jonathan.greenberg@cbre.com
Martha A. Hastings Brian H. Margerum Michael D. Rudolph John T. Sheridan, Jr.
Senior Vice President Senior Vice President Senior Vice President Senior Vice President
(O) +1 410 244 3162 (O) +1 410 244 3135 (O) +1 410 244 3121 (O) +1 703 905 0239
(M) +1 410 807 2450 (M) +1 443 386 1096 (M) +1 443 928 0392 (M) +1 703 200 7720
martha.hastings@cbre.com brian.margerum@cbre.com michael.rudolph@cbre.com john.sheridan@cbre.com
Yalda G. Howell Thomas B. Leachman Kemp D. Broujos Nathan E. Barth
First Vice President Vice President Senior Associate Associate
(O) +1 202 585 5677 (O) +1 202 585 5638 (O) +1 202 585 5724 (O) +1 703 905 0228
(M) +1 240 462 2332 (M) +1 240 688 0189 (M) +1 443 786 2951 (C) +1 703 340 6828
yalda.ghamarian@cbre.com thomas.leachman@cbre.com kemp.broujos@cbre.com nathan.barth@cbre.com
Zachary L. Stone
Sales Assistant
(O) +1 202 585 5650
(M) +1 202 713 8404
zach.stone@cbre.com
Operations & Marketing
Patricia C. Bonebrake Jennifer W. Bussey Cheryl Finlayson Margaret O. Macleay
Senior Director of Operations Operations Manager Productions Systems Manager Operations Supervisor
(O) +1 410 244 3141 (O) +1 410 244 3134 (O) +1 410 244 7100 (O) +1 202 585 5638
(C) +1 443 253 5917 (C) +1 410 300 1302 (C) +1 410 244 3101 (C) +1 410 562 9340
trish.bonebrake@cbre.com jennifer.bussey@cbre.com cheryl.finlayson@cbre.com maggie.macleay@cbre.com
Rachel L. Mossman Samantha S. Fifield Caroline P. Lekakos Yasmeen F. Sharara
Senior Communications Specialist Sales Assistant Client Services Coordinator Client Services Coordinator
(O) +1 410 244 3179 (O) +1 202 585 5773 (O) +1 202 585 5606 (O) +1 202 585 5580
(C) +1 410 244 7100 (C) +1 310 266 0003 (C) +1 240 595 0642 (C) +1 301 828 7435
rachel.mossman@cbre.com samantha.fifield@cbre.com caroline.lekakos@cbre.com yasmeen.sharara@cbre.com
Lauren E. Spielman Grace F. Trimble
Client Services Coordinator Client Services Coordinator
(O) +1 410 244 3129 (O) +1 410 244 3123
(C) +1 443 800 4388 (C) +1 410 499 1064
lauren.spielman@cbre.com grace.trimble@cbre.com
Debt & Structured Finance Team
David F. Webb Maximiliane T. Leachman Justin J. Glasgow
Vice Chairman Executive Vice President Senior Vice President
(O) +1 202 585 5721 (O) +1 202 585 5655 (O) +1 202 783 1723
(M) +1 202 744 4900 (M) +1 404 358 4317 (M) +1 202 316 1804
david.webb@cbre.com maxi.leachman@cbre.com justin.glasgow@cbre.com
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