Moody's Corporation · NYSE:MCO
Moody's — Investor Presentation (April 2021)
18 slides from Moody's's investor presentation, Apr 7, 2021
Slide 1: The Post-COVID CRE World: Has the Apocalypse Been Cancelled?
The Post-COVID CRE World: Has the Apocalypse Been Cancelled? Victor Calanog PhD CRE® FRICS LinkedIn: https://www.linkedin.com/in/vcalanog/ Twitter: @VictorCalanog April 7, 2021
Slide 2: Agenda
Agenda 1. Multifamily and CRE Update 2. Transaction Activity and Pricing Forecasts 3. Has the Apocalypse Been Cancelled? Explaining the Wedge CRE (and Multifamily) in 2021 2
Slide 3: Multifamily & CRE Update
1 Multifamily & CRE Update
Slide 4: National Apartment Market
National Apartment Market Quarterly & annual market conditions Asking Percent Effective Percent Vacancy Asking Percent Effective Percent Vacancy Year Qtr Year Rent Change Rent Change Rate Rent Change Rent Change Rate 2014 1 $1,155 0.8% $1,110 0.9% 4.3% 2011 $1,070 2.5% $1,019 2.8% 5.3% » Vacancy rat
Slide 5: National Office Market
National Office Market Quarterly & annual market conditions Net Asking Percent Effective Percent Vacancy Net Asking Percent Effective Percent Vacancy Year Qtr Year Absorption Rent Change Rent Change Rate Absorption Rent Change Rent Change Rate » Office vacancies rose by 2014 1 10.1 $29.54 0.8% $23.8
Slide 6: But Why Hasn't the Other Shoe Dropped?
But Why Hasn’t the Other Shoe Dropped? The evolution of the office sector will take time CRE (and Multifamily) in 2021 6
Slide 7: How Much Time, Exactly?
How Much Time, Exactly? CRE (and Multifamily) in 2021 7
Slide 8: Industrial: Holding Steady in the Fourth Quarter
Industrial: Holding Steady in the Fourth Quarter 1.2% 13% Effective Rent Growth Vacancy Rate 1.0% 12% » Flex/R&D vacancies down by Flex/R&D 0.8% 11% Effective Rent Growth 10 basis points in the fourth Vacancy Rate 0.6% 10% quarter to 10.2%. 0.4% 9% » Effective rents rose by 0.5% in 0.2% 8% the fourt
Slide 9: The Transition to E-Commerce
The Transition to E-Commerce Will the pendulum swing back fully? Sources:US Department of Commerce, Moody’s Analytics CRE (and Multifamily) in 2021 9
Slide 10: The Reality of Retail Repurposing
The Reality of Retail Repurposing How much fallow retail space do industrial developers really want? » Retail conversions to logistics could amount to 5-10 million SF per year, which represents: » < 5% of Last Touch facilities » < 1% of existing logistics real estate facilities » < 2% of typical ann
Slide 11: CRE Pricing and Transaction Markets
2 CRE Pricing and Transaction Markets
Slide 12: Transaction Activity Throughout 2020
Transaction Activity Throughout 2020 Compare and contrast this with 2008-2009 $140 Transaction Volume (In $Billions) $120 $100 $80 $60 $40 $20 $- 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Apartment Office Retail Industrial Hotel Source: Moody’s Analytics REIS CRE (and Mul
Slide 13: Cap Rate Forecasts
Cap Rate Forecasts Implied peak-to-trough declines significantly lower 14% Apartment Office Retail Industrial Hotel » Cap rate increases are still forecasted for 2021 through 12% 2022, but at a trajectory much less steeper than before. Price 10% declines are therefore expected to be much less severe
Slide 14: Explaining the Wedge
3 Explaining the Wedge
Slide 15: You Were Well Behaved: Part 1
You Were Well Behaved: Part 1 Historical trends in DSCR, 2000-2019 Source: Moody’s Analytics CRE (and Multifamily) in 2021 15
Slide 16: You Were Well Behaved: Part 2
You Were Well Behaved: Part 2 Historical trends in LTV, 2000-2019 Source: Moody’s Analytics CRE (and Multifamily) in 2021 16
Slide 17: Contact Us
Contact Us: Victor Calanog, PhD Head of CRE Economics Moody’s Analytics Victor.Calanog@moodys.com Robby Holditch Director Moody’s Analytics Robby.Holditch@moodys.com John Toohig Head of Whole Loan Trading Raymond James John.Toohig@RaymondJames.com
Slide 18: CRE (and Multifamily) in 2021
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