Menu
|
|
CBRE Says Apartment Occupancy Stable, Rents on Rise
|
| | Home | Events | Advertise | Feedback | |
Headlines
Top Story
CBRE Says Apartment Occupancy Stable, Rents on Rise
Industry News
Property Expert Thomas Bohjalian Favors Apartments
Jones Lang LaSalle Creates Multifamily Practice
Apartments to Multiply in Houston
Rare Affordable Apartment Portfolio Solid in Hawaii
Essex Property Trust Benefits From Lousy Housing Market
Apartment Vacancies in Arizona's Southeast Valley Fall
Moody's Has Positive Outlook on Apartments
Developers Seek New Rental Opportunities in Cleveland
Madison (Wis.) Vacancies Reach Lowest Rate in Years
CBRE Reports Continued Apartment Sector Growth
Moody's: Multifamily to Lead Commercial RE Price Recovery
Legislative/Legal News
Calif. City Looks to Give More Protections to Those Evicted
L.A. Moves to Allow Overhaul of Commercial Trash Collection
Top Story
Time Warner Cable Community Solutions has proven success partnering with MDU owners, providing quality voice/video/data products to their residents.
CBRE Says Apartment Occupancy Stable, Rents on Rise
Digested From "Apartment Occupancy Stable, Rents on Rise"
Los Angeles Times (11/27/11)
CBRE Group Inc. forecasts that the country's apartment vacancy rate is expected to be 5.5 percent at the end of 2011 and hold at that rate through next year. According to the brokerage's latest report, vacancy is down slightly from a year earlier and off almost 2 percentage points from the 2009 peak. Gleb Nechayev, a senior economist for CBRE Group, states, "Apartment demand is benefiting from slight job growth as well as an expanding pool of potential renters." Conditions generally favor apartment owners, but vary from market to market. Indeed, monthly rents flat or down slightly in some and rising by nearly 15 percent in others from a year earlier. Over the next two years, such major metro areas as Austin, Denver, San Francisco, San Jose, and Seattle are expected to post the highest rent growth.
Industry News
Property Expert Thomas Bohjalian Favors Apartments
Digested From "Five Questions With Real Estate Expert Thomas Bohjalian"
InvestmentNews (11/25/11) by Thomas Bohjalian
Thomas N. Bohjalian, a portfolio manager at Cohen & Steers, has been placing big bets on shares of apartment REITs. Among Cohen & Steers' top holdings are AvalonBay Communities and Equity Residential, two REITs that own apartment communities throughout the United States. When asked why are such REITs are doing so well, Bohjalian replied, "Historically 65 percent of households chose to buy a home and 35 percent chose to rent. . . . Because the housing bubble burst, you have a lot of excess single-family homes, either foreclosures or people unable to sell their homes and staying in their homes." With occupancy rates well above 90 percent in many markets nationwide, apartment owners have pricing power. Bohjalian notes, "They've been able to raise the rents and still increase occupancies. They've also been able to hold expenses pretty low. That's translated into higher cash flow for those multifamily REITs." A lack of new construction in most areas has similarly favored owners. Furthermore, with many of the newly employed skewing younger, this demographic has proven that they do not want to be tied down to a home or to one job market. With regard to rents, Bohjalian concludes, "It seems like there is some pushback. . . . There is going to be more pressure on the lower end, where tenants are really renters by necessity."
Jones Lang LaSalle Creates Multifamily Practice
Digested From "Jones Lang LaSalle Creates Multifamily Practice"
Phoenix Business Journal (11/21/11) by Jan Buchholz
Jones Lang LaSalle (JLL) reports that its Phoenix office has established a multifamily investment sales division that will be headed by John Cunningham. Cunningham has a proven track record in the apartment sector, having worked for such notable players as Alliance Residential, Camden Property Trust, and United Dominion Realty Trust. He notes that the multifamily housing market has continued to be robust through much of the economic doldrums that have characterized the past several years. JLL is simply looking to capture some of that business. Jubeen Vaghefi, managing director of JLL's national multifamily investment sales team, states, "Bringing John in to steer our apartment expertise in this growing region is key to our growth plan."
Apartments to Multiply in Houston
Digested From "Apartments to Multiply Inside the Loop"
Houston Chronicle (11/21/11) by Nancy Sarnoff
After an extended period of inactivity with the local employment market stagnating, Houston is once again a jobs hot spot and is seeing an influx in new apartment communities being built as a result. Currently, more than 3,500 rental units are being built inside the loop with another 8,700 apartment proposed. Apartment Data Services gathered the data. The firm's researchers say that, with the increase in jobs, "If we ever needed construction, we need it now and we need it soon." According to Ted C. Jones of Stewart Title Guaranty Co., Houston should finish 2011 with approximately 66,000 new jobs and is on track to see another 62,000 added in 2012.
Rare Affordable Apartment Portfolio Solid in Hawaii
Digested From "A Rare 'Affordable' Portfolio Sale in Honolulu"
Wall Street Journal (11/23/11) by Maura Webber Sadovi
In Honolulu, an apartment portfolio is going on the selling block that will test investors' appetite for affordable multifamily housing in such a high-rent market. The city and county of Honolulu are looking to fetch more than $28 million for a 65-year lease on a dozen affordable apartment communities containing 1,257 rental units. Sam Moku, director of the city and county of Honolulu's Department of Community Services, notes that the 12 communities were last appraised at $28 million two years ago. Values have since risen. CBRE Group Inc. has agreed to market the portfolio. Ben Carlos Thypin, director of market analysis for Real Capital Analytics, comments, "Demand for apartment properties has grown broadly since the recession, with rental demand increasing as people got kicked out of houses." His firm estimates the volume of affordable housing sold last year climbed nearly 80 percent from 2009, adding that this year is on pace to be slightly lower. Scott Gomes, executive vice president in CBRE's Hawaii office, is anticipating strong interest from U.S. private-equity firms due to the shortage of affordable housing in the Aloha State and the Honolulu metro area's strong apartment market. Monthly average asking rents for apartments in and around the city stood at $1,310 as of Sept. 30, above the average U.S. asking rent of $1,059. Meanwhile, the apartment vacancy rate in the Honolulu metro area stood at 2.1 percent versus the 5.6 percent U.S. level, reports Reis Inc.
Essex Property Trust Benefits From Lousy Housing Market
Digested From "West Coast Apartment REIT Living It Up Thanks To Lousy Housing Market"
Forbes (11/23/11) by Peter Slatin
Essex Property Trust recorded strong third-quarter financial results, with management raising its guidance for the remainder of the year. Analysts are now forecasting strong growth for the apartment REIT over the next few years as Essex continues to benefit from a decrease in homeownership rates nationwide. The REIT also pays out a quarterly dividend that yields a solid 3.2 percent, which it has steadily increased over the past 10 years. Essex Property currently has ownership stakes in 155 apartment communities, containing more than 32,000 rental units. The lion's share of these apartments are along the West Coast in Southern California, the San Francisco Bay area, and Seattle. Headquartered in Palo Alto, Calif., the REIT posted a 4.1 percent increase in same-property revenues year-over-year propelled by a 5.3 percent increase in rental rates. Same-property rental rates, meanwhile, rose 2.4 percent from the previous three-month period -- the highest quarter-over-quarter rental rate increase in more than three years.
Apartment Vacancies in Arizona's Southeast Valley Fall
Digested From "Southeast Valley Apartment Vacancy Rates Keep Dropping"
Arizona Republic (11/22/11) by Edythe Jensen
The latest quarterly report from AZ Investment Property Experts shows that apartment vacancy rates throughout Arizona's Southeast Valley have been dropping since 2009. In fact, they are now among the Phoenix metro area's lowest. However, Phoenix officials and local property professionals have different ideas on why this has been occurring and what it means for the various communities. For the most part, elected officials view the low vacancies as a positive sign, crediting the influx of new jobs and an improving regional economy. On the other hand, some real estate experts say it's just the aftermath of the foreclosure crisis and construction slowdown. They caution that apartment residents can expect rising rents if no new multifamily housing is built in the near future to meet the growing demand. All areas of Chandler, Gilbert, Mesa, Tempe, and Ahwatukee Foothills are reporting single-digit apartment vacancy rates. According to the study, the lowest is 4.3 percent in east Mesa. The highest -- 9.4 percent -- is in south Mesa. Researchers note that all are below the double-digit rates reported in other areas of Phoenix.
Moody's Has Positive Outlook on Apartments
Digested From "Property Pulse: Sluggish Growth Expected for Values"
Wall Street Journal (11/23/11) P. C9; by Eliot Brown
Moody's Investor Service forecasts that U.S. commercial-property values overall will see lethargic growth in the coming years due to such factors as slow job gains and hundreds of billions of distressed commercial mortgages coming due. The firm predicts that office property values will increase only 1.3 percent by 2015. Moody's has a generally positive outlook on apartments, though, projecting a 33 percent gain in apartment values over the next four years.
Developers Seek New Rental Opportunities in Cleveland
Digested From "With Apartments Full, Developers Look for New Rental Opportunities in Downtown Cleveland"
Cleveland Plain Dealer (OH) (11/26/11) by Michelle Jarboe McFee
Downtown Cleveland boasts one of the hottest apartment markets in the country, with most buildings and communities almost full and waiting lists piling up. The occupancy spike has developers jockeying to meet demand. Ralph McGreevy, executive vice president of the Northeast Ohio Apartment Association, states, "Downtown needs more apartments, and it's just that simple." In the Cleveland-Elyria-Mentor area, Reis Inc. reports that apartment owners are having their best year since the early 2000s. The region's occupancy rate hit a recent low of 93 percent during the first three months of last year. Currently, it is 95.2 percent versus a national rate of 94.4 percent as of Sept. 30. Reis researchers pinpoint apartment occupancy in downtown Cleveland at 93.2 percent, putting the center city just behind the city's suburbs. Nevertheless, enthusiasm for downtown is growing fast, and the vacancy rate has been sliced by almost 50 percent over the past 21 months. Ryan Severino, a Reis senior economist in New York, states, "That is a phenomenal increase during that period of time."
Madison (Wis.) Vacancies Reach Lowest Rate in Years
Digested From "Strong Apartment Demand Pushes Madison-Area Rental Vacancies to Lowest Rate since at Least 2005"
Wisconsin State Journal (11/21/11) by Karen Rivedal
In Wisconsin, Madison Gas & Electric's (MG&E's) latest survey of apartment communities shows that the Madison area's vacancy rate was at its lowest level since at least 2005 during this year's third quarter. Researchers hold this trend up as further proof of the continuing strong demand for rental housing locally. The data comes from apartments that appear to be vacant either because of utility shut-offs or service moved to an owner's name. According to the research, Madison's third quarter vacancy rate of 2.57 percent was down from the 3.7 percent posted for the same period a year earlier. Furthermore, it was less than half the 6.43 percent vacancy rate recorded in 2005's July-through-September period at the height of the housing boom. The MG&E study breaks down current area vacancies by zip code and total rental apartments. Madison's 53715 district, containing 2,697 total units, had the lowest rate at 0.92 percent. The highest -- at 5.07 percent -- was registered in Madison/Monona's 53716 zip code, with 1,716 total apartments. The continuing low vacancy rate overall means Madison's apartment communities are near 100-percent occupancy, suggesting strong demand for at least the foreseeable future.
CBRE Reports Continued Apartment Sector Growth
Digested From "Exclusive: Apartment Sector Grows Past Recovery -- Report"
Reuters (11/18/11) by Ilaina Jonas
A new report by CBRE Econometric Advisors (CBRE-EA) says that apartments have been the bright spot in the U.S. commercial real estate market, with the vacancy rate expected to hold at 5.5 percent next year, down from 7.04 percent in 2009, as more people choose to rent instead of buy houses. According to CBRE-EA senior managing economist Gleb Nechayev, "Multifamily housing is leading commercial real estate in terms of its recovery. It's actually not in recovery anymore. It entered the expansion phase, which means it's actually back to the normal vacancy levels." The report forecasts a 5.2 percent vacancy rate in 2013, with a slight decrease from 2012 expected as more than 200,000 new units go on the market. The vacancy rate will then drop to 5.1 percent, as the job market improves. Vacancy rates could decline more significantly if the homeownership rate continues to fall. Meanwhile, property owners can anticipate a 3 percent jump in revenue in 2012 on the heels of an expected 4.1 percent hike in rents in 2011. Nechayev predicts that gains in the technology sector that promote job growth will boost rents and revenue growth in such cities as San Francisco, San Jose, Austin, Denver, and Seattle over the next couple of years. Other top performing markets will be Boston, the District of Columbia, New York, and Phoenix.
Moody's: Multifamily to Lead Commercial RE Price Recovery
Digested From "Moody's: Commercial Real-Estate Prices Fell In September"
Wall Street Journal (11/21/11) by Tess Stynes
Moody's Investors Service reports that U.S. commercial real-estate prices dipped 1.4 percent during September, ending four straight months of growth. Moody's expects the "bottoming process" for the sector to continue for at least the next couple of years. Nick Levidy, Moody's managing director, forecasts that "multifamily and hotel properties to lead the price recovery." Transaction volume remained high in September with 225 repeat sales, which was above the monthly average of 192 so far this year. By contrast, the average monthly transaction count was 114 in 2010 and 96 the previous year.
Legislative/Legal News
Calif. City Looks to Give More Protections to Those Evicted
Digested From "East Palo Alto Looks to Give More Protections to Some Evicted Tenants"
San Jose Mercury News (11/22/11) by Bonnie Eslinger
Earlier in November, Equity Residential disclosed plans to complete its acquisition of more than 1,800 East Palo Alto apartment units by the end of December. Those apartment communities were previously owned by Page Mill Properties, which was reviled citywide after it significantly hiked rents, evicted residents, and mounted an aggressive legal challenge to the city's rent-control ordinance. A California law known as the Ellis Act enables property owners to evict all residents if they decide to stop renting their properties. In response, a number of cities statewide have crafted ordinances to aid those displaced. East Palo Alto Mayor Carlos Romero reports that the city is proposing changes to its ordinance designed to "think a little more preemptively and coercively in terms of how we can better ensure tenant protections." He added that intention is not to interfere with owners' legal rights to remove units from the rental market. The city currently mandates that an apartment owner pay "relocation assistance" of $4,500 to each adult resident evicted, or up to $13,500 per unit. Residents who face difficult hardships if forced to move, such as the disabled and elderly, would receive an extra $5,000 per category of hardship. Proposed changes to the ordinance include that "relocation assistance" being increased to between $7,500 and $10,000 per resident depending on how long the person has lived in the apartment.
L.A. Moves to Allow Overhaul of Commercial Trash Collection
Digested From "City Moves to Allow Overhaul of Commercial Trash Collection"
Daily News of Los Angeles (11/22/11) by Daily News Wire Services
The Los Angeles City Council's Energy and Environment Committee has unanimously approved a new plan to overhaul garbage collection from apartment communities and commercial buildings in the city. Currently, around 145 private companies contract with individual commercial customers for trash pick-up. But, in the new system, companies would compete for city contracts for pick ups in certain areas. The plan that was passed by the committee is a state-mandated five-year notice to companies about this new system. Sanitation Director Enrique Zaldivar supports the new plan because it would allow the city to require cleaner trucks, improve recycling, generate revenue through franchise fees, and impose stricter worker health and safety requirements. David Pettit, director of the Natural Resources Defense Council Southern California Air Program, says the current system has "created a haven for dirty trucks," and it needs to be fixed.
Abstract News © Copyright 2011 INFORMATION, INC.
|
|
|