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News release

LOS ANGELES, CA

West Coast Remains Prime Target for Multifamily

Seattle, Phoenix, Los Angeles and San Diego redeemed in the recovery; total transaction volume in four cities reaches $4.6 billion


LOS ANGELES, Nov. 13, 2012 - Multifamily investors are making an aggressive push westward into Seattle, Phoenix, Los Angeles and San Diego, according to Jones Lang LaSalle’s third quarter 2012 West Coast Multifamily Outlook. As result of the positive momentum from the falling unemployment rates and increase in rental and occupancy fundamentals, these target cities witnessed a total combined multifamily transaction volume of $4.6 billion year-to-date September 2012. 

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All Roads Lead to the Emerald City

Seattle remains high on the list of target cities for multifamily investment, as transaction volume year-to-date is up to $1.03 billion. Private equity buyers have fueled more than half of the transactions, accounting for 57 percent of the investor composition, followed by institutional capital at 23 percent. In the past year, the Seattle metro’s added 13,800 jobs.  David Young, Managing Director of Jones Lang LaSalle in Seattle added, “Over the next three years we expect the apartment sector in Seattle to outperform much of the United States, keeping Puget Sound front and center on investor’s radar. The Seattle area will have slow but steady growth in the coming year, as increases in gas prices and lower cost of living keeps migration focused around the urban core.”
 
The Valley of the Sun is still shining for multifamily investors
 
The robust demand for multifamily investment witnessed by Phoenix in 2011 continued into 2012.The city ranked third in the nation in terms of total dollar volume of sales, and year-to-date is up nearly 55 percent over 2011 at $1.65 billion. In the past year, the Phoenix metro has added 33,000 jobs.  John Cunningham, Executive Vice President of Jones Lang LaSalle in Phoenix added, “We’ve seen cap rates fall an average of 30 basis points in Phoenix, since 2011. Private investors have dominated the 2012 acquisition landscape, and we expect them to continue to play an integral role in the market in 2013. In terms of market performance, rental demand has been strong and vacancy has plummeted from its peak in 2009. New deliveries have just begun to enter the market however, absorption is strong while overall rental rate continue to increase.”

The City of Angels is still flying sky-high

Apartment fundamentals have improved in Los Angeles with consistant gains since 2009. The apartment sector is expected to continue rebounding as economic growth moves at a modest pace with renting a  more favorable option over homeownership. In the past year, Los Angeles has added 66,100 jobs.  Joe Leon, Managing Director of Jones Lang LaSalle in Los Angeles added, “As a gateway, coastal market, Los Angeles continues to be high on investor’s lists as it continues to recover. It currently ranks fifth in terms of total dollar volume of multifamily sales, with $1.47 billion in multifamily transactions year-to-date 2012. We’re seeing developer and owner/operators continue to be the dominant force in the transaction market, making up nearly three-quarters of the investor composition.”  

Americas Finest City on its way to recovery

San Diego’s balancing economy is fueling investment demand, as sales volume has increased 34 percent on average each year since 2009. The multifamily transaction market in San Diego currently stands at $492 million year-to-date 2012, with 93 percent of the investor mix controlled by private equity. Additionally, cap rates in the market have continued to compress, dropping 1 percent on average since 2009 as well. In the past year, San Diego has added 28,000 jobs.  Darcy Miramontes, Executive Vice President of Jones Lang LaSalle in San Diego added, “San Diego’s high barrier-to-entry fundamentals and its location amplifies its economic recovery. The market is coming back, and we’re seeing population growth positively impact the multifamily investor demand. Tourism has also had a positive effect on the service industries, while construction and finance sectors re-emerge as key sectors that were constrained in the economic expansion.”

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Jones Lang LaSalle Capital Markets is a full-service global provider of capital solutions for real estate investors and occupiers. The firm’s in-depth local market and global investor knowledge delivers the best-in-class solutions for clients — whether a sale, financing, repositioning, advisory or recapitalization execution. In 2011 alone, Jones Lang LaSalle Capital Markets completed $60 billion in investment sale and debt and equity transactions globally. The firm’s dealmakers completed $52 billion in global investment sales and buy-side transactions, equating to nearly $216 million of investment trades completed every working day around the globe. In the United States, Jones Lang LaSalle grew its total Capital Markets volumes by 122 percent in 2011 and is quickly gaining market share across all property types. The firm’s Capital Markets team comprises more than 1,200 specialists, operating all over the globe.

About Jones Lang LaSalle
Jones Lang LaSalle (NYSE:JLL) is a financial and professional services firm specializing in real estate. The firm offers integrated services delivered by expert teams worldwide to clients seeking increased value by owning, occupying or investing in real estate. With 2011 global revenue of $3.6 billion, Jones Lang LaSalle serves clients in 70 countries from more than 1,000 locations worldwide, including 200 corporate offices.  The firm is an industry leader in property and corporate facility management services, with a portfolio of approximately 2.1 billion square feet worldwide. LaSalle Investment Management, the company’s investment management business, is one of the world’s largest and most diverse in real estate with $47 billion of assets under management. For further information, please visit www.joneslanglasalle.com.