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Market-Rate Multifamily Studies

Following is a synopsis of the components typically included within a Danter Company multifamily market feasibility study:

Market-rate Multifamily Analysis

Following are the items typically included within our market-rate multifamily analyses. Typically, such analyses take four weeks to complete. Discounts are often available for multiple jobs in the same area, and jobs requiring faster turnaround typically include a surcharge.

Site Inspection

Each proposed site is personally inspected by a Danter Company field analyst. The site is inspected for the suitability for development as it relates to the market. A full area description is included identifying surrounding land uses, as well as proximity to area resident services.

Effective Market Area (EMA)

The EMA, the smallest area from which the project is expected to draw 60% to 70% of its support, is identified for the proposed site. Mobility patterns affecting development at the subject site, natural and manmade boundaries that affect mobility, and area perceptions affecting the site are all identified.

Area Profile

A social, demographic, and economic profile is conducted for the subject city, county, and Effective Market Area. Included are population, household, income, employment, and housing trends.

100% Field Survey

All modern apartment development within the EMA is surveyed by our field analysts. The number of units surveyed is checked against census and local building permit data to ensure proper representation. The following information is identified for each community.

  1. Number of units
  2. Type of unit (garden/townhouse)
  3. Unit mix
  4. Rent
  5. Vacancies
  6. Unit amenities
  7. Project amenities
  8. Project type (market-rate or government subsidized)
  9. Utilities
  10. Comparability rating of the project
  11. Year built/opened

The use of a 100% database allows us to use the following:

  • Step-up support
  • Exit and turnover vulnerability
  • Gap pricing
  • Regression analysis

Conclusions and Recommendations

  • Unit mix, number and size recommendations
  • A unit and project amenities package that is competitive with area developments
  • Projected absorption--including absorption expected in initial lease-up, an overall average absorption rate and absorption impacted by turnover if absorption is extended beyond standard lease terms
  • A comparison of proposed rent to expected market-driven rent at opening based on a Comparable Rent Analysis. The Comparable Rent Analysis allows for determination of market-driven rent for projects of any amenity level by using a regression analysis to analyze project rent in conjunction with its Comparability Rating.
  • An analysis of step-up support for the proposed project. Our research indicates that the largest single component of support for any apartment project is apartment tenants already residing within the EMA, and that most apartment shoppers will "step up" their rent payments for housing that they consider to be a value. Our analysis identifies this step-up support by dollar range and median.
  • An analysis of potential turnover vulnerability for the proposed project. Our research indicates that the largest single source of tenant "drain" from any development is the apartment communities in the EMA priced within step-up range of the subject community.
  • An analysis of rent gaps. Rent gaps are the differences in rent between unit types, such as one-bedroom and two-bedroom units. Rent gaps can be a substantial factor in a project's initial rent-up. Our analysis identifies the area's median rent gap, rent gap at the proposed project's Comparability Rating, and rent gap at the proposed project. Rent gap among product alternatives (such as mix, location, and floor plan) at the subject site is also evaluated.
  • Competitive Analysis. When necessary, potentially competitive projects are compared with the proposed project and analyzed in detail, including a detailed look at floor plans, entry impact, storage space, unit and project amenities, and pricing.
  • Marketing strategies for the proposed project may be discussed if appropriate.

For more information on market-rate multifamily studies, please call us at (614) 221-9096 during business hours (8 am to 5 pm) Eastern US time.

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