Using location data for MFR real estate investment opportunities

Using location data for MFR real estate investment opportunities

Here you’ll find location data-driven analysis of foot traffic and migration patterns for property and real estate around multi family residential (MFR) properties in Orlando, Tempe, Atlanta and Houston. These real estate investment opportunities are each examined using location and mobility data to augment traditional analysis performed by MFR income investors.

You will learn each MFR’s neighborhood net population flow for 2020, when cities across the US were ravaged by COVID-19. You will see how the inflow or outflow of average income can supersede population loss or gain as a matter of income property performance. 

You will gain insights to leading indicators for MFR investment opportunities, and you will understand how location data can be applied to commercial real estate investment and multi family residential investment and operations decision making.

The purpose of this document is to demonstrate Unacast’s basic capabilities for applying location to data driven decision-making for investment in multifamily residences. 

Getting ready to use location data for MFR income investment 

We first began our analysis of the MFR category in mid 2020 in the NYC area. Then, we were focused on a specific hypothetical use case: identifying and assessing a property for development into an MFR. 

Here, we will change approach by beginning with actual MFRs in four urban areas and zoom-out to assess the mobility data of each. The properties selected are in or around downtown Houston, Tempe, Atlanta and Orlando. Two of the four properties were for sale at the time of writing. 

Our objective is to inform the decision making of real estate investors, commercial property operators, and those involved with MFR income property investment. Our modus operandi is to: 

  • Assess the recovery of foot traffic in local area and impact to local business; 
  • Determine the migration flow and area income change based on population change; and 
  • Provide insights as to leading market indicators in the data assessed. 

To conduct our MFR income property investment analysis, we used our Neighborhood Insights tool to build custom collections and identify local Points of Interest, or POIs. To examine population and income inflow and outflow around various investment properties, we used our Migration Patterns platform combined with our Emerging Areas data set.

Average income data is pulled from the American Census Service and rolled-up to the county level. All data is privacy compliant and used for good. Many of Unacast’s clients are well-known commercial real estate and multifamily residential investment and development firms.

Location datasets used in MFR income investment

Our Migration Patterns offering is a set of products for analyzing shifts in population. Currently, the package consists of two datasets: Home-based Origin-Destination Flux (OD Flux), and Population Distribution Trends (PDT). 

Home-based Origin-Destination Flux (OD Flux) derives moves from changes in home location of a device and therefore is able to capture the origin and destination of each move. In order to assess that a move happened with certain confidence, an observation window of several weeks (currently 8) is required, which means that our insights are more certain, however, come with a delay of approximately half of the observation window (4 weeks). 

Population Distribution Trends (PDT) is a metric that measures the proportion of devices in each state or county at a weekly snapshot. When a mass of people moves from one area to another, the proportion shifts accordingly. This metric is useful for analysing the momentary situation, as it has no delay. Compared to OD Flux it doesn’t provide information about directionality of the moves or their permanency. 

Emerging Areas calculates the inflow, outflow, and net flow of people as well as the accompanying change in income for a given area. To calculate the total net flow of an area, we sum up all inflows into and outflows from an area and calculate the difference. Weekly data from Migration Patterns is aggregated monthly for this purpose.

Multifamily residential property investment opportunities

In each of the following examples, we use our location data platform and tools to probe new insights into multifamily residential income property investment. In some cases, the listings are targeted to real estate investment firms, in other cases, private MFR income investors.

1011 E Orange Street, Tempe, AZ 

Aka Park Terrace, is a 40-unit, garden-style MFR listed for $6,800,000. This MFR is located within two blocks of ASU's Tempe Campus and is adjacent to the Valley Metro Light Rail. Income on this property is estimated at $32,000/mos. 

There are numerous dining and shopping options in close proximity to the property, including Tempe Marketplace. Local POIs include Walmart (-31% foot traffic vs 2019 w/ strong upward trend), Target (-5% w/ strong upward trend), and regional player Fry’s Food & Drug Stores (-2% w/ strong upwards trend). 

Net population flow is negative, with at least 1,350 people having left this neighborhood heading into 2021. On the positive side, the new people who have moved in average between 2x and 5x the income of the previous, mostly student rental residents. 

Of the 54 census tracts we examined in the Tempe area, 42% are recovered or trending towards recovery. Immigration to the area showed some gains going into September and positive momentum in late 2020. The movement of People with Money to this area, if long term, could significantly alter local consumer tastes and markets for retail, restaurant and real estate. 

1500 Noble Vines Drive, Buford, GA

aka Noble Vines at Braselton, this is a 248 unit apartment style community that opened in Fall of 2019. This MFR, located ~10 miles NE of downtown Atlanta, incorporates many resident amenities into its 18 acre grounds. An 1,100 sq. ft., 2BR/2bath unit rents for ~$1,550 per month.

This is a bedroom community with shopping and restaurants a short drive away. Top area POIs include The Home Depot (-6% foot traffic vs 2019 w/ strong upwards trend), QuikTrip (-39% w/ slight downwards trend), and Family Dollar (-48% w/ slight downwards trend. 

This neighborhood lost ~200 people in 2020, though net population flow was turning modestly positive again as of early Fall. For the period measured, new immigrants to the neighborhood were earning about 1.5x to 2.5x more than current neighborhood residents, indicating increased disposable income. 

The gradual increase of average income in the area, despite what is perceived as a temporarily negative turn in population flow, indicates a healthy market for family residences in this primarily residential area. Net population flow is expected to turn positive in 2021. The property’s amenities are essential given the lack of easily walkable POIs and shopping

5151 Hidalgo Street Houston, TX

aka Alexan 5151, this is a 397 unit, 4-storey apartment community on the eastern edge of the city’s inner ring. A 1,280 sq. ft. 2BR/2bath unit rents for ~$1,860 per month. 

This is an urban neighborhood with easy walking to shops, restaurants etc. Major freeways and connectors are directly accessible. Locals POIs include Sam’s Club (-33% foot traffic vs 2019 w/ slight downwards trend), nearby Macy’s (-57% w/ strong downwards trend), and department store Dillard’s (-26% w/ strong downwards trend. 

Migration is negative, with population outflow exceeding inflow by ~270 people. This outward flow is consistent with other areas of the city and Harris County, as noted in our recent white paper, Houston’s billion dollar shakeup. Consistent with the broader area, new people moving to the neighborhood earn about 15% less average income than current residents. 

Downtown Houston and Harris County have lost $10,000 people and $750 million in 2020. 30% of that moved to an adjoining county in the Houston area. Both population and area income are decreasing, as is foot traffic to major points of interest. Meanwhile, outside the city in Montgomery and Waller counties, both population and average income are increasing, indicating improving market conditions for retailer, restaurants and residential real estate

4731 N Pine Hills Road, Orlando, FL

Aka Crest Villas, this is a 94 unit garden style apartment building currently listed for ~$9.1 million. The 4.3 acre property sits about 10 miles northwest of downtown Orlando.

This is a suburban style neighborhood with golf and lakes in walking distance, and shopping, restaurants and freeways within a few minutes. The top local points of interest for foot traffic are a supermarket, (President w/ strong upward trend), and 7-Eleven (-37% vs 2019 w/ strong upward trend). 

A net of some 150 people moved away from this census tract neighborhood in 2020. Immigrants to the area have provided a significant economic boost by injecting an average of ~1.5x to 2x more average income than residents in 2019. Loss of population is expected to flatten or reverse to a gain in 2021. The gain in average income is expected to continue in 2021. 

The average census tract in this predominantly residential area is about 60% recovered based on foot traffic analysis. A small loss of population offset by a notable increase in average income per new resident indicates people of greater relative means are joining the local community, portending a rise in real estate prices and lease rates.

In summary - Location data for MFR income investment

The key to data-driven decision making in multifamily residence investment and operations is ease of use. Through our new data portal, you can access all of Unacast's powerful datasets in a single view, to quickly assess the foot traffic, migration patterns and income flow of any US census tract, city, or county. 

To help MFR investors make better, more informed decisions when assessing real estate investment opportunities, just call up the area you are looking for, see the raw data, download it directly to a CSV file if you like, and blend with your own data. The added perspective will help you find ideal opportunities for income investment opportunities in multifamily residences. 

For more information or to arrange a demonstration, please email talktous@unacast.com

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