The net operating income (NOI) for garden-style apartment buildings rose by 5.3% to $7.13 per square foot nationwide in 2016, the highest percentage increase in NOI across all apartment types.
These findings and more appear in the Institute of Real Estate Management (IREM)’s recently released Annual Income/Expense Analysis Reports, which provide updated investment property data, insight, and trend analysis across five real estate investment categories: condominiums, cooperatives, and planned unit developments; conventional apartments; federally assisted apartments; office buildings; and shopping centers.
These data are available at the local, regional, and national levels in a variety of formats, including online labs and interactive PDF/Excel files, in an effort to enable apartment professionals to benchmark and forecast their properties' market performance.
Highlights from each of the three national residential reports for 2016 appear below.
Conventional Apartments
In addition to providing NOI for garden apartments, IREM's conventional-apartments report breaks down the figures for other building types, as well. For example, elevator buildings’ NOI rose only 0.2%, to $12.24 per square foot, last year, but NOI for low-rise buildings with 25 or more units rose 2.5%, to $6.66 per square foot, and NOI for low-rise buildings with 12 to 24 units rose 4.5%, to $5.61 per square foot.
Elevator buildings experienced the highest increase in gross possible rent, at 5.3%, up to $20.80 per square foot, while garden-style buildings reported a 3.7% rent gain, up to $12.67 per square foot. Low-rises with 25-plus units reported a 1.6% rent increase, to $12.93 per square foot, while rents for low-rises with 12 to 24 units rose 1.7%, up to $12.55 per square foot.
As for expenses, low-rise buildings with 12 to 24 units experienced a 4.7% drop, down to $5.33 per square foot, but expenses for low-rise buildings with 25+ units rose 3.2%, to $5.76 per square foot. Expenses for garden buildings, meanwhile, climbed 3.5%, to $5.55 per square foot, while elevator building expenses rose 1.3%, to $8.34 per square foot.
Federally Assisted Apartments
Sec. 221(d)3 garden buildings experienced the lowest expenses in 2016, at $5.21, while Sec. 236 elevator buildings had the highest total expenses in 2016, at $9.93. Total expenses have decreased for all high-rise subsidies across the past two years, except for Sec. 8 family subsidies.
Net income for Sec. 202 building categories ranged from $3.64 to $7.29 per square foot. Sec. 221(d)3 buildings ranged from $7.40 to $9.80 per square foot, and Sec. 236 buildings ranged from $2.85 to $6.12 per square foot. Sec. 8 buildings ranged from $5.94 to $7.42 per square foot for elderly/handicapped properties and from $4.34 to $7.38 per square foot for family properties.
Condominiums, Cooperatives, and Planned Unit Developments
Median total annual operating expenses for all condo building types increased by 1.4% in 2016, up to $2,992.40 per unit from $2,950.88 per unit in 2015. As a group, condo owners paid 3.1% more in assessments last year. The median monthly assessment rose to $312.25 per unit, up from $303.00 in 2015.
Per-unit operating expenses for combination properties rose by 10.1%, up to $2,370.00 per unit. High-rise property expenses rose by 1.8%, to $4,988.00 per unit, and townhouse property expenses rose by 9.0%, to $2,281.76 per unit.
