Headlines
Top Story
Apartment Owners and Managers Must Take Steps Against Bed Bugs
Industry News
Apartment Sales Defy the Slump
New Home and Apartment Construction Jumps 10.5 Percent in August
Rent.com Survey Shows Rental Rates Rise With Stronger Demand for Apartments
Local Market for Apartment Communities Heats Up
Apartment Construction Rebounds in Ohio
Archstone Executive Al Neely Dies
Finding a Pet-Friendly Apartment Online Just Got Easier With New Site
Crosland Confirms That It Has Worked Through Its Cash-Flow and Financing Issues
Unemployment Rises in 27 States Last Month
Apartment Demand Spurs Construction in Fayetteville and Spring Lake, N.C.
Legislative/Legal News
Ohio Court Upholds Tax Break for Some Apartment Owners
Madison City Council Tables Debate on Apartment Showing Ordinance
Green Options Could Be Coming for San Antonio Apartment Residents 
Top Story
Time Warner Cable Community Solutions has proven success partnering with MDU owners, providing quality voice/video/data products to their residents.
Apartment Owners and Managers Must Take Steps Against Bed Bugs
Digested From "Getting to Know Bed Bugs"
UNITS (10/10) by Larry Pinto; Richard Cooper; Sandra Kraft
It is important for apartment owners to make sure all unwanted insect guests have also left after residents have vacated their apartments. Of course, determining when a bed bug infestation is eliminated in a vacant apartment is hard work, and bed bug eggs in protected sites will continue to hatch for weeks. In the absence of a host, bed bugs do indeed tend to be inactive and remain in hiding. An owner or a manager may not discover an apartment has an infestation until after the resident has left and maintenance prepares it for the next resident. Other times, apartment residents will terminate their lease after discovering they have bed bugs. Bed bugs can persist at very low numbers in vacated apartments for five or more months. To be sure, there are steps apartment managers can take to minimize the chances that new residents encounter bed bugs. First, try and eliminate any bed bug infestation before an apartment becomes available. Also recommended is the addition of language to the rental lease agreement that upon notice of the lease termination, an inspection of the unit will be conducted. In the event the inspection uncovers proof of bed bugs, there may be sufficient time to eliminate the problem before the unit is vacated. The National Apartment Association (NAA) has launched the Bed Bug Resource Center, which serves as a comprehensive online repository featuring materials developed under the guidance of the association's Bed Bugs Working Group. Numerous bed bug-related resources are available to NAA members via this platform, including educational brochures for property management staff and residents and legislative information.
Industry News
Benefit by centralizing your property management information in a single database with Yardi Multifamily Suite™. Learn more…
Apartment Sales Defy the Slump
Digested From "Multifamily Sales Defy the Slump"
Wall Street Journal (09/22/10) by Dawn Wotapka
Multifamily housing sales are on the rise, reversing the slowdown that followed the financial market's collapse two years earlier. According to Marcus & Millichap Research Services, apartment transactions totaled $7.1 billion in this year's second quarter -- a 32 percent increase from a year earlier. Real Capital Analytics, meanwhile, reports that closed sales topped $2.6 billion last month. As sales activity increases, a plethora of new inventory is hitting the market. Indeed, listings tallied $3.3 billion in August, on top of the previous month's $3.5 billion. Dan Fasulo, a Real Capital managing director, remarks, "That's more fuel, basically, for a fire that's going to continue into the fall." Of course, this activity is still well below 2006's peak level of more than $120 billion. In addition, the increased sales volume is inflating prices from their depressed post-housing-crash levels, which is increasing the risk for buyers. Fasulo observes, "We see prices rising rapidly for apartment communities all around the country, even in some of those secondary markets that would make you shake your head." Buyers of top-quality apartment communities in the best markets are generally getting yields of about 5 percent, states Haendel St. Juste, a REIT analyst with Keefe, Bruyette & Woods Inc. In other words, an apartment community that fetched $100 million would generate nearly $5 million in net income. A year earlier, investors were getting yields of around 6 percent.
New Home and Apartment Construction Jumps 10.5 Percent in August
Digested From "Home Construction Jumps 10.5 Pct in August"
Associated Press (09/21/10) by Alan Zibel
Construction of new homes and apartments rose 10.5 percent in August from a month earlier due to gains mainly in apartment and condominium construction, not the much larger single-family homes sector. There was a 32 percent monthly increase in the condominium and apartment market, whereas single-family homes grew just more than 4 percent. Builders are still struggling against weakened demand as a result of high unemployment and a glut of foreclosed homes on the market.
Rent.com Survey Shows Rental Rates Rise With Stronger Demand for Apartments
Digested From "Rental Rates Rise With Stronger Demand for Apartments"
WTOP Radio (09/27/10) by Hank Silverberg
A new Rent.com survey shows that more people are renting apartments and homes nationwide, a trend that has driven rental rates up in some markets. The research notes that about 42 percent of apartment owners polled are seeing lower vacancy rates. John McClain, deputy director of the Center for Regional Analysis at George Mason University, comments, "Obviously, there have been a lot of foreclosures, a couple million a year. Where have those people gone to live? That could be part of that rental market." A year earlier, 69 percent of respondents said they lowered their rents to fill vacancies. In the latest poll, only 31 percent are doing so. With more people renting, the days of rental incentives may be coming to an end. Just 38 percent of apartment owners are willing to make concessions to fill vacancies, the Rent.com survey shows. While many apartment communities have stopped offering the deals they were a year ago, 36 percent nationwide say they are offering one or more rent-free months. Four in 10, meanwhile, have reduced security deposits. Finally, around 22 percent are still offering unit upgrades at no extra charge. Those polled by the Web site own approximately 1 million rental apartments in more than 4,000 communities throughout the country.
Local Market for Apartment Communities Heats Up
Digested From "Local Market for Apartment Buildings Heats Up"
American Chronicle (09/26/10) by Eric Wolff
Investors on the hunt for growth opportunities have taken a shine to San Diego County's apartment sector this year. With so many other investments limping along, major investment groups turned to apartments to provide reliable income. San Diego County apartments have a good name within the investment community due to such factors as limited development opportunities. Even Southwest Riverside County's apartment stock is inspiring some enthusiasm among investors because of its proximity to San Diego. Darcy Miramontes, a commercial broker with Cassidy Turley BRE Commercial Real Estate Services, states, "It jumped from kind of quiet and flat. Now there's more volume, more activity." Nationwide, builders have responded to strength in the apartment sector by pulling permits for 150 communities of five rental units or more. That is a 39 percent increase from the previous August, according to the Commerce Department. Kevin Mulhern, an apartment specialist with CB Richard Ellis, concludes, "There's still a ton of demand."
Apartment Construction Rebounds in Ohio
Digested From "Builders Bet on Rent"
Columbus Dispatch (OH) (09/23/10) by Jim Weiker
Apartment construction is making a rebound in Ohio, catering mostly to residents who have lost their homes as well as those who are either unwilling or unable to buy. Robert Vogt, a partner in the Columbus-based apartment research firm Vogt Santer Insights, expects to see a strong market for the next several years in certain areas. Older rental units are still struggling to retain residents. However, newer apartments in trendier locations have been forced to turn potential residents away. The occupancy rate for top-quality, Class A apartments is about 96 percent. Six large apartment communities, totaling more than 1,600 units, are under construction in the Columbus metro area alone to fulfill the demand. In addition, at least nine smaller apartment communities for low-income residents and senior citizens are under way around central Ohio. Developers who are seeking more building sites say they are emboldened by a new pool of people interested in renting. Those would be folks who affluent enough to buy a house, but either unable to because of credit issues or unwilling to because of the housing-market collapse.
Archstone Executive Al Neely Dies
Digested From "Archstone Executive Al Neely Dies"
Denver Business Journal (09/22/10) by Trevor Echols
Al Neely, chief development officer at Colorado-based apartment owner and operator Archstone, passed away last week of natural causes. Neely came to Archstone via its merger with Charles E. Smith Residential, which he joined in 1989 as vice president of development. While with Archstone, Neely guided the development and repositioning of apartment communities encompassing more than 15,000 units and was instrumental in the creation of a joint venture with Hines for CityCenterDC. He received the Developer of the Year Award in 1997 from the National Association of Industrial and Office Properties as well as the National Association of Home Builders' Multi-Family Developer of the Year Award four years later.
Finding a Pet-Friendly Apartment Online Just Got Easier With New Site
Digested From "Finding a Pet-Friendly Apartment Online"
Los Angeles Times (09/26/10) by Mary Umberger
Finding a pet-friendly apartment is still a chore for many, but a few Web sites have popped up in recent years to help apartment residents find them. The latest is PetFriendlyRentalProperties.com, introduced by Rhona Sutter. The Web entrepreneur had a hit with pet owners a few years ago when she founded PetRealtyNetwork.com, which matches animal lovers with like-minded Realtors. She remarks, "We've gotten so many requests for [pet-friendly] rentals for people who have lost their homes through foreclosure. I think it's heartbreaking that people just can't find homes for their pets, and they're having to surrender them to shelters." The Humane Society of the United States reports that 39 percent of U.S. households own at least one dog and 33 percent own at least one cat.
Crosland Confirms That It Has Worked Through Its Cash-Flow and Financing Issues
Digested From "Crosland Says It's Found 'Stabilization'"
Charlotte Observer (NC) (09/26/10) by Kerry Hall Singe
Crosland relies on what it calls a "recycling of capital," where it develops projects and then sells a portion of its assets. However, when the financial markets crashed two years ago, both financing and buyers suddenly dried up. Since then, the company has put two of its apartment communities into bankruptcy protection to avoid foreclosure, sold a Raleigh apartment community at a premium, and turned the reins of leadership over to CEO Stephen Mauldin. Mauldin and former Chief Executive Todd Mansfield recently spoke about how the company coped during one of the deepest real estate recessions on record. Over the last two years, Crosland went from generating a steady $50 million to $80 million a year in free cash flow in the mid-2000s to between $10 million and $30 million. Mauldin notes that the industry got away from the basics of real estate during the boom, adding that history will show 2009 to be one of the worst for developers. Mansfield agreed, stating, "I couldn't have estimated the depth of this. It caught me a bit flat-footed, and at times it felt like death by a thousand cuts." Mauldin now declares that Crosland has reached "a spot of relative stabilization." Today, it has 29 lenders, three of which provide nearly 70 percent of its debt. The Charlotte-based developer develops and manages properties in the Southeast, focusing on multifamily, retail, and single-family lots. The firm also manages apartment communities, most notably the Catalyst high-rise in uptown Charlotte.
Unemployment Rises in 27 States Last Month
Digested From "Unemployment Rises in 27 States Last Month"
Associated Press (09/21/10) by Christopher Rugaber
The U.S. Labor Department documented higher unemployment across America last month, with 27 states registering increased jobless rates in August compared to 14 states where the rate climbed in July. The unemployment market continues to be out of balance, however, with some regions bouncing back faster than others. For example, even as Western states -- held back by a battered housing sector -- hemorrhage jobs, Northeastern states are welcoming more and more finance, hotel, and restaurant job openings. For the U.S. West, "nothing really gets better until the housing market stabilizes," speculates Moody's Analytics economist Steve Cochrane. The struggling residential property market means fewer job opportunities for construction workers, real estate agents, and other tied directly to the sector. Moreover, distressed homeowners who owe more on their mortgage than the property is worth do not have the discretionary income to redo, rehabilitate, or re-furnish their dwellings.
Apartment Demand Spurs Construction in Fayetteville and Spring Lake, N.C.
Digested From "Apartment Demand Spurs Construction in Fayetteville, Spring Lake"
Fayetteville Observer (NC) (09/20/10) by Andrew Barksdale
A surge in demand and soaring occupancy rates have led to an increase in the number of apartment communities being constructed in Fayetteville and Spring Lake, N.C. Construction permits for more than 1,200 apartments have been approved so far this year in the former, and permits for more than 500 units have been granted in the latter. Some apartment managers say their communities are nearly full, partly because of lifestyle changes and the return of thousands of Fort Bragg soldiers after lengthy deployments overseas. There are also more people hoping to shed the responsibility of lawn maintenance or the hassle of selling a house when it is time to move. Military buildup under base realignment is also driving demand, as Forces Command and the Army Reserve Command are relocating to Fort Bragg from Atlanta by next year because of BRAC. Some communities are reporting occupancy rates above 90 percent, which apartment managers find especially encouraging as they move forward with new construction.
Legislative/Legal News
NAAEI is excited to launch its National Apartment Leasing Professional (NALP) Online course on October 1.
Ohio Court Upholds Tax Break for Some Apartment Owners
Digested From "Court Upholds Tax Break for Some Rental Property Owners"
Dayton Daily News (OH) (09/23/10)
The Ohio Supreme Court this past week upheld a legislative decision to grant a tax break to some rental housing owners, but not others. As part of its 2005 overhaul of the state's business taxes, the Ohio General Assembly amended a law to allow a 10 percent property tax rollback to owners of single-family, two-family, and three-family residential properties. But the amendment did not grant that tax break to owners of apartment communities with four or more residential units. Prior to the amendment, the law had granted a 10 percent property tax exemption for all real property occupied by residential dwellings, regardless of the number of units. The Ohio Apartment Association complained to the state Board of Tax Appeals that the distinction violated the Ohio Constitution's equal protection of law requirement, but the appeals board ruled against the apartment association. On Sept. 23, the state Supreme Court followed suit with a 6-1 ruling that the distinction is permitted by the Ohio Constitution.
Madison City Council Tables Debate on Apartment Showing Ordinance
Digested From "City Council Tables Debate on Showing Ordinance"
Badger Herald (09/22/10) by Ryan Rainey
In Madison, Wis., a proposal to limit city apartment owners from showing their rental units will spend another month on the docket now that the City Council has voted to sit on the ordinance until October. The proposal, which Ald. Bridget Maniaci proposed and vouched for, would have limited all city property owners from showing apartments for 45 percent of the year, or some time in late January for a typical lease that a University of Wisconsin student would sign. Associated Students of Madison Vice Chair Adam Johnson referred to e-mails he had received in his WiscMail inbox as early as September 29 his freshman year urging him to rent from such major apartment owners as Madison Property Management. He said those e-mails and other advertising tactics owners used have affected his decision to move quickly into a lease his sophomore year, a decision he now regrets. Nancy Jensen of the Apartment Association of South Central Wisconsin warns that owners may pursue legal action if the current ordinance passes. She remarks, "We're putting you on notice in terms of where this will go legally."
Green Options Could Be Coming for San Antonio Apartment Residents
Digested From "Green Options Could Be Coming for S.A. Apartment-Dwellers "
KENS5.com (TX) (09/22/10)
Apartment residents and others in San Antonio have found it difficult to "go green" and recycle. Currently, the city is recycling only about 18 percent of what it could. San Antonio's goal is to recycle 60 percent of the community's waste by the end of this next decade, which many say can't be achieved as long as private contractors are hauling the waste away and not the city. Now, a new ordinance governing waste and recycling could come to a San Antonio City Council vote as early as next month. In addition, a recycling program for apartments could come in phases starting after the first of next year. Some unresolved issues, though, still remain. Rachelle Landry of the San Antonio Apartment Association states, "For us, we're concerned about how to police this. And we have to figure out where to put the containers [and] who's going to do the haul-away."
Abstract News © Copyright 2010 INFORMATION, INC.
|