Headlines
Top Story
Apartment REIT Chief Execs Offer Their Positive Outlook
Industry News
Equity Residential the Lead Bidder for Rival Archstone
Apartment Construction Rising, and So Are Rents
New Atlanta Tower Points to Larger Apartment Surge
BRE Properties Sheds Assets
Rising North Texas Employment to Spur Rise in Apartment Rents
Homeownership Unlikely to Be Overtaken by Renting, Study Finds
More Residents Benefit Equity Residential
Essex Closes $200M Unsecured Loan
Changes Pave Way For U.K.'s First Residential REIT
Aimco Donates $146,000 to Assist Military Families Through TAPS
Are San Diego County Apartments Good Investments?
Luxury Houses Become Student Housing
Legislative/Legal News
Project Aims to Keep Cary, N.C., Apartments Safe
L.A. County Warns Apartment, Condo Dwellers of Secondhand Smoke
Wisconsin Meetings Focus on Affordable Housing
Top Story
Time Warner Cable Community Solutions has proven success partnering with MDU owners, providing quality voice/video/data products to their residents.
Apartment REIT Chief Execs Offer Their Positive Outlook
Digested From "Apartment REITs: These Are The Salad Days"
Wall Street Journal (11/16/11) by Kris Hudson
The apartment rental industry is doing well with the depressed housing market and few new apartment communities being built. In fact, some of the industry's top players expect it will likely stay that way for several years. Four chief executives of major apartment owners gave a rosy outlook at the recent National Association of Real Estate Investment Trusts World Conference in Dallas. UDR Inc. President and CEO Thomas Toomey said there are many factors that will help the sector, including the fact that many in the millennial generation prefer to live in apartments close to the city. UDR has ownership interests in approximately 62,000 apartments. The national vacancy rate for apartments in the U.S. stood at 5.6 percent at the end of the third quarter, with average rents up 1.8 percent from a year before. Some of the panelists raised concerns about Europe's debt crisis, which they fear could depress job growth. The CEOs said they expect the U.S. homeownership rate to continue to fall, which will likely increase their business. Equity Residential President and CEO David Neithercut concluded that job growth is not as critical for the industry as it was in past cycles. He added, "We don’t see any reason that for the next several years we won’t see very strong revenue growth in our space."
Industry News
Equity Residential the Lead Bidder for Rival Archstone
Digested From "Zell's Equity Residential the Lead Bidder for Rival Archstone"
Chicago Tribune (11/16/11)
Equity Residential is now positioned as the lead bidder in the contest to purchase more than 50 percent of rival Archstone. Such a deal would rank as one of the biggest real-estate transactions since the economic downturn. Tribune sources say Equity Residential has offered more than $2.5 billion in cash and stock to acquire the 53 percent equity stake currently held by Bank of America Corp. and Barclays PLC. An agreement is still not certain, though, and a higher bidder could emerge. The remainder of the company is owned by the bankruptcy estate of Lehman Brothers Holdings Inc., which spearheaded a group that acquired Archstone four years ago and prefers to keep its holding. Analysts say Equity Residential's bid is the latest proof of the high level of interest among investors in rental apartments. While other forms of commercial real estate have suffered amid the economic downturn, apartment communities have been in high demand as homeownership rates have fallen. Sources say the proposed sale to Equity Residential would value Archstone at around $16 billion, including some $11 billion in debt mostly held by Fannie Mae and Freddie Mac.
Apartment Construction Rising, and So Are Rents
Digested From "Apartment Construction Rising, and So Are Rents"
Southtown Star (IL) (11/20/11) by Derek Kravitz
American builders started slightly fewer homes in October but turned in plans for a spate of apartments, a mixed sign for the struggling housing market. Builders broke ground on a seasonally adjusted annual rate of 628,000 homes in October, the Commerce Department said Nov. 17. That is roughly half the 1.2 million that analysts equate with a robust housing market. But building permits, a barometer of future construction, increased nearly 11 percent. The rise was driven by a 30 percent increase in apartment permits, which hit its highest level in three years. Over the past year, apartment permits have spiked roughly 63 percent; while single-family permits increased just 6.6 percent over the same period. Renting has become the option of choice for many Americans who lost their jobs during the recession and were forced to move out of their homes.
New Atlanta Tower Points to Larger Apartment Surge
Digested From "Atlanta's Rental Rebound"
Wall Street Journal (11/16/11) by Maura Webber Sadovi
In the latest sign that the apartment recovery is bolstering the country's troubled construction sector, a venture of Selig Enterprises Inc. and Daniel Corp. is set to break ground in December on an $82 million glass tower in Atlanta's Midtown area. The planned 330-unit tower is the next phase in a massive, mixed-use development that was put on hold by the recession. Apartment rentals in the area are in short supply, meanwhile, with Midtown's vacancy rate falling to 7.2 percent in the third quarter from 11.4 percent during the same period a year earlier, reports Reis Inc. Buoyed by consumers who either can't afford down payments on houses or condos or who simply don't want to make the leap into homeownership, the apartment sector started to rebound in the first quarter of 2010. According to Reis researchers, effective U.S. third-quarter monthly apartment rents stood at $1,004, up from $981 a year ago. Meanwhile, apartment vacancies fell from 7.1 percent to 5.6 percent over that same time span. Fortunately, lenders appear to be getting more and more comfortable with providing construction financing for new apartment communities.
BRE Properties Sheds Assets
Digested From "BRE Properties Sheds Assets"
Zacks Equity Research (11/17/11)
BRE Properties Inc. recently announced the sale of two apartment communities in Moreno Valley, Calif., and in nearby Colton. Proceeds from the sale will be used to repay outstanding debt under the multifamily REIT's revolving credit facility. The sale is seen as a strategic move on BRE's part to streamline its apartment portfolio by reducing its presence in the eastern portion of California's Inland Empire and reinvesting the proceeds in certain coastal markets with stronger long-term growth prospects. BRE Properties specializes in developing, acquiring, and operating apartment communities in the Western U.S., where it currently has assets in three states -- Arizona, California, and Washington.
Rising North Texas Employment to Spur Rise in Apartment Rents
Digested From "Rising North Texas Employment to Spur Rise in Apartment Rents"
Fort Worth Star-Telegram (11/18/11) by Sandra Baker
The expansion at Alcon Labs is one of a number of corporate expansions that will happen in the Dallas-Fort Worth area in the coming months that will spur employment. With this job growth will likely be a corresponding rise in apartment rents and a decrease in concessions, notes a newly released Marcus & Millichap market study. Researchers say these trends will also mean increased investments in the various existing apartment communities themselves. The report states: "Investors will continue to expand their portfolios, encouraged by the Metroplex's jump in employment growth and improving apartment operations." Meanwhile, building activity is indeed showing signs of ramping up. In 2011 alone, nearly 2,900 new apartments will be delivered to the market, while about 5,300 rental units are in various stages of planning and development in and around Dallas-Fort Worth. According to Marcus & Millichap, asking rents should top $799 a month by the end of next month, marking a 3 percent improvement -- more than twice the increase seen in 2010.
Homeownership Unlikely to Be Overtaken by Renting, Study Finds
Digested From "Homeownership Unlikely to Be Overtaken by Renting in the US, Study Finds"
Property Wire (11/17/2011)
At the 2011 Realtors Conference in Anaheim, Calif., Ken Johnson, editor of Florida International University's Journal of Housing Research, said homeowners generally accumulate more wealth than renters. Johnson presented the findings of a study he co-authored with Eli Beracha that compares homeownership and renting in 23 metro areas over 31 years. They found that in 91 percent of the metro areas, renters came out ahead when reinvesting savings on a mortgage, maintenance, and down payment into rent. However, 84 percent of buyers were favored when renters spent those savings. Johnson called homeownership "a self imposed savings plan" and said those intending to stay put over the long term would benefit by buying -- especially as home prices are at their most affordable level in three decades. "We believe that anyone who is able and willing to assume the responsibilities of owning a home should have the opportunity to pursue that dream," said National Association of Realtors President Ron Phipps.
More Residents Benefit Equity Residential
Digested From "More Renters Benefit Apartment REIT Equity Residential"
Medill News Service (11/17/11) by Kyle Clapham
Despite tepid job growth across the country, Equity Residential has seen its earnings increase across the board as those who are unable or unwilling to buy homes are opting to rent. Occupancy rates in the Chicago-based REIT's apartment communities remain above 95 percent on average, fueled by increased demand and lack of new property development. The company has pushed rents up and believes that a population surge of people in their 20s should work to their advantage. The company saw a net income in its July-through-September period of $104.4 million, an increase from 76 percent from a year earlier. Equity Residential's funds from operations in the third quarter rose 18 percent to $200 million from a year earlier.
Essex Closes $200M Unsecured Loan
Digested From "Essex Closes $200M Unsecured Loan"
San Jose Business Journal (11/16/11)
Essex Property Trust Inc. confirms that it has closed a $200 million unsecured term loan. According to the California-based apartment REIT, the five-year loan could be increased to $300 million. Proceeds will likely be used to help the company retire a $250 million Freddie Mac secured facility. Essex officials add that the 11 apartment communities in the secured facility will become unencumbered.
Changes Pave Way For U.K.'s First Residential REIT
Digested From "Changes Pave Way For U.K.'s First Residential REIT"
Wall Street Journal (11/16/11) by Anita Likus
London & Stamford Property PLC has announced plans to establish the United Kingdom's first residential REIT amid hopes of further regulatory relaxation by the government. This comes after the government has already cut stamp duty, a tax on purchasing property, to make it easier to establish REITs. London & Stamford currently has around US$159 million of equity in 270 apartments, which it hopes to move into the new REIT. London & Stamford CEO Patrick Vaughan remarks, "The plan is to gear up existing residential assets conservatively and for potential new investors to come on board, to give the REIT a significant start-up scale of about £300 million to £400 million of equity." To date, U.K. investors have only used the REIT structure for nonresidential properties such as retail centers and office buildings. Residential properties, though, typically generate lower profits due to higher maintenance and turnover costs. In addition, they tend to be more highly leveraged, making it more difficult for residential-property investors to work within the REIT regime.
Aimco Donates $146,000 to Assist Military Families Through TAPS
Digested From "Aimco Donates $146,000 to Assist Military Families Through TAPS"
PR Newswire (11/15/11)
Apartment Investment and Management Co. (Aimco) has donated $146,000 via its philanthropic arm to The Tragedy Assistance Program for Survivors (TAPS) from proceeds raised by corporate sponsors of the 8th annual Aimco Cares Charity Golf Classic. Jones Lang LaSalle, Transwestern, and numerous other companies provided sponsorships to raise funds for the charity event. TAPS helps family members who have lost a loved one in the line of duty. Since its launch, the annual golf classic has raised almost $1.3 million for different charitable organizations.
Are San Diego County Apartments Good Investments?
Digested From "Are Apartments Good Investments?"
San Diego Union Tribune (11/16/11) by Roger Showley
Analysts have a mostly positive outlook for San Diego County's apartment market for next year, at least as far as investors are concerned. Positive factors range from rising demand and falling vacancies to higher rents and more development in the pipeline. Among the proponents is Russ Valone, president of MarketPointe Realty Advisors. He states, "The apartment market is going to be very strong. There's a lot of demand out there because people are shy about the for-sale marketplace today." In particular, younger apartment residents are craving flexibility in case job prospects draw them away. Young families, meanwhile, are showing increased interest in renting foreclosed houses and townhomes instead of buying as they normally would in their late-20s and early-30s. Also, an increasing number of former homeowners are settling into apartments. Valone adds that some of the increasing demand derives from people who moved to Riverside and Imperial counties for affordable housing and commuted to work in San Diego. Many are renting back in the county in order to be closer to their places of employment. He concludes, "So you've seen a repatriation of a lot of households who had left the county for housing but continued to be employed in the county." The present apartment vacancy rate of 4.5 percent is considered a healthy one, as measured in a survey in September of more than 117,800 rental units in 803 apartment communities.
Luxury Houses Become Student Housing
Digested From "Animal McMansion: Students Trade Dorm for Suburban Luxury"
New York Times (11/13/11) P. A1; by Patricia Leigh Brown
In California, college students are opting to rent depreciating McMansions rather than small dorm rooms. With a shortage of dorm space available for students, universities and colleges in areas hit hardest by the foreclosure crisis offer a surprising opportunity: luxury houses for rent in planned communities. These houses often have three-car garages, wall-to-wall carpeting, whirlpool baths, granite kitchen countertops, walk-in closets, gas fireplaces, and other amenities. Renting these houses can cost between $200 and $350 monthly per student, who often have their own private room and bathroom. Universities estimate that on-campus room and board can cost more than $13,000 annually, compared with about $7,000 per year for off-campus housing.
Legislative/Legal News
Project Aims to Keep Cary, N.C., Apartments Safe
Digested From "Project Aims to Keep Cary Apartment Complexes Safe"
WRAL.com (11/17/11) by Renee Chou
The town of Cary, N.C., has spent about $263,000 to help reduce crime in local apartment communities. As part of Project Phoenix, three officers and one police lieutenant work with area residents and apartment owners to decrease drugs and illegal activity. For instance, Officer Matt Long stops by Woodcreek Apartments to meet with apartment manager Laura Grubbs three times a week. Together, they walk the grounds and assesses what improvements can be made to better ensure safety. The pair has talked about making addresses and signs easier to read, adding more exterior lighting, and cutting bushes down so people cannot hide behind them. The project has already installed wide-angle peep holes in all doors to ensure residents can see out front and to the sides of their entry-way. Talking about the program's benefits, Long remarked, "The people who live here and in other communities feel like they can actually go to the office staff or call us and talk to us."
L.A. County Warns Apartment, Condo Dwellers of Secondhand Smoke
Digested From "L.A. County Warns Apartment, Condo Dwellers of Secondhand Smoke"
Los Angeles Times (11/16/11)
In California, Los Angeles County public health officials are cautioning nonsmoking residents of apartment and condominium communities that they are at risk of secondhand smoke. They say smoke can travel through walls, pipes, vents, electrical outlets, and windows of buildings. Their warning was based on research by Dr. Neil Klepeis, who measured levels of particle smoke in buildings throughout the county. The Stanford University scientist concluded that some nonsmoking apartments are as smoky as some bars. Approximately 40 percent of the multifamily housing units in L.A. County are in multi-unit buildings such as duplexes and apartment buildings. Even when the smoke cannot be smelled or seen, health officials said there is still a danger that secondhand smoke can lead to lung disease, respiratory problems, and other ailments. To this end, several California cities have passed smoke-free housing ordinances, most notably Baldwin Park and Compton.
Wisconsin Meetings Focus on Affordable Housing
Digested From "Meetings Focus on Affordable Housing Issues"
Milwaukee Journal Sentinel (11/14/11) by Laurel Walker
A total of nine public meetings have been scheduled throughout southeastern Wisconsin over the next month, all of which will focus on a regional housing plan now in development by the Southeastern Wisconsin Regional Planning Commission. The first sessions are scheduled for this week in Racine and Kenosha and next Monday in Waukesha. Started more than two years ago, the goal of the new study is to identify the availability and character of housing in the seven-county region and place greater emphasis on affordable housing issues. Initial studies have found that while the region's existing housing stock is in good shape overall, 36 percent of households in southeastern Wisconsin had a "high housing cost burden" -- or monthly housing costs that exceed 30 percent of gross household income. In addition, the plan examines imbalances between jobs and housing. For instance, suburban communities typically have more lower-wage jobs than they have low-cost housing, which could be corrected with additional multifamily housing.
Abstract News © Copyright 2011 INFORMATION, INC.
|