Headlines
Top Story
Apartment Owners Offer Incentives to Stay Put
Industry News
Job Losses Driving Las Vegas Valley Apartment Vacancies
UDR Announces Enhancement to its Mobile Apartment Reservation Tool
Apartment Investment & Management Q3 2009 FFO Falls
Two Big U.S. Apartment Owners Finally See Some Hope
Home Buyer Credit Gets New Life
AvalonBay's Q3 2009 FFO Dips
Alliance Expands Apartment Services Into Chicago
Washington State Apartment Market Hit by Deployments
Rreef Takes $103M Out of Four Apartment Communities
Legislative/Legal News
California Court Refuses to Review Low-Income Housing Ruling
California Apartment Managers Begin Program to Reduce Crime
Revaluation of Commercial Properties Is Under Way
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 Offer Incentives to Stay Put
Digested From "Landlords Offer Incentives to Stay Put"
Wall Street Journal (11/02/09) P. B1; by Dawn Wotapka
Reis Inc. reports that high jobless figures -- coupled with more apartment residents seeking roommates, moving in with family, or trading down to cheaper rental units -- propelled the U.S. apartment vacancy rate to a 23-year high of 7.8 percent in the third quarter. More owners are attracting new residents and keeping existing ones by offering incentives and slashing monthly rent. Owners are focused on retaining residents because when apartments become empty, they can stay that way for months and often require such expenses as painting and even brokerage commissions to attract new occupants. One problem for owners is that current residents can easily surf the Internet to see what deals new neighbors are being offered. At the same time, more and more landlords are having no choice but to become more open-minded with regards to residents with poor credit issues, especially whose homes have recently been foreclosed. One of the only benefits of the poor market is that it has practically halted new construction. Green Street Advisors expects new completions to total around 98,000 in 2010 and 109,000 the year after, compared with 188,000 in 2008 and 204,000 this year.
Web Link | Return to Headlines
Industry News
Job Losses Driving Las Vegas Valley Apartment Vacancies
Digested From "Valley Job Losses Driving Apartment Vacancies"
Las Vegas Sun (10/30/09) by Brian Wargo
Marcus & Millichap forecasts that Las Vegas Valley apartment vacancies will rise well into next year, as high unemployment continues to lessen the demand for rental units. Researchers project that because of the struggling job market, the region will see fewer than 10,000 new households created this year and next. At the same time, homes and condos that are available for rent will continue to provide stiff competition for the area's apartment stock. With approximately 6,600 condos now in various stages of development, that will place even more pressure on apartment owners. According to John Vorsheck, Marcus & Millichap's regional manager, the Valley's apartment vacancy rate will increase from 10.7 percent in the third quarter to 12.1 percent by the end of this year. By comparison, the vacancy rate rose 1.8 percentage points in all of 2008. Higher-end rental units witnessed vacancy rates climb almost 1 percentage point in this year's July-through-September period to 10.8 percent. Although construction has slowed, Vorsheck notes, "the considerable stock of single-family homes serving as rentals will remain a source of competition for the top-tier apartments." That is because the rents requested by owners of top-tier apartments are about $200 more a month than the mortgage payment on a median-priced house. Apartments as a whole are offering 25 days of free rent on average, an increase from 16 days a year earlier. By the end of December, Vorsheck said apartment owners will be seeking rents of $841 a month on average, with incentives effectively reducing monthly rents to $779. Throughout the Valley, an estimated 2,200 apartments are now under construction. Most are expected to open in the next six months. Another 4,000 units are in the planning stages, but they won't go forward until the economy shows signs of improvement.
Web Link | Return to Headlines
UDR Announces Enhancement to its Mobile Apartment Reservation Tool
Digested From "UDR Announces Enhancement to its Mobile Apartment Reservation Tool"
Business Wire (10/29/09)
UDR Inc.'s existing mobile apartment reservation/hold tool now features an option that allows apartment prospects to complete its standard rental qualification process via their smartphones. Steve Taraborelli, vice president of sales and marketing at UDR, states, "Smartphones are becoming more like personal computers and their owners are relying on them now more than ever before. We're excited about this enhancement because it streamlines the approval process for individuals who are interested in renting a UDR property." Indeed, UDR's mobile technology enables apartment hunters to view its entire inventory of apartments by state, city, region, and price all while on the go. In addition, the company's enhanced apartment reservation/hold tool gives prospects the ability to view floor plans, receive up-to-date pricing and select a move-in date. As of the end of this year's third quarter, UDR owned more than 45,200 apartments nationwide. It had another 1,657 rental units in various stages of development.
Web Link | Return to Headlines
Apartment Investment & Management Q3 2009 FFO Falls
Digested From "Apartment Investment & Management 3Q FFO Falls"
San Francisco Examiner (10/30/09)
Apartment Investment & Management Co.'s (Aimco's) Q3 2009 funds from operations declined as rents and occupancy fell. The apartment REIT's quarterly FFO declined from $73 million a year earlier to $22.3 million. According to Aimco Chairman and CEO Terry Considine, rents for apartment communities open at least one year dipped, but added that the decline was beginning to taper off. Average daily occupancy slipped to 94.8 percent in the third quarter from 95 percent a year ago, while average rent per unit dropped from $1,026 to $990. Aimco further confirmed that it lost $40.5 million during the three-month period ended Sept. 30 versus a profit of $159.5 million for 2008's third quarter.
Web Link | Return to Headlines
Two Big U.S. Apartment Owners Finally See Some Hope
Digested From "Two Big U.S. Apartment Owners See Some Hope, Finally"
New York Times (10/29/09)
Equity Residential and AvalonBay Communities Inc. -- two of the nation's biggest apartment owners -- both expressed optimism in the past week following the release of their quarterly numbers. While not declaring an end to falling rents and declining net cash generated by their apartment communities, the heads of both companies said they are seeing increased demand for some of their rental units. AvalonBay Chairman and CEO Bryce Blair remarks, "While we expect operating performance to remain weak near term, there are signs that the weaknesses in both the economy and in some of our operating metrics are beginning to moderate." The U.S. apartment sector has been in a freefall for over a year now thanks to high unemployment. Because of their short leases, apartment communities are quick to feel market softness. Such properties, though, also tend to rebound quickly. AvalonBay noted its communities in Washington, D.C. are showing signs of improving, while those in the New York metro area are about the same. Overall occupancy in its apartment communities improved throughout the third quarter to 96.2 percent in September from 95.9 percent in August and 95.8 percent in July. Equity Residential Chairman Sam Zell, meanwhile, states rents in such markets as Boston, the nation's capital and South Florida were higher in the most recent quarter. The REIT expects to close on a new building as early as the end of this week.
Web Link | Return to Headlines
Home Buyer Credit Gets New Life
Digested From "Home Buyer Credit Gets New Life"
Wall Street Journal (10/29/09) P. A4; by Corey Boles; John D. McKinnon
Key lawmakers in the Senate have tentatively agreed to extend the existing $8,000 tax credit for first-time home buyers and also offer a new $6,500 credit for existing homeowners who have lived in their current residence for a consecutive five-year period in the past eight years. Home buyers must be under contract by April 30, 2010, and close before July 1. House Democrats have expressed concern about the cost of the tax credit for the government, and allegations of abuse have resulted in an IRS probe of the program.
Web Link | Return to Headlines
AvalonBay's Q3 2009 FFO Dips
Digested From "AvalonBay's Q3 FFO Dips"
Zacks Equity Research (10/29/09)
AvalonBay Communities Inc. recorded third-quarter funds from operations (FFO) of $87.7 million versus $99 million in the same period a year earlier. Total revenue, meanwhile, rose 0.3 percent on a year-over-year basis to $224.2 million. AvalonBay completed development activities in three communities in California, Massachusetts and New York during the July-through-September period, totaling 614 apartments at an aggregate cost of $173 million. As of Sept. 30, the REIT had nine apartment communities in its development pipeline at a total estimated cost of $1.2 billion. AvalonBay did not start any new construction projects during the quarter. However, the company expects to start development work on two communities totaling 399 rental units and complete the construction of four communities with 1,382 apartments during the fourth quarter. Finally, AvalonBay issued $500 million of unsecured notes in two separate tranches of $250 million each.
Web Link | Return to Headlines
Alliance Expands Apartment Services Into Chicago
Digested From "Alliance Expands Into Chicago Market"
GlobeSt.com (10/26/09) by Katie Hinderer
With this past week's opening of a new Chicago office, Alliance Residential Co. of Phoenix has effectively expanded into the Midwest. The company is now located in 11 states, managing more than $6 billion of assets split between 160 apartment communities and approximately 45,000 rental units. The expansion was partly due to increased client demand. An unnamed company spokesman stated, "We are a national company and this move will assist in filling our clients' needs. We are excited to be able to meet their request." The new office will grow its staff roster as determined by market demand.
Web Link | Return to Headlines
Washington State Apartment Market Hit by Deployments
Digested From "Apartment Market Hit by Deployments"
South Sound Business Examiner (10/26/09)
The vacancy rate for apartment communities in Pierce County, Wash., was 8.3 percent at the end of this year's third quarter, an increase from 6.3 percent in the second quarter. According to Tom Cain of Apartment Insights, this sudden leap is mainly because of troop deployment as evidenced by the vacancy rises in submarkets located closest to the local military bases. The vacancy rate for nearby Thurston County was 6.5 percent as of Sept. 30, with some apartment owners and managers having to implement rental incentives for the first time in years. Among the various submarkets, Olympia is tops with a 5.7 percent vacancy rate. Nearby Lacey is 6.4 percent vacant, while the Tumwater submarket is at 7.7 percent vacancy. In Pierce County, apartment rents have declined $6 per month for the last two quarters to currently average $827 per month. The major plus is on the supply side, as there has been virtually no new construction or planned construction that will compete with the existing inventory for apartment residents in the months to come.
Web Link | Return to Headlines
Rreef Takes $103M Out of Four Apartment Communities
Digested From "Rreef Takes $103M Out of Four Apartment Assets"
GlobeSt.com (10/26/09) by Brian K. Miller
Rreef has secured first mortgage Freddie Mac financing totaling $103.7 million with four stabilized apartment communities in three states -- Colorado, Texas and Washington. CBRE Capital Markets arranged the loans. All four communities are approximately 97 percent occupied. Three were used as collateral for 10-year, 60 percent loans with interest rates fixed at 5.79 percent. The fourth was secured with a seven-year Capped ARM, boasting a starting interest rate of 4.1 percent and an internal cap of 7 percent. Eric Tupler of CBRE's Denver office states, "What we are seeing across the board is owners recognizing the favorable financing through agencies and being proactive about putting their multifamily properties to bed. Owners are looking at these financings to offset more difficult financings."
Web Link | Return to Headlines
Legislative/Legal News
California Court Refuses to Review Low-Income Housing Ruling
Digested From "Court Refuses to Review Low-Income Housing Ruling"
Los Angeles Downtown News (10/22/09) by Anna Scott
The California Supreme Court recently denied Los Angeles city officials' request to review a lawsuit in which downtown L.A. developer Geoff Palmer successfully challenged an affordable housing requirement for City West. The Oct. 22 decision could hinder Mayor Antonio Villaraigosa's efforts to establish a citywide low-income housing mandate. Palmer, one of the downtown area's biggest developers, sued the city in 2007 to avoid having to set aside units for low-income residents in his proposed Piero II apartment community in City West. He won the case two years ago next month. The city then appealed the ruling. This was considered a particularly risky move because while the original decision applied only to Palmer's case, an appellate court ruling would set a precedent throughout the state. Palmer was triumphant in the state Court of Appeal earlier this summer, and the city subsequently filed a petition asking the California Supreme Court to review the case. Last month's denial of that request renders the appellate court decision final.
Web Link | Return to Headlines
California Apartment Managers Begin Program to Reduce Crime
Digested From "Property Managers Begin Pomona Program to Reduce Crime in Multi-Unit Facilities"
Inland Valley Daily Bulletin (CA) (10/28/09) by Monica Rodriguez
In Pomona, Calif., apartment owners and managers recently launched a new program aimed at making their communities safer. The Crime Free Multi-Housing program tackles such topics as identifying gang activity and screening potential residents for past criminal behavior. In addition, more and more owners are using a crime free rental agreement under the three-phase program, which has been successfully used nationwide and all over the world. Through the program, Pomona city representatives are offering assistance to local apartment owners and managers in creating safer environments and reducing crime. Teri Baker, crime-free housing coordinator with the Pomona Police Department's code compliance unit, notes that the program require owners to be "active managers in crime prevention." A core feature of the program is indeed the use of the crime-free lease addendum. By signing such an accord, residents agree not to take part in any criminal activity on the property. They also pledge to prohibit any guests and other members of the household from engaging in criminal activity there. Phase 1 of the program prepares owners and managers for a wide range of issues, such as applicant screening. Phase 2 entails inspecting apartment communities using the principles of Crime Prevention Through Environmental Design. The third and final phase involves bringing residents together for a social event where they can learn how the program works and what it's meant to do. Representatives from the Apartment Association of the Greater Inland Empire have been involved in offering advice on credit checks and how to go have access thorough criminal background checks.
Web Link | Return to Headlines
Revaluation of Commercial Properties Is Under Way
Digested From "Revaluation of Commercial Properties Is Under Way"
Janesville Gazette (WI) (10/26/09)
In Janesville, Wis., the City Assessor's Office has authorized a revaluation of all commercial properties for the 2010 assessments roll in June. Commercial properties include multifamily housing containing four or more apartments. According to Janesville officials, the last revaluation of property occurred for the 2002 assessments. Tyler Technologies' CLT Division will perform most of the commercial revaluation tasks, teaming up with city appraisal staffers to collect and/or verify the physical data for all commercial properties. The information gathered during these property inspections this fall and winter will be used to make value estimates for next year's assessments.
Web Link | Return to Headlines
Abstract News © Copyright 2009 INFORMATION, INC.
|