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Equity Residential Goes on the Offensive
Industry News
Gus Remppies Appointed President of Grubb & Ellis Apartment REIT
Employers That Are Hiring Leery of Bad Credit History of Job Seekers
More New York City Style Loft Apartments Coming To Downtown Buffalo 
CIM Group Acquires Texas Apartment Communities from Gables
Associated Estates Declares Common Share Dividend
KBS Launches Apartment, Opportunity REITs
Legislative/Legal News
Detailing the Sordid Politics That Got ObamaCare Passed
Out-of-State Apartment Owners Tax Being Enforced in California
'Rent Control' Bill an Effort to Increase Affordable Housing in Colorado
Company Plans Bigger Battle Against Bedbugs in Its Apartments
San Diego Apartment Owners Face Megan's Law Dilemma
21 Parties Hope To Intervene in Sewer District Lawsuit
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Equity Residential Goes on the Offensive
Digested From "Apartment REITs Go On The Offensive"
Forbes.com (03/16/10) by Brad Berton
Multifamily housing interests are beginning to buy and build again after the major economic collapse, and they are doing so rather suddenly. Equity Residential has proven themselves to be at the forefront of this trend. Apartment REIT analyst Andrew McCulloch praises Equity's ability to grow by using its capital resources for large, complex transactions and says that it's time for other large trusts to begin investing similarly in anticipation of a better market. The REIT recently paid $45 million for an apartment community in Del Mar, Calif., that was built in the 1990s and has 181 apartments. Equity plans to invest more to boost value and rent by finishing up partially completed projects, redeveloping older communities, and occasionally launching completely new developments. Equity Residential CEO David Neithercut explained that his company had been "sitting on the sidelines" without making acquisitions and "hoarding cash," but now they are seeing "attractive pricing on good, quality assets in core markets, assets that we could acquire at discounts to replacement costs, and good [returns]."
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Gus Remppies Appointed President of Grubb & Ellis Apartment REIT
Digested From "Gus Remppies Appointed President of Grubb & Ellis Apartment REIT"
Forbes (03/17/10)
Grubb & Ellis Apartment REIT Inc.'s board of directors has appointed Gustav G. "Gus" Remppies president of the company, effective immediately. Stanley J. Olander, who had served as president for the past three years, will continue to serve as chairman and CEO. He states, "Gus Remppies has been a recognized authority in the multifamily real estate sector for decades and I couldn't be more pleased to have him assume the presidency of Grubb & Ellis Apartment REIT. His experience and proven track record are exceptionally valuable to our company and, more importantly, to our investors." Indeed, Remppies has specialized in the multifamily housing sector for over two decades. He previously served as executive vice president and chief investment officer of Grubb & Ellis Apartment REIT since its 2005 formation. For 10 years prior to that, he served in various executive capacities with Cornerstone Realty Income Trust, where he oversaw the acquisition and development of approximately 30,000 apartments.
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Employers That Are Hiring Leery of Bad Credit History of Job Seekers
Digested From "Bad Credit Derails Job Seekers"
Wall Street Journal (03/16/10) by Kristen McNamara
A growing number of employers are conducting credit background checks on applicants for some positions, worried about rising rates of employee theft and fiduciary issues. According to companies that have gone this route, the financial information can offer insight into a candidate's level of responsibility. However, those whose previously solid credit has been hit hard by the recession argue that they are victims of circumstances beyond their control. The Fair Credit Reporting Act gives employers the right to conduct background checks on current and potential employees via third-party firms, as long as the individual gives his/her consent. Some 47 percent of employers say they check the credit history of applicants for certain positions, notes a recent survey by the Society for Human Resource Management of more than 430 organizations in last year's fourth quarter -- an increase from 42 percent in late 2006. Companies typically look back over a period of years for patterns in applicants' behavior. Mike Aitken, the professional group's director of government affairs, notes, "It's a longer-term snapshot to see if that's indicative of fiscal responsibility."
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More New York City Style Loft Apartments Coming To Downtown Buffalo
Digested From "More New York City Style Loft Apartments Coming To Downtown Buffalo"
WGRZ-TV (03/19/10) by Scott Brown
in downtown Buffalo, more and more old and abandoned buildings are being turned into loft apartments. Washington Street is at the center of this new trend. There, developer Rocco Termini is currently transforming the old AM&A's warehouse into a 48-unit apartment community, with individual units featuring everything from granite countertops to exposed brick to and hardwood floors. With little in the way of advertising, the building is nearly 66 percent leased with still two months to go before its grand opening. The warehouse is the sixth building that Termini has reclaimed and renovated in the last seven years. He remarks, "We have 185 apartments downtown right now and we have zero vacancies. If that doesn't cause you to believe, I don't know what would."
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CIM Group Acquires Texas Apartment Communities from Gables
Digested From "CIM Group Acquires Four Texas Apartment Properties from Gables Residential"
Yahoo! Finance (03/18/10)
Last week, CIM Group has acquired four Class A apartment communities in Texas, totaling 820 rental units. The deal signals CIM's entrance into the Dallas and Houston markets, which fits with the firm's urban investment strategy and focus on areas positioned for economic expansion in the coming months. Three of the apartment communities are in the Uptown area of Dallas, while the fourth is near two of Houston's biggest business districts. The apartments were purchased from Gables Residential Corp., which will remain involved in property management for the communities.
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Associated Estates Declares Common Share Dividend
Digested From "Associated Estates Declares Common Share Dividend"
Globe Newswire (03/17/10)
Associated Estates Realty Corp. has declared a quarterly dividend of $0.17 per common share, which will be payable May 3 to shareholders of record as of April 15. The Ohio-based REIT, a member of the Russell 2000, operates a portfolio of 49 apartment communities in eight states. Together, these communities contain more than 12,300 rental units
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KBS Launches Apartment, Opportunity REITs
Digested From "KBS Launches Apartment, Opportunity REITs"
GlobeSt.com (03/15/10) by Bob Howard
KBS Capital Markets Group this week commenced its initial public offerings on a couple of new nontraded REITs. One is called Legacy Partners Apartment REIT Inc., while the other is KBS Strategic Opportunity REIT Inc. KBS is launching the former in partnership with Legacy Partners Residential Realty as its co-sponsor of the REIT. The KBS Legacy Partners Apartment REIT will offer as many as 200 million shares at a capped price of no more than $10 per share. The company will use the proceeds to acquire and manage well-positioned apartment communities that are producing steady streams of rental income. The latter REIT, meanwhile, will offer up to 100 million shares of common stock in a primary offering at a maximum price of $10 per share. Proceeds will go to invest in and manage a diverse portfolio of property-related loans.
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Legislative/Legal News
Detailing the Sordid Politics That Got ObamaCare Passed
Digested From "Inside the Pelosi Sausage Factory"
Wall Street Journal (03/21/10) by Kimberley A. Strassel
Columnist Kimberley A. Strassel this week expressed her distaste for how the health-care reform bill was passed in the House of Representatives. Strassel writes: "Never before has the average American been treated to such a live-action view of the sordid politics necessary to push a deeply flawed bill to completion. It was dirty deals, open threats, broken promises and disregard for democracy that pulled ObamaCare to this point, and yesterday the same machinations pushed it across the finish line." She reports that President Obama flew to four states -- Pennsylvania, Missouri, Ohio and Virginia -- to cajole wavering House Democrats and hold rallies with small, supportive crowds. "In four days," she notes, "Mr. Obama held 64 meetings or calls with congressmen. The goal was to let undecideds know that the president had them in his crosshairs, that he still had pull with the base, and he'd use it against them." Meanwhile, California Rep. Jim Costa openly bragged that during his meeting with Obama, he demanded the White House increase water to his Central Valley district. The Interior Department since gave Central Valley farmers 25 percent of water supplies instead of the expected 5 percent allocation. Costa subsequently flipped his vote to on the health-care bill to a "yes." Strasssel concludes, "President Obama was elected by millions of Americans attracted to his promise to change Washington politics. These were voters furious with earmarks, insider deals and a lack of transparency. They were the many Americans who, even before this week, held Congress in historic low esteem. They'll remember this spectacle come November."
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Out-of-State Apartment Owners Tax Being Enforced in California
Digested From "Out-of-State Property Owners Tax Being Enforced"
San Diego Union-Tribune (03/19/10) by Roger Showley
Starting March 24, apartment managers throughout California will be required to pay the state 7 percent of rental proceeds to cover out-of-state owners' estimated income taxes. Owners who already file state income taxes are exempted, as are owners who hold properties as corporations, partnerships and other entities. The nearly five-decade-old requirement is now being enforced as the state struggles with billions of dollars in budget deficits. Managers have been scrambling to contact owners to get their legally required consent to pay the tax. If the consent is not given, California law would take away their real estate licenses. However, a conflicting law requires them to pay the tax or be subject to fines and jail time. Tom Poole, spokesman for the Department of Real Estate, states, "If the [property] owner does not give the authorization, there’s not a whole lot the property manager can do if he wants to stay out of the cross hairs of the Franchise Tax Board." Brenda Voet, spokeswoman for the tax board, counters that the budget deficit did not prompt the clarification of state withholding law. Instead, she remarked, "it's just one of the periodic reviews of how tax laws are being followed. We realized a lot of real estate is owned by non-California residents."
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'Rent Control' Bill an Effort to Increase Affordable Housing in Colorado
Digested From "'Rent Control' Bill an Effort to Increase Affordable Housing"
Colorado Springs Business Journal (03/20/10) by Amy Gillentine
In Colorado, state legislators are considering a bill this year that would give local governments more leeway in requiring private developers to build affordable housing. Opponents, though, say the proposal is merely a back-door to controlling rents. Rep. Daniel Kagan (D-Denver), the author of House Bill 1017, says his goal is to fix two problems: one, lack of affordable housing in the state; and, two, the inability of local government to require developers to set aside lower-priced units as part of their larger projects. Kagan notes that imposing limits on rents is not his intent. Instead, the bill merely seeks to clarify that nothing in the Colorado's rent-control laws restrict property owners from voluntarily entering into an agreement that controls rent. Nancy Burke of the Colorado Apartment Association is among those opposed. She states, "It puts pressure on landlords to agree to affordable housing -- even if they don't want to. It's a back-door to rent control. It's definitely the start of that."
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Company Plans Bigger Battle Against Bedbugs in Its Apartments
Digested From "Company Plans Bigger Battle Against Bedbugs"
KCCI-TV 8 (Des Moines, IA) (03/18/10)
American Baptist Homes of the Midwest is facing a class action lawsuit filed by residents in two of its Des Moines, Iowa, apartment communities for failure to eradicate a bedbug infestation. Residents say the bedbugs have been biting for months and have spread throughout the buildings. CEO Dave Zwickey has acknowledged that his organization did not do a good job responding in a timely manner. Zwickey now says the company's top priority is getting rid of the bugs and repairing relationships with its apartment residents. Regardless, the matter may still necessitate court settlement.
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San Diego Apartment Owners Face Megan's Law Dilemma
Digested From "Landlords Face Megan's Law Dilemma"
KGTV (03/16/10)
In San Diego, more and more local apartment owners lament that the state is not helping them at all with regards to where registered sex offenders can and should live. Currently, apartment owners are not required to check the Megan's Law Web site to see if prospective or current residents are in the database. They said even if they do take a look, their hands are tied. Bob Pinnegar, executive director of the San Diego County Apartment Association, pointed out that apartment owners and managers cannot legally use the information on the Web site to evict registered sex offenders or deny them from renting an apartment. On the other hand, owners can be held liable for not protecting residents from a known risk. Pinnegar laments, "Apartment owners are in a Catch-22 situation. . . . Your duty is to protect the residents, but the state has not given us the tools to protect residents in the case of sex offenders."
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21 Parties Hope To Intervene in Sewer District Lawsuit
Digested From "21 Parties Hope To Intervene in Sewer District Lawsuit"
Crain's Cleveland Business (03/18/10) by Jay Miller
A group consisting of 21 property owners and real estate groups have filed a motion seeking permission to intervene in a lawsuit brought about by the Northeast Ohio Regional Sewer District. The sewer district is asking the court for the right to impose user fees to cover the costs of mitigating storm water runoff. Such fees would result in higher operating costs for property owners and real estate groups, who feel their interests are not adequately represented in the case. Real estate attorney Sheldon Berns is now representing the group and is arguing that money for storm water problems should be provided by voter-approved taxes, not user fees. He went on to question the legal authority of the sewer district, asserting that local counties should be responsible for proper storm water management rather than an unelected board. Additionally, Bern said that because some communities manage their own sewer systems they would not be required pay the fee while still contributing to the runoff problems.
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