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Apartment Demand Spreads From Coasts to Middle America
Industry News
Western National President Khouri Talks Apartments
Incentives and Biz Moves Drive Surge in Detroit Apartments
Cramer: Skip Treasuries - Buy REITs 
Camden Property Trust Announces Q2 2011 Dividend
Four Austin Apartment Communities for Sale
More in Upstate S.C. Look to Apartment Living
Housing Starts Are Up Thanks to Multifamily
Increased Renting Demands Insurance
Florida's Lakewood Ranch to Include Apartments
AvalonBay CFO Sargeant Sells $9.7M in Stock
Legislative/Legal News
Cedar Falls Apartment Keys Ordinance Faces Backlash
Indiana Town's Apartment Ordinance Blocked by Federal Judge
Indianapolis Towing Proposal Hits Snag With Apartment Owners
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Apartment Demand Spreads From Coasts to Middle America
Digested From "Apartment Lure Goes Inside Coasts"
Wall Street Journal (06/15/11) by Dawn Wotapka; Eliot Brown
There are growing signs that investor demand for apartment communities is moving beyond the coasts and into middle America. Camden Property Trust, for instance, recently went under contract to acquire 11 Texas communities with 3,750 rental units from Verde Apartment Communities. The total purchase price was $321 million. According to Camden, one of America's biggest public apartment owners and managers, the deals are expected to begin closing this week and continue closing through the end of the month. In the meantime, a venture led by Kushner Cos. has purchased a troubled portfolio of 4,681 apartments in three states -- Ohio, Indiana, and Pennsylvania -- from Prudential Mortgage Capital Co. The seller was in the process of foreclosing on the portfolio. Kushner is paying approximately $72 million for the portfolio, or nearly 50 percent of the face value of the insurance giant's mortgage. These and other deals are indeed the latest proof of the current strength in apartment sales, which are partly being fueled by strong demand from homeowners-turned-renters. To date, that demand has been strongest in such major coastal markets as New York and Washington, D.C. Camden CEO Richard Campo this week declared, "There is life off the coasts."
Industry News
Western National President Khouri Talks Apartments
Digested From "Six Questions for Western National’s Khouri"
GlobeSt.com (06/20/11) by Natalie Dolce
Western National Property Management (WNPM) President Laura Khouri has plans to expand her firm's operations. She states, "We've strengthened our internal leadership and are focused on new business development. What really makes us successful is being both transparent to the client and real. Given our results and full disclosure approach, our clients are our greatest supporters and that equates to an impressive sales tool. Our recent management contracts were obtained through referrals and word of mouth and you can’t buy that kind of advertising." WNPM currently manages more than 22,000 apartments in 150 communities spread across Southern and Northern California, Arizona, and Utah. Khouri is in charge of the operations of the WNPM's property management division and provides strategic direction to the company relative to all the apartment communities in the portfolio. She states, "From a financial standpoint, it is of utmost importance to understand why we have all but eliminated concessions and discounts, pushed the rents and thereby increased renewals. From a resident satisfaction standpoint, we are continuing our care and connect program with our associates which has become a way of life at Western in the way we treat each other and our residents."
Incentives and Biz Moves Drive Surge in Detroit Apartments
Digested From "Detroit Apartment Buildings Fill; Renters' Age Falls: Incentives, Biz Moves Drive Surge"
Crain's Detroit Business (06/19/2011) by Daniel Duggan
In Detroit, growth in downtown businesses coupled with increased incentives for people to move in has many city apartment communities at or near 100-percent occupancy. Citywide, apartment owners cite a boost in the last several months. In some cases, the apartments have waiting lists. Such buildings and communities as The Studio One apartments, the rental units in the Park Shelton in Midtown, the Lofts of Merchants Row, and the Lofts at Woodward in the central business district are full. Detroit's Midtown neighborhood is currently 94 percent occupied, according to a first-quarter study by Midtown Detroit Inc. that covered the approximately 4,500 apartment units. However, the apartment boom is not limited to Midtown. Michael Martorelli, sales and leasing manager with the Southfield-based Berger Realty Group, concludes, "If we had more units right now, we'd fill them."
Cramer: Skip Treasuries - Buy REITs
Digested From "Cramer: Skip Treasuries - Buy REITs"
TheStreet.com (06/13/11) by Jim Cramer; Debra Borchardt
Noted financial expert and TV personality Jim Cramer is recommending that investors buy REITs yielding more than 5 percent instead of Treasuries for safe money. Cramer says he is not a fan of Treasuries because they are overvalued and he likes dividends. Of REITs, he said, "I only want those are yielding more than 5 [percent]." He singled out hotel and hospital REITs as particularly attractive, but lumped AvalonBay Communities into a group that he called "too expensive."
Camden Property Trust Announces Q2 2011 Dividend
Digested From "Camden Property Trust Announces Second Quarter 2011 Dividend"
MarketWatch (06/15/11)
Camden Property Trust's board of trust managers has declared a second-quarter cash dividend of $0.49 per share, which will be payable July 18 to shareholders of record as of June 30. The REIT specializes in owning, developing, acquiring, and managing apartment communities nationwide. Camden currently has ownership stakes in 188 such properties containing 64,248 rental units. Upon completion of seven communities now in various stages of development, the REIT's portfolio will increase to 66,213 apartments. In addition, Camden was recently named by FORTUNE Magazine as one of the "100 Best Companies to Work" in America for the fourth straight year.
Four Austin Apartment Communities for Sale
Digested From "Four Austin Apartment Buildings for Sale"
Austin Business Journal (06/17/11) by Cody Lyon
Marcus & Millichap Real Estate Investment Services Inc. reports that four large apartment communities in North Austin are now on the selling block. Marcus & Millichap property brokers Joe James and Kent Myers said the four communities are available either individually or as a 542-unit portfolio on an all-cash basis. Each apartment community is about 90 percent leased and owned by The Hayman Co. James notes, "There hasn't been a large, stable portfolio of non-loan-assuming multifamily property in the North Austin market in quiet a while." Because of the city's recent rankings at or near the top of apartment market lists, interest has already been high on the portfolio, mainly from investors in California and New York who are looking to break into the Austin market.
More in Upstate S.C. Look to Apartment Living
Digested From "More in Upstate Look Toward Apartment Dwelling"
Greenville News (SC) (06/17/11) by Angelia Davis
South Carolina's Greenville-Spartanburg-Anderson area has seen its apartment vacancy rate improve to 7.2 percent over the last six months. According to Real Data, weak home sales has resulted in strong demand for Upstate apartments, with the number of units absorbed doubling over the past few months. Occupancies have been on an upward trend in this area for the last two years, researchers further confirm. The average occupancy rate for the Upstate rose to 91.3 percent last year from a little more than 88 percent at the end of 2009, reports Andrea Barbarino of Real Data. The occupancy rate has since climbed to 92.8 percent. Growth in supply, though, has been minimal. Only 445 new rental units were completed last year. As of this month, there are more than 1,200 apartments proposed for this region. Researchers expect rent and occupancy growth to continue to climb throughout the second half of 2011 on account of increased demand and lagging development.
Housing Starts Are Up Thanks to Multifamily
Digested From "Housing Starts Are Up"
Philadelphia Inquirer (06/17/11)
According to the Commerce Department, new-home building climbed 3.5 percent from April to May to an annual rate of 560,000 units but was still far off the targeted pace of 1.2 million that is needed to sustain a healthy housing market. Permits also rose last month to the highest level since December, but apartments and condominiums accounted for a large chunk of that gain. Renting has become a preferred choice for many as the national job outlook remains bleak and foreclosures remain high.
Increased Renting Demands Insurance
Digested From "Making The Move: From Owning To Renting"
WFMY News 2 (Greensboro, N.C.) (06/17/11) by Meghan Packer
Susanna Nunn, a State Farm insurance agent, says the agency is seeing a fair number of people who are moving out of their homes and starting to rent, or renting out their homes if they are unable to sell them. Nunn said renters insurance policies are up 50 percent at State Farm compared to this time last year, and homeowners insurance is down about 20 percent. North Carolina's Piedmont Triad Apartment Association has noticed the trend as well, recording fewer vacancies in area apartments.
Florida's Lakewood Ranch to Include Apartments
Digested From "Lakewood Ranch Spawns $100M in Commercial Growth"
GlobeSt.com (06/16/11) by Jennifer LeClaire
Florida's Lakewood Ranch is seeing a plethora of new development this year that will infuse more than $100 million into the Sunshine State's west coast. Schroeder-Manatee Ranch, the entity responsible for developing the master-planned community, has attracted a number of private groups to develop a mix of apartments, homes, schools, retail stores, and government offices there. Lakewood Ranch is a 8,500-acre master-planned community in Sarasota and Manatee counties that is home to more 15,000 residents and approximately 4 million square feet of commercial property. LWR Commercial Realty President Brian Kennelly states, "Lakewood Ranch is without a doubt the growth corridor in the region and the state right now. We are a pocket of normalcy in the region and are coming out of the recession first due to the strength, stability and value that this area provides to buyers and business owners." New projects include the Lost Creek apartment community, which will offer 272 apartments at a cost of about $30 million. Once completed, it will be the first new apartment community to be added in Manatee County in the last 10 years. Residents are expected to begin occupying rental units starting this December.
AvalonBay CFO Sargeant Sells $9.7M in Stock
Digested From "AvalonBay CFO Sargeant Sells $9.7M in Stock"
Citybizlist Washington, D.C. (06/13/11)
AvalonBay Communities confirms that CFO Thomas Sargeant has sold $9.70 million in stock. Sargeant sold more than 73,100 shares at an average of $132.66 a share after acquiring 76,788 shares by exercising options at an average price of $83.48 a share. Sargeant, who is responsible for all of the financial operations at the apartment REIT, previously served as group financial officer for the Northeast Group, the Mid-Atlantic Group, and the Midwest Group of Trammell Crow Residential. As of the end of this year's first quarter, AvalonBay had ownership interests in 187 apartment communities containing 55,027 rental units. These communities are spread throughout 10 states and Washington, D.C.
Legislative/Legal News
Cedar Falls Apartment Keys Ordinance Faces Backlash
Digested From "Iowa City's Ordinance Making Apartment Keys Available to Emergency Crews Faces Backlash"
Fox News (06/15/11) by Joshua Rhett Miller
In Iowa, an ordinance has been passed by the Cedar Falls City Council requiring hundreds of apartment communities and commercial buildings to "leave the keys outside" in case of an emergency. It expands a previous ordinance that required lock boxes containing keys at multifamily buildings with six or more units and commercial buildings with a sprinkler system or unsupervised alarms, and it includes apartment communities with just three or more units. Nick Taiber, the lone council member to oppose the ordinance, said he had yet to see a "strong case" for the benefits of requiring the safe-like boxes located on the outside of buildings so fire officials, with a master key, can gain entry during emergencies. Still, proponents say expansion of the ordinance to include additional apartment communities will lead to increased ease of entry during emergencies and a reduction in property damage. Critics, though, remain concerned that the increased ease of entry could lead to an increase in property breaches with malicious intent. Opponents have also raised the possibility that the decision represents government overreach.
Indiana Town's Apartment Ordinance Blocked by Federal Judge
Digested From "Hammond's Apartment Ordinance Blocked by Federal Judge"
Post-Tribune (IN) (06/17/11) by Teresa Auch Schultz
U.S. District Judge Theresa Springmann late last week blocked a Hammond, Ind., ordinance that charges non-city apartment owners more than those who live in the city. Springmann also said in her order that the Indiana Apartment Association (IAA) would likely win its lawsuit against Hammond's rental registration ordinance. The suit focuses on a law the Hammond City Council approved last year to charge apartment owners $20 per rental unit in the city each year. However, owners who do not live in the city would be charged $80 a unit annually. IAA filed a federal lawsuit in 2010, contending the ordinance violates the U.S. Constitution's Commerce Clause by harming a non-resident’s right to do business in Hammond. The city filed responses saying that because a large majority of apartment problems come from those owned by non-residents, it was fair to charge them more. Springmann disagrees, noting that the city did not provide similar statistics for how many of the apartments in Hammond are owned by non-residents. Her ruling stated: "The ordinance discriminates on its face against non-Hammond residents."
Indianapolis Towing Proposal Hits Snag With Apartment Owners
Digested From "Towing Proposal Hits Snag With Apartment Owners"
WTHR-TV (Indianapolis) (06/13/11) by David MacAnally
In Indianapolis, a city panel has agreed to delay a vote related to regulating Indianapolis tow truck operators until next month after an investigation found that some were removing legally parked cars from private business parking lots. At a hearing on Monday, area apartment owners argued that they need to tow away illegally parked cars from residents' appointed parking spaces at any hour of the day or night, but they cannot always be there to order the tow as the new law would require. As such, city councilors will delay a vote on the plan until they come up with language to help those apartment owners.
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