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GOP Has Own Fannie-Freddie Plan
Industry News
REITs Look to Take Manhattan's Apartment Market
Norfolk (Va.) Officials Concerned About Apt Construction
Apartments Are on the Rise in Seattle
Dayton Apartment Rents Stay Low
Full Occupancy Expected Near Cent. Mich. U Apts in Fall
Apartment Deals Continue to Lead Recovery in Maryland
MAA Announces Quarterly Common Dividend
Upscale Amenities Offered at More Balt. Apt Communities
Ex-Cop's Security Firm Eyes Apartments in Cincinnati
Douglas Emmett Obtains Loan Fixed at 4.12 Percent
Equity Residential Buys Building Near Seattle Waterfront
Albuquerque's Apartment Market Remains Slow but Steady
Legislative/Legal News
NYC Housing Program Funds Stalled Apartments
The Value of Structured Maintenance Training
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GOP Has Own Fannie-Freddie Plan
Digested From "GOP Has Own Fannie-Freddie Plan"
Washington Post (03/29/11) P. A15; by Zachary A. Goldfarb
House Republicans will introduce a series of eight bills to scale back Fannie Mae and Freddie Mac's involvement in the housing market. These bills would expand the authority of the Federal Housing Finance Agency; subject employees of the mortgage giants to the federal payscale; boost fees charged to borrowers over two years; prevent them from entering new lending markets; require Treasury approval of all new debt issuance; eliminate their affordable-housing goals; reduce their portfolios to $250 billion in five years; and ensure they are not exempt from rules that require mortgage lenders to retain a financial interest in their loans. Observers note that the GOP plan is similar to the Obama administration's but quickens the process of winding down the GSEs, a move that the administration worries could destabilize the housing market.
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REITs Look to Take Manhattan's Apartment Market
Digested From "More and More REITs Investing in Big Apple"
The Real Deal (03/23/11) by Michael Stoler
Investors from around the globe are vying to own commercial real estate in New York City. Among the most active players is publicly traded and non-traded REITs, such as SL Green Realty, Vornado Realty Trust, Boston Properties, and Brookfield Properties. All four have significant ownership in the city's best office buildings. With regard to the city's prize residential rental market, REITs have dominated ownership in the market with Equity Residential, Apartment Investment and Management Co., AvalonBay Communities, and Archstone-Smith leading the way. Colorado-based UDR is the latest entrant into the Manhattan marketplace. The multifamily REIT, which has ownership stakes in 59,614 apartments nationwide, recently entered into a definitive agreement to acquire 10 Hanover Square in the Financial District. The Witkoff Group was the seller, garnering $260.8 million for the former office building that had been converted to a residential tower in 2005. UDR President and CEO Tom Toomey remarks, "The expansion of our portfolio into Manhattan reflects our desire to own and operate apartment homes in markets that have the best growth prospects based on favorable job formation and low home affordability. With total revenue per home of $3,000 per month and only six years following the completion of a major redevelopment, the acquisition of 10 Hanover Square will further enhance the overall quality of our portfolio."
Norfolk (Va.) Officials Concerned About Apt Construction
Digested From "Report: Norfolk Officials Worried About Apartment Construction"
Daily Press (Virginia) (03/27/11)
In Norfolk, Va., several city government officials are expressing concern about the amount of apartments being constructed locally. Specifically, Norfolk city council members are concerned the new construction could create more crime and greater urban density. Indeed, more than 3,200 new apartment communities are in various stages of planning and development citywide at a cost of nearly $400 million. This makes Norfolk the leading city for apartment construction in the South Hampton Roads region.
Apartments Are on the Rise in Seattle
Digested From "Apartment Projects on the Rise in Seattle"
KUOW.ORG 94.9 FM (03/24/11) by Amy Radil
Demand for apartments is growing sharply in the Seattle market, and developers are now scrambling to break ground on new communities. Gary Carpenter, executive vice president for Bentall Kennedy, confirms, "Apartments are the darlings right now of both the acquisition and development world, and it's consistent across the country." Financing for apartment and other construction slowed down considerably during the recession. Only recently have new apartment communities and other commercial projects started getting off the drawing board. Seattle-based Harbor Properties has been among the most aggressive players locally. The company expects the first residents to move into its new Link building in West Seattle this week. They add that the 200–unit building is one of only a few new apartment developments coming online in Seattle between now and the end of the year. To keep rents low, some trade–offs in the amount of space people get had to be made. Harbor Executive Vice President Denny Onslow states, "Every space is used but used very efficiently, and thus the affordability."
Dayton Apartment Rents Stay Low
Digested From "Low Demand Keeping Area Local Rental Prices Down; National Rates Soaring"
Dayton Daily News (OH) (03/24/11) by Randy Tucker
Vacancy rates twice the national average are causing apartment owners in Dayton, Ohio, to keep rents stable even as monthly rates are expected to rise nationwide. In the Dayton metro area, the rental vacancy rate was 18.6 percent at the end of last year versus a national average of 9.4 percent. According to John Bowblis, a Miami University economist who has studied the local real estate market, the high vacancy rate can likely be attributed to the area's stagnant population growth and exodus of major employers. "Some of those vacancies are due to apartment foreclosures, but a lot of people who were renting before have simply left the market," Bowblis said. "That's why vacancy rates are still high even though more people are moving toward renting apartments." A recent report from Rent.com shows apartment rents rising by 7 percent each of the next two years to a national average above $800 a month. By comparison, Dayton-area rents are around $522 per month.
Full Occupancy Expected Near Cent. Mich. U Apts in Fall
Digested From "Many Landlords Expect 100-Percent Occupancy at Major Apartment Complexes Next Fall"
Central Michigan Life (03/23/11) by Melissa Beauchamp
Student apartment communities near Central Michigan University in Mount Pleasant are expected to remain filled as local owners and managers foresee 100 percent occupancy for the 2011-12 school year. Amber Greco, manager at Copper Beech Townhomes, observes, "We are ahead of where we were last year. I think people choose the apartments because it’s a little more freedom." Cost remains the biggest factor for residents in determining whether to live in the apartments or on campus. Apartments are typically less expensive. But students do need to take into account such expenses as food and utilities." Rob Zientek, manager at the Village at Bluegrass, said there was a noticeable spike in popularity for local apartment living about five years ago. In the past three years, he adds, this trend has remained constant. Zientek concludes, "The apartments offer the freedom and space students want. The amenities are right on site for students that do not have cars. We also have a busing system." Still, it should be noted that recent Residence Life surveys show living on campus increases students' likelihood of graduating and achieving a higher grade point average. The same study shows that apartment living typically offers more space and fewer regulations.
Apartment Deals Continue to Lead Recovery in Maryland
Digested From "Commercial Real Estate: Apartment Deals Continue to Lead Recovery"
Gazette.Net (03/25/11) by Sonny Goldreich
Apartment deals are a focal point of Maryland's commercial real estate market, as developers continue to seek out investment properties that can benefit from the dearth of construction. In line with this, Federal Capital Partners of Washington, D.C., recently announced its purchase of a pair of garden apartment communities in Frederick, Md., for $50.5 million. According to managing partner Alex Marshall, the two communities were acquired at a significant discount to replacement cost and allow Federal Capital to achieve additional economies of scale with its nearby Crystal Park community. Federal Capital has now bought approximately 7,000 rental units in the past 18 months in the mid-Atlantic region.
MAA Announces Quarterly Common Dividend
Digested From "MAA Announces Quarterly Common Dividend"
Sacramento Bee (CA) (03/22/11)
MAA reports that its board of directors has approved a quarterly common dividend of $0.6275 per share, which will be payable on April 29 to shareholders of record as of April 15. The self-managed apartment REIT is declaring its quarterly common dividend in advance of its earnings announcement. MAA currently owns or has ownership stakes in 47,288 apartment units.
Upscale Amenities Offered at More Balt. Apt Communities
Digested From "New Apartment Complex to Offer Electric-Car Charging Stations"
Baltimore Sun (03/23/11) by Jamie Smith Hopkins
The Arbors at Baltimore Crossroads, a 365-unit development under construction near the Baltimore suburb of White Marsh, Md., will feature a number of upscale amenities. Most notably, it will offer charging stations for electric cars. In addition, the apartment community will offer an on-site pet spa, a dog run, a multi-tiered swimming pool, and a Zen garden. Other apartments in the area are following suit, touting their own luxury features. Chief among them is The Zenith, which boasts "cultured-marble vanities," and Symphony Center, which has gourmet kitchens in community areas. Other apartment communities in the Baltimore area offer boat slips, dry cleaning service, and complementary yoga classes. Somerset Construction Co., which is developing the Arbors, is trying to win LEED silver-level certification. Consequently, each apartment will include green elements such as energy-efficient heating and low-flow toilets that lower utility bills.
Ex-Cop's Security Firm Eyes Apartments in Cincinnati
Digested From "Former Cincinnati Cop's Security Firm Keeps Eye on Apartments"
Cincinnati Business Courier (03/25/11)
The city of Cincinnati's ongoing crackdown on its apartment industry has fueled the growth of firms like PLS Protective Services LLC. The 50-employee firm specializes in providing on-site security for a growing number of area apartment communities. Business has been so good that owner Paul Smith, a former cop, plans to hire as many as 30 new employees between now and the end of the year. Smith expects revenue to reach $1.5 million in 2011, a 50 percent increase over a year ago. Smith states, "We're looking at a bigger office in Cincinnati and planning to expand to Dayton." He went on to confirm that the lion's share of PLS's most recent growth has come from apartment security contracts.
Douglas Emmett Obtains Loan Fixed at 4.12 Percent
Digested From "Douglas Emmett Obtains $510 Million Term Loan Fixed at 4.12 Percent"
TheStreet.com (03/23/11)
Douglas Emmett Inc. has closed a seven-year secured non-recourse $510 million term loan to refinance existing debt. The loan, which is payable interest only, is due to mature on April 1, 2018. Through an interest rate swap contract, the REIT has effectively fixed the floating interest rate on the loan at 4.12 percent per annum until April 1, 2016. Douglas Emmett ranks as one of the biggest owners and managers of high-quality apartment communities and office buildings in the various premier submarkets of Southern California and Hawaii, including Beverly Hills, Brentwood, Burbank, Century City, Santa Monica, and Honolulu.
Equity Residential Buys Building Near Seattle Waterfront
Digested From "Equity Residential Buys Building Near Seattle Waterfront"
Seattle Times (03/22/11) by Eric Pryne
Equity Residential has acquired a six-story office building on downtown Seattle's waterfront that is nearly a century old. Equity sees the newly purchased asset as "a long-term redevelopment opportunity" to complement its Harbor Steps apartment community one block away. However, it has no immediate plans for the site. The seller, Goodman Real Estate of Seattle, had contemplated adding more floors with apartments to the building. Equity likely has similar ideas. Equity reportedly paid Goodman $11.75 million for the property. Founded by Sam Zell, Equity Residential ranks as the nation's biggest apartment owner with stakes in 452 apartment communities nationwide. These include more than 30 in the Seattle metro area.
Albuquerque's Apartment Market Remains Slow but Steady
Digested From "Market Snapshot: Albuquerque, N.M. Market Remains Slow but Steady"
Multi-Housing News (03/11) by Erika Schnitzer
Albuquerque's apartment market has not suffered greatly in recent months despite continued high unemployment. David Eagle, a senior vice president in CBRE Capital Markets' Multi-Housing Group, states, "We saw unemployment hit 9 percent in January, and back in mid-2008 it was 3.5 percent. So you'd expect to see our apartment market, and the overall housing market, in a really severe slump. In contrast, the multifamily market continues to do quite well." Eagle credits Kirtland Air Force Base and Sandia National Labs with providing the Albuquerque metro area with a relatively steady workforce. Despite the unemployment figures, average market occupancy as of the first of this year was 94.96 percent -- a 2.03 percent gain from a year earlier, notes CB Richard Ellis Multi-Housing Group's Albuquerque & Santa Fe January 2011 Apartment Market Report. At the same time, year-over-year average rent rose 3.34 percent. Finally, 36 percent of local apartment communities surveyed offered some form of concessions in January versus 27 percent back in September. However, year-over-year concessions plummeted from 60 percent of surveyed properties.
Legislative/Legal News
NYC Housing Program Funds Stalled Apartments
Digested From "NYC Housing Program Funds Stalled Apartments"
Wall Street Journal (03/22/11)
New York City has started awarding affordable-housing grants under a program to relaunch projects that became stalled during the credit crisis. According to City Council Speaker Christine Quinn, the first building to be selected for the $20 million pilot Housing Asset Renewal Program started construction in Brooklyn's Prospect Lefferts Gardens area four years ago, but was halted in 2008 when the developer fell behind on payments. The city is now paying $3 million to subsidize the construction. In return, the developers will reserve the building's 46 apartments for middle-income New Yorkers who will be selected through a lottery. Quinn remarks, "With the credit crunch leaving so many buildings empty and so many New Yorkers looking for an affordable place to live, it seemed natural to take those two problems and make them into a solution." Quinn first proposed the program in 2009.
The Value of Structured Maintenance Training
Digested From "The Value of Structured Maintenance Training"
Multi-Housing News (03/11) by Keat Foong
In terms of educating apartment staff, relying on informal hands-on training can result in the conveyance of incomplete or incorrect information. Unfortunately, in today's average apartment community, the only education maintenance technicians receive is on-the-job, watch-and-copy instruction from other technicians. Due to high turnover among maintenance technicians, many apartment owners are hesitant to send their maintenance workers to structured classes. Another reason may be that apartment managers think they are unable to afford to lose their valued technicians to a few hours or days of classroom instruction. Maureen Lambe, executive vice president of the National Apartment Association Education Institute (NAAEI), states, "If I was given the opportunity to get on a soapbox in front of the apartment industry, it would be to say to apartment managers and regional managers, 'train your maintenance team members. Suck it up and let them leave the apartment community for training. It may be inconvenient for a few days, but the benefits can transform your community.'" There are a number of options for those apartment firms looking to send their maintenance personnel to classes. NAAEI's CAMT program recently received accreditation by the American National Standards Institute (ANSI). Additionally, local chapters of trade associations also provide maintenance technician programs. For instance, the maintenance training supplied by local NAA chapters follow the CAMT curriculum. Technical high schools and colleges also offer maintenance programs.
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