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Top Story
Midwest Firm Sees Dramatic Increase in Receivership Business
Industry News
N.J. Developer Pays $60M for Chicago-Area Apartment Community
Monthly Apartment Rents Rise in Albany Capital Region
Study Shows Apartment Managers Worried About Finding Reliable Residents
Recession Forces Oklahoma Apartments to Raise Rates 
Apartment Communities Profit From CORT's Services
Tampa's Apartment Vacancy Rate Rises
Kara Garst Named President of Austin Apartment Association
New Company Formed to Capitalize on Future Apartment Trends
Vacancies, Rent up for Denver-Area Apartments
New Apartments Filling up Quickly in Augusta, Ga.
Legislative/Legal News
Oklahoma Town Council Approves Bike Parking Law
San Francisco Passes New Apartment Rules
Jersey's Highest Court Rejects Apartment Trash Pickup Ruling
Tallahassee Cops to Bring Neighborhood Watch to Apartment Communities
Changes Urged to Rules on Condo Loans
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Midwest Firm Sees Dramatic Increase in Receivership Business
Digested From "When Apartments Fail, Buckingham Cos. Gets a Call"
Indianapolis Star (06/29/09) by Jeff Swiatek
As more apartment communities lapse into default, receiverships have become increasingly common. One of the more active receivers has been Buckingham Cos., which has become an agent of choice particularly in the Midwest. Over the last couple of years, the Indianapolis-based apartment manager and developer has taken on about 30 receiverships in several Midwestern states. Alexandra Jackiw, president of Buckingham's management arm, remarks, "These assignments have increased dramatically in the last 12 to 18 months. It's become a significant focus for us." In fact, Jackiw reports receiving calls on a daily basis from special loan servicers seeking firms such as Buckingham to act on behalf of a lender and take over an apartment community that has defaulted on its loan. She remarks, "A lot of these assets come to us with very short notice." Once a lender hires a receiver with court approval, the staff must work fast to take over the apartments and put utility and other billings and bank accounts in their name, securing staff and notifying residents of the management change. In the case of Buckingham, it assembles an emergency response team of as many as 10 people to do a comprehensive, four-day inspection that assesses the condition of each unit. The team also pays close attention to such big-expense items as roofs and heating and air-conditioning systems. While the physical inspection is proceeding, Buckingham's accountants open up the apartment community's books to get a detailed picture of the finances.
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Industry News
N.J. Developer Pays $60M for Chicago-Area Apartment Community
Digested From "NJ Developer Pays $60M for Chicago-Area Multifamily"
CoStar Group (06/29/09) by Laurie Forbes
Penobscot has purchased the AMLI at Chevy Chase apartment community in Buffalo Grove, Ill., from AMLI Residential. The New Jersey-based apartment developer paid $60 million for the 592-unit property, which equates to around $101,351 per unit. AMLI at Chevy Chase is made up of 38 three-story buildings in the Central North submarket. The 21-year-old property was only 10 percent vacant at the time of sale. Debbie Corson, a principal at Apartment Realty Advisors (ARA), remarks, "This sale represents the highest volume and the largest property [in terms of number of units] transacted in the Chicago market over the past 18 months." ARA represented AMLI Residential in the transaction, while Penobscot used in-house representation.
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Monthly Apartment Rents Rise in Albany Capital Region
Digested From "Monthly Rents Rise in Capital Region"
Albany Times Union (NY) (06/26/09) by Chris Churchill
A new Sunrise Management and Consulting report found that the average rent sought this spring by the Capital Region's larger apartment communities rose 3.2 percent from a year ago to $914 per month. The study further determined that Albany County had the highest asked-for monthly rent among the region's four core counties at $940, an increase from $911 a year earlier. Sunrise conducts its research every six months, asking area apartment communities for the rents they are seeking from new residents. It should be noted that Sunrise researchers do not consider whether the unit includes utility costs in the rents. Furthermore, the survey does not include the many smaller apartment communities or private homes that account for much of the area's rental housing market. Finally, the rise in Capital Region rents contrasts with what Sunrise found in other places. In western Connecticut, for instance, the average asked-for apartment rent fell $74 from a year earlier.
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Study Shows Apartment Managers Worried About Finding Reliable Residents
Digested From "TransUnion Rental Screening Survey Finds 81 Percent of Property Managers Are Concerned About Locating Reliable Residents for the Remainder of 2009"
PRNewswire (06/25/09)
A new TransUnion poll of more than 870 apartment managers nationwide shows that roughly 50 percent of the respondents are experiencing more difficulty locating qualified residents versus a year ago. In addition, a whopping 81 percent say they are concerned they will not be able to find reliable residents for at least the rest of 2009. The survey's results are being published in conjunction with the National Apartment Association's Education Conference & Exposition in Las Vegas. Mike Britti, group vice president of TransUnion's rental screening group, states, "In this dynamic economy, it is important for property managers to look for efficiencies throughout their business processes while also locating the residents who will be both reliable and profitable." While 32 percent of the managers polled noted that vacancy rates are higher than the same period a year earlier, 48 percent viewed it about the same while 20 percent have experienced lower vacancy. The survey further found that 33 percent of respondents said having access to accurate income and employment data were the two most important factors in screening prospective residents. Nearly 28 percent of respondents listed criminal/background checks as the most important consideration factors, followed by credit history (22 percent).
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Recession Forces Oklahoma Apartments to Raise Rates
Digested From "Recession Forces Apartments to Raise Rates"
KSWO Channel 7 (OK) (06/26/2009)
Throughout Oklahoma, apartment communities are feeling the negative effects of the recession. So much so that more and more owners are forcing their residents to shoulder the load in the form of higher rents. Indeed, in the months to come, everything from utilities to material for repairs could see an increase due the poor economy. According to Oklahoma's 7NEWS, more than 10 area apartment communities were contacted for comment on higher rates. All but two said higher utility costs were forcing them to raise monthly rents. Barbara Boguski, owner of the Bellaire Apartments, states, "The cost of maintenance in general, running an apartment [community] in general, has gone up a minimum of 30 to 40 percent since we started in 2005." Boguski says that although maintenance makes up about 30 percent of her community's annual budget, taxes and insurance are the biggest expense and they continue to rise on a yearly basis.
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Apartment Communities Profit From CORT's Services
Digested From "Apartment Communities Profit From CORT's Local Market Tours and Staging"
dBusinessNews (06/25/09)
Forced to deal with a three-year high in vacancy rates, the nation's apartment communities are looking to reap the rewards of a relationship with CORT. A Berkshire Hathaway company, CORT offers apartment owners a wide range of services to help differentiate their community and reach corporate residents in markets outside of their own. CORT has offices in the nation's 70 biggest metro areas. In the last decade, it has invested in such new services as Web-based rental listings via ApartmentSearch.com and a comprehensive suite of touring and relocation services for prospective apartment residents. CORT, which has worked with more than 80 percent of today's Fortune 500 companies, provides apartment community partners with exposure to quality resident candidates who are being relocated for work purposes. Maryrose Drucis, corporate sales manager for Business Suites USA, states, "We have always referred customers to CORT for furniture rental. But since we began working with their rental relocation team, CORT has also succeeded in connecting us with residents from prominent local companies that we have long been interested in serving. In one case, we rented 20 units to employees from a single company that came with CORT to tour our property." With a worsening job market and the nation's apartment vacancy rate climbing to 7.2 percent in this year's first quarter, apartment communities need solutions to differentiate themselves from the competition. CORT could be the answer for many. Mishelle Estrada, community manager for Portofino Apartment Homes in Tampa, notes, "Not only has CORT brought multiple employees from one of Tampa's largest employers to tour our property, we are also benefiting from the positive word-of-mouth feedback these new residents are sharing with their family and friends."
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Tampa's Apartment Vacancy Rate Rises
Digested From "Apartment Vacancy, Resident Frustration Up"
Tampa Bay Business Journal (06/25/09) by Michael Hinman
A new Rent.com survey is demonstrating how hard it is for Tampa-area residents to find a suitable place to live. Around half of all respondents cited rental ads missing key information, such as pet policies, as a hindrance. Another 25 percent said they have been unable to find enough apartments worth visiting, while 26 percent said they were finding it difficult to take time off from work to tour desired apartment communities. Those interested should be able to find more available apartments in the Tampa area now than they have in the past. Real Data Apartment Market Research confirms that the region's apartment vacancy rate has soared to 10 percent, while average monthly rents have fallen to $819 on average. Rents have not been this low on a per-square-foot basis since May 2006, confirms Real Data. The highest vacancy rate can be found in East Tampa where 15 percent of the total inventory currently sits empty. Central Tampa is close behind with a 13.9 percent vacancy rate. The metro area's best vacancy rate is currently in West Tampa where only 6.6 percent of the total inventory is empty. Northwest Tampa is a not-too-distant second, with a 6.8 percent vacancy rate.
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Kara Garst Named President of Austin Apartment Association
Digested From "Up the Ladder: Kara Garst"
Austin American-Statesman (TX) (06/24/09)
Kara Garst has been appointed president of the Austin Apartment Association, which represents apartment owners and managers of more than 175,000 rental units across Central Texas. Garst currently serves as a district manager for UDR Inc., overseeing apartment communities throughout the Austin and Dallas metro areas.
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New Company Formed to Capitalize on Future Apartment Trends
Digested From "Angling to Capitalize on Future Apartment Market Changes, Industry Vets Form New Firm "
Commercial Property News (06/24/09) by Barbra Murray
While many investors are shying away from the apartment sector, industry veterans Jim Butz and Greg Lamb of JPI East have partnered with office and mixed-use developer Akridge to launch Jefferson Apartment Group. Their goal is to acquire and eventually develop apartment communities throughout the Mid-Atlantic and Northeast regions. It's an odd time for such a launch, considering the average national apartment vacancy rate hit 7.2 percent in the first three months of this year and is on pace to top 8 percent by the end of the year. According to Marcus & Millichap Real Estate Investment Services, that would mark the highest level since 1980. Jefferson Apartment Group, though, believes there is a positive side to the grim numbers. Butz remarks, "We believe the market is clearly at a low point, maybe not at the bottom, but it's an opportunistic point to be in the market buying assets at advantageous prices; to start now and move forward from what is close to the bottom of the market." Butz has agreed to serve as managing partner of the new company, while co-owner Lamb will hold the position of executive vice president. Jefferson Apartment Group will initially be based in Northern Virginia and will focus on acquisition opportunities in the Boston, New York and Philadelphia metro areas. Butz states, "We'll be looking at distressed properties, properties where we can benefit from value-add renovations and properties where the existing owners have debt maturity issues."
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Vacancies, Rent up for Denver-Area Apartments
Digested From "Vacancies, Rent up for Denver-Area Rental Homes"
Denver Business Journal (06/25/09)
A new Colorado Division of Housing report shows that vacancies and rents in the Denver metro area's rental housing market rose during the first three months of this year from the same period a year earlier. Metrowide average rent for rental housing climbed to $1,004.44 in the first quarter from $984.61 a year earlier. Four of the six counties tracked by the agency had higher vacancies in this year's January-through-March period on a year-over-year basis. The lone exceptions were Adams and Boulder/Broomfield counties. From the fourth quarter of last year to this year's first quarter, all Denver-area counties recorded decreases in the vacancy rate. It should be noted that the division does not include apartments in its rental housing survey. Instead, it produces a separate report for apartments. Nevertheless, the rental-housing survey was compiled by University of Denver business professor Gordon Von Stroh, with assistance from the Apartment Association of Metro Denver and other local groups.
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New Apartments Filling up Quickly in Augusta, Ga.
Digested From "New Apartment Complexes Filling up Quickly"
Augusta Chronicle (GA) (06/26/09) by LaTina Emerson
In Augusta, Ga., apartment communities are filling up quickly as more and more people shy away from buying. The fear is that if you purchase a home and need to sell it in a couple of years for work-related or other reasons, the market still may not be strong enough to allow for a timely transaction. Those seeking rental units range from students at the Medical College of Georgia to employees at Savannah River Site to those who have recently lost their homes to foreclosure. Among the owners and operators thriving is ATC Development Corp., which has 10 apartment communities throughout the Augusta area. Its latest, dubbed Avalon Apartments, opened in May. Leasing consultant Kalyn Michaels notes, "We're almost full, and we don't even have half the buildings finished. We have a few that are still open, but the majority are pre-leased."
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Legislative/Legal News
Oklahoma Town Council Approves Bike Parking Law
Digested From "Norman Council OKs Bike Parking Law"
Norman Transcript (OK) (06/27/09) by Jane Glenn Cannon
In Oklahoma, the Norman City Council recently passed an ordinance requiring newly constructed commercial buildings or apartment communities to include a certain amount of bike parking spaces. Council members hope this will encourage more people to use bicycles as a means of transportation. The ordinance was recommended by a bicycle advisory committee. Indeed, committee members based the recommendation on a belief that more people would forego cars if parking for bikes were more convenient. A bicycle design standard is included in the ordinance, which recommends that racks that protect against bicycle thefts and do not interfere with traffic flow. About a dozen bikes can be parked in the space required to park one car, notes city planner Doug Koscinski.
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San Francisco Passes New Apartment Rules
Digested From "S.F. Supes Pass New Rules on Renters' Rights"
San Francisco Chronicle (06/24/09) by Marisa Lagos
On June 23, San Francisco's Board of Supervisors voted in favor of a package of renters' rights laws. Separately, Supervisor Eric Mar introduced a measure that would make it illegal for apartment owners who want to move into their community to evict families with children. The new legislation, which aims to keep families with kids in affordable digs, is an expansion of existing law that protect seniors, disabled people and the terminally ill from similar evictions in multi-unit communities. Apartment owners are up in arms, calling the laws unnecessary. San Francisco Apartment Association President Janan New states, "This is ridiculous. In this economy, there are no owner move-in evictions going on." New's organization is also opposed to any attempt to limit the amount of so-called banked rent increases in which annual rent hikes permitted under existing city laws are saved up and then imposed all at once. Additionally, the association is gearing up to oppose legislation from Supervisor John Avalos that would expand eviction protections to residents in units not covered by rent control. The most controversial proposal prohibits apartment owners from increasing rent to more than 33 percent of a resident's income. San Francisco Tenants Union leader Ted Gullicksen, who had a hand in crafting the measures, insists the laws are necessary to help struggling residents make rent each month. New, though, says officials are not taking into account the rising costs that owners are dealing with. New explains, "We're under fire on many different fronts. There are new fees from the Health Department for vector control, coupled with demands from the mayor's office that we compost and new fees from the Fire Department."
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Jersey's Highest Court Rejects Apartment Trash Pickup Ruling
Digested From "Court Rejects Ruling on Clayton Trash Pickup"
Gloucester County Times (NJ) (06/24/09) by Pete McCarthy
A seven-year legal battle has resulted in New Jersey's Supreme Court unanimously ruling that the town of Clayton is responsible for trash removal at a local apartment community located on private property. The decision overturned a 2008 ruling by the Appellate Court that said Clayton was not responsible for garbage pickup at the 161-unit Rustic Village apartment community. New Jersey law clearly states that all residents, even those who reside on private property, are entitled to the same services provided to those who live on public streets. The New Jersey Apartment Association had sided with the community owners in public debates on the matter. Nicholas Kikis, director of Regulatory Affairs and Research for the association, remarks, "Any time the New Jersey Supreme Court reaffirms that renters and apartment owners are entitled to the same municipal services as other residents in the community is a significant victory."
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Tallahassee Cops to Bring Neighborhood Watch to Apartment Communities
Digested From "Tallahassee Police to Bring Neighborhood Watch to Apartment Complexes"
Tallahassee Democrat (FL) (06/24/09) by Elizabeth Mack
The Tallahassee Police Department (TPD) is looking to expand its community involvement from just single-family housing neighborhoods to apartment communities. Dubbed the Apartment Complex Watch Program, this new initiative was announced earlier in June by Police Chief Dennis Jones. The goal of the program is to act a resource to help officers stamp out crime before it even starts. Such programs work by opening lines of communication with residents. Jones states, "Citizens are the eyes and ears of the Tallahassee Police Department. We have solved crimes ranging from criminal mischief to murder as a result of one phone call. Crime watch programs work." He adds that there is no cost for an apartment community to become involved in the program, with the exception of purchasing a sign touting the program. For communities to become a member, management must attend three meetings with TPD to discuss safety awareness and the best ways to report a crime. So far, more than 50 area apartment communities have joined the program.
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Changes Urged to Rules on Condo Loans
Digested From "Changes Urged to Rules on Condo Loans"
Wall Street Journal (06/22/09) P. A4; by Nick Timiraos
New underwriting standards for mortgages on condominiums have raised concern that multifamily housing developers will not be able to sell units and the housing recovery will be slowed. Fannie Mae said in March that it would no longer guarantee mortgages on condos in communities where fewer than 70 percent of units have been sold or purchase mortgages in buildings where 15 percent of owners are delinquent on condo association dues or where one owner has more than 10 percent of unit. Freddie Mac plans to adopt similar rules in July. Reps. Barney Frank (D-Mass.) and Anthony Weiner (D-N.Y.) have written a letter to the CEOs of Fannie Mae and Freddie Mac, asking them to relax the recently tightened standards for condo loans.
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