Headlines
Top Story
Archstone Looks Likely to Go Public Again
Industry News
Fewer in US Deem Homeownership a Safe Investment
Gainesville Named Worst Student Housing Market
Investors Swoop In on Charlotte Apartments
Vacancy Rate Sinks to 5.5 Percent in Des Moines Area
Santa Clarita Apartment Rentals Held Steady in Q4
Demand for Apartments Outpaces Condos in Boston
Apartments Still Top-Performing Sector, Reports Moody's
Arlington Properties Names Jim Dixon President
Praxis Capital Eyes Opportunities in Calif. Apartment Market
Developers Look to Fill Apartment Need in Hartford
Apartment Boom Amid Housing Bust in Twin Cities
Slow Housing Market Has Mixed Results for Ohio Apartments
Northern Virginia Plan to Include Multifamily Housing
Top Story
Time Warner Cable Community Solutions has proven success partnering with MDU owners, providing quality voice/video/data products to their residents.
Archstone Looks Likely to Go Public Again
Digested From "Archstone Looks Likely to Go Public Again"
Wall Street Journal (02/23/11) by Robbie Whelan
The sharp increase in the value of apartment communities is raising the likelihood that Archstone will be resold to the public later this year in what could be the largest real-estate initial public offering ever. Moreover, the market resurgence is paring the loss in value experienced by Archstone, which was taken private in a buyout at the top of the market that valued the company at $22 billion. This is good news for the company's owners, Lehman Brothers Holdings Inc., Bank of America Corp. and Barclays PLC. Green Street Advisors analyst Craig Leupold says that Archstone could raise between $4 billion and $5 billion by selling its shares. That would put a value on the company of about $18 billion, including debt. Archstone has sold just over $2 billion in assets since the buyout, reports Real Capital Analytics. Archstone currently owns about 200 apartment communities across the U.S. and 230 apartment communities in Europe.
Industry News
Yardi Utility Billing™ improves cash flow. Click here to learn more.
Fewer in US Deem Homeownership a Safe Investment
Digested From "Fewer in US Deem Homeownership a Safe Investment"
CNBC.com (02/28/11) by Hugh Son
Fannie Mae has released a survey finding that fewer than two in three Americans now think owning their own home is a safe investment, down sharply from more than four out of five who thought it was a good investment less than a decade ago. That attitude shift is likely to cause rents to rise as more Americans opt for renting over buying. Fannie Mae's National Housing Quarterly Survey found just 64 percent of Americans think owning their own home is a safe investment, down from 70 percent at the beginning of last year and sharply lower than the 83 percent who thought it was a safe investment in 2003. An overhang of foreclosed properties is weighing down the property market even as the broader economy appears to have entered a sustainable growth path. "The public is aware that the demand side increase is going to be in the rental market, not the housing (purchase) market," says Doug Duncan, chief economist at Fannie Mae.
Gainesville Named Worst Student Housing Market
Digested From "Developers Call Gainesville Worst Student Housing Market"
Gainesville Sun (FL) (02/23/11) by Anthony Clark
Gainesville has once again been named the worst student housing market in the nation by a panel of five student housing developers, which was part of the opening session of the National Apartment Association's recent Student Housing Conference in Las Vegas. This marked the third year in a row panelists named Gainesville the worst market after numerous new apartment communities opened just as the University of Florida began cutting back on undergraduate enrollment. The occupancy rate for all Gainesville apartments, not just student housing, was 90.9 percent last month. That's up 2.3 percent from a year earlier, notes a survey of owners by ALN Apartment Data. Effective rental rates factoring in concessions fell 0.9 percent. Meanwhile, the average concessions and the number of complexes offering concessions were down as more owners adjusted rental rates instead of offering concessions. Of the five developers on the panel, only Campus Advantage has a presence in Gainesville. After Gainesville, the panel singled out as bad markets for student housing Tallahassee; Austin, Texas; Auburn, Ala.; Statesboro, Ga.; and Orlando.
Investors Swoop In on Charlotte Apartments
Digested From "Investors Swoop in on Apartment Buildings"
Charlotte Observer (NC) (02/26/11) by Kerry Hall Singe
Rising occupancy rates are making Charlotte-area apartment communities more attractive to investors. As a result, apartment residents -- especially those in the more upscale communities -- can expect to pay higher monthly rents. Investment sales of Charlotte-area apartments had such a strong recovery in 2011 that some analysts are wondering whether a pricing boom could be on the not-too-distant horizon. Industry observers further predict the area could face an apartment shortage in the coming years, a reversal from less than two years earlier when apartment managers were offering a wealth of freebies to woo potential residents. Sales volume of Charlotte-area apartment buildings more than tripled in 2010 compared with the year before, reports Real Capital Analytics. Andrea Howard, senior vice president with Grubb Properties, comments, "Institutional investors are leading the herd. They came out wanting safety, security. They want Class A, and they are willing to pay for it because they are buying at the bottom." She adds that apartments are proving to be popular among investors partly because they are fairly cheap to finance. Fannie Mae and Freddie Mac have stepped up their lending to the industry and are buying loans originated by others.
Vacancy Rate Sinks to 5.5 Percent in Des Moines Area
Digested From "Apartment Vacancy Rate Sinks to 5.5 Percent in Des Moines Area"
Des Moines Register (IA) (02/25/11) by David Elbert
Hubbell Realty Co.'s latest apartment survey of the Des Moines, Iowa, metro area shows the local market has gotten significantly tighter in the last year. As of Dec. 31, the average vacancy rate for the market was only 5.5 percent -- the lowest since 2002 -- versus 8 percent a year earlier. Hubbell's Rick Krause reports that rents for efficiency apartments in the western suburbs rose an average of nearly 20 percent. Average rent hikes, meanwhile, ranged from 4.9 percent for a two-bedroom apartment to 7.5 percent for an efficiency. Krause added that a total of 963 rental apartments were built in the Des Moines metro area during 2010. Of that tally, 572 were built using tax credits. So far this year, permits for 485 apartments have been approved, including 121 that use tax credits.
Santa Clarita Apartment Rentals Held Steady in Q4
Digested From "Apartment Rentals Held Steady in 4Q"
Santa Clarita Valley Signal (02/24/11) by Jana Adkins
In California, the city of Santa Clarita's economic report listed average apartment rents as slightly lower in the third quarter 2010 compared to the prior year. The city's October-through-December data has yet to be released. Most rental sources show average local rents for a two-bedroom apartment in the $1,400- to $1,500-per-month range. According to RentJungle.com, one-bedroom units in Santa Clarita go for an average of $1,053 per month. Two-bedroom apartment rents, meanwhile, average $1,483. RentJungle.com calculates figures by analyzing over 1 million apartment ads per month. There were some encouraging signs in the overall national rental market this past year, according to RentJungle.com founder Jon Pastor. He states, "Rents were up significantly in the first three quarters of 2010 in most markets. The fourth quarter saw a slight flattening of that trend, but nothing that would be considered a reversal." Meanwhile, the Los Angeles Economic Development Corporation states that demand for rental apartments was affected by the affordability of homes for sale and super low mortgage rates in the last year.
Demand for Apartments Outpaces Condos in Boston
Digested From "As Boston's Economy Grows, Demand for Rental Units Outpaces Condo Market"
New York Times (02/23/11) by Susan Diesenhouse
Investments in rental apartments have been one of the few hot spots in the Boston metro area, where a high-tech economy is witnessing solid job growth. In the past few weeks, city officials have allowed developers of three buildings with nearly 1,000 units to decrease or eliminate for-sale condominiums in favor of additional rental apartments. Overall, the Boston Redevelopment Authority expects construction to commence this year on a total of 1,855 apartments, nearly all rentals, versus just 600 starts last year. This month, for instance, Millennium's $200 million Hayward Place project in Boston's theater district sought city approval to convert from 200 condominiums to 265 mostly rental units. With rents up to $4 square foot and construction costs down to $500 a square foot, high-quality apartments that rent for as much as $5,000 a month are proving to be better business plays. For 2011, Boston is ranked No. 3 as a strong multifamily rental market by the National Apartment Index released by Institutional Property Advisors. That is up from No. 8 a year earlier. Only New York and Washington, D.C., rank ahead of Boston. In the city's favor is the fact that job growth is indeed outpacing such other metro areas as San Francisco with similar demographics. Approximately 49,000 new positions are expected to be created this year in Boston, an increase from 37,500 in 2010. Especially strong sectors will range from business consulting and technology to life sciences and health care. If current trending data holds, the apartment vacancy rate will fall to 4.5 percent, according to the index.
Apartments Still Top-Performing Sector, Reports Moody's
Digested From "Moody's: Commercial Real Estate Prices Dip 0.9 Percent in December"
Wall Street Journal (02/22/11) by Matt Jarzemsky
According to Moody's Investors Service and Real Estate Analytics LLC, U.S. commercial real-estate prices dipped 0.9 percent in December from a month earlier. The decline comes as the sector continues to struggle with slack demand for office space, shopping centers, and apartment communities. That has put pressure on buildings' values, often making it difficult for investors to service debt taken on to finance acquisitions. Moody's Managing Director Nick Levidy comments, "A robust, broad-based recovery in commercial real-estate prices has remained elusive, although some major markets, particularly capital-attracting gateway cities, continue to show signs of strength." At the same time, all four commercial property types saw prices increase in the fourth quarter. Retail properties had the biggest gain (8.4 percent), while apartment prices registered the smallest increase (3.6 percent). Apartments, though, remained the best-performing asset type over the entire year.
Arlington Properties Names Jim Dixon President
Digested From "Arlington Properties Names Jim Dixon President"
Birmingham News (AL) (02/22/11)
Arlington Properties last week promoted James M. Dixon, who had been the real estate firm's executive vice president of development, to president. Arlington Properties currently manages 10,800 rental apartments in 11 states. In addition, it has five apartment communities with more than 950 units in various stages of development. According to Vice Chairman Kent Graeve, Dixon's promotion "has been a key part of our long range plan for transitioning Arlington Properties to the next generation."
Praxis Capital Eyes Opportunities in Calif. Apartment Market
Digested From "Santa Rosa Investment Firm Eyes Opportunities in Rental Market"
Santa Rosa Press Democrat (CA) (02/27/11) by Robert Digitale
Chris Peterson and Brian Burke, managing directors of the Santa Rosa investment firm Praxis Capital, say they plan to continue buying up foreclosed homes throughout Sonoma County, Calif., as has been their specialty for two years now. Now, though, they are embarking on a new strategy: becoming apartment owners in both the Central Valley and Texas. Their plan is to buy, hold, and rent out an undisclosed number of apartment communities in the months to come. Peterson states, "We think the big opportunity in the next 10 years is going to be in rental property." In addition, Praxis is seeking to buy as many as a half-dozen apartment communities in and near Austin, Texas. According to Peterson and Burke, the company recently purchased a 54-unit apartment development in Texas that recently went through foreclosure.
Developers Look to Fill Apartment Need in Hartford
Digested From "More Apartments Downtown?"
Hartford Business Journal (02/28/11)
New York developer Martin Kenny is wagering $500,000 that there is enough demand in downtown Hartford to support 180 new high-end apartments he is planning to build. The new units will be going in the long-time vacant Clarion Hotel. City officials and some developers say the additional rental units will be welcomed, citing a long-term need for as many as 1,000 more units downtown. Among them is David Panagore, the city's chief operating officer, who says he sees a long-term need for as many as 2,500 more units in that part of the city. Smaller units such as studios and one-bedroom apartments could prove to be in especially high demand. Other local observers remain skeptical, stating that job growth in Hartford's central business district needs to rebound considerably prior to any further expansion. Brian Lemire, a senior property manager for Winn Residential in Hartford and president-elect of the Connecticut Apartment Association, remarks, "Where are the jobs being created that are going to support more units for downtown Hartford? If you don't have the jobs downtown, who are the people that are going to live downtown?"
Apartment Boom Amid Housing Bust in Twin Cities
Digested From "Apartment Boom Amid Housing Bust"
St. Paul Pioneer Press (MN) (02/26/11) by Gita Sitaramiah
The stars appear to be aligning for an apartment development boom in Minnesota's Twin Cities, according to Cassidy Turley's fourth-quarter market report. At the same time, the outlook for local apartment owners is improving after vacancies skyrocketed during the recession. Marquette Advisors in Minneapolis notes that the Twin Cities metro-area apartment vacancy rate was 3.8 percent as of Dec. 31, a fairly substantial decrease from 7.3 percent a year earlier. Cassidy Turley, which tracks local apartment trends, reports that 5,032 units are currently proposed to be added throughout the metro area. The greatest activity is expected in the two downtowns of Minneapolis and St. Paul and also in the University area and along the Hiawatha light-rail line. Many of those who likely would have purchased a condominium during the boom look to now be turning to rental apartment living. Despite an overall decrease in homebuilding permits in the Twin Cities, multifamily housing increased as a percentage of permitted units during the condo boom and have yet to drop significantly since the housing downturn.
Slow Housing Market Has Mixed Results for Ohio Apartments
Digested From "Slow Housing Market Has Some Apartment Complexes Seeing Higher Occupancy Rates"
News-Herald (OH) (02/25/11) by Tracy Read
In Northern Ohio, the poor housing market has definitely boosted occupancy rates in several area apartment communities. Kathy Fenlason, manager of Madison Place Apartments in Madison Township, states, "I actually have a waiting list of about 15 people for 73 units." Other apartment owners and managers in the region say the rental market is not going nearly as well as some might think. Ron Robertson, who manages four local apartment assets, laments, "There's a lot of moving in and moving out. . . . People are having difficulties even paying rent." Robertson's current vacancy rate is around 16 percent, higher than normal. He concludes, "I get lots and lots of inquiries, but people don't have the money to make the move. If they do, they have to do it with assistance. It's not a good time to be a building owner."
Northern Virginia Plan to Include Multifamily Housing
Digested From "Tysons' Plan Includes 11 New Office Buildings, Housing"
WTOP News (02/22/11) by Hank Silverberg
With the rail extension to Northern Virginia's Dulles Airport through the bustling Washington, D.C., suburb of Tysons Corner, Va., now well underway, so too is the transition from shopping mecca to urban center. Cityline Partners, owner of 40 acres in Tysons Corner, recently took the wraps off an $8.5 million, mixed-use development that would boast 11 new office buildings and more than 2,800 new multifamily housing units. The firm's plan also calls for additional retail space and at least one hotel. The parcel is situated close to a couple of Metro subway stations that are now under construction and scheduled to open in 2013. Cityline Vice President Donna Schafer remarks, "Right now, the hottest opportunities are in multifamily housing so we see that happening first." According to Schafer, the rest could take decades to complete.
Abstract News © Copyright 2011 INFORMATION, INC.
|