OH - KY | MIDWEST | MULTIFAMILY
QUARTERLY REVIEW
QUARTER 2 2024
STATS AND INFO SOURCED BY
2ND QUARTER SNAPSHOT
MIDWEST MARKETS LOCATIONS
CINCINNATI, OHIO
LOUISVILLE, KENTUCKY
DAYTON, OHIO
LEXINGTON, KY
COLUMBUS, OHIO
Quarterly Rent Growth- 1.1%
Rent- $1,828
Rent/SF- $2.011
Occupancy- 94.2%
Units Completed in last 4 quarters157,062
Annual Supply Growth- 2.7%
Units under construction- 628,649
Projected Supply growth- 3.2%
Annual Job Change- 2.7mm
1.4%
$1,403
$1.509 Occupancy- 95.1%
Units Completed in last 4 quarters3,213
Annual Supply Growth- 1.8%
Units under construction- 4,074
Projected Supply growth- 2.39%
Annual Job Change- 9,900
LEXINGTON LOUISVILLE DAYTON COLUMBUS
NATIONAL OUTLOOK
• Market trends continue to support the idea that the U.S. apartment market performance is stabilizing. U.S. apartment demand surpassed expectations in the first half of 2024, and absorption is expected to continue to thrive in the near term.
• The record supply wave will continue to loom over occupancy and rent performance fundamentals in the near term.
• The U.S. economy displayed resilience in 2nd quarter 2024, with solid employment growth and reduced inflationary pressure.
• Occupancy is slated to inch upward in the coming year as operators focus on stabilizing rent rolls.
• As demand and occupancy improve, annual effective asking rent growth is expected edge upward as well, though supply constraints will keep price increases modest compared to historical averages.
• Most markets nationwide should see rent growth above 2% in the coming year, with high-supply markets skewing a bit lower. THE OUTLOOK
• U.S. economic growth generally followed along a slow trajectory in the 10 years leading up to the pandemic, with real gross domestic product (GDP) growing at an average annual rate of just over 2% from 2010 to 2019. The economic fallout from the pandemic caused the economy to contract nearly 30% in 2nd quarter 2020 before rebounding around 35% in 3rd quarter 2020.
• Most recently, GDP expanded at an annual rate of 2.8% in 2nd quarter 2024, based on an advance estimate from the Bureau of Economic Analysis. That recent expansion was above the 1.4% growth seen in 1st quarter 2024 and an improvement from the 2.1% expansion in 2nd quarter 2023.
• In the year-ending May 2024, the nation’s job base expanded 1.7% year-over-year with the net addition of more than 2.7 million jobs, according to not seasonally adjusted data from the Bureau of Labor Statistics. That is in contrast to the annual job base contraction of roughly 12% to 13% in April and May 2020, when year-over-year job losses got as deep as 20 million.
• By comparison, the nation’s employment base grew roughly 1.5% to 2.5% annually from late 2011 through early 2020, adding about 2.2 million jobs annually during that period. Despite job losses stemming from the pandemic, the current employment base in the U.S. now sits nearly 7.9 million jobs or 5.2% above the pre-pandemic level in February 2020.
• As the economy continues to expand beyond its pre-pandemic employment base, job growth is expected to ease over the coming year.
• Among individual markets, New York-White Plains recorded the nation’s strongest annual job growth performance during the year-ending May 2024, with a net increase of roughly 101,200 jobs.
• Two other markets gained more than 50,000 jobs: Houston-The Woodlands-Sugar Land (81,700 jobs) and Phoenix-Mesa-Scottsdale (52,300 jobs).
• For proportional change, Charleston-North Charleston was at the top of the pack with a job base expansion of 4.5%, followed by College Station-Bryan and Las Vegas-Henderson-Paradise, both logging 4.0% annual job growth.
NATIONAL OUTLOOK
• Annual supply levels have been elevated during the past decade, topping 200,000 units annually during that period and topping 300,000 units annually for the past four years. In 2nd quarter 2024, a total of 157,062 units came online.
• That recent annual total was roughly 161,200 units greater than the five-year average and about 195,700 units above the decade average.
• Completion levels are expected to pick up, with 628,649 units scheduled to deliver in the year-ending 2nd quarter 2025, which would set a new record high.
• For comparison, in the early 2000s, annual new supply levels peaked at about 226,000 units in 3rd quarter 2000.
• In the year-ending 2nd quarter 2024, Dallas-Plano-Irving led the nation with 29,007 units built.
• Also adding more than 15,000 units annually were Houston-The Woodlands-Sugar Land (25,906 units), Atlanta-Sandy Springs-Roswell (23,456 units), Austin-Round Rock (23,114 units) and Phoenix-Mesa-Scottsdale (19,988 units).
• Since the global pandemic, apartment demand has swung between highs and lows. Demand temporarily plummeted in the early days of the pandemic, only to come roaring back to reach record highs in late 2021 and early 2022. During that time, pentup demand pulled forward considerable volumes of apartment absorption, essentially capturing two years’ worth of demand in just a couple of quarters.
• Demand started cooling in 2nd quarter 2022 and plummeted for about a year. More recently, demand has rebounded nationwide to a strong reading in 2024’s 2nd quarter.
• In the April to June time frame, the core 150 markets posted demand for 161,707 units, above the 2nd quarter average in the 10 years leading up to the pandemic (roughly 143,000 units).
• In the year-ending 2nd quarter 2024, the core 150 markets collectively posted net demand for 389,629 units, above the annual average from 2010 to 2019 (255,600 units).
• Looking at absorption in individual markets, Dallas-Plano-Irving led the nation with 21,322 units absorbed in the year-ending 2nd quarter 2024. Also absorbing more than 13,000 units annually were Houston-The Woodlands-Sugar Land (20,046 units), Austin-Round Rock (17,451 units), Phoenix-Mesa-Scottsdale (17,440 units) and Atlanta-Sandy Springs-Roswell (16,333 units).
• In 2nd quarter 2024, the weakest annual demand showing was recorded in Springfield, MA (-719 units).
• As of 2nd quarter 2024, occupancy in the core 150 U.S. markets registered at 94.2%, up 0.1 point from last quarter’s 12-year low but 0.5 points below the year-earlier rate. By comparison, occupancy over the past decade averaged 95.3%.
• During the Great Recession, occupancy fell to roughly 92% throughout 2009 before rebounding. Prior to the Great Recession, from 2005 to 2007, occupancy averaged 94.1%. Even during the pandemic-induced recession in 2020, occupancy stayed above 95% and peaked at a historic high of 97.5% in early 2022.
• Looking at individual markets, Syracuse led the nation with 2nd quarter 2024 occupancy at 97.4%. That market was followed by Youngstown-Warren-Boardman (97.2%), Manchester/Nashua/ Concord (97.1%) and Salinas (97.1%). A
• t the low end, eight markets posted occupancy below 92%, with the weakest reading in Myrtle Beach-Conway-North Myrtle Beach (90.7%).
• In terms of annual occupancy change, with the biggest increase of 1.0 point in both Jackson and Syracuse. Conversely, Sioux Falls logged the nation’s worst occupancy contraction, recording a 3.2-point year-over-year decline.
• Effective asking rents rose 1.1% in 2nd quarter 2024. Due to previous price reductions, rents were up just 0.2% year-over-year. That annual rent growth pace was well below the record increases in late 2021 and early 2022 and landed below the average of 3.6% during the five years leading up to the pandemic.
• Throughout the pandemic and subsequent recovery period, annual rent growth peaked at 15.3% in 1st quarter 2022 before slowing every consecutive quarter since to land at the near-stagnant annual rent growth seen in the last four quarters. Prior to the pandemic, the previous rent growth high was achieved in 3rd quarter 2000 when rents climbed 7.5% year-over-year, while the weakest annual rent change performance came in 3rd quarter 2009 when rents were cut 5.5% year-over-year.
• The recent shifts brought average effective asking rents in the core 150 U.S. markets to $1,828 per month, or $2.011 per square foot, as of 2nd quarter 2024.
• Looking at year-over-year rent change in individual markets, Syracuse led the nation, with an increase of 7.3%. That market was followed by Midland/Odessa (7.0%) and Lincoln (6.1%).
• Five other markets recorded annual hikes above 5%: Salinas (5.6%), Buffalo-Cheektowaga- Niagara Falls (5.5%), Dayton (5.4%), Springfield, MA (5.3%) and Urban Honolulu (5.1%). Meanwhile, the year-ending 2nd quarter 2024, with the steepest price cut was in Cape Coral-Fort Myers (-9.4%).
CINCINNATI
supply occupancy
1| New apartment completions in Cincinnati were moderate recently, as 3,213 units delivered in the year-ending 2nd quarter 2024. 2| With 150 units removed from existing stock over the past year, the local inventory base grew 1.8%. 3| In the past year, supply was greatest in Southeast Cincinnati, Campbell/Kenton Counties and North Cincinnati. 4| Annual new supply averaged 1,949 units, and annual inventory growth averaged 1.1% over the past five years. 5| During that period, new supply was concentrated in Campbell/Kenton Counties and Central Cincinnati, which received 42% of the market’s total completions. 6| At the end of 2nd quarter 2024, there were 4,074 units under construction with 3,214 of those units scheduled to complete in the next four quarters, almost exactly the same as the recent annual delivery load. 7| Scheduled deliveries in the coming year are expected to be concentrated in Central Cincinnati and Boone County/Erlanger.
rent
1| Over the past five years, annual change in effective asking rents in Cincinnati ranged from 2.0% to 11.9%. 2| In 2nd quarter 2024, same-store effective asking rents for new leases were up 3.0% year-over-year. 3| That annual rent performance was below the market’s five-year average of 5.7%.
4| Looking at product classes in Cincinnati, Class B led for rent performance over the past five years. 5| In 2nd quarter 2024, annual effective rent change registered at 1.6% in Class A units, 3.3% in Class B units and 3.9% in Class C units. 6| Among submarkets, the strongest annual rent change performances over the past year were in West Cincinnati (6.7%) and Boone County/Erlanger (5.7%). 7| The weakest performances were in North Central Cincinnati (-0.8%) and Butler County (0.8%). 8| Over the past five years, rent growth was strongest in Southeast Cincinnati. 9| In the coming year, effective asking rent change in Cincinnati is expected to remain around the current level. As of 2nd quarter 2024, effective asking rental rates in Cincinnati averaged $1,403 per month, or $1.509 per square foot.
1| Occupancy in the Cincinnati apartment market has ranged from 94.7% to 98.2% over the past five years, averaging 96.3% during that period. 2| Over the past year, occupancy lost 0.6 points, with the 2nd quarter 2024 rate landing at 95.1%. 3| Looking at product classes in Cincinnati, 2nd quarter 2024 occupancy registered at 94.2% in Class A units, 95.3% in Class B units and 95.5% in Class C units. 4| Occupancy in the more affordable Class C product was generally tightest over the past five years. 5| Among submarkets, 2nd quarter 2024 occupancy was strongest in Northeast Cincinnati/ Warren County and Campbell/Kenton Counties with both above 96%. 6| The weakest readings were seen in Central Cincinnati, North Central Cincinnati and Boone County/Erlanger, all three below 94%. 7| Over the past five years, Campbell/Kenton Counties generally led for occupancy. During the coming year, occupancy in Cincinnati is expected to register around 95%.
demand
1| Over the past five years, annual absorption in Cincinnati has ranged from net move-outs from 1,650 units to demand for 4,528 units, averaging 1,509 units annually during that time. 2| In the year-ending 2nd quarter 2024, the market recorded demand for 1,859 units, trailing concurrent supply volumes. 3| Among submarkets, the strongest absorption over the past five years was seen in Campbell/Kenton Counties, Northeast Cincinnati/Warren County and Central Cincinnati. Those areas accounted for 65% of the market’s total demand over the past five years. 4| In the past year, demand was greatest in North Cincinnati, Campbell/Kenton Counties and Northeast Cincinnati/ Warren County.
for-sale housing
1| Prior to the pandemic, Cincinnati’s real gross metropolitan product grew at an average annual rate of 2.2% from 2015 to 2019. During that same fiveyear period, job growth averaged 1.4% annually, with roughly 15,200 jobs added on average each year. 2| In 2020, COVID-19 mitigation measures and limited business activity caused the local economy to contract as much as 8.2% year-over-year in 2nd quarter. 3| In the year-ending 2nd quarter 2024, the metro’s inflation-adjusted economic output expanded 2.9%. At the same time, the metro recorded a net gain of 9,900 jobs, expanding the employment base 0.9%. 4| As such, Cincinnati’s unemployment rate in May 2024 rose 1.3 points year-over-year to 4.4%, above the national average of 3.7%.
HIGHEST OVERALL PERFORMING SUBMARKET
3,213 units completed in past 12 months 4,074 units currently in progress
LOWEST OVERALL PERFORMING SUBMARKETS
UNITS UNDER CONSTRUCTION
RENT GROWTH
SECTOR
EMPLOYMENT
other highlights
• In May, Chicago-based Blue Vista Capital Management purchased the 192-unit RiverHaus apartment community in Covington, KY for more than $58.7 million, or over $305,900 per door, according to transactional data from Real Capital Analytics. The property is located along Main Street in an urban riverfront neighborhood in downtown Covington, within Cincinnati’s Campbell/Kenton Counties submarket. Built in 2019, this five-story development features an array of outdoor community spaces including a courtyard, lounge area, sky deck, pool and on-site dog park. The seller was Indianapolis-based Flaherty & Collins Properties.
• Locally based aircraft engine supplier GE Aerospace announced in March a plan to invest $650 million in its manufacturing sites and supplier partners, including $107 million in Cincinnati area facilities, after it becomes a spinoff from GE Vernova in April. The investments aim to enhance future flight technologies and safety measures, with over 1,000 jobs expected to be created across the firm’s U.S. factories, reports Cincinnati Business Courier.
GE Aerospace aims to double revenue and reach $10 billion in profit by 2028, with a $15 billion share buyback. These investments aim to boost production and quality to meet growing demands from commercial and defense customers. GE Aerospace is a major player in the commercial aircraft engine industry.
• New renderings for the renovation of Cincinnati’s Duke Energy Center were unveiled during Visit Cincy’s annual luncheon in January. The $200 million renovation project, set to begin this year, will add over 90,000 square feet of new space alongside a new 800-room hotel, according to local news.
Visit Cincy has partnered with the Cincinnati Regional Business Committee to develop a funding plan for a new sports commission aimed at boosting sports tourism in the area. This initiative, slated to launch in spring 2024, seeks to attract top-level sporting events to Cincinnati, filling a gap as the city currently lacks an active sports corporation.
• Amtrak rail service has plans for new routes linking Cincinnati, Cleveland, Columbus and Dayton to Detroit via Toledo. The Federal Railroad Administration awarded initial funding for these projects, which will undergo planning phases to determine costs, passenger estimates, travel times and station locations, reports the Mid-Ohio Regional Planning Commission. However, there’s uncertainty about whether all proposed routes will proceed to construction. Despite challenges, advocates argue that improved rail service will enhance productivity, economic impact and sustainability. The expansion is part of a broader $66 billion investment in rail infrastructure, supported by policy pushes from the federal government.
• Ohio was among 22 states to enact minimum wage increases on January 1. The hikes come as the federal minimum wage has remained at $7.25 per hour since 2009, reports trade publication Chain Store Age. In Ohio, the minimum wage increased from $10.10 an hour to $10.45 an hour. Four other states will increase their minimum wages in the second half of 2024.
• Green Township in West Cincinnati is scheduled to see significant developments, particularly in housing, infrastructure and public safety, in 2024.
One notable project is Trailside Village, a large housing development focused on preserving natural features like woodlands and streams. This conservation development includes various types of homes and amenities integrated with the surrounding environment. Other housing developments by different builders are also underway, adding to the township’s residential options, reports Cincinnati.com. Additionally, the township is investing in enhancing public safety by constructing a new police station to accommodate the growing police department. Infrastructure improvements, such as new sidewalks, road enhancements, and trail expansions, are also planned to increase safety and accessibility for pedestrians and cyclists throughout the township.
DAYTON
supply occupancy
1| New apartment completions in Dayton were moderate recently, as 1,009 units delivered in the year-ending 2nd quarter 2024. Completions over the past year expanded the local inventory base 1.8%. 2| In the past year, supply was greatest in Central Dayton/Kettering and North Dayton/Miami County. Annual new supply averaged 643 units, and annual inventory growth averaged 1.2% over the past five years. 3| During that period, new supply was concentrated in Central Dayton/Kettering and South Montgomery County, which received 64% of the market’s total completions. 4| At the end of 2nd quarter 2024, there were 662 units under construction with 284 of those units scheduled to complete in the next four quarters. 5| Scheduled deliveries in the coming year are expected to be limited to Central Dayton/ Kettering (199 units) and South Montgomery County (85 units).
rent
1| Over the past five years, annual change in effective asking rents in Dayton ranged from 2.2% to 10.2%. 2| In 2nd quarter 2024, same-store effective asking rents for new leases were up 5.4% year-over-year. 3| That annual rent performance was slightly below the market’s five-year average of 5.6%.
4| Product classes in Dayton, Class A led for rent performance over the past five years. In 2nd quarter 2024, annual effective rent change registered at 5.1% in Class A units, 6.7% in Class B units and 4.7% in Class C units. 5| Among submarkets, the strongest annual rent change performances over the past year were in Greene County and Northwest Dayton. The weakest performances were in Central Dayton/Kettering and North Dayton/Miami County. 6| Over the past five years, rent growth was strongest in South Montgomery County. 7| In the coming year, effective asking rent change in Dayton is expected to slow from the current level. As of 2nd quarter 2024, effective asking rental rates in Dayton averaged $1,173 per month, or $1.274 per square foot.
1| Occupancy in the Dayton apartment market has ranged from 95.1% to 98.0% over the past five years, averaging 96.5% during that period. 2| Over the past year, occupancy lost 0.6 points, with the 2nd quarter 2024 rate landing at 95.1%.3| Product classes in Dayton, 2nd quarter 2024 occupancy registered at 94.1% in Class A units, 95.6% in Class B units and 95.6% in Class C units. Occupancy in Class C product was generally tightest over the past five years. 4| Among submarkets, 2nd quarter 2024 occupancy was strongest in Greene County and South Montgomery County. 5| The weakest readings were seen in Northwest Dayton and North Dayton/Miami County. Over the past five years, Greene County generally led for occupancy. 6| During the coming year, occupancy in Dayton is expected to register around 95%.
the economy
1| Prior to the pandemic, Dayton’s real gross metropolitan product grew at an average annual rate of 1.4% from 2015 to 2019. 2| During that same five-year period, job growth averaged 1.0% annually, with roughly 3,700 jobs added on average each year. 3| In 2020, COVID-19 mitigation measures and limited business activity caused the local economy to contract as much as 9.2% year-over-year in 2nd quarter. 4| In the year-ending 2nd quarter 2024, the metro’s inflation-adjusted economic output expanded 2.9%. At the same time, the metro recorded a net gain of 2,100 jobs, expanding the employment base 0.5%.5| Dayton’s unemployment rate in May 2024 rose 1.4 points yearover-year to 4.8%, above the national average of 3.7%. 6| During the past year, job gains in Dayton were most pronounced in the Leisure/Hospitality Services sector followed by Education/Health Services. 7| Despite job losses stemming from the pandemic, Dayton’s current employment base now sits roughly 1,600 jobs above the pre-pandemic level in February 2020.
1,006 units completed in past 12 months
662 units currently in progress
RENT GROWTH SECTOR
Q2 2024 MARKET SNAPSHOT
LOUISVILLE
1| New apartment completions in Louisville/Jefferson County were moderate recently, as 2,354 units delivered in the year-ending 2nd quarter 2024.
2| With 8 units removed from existing stock over the past year, the local inventory base grew 2.4%. In the past year, supply was greatest in Northwest Louisville and Southwest Louisville. 3| Annual new supply averaged 1,998 units, and annual inventory growth averaged 2.1% over the past five years. During that period, new supply was concentrated in Northeast Louisville and Northwest Louisville, which received 61% of the market’s total completions. 4| At the end of 2nd quarter 2024, there were 4,292 units under construction with 3,395 of those units scheduled to complete in the next four quarters, which would be a new record high. 5| Scheduled deliveries in the coming year are expected to be concentrated in Southwest Louisville and South Central Louisville.
supply occupancy rent
1| Over the past five years, annual change in effective asking rents in Louisville/Jefferson County ranged from a decline of 0.1% to an increase of 12.1%.
2| In 2nd quarter 2024, effective asking rents for new leases were up 5.0% year-over-year. That annual rent performance was in line with the market’s five-year average of 5.1%. 3| Product classes in Louisville/Jefferson County, Class A led for rent performance over the past five years. 4| In 2nd quarter 2024, annual effective rent change registered at 3.8% in Class A units, 6.1% in Class B units and 4.6% in Class C units. 5| Among submarkets, the strongest annual rent change performances over the past year were in South Central Louisville (7.3%) and Southeast Louisville (6.5%). 6| The weakest performances were in Northwest Louisville (2.6%) and Central Louisville (4.1%). 7| Over the past five years, rent growth was strongest in South Central Louisville. 8| In the coming year, effective asking rent change in Louisville/Jefferson County is expected to slow from the current level.
1| Occupancy in the Louisville/Jefferson County apartment market has ranged from 94.0% to 97.3% over the past five years, averaging 95.2% during that period. 2| Over the past year, occupancy gained 0.1 point, with the 2nd quarter 2024 rate landing at 94.6%. 3| Product classes in Louisville/Jefferson County, 2nd quarter 2024 occupancy registered at 94.9% in Class A units, 94.3% in Class B units and 95.1% in Class C units. 4| Occupancy in Class C product was generally tightest over the past five years. Among submarkets, 2nd quarter 2024 occupancy was strongest in South Central Louisville (96.0%) and Northeast Louisville (95.1%). 5| The weakest readings were seen in Southwest Louisville (93.1%) and Central Louisville (94.1%).
the economy
1| Prior to the pandemic, Louisville/Jefferson County’s real gross metropolitan product grew at an average annual rate of 2.0% from 2015 to 2019. During that same five-year period, job growth averaged 1.5% annually, with roughly 9,800 jobs added on average each year. 2| In 2020, COVID- 19 mitigation measures and limited business activity caused the local economy to contract as much as 7.7% year-over-year in 2nd quarter. 3| In the year-ending 2nd quarter 2024, the metro’s inflation-adjusted economic output expanded 2.0%. At the same time, the metro recorded a net gain of 5,100 jobs, expanding the employment base 0.7%. 4| Louisville/Jefferson County’s unemployment rate in May 2024 rose 0.5 points year-over-year to 4.0%, above the national average of 3.7%. 5| During the past year, job gains in Louisville/ Jefferson County were most pronounced in the Education/Health Services sector. 6| Despite job losses stemming from the pandemic, Louisville/Jefferson County’s current employment base now sits roughly 30,700 jobs or about 5% above the pre-pandemic level in February 2020.
2,345 units completed in past 12 months 4,292 units currently in progress
HIGHEST OVERALL PERFORMING SUBMARKET
LOWEST OVERALL PERFORMING SUBMARKETS
Q2 2024 MARKET SNAPSHOT
LEXINGTON
Quarterly Rent
3.0% Rent- $1,223 Rent/SF- $1.328 Occupancy- 95.2% Units Completed in last 4 quarters- 576 Annual Supply Growth- 1.2%
Units under construction- 741
Projected Supply growth- 1.53% Annual Job Change- 6,100
QUARTER 2
1| New apartment completions in Lexington-Fayette were modest recently, as 576 units delivered in the year-ending 2nd quarter 2024. 2| Completions over the past year expanded the local inventory base 1.2%. In the past year, supply was limited to North Lexington (379 units) and Downtown Lexington/University (197 units).3| Annual new supply averaged 472 units, and annual inventory growth averaged 1.0% over the past five years. 4| During that period, new supply was concentrated in North Lexington, which received 46% of the market’s total completions. 5| At the end of 2nd quarter 2024, there were 741 units under construction with all of those units scheduled to complete in the next four quarters. 6| Scheduled deliveries in the coming year are expected to be concentrated in South Lexington.
supply occupancy rent
1| Over the past five years, annual change in effective asking rents in Lexington-Fayette ranged from a decline of 0.2% to an increase of 15.4%. In 2nd quarter 2024, same-store effective asking rents for new leases were up 4.7% year-over-year. That annual rent performance was below the market’s five-year average of 6.6%. 2| Looking at product classes in Lexington-Fayette, Class A led for rent performance over the past five years. In 2nd quarter 2024, annual effective rent change registered at 5.7% in Class A units, 5.2% in Class B units and 1.4% in Class C units. 3| The strongest annual rent change performance over the past year was in South Lexington (5.3%). The weakest performance was in Downtown Lexington/University (2.5%). 4| Over the past five years, rent growth was strongest in South Lexington. In the coming year, same-store effective asking rent change in Lexington-Fayette is expected to slow from the current level. 5| As of 2nd quarter 2024, effective asking rental rates in Lexington-Fayette averaged $1,223 per month, or $1.328 per square foot.
1| Occupancy in the Lexington-Fayette apartment market has ranged from 94.4% to 97.6% over the past five years, averaging 95.8% during that period. Over the past year, occupancy lost 0.3 points, with the 2nd quarter 2024 rate landing at 95.2%. 2| Looking at product classes in Lexington-Fayette, 2nd quarter 2024 occupancy registered at 96.1% in Class A units, 95.4% in Class B units and 93.3% in Class C units. 3| Among submarkets, 2nd quarter 2024 occupancy was strongest in North Lexington (95.5%). The weakest reading was seen in Downtown Lexington/University (94.4%). 4| Over the past five years, North Lexington generally led for occupancy. During the coming year, occupancy in Lexington-Fayette is expected to register around 94.5%.
the economy
1| Prior to the pandemic, Lexington-Fayette’s real gross metropolitan product grew at an average annual rate of 1.8% from 2015 to 2019. 2| During that same five-year period, job growth averaged 1.2% annually, with roughly 3,100 jobs added on average each year. In 2020, COVID-19 mitigation measures and limited business activity caused the local economy to contract as much as 7.8% year-over-year in 2nd quarter. 3| In the year-ending 2nd quarter 2024, the metro’s inflation-adjusted economic output expanded 4.0%. At the same time, the metro recorded a net gain of 6,100 jobs, expanding the employment base 2.1%. 4| As such, Lexington-Fayette’s unemployment rate in May 2024 rose 0.4 points year-over-year to 3.8%, in line with the national average of 3.7%. 5| During the past year, job gains in Lexington-Fayette were most pronounced in the Government sector followed by Education/Health Services and Leisure/Hospitality Services. 6| Despite job losses stemming from the pandemic, Lexington-Fayette’s current employment base now sits roughly 21,700 jobs or about 8% above the pre-pandemic level in February 2020.
RENT GROWTH
COLUMBUS
1| New apartment completions in Columbus were elevated recently, as 7,611 units delivered in the year-ending 2nd quarter 2024. 2| With 749 units removed from existing stock over the past year, the local inventory base grew 3.4%. In the past year, supply was greatest in Downtown Columbus/University District, Reynoldsburg/Far East Columbus and Grove City/South Columbus. 3| Annual new supply averaged 5,006 units, and annual inventory growth averaged 2.5% over the past five years. 4| During that period, new supply was concentrated in Downtown Columbus/University District and Westerville/New Albany/Delaware, which received 44% of the market’s total completions. 5| At the end of 2nd quarter 2024, there were 10,697 units under construction with 6,889 of those units scheduled to complete in the next four quarters.
supply occupancy rent
1| Over the past five years, annual change in effective asking rents in Columbus ranged from 1.1% to 11.3%. 2| In 2nd quarter 2024, same-store effective asking rents for new leases were up 2.7% year-over-year. 3| That annual rent performance was below the market’s five-year average of 4.9%. 4| Looking at product classes in Columbus, Class B led for rent performance over the past five years. In 2nd quarter 2024, annual effective rent change registered at 0.8% in Class A units, 3.2% in Class B units and 3.7% in Class C units. 5| Among submarkets, the strongest annual rent change performances over the past year were in Southeast Columbus (5.6%) and North Central Columbus (4.9%). 6| The weakest performances were in Downtown Columbus/University District (-1.4%) and Dublin/Hilliard (2.2%). Over the past five years, rent growth was strongest in North Central Columbus. 7| In the coming year, effective asking rent change in Columbus is expected to pick up from the current level. As of 2nd quarter 2024, effective asking rental rates in Columbus averaged $1,346 per month, or $1.421 per square foot.
1| Occupancy in the Columbus apartment market has ranged from 94.3% to 97.6% over the past five years, averaging 95.7% during that period. Over the past year, occupancy lost 0.5 points, with the 2nd quarter 2024 rate landing at 94.6%. 2| Looking at product classes in Columbus, 2nd quarter 2024 occupancy registered at 93.5% in Class A units, 94.7% in Class B units and 95.1% in Class C units. Occupancy in the more affordable Class C product was generally tightest over the past five years. 3| Among submarkets, 2nd quarter 2024 occupancy was strongest in Reynoldsburg/Far East Columbus, Dublin/ Hilliard, North Central Columbus and Westerville/New Albany/Delaware at 95% or greater. 4| The weakest readings were seen in Downtown Columbus/ University District and Southeast Columbus with both below 94%.
the economy
1| Prior to the pandemic, Columbus’ real gross metropolitan product grew at an average annual rate of 3.0% from 2015 to 2019. During that same five-year period, job growth averaged 1.8% annually, with roughly 19,400 jobs added on average each year. 2| In 2020, COVID-19 mitigation measures and limited business activity caused the local economy to contract as much as 7.0% year-over-year in 2nd quarter. 3| In the year-ending 2nd quarter 2024, the metro’s inflation-adjusted economic output expanded 2.0%. 4| The metro recorded a net gain of 13,000 jobs, expanding the employment base 1.1%. 5| As such, Columbus’ unemployment rate in May 2024 rose 1.4 points year-overyear to 4.3%, above the national average of 3.7%. 6| During the past year, job gains in Columbus were most pronounced in the Education/Health Services sector followed by Government. 7| Despite job losses stemming from the pandemic, Columbus’ current employment base now sits roughly 57,800 jobs or about 5% above the pre-pandemic level in February 2020.
COLUMBUS
7,611 units completed in past 12 months
HIGHEST
10,697 units currently in progress
LOWEST OVERALL PERFORMING SUBMARKETS
RENT GROWTH SECTOR
UNRIVALED SUCCESS IN THE MIDWEST
YOUR TEAM
JORDAN DICKMAN
FIRST VICE PRESIDENTS DIRECTOR, NMHG
NICK ANDREWS
FIRST VICE PRESIDENTS DIRECTOR, NMHG
AUSTIN SUM
SENIOR INVESTMENT ASSOCIATE
AUSTIN Hall
INVESTMENT ASSOCIATE
ALDEN SIMMS
INVESTMENT ASSOCIATE
CORPORATE SUPPORT
LIZ POPP
MIDWEST OPERATIONS MANAGER
JOSH CARUANA
VICE PRESIDENT
REGIONAL MANAGER
INDIANAPOLIS | CINCINNATI | LOUISVILLE | ST LOUIS | KANSAS CITY
Peter Stanley
National Director
National Multi Housing Group
MICHAEL GLASS
SENIOR VICE PRESIDENT
MIDWEST DIVISION MANAGER
NATIONAL DIRECTOR, MANUFACTURED HOME COMMUNITIES GROUP
BROKER SUPPORT
SAM PETROSINO
VALUATION & RESEARCH
BRETT MARTIN
INTERNAL ACCOUNTANT
PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY.
PLEASE CONTACT ANDREWS | DICKMAN FOR MORE DETAILS.
BRITTANY CAMPBELL-KOCH
DIRECTOR OF OPERATIONS
ALEX PAPA
MARKETING COORDINATOR
OH - KY | MIDWEST | MULTIFAMILY
Our commitment is to help our clients create and preserve wealth by providing them with the best real estate investment sales, financing, research and advisory services available
