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Headlines
Top Story
Apartment Sector Continues to Rise as Home Buyers Diminish
Industry News
Apartment REITs See D.C. Region as a Good Investment
Apartment Hot Pockets Emerge in Nashville Area
San Antonio Apartment Market Primed for Acquisition Activity
Heating Costs Look to Cool
Home Construction Up, Driven by Apartments
Apartments Returning to the Mix in Charleston
RealShare Apartments 2011 Panelists Tout Multifamily
Universities Are Using Facebook as a Marketing Tool
Lynd Launches Student Housing Division
Inside Why So Few Americans Are Buying Homes
Home Properties Goes on Spending Spree in Mid-Atlantic
Sovereign Wealth Funds Exploring U.S. Apartment Opportunities
Phoenix Apartment Developer Expands NW Office
Legislative/Legal News
Scottsdale Council OKs First Plan for Apartments Near Airport
NAA Announcements
AIM 2.0: Internet Marketing for Apartment Suppliers Conference
2012 NAA Student Housing Conference & Exposition: Registration is Open!
2012 NAA Education Conference & Exposition: Registration Opens on Wednesday, October 12!
NAA 2011 Income & Expense Survey Now Available
Join the Conversation and Celebrate the NAA Community Site’s First Year
Upcoming NAAEI Webinars
Find an NAAEI Designation Course Near You!
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Apartment Sector Continues to Rise as Home Buyers Diminish
Digested From "Net New Renters 1.4 Million, Net New Home Buyers 0"
United Press International (10/18/11) by Steve Cook
The U.S. Census Bureau recently reported a net increase of 1.4 million households that have moved into rental housing this year. Clearly, many in single-family homes converted from ownership to rental. A new Reis Inc. survey of professionally managed apartment communities in major metro areas found vacancy rates stood at 5.9 percent during the latest quarter, the lowest since 2007 for that class of apartment. Freddie Mac has described the rental housing market as "a bright spot" in the housing sector, forecasting that 2011 will end with a "thud" for home sales. Freddie Mac chief economist Frank Nothaft states, "Much of the rental demand is from young and newly formed households who have decided to postpone homeownership in favor of renting during unsettled economic times." Indeed, research shows that the decline in the homeownership rate has been sharpest for those household heads under the age of 30. Nothaft concludes, "With rental demand rising and apartment economics improving, the multifamily sector is a positive signal for the U.S. housing industry."
Industry News
Apartment REITs See D.C. Region as a Good Investment
Digested From "Apartment REITs See Washington Region as a Good Investment"
Washington Post (10/23/11) by Danielle Douglas
The Washington, D.C., metro area has become one of the most popular locations for apartment development among publicly traded REITs, notes new data from SNL Financial. Trusts that specialize in apartment communities own nearly 15 percent of the nation's total apartment stock. However, their communities tend to be large, high-quality assets in core markets. There are a dozen apartment communities now being built by REITs slated to open in the next two to three years across the D.C. region, placing the nation's capital behind only the Los Angeles-Long Beach-Santa Ana region with 20 such properties in the pipeline. Kevin Lindemann, director of SNL's real estate group, states, "When you look at new development in this kind of environment, this kind of economy, it's indicative of the really strong demand [for apartments] we're seeing in the Washington metro area." In this year's July-through-August period, Delta Associates reports that the nation's capital boasted a 2.8 percent apartment vacancy rate versus the U.S. rate at 5.8 percent. Real Capital Analytics, meanwhile, tracked $4.8 billion in local apartment building sales in the last quarter -- the second highest sales volume behind New York City with $7.1 billion. In terms of individual REITs, Home Properties is building all three of its planned apartment communities in the area, where it already holds 10,723 rental apartments -- or 27 percent of its total portfolio. Atlanta-based Post Properties has also been active, with 11.4 percent of its total portfolio now in the Washington area.
Apartment Hot Pockets Emerge in Nashville Area
Digested From "Rental Hot Pockets Emerge in Nashville Area"
Tennessean (TN) (10/24/11) by Josh Adams
Parthenon Properties Chairman Woody McLaughlin, who serves on the statistics committee of the Greater Nashville Apartment Association, notes that an estimated 4,000 new apartments are in the planning and development stages throughout greater Nashville. Many of them will be in the Franklin suburb. He states, "There's pent-up demand. Put it this way, of all the speculative construction, they generally fall into two markets: West End and Franklin." Analysts note that the apartment push throughout Williamson County runs counter to decades of long-standing opposition to multifamily housing. Strict zoning regulations, especially in Brentwood, prohibit developers from even considering higher-density developments. Also, for years, those who rent have had the reputation of being a transient, less-affluent part of the population whose lack of investment in the community serves as a drag. Today, perceptions are shifting due to the economy. Developers add that if the stigma hasn't been lifted fully, at least the market is seeing apartment residents in a different light. McLaughlin is now tracking a number of new apartment communities in Williamson County. One now under way in the Cool Springs area is set to bring 428 rental units to the market. Closer to Franklin's downtown district, Bristol Development has teamed with Bell Partners to break ground on 218 apartments.
San Antonio Apartment Market Primed for Acquisition Activity
Digested From "Alamo City Apartment Market Primed for Acquisition Activity"
San Antonio Business Journal (10/21/11) by Tricia Lynn Silva
San Antonio's apartment sector continues post stable vacancy and rent numbers all around, which has made it a magnet for investors' money in recent months. Pensam Capital, a Miami-based investment firm, is the latest to target the Alamo City. It recently closed on the acquisition of a local multifamily housing portfolio, purchasing the various apartment assets in a joint venture with Iowa-based BH Management Services Inc. The portfolio was comprised of three apartment communities, including the La Hacienda Apartments in Southeast San Antonio. Beucler Properties was the seller, having developed each of the three apartment communities.
Heating Costs Look to Cool
Digested From "Heating Costs Look to Cool"
Wall Street Journal (10/19/11) by Jerry A. DiColo
Natural gas, used to heat almost percent of all U.S. homes, is expected to hit some of the lowest winter prices in years as a mild autumn coupled with rising production have sent U.S. stockpiles of the fuel to all-time high levels. Normally, natural-gas prices surge starting in December, as cold blankets the country and residents heat their residences. However, the supply glut is pushing down futures prices. In turn, utilities have responded by locking in low prices they can pass on to consumers. Natural-gas futures for next month's delivery settled 3.7 percent lower at $3.553 a million British thermal units this past Tuesday on the New York Mercantile Exchange. Observers say futures contracts for delivery in January might offer an even better bargain. Looking at individual companies, New Jersey-based utility Public Service Electric and Gas cut its natural-gas rates by 1.3 percent starting Oct. 1, while Consolidated Edison Inc. recently stated that it expects average residential gas-heating bills this winter to drop by 3.8 percent.
Home Construction Up, Driven by Apartments
Digested From "Home Construction Up, Driven by Apartments"
Charleston Post and Courier (10/20/11)
Housing starts rose in September to a seasonally adjusted annual rate of 658,000 units, reports the Commerce Department. The fastest pace in 17 months, the tally represents a 15 percent increase from new projects in August. Apartments accounted for most of the gain, although single-family home construction rose slightly. Building permits, meanwhile, declined to the lowest level in five months.
Apartments Returning to the Mix in Charleston
Digested From "Apartment Projects Returning to the Mix"
Charleston Post and Courier (10/24/11) by John McDermott
Ground has been broken on the second of at least four new apartment communities proposed for Mount Pleasant, S.C., just east of Charleston. The 258-unit Woodfield Long Point Apartments will be located near Interstate 526 and include a mix of one- to three-bedroom units ranging from 783 to 1,340 square feet. Virginia-based Woodfield Investments is the developer along with partner CNL Macquarie Global Growth Trust, with a spring 2012 completion planned. Real Data, meanwhile, reports on Charleston's apartment numbers twice a year. It found in its latest survey that the metro area's vacancy rate has been below the 7 percent mark now since February. That figure was more than 15 percent less than three years ago.
RealShare Apartments 2011 Panelists Tout Multifamily
Digested From "Apartments Are the 'Place of Stability'"
GlobeSt.com (10/20/11) by Natalie Dolce
The panelists at the recent RealShare Apartments 2011 event came to the conclusion that all of the real estate treads are heading in the right direction for multifamily housing. More than 1,400 top executives came together to study the apartment sector. According to Phyllis Klein, the director of strategic customer relationships at Fannie Mae, monthly rents are expected to increase between 2 percent and 3 percent going forward. The majority of speakers at the panel agreed that the multifamily housing market is expected to perform well in both the near term and long term. Experts pointed out that strong markets in Denver, Seattle, and California's Silicon Valley have lately seen significant job growth followed by increasing rents. Additionally, Phoenix, Las Vegas, San Diego, and California's Orange County are all expected to do well in the months to come. Finally, continued high foreclosure numbers bode well for apartment owners and their communities, as more U.S. residents will be pushed into rental situations. However, underwater apartments projects do remain a problem.
Universities Are Using Facebook as a Marketing Tool
Digested From "Seven Ways Universities Are Using Facebook as a Marketing Tool "
Mashable (10/17/11) by Sarah Kessler
Earlier this year, researchers from the University of Massachusetts surveyed a group of U.S.-based colleges and universities and found that 100 percent of participants are now using social media as a marketing tool. That is up from 61 percent in 2007. The survey found that 98 percent of schools said they had a Facebook presence and that the social networking site is the most commonly used social networking tool in higher education. Such schools use Facebook and social media in several ways, including: offering virtual campus tours; rallying school pride; selling school-branded merchandise; organizing alumni groups; sharing department content; and, finally, reaching out to potential students.
Lynd Launches Student Housing Division
Digested From "Lynd Launches Student Housing Division"
GlobeSt.com (10/19/11) by Amy Wolff Sorter
Soon after the launch of a division that handles operations of both its existing portfolio as well as current and future acquisitions and developments, apartment developer Lynd has developed a new brand that it has dubbed Lynd Student Living. Lynd has actually owned product in this category for the past eight years, building a portfolio of approximately 7,900 beds. This past spring, it upped its student housing ante with the acquisition of an $80 million portfolio of distressed product. The company's overall portfolio currently spans six states -- Florida, Kentucky, Louisiana, North Carolina, South Carolina, and Texas. President and COO A. David Lynd remarks, "The margin for error in a student housing deal is very narrow. You miss the leasing season, you really mess up your brand. You provide poor service, the word gets out." He adds that the new division was formed to ensure such things would not happen.
Inside Why So Few Americans Are Buying Homes
Digested From "Condo Nation: Why So Few Americans Are Buying Homes"
CNBC News (10/19/11) by John Melloy
According to the U.S. Commerce Department, construction of multifamily housing such as apartment communities soared 51 percent in September as demand for rental units continued to increase. Government data shows that multifamily starts in September rose to a seasonally adjusted annual rate of 233,000 units, the highest since October 2008. At the same time, single-family housing starts increased just 1.7 percent to a 425,000 annual rate. According to Jeffrey Greenberg, an economist with Nomura Securities International, people are not ready to assume the risk of purchasing a home even with the average mortgage rates at approximately 4.3 percent. Additionally, more and more lenders are tightening their lending standards, making it harder for Americans to purchase homes.
Home Properties Goes on Spending Spree in Mid-Atlantic
Digested From "Home Properties Goes on Spending Spree in Mid-Atlantic"
GlobeSt.com (10/20/11) by Erika Morphy
Home Properties has invested a considerable amount of capital in acquiring apartment communities this year, particularly in the Mid-Atlantic region. Its most recent acquisition closed this week in the Alexandria, Va., suburb. It was for the 31-building Newport Village community, which traded for approximately $219,000 per unit. From all indications, Home Properties is now done with its buying spree at least for this year. Since Jan. 1, the REIT has made more than $385 million in acquisitions, exceeding the $200 million to $350 million range it projected at the start of 2011. Following the lead of many other publicly-traded property firms, Home Properties has turned to the equity markets to replenish its balance sheet. Earlier in the year, it went to market with a public offering of 6 million shares priced at $58.50 per unit, netting proceeds of $336.8 million. At the time, Home Properties announced plans to use the proceeds to fund acquisitions, along with new development and redevelopment of apartment communities.
Sovereign Wealth Funds Exploring U.S. Apartment Opportunities
Digested From "Sovereign Wealth Funds Exploring U.S."
REIT.com (10/20/11) by Allen Kenney
Bob Lieber, executive managing director for Island Capital Group LLC, reports that sovereign wealth funds are now exploring the commercial real estate markets in the United States for investment opportunities that offer value and stability. According to Lieber, sovereign wealth funds from abroad are interested in investing on both the debt and asset sides. He states, "We see some of the sovereign wealth fund players coming in on the debt side, wanting to be a little more senior in the capital stack. But they're also looking in the major markets for the major assets and the stability of those returns and trying to buy at a particularly attractive price." For the most part, sectors with "higher resiliency" are proving to be most attractive in the current market environment. The apartment sector, in particular, is attracting interest. Lieber notes, "When you look at the multifamily space, the needy renters, the B-quality multifamilies -- I think we see pretty high resiliency for demand around those types of assets and a relative degree of interest in trying to buy those assets, because you do have that projected stability and the underpinnings that are going to be generated from the cash flows on those assets." Looking at specific geographic regions, Lieber remarks that such "24-7 markets" as New York and San Francisco are currently drawing the most interest from investors.
Phoenix Apartment Developer Expands NW Office
Digested From "Phoenix Apartment Developer Expands NW Office"
Puget Sound Business Journal (Seattle) (10/18/11) by Jeanne Lang Jones
Alliance Residential Co. has hired former Trammell Crow Residential executive Noel Johnson to serve as its new regional manager to grow its portfolio of apartment communities throughout the Pacific Northwest. Johnson's official title will be managing director in charge of the Pacific Northwest. In that post, he will oversee Alliance Residential offices in Seattle and Portland. Moving forward, the Phoenix-based firm plans to acquire or develop apartment communities near mass transit hubs in both Portland and Seattle. Alliance currently has operations in 15 states, with a portfolio of 48,000 apartments in 24 major metropolitan markets. The company currently manages 6,843 apartments in the Northwest, including three communities in Washington state.
Legislative/Legal News
Scottsdale Council OKs First Plan for Apartments Near Airport
Digested From "Scottsdale Council OKs First Plan for Apartments Near Airport"
Arizona Republic (10/20/11) by Edward Gately
In Arizona, the Scottsdale City Council this past week signed off on the first of three proposals to build apartment communities in the Scottsdale Airpark. The decision to approve such plans came despite warnings from Councilman Bob Littlefield and others that new multifamily housing will hurt the Scottsdale Airport and drive business to other Valley terminals. The three proposals could lead to more than 3,300 residents in the airpark area. Earlier in October, the Scottsdale Airport Advisory Commission rejected all three, concerned that nearby residents would complain about noise and push for flight restrictions. However, Scottsdale's Planning Commission recommended the council approve all three proposals. Littlefield warns, "Five years from now, when people are down here complaining about the noise, these [council members], if any of them are left, better hope that the voters forget that they voted for this." Scottsdale Mayor Jim Lane counters that the city has protected the airport for decades, describing the outcry toward this as the work of "overzealous protectors. I think this is a good project, and it brings an awful lot of positive growth."
Abstract News © Copyright 2011 INFORMATION, INC.
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