M A R K E T R E P O R T

Fox Valley, Wisconsin Second Quarter 2008

MARKET MAP MARKET FACTS


 

Green
Green
Green
Green
Green
Green
Green
Green
29 41 Bay
Bay
Bay
Bay
Bay
Bay
Bay
Bay
Market State

Population 725,172 5,600,910



45
Green
Green Bay
Bay
Avg. Annual Five-Year Chg.* 0.8% 0.6%
New
New
New
New
New
New


10 London
London
London Fox
Fox Valley
Valley Total Households 291,824 2,271,010
Appleton
Appleton
Appleton
Appleton
Appleton
Appleton 

43
Avg. Annual Five-Year HH Chg.* 1.4% 1.1%


10
Manitowoc
Manitowoc
Manitowoc
Manitowoc
Manitowoc
Manitowoc Median Household Income $57,291 $53,417
Oshkosh
Oshkosh
Oshkosh
Oshkosh
Oshkosh
Oshkosh Lake
Lake
Lake
Lake
Lake
Lake
Lake
Lake 

151
Winnebago
Winnebago
Winnebago
Winnebago
Winnebago
Winnebago
Winnebago
Winnebago Median Age 37.2 38.0


41
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Employment 463,883 3,217,964
Fond
Fond
Fond
Fond
Fond du
Fond du
du
du Lac
du Lac
Lac
Lac
Lac Sheboygan
Sheboygan
Sheboygan * 2007-2012 Forecast


45



151 

41



43

MAJOR AREA EMPLOYERS MARKET HIGHLIGHTS

Employer City
Fundamentals are improving significantly in the
Fox Valley, which is comprised of Appleton, Oshkosh,
Curwood Inc. New London Green Bay and Fond du Lac. Supply expansion in the
last decade has been robust, as builders have favored
Waltco Inc. Green Bay the region’s low development costs. Construction activ-
ity is returning to a more sustainable pace, however, as
American Legion Pulaski the number of permits pulled in the last year has mod-
erated. On the demand side, employment growth of 2.2
Good Sheppard SVC Ltd. Seymour percent in Appleton last year led the state, indicative of
the Fox Valley’s healthy economy. Furthering demand
New London Family Medical Center New London
have been annual population increases of 2 percent
since 2000, a trend that is forecast to continue in the
Oneida Tribe Norbert Hill Center Oneida
coming years. As a result, vacancy has tightened over
the last three years.
Simmons Juvenile Products New London
Most local investors have followed a long-term
Woodman’s Food Market Green Bay
strategy, focusing on better managing their properties
while anticipating future rent appreciation. Some
Tosca Ltd. Green Bay developers have begun to sell their newer projects,
recording cap rates in the low- to mid-7 percent range,
Kitchen Fresh Foods Inc. Green Bay while older assets have traded at cap rates in the low-
to mid-8 percent range. Going forward, a stronger sup-
ply and demand balance will allow owners to increase
rents, driving up property values in the area.

Chris Best © Marcus & Millichap 2008

Research Associate www.MarcusMillichap.com
Fox Valley, Wisconsin Apartment Market Report ◆ Second Quarter 2008

Construction Trends CONSTRUCTION TRENDS

280
◆ Developers slowed construction activity in 2007, delivering 227
units to the Fox Valley. All three projects completed last year
210
came to market in the fourth quarter.
Units Completed

140
◆ Two developments totaling 82 units are slated for arrival this
year, both of which are currently under construction. Supply
70 growth is moderating as building activity returns to a more sus-
tainable pace.
0
04 05 06 07 08* ◆ One project representative of current development trends in the
* Forecast
Sources: Marcus & Millichap Research Services, Reis, TWR region is the 62-unit River Center Lofts in Green Bay. The complex
is using subsidies from the local government to make construction
feasible by keeping some units as below-market-rate rentals.

RENT AND VACANCY TRENDS

◆ Vacancy in the first quarter improved 80 basis points year over
Asking Rent and Vacancy Trends year to 4.4 percent, although the rate has remained unchanged
$650 Average Asking Rent 7%
during the last two quarters. Vacancy is expected to finish 2008 at
Average Asking Rent per Month

Vacancy 4.1 percent, in line with the previous year’s average.

$625 6%
◆ First quarter asking rents were $613 per month, a 3.3 percent
Vacancy Rate

$600 increase over the first quarter of 2007. Rent growth exceeding 3
5%
percent is significant, as owners have been traditionally reluctant
$575 to raise rents due to relatively affordable homeownership and
4%
competition from new construction.
$550 3%
04 05 06 07 08* ◆ Rent growth is forecast to slow in 2008 to 1.1 percent, or $618 per
* Forecast
Sources: Marcus & Millichap Research Services, Reis month. Concessions that were extended at the beginning of the
decade as a result of robust supply increases are now being
recouped by owners as vacancy tightens.

RENTER COHORT TRENDS

◆ From 1990 to 2000, the population of 20- to 34-year-olds in the Fox
Valley region contracted by 0.6 percent annually. This trend was
Renter Demographics
reversed from 2000 to 2007, with this age group recording growth
30% Ages 20-24
Ages 25-29 of 0.8 percent per year.
Ages 30-34
15%
Percent Change

◆ Through 2012, the 20- to 24-year-old cohort is expected to recede

0%
by 0.5 percent yearly; however, the number of residents ages 25 to
29 and 30 to 34 will expand by 0.7 percent and 1.7 percent, respec-
tively, per year.
-15%

-30%
◆ Overall growth in these key renter cohorts over the next five years
1990-2000 2000-2007 2007-2012* will deepen the renter pool, putting downward pressure on
* Forecast
Sources: Marcus & Millichap Research Services, Economy.com
vacancy. Additionally, mortgage lenders have increased the stan-
dards for obtaining a loan, forcing many potential homeowners in
these age groups to continue renting.

Chris Best © Marcus & Millichap 2008

Research Associate www.MarcusMillichap.com
Sources: Marcus & Millichap Research Services, BOC, CoStar Group Inc., RCA, Reis, SRC, TWR
The information contained herein was obtained from sources deemed reliable. Every effort was made to obtain complete and accurate information; however, no representation, warranty or guarantee to the accuracy, express or implied, is made.