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How We Define The Apartment Rental Market
The Rental Market, as reported by Yardi Matrix, is defined within two parameters:
- Geographic, and;
- Property rental market position
Geographic Definitions
A geographic market can be defined within a micro, to macro, range:
- Selected property – a designated subject property’s competitive environment can be defined within a radius extending from one, to five, miles surrounding the property ,or within user-selected boundaries.
- Zip Code – Properties included within a zip code or combination of zip codes;
- Submarket – Properties included within a submarket, or combination of submarket;
- Market – A Yardi Matrix market generally corresponds to a Standard Metropolitan Statistical Area (SMSA), as defined by the United States Bureau of Statistics.
Measurement of rentals rates and rental rate concessions is surveyed three times annually. Reporting can apply to: A property’s Competitive Cluster – as defined by a radius; a submarket, or; the metropolitan area. Each definition can extend to discrete illustration of rental rates according to:
Unit Type
Property Age Range
Property Improvements rating
Location rating
Any combination of the above
Property Rental Market Position
The apartment rental market is further defined within rental household segments as:
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Rental Household Market Positioning
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Property/Household Type
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Property
Context® Rating
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Discretionary
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Renters by choice. Attracted to the extreme upper end of the apartment market; properties generally of resort quality, clearly appealing to households capable of owning a residence, but choosing to rent, or households with substantial incomes, but without wealth. The luxury rental category primarily focuses on empty nester households, or more particularly, high net worth households. The renter-by-choice household is demanding; finishing detail and amenities included in properties appealing to this category must be of exceptional quality.
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A+ / A
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High Mid-Range
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"Lifestyle renters." The high mid-range category appeals to double-income-no-kids ("DINK") households holding income status similar to that typically required of discretionary property positioning, but not in possession of the wealth more probably associated with the renter-by-choice rental household category. Properties holding high mid-range status typically offer excellent finishing quality, and attractive common area facilities, and typically focus on an environment providing a more social experience.
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A- / B+
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Low Mid-Range
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Working professionals. The low mid-range household is typically composed of working professional, “gray collar” households (i.e. policemen, firemen, teachers, technical workers). These households, while renters-of-necessity, are inclined to apply some discretion regarding rental environment quality, and will opt for “adequate” quality of improvements offering reasonably attractive amenities in a good/convenient location.
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B / B-
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Workforce
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Blue collar workforce. Blue collar workforce category renters are capable of paying lower market-rate rents, but at a rate consistent with their income category. Workforce housing is typically older, with fewer amenities; often incorporating efficiency, studio, two bedroom/one bath, or three+ bedroom units as significant unit mix components.
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C+ / C / C- / D
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Subsidized
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Struggling households. Fully affordable apartment communities typically serve very low income, economically struggling, households, with rents subsidized in some form by a governmental agency – either through direct household subsidy, or rent-regulated maximums to qualifying households. The subsidized property is typically funded through additional property-related government incentives – tax credit or bond funded, – strictly offering rentals to very low-income households.
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See "note" below.
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Student
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An aggressively growing multi-family market component focuses on university students. Student-oriented properties rent apartments "by-the-bed", and are typically located within close proximity of, or on, a college campus. When on-campus, ownership is most often a partnership between the institution and a private developer. This relatively recent evolution from institutionally-owned dormitory facilities, to privately developed, and owned, facilities, has gained considerable traction in and around college campuses throughout geographic markets of all sizes.
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See "note" below.
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Military
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In a manner similar to student-oriented rentals, military housing is typically located on, or near, a military facility. Development and management is principally by private entities, and is often managed by the same entity. Resident households are restricted to active military.
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See "note" below.
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Senior
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Senior rentals are age-restricted; often subsidized. As this category is concerned, several variations distinguish a purely rental community is distinguished from more service-oriented "Senior Housing" facilities. Senior Housing, incorporating on-site services, and food service, is not included in Pro Lab reporting.
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See "note" below.
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Transitional
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Transitional housing is a relatively minor, but emerging, rental category. Transitional housing principally incorporates properties renting specifically to the formerly homeless, or individuals transitioning from drug rehabilitation, or recent incarceration. While transitional housing inventory is not of significant size, properties serving this purpose are being added to the apartment supply. A frequent form of transitional housing favors single-room occupancy (SRO) formats. The SRO format, more prevalent in larger metropolitan areas, typically does not include kitchen facilities, and may, or may not, include a private bath.
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See "note" below.
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Note:
Context® improvements ratings are assigned to properties included in each of these rental categories, and can be referenced when a search is being conducted. As these segments are restricted to a particular household status, improvements ratings are not prime determinants when segmenting these properties into a select list is the objective.
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