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Apartment Residents in Seattle Find Inventory Scarce, Prices High
Industry News
Aimco Promotes Beaudin to Chief Property Operating Officer
San Jose Now the Most Expensive Apartment Market in California
San Diego County Apartment Rents, Demand Described as Flat
With Condos Cooling, Apartments Are Heating Up in Downtown Nashville
Post Properties Announces Voting Results and Appointment of Dale Reiss
Apartment Investment and Management Company Announces Special Dividend
Austin's Apartment Rent Growth Slows as Vacancy Rises
New Mexico's Apartment Market Remains Stable
UDR Is One Apartment REIT in Good Position, Says Zacks
Legislative/Legal News
Waterworks Puts Onus on South Carolina Apartment Owners
Scammers Target Apartment Hunters in Houston
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Apartment Residents in Seattle Find Inventory Scarce, Prices High
Digested From "Renters in Seattle Find Inventory Scarce, Prices High"
Seattle Times (10/18/08) by Tim Harvillle; Leah L. Culler
Low vacancy rates and high prices have created a sense of competition for many Seattle-area apartment residents, especially those in the lower-income and under-30 demographics. Those looking to pay less than $1,500 a month in rent, especially in urban Seattle, have to act quickly when a high-quality apartment comes on the market in their price range. Steve Spencer, a student at Seattle Pacific University, laments, "If you see anything on Craigslist for a decent price, it's gone in a day." Based on research from Dupre + Scott Apartment Advisors, which provides rental-market statistics for the Seattle metro area, more than 21,000 Seattle renter-households--about 19 percent--already pay more than 50 percent of their income in rent. The majority are low-income households, and nearly all earn less than half the market's median income--$40,453 for a two-person household. Demand for rentals is similarly high in suburban areas and on Seattle's Eastside. Local officials say soaring rents can be attributed to a number of factors, including a slowdown in apartment-to-condominium conversions that has decreased the number of affordable homes and forced more would-be buyers to continue renting. There is little, if any, relief in sight. Analysts forecast a 17 percent increase in area rents from April 2008 to December 2010.
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Aimco Promotes Beaudin to Chief Property Operating Officer
Digested From "Apartment Investment and Management Company Promotes Beaudin to Chief Property Operating Officer"
PRNewswire (10/17/08)
Apartment Investment and Management Company ("Aimco") has promoted Tim Beaudin to chief property operating officer. The three-year company veteran, who previously served as the apartment REIT's chief development officer, has played a key role in planning and executing Aimco's strategy in such areas as redevelopment and construction services. In his new position, Beaudin will be in charge of conventional and affordable property operations and information technology. In addition, he will build and lead a newly defined asset management function for conventional apartment communities. Aimco Chairman and CEO Terry Considine states, "Tim's solid record of success in redevelopment and his strong business acumen will enhance the effective execution of Aimco's strategic plan. Tim's proven leadership will be a key asset as we align our operations, information technology, redevelopment and asset management functions to improve performance and deliver positive results to our shareholders." Before joining Aimco, Beaudin served as executive vice president for Catellus Development Corp., where he was responsible for overseeing development, construction and asset management. Through its subsidiaries and affiliates, Aimco ranks as one of the biggest owners and managers of apartment communities nationwide, with 1,114 communities containing 188,672 rental units.
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San Jose Now the Most Expensive Apartment Market in California
Digested From "San Jose Now the Most Expensive Rental Market in the State"
KRON-TV (10/16/08)
In California, the Tri-County Apartment Association reports that San Jose has become the most expensive rental housing market in the state, with the average apartment going for roughly $1,708 a month. Association executive Joshua Howard believes this is just another side effect of the ongoing mortgage crisis. He explains, "You have individuals forced out of their homes because they're being foreclosed on and they're turning to the rental market, and you have people trying to buy a home when they can't quality for a loan because lending has dried up." A recent RealFacts study shows that apartment rents in Santa Clara County increased 5.2 percent in 2008's third quarter versus the same period a year earlier. Howard concludes that it is costing more to rent in the county because the operational costs that go into managing an apartment community have gone up and are being passed on to tenants. The second priciest place to rent an apartment in California is Los Angeles/Orange County, while San Francisco ranks as the third-highest.
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San Diego County Apartment Rents, Demand Described as Flat
Digested From "County Apartment Rents, Demand Described as Flat"
San Diego Union-Tribune (10/16/08) by Emmet Pierce
A new RealFacts Inc. survey shows that the cost of renting an apartment remains stable in San Diego County. According to the research, the average cost of renting in communities of 100 or more units rose less than 1 percent in 2008's third quarter to $1,405 a month. The county's average apartment occupancy rate in the quarter was 95.8 percent, a slight rise from the second quarter rate of 95.5 percent. RealFacts CEO Caroline Latham comments, "Right now, everything is flat. I would say rents are going to remain flat in the next quarter. There is absolutely no evidence from our data of anything happening [to change apartment demand]." She adds that it does not appear that San Diego-area residents who are losing their homes are moving in any significant numbers to the large apartment communities her firm monitors. While some who have gone into loan default have left the county, Latham believes that the majority have moved in with family. At the end of this year's second quarter, the San Diego County Apartment Association reported that the average rent locally was $1,201 a month, a nearly 3 percent increase over the association's fall 2007 report. It further found a 4.8 percent vacancy rate countywide, up from the 3.4 percent reported in the fall survey.
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With Condos Cooling, Apartments Are Heating Up in Downtown Nashville
Digested From "As Condo Passion Cools, Rentals Move in on Downtown Market"
Tennessean (10/13/08) by Chas Sisk
Middle Tennessee developers are once again embracing rental housing. Three area developers are currently pitching four apartment communities in fast-growing neighborhoods near Nashville's city center. The projects will feature such amenities as swimming pools, fitness facilities and rents on the high end for the city. As such, they are being targeted at downtown professionals who have been a prime target of the city's high-rises. Analysts report that the apartments could serve as the leading edge of a budding trend in local development, especially as condo loans have become increasingly hard for both developers and potential buyers to obtain. First Management Services President Kirby Davis states, "Developers tend to be very practical. They build what they can, not what they can dream about." The apartments are being planned for three neighborhoods--East Nashville, Germantown and Midtown--that have been prime condo markets in recent years. They also come amid a general boom in rental housing locally. As of this summer, 17 apartment communities were in various stages of development throughout Middle Tennessee. Regardless, rental growth has been modest, with the average rent for a Nashville apartment edging up about 2 percent to 4 percent over the past couple of years. The Greater Nashville Apartment Association does not expect apartment rents to increase sharply again until job growth and wages recover. Bill Freeman, a principal at the Nashville-based apartment firm Freeman Webb, comments, "What we're seeing is more growth in occupancy than growth in rents."
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Post Properties Announces Voting Results and Appointment of Dale Reiss
Digested From "Post Properties Announces Annual Meeting Voting Results and Appointment of Dale Reiss as a New Independent Director"
Business Wire (10/16/08)
Post Properties Inc. has announced the voting results from its Oct. 16 annual shareholders meeting. Shareholders ratified the appointment of Deloitte & Touche LLP as the apartment REIT's independent registered public accountants for 2008, elected all nine of the board's nominees and approved the Amended and Restated Post Properties, Inc. 2003 Incentive Stock Plan. Board members also appointed Dale Anne Reiss--the recently retired Global Director of Real Estate, Hospitality and Construction Services for Ernst & Young LLP--as a new independent director. Reiss served as a senior partner at E&Y from 1995 through 2008, Additionally, she was a managing partner at its predecessor, Kenneth Levanthal & Company, from 1985 through its merger with Ernst & Young a decade later. Reiss has also been appointed to the board's Audit and Nominating and Corporate Governance Committees. Post Properties Chairman Robert C. Goddard III remarks, "Ms. Reiss is a highly respected real estate industry professional who brings a wealth of knowledge and insight to Post. The addition of another independent director with the stature, experience and financial background of Ms. Reiss will further enhance the depth of our board and reflects our commitment to the highest standards of corporate governance." Post Properties ranks as one of the country's biggest developers and managers of upscale apartment communities. The Atlanta-based REIT owns 21,890 apartments in 60 such communities.
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Apartment Investment and Management Company Announces Special Dividend
Digested From "Apartment Investment and Management Company Announces Special Dividend"
PRNewswire (10/16/08)
Apartment Investment and Management Company's (Aimco's) board of directors has declared a special dividend payable to holders of its Class A Common Stock of $1.80 per share on Dec. 1 to shareholders of record as of Oct. 27. A portion of this special dividend in the amount of $0.60 per share represents payment of the regular dividend for the third quarter ended Sept. 30. Another portion represents an additional dividend payment in the amount of $1.20 per share associated with taxable gains arising from property dispositions throughout this year. The special dividend will be payable in a combination of cash and additional Class A shares. Aimco is a Denver-based REIT that ranks as one of America's biggest owners and operators of apartment communities. Its total portfolio contains 1,114 communities in 46 states, the nation's capital and Puerto Rico.
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Austin's Apartment Rent Growth Slows as Vacancy Rises
Digested From "Austin's Apartment Rent Growth Slows as Vacancy Rises"
Austin Business Journal (10/15/08) by A.J. Mistretta
Axiometrics reports that the Austin apartment sector recorded one of the largest declines in annual rent growth in the nation during 2008's July-through-September period. The city's annual rents rose just under 1 percent in the third quarter, down from a 5.6 percent increase in the same period a year earlier. Axiometrics President Ronald Johnsey comments, "Austin had been experiencing incredible job growth, and now that's fallen off the cliff. The apartment vacancy rate has increased from 5 percent to 6 percent in the last year. Meanwhile, developers are delivering 8,000 new units this year." Johnsey predicts the market's vacancy rate will increase to 8.1 percent in 2009. Nevertheless, developers have recognized the need to curtail building activity. New multifamily housing permits decreased almost 30 percent in the past year, which should help stabilize the market in the coming years.
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New Mexico's Apartment Market Remains Stable
Digested From "New Mexico's Apartment Market Remains Stable"
GlobeSt.com (10/14/08) by Amy Wolff Sorter
New Mexico's two major metropolitan areas expect to enjoy a stable multifamily housing market for some time to come. Steady growth coupled with barriers to development are keeping weighted occupancies at 94 percent or higher. A CB Richard Ellis report shows that Albuquerque's 36,345-unit inventory is 94.9 percent occupied and Santa Fe's 2,674-unit supply is 94.2 percent. Monthly rents average $688 and $800, respectively. David Eagle, a CBRE senior vice president in Albuquerque, says occupancies in both markets are destined to continue ticking upward thanks mainly to the employment outlook. He reasons, "About 20 percent to 25 percent of the jobs here are public sector jobs, meaning government." Neither city is a likely target for runaway development. Pushing new developments through Santa Fe's city council has proven to be difficult, with the lion's share of the multifamily product being income-restricted. Looking at Albuquerque, Eagle remarks, "Much of the land available for building is on the west side and people aren't going to commute from there into town."
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UDR Is One Apartment REIT in Good Position, Says Zacks
Digested From "UDR a Renter in Good Shape"
Zacks Equity Research (10/13/08) by Greg Sukenik
UDR Inc. is a Denver-based apartment REIT that specializes in owning, managing, acquiring and developing middle-market apartment communities. Although it has assets across the nation, the company's exposure is primarily in the Western and Mid-Atlantic states. As of the end of this year's first half, UDR had ownership stakes in more than 43,000 apartments, including 4,991 units under development at the time. Over the past week, though, UDR's stock has dropped 30 percent because of a general market selloff. Analyst Greg Sukenik comments, "We think UDR is attractively valued relative to underlying [net asset valuation]. The yield remains one of the most attractive payouts among national apartment REITs, and the company is covering the dividend with operating cash." While the apartment sector's fundamentals are expected to continue deteriorating, Zacks Equity Research believes well-capitalized multifamily REITs will be in a good position to weather the storm.
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Legislative/Legal News
Waterworks Puts Onus on South Carolina Apartment Owners
Digested From "Waterworks Puts Onus on Landlords"
Charleston Post and Courier (10/15/08) by Katy Stech
In South Carolina, Mount Pleasant Waterworks (MPW) recently announced a policy change designed to shift the burden of an apartment resident's unpaid water bill away from its broader customer base and directly onto owners. As of Nov. 1, the water utility will cease allowing new accounts to be established in a resident's name, but will instead be in the name of the apartment owner. MPW General Manager Clay Duffie comments, "The property owner is the one that is ultimately responsible for what goes on on their property. We're just hoping they will understand that we're just trying to place that responsibility on the person who's making money off the property, and that's the property owner." MPW officials add that higher resident turnover and a weakening economy have resulted in an increase in unpaid water bills. In its last fiscal year, the utility was forced to write off nearly $192,000 in lost funds--a 42 percent increase over the previous fiscal year. The policy change has irked some apartment owners, who complain that they will now have to bear greater risks and unknown costs. South Carolina Apartment Association President Victoria Cowart is dismayed that neither the problem nor the solution were ever discussed with leaders from her industry. She remarks, "I'm sure Waterworks has legitimate concerns, but who did they seek advice and counsel from?" It should be noted that the policy change applies only to new residents. Those who already have accounts in their names with the utility will not be affected.
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Scammers Target Apartment Hunters in Houston
Digested From "Scammers Target Apartment Hunters"
KTRK-TV (Houston) (10/14/08) by Jeff Ehling
Hurricane Ike has made finding an apartment close to impossible in certain parts of the Houston metro area. Lately, the difficulty in finding a rental unit has been further complicated by predators looking to make a fast buck. The upscale Seven Riverway building, for instance, has units available for more than $3,000 a month, according to the Houston Apartment Association. So it was highly suspect when an ad popped up on Craigslist recently offering to rent a unit for just $1,000 a month sight unseen. David Jones, vice president of the Houston Apartment Association, comments, "[Potential residents] should always have the opportunity to tour the actual apartment they are going to be renting prior to signing a lease. It may not be available the day they fill out an application, but certainly before signing an application they should tour the apartment." In the ad, the owner claimed to be in England and that potential residents should send a deposit via Western Union. The appearance of these and other questionable apartment ads is hardly surprising, considering the storm displaced thousands of people from Galveston Island and beyond--people who are now in need of affordable digs. Jones remarks, "A lot of people are temporarily displaced that were homeowners and never were renters prior and need temporary housing." He further notes that his association has a list of resources available for apartment hunters, including the rental agreement most area communities use.
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