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Double-Digit Rent Hikes May Be on the Way
Industry News
Aimco President Beaudin Resigns
Gables, USAA Team to Build and Buy Apartments
NAHB Estimates Multifamily Housing Starts
South Fla. Apartment Rents to Rise This Year
More People Choosing to Rent, Reis Report Shows
Analyst Expects REITs to See 5 to 10 Pct Growth in 2011
Aimco Promotes 3 Executive VPs
Camden REIT Names Coletta VP of Investments, Mid-Atlantic
Your BlackBerry or Your Wife
Legislative/Legal News
Broward, Central Florida Lead State in Bedbugs Violations
Banks Saddled With Foreclosed Properties
NYC's Bedbug Problem Gets Itchier
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Double-Digit Rent Hikes May Be on the Way
Digested From "Double-Digit Rent Hikes are on the Way"
MarketWatch (01/13/11) by Steve Kerch
According to development experts, apartment residents could see double-digit rent increases in the coming years as a shortage of new multifamily housing units coupled with a rise in prime renter-age households gives apartment owners increased clout they haven't seen since the mid-1990s. "Demand pressures are building. It's not bad today because rents have been down the last two years," says William McLaughlin, an executive vice president with AvalonBay Communities. Apartment developers broke ground on just 114,000 units in the United States in 2010. Although that number is expected to grow 16 percent to 133,000 in 2011, there will still be a substantial deficit in the number of units needed to meet expected demand. Already there are signs the apartment market is tightening, with rents in some cities rising by 7 percent or 8 percent per year. Jay Jacobson, a partner in the Boca Raton, Fla., office of Wood Partners, says that the challenge of getting a mortgage these days is forcing many to rent. Despite the demand, financing has been a challenge for multifamily housing developers, many of whom are scrambling to secure debt and equity financing as traditional lenders have backed off the sector.
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Aimco President Beaudin Resigns
Digested From "Aimco President Resigns After 11 Months"
Denver Business Journal (01/11/11)
Apartment Investment and Management Co. (Aimco) President and COO Tim Beaudin has announced his resignation after 11 months on the job. Beaudin was indeed named to his current post in February 2009. He had previously served as executive vice president, chief development officer, and chief property operating officer since joining the REIT in the fall of 2005. According to the Denver-based apartment operator, Beaudin will stay with Aimco through March 1 to provide an orderly transition. Beaudin is leaving to manage a new industrial platform for Blackstone.
Gables, USAA Team to Build and Buy Apartments
Digested From "Gables Residential, USAA Teaming up to Build and Buy $400 Million in Apartments"
Dallas Morning News (TX) (01/14/11) by Steve Brown
San Antonio-based USAA Real Estate Co. has formed a joint venture with Gables Residential to develop and purchase more than $400 million in apartment communities. Among the first deals will be the new Gables Fairmont community in Dallas' Uptown neighborhood. Other new apartments are in the planning stages in Houston and suburban Maryland. USAA has been a major recent buyer of apartments around the nation. USAA Real Estate Chairman and CEO Pat Duncan remarks, "This venture represents a unique opportunity to strategically add premier multifamily assets to our portfolio of investments. We look forward to building a strong relationship with the Gables team and engaging in future opportunities." Gables currently has land to build an additional 4,000 apartments nationwide. For its part, USAA has nearly $6 billion in assets.
NAHB Estimates Multifamily Housing Starts
Digested From "Supply Shortage in Multifamily"
American Banker (01/14/11) P. 8; by Lew Sichelman
Multifamily housing starts will rise 16 percent in 2011 to about 133,000 units, estimates the National Association of Home Builders. However, apartment developers need to produce 250,000 to 300,000 units to meet demand, according to NAHB chief economist David Crowe. The sector is about 1 million to 2 million households under where it should be, he says, but apartment developers do not have access to the capital needed to build more units.
South Fla. Apartment Rents to Rise This Year
Digested From "Apartment Rents Expected to Rise This Year"
SunSentinel.com (01/11/11) by Paul Owers
MPF Research says apartment hunters in south Florida can count on fewer vacancies and higher rents this year, the result of an improving economy and a lack of new construction. MPF says Broward County's apartment occupancy, now at about 95 percent, could increase by 1.6 percentage points in 2011. Apartment rents in the county, meanwhile, are expected to rise by about 5 percent this year. Palm Beach County's occupancy rate of 93 percent stands to rise 1.7 percentage points in 2011, and rents are expected to inch up 3 percent. The tighter market for apartment residents has a lot to do with foreclosures and price declines that have left many residents wary of homeownership or unable to qualify for mortgages. "People are much more comfortable with the fixed monthly costs of renting," said Damien Barr, co-founder of KangaRent. Additionally, apartment rentals are experiencing even greater demand due to fears of leasing single-family homes and condominiums from individual owners. According to MPF, the metro areas of San Jose, Calif.; Austin, Texas; Boston; New York; and Denver all are expected to register revenue gains of between 8 percent and 10 percent this year. Broward County, the nation's capital, San Francisco, Raleigh, and Baltimore are forecast to see gains of about 7 percent.
More People Choosing to Rent, Reis Report Shows
Digested From "Still Renting After All These Years"
Wall Street Journal (NY) (01/08/11) by M.P. McQueen
Despite low mortgage rates and affordable house prices, more people are choosing to rent even when homeownership is within their means. Reis Inc. reports that apartment vacancies dipped under 7 percent in the fourth quarter of 2010, at the same time that rents surged 2.3 percent year over year. Stricter mortgage standards, concerns about additional decreases in house prices, scaled-back corporate relocation packages, and worries about the job market are blamed for more people choosing to rent. "I started thinking about buying because houses were so cheap, but I couldn't commit," says Amanda Oberhausen of Alpharetta, Ga., who kept her $925-per-month rental instead of buying a $100,000 to $150,000 townhouse. "I was just too nervous." In markets where vacation homes and investment properties abound, renting is gaining popularity. Rents on three-bedroom units in Miami Beach's South Beach district, for instance, have jumped to $10,000 to $30,000 per month and as high as $75,000 per month on the ocean.
Analyst Expects REITs to See 5 to 10 Pct Growth in 2011
Digested From "Analyst: REITs to See 5 to 10 Percent Growth in 2011"
Bloomberg (01/13/11)
Goldman Sachs & Co. analyst Jonathan Habermann expects a return of 5 percent to 10 percent this year for REIT stocks after last year's 29 percent total return. He wrote: "At the same time, given the improving growth outlook for the U.S. economy combined with still low interest rates, we simply do not see significant downside for the shares." Overall, Habermann maintains a "Neutral" view on the REIT industry. Looking at specific companies, Habermann has also upgraded AvalonBay Communities Inc. to "Buy" from "Neutral" and raised the price target to $121 from $98. Habermann, though, downgraded Cousins Properties Inc. to "Sell" from "Neutral" because of lagging growth expectations.
Aimco Promotes 3 Executive VPs
Digested From "Aimco Promotes 3 Executive Vice Presidents; President/COO Resigns"
TradingMarkets.com (01/13/11)
Apartment Investment and Management Company (Aimco) confirms that it is promoting a trio of veteran executives. Keith Kimmel, who joined the company in 2002, will be promoted to Executive Vice President, Property Operations after serving as the area vice president for the West for almost three years. Matula, who joined the apartment REIT in 2006 and has been in charge of redevelopment and construction services, will be promoted to Executive Vice President, Redevelopment and Construction Services. Finally, John Bezzant has agreed to become Executive Vice President of Transactions. He also joined Aimco in 2006 and has held roles in redevelopment and transactions. The three will report directly to Aimco Chairman and CEO Terry Considine, who remarks, "Each has been an integral part of the Aimco team for many years, and each played a key role in helping Aimco reach the success we had in 2010. I look forward to their continued success in 2011 and beyond." Aimco remains focused on owning and managing quality apartment communities in the country's 20 largest markets.
Camden REIT Names Coletta VP of Investments, Mid-Atlantic
Digested From "Camden REIT Names Coletta VP of Investments, Mid-Atlantic"
Citybizlist Washington, D.C. (01/13/11)
Camden Property Trust this week appointed Mark Coletta as its new vice president of real estate investments. Coletta will be based in the Washington, D.C., metro area and be in charge of the Houston-based apartment REIT's investment activity in the region. His primary duties will include overseeing all facets of the company's multifamily development activity, ranging from site selection, feasibility analysis, and contract negotiations to architectural design, construction, and lease-up. He will also be in charge of property acquisitions in the Mid-Atlantic market. Before joining Camden, Coletta served in a variety of roles with Fairfield Residential. Most recently, he was Regional Partner in their D.C. office. During his time with Fairfield, he was responsible for the development of 22 apartment communities containing more than 8,100 rental units. As of the end of last year, Camden had ownership and management stakes in 186 communities containing 63,964 apartments nationwide.
Your BlackBerry or Your Wife
Digested From "Your BlackBerry or Your Wife"
Wall Street Journal (01/11/11) by Elizabeth Bernstein
For many Americans, an inundation of technology in the home means it is time for a technology cleanse, which means unplugging in the near-term to benefit relationships in the long-term. Though most people are almost constantly connected through technology, electronic communication can really be keeping them apart. Sharon Gilchrest O'Neill, a marriage and family therapist in New York, says technology is a distraction from family, and it is hard to resist because it is portable and provides instant gratification. "There has to be some time in the week when you are all together and you shut off the technology," she says. There are some important tips for people who are considering a technology fast: give families advance warning to allow themselves to prepare mentally; clarify the goal so as to make sure time normally spent with technology is purposefully filled; wean off of gadgets gradually; start when kids are young; be clear on what counts and does not count as technology use; make the bedroom a media-free zone; learn to avoid the "time-suck" of letting one Internet search lead to another; and, finally, allow only one screen at a time.
Legislative/Legal News
Broward, Central Florida Lead State in Bedbugs Violations
Digested From "Broward, Central Florida Lead State in Bedbugs Violations"
Broward Directory Blog (01/13/11)
There has been a resurgence of bedbugs around the world in the past decade, and Florida has not been immune. Last year, inspectors from the Florida Department of Business Professional Regulation found bedbugs in 68 accommodations, accounting for just 0.18 percent of 36,947 licensed hotels, motels, apartments, and condominiums. People likely carried the bugs in their clothing, laptop computers, and luggage when traveling to Florida counties featuring the most popular destinations. Indeed, Broward County topping the list with 13 citations, followed by Orange County with 10 confirmed parasite infestations. Nicki E. Grossman, president of the Greater Fort Lauderdale Convention Visitors Bureau, remarks, "Unfortunately, any location that hosts world travelers is susceptible. Broward hoteliers, many of which carry the top flags in the hospitality industry, are aware of the global issue and are diligent in their operating procedures to maintain the highest standards of cleanliness and fix any problems that might arise."
Banks Saddled With Foreclosed Properties
Digested From "Four Horsemen of the Housing Bust Saddled with Homes"
Wall Street Journal (01/13/11) by David Reilly
In light of their burdensome holding of many distressed homes, some banks have begun offering incentives to buyers who purchase foreclosed properties. The issue could become even more pronounced if foreclosures pick up again in a housing double-dip in 2011, which could occur as problems associated with the "robo signing" scandal and questions over the ownership of loans sold to investors are resolved. Banks' core businesses are being pinched by the costs associated with foreclosed property, and this pressure comes on top of possible capital losses and revenue-limiting regulatory changes. Holdings of foreclosed residential real estate at the four biggest banks—Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo—grew 33 percent in the first nine months of the year to $6.8 billion, and an even more pronounced swell was seen at Fannie Mae and Freddie Mac, which held $24.4 billion of foreclosed property at the end of the third quarter. The foreclosed assets are a burden to balance sheets, as banks carry them at written-down values, and losses can ensue if prices fall further.
NYC's Bedbug Problem Gets Itchier
Digested From "City's Problem With Bedbugs Getting Itchier"
Wall Street Journal (01/11/11) by Melanie Grayce West
According to data from the New York City's Department of Housing, Preservation and Development, residential bedbug complaints in the city increased almost 7 percent during last year. Bedbug complaints are typically registered with the city's 311 nonemergency hotline. The building owner is then notified of the complaint, and the department contacts the tenant to confirm the complaint before making a site visit and inspection. A violation is issued if bedbugs are found. A recent national survey by the National Pest Management Association shows that respondents are most concerned about encountering bedbugs at hotels, in public transportation, at movie theaters, in retail stores, and at medical facilities. The association notes that bedbugs are in every state and that there is no regional hot spot for infestation. In fact, the most recent statistics show that one out of five survey respondents in the Midwest and the South had encountered bedbugs, as had 19 percent of respondents in the West and 17 percent in the Northeast.
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