Multifamily Super Bowl 2021 | Tampa vs. Kansas City
Two Stellar Markets Compete for Trophy
Super Bowl LX is approaching fast. Congratulations to the Tampa Bay Buccaneers and the Kansas City Chiefs who have deservedly earned their places at the premier sporting event of the year. Both teams had spectacular seasons and playoff performances. Kansas City, last year’s Super Bowl champs, is the slight favorite to win the Lombardi Trophy, but it’s really a toss-up, especially given Tampa’s home field advantage.
Our annual “Multifamily Super Bowl” contest pitted these two excellent markets head-to-head. CBRE Research conducted a multifamily market Super Bowl simulation game, and it was highly competitive with loads of offense, just as pundits predict for Super Bowl Sunday. Both Tampa and Kansas City multifamily markets experienced impressive performance in 2020 and are among the best in the country.
Here’s how our Multifamily Super Bowl 2021 played out.
1st Quarter | Comparable Power from Economic & Demographic Growth
Just as Tom Brady and Patrick Mahomes can march their teams up the field, economic and demographic growth drive multifamily demand. And economic and demographic growth of our star metros provided tremendous offensive fire power. Kansas City scored a field goal for its less severe year-over-year employment drop and its superior recovery of early-COVID job losses.
Tampa scored a field goal for its employment and population growth outlooks. Tampa’s employment is expected to rise by nearly 8% over the next five years. The outlook for population growth is equally impressive at 7%.
End of 1st Quarter: 3 - 3
2nd Quarter | Supply & Demand Score Touchdowns
In the second period, Tampa and Kansas City were almost evenly matched on supply/demand measures. Both showed great performance.
Tampa scored a touchdown on its moderate level of new supply. The market added only 3,300 multifamily units for a relatively low completions-to-inventory ratio of 1.3%. Kansas City’s 2020 completions total of 5,400 units (3.4% ratio) set a new record for annual deliveries and was twice the average experienced over the past decade.
Kansas City’s counter offensive—leading to KC’s first touchdown—was its stunning 2020 demand total of 4,700 units and an outstanding 3.0% net-absorption-to-inventory ratio. Kansas City surprised the football world by going for and making a two-point conversion.
End of first half: 11 - 10 Kansas City
3rd Quarter | Tampa Overshadows KC on Key Operating Measures
The Multifamily Super Bowl remained tense in the third period, with both teams showing favorable performance in the key operating measures of rent and vacancy. Tampa, however, scored an early touchdown with its lower Q4 vacancy rate (4.2%) and more favorable 2020 vacancy change (-40 basis points).
Both markets achieved rent growth in 2020. Tampa had the higher increase of 3.0% leading to a successful field goal kick. Tampa also had a slight advantage over Kansas City based on the forecasted 2021 rent growth rates—3.9% vs. 3.3%. This match up was too close to convert to any points on the gridiron.
End of 3rd quarter: 20 - 11 Tampa
4th Quarter | Both Teams Score Based on Investment Metrics
The offensive game intensified in the final quarter where investment was the focus. In the opening minutes of the quarter, Kansas City scored a touchdown for setting a new investment record at $1.2 billion. The 8% year-over-year rise in total volume led to another successful two-point conversion. The score was now 20-19 with Tampa just hanging onto the lead.
In the final minutes of the game, Tampa returned its own investment field goal. While Tampa’s 2020 investment volume was down 21% from the prior year, its total volume of $2.8 billion translated into a higher perceived liquidity status.
Final: 23 – 19 Tampa
Congratulations to both metros in their performance in Multifamily Super Bowl 2021 simulation.