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Apartment Vacancy Rates Improve for First Time in Three Years
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Reis: Apartment Vacancy Rates Improve for First Time in Three Years
Industry News
Bernanke Urges Small-Business Lending
FICO Reports 25 Percent of Americans' Credit Scores Fall Under 599
Apartment Safety Is Key to Peace of Mind in New Jersey and Elsewhere
Fitch Reports Commercial Loan Delinquencies Rose in June, Affecting Apartments
BRE Properties Announces Resignation of Chief Operating Officer
Apartment Owner Stocks Mostly Up Late Last Week
Industry Veterans Launch Phoenix-Based Apartment Management Firm
Wisconsin Realty Firm Announces Home Leasing and Apartment Rental Division
Crosland Rates High in Recent Resident Satisfaction Survey
Legislative/Legal News
Plans for Luxury Apartments Spark Height Debate in Downtown Scottsdale
Orlando Apartment Residents Can't Back-In Park 
Pennsylvania Town Wavers on Trash Fee for Apartment Communities
Recycling Remains Inconvenient for Many El Paso Apartment Communities
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Reis: Apartment Vacancy Rates Improve for First Time in Three Years
Digested From "Apartment Vacancies Fell in Quarter"
Wall Street Journal (07/08/10) by Nick Timiraos
Reis Inc. reports that the nation's apartment vacancies fell slightly from 8 percent during the firs three months of the year to 7.8 percent as of June 30, the first quarter-to-quarter decline in three years. According to researchers, improving consumer confidence reversed the trend of renters doubling up with roommates or moving in with family during the recession. In turn, the improvement has enabled owners and managers to modestly hike rents. Indeed, Reis reports, apartment rents gained by 0.7 percent from April through June -- the biggest quarterly gain in two years. Leading the way were such markets as Boston; Long Island, N.Y.; San Jose, Calif.; and Seattle. In those cities, apartment owners reduced rents in 2009 as job losses prompted more residents to downsize. Not surprisingly, the District of Columbia recorded the biggest 12-month rent gain of 3.1 percent. New York City, meanwhile, saw rents climb 1.4 percent during the quarter. Apartment rents fell in only 10 of the 82 markets tracked by Reis, with the largest declines coming in Orlando and Baltimore. Those markets with a considerable oversupply of vacant and foreclosed entry-level homes will likely remain weak for some time. Phoenix and Las Vegas, for instance, reported the largest year-over-year rent declines of 2.3 percent and 2.9 percent, respectively.
Industry News
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Bernanke Urges Small-Business Lending
Digested From "Bernanke Urges Small-Business Lending"
Wall Street Journal (07/12/10) by Tom Barkley
On Monday, Federal Reserve Chairman Ben Bernanke urged banks and regulators to pursue new ways to ensure that small businesses get the credit they need to create jobs. In prepared remarks to the central bank's forum on restoring credit to small businesses, he stated, "Making credit accessible to sound small businesses is crucial to our economic recovery and so should be front and center among our current policy challenges." He further declared small businesses to be "central" to tackling unemployment, adding that not enough is being done to ensure that financially sound companies can obtain loans. Last month, the U.S. jobless rate edged down to 9.5 percent from 9.7 percent in May. However, the economy shed jobs for the first time this year, with nonfarm payrolls falling 125,000 in June. Bernanke concluded, "The formation and growth of small businesses depends critically on access to credit. Unfortunately, those businesses report that credit conditions remain very difficult."
FICO Reports 25 Percent of Americans' Credit Scores Fall Under 599
Digested From "25 Percent of Americans' Credit Scores Make Them Poor Lending Risks"
Dallas Morning News (TX) (07/12/10)
New data provided by FICO Inc. show that 25.5 percent of consumers -- more than 43 million people -- now have a credit score of 599 or below, marking them as poor risks for lenders. Under the tighter lending standards banks now use, it is unlikely these people will be able to get credit cards, automobile loans, or mortgages. The firm's latest analysis is based on consumer credit reports as of April. FICO confirms that there has been an increase of about 2.4 million people in the lowest credit score categories over the last couple of years. Historically, Myfico.com notes that only 15 percent of the 170 million consumers with active credit accounts -- or 25.5 million people -- fell below the 599 mark.
Apartment Safety Is Key to Peace of Mind in New Jersey and Elsewhere
Digested From "Condo, Apartment Safety Is Key to Peace of Mind"
NorthJersey.com (07/11/10) by Donna Rolando
Apartment communities should always be looking to improve security as a key selling point to future and existing residents. Protections can run the gamut from doormen to alarms to surveillance cameras. A good doorman will not only keeps tabs on who's coming and going, he will keep strangers out. Meanwhile, New Jersey Tenants Organization President Matt Shapiro recommends security guards for high-risk apartment communities. A system of surveillance cameras can also prove effective at deterring crime, as can buzzer systems -- but only if residents refuse to buzz in strangers. Mike Beirne of the New Jersey Apartment Association said that apartment owners generally do not prohibit individual alarm systems. He adds, "I would think that the majority who own and operate apartments try to make them as safe as possible with a myriad of methods." Boston-based SimpliSafe Inc. has even come up with movable alarm systems connected to an emergency dispatch center 24 hours a day via a wireless network. Customer and apartment resident Christina Stelman comments, "It's nice to have a sense of security, God forbid anything happens. It also lowers my rental insurance." In addition, residents can take on simple improvements like changing the locks before they move in and researching the community for any safety concerns.
Fitch Reports Commercial Loan Delinquencies Rose in June, Affecting Apartments
Digested From "Fitch: Commercial Loan Delinquencies Rose in June"
Associated Press (07/09/10)
Fitch Ratings reports that delinquencies among U.S. commercial loans backed by securities climbed 8.14 percent in June -- the smallest increase in 11 months. The ratings agency's commercial mortgage-backed securities index tracks loans on apartment, office, retail, industrial, and hotel properties with mortgage payments at least 60 days overdue. By property type, hotels had the highest delinquency rate in June at 18.6 percent, while apartment communities had a 13.8 percent rate. The delinquency rate for retail properties was 6.2 percent, while the rate for industrial facilities was 5.5 percent and the rate for office buildings was 4.8 percent. Fitch managing director Mary MacNeill warns, "The number of distressed properties continues to grow. If borrowers are unable to access capital for leasing costs or are unable to restructure their loans to a leverage level commensurate with sustainable property values, they may stop subsidizing debt service payments."
BRE Properties Announces Resignation of Chief Operating Officer
Digested From "BRE Properties Announces Resignation of Chief Operating Officer"
Business Wire (07/08/10)
Edward F. Lange, Jr. has resigned as BRE Properties Inc.'s executive vice president and COO, effective July 31. Lange is also resigning from the apartment REIT's board of directors. BRE President and CEO Constance B. Moore remarks, "After 10 years of great contributions, Ed was interested in pursuing new challenges and business opportunities. . . . Ed's leadership and long-term dedication to BRE helped to establish the company as a leader in the apartment industry." Upon Lange's departure, Moore will assume the duties and responsibilities of COO during a transitional period. BRE Properties owns and manages 75 apartment communities in three states -- California, Arizona and Washington. The San Francisco-based REIT's total portfolio contains 21,735 rental units.
Apartment Owner Stocks Mostly Up Late Last Week
Digested From "Sector Snap: Apartment Owner Stocks Mostly Up"
Associated Press Worldstream (07/08/10)
Shares of apartment owners rose for the most part late last week, and a Morgan Keegan analyst Stephen C. Swett expects solid second-quarter results and outlooks due to improved market conditions. The sector received an additional boost from Swett's upgrades on AvalonBay Communities Inc. and UDR Inc. to "Outperform" from "Market Perform," respectively. Swett said AvalonBay's concentrations of Northeast and Mid-Atlantic apartments could fuel growth well into 2011, while its pending developments could increase its portfolio. Keegan expects UDR's team to drive improved growth. Of the owners that Swett assessed, only BRE Properties saw its shares decline.
Industry Veterans Launch Phoenix-Based Apartment Management Firm
Digested From "Industry Veterans Launch Management Firm"
GlobeSt.com (07/07/10) by Jennifer Duell Popovec
In Phoenix, industry veterans Vicki Allison, Pam Shelton, and Tom Shelton recently launched Allison-Shelton Real Estate Services. This third-party leasing and management firm is due to focus on multifamily housing. Allison brought her existing property management clients to the new venture -- 9,500 total units in Arizona, Texas, and New Mexico. Partner Tom Shelton remarks, "While the company is new, it’s anything but a start-up in terms of our people and their longevity and experience in the business." Allison-Shelton Real Estate Services handles both affordable and conventional apartments, along with homeowner's associations, condominium conversions and reversions, and individual condo unit sales and management for absentee investors.
Wisconsin Realty Firm Announces Home Leasing and Apartment Rental Division
Digested From "Keller Williams Realty Elm Grove: Announces Home Leasing and Apartment Rental Division"
Wisbusiness.com (07/06/10)
In Wisconsin, Keller Williams Realty Elm Grove recently added an undisclosed number of agents to facilitate the Home Leasing and Apartment Rental arm of its business. Dedicated to serving the rental and short-term lease market, the firm's members-only Leasing/Rental division offers eligible associates training and a new form of commission splits to Realtors who opt to participate. Former Shorewest Realtors staffer Lisa Huron, for instance, has decided to join her years of apartment building management experience along with her residential real estate sales experience with the Keller Williams model just this past week. She commented, "It is awesome that we have brought the rental and leasing sectors of real estate in Milwaukee into modern times. All other major cities have companies that service this section of the market. We are proud to be the first major company in the Milwaukee market to do so."
Crosland Rates High in Recent Resident Satisfaction Survey
Digested From "A Decade of Doing Things Right Pays Off for Crosland"
dBusinessNews (07/07/10)
For the tenth straight year, Crosland LLC has received national acclaim for its excellence in customer service. The commendation was given by CEL & Associates, which compiled customer satisfaction survey data from approximately 2.5 million residents in some 6,000 apartment communities nationwide to determine which apartment owners and communities are the best in the industry. David Ravin, president of Crosland's residential division, comments, "A decade of being placed among the top of the industry by our own residents is a testament to Crosland's promise to residents by providing excellent customer service and high quality housing." Crosland's multifamily housing portfolio totals nearly 7,000 rental units in 35 apartment communities throughout North Carolina.
Legislative/Legal News
Plans for Luxury Apartments Spark Height Debate in Downtown Scottsdale
Digested From "Plans for Luxury Apartments Spark Downtown Height Debate"
Arizona Republic (07/12/10) by Peter Corbett
Gray Development Group's plan to build up to 1,100 luxury apartments in downtown Scottsdale has resurrected a debate over the height of buildings in that part of the city. The company was scheduled to submit plans late last week for Scottsdale Riverwalk, a two-building apartment community that would contain 1,100 rental units. That would be in addition to nearly 500 condominiums the Scottsdale City Council approved this week for Optima Sonoran Village nearby. Gray COO Brian Kearney insists there is strong demand downtown for luxury apartments, which he adds is quite distinct from the for-sale condo market. However, the project is likely to encounter opposition from citizen groups that have been battling height and density issues in the downtown corridor for at least the past decade. The taller of Gray's two buildings could be anywhere from 50 to 148 feet tall, according to Gray spokesman Jason Rose. He adds, "We want to do a little more listening to the council and the community" before a final decision is made on the project's height. Peter TeKampe, Marcus and Millichap's vice president of investment, observes that Scottsdale boasts one of the Valley region's strongest apartment submarkets with no new supply added in several years.
Orlando Apartment Residents Can't Back-In Park
Digested From "Apartment Residents Can't Back-In Park"
WESH NewsChannel 2 (Central Florida) (07/07/10)
In Daytona Beach, residents who back their vehicles into parking spaces at several local apartment communities could soon be towed. The new rule is part of an ambitious crime prevention initiative. To date, a total of seven Daytona Beach apartment communities have signed on to the program, and seven more will be doing so very soon. It is not an official city ordinance, so local police can only encourage apartment communities to make the change. Law enforcement states that in the event of a crime they can just show up at an apartment community and quickly check tag numbers. Residents who do not comply will be towed. Daytona Beach Police Deputy Chief Steve Beres states, "Normally, people just pull right into a parking spot, but to back in, you might be hiding something, hiding the tag." Some residents argue that if cops want to check a license plate number, they can easily get out of their cruiser and walk around to the back of the car. The program also includes installing better lighting, trimming shrubs, and adding new door and window locks.
Pennsylvania Town Wavers on Trash Fee for Apartment Communities
Digested From "Perkasie Wavers on Trash Fee for Apartment Complexes"
Montgomery News-Herald (PA) (07/08/10) by Erin DuBois
It is now looking like the Perkasie Borough Council in Pennsylvania will budge on its decision to include apartment residents in a $35 annual flat fee for trash removal. The fee went into effect on July 1 in an effort to close the $119,000 deficit in the borough's trash program. A group of residents gathered five days later to voice their opposition. Many local apartment residents have trash removal fees already included in their rent and are opposed to the idea of being charged for a service they would not even use. Bob Galla, Third District Republican Committee member, recently called the fee "an unfair tax for those who can't afford the luxury of owning a residence." Councilman Matt Aigeldinger explained the council's responsibility to balance the budget, but has conceded that residents who do not use the service should be exempt. Council Vice President Rich Hendricks expects a final decision by the end of the month, adding, "It's fair to say this fee is going away."
Recycling Remains Inconvenient for Many El Paso Apartment Communities
Digested From "Recycling Not Convenient for Some Apartment Complexes"
KTSM (07/07/10) by Lindsey Reiser
While most of the trash at El Paso's apartment communities is recyclable, most of the city's apartments do not recycle it. This, in turn, is costing the city both space and money. El Paso Apartment Association President Rick Soto notes that there is one major reason why most communities do not recycle. "Space," he declared. "There's just no space to put additional dumpsters." Another problem is the fact that most disposal companies require apartment owners and managers to separate the materials like tin, paper, and plastic prior to pick-up. Soto states that most apartment maintenance crews don't have the time for such tasks. Katherine Gunter-Palafox, president of Keep El Paso Beautiful, laments that it is a shame most multifamily housing communities lack a recycling program because 75 percent of apartment trash is recyclable and pick-up is generally cheap.
Abstract News © Copyright 2010 INFORMATION, INC.
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