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Demand for Apartments Rises All Over, Despite Economy
Industry News
FHA Sinks More than $10 Billion Into Multifamily Housing
Charleston Apartments Thrive Despite Decreased Enrollment
Apartment Supply Remains Tight in Portland
Milwaukee Area Apartment Construction Booming
Minneapolis Sees an Apartment Building Spurt
UDR Completes $138M 21 Chelsea Acquisition
FHA Multifamily Origination Breaks Record
SilverLeaf Buys Non-Performing Loans on Georgia Apartments
The Etiquette of Eating at Your Desk 
Legislative/Legal News
N.J. Adopts Sub-Metering for New Apartment Construction
CBO Ramps Up Estimated Cost of Fannie Mae, Freddie Mac
Baldwin (Pa.) Apartment Owners Asked to Supply Keys
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Demand for Apartments Rises All Over, Despite Economy
Digested From "Demand for Apartments Rises All Over, Despite Economy"
Investors Business Daily (08/25/11) by Joe Gose
Demand for rental apartments continues to rise in many areas of the country despite the ongoing economic unease. While job creation is typically the driving factor in apartment demand, this time a lack of new supply is fueling much of the activity. After New York City, which has a vacancy rate of 2.8 percent, the tightest areas include Minneapolis, San Jose, Calif., and Portland, Ore. All have vacancy rates under 4 percent. Hessam Nadji, managing director at Marcus & Millichap Real Estate Investment Services, remarks, "The demand for apartments is at levels that we haven't seen since economic boom years like those in 1999 and 2000." Additionally, Nadji says that about 3 million young adults between the ages of 24 and 34 moved home with their families or roommates in the past five years and are now ready to be back in their own places again as employment prospects improve. Stricter mortgage qualification requirements and a double-dip in home values has some house hunters reconsidering. This, in turn, is also fueling the increase in renting.
Industry News
FHA Sinks More than $10 Billion Into Multifamily Housing
Digested From "FHA Sinks More than $10 Billion Into Multifamily Housing"
Bryan Ellis Real Estate Letter (08/24/2011)
Since October of last year, the Federal Housing Administration has put $10.5 billion into multifamily rental housing loans. This marks only the second time in the agency's history that it has funded more than $10 billion in such loans. A newly released National Mortgage Professional report confirms: "Never in the history of the Federal Housing Administration has there been such demand for FHA-insured financing to build, rehabilitate, or refinance multifamily apartment communities." Acting FHA Commissioner Carol Galante adds that the spike in lending shows that "FHA has never been more relevant." To this end, she and her staff have pledged to accelerate the loan application process to insure that the agency continues to meet lending demands. Meanwhile demand for apartments is fueling some robust construction activity, with multifamily housing starts increasing 7.8 percent during July.
Charleston Apartments Thrive Despite Decreased Enrollment
Digested From "Charleston Apartments Thrive Despite Decreased Enrollment"
Daily Eastern News (08/25/11)
Apartment communities are thriving in Charleston, Ill. Although fall enrollment at Eastern Illinois University has declined, local apartment owners and managers do not appear to be feeling the impact in the number of students. Logan Graves, senior leasing consultant for Campus Pointe Apartments, said the upcoming semester has been the community's most profitable year to date. She adds, "This year has been record-breaking in terms of number of tenants and space available. It's been the best year for the property since our company has owned it." In fact, Campus Pointe only has a few three-bedroom units left. Youngstown Apartments is another local multifamily housing community with just a few vacancies open for prospective residents, along with Lincolnwood Apartments. Jennifer Carver, property manager of Youngstown Apartments, said residents started signing leases for her community's 88 apartments earlier this year. She remarks, "We usually start renting right before and after Christmas." Carver believes the reason apartments have thrived is because they cater to a variety of peoples' needs. She concludes, "We have a combination of family and student rentals. We also usually have a lot of graduate kids, even couples, working people. They're not all students."
Apartment Supply Remains Tight in Portland
Digested From "Apartments Hard to Come by in Portland, and Little Relief on the Way"
OregonLive.com (08/25/11) by Elliot Njus
Portland, Ore., is already known for its tight rental housing market, and now apartment residents are snapping up the remaining units at rates not seen since 2007. The collapse of the for-sale housing market has left some former homeowners looking for cheaper places to live. Those with less-than-perfect credit are turning to apartments. According to the Metro Multifamily Housing Association's Apartment Report, the Portland metro area's apaartment vacancy rate has dropped from 5.6 percent in 2009 to 3.8 percent currently. This is good news for property owners and managers, who have been hoping to raise rents to meet increasing costs. The Capital Property Management Services said it typically takes just five days to rent out an apartment in and around Portland. With the increased demand, fewer owners and managers are offering lease incentives. Additionally, more are billing utilities to residents.
Milwaukee Area Apartment Construction Booming
Digested From "Metro Area Apartment Construction Booming"
WUWM (WI) (08/26/11) by Bob Bach
The Milwaukee metro area's apartment sector remains hot. Large apartment communities are taking shape throughout the region, with more than 1,000 rental units having already opened or in the planning and development stages. Projects range from the 30-story Moderne in downtown Milwaukee to a low rise, mixed-used community in Shorewood. Mike Fabishak of the Associated General Contractors calls the market for local apartment housing over the last five years "remarkable." He adds, "Some of the construction, however, was built as condominiums. And, because of the mortgage crisis we had a few years ago, the capacity for people to want to buy them changed. As a result, many of those condominiums are now apartments." The Mandel Group is among the developers that have sought to capitalize on the rental apartment trend. Company spokesman Dick Lincoln says his firm is going "full blast" with new apartment construction.
Minneapolis Sees an Apartment Building Spurt
Digested From "A Building Spurt in Minneapolis"
Star Tribune (Minn.) (08/25/11) by Jim Buchta
While home construction continues to struggle in most parts of the country, Minneapolis is showing signs of strength. According to the city's Community Planning and Economic Development Department, Minneapolis expects to issue permits for the construction of more than 1,500 new housing units, most of which will be rental apartments. The boom is being propelled by two emerging trends: one, a return to city living; and, two, a growing preference for rental housing over homeownership. Marquette Advisors said that with the average apartment vacancy rate in the city hovering at around 2 percent during the April-through-June quarter, developers are focusing on new apartment construction. Tom Streitz, the city's director of housing, notes that the new apartment construction is happening despite the fact that the city has less money to subsidize development.
UDR Completes $138M 21 Chelsea Acquisition
Digested From "UDR Completes $138M 21 Chelsea Acquisition"
GlobeSt.com (08/26/11) by Jacqueline Hlavenka
Late last week, UDR Inc. continued its recent acquisition spree with the purchase of the 14-story, 210-unit 21 Chelsea luxury apartment building from 21 Chelsea LLC. The total purchase price was $138 million. This marks the latest deal to close in the apartment REIT's current credit facility, which also includes the 185-unit View 14 in Washington, D.C. According to UDR President and CEO Tom Toomey, the latest acquisitions are all part of the company's new Northeast strategy. He states, "It continues our portfolio transformation of owning apartment homes in markets characterized by above average job growth, low home affordability, and limited new supply -- three of the key drivers to strong rental growth." The company plans to redevelop all of its new acquisitions, adding a variety of interior and exterior upgrades and amenities.
FHA Multifamily Origination Breaks Record
Digested From "FHA Multifamily Origination Breaks Record"
Housing Wire (08/22/11) by Jon Prior
The Federal Housing Administration (FHA) has endorsed a record $10.5 billion in multifamily rental housing loans with still another month and a half to go before its fiscal 2011 ends in October. Loan activity has surpassed $10 billion for only the second time; so far the FHA has endorsed nearly 1,100 multifamily loans, which is seven times the amount three years ago. For the entire industry, commercial and multifamily originations have doubled in the second quarter from a year ago, according to the Mortgage Bankers Association.
SilverLeaf Buys Non-Performing Loans on Georgia Apartments
Digested From "SilverLeaf Buys $16M of Non Performing Loans on GA Apartment Complexes"
Citybizlist Atlanta (08/24/11)
SilverLeaf Financial has purchased a half-dozen non-performing notes secured by various apartment communities in Georgia, containing 751 total rental units. According to SilverLeaf, the aggregate unpaid balance of the notes total $16,611,579. SilverLeaf is a private equity firm specializing in buying distressed debt. This latest acquisition brings the Utah-based company's acquisition total to $647 Million of face value non-performing notes.
The Etiquette of Eating at Your Desk
Digested From "The Etiquette of Eating at Your Desk"
MarketWatch (08/23/11) by Sue Shellenbarger
More employees are eating at their desks these days, looking to increase their productivity. In these tough economic times, many feel that appearing busy to a boss by not leaving one's workstation even for a brief lunch break is a plus. Bringing food from home also cuts down on expenses in these tough economic times. On the downside, those who do so can be quite annoying munching food that sometimes has a pungent odor. Among the most bothersome foods in terms of smell are fish, microwave popcorn, and microwave burritos. Office etiquette experts recommend that those offended or inconvenienced settle the dispute one on one before involving a boss or manager. One course of action would be to ask the office mate to bring food that isn't so pungent. Bosses, meanwhile, can make a difference by advising staffers to clean up after themselves, especially microwave splatters that can cause food smells to linger long after. Finally, employees should be encouraged to at least leave their desks for a little while each day if only to clear their heads and get some fresh air or a temporary change of scenery. Doing so will actually improve productivity in most cases.
Legislative/Legal News
N.J. Adopts Sub-Metering for New Apartment Construction
Digested From "NJ Adopts Sub-Metering for New Multifamily Construction"
GlobeSt.com (08/25/11) by Debra Hazel
The New Jersey Board of Public Utilities this past week approved a petition submitted by the New Jersey Apartment Association (NJAA) for the approval of water sub-metering in newly constructed apartment communities, making the Garden State the last in the country to do so. This will enable rents to pay only for their own usage of utilities instead of contributing to a share of general consumption. The petition's success is the result of a decade of effort by the NJAA covering a half-dozen gubernatorial administrations. Conor Fennessy, vice president of government affairs for the NJAA, states, "This is what we call conservation through education." Apartment owners and managers in New Jersey have long sought to implement new technologies that promote water conservation. NJAA officials presented findings from a 2004 Environmental Protection Agency study that saw 15 percent or greater reductions in expenses in sub-metered apartment communities. A Dartmouth College survey conducted that same year registered savings of as much as 32 percent.
CBO Ramps Up Estimated Cost of Fannie Mae, Freddie Mac
Digested From "CBO Ramps Up Estimated Cost of Fannie Mae, Freddie Mac"
Housing Wire (08/24/11) by Jon Prior
A newly released Congressional Budget Office report forecasts that Fannie Mae and Freddie Mac will cost taxpayers $51 billion between 2012 and 2021, a $9 billion jump from the CBO's previous projection in June. Since placing the federally chartered firms in conservatorship three years ago, the Treasury has sent $103.8 billion in subsidies to Fannie Mae and another $66.2 billion to Freddie Mac. However, analysts expect these yearly payments to shrink.
Baldwin (Pa.) Apartment Owners Asked to Supply Keys
Digested From "Apartment Complexes in Baldwin Asked to Supply Keys"
Fire Engineering (08/25/11)
Baldwin, Pa., officials recently asked the owners of at least 14 apartment communities to voluntarily place holders for keys on the exterior of their buildings so rescue personnel can gain quick access in the event of a fire or other emergency event. If the owners agree, all four city fire department chiefs and the officers in charge of each shift on the local police force would be given a master key to the boxes to use in an emergency. Officials said that focusing on the apartment communities with the largest number of residents was the most important. Some are concerned that the boxes could be tampered with, but Borough Manager John Barrett assures that the boxes will be secure. Councilman Ed Moeller remarks, "My concern is safety and going to find people in the structures."
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