Headlines
Top Story
Craigslist Likely to Charge for Apt Listings Within a Year
Industry News
Aimco Swings To 4Q Loss; FFO Beats Views
Many Nevadans Choosing Apartment Living 
AvalonBay Quarterly FFO Rises 64.7 Percent
Wells Fargo Ranks as No. 1 Multifamily Housing Servicer
Equity Residential 4Q Profit Quadruples, FFO Climbs
MIT Index Shows Gains for Commercial Property Prices
Home Prices Continue to Fall, Stoking Economy Concerns
Occupancy Up, Incentives Down at Apartments
Federal Capital, Grubb Partner in Apartment JV
Nearly 11 Percent of US Houses Empty
Jacksonville Apartment Vacancies Continue to Fall
HUD Reports Record Jump in Households With Worst Needs
Legislative/Legal News
Business Wins Provision as Senate Votes Down Health Repeal
Apartment Groups Welcome Obama 'Better Buildings Initiative'
Central Michigan SGA Urges Recycling for Off-Campus Apartments
Top Story
Time Warner Cable Community Solutions has proven success partnering with MDU owners, providing quality voice/video/data products to their residents.
Craigslist Likely to Charge for Apt Listings Within a Year
Digested From "Craigslist Is Charging: 5 Strategies for Pay-for-Post Success"
Multifamily Executive (02/11) by Chris Wood
According to numerous multifamily housing ad experts, Craigslist will likely move to a pay-per-post model for apartment listings in major U.S. metros within the next year or so. Apartment marketers have been expecting a broad move to a pay-per-post model ever since Craigslist's 2006 decision to begin charging $10 for brokered New York City listings. The move is more likely now, as the San Francisco-based company has seen the pay model help significantly reduce illegitimate listings in high-volume, growth categories such as apartment listings in large urban markets. Steven Pollock, vice president of product management for apartment ILS MyNewPlace.com, remarks, "In general, it seems to be when the volume hits a certain number, Craigslist will move to a pay model. One of the reasons they do that is because the category becomes extremely overcrowded with postings." Meanwhile, Axiom Marketing President Ron Simoncini expects Craigslist to begin charging on a market-to-market basis, with metro areas that have a larger volume of apartment listings -- or those beset with spamming issues -- falling first. He concludes, "Ultimately, I don't think it will take more than three years to have nationwide pay-for-listing status for apartments. I think you’ll see them add the entire top 25 MSAs within the next 18 months."
Industry News
Aimco Swings To 4Q Loss; FFO Beats Views
Digested From "Apartment Investment Swings To 4Q Loss; FFO Beats Views"
Wall Street Journal (02/04/11) by Matt Jarzemsky
Apartment Investment & Management Co. (Aimco) reports that it swung to a fourth-quarter loss absent $60.7 million in income from communities that had been sold. For the new year, though, the multifamily REIT is forecasting funds from operations of $1.46 to $1.56 a share. Analysts polled by Thomson Reuters had been expecting $1.58 a share. Aimco will continue to focus on owning and managing apartment communities in the country's 20 largest markets. Its average daily occupancy rose from 95.3 percent a year earlier to 96.7 percent and 96 percent in the third quarter of 2010. Average rent, meanwhile, fell 0.8 percent from a year earlier but was up 0.1 percent from the July-through-September period. Among commercial property owners, apartment owners have enjoyed the benefit of economic recovery relatively quickly as the leases they offer are generally for shorter terms than those for office buildings, industrial facilities, or retail space. On the downside, they are dealing with a potentially shrinking pool of residents beset by persistently high unemployment.
Many Nevadans Choosing Apartment Living
Digested From "Many Nevadans Choosing Apartment Living"
KTVN Channel 2 News (02/02/11) by Chris Ciarlo
Many Nevada residents are considering living in an apartment as an affordable alternative to owning or renting a house, particularly as the state's residential real estate market struggles to recover. "We're definitely seeing more people moving into our communities," said Roland Montoya, a regional manager of 11 apartment communities in the Reno-Sparks region. Apartment managers say they have something for everyone, which is an enticing offer for people looking to save and find a stable housing situation. Since 2006, the average monthly rent for a one-bedroom apartment in the Reno area has dropped $41. Meanwhile, the average price for a two bedroom has declined $120. Montoya adds that studio apartments, in particular, will become even cheaper this year, because many people cannot afford to live on their own. This, in turn, will drive demand for smaller apartments down. He said two- and three-bedroom apartments are currently a hot commodity, sitting at about 93 percent occupancy.
AvalonBay Quarterly FFO Rises 64.7 Percent
Digested From "AvalonBay Quarterly FFO Rises 64.7 Pct"
Reuters (02/02/11) by Ilaina Jonas
AvalonBay Communities Inc. confirms that its quarterly funds from operations increased 64.7 percent to $86.8 million from $52.7 million in the year-earlier period. The results did meet the average forecast by analysts, notes Thomson Reuters. Company officials expect greater revenue growth and investment activity, especially in new apartment construction, will drive 2011 results higher. AvalonBay sees 2011 FFO in the range of $4.50 to $4.75 per share, an increase from $4.00 per share in 2010.
Wells Fargo Ranks as No. 1 Multifamily Housing Servicer
Digested From "Monday Morning Cup of Coffee: Wells Fargo"
Housing Wire (02/07/11) by Christine Ricciardi
The Mortgage Bankers Association ranks Wells Fargo as the No. 1 commercial real estate and multifamily housing servicer in terms of volume last year, servicing approximately $451.1 billion in loans. PNC Real Estate/Midland Loan Services placed second at $337.4 billion, followed by Berkadia Commercial Mortgage, Bank of America Merrill Lynch and Key Bank Real Estate Capital.
Equity Residential 4Q Profit Quadruples, FFO Climbs
Digested From "Equity Residential 4Q Profit Quadruples, FFO Climbs"
Wall Street Journal (02/02/11) by Nathan Becker; Joan E. Solsman
Equity Residential reports that its fourth-quarter earnings nearly quadrupled from $45.3 million a year earlier to $189.4 million. The nation's largest apartment developer and manager has also seen its funds from operations improve as occupancy has grown on essentially steady average rents. In November, though, Fitch Ratings downgraded the REIT by a notch. Fitch blamed Equity Residential's recent acquisition of some near-vacant apartment communities for weighing on the ratings agency's primary measure of leverage. In the latest period, same-property revenue rose 2.7 percent, while average rental rates climbed 1.9 percent and occupancy rose to 94.6 percent from 93.9 percent. Equity Residential CEO David J. Neithercut said the company's impressive fourth-quarter performance reflected the strengthening apartment fundamentals and pricing and expense controls. The latest three-month period had higher gains from property sales partially offset by a write-down. Excluding the impairment charge, FFO rose from 43 cents to 60 cents.
MIT Index Shows Gains for Commercial Property Prices
Digested From "MIT Index Shows Gains for Commercial Property Prices"
Wall Street Journal (02/02/11) by Matthew Strozier
The Massachusetts Institute of Technology (MIT) released its commercial property price index on Wednesday, and the measure showed some impressive gains for the fourth quarter and last year overall. According to the index created by the MIT Center for Real Estate, prices of commercial properties sold by major institutional investors increased by 11.9 percent during the last three months of 2010 and 19.3 percent percent for 2010 overall. The transactions-based index mainly looks at trophy properties in top-tier cities, typically office buildings, shopping malls, and apartment communities. According to MIT Professor David Geltner, director of research at the Center for Real Estate, such major groups as REITs and private equity firms were active in this market segment last year. He adds, "Barring a major problem with the economy, I think we should see these segments coming together this year."
Home Prices Continue to Fall, Stoking Economy Concerns
Digested From "We're Not Home Yet"
Time (02/03/11) by Rana Foroohar
The latest figures from the Case-Shiller home-price index shows a fifth consecutive month of price decreases, including significant drops in such major markets as Boston, Dallas, and Las Vegas. The trend has some economists concerned that we may be headed for a double dip in the housing market in 2011. This, in turn, could restrain the economic growth the country is finally beginning to see. The Mortgage Bankers Association calculates that there are already 4.5 million homes in some stage of foreclosure. Other researchers say an additional 1.5 million may be added to the total by the end of the year. Of particular worry for some economists is recent data on so-called modified loans showing g that 45 percent of them had been canceled. This means that the borrowers very likely redefaulted, even after the payments had been adjusted.
Occupancy Up, Incentives Down at Apartments
Digested From "Occupancy Up, Incentives Down at Apartments"
Gainesville Sun (FL) (02/01/11) by Anthony Clark
In the Gainesville, Fla., area, apartment rents are down 20 percent to 30 percent compared with a few years ago. As occupancy rates rise, though, some may find apartment communities pulling back on such concessions as free months and debit cards. Older properties or those farther from the University of Florida campus that are less in demand are among the most likely to still be offering incentives. Data from the ALN Apartment Data of Texas for the North Central Florida Apartment Association shows that the rate of units with concessions in the area was at 48 percent, an 18.4 percent decrease from a year earlier. Meanwhile, occupancy rates were at 90 percent in December, up 1.2 percent, and asking rents were averaging $791, down 3.6 percent. ALN researchers add that new apartment construction has slowed considerably from the 2,000 units built locally in 2008 and 2009.
Federal Capital, Grubb Partner in Apartment JV
Digested From "Federal Capital Partners, Grubb Properties Partner"
Washington Business Journal (02/01/2011)
Federal Capital Partners (FCP) has teamed up with Grubb Properties in a $42 million apartment joint venture. The two companies have agreed to buy more than 600 apartments in a couple of North Carolina-based communities. FCP managing partner Alex Marshall remarks, "The FCP/GPI team plans to improve and reposition these properties over the coming months and will continue to look for additional opportunities to make direct investments as well as provide mezzanine debt and preferred equity for recapitalizations and purchases."
Nearly 11 Percent of US Houses Empty
Digested From "Nearly 11 Percent of US Houses Empty"
CNBC News (01/31/11) by Diana Olick
The latest U.S. Census data shows that America's homeownership rate declined in the fourth quarter from 66.9 percent to 66.5 percent -- the lowest level since 1998. Researchers marvel that homeownership is falling at such an alarming pace despite the fact that affordability is much improved and inventories of new and existing homes are still running quite high. The problem is not enough buyers are interested or eligible to take advantage of current market conditions. The vacancy rate is quite alarming, too. Of the nearly 131 million housing units nationwide, 112.5 million are occupied. Approximately 74.8 million are owned, and 38 million are rented -- up by more than 1 million year over year. That means more new households are choosing to rent. Indeed, the number of vacant homes for rent decreased by 493,000 in the fourth quarter as rental demand grew.
Jacksonville Apartment Vacancies Continue to Fall
Digested From "Jacksonville Apartment Vacancies Continue to Fall as Market Improves"
Florida Times-Union (01/31/11) by Kevin Turner
Jacksonville's apartment market is improving as occupancy rates and rents continue to rise. Continuing home foreclosures citywide are at least partly to credit. As such, many apartment communities have adopted a policy of looking the other way when an applicant has a foreclosure on an otherwise good credit report. Such "foreclosure forgiveness" policies acknowledge foreclosure as a reality in today's real estate market and give people who have been turned out of their homes or have been staying with relatives as a result of a foreclosure a chance to have their own place again. Marcus & Millichap Real Estate Investment Services Inc. noted in a 2010 annual report that foreclosures have become a driving force in the Jacksonville apartment market. Improvement is expected to be slow, though. Marcus & Millichap's report reads: "Jacksonville will retain one of the highest vacancy rates in the country during 2011, but operating conditions will improve as demand strengthens and development subsides." Researchers further forecast that "a healthier pace of job creation will become the dominant driver of demand in the months ahead."
HUD Reports Record Jump in Households With Worst Needs
Digested From "Record Jump in Households With Worst Needs: HUD"
MarketWatch (02/01/11) by Amy Hoak
HUD reports that the number of very low-income households with the "worst-case housing needs" increased 20 percent between 2007 and 2009. These households totaled 7.1 million in 2009, an increase from 5.91 million two years prior and the largest two-year jump since HUD began tracking the segment in 1985. Since 2001, the number of worst-case households has increased a whopping 42 percent. Households with the worst case housing needs are defined by a couple of key traits -- those with incomes below 50 percent of the area median income and that pay more than 50 percent their monthly income for rent or live in severely substandard housing. HUD researchers based their findings on data from the U.S Census Bureau's American Housing Survey, which was conducted between May and September 2009.
Legislative/Legal News
Business Wins Provision as Senate Votes Down Health Repeal
Digested From "Senate Votes Down Health-Care Repeal"
Wall Street Journal (02/03/11) by Janet Adamy
The Senate on Wednesday voted 51-47 against repealing the health-care overhaul. In addition, lawmakers voted 81-17 to remove a piece of the law that calls for businesses to file a 1099 tax form when they pay a vendor more than $600 in a year.
Apartment Groups Welcome Obama 'Better Buildings Initiative'
Digested From "Apartment Groups Welcome Obama 'Better Buildings Initiative'"
Bradenton Herald (FL) (02/03/11)
The National Apartment Association (NAA) and the National Multi Housing Council (NMHC) on Thursday released a joint statement concerning the Better Buildings Initiative announced by President Obama this past week. The statement was issued by Eileen Lee, NAA/NMHC's Vice President of Energy and Environment. It read: "We commend the Obama Administration for its focus on energy efficiency in commercial properties, including apartments, and for taking an incentive-based approach to achieving meaningful reductions in our building energy usage. Energy consumption and energy policy are priority issues for the apartment sector." The plan includes a number of items long advocated by both organizations, most notably reforming the existing building efficiency tax incentives. Lee added, "Changing the deduction to a more generous tax credit and creating more incentives for owners to undertake costly retrofits on existing properties are welcome changes. The President's plan would also wisely ensure that real estate investment trusts (REITs) can take advantage of the credit."
Central Michigan SGA Urges Recycling for Off-Campus Apartments
Digested From "SGA Recommends Recycling Service for Off-Campus Apartment Complexes"
Central Michigan Life (02/01/11) by Brad Canze
The Student Government Association (SGA) at Central Michigan University unanimously passed a resolution to urge owners of off-campus apartment communities to provide recycling services to their residents. It will now be sent to the Mount Pleasant city commission, area apartment owners, and university administrators. SGA Vice President Dave Breed, a senior, explained that no off-campus apartment communities in the city of Mount Pleasant or Union Township currently offer recycling service. Prior to voting on the resolution, the SGA collected 3,000 signatures on a petition in support of such services at area apartments. In addition, the organization conducted a poll that revealed environmental sustainability is one of the top five student priorities. In response to a campaign by the SGA, the Isabella County Material Recovery Facility has agreed to a 2 percent grant to measure the cost-effectiveness of recycling service at one area apartment community.
|