Menu
|
|
Apartment Rentals Surge in U.S. on Home Foreclosures, Job Gains
|
|
Headlines
Top Story
Apartment Rentals Surge in U.S. on Home Foreclosures, Job Gains
Industry News
REIT Funds Go Through the Roof as Apartments Lead the Way
The Financial Case for Renting Vs. Buying a Home
Bozzuto, Pritzker Realty Form $75M Joint Venture
Bascom Group Exec Says Apartment Rents Hitting Bottom
Camden Property Trust Announces Second Quarter 2010 Operating Results
New Haven Gets Major Mixed-Use Development That Includes Apartments
Austin Apartment Market Occupancy, Rents Are Up
Equity Residential Q2 2010 Funds From Operations Rises
Miami-Based Kislak to Invest $200M in Multifamily Housing
Colorado Springs Apartment Vacancies Plunged to 9-Year Low During Q2 2010
Legislative/Legal News
More New Jersey Apartment Owners Addressing Mold
Calif. City Council Places Resident Protection Measure on Nov. Ballot
Columbus Orders 12 Apartment Communities to Find Trash Pickup Service
Owner of Sacramento Apartments Given Public Nuisance Charge
Top Story
Time Warner Cable Community Solutions has proven success partnering with MDU owners, providing quality voice/video/data products to their residents.
Apartment Rentals Surge in U.S. on Home Foreclosures, Job Gains
Digested From "Apartment Rentals Surge in U.S. on Home Foreclosures, Job Gains"
Business Week (07/27/10) by Prashant Gopal
With mounting foreclosures turning more homeowners into renters and an improving job market encouraging more young adults to find their own places to live, MPF Research reports that the number of occupied apartments increased by approximately 215,000 in the country's 64 biggest markets during this year's first and second quarters. The nation's apartment vacancy rate, meanwhile, fell to 6.6 percent in June from 8.2 percent late last year. Investors expect the improved conditions will result in earnings gains in 2011 of about 5 percent to 10 percent or more for such apartment REITs as AvalonBay Communities Inc. and Equity Residential. They point to the Bloomberg REIT Apartment Index gaining 24 percent this year through July 23 -- twice the 12 percent improvement in the broader Bloomberg REIT Index -- as further reason for optimism.
Industry News
REIT Funds Go Through the Roof as Apartments Lead the Way
Digested From "REIT Funds Go Through the Roof"
MarketWatch (08/01/10) by John Spence
Analysts report that the surprising outperformance of exchange-traded funds that track real estate stocks since the first of the year suggests improvement in the economy and the battered commercial-property sector. In their second-quarter earnings outlook, analysts at Keefe, Bruyette & Woods write that REITs have outperformed the broader market "in anticipation of upcoming growth opportunities -- internally, through improving fundamentals, and externally via acquisitions." The hottest REIT stocks so far in 2010 have been apartment sector ones, specifically Apartment Investment and Management Co. and Equity Residential Properties Trust. Both companies posted quarterly earnings a week ago and the stocks have gained more than 30 percent since Jan. 1. A solid quarterly report from Equity Residential coupled with improving market conditions "should have a positive impact on the overall apartment sector," reports Stifel Nicolaus analyst Rod Petrik. "The company appears well positioned to take advantage of positive market trends in the apartment industry." Stephen Swett at Morgan Keenan adds, "We remain positive on apartments, relative to commercial REITs, as we believe the overall risks in the economy pose less risk to multifamily fundamentals at this time."
The Financial Case for Renting Vs. Buying a Home
Digested From "Rise of the Renting Class"
CNNMoney.com (07/28/10) by Nin-Hai Tseng
In today's weak housing market, homeownership is no longer viewed by many as an investment vehicle or as an ATM machine for constant refinancing. That is because ownership has been a "culprit of distress" for the last four years. RealtyTrac Inc. reports that one in every 411 housing units received a foreclosure filing during the month of June. The S&P/Case-Shiller Home Price Index, meanwhile, shows that home prices plunged more than 32 percent between 2006 and 2009. With so much stress on homeowner markets, renting has become more appealing than owning for many. A 2010 study of the Joint Center for Housing Studies of Harvard University determined that the number of renter households increased almost 10 percent, or by 3.4 million, between 2004 and 2009. The increase was most dramatic in the Midwest, where growth of renter households swung upwards by 15.4 percent during that time span. The South, meanwhile, added the largest number of renter households with a 1.2 million increase. Officials in Washington are now rethinking their definition of the American Dream. In May, HUD Secretary Shaun Donovan testified before a House committee that the financial crisis proved the need for a better balance between rental housing and ownership. Just last week, HUD senior official Raphael Bostic told the Washington Post: "In previous eras, we haven't seen people question whether homeownership was the right decision. It was just assumed that's where you want to go. You're not going to hear us say that."
Bozzuto, Pritzker Realty Form $75M Joint Venture
Digested From "Bozzuto, Pritzker Realty Form $75M Joint Venture"
Baltimore Business Journal (07/27/10) by Ryan Sharrow
The Bozzuto Group has agreed to partner with Chicago-based Pritzker Realty Group on a new $75 million investment fund to acquire and develop apartment communities, mostly in the Baltimore-Washington, D.C., metro area. According to Bozzuto Group CEO Tom Bozzuto, the joint venture already has a half-dozen target development opportunities in its sights in the region, but he would not disclose any specific locations. The fund will also seek opportunities in the Northeast U.S. Bozzuto remarks, "We think the future of the apartment business is better today than it's probably been at any point in the last 30 years. The population of young people who will want to rent when they come into the work force we see growing significantly over the next few years." The focus will be on transit-oriented, urban locations.
Bascom Group Exec Says Apartment Rents Hitting Bottom
Digested From "Apartment Rents Hitting Bottom"
Orange County Register (CA) (07/31/10) by Jeff Collins
Scott R. McClave is a principal of transactions and finance for The Bascom Group, a California-based investment firm that manages more than 30,000 apartments in 10 states. McClave is heavily involved with the acquisitions, financing, and dispositions of apartment communities, which the company renovates, rents up, and, ultimately, sells after a number of years. He notes the ongoing credit crunch has changed the way Bascom operates, reasoning, "Over-leverage driven by overly optimistic projections were probably the biggest factors in where we are today." Indeed, the company now holds onto its apartment communities much longer, as it has been more profitable to continue managing them than to sell them quickly. McClave is starting to see signs of improvement, though. He states, "The biggest improvement has been on the capital side with both bridge and permanent lenders as well as new equity groups starting to return to the marketplace." For most of the article, McClave focused on California's Orange County apartment market where the firm is based. To this end, he stated, "Orange County, as well as most of Southern California, is seeing a surprising amount of activity on the properties that have been brought to market. Buyers have been very aggressive on a cap rate basis with the anticipation of a recovery and have driven all cash yields down to 4 percent to 5 percent on Class A properties."
Camden Property Trust Announces Second Quarter 2010 Operating Results
Digested From "Camden Property Trust Announces Second Quarter 2010 Operating Results"
Business Wire (07/30/10)
Camden Property Trust this past week announced operating results for the second quarter and first half of 2010. Funds from operations (FFO) for the three-month period ended June 30 totaled $0.66 per diluted share, or $46.7 million. That is compared to $0.72 per diluted share, or $46.6 million, for the same period a year earlier. FFO for the six months ended June 30, meanwhile, totaled $1.34 per diluted share or $93.7 million versus $1.60 per diluted share or $98.2 million for the same period in 2009. Camden Chairman and CEO Richard J. Campo states, "We are pleased to report that Camden's second quarter operating results were better than expected. Based on these results and an improved outlook for our business, we have raised our 2010 guidance for both earnings and same property performance." Camden Property Trust is an S&P 400 Company that specializes in acquiring, developing, owning, and managing apartment communities. Camden owns a total of 187 such communities containing more than 64,000 apartments nationwide. It was recently named by FORTUNE Magazine as one of the "100 Best Companies to Work For" in America for the third consecutive year.
New Haven Gets Major Mixed-Use Development That Includes Apartments
Digested From "Near Yale, a 32-Story Gamble Rises in New Haven"
New York Times (07/28/10) P. B4; by Lynnley Browning
New Haven, Conn., is welcoming a new $190 million high-rise project downtown that includes mixed-income housing, street-level stores, indoor parking, and quite possibly the nation's biggest alternative energy source for a residential building -- a 400-kilowatt fuel cell that generates electricity. Known as 360 State Street, the 700,000 square-foot structure is within walking distance of Yale University and boasts 500 apartments and luxury penthouses. At 32 stories, it ranks as the city's second-tallest building and was designed and developed by Becker & Becker of Fairfield. Becker & Becker has completed a number of similar projects in other dense urban areas, most notably the Octagon Project on Roosevelt Island and the Fairfield Apartments in Bridgeport, Conn. Becker is aiming to attract at least 50 percent of his apartment residents from the Yale graduate student and medical community connected with the university. The plan is for the remaining apartment residents to consist of retired professors, empty-nesters looking to downsize, and professionals hoping to use New Haven as a springboard to New York.
Austin Apartment Market Occupancy, Rents Are Up
Digested From "Apartment Market Occupancy, Rents Are Up"
Austin American-Statesman (TX) (07/28/10) by Shonda Novak
Central Texas' apartment market appears to be in the early stages of stabilizing, according to a new report by Austin Investor Interests. Occupancy rates were 90.9 percent in the second quarter, the highest in almost two years. The increase of 3.6 percentage points from a year earlier was the biggest such increase in 22 years. Robin Davis, manager of Austin Investor Interests, reports that the market has shown the strongest recovery this year since the recession began. She adds, "It's a positive sign that stabilization is on the way." One major positive factor has been the fact that Austin's job market has started to recover in recent months. Central Texas also continues to attract new residents, another condition that creates demand for apartments. Davis notes that one key factor boosting occupancy is that new apartment communities are filling up. Occupancy levels at top-quality apartment communities have been rising for the past five quarters, reaching 88.9 percent in the second quarter. Many communities are offering incentives to lure residents, with an average $121 per month discount from market rents. Gables Residential, for example, is offering six weeks of free rent at one of its communities west of downtown and up to two months of free rent at another.
Equity Residential Q2 2010 Funds From Operations Rises
Digested From "Equity Residential Second-Quarter FFO Rises"
Reuters (07/28/10) by Ilaina Jonas
Equity Residential's quarterly funds from operations (FFO) recorded second-quarter FFO of $175 million, a nearly 4 percent increase from $168.7 million a year earlier when the Chicago-based apartment REIT had about 10 million fewer shares and incurred an $11 million impairment charge. The U.S. apartment sector has been the first of the major commercial real estate types to mount a comeback from one of the worst declines in more than a decade. In this year's April-through-June swing, Reis Inc. notes that the national apartment vacancy rate fell for the first time in almost three years. For apartment communities the REIT has managed for at least a year, revenue fell 1.2 percent and expenses increased 1.5 percent. Equity Residential's occupancy rate increased to 95.1 percent in the quarter from 93.6 a year earlier. Finally, residents were found to be staying in their units longer, with turnover falling to 14.3 percent from 15.1 percent on a year-over-year basis. Equity Residential CEO David Neithercut concludes, "With strong occupancy, little new supply and favorable demographics, we expect top line growth for years to come. Obviously, the rate of that growth is highly dependent on employment growth."
Miami-Based Kislak to Invest $200M in Multifamily Housing
Digested From "Kislak to Invest $200M in Multifamily Properties"
GlobeSt.com (07/28/10) by Hortense Leon
Miami-based J.I. Kislak Inc. is looking to expand its commercial real estate portfolio by acquiring multifamily housing throughout the nation's Sunbelt, primarily in Arizona, Florida, and Texas. The national investment company expects to deploy more than $200 million for this effort, including leverage and the support of partners as well as Kislak's own capital. Although Kislak currently has no properties under contract, Lam observes, "We are seeing lots of deals because the bid-ask spread between buyers and sellers [of multifamily properties] is narrowing." Kislak is particularly interested in buying new assets with 150 units or more.
Colorado Springs Apartment Vacancies Plunged to 9-Year Low During Q2 2010
Digested From "Local Apartment Vacancies Plunged to 9-Year Low During the 2nd Quarter"
The Gazette (07/27/10) by Rich Laden
Colorado Springs-area apartment vacancies fell to their lowest rate since the third quarter of 2001 during this year's April-through-June period, registering at 5.8 percent. Troop increases at Ft. Carson and a shortage of new construction were cited as reasoning behind the falling numbers. Still, apartment rents increased only slightly, with the average monthly rent rising in the second quarter to $719.22 from $717.65 during the same period one year ago. Ryan McMaken, a Division of Housing spokesman, said a lack of job growth will keep some downward pressure on rents.
Legislative/Legal News
More New Jersey Apartment Owners Addressing Mold
Digested From "More Landlords Addressing Mold"
NorthJersey.com (08/01/10) by Donna Rolando
In an effort to ward off health concerns and the lawsuits that might ensue, many apartment communities in New Jersey and elsewehere are not only responding quickly to mold reports -- they are seeking them out. Mike Beirne, executive vice president of Englewood Cliffs-based Kamson Corp., manages apartments throughout North Jersey. Of the many types of mold, he notes, "many are not dangerous to anyone. On the other hand, there are people sensitive to different kinds of mold. There are some cases where mold can be a serious issue, and for that reason, many in the apartment industry have established policies on how to deal with mold." A policy of fast action can only spare an apartment owner both the cost of litigation and exorbitant clean-up costs. John McDermott, general counsel for the National Apartment Association (NAA), comments, "It's best to have a happy tenant who pays the rent." He adds that a resident blaming an owner for sickness is not likely to be happy or timely with his/her rent payments. Though the NAA has argued in court that scientific evidence does not support a link between mold and sickness, the association provides members with a lease addressing mold. In addition, the NAA strives to educate both residents and maintenance workers on how to avoid mold.
Calif. City Council Places Resident Protection Measure on Nov. Ballot
Digested From "Santa Monica City Council Votes to Place Tenant Protection Measure on November Ballot"
The Argonaut (07/30/10) by Vince Echavaria
In California, the Santa Monica City Council voted unanimously late last week to include a provision on the November ballot that would require apartment managers to establish good cause to evict any resident and requiring warning notices giving residents reasonable time to correct rental agreement violations other than non-payment of rent. The measure would also prohibit eviction of elderly, disabled, or terminally ill residents for owner occupancy unless the owner is also elderly or disabled. According to City Councilman Richard Bloom, the provision reflects what responsible apartment owners and managers are doing already. There is a need to expand the measure to non-rent controlled residents because of the disparity between rent controlled and market rate units that creates a potential incentive for owners to evict long-term residents. Wes Wellman, president of the Action Apartment Association, laments that the ballot initiative is "more about political machine protection than tenant protection."
Columbus Orders 12 Apartment Communities to Find Trash Pickup Service
Digested From "Columbus Orders 12 Apartment Complexes to Find Commercial Service for Garbage Pickup"
Ledger-Enquirer (GA) (07/29/10) by Ben Wright
Beginning on Oct. 1, the owners and managers of a dozen apartment complexes in Columbus will be required to find a commercial service to dispose of their garbage. Residents will owe a $14 monthly garbage collection fee. Apartment communities were previously paying as though they had trash cans instead of one dumpster, according to Ron Smith, deputy director of Public Services. Managers and owners have already begun preparing to switch over. Some look forward to the change in service, though they are a bit concerned about where the fee will go. Cutting services to apartments will free up resources for the city to concentrate more on residential garbage collection, which cost about $9.9 million this fiscal year.
Owner of Sacramento Apartments Given Public Nuisance Charge
Digested From "Owner of Apartment Complexes Given Public Nuisance Charge"
Sacramento Bee (CA) (07/26/10) by Cathy Locke
The owner of several crime-plagued apartment communities has been charged by the Sacramento County District Attorney's Office with allowing a public nuisance to exist on her property, which is unlawful under the California Penal Code. A misdemeanor charge was filed and property owner Emily Chen could face a maximum penalty of six months in jail and a $1,000 fine. Law enforcement officials have concluded that the apartments have inadequate security, adding that violence perpetrated by residents and their visitors has resulted in a disproportionately high number of calls to the Sheriff's Department. The apartments also lacked an on-site manager, which is required by the California Code of Regulation.
Abstract News © Copyright 2010 INFORMATION, INC.
|
|