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A MONTHLY METER OF INDUSTRY TRENDS

STABILIZING MANHATTAN OFFICE MARKET

For the first time in months, the rate of decline has begun to level off in Manhattan, according to first-quarter 2003 numbers from Cushman & Wakefield. The trend is attributed to several factors: the fact that space in many buildings is being offered at attractive prices and business incentives available to tenants who locate Downtown.

Manhattan Office Market Statistical Breakdown
Manhattan Overall 1Q 2003 4Q 2002 1Q 2002
Vacancy Rate 12.3% 12.0% 10.4%
Rent/Sq. Ft. $41.97 $42.96 $45.69
Downtown Manhattan 1Q 2003 4Q 2002 1Q 2002
Vacancy Rate 13.3% 13.2% 11.9%
Rent/Sq. Ft. $38.24 $39.17 $40.55
Midtown South 1Q 2003 4Q 2002 1Q 2002
Vacancy Rate 13.9% 13.5% 12.1%
Rent/Sq. Ft. $31.43 $33.23 $36.71
Midtown Manhattan 1Q 2003 4Q 2002 1Q 2002
Vacancy Rate 11.5% 11.1% 9.3%
Rent/Sq. Ft. $47.30 $48.15 $51.68
Source: Cushman & Wakefield


THE BIG 3 IN MULTIFAMILY REITS

More than half of the equity market cap of the publicly traded multifamily REITs is made up by the top three companies: Equity Residential (24.70%), Archstone-Smith (15.09%) and Apartment Investment & Management Co. (12.97%).

Market Capitalization
Rank Company Ticker Symbol Billions of Dollars Percent of Subsector
1 Equity Residential Properties Trust EQR $6.52 24.70%
2 Archstone-Smith Trust ASN $3.98 15.09%
3 Apartment Investment & Management Co. AIV $3.42 12.97%
4 AvalonBay Communities Inc. AVB $2.51 9.53%
5 United Dominion Realty Trust Inc. UDR $1.71 6.49%
Source: National Association of Real Estate Investment Trusts


TOP INDUSTRIAL INVESTMENT MARKETS

Jacksonville and Houston are two of the best places to buy industrial properties in the country, offering median yields of 10.95% and 10.6% respectively, according to real estate brokerage Sperry Van Ness. The study is based on the transaction yields of multi-million dollar sales on an all-cash basis and the price per foot paid for buildings in 2002.

Top 5 Buyer's Markets
Rank Region Yield Price per sq. ft.
1 Jacksonville, Fla. 10.95% $33.91
2 Houston 10.6% $29.28
3 Boston 10.43% $53.33
4 Colorado Springs, Colo. 10.32% $41.35
5 Columbus, Ohio 10.24% $29.05
Source: Sperry Van Ness


NO BARGAIN FOR HOTEL FRANCHISEES

It's getting more expensive to own an economy-level hotel franchise. Research by HVS International reveals that the average franchise fee — measured as a percentage of room revenue — for economy brands (Days Inn, EconoLodge and Super 8) is now equal to that of mid-market brands (Best Western, Holiday Inn, Ramada). More than a decade ago, franchise fees for economy brands measured only 5.2% of room revenue, compared with mid-market fees of 5.7% and first-class fees of 9.6%.

RENT REPORT

Of the 105 million households in America, 36 million — or 34% — live in rented quarters, according to the 2000 Census. The average monthly rent for rented digs is $612.

Percentage of renters whose monthly rent is:
No-cash rent 5%
Less than $200 4%
$200-$299 5%
$300-$499 22%
$500-$749 34%
$750-$999 18%
$1,000-$1,499 9%
$1,500 or more 3%
Source: U.S. Census Bureau

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