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Apartment Builders See Wait for U.S. Loans
Industry News
Greystar Has $300M Apartment Development Pipeline in D.C. Area
Migration Slowdown Is Sun Belt's Loss and North's Gain
Weidner Apartment Homes Donates $1 Million to Ball State
Chicago Apartment Residents Seek High-End Amenities
Average Rent for Newer Baltimore-Area Apartments Is $1,500
US Commercial Property Investors Are More Bearish
U.S. Homeownership Falls to Historic Lows
Rents Climbing for Apartments, Vacancies Falling in Salt Lake Area
No Recovery in Home Prices Until 2020?
Legislative/Legal News
Calif. Town Reviews Smoking in Apartments, Condos
A Dozen Clothes Dryers Stolen From S.C. Apartments
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Apartment Builders See Wait for U.S. Loans
Digested From "Apartment Builders See Wait for U.S. Loans"
Bloomberg (10/05/11) by Clea Benson
An uptick in single-family home foreclosures in conjunction with tighter credit markets has given the federal government a significantly increased role in the financing of new construction and rehabilitation of the nation's apartment stock, leaving multifamily developers out in the cold. According to the Mortgage Bankers Association (MBA), Fannie Mae and Freddie Mac currently hold 41 percent of outstanding multifamily mortgage debt -- an increase from 34 percent in 2008. While loan volume has quadrupled in recent years, the number of Federal Housing Administration officials devoted to multifamily loans has dropped to 1,414 in the U.S. That is down 13 percent since 2005. These factors have created a backlog of loans waiting for approval. In the meantime, apartment developers continue to raise concerns about the difficulty in determining their loan applications and lengthy approval process.
Industry News
Greystar Has $300M Apartment Development Pipeline in D.C. Area
Digested From "Greystar Aims $300M Development Pipeline at DC"
GlobeSt.com (10/10/11) by Erika Morphy
Greystar Real Estate is now actively building on five development sites in the Washington, D.C., metro area for a total multifamily housing pipeline of $300 million. Kevin Sheehan, managing director of real estate for Greystar, expects the 1,460 rental units to hit the market over the next 24 to 36 months. Sheehan adds, "We are actively seeking both development and acquisition opportunities here." Greystar also hopes to invest as much as $100 million more in apartment acquisitions across the Mid-Atlantic region, with a heavy concentration in and around the nation's capital. Doug Root, senior director of acquisitions, notes, "That translates into $200 million to $300 million in purchasing power." Finally, the firm has spent around $1.2 million to grow its D.C. office, focusing on adding new staff or otherwise investing in its property management, investment, development, marketing, and training operations.
Migration Slowdown Is Sun Belt's Loss and North's Gain
Digested From "Migration Slowdown Is Sun Belt's Loss and North's Gain"
USA Today (10/04/11) by Haya El Nasser
The steady flow of people moving to the Sun Belt has waned, with recent migration data from the IRS showing that net population gains from Americans moving to Arizona, Nevada, and Florida from other states have been largely wiped out. Kenneth Johnson, demographer at the University of New Hampshire's Carsey Institute who analyzed the data, states, "This recession has been a sobering experience for Americans when it comes to migration." It has been a particularly sobering experience for states that have long counted on more people moving in than out. Nevada gained a net of more than 40,000 people at the peak of the boom in 2006. By contrast, the state registered a net loss of more than 4,000 three years later. This trend has been a windfall of sorts for states in the North. Massachusetts' loss of people to other states dwindled from 2006 to 2009, while New York's net loss plummeted 58 percent. Susan Strate, a state demographer at the University of Massachusetts' Donahue Institute. "Part of the concern in the middle of the decade was the brain drain . . . people coming to get education and leaving the state." With fewer people migrating out, Massachusetts has stepped up its investing in high-tech and biotech industries and hopes to hang on to more people as the economy improves.
Weidner Apartment Homes Donates $1 Million to Ball State
Digested From "Seattle Apartment Developer Donates $1 Million to BSU"
Muncie Star Press (IN) (10/04/11) by Seth Slabaugh
Weidner Apartment Homes has made a $1 million donation to Ball State University (BSU) to bring recognition to its residential property management (RPM) program -- one of the few in the country that offers degrees in that field. Seattle-based Weidner began recruiting BSU grads three years ago, even though it had no connection to the campus. Marie Virgilio, director of recruiting for Weidner Apartment Homes, states, "We have no properties in Indiana, but the graduates we hire from Ball State are phenomenal. This is an outstanding program. It benefits the industry. The graduates come out well-groomed with core Midwestern values that I can't teach." The $1 million donation will be used to create scholarships mostly. BSU students majoring in RPM take courses in everything from interior design and construction to marketing, leasing, and accounting. BSU offers both bachelor's and master's degrees in the field, along with minors and certificates. Weidner reports that it has hired 15 BSU graduates from the program in just the last three years.
Chicago Apartment Residents Seek High-End Amenities
Digested From "Chicago Renters Seek High-End Upgrades and Amenities"
Chicago Journal (10/05/11) by Don DeBat
In Chicago and elsewhere, with more and more Generation Y residents renting instead of buying, apartment developers are catering to their every whim. Demand for high-end upgrades and amenities typically found in newly built condominiums is especially high. Lori Postma, director of marketing for Reside Living, which manages about 2,000 rental apartments mostly on Chicago's North Side, states, "Renters today are looking for great building amenities such as a club room and a rooftop deck with a fire pit. Renting an apartment really is about creating a lifestyle." Ron DeVries, vice president of Appraisal Research Counselors, Ltd., notes that rental apartment demand is being driven by a lack of confidence in the for-sale housing market. A recent National Apartment Association survey determined that 76 percent of consumers now believe renting is a better option than owning a home. Of those, 64 percent cited having no responsibility for maintenance and major repairs as a main reason to rent. While Chicago's apartment sector is sizzling right now, the suburbs are also booming. At The Commons at Town Center in north suburban Vernon Hills, developer Sy Taxman offers all of the perks of living in a luxury condo without the financial strain of ownership. Amenities range from stainless-steel appliances and granite counter tops to an on-site a fitness facility, indoor heated parking, and 24-hour maintenance.
Average Rent for Newer Baltimore-Area Apartments Is $1,500
Digested From "Average Rent for Newer Baltimore-Area Apartments: $1,500"
Baltimore Sun (10/04/11) by Jamie Smith Hopkins
A new Delta Associates study shows that the average monthly rent for "Class A" apartment communities in the Baltimore metro area was $1,500 over the summer, a 1.7 percent increase from a year ago. The average effective rent comes to $1.50 per square foot a month. Throughout the region, the apartment vacancy rate is currently at 3.4 percent. According to Delta researchers, downtown Baltimore apartment residents felt the region's biggest year-over-year increase in monthly rent -- 6.7 percent. The Fells Point/Inner Harbor saw average rent hikes of 3 percent, while monthly rents gained 2.6 percent in the suburban communities south of Baltimore. However, average rents dipped 1.1 percent north of the city.
US Commercial Property Investors Are More Bearish
Digested From "US Commercial Property Investors Are More Bearish"
Reuters (10/04/11) by Ilaina Jonas
A new survey by law firm DLA Piper shows that an overwhelming majority of U.S. commercial real estate investors are bearish on the outlook for the sector over the next year because of three factors -- a lack confidence in the White House, poor employment growth, and gridlock on Capitol Hill. The DLA Piper survey further showed that 44.6 percent of respondents believed that multifamily housing would be the most attractive commercial real estate investments over the next six months as demand for apartments should continue to rise. Nevertheless, more than 70 percent of respondents described themselves as "bears," an increase from 60 percent a year ago. Jay Epstien, a partner with DLA Piper, remarks, "What you now see is a growing degree of uncertainty, and uncertainty begins to push money to the sidelines because people are much more reluctant to make a decision." Meanwhile, the 29.6 percent who described themselves as "bulls" attributed their optimism to what they see as opportunities created by a market correction. They also cited an abundance of equity capital ready to be put to work. As of July 31, U.S. commercial real estate prices were 42.5 percent off their October 2007 peak but had regained about 12.6 percent of their prices since hitting a low in April , noted the most recent Moody's/REAL Commercial Property Price Index. Moody's researchers add that a slowdown in commercial mortgage-backed securities (CMBS) sales will likely prolong the bottoming of the market as a whole.
U.S. Homeownership Falls to Historic Lows
Digested From "U.S. Homeownership Falls to Historic Lows"
Washington Post (10/07/11) P. A14
Census figures show that the national homeownership rate slipped in 2010 to 65.1 percent, the biggest decline since the Great Depression, but remains the second-highest decennial rate. Analysts believe homeownership is unlikely to return to the nearly 70 percent level reached at the peak of the housing boom in the middle of the decade. Unemployed young adults have delayed first-time purchases and are least likely to own a home, and homeownership among adults ages 35 to 64 has fallen to the lowest level in decades as many have faced foreclosure or bankruptcy.
Rents Climbing for Apartments, Vacancies Falling in Salt Lake Area
Digested From "Rents Climbing for Apartments, Vacancies Falling in Salt Lake Metro Area"
Deseret News (UT) (10/03/11) by Jasen Lee
Finding an apartment in the Salt Lake City metro area has become a real challenge. Recent studies have shown that the overall mid-year apartment vacancy rate in Salt Lake County was 5.2 percent, a slight decline from the year-earlier rate of 5.7 percent. The increasing number of households unable to qualify for homeownership was cited as the top reason for the decrease. Kip Paul, executive director of investment sales for Commerce Real Estate Solutions, comments, "With the chaos in the home mortgage market, it's really forcing a lot of people to be renters." He adds that vacancy rates for all types of apartments declined over the past year with the exception of studio units. At the same time, all types of apartments experienced increases in average rental rates in the past year. Commerce Real Estate Solutions states that the combined average monthly rental rate for all types of units is $754, a 4.7 percent increase from 2010. In previous years, apartment communities west of I-15 had slightly higher vacancy rates -- a trend that has held into today. The overall monthly rental rate on the west side is $743 compared to $766 for east-side apartment communities.
No Recovery in Home Prices Until 2020?
Digested From "No Recovery in Home Prices Until 2020?"
Boston Globe (10/04/11) by Scott Van Voorhis
A new FICO poll of risk management officers at banks nationwide found that 49 percent do not expect home prices to return to 2007 levels until at least 2020. By contrast, only 21 percent of survey respondents said they thought prices would rebound before the end of the decade; while 73 percent warned that foreclosures will be a major hurdle for at least another five years. About 46 percent predicted that mortgage delinquencies will increase over the next six months.
Legislative/Legal News
Calif. Town Reviews Smoking in Apartments, Condos
Digested From "Aliso Viejo Reviews Smoking in Apartments, Condos"
Orange County Register (CA) (10/06/11) by Claudia Koerner
In California, the Aliso Viejo City Council has requested more information on how limited smoking in apartments, condominiums, and townhomes might work. Additionally, the council will hold an upcoming meeting between the residents calling for the reforms and representatives from the Apartment Association of Orange County, as well as local homeowners associations. "What we want to see is that everyone who is a nonsmoker in this community has the option of smoke-free housing," said Jodie Feinberg, local resident and founder of Residents for Smoke-Free Living. If the measure is successful, the town could ban smoking in certain units within a community, common areas, or balconies and patios. Supporters of the measure claim a smoke-free ban is considered an amenity by some, and potential residents would be willing to pay more for it. The council is studying how other California towns and cities have implemented similar bans, including Calabasas and Glendale.
A Dozen Clothes Dryers Stolen From S.C. Apartments
Digested From "A Dozen Clothes Dryers Stolen From SC Apartments"
Associated Press (09/27/11)
More than a dozen coin-operated clothes dryers have been stolen from apartment communities in southeastern South Carolina in recent weeks. Authorities say the machines are valued between $400 and $1,500 each. According to Summerville Police Capt. Jon Rogers, investigators believe the thieves are after the money in the coin-operated machines. Officers say the thieves hit one apartment community in particular two days in a row, swiping four dryers and a washing machine. A total of five dryers were stolen from another community. The thefts began in August. As of presstime, no arrests have been made.
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