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FBR Capital Markets: U.S. Policy to Favor Apartments Over Houses
Industry News
Oregon Researchers Say Multifamily Housing Should Connect Residents to Shopping
Demand Rebounds for Rentals Across Greater Cincinnati and Northern Kentucky
Post Properties Unit Raises $150 Million
New Missouri State University Apartments Under Consideration
Campus Crest Communities Schedules IPO for 3rd Time
Boston Capital Closes Major Apartment Fund
Dallas-Fort Worth Apartment Occupancy Grows Slightly in Q3 2010
Rockford (Ill.) Apartment Assoc. Launches Web Site
UDR Senior VP W. Mark Wallis Set to Retire
Late Loan for Sale on South Side Chicago Apartments
San Francisco Investor Buys 3 Denver Apartment Communities for $62 Million
The Texting Revolution Is Here
Legislative/Legal News
Nuisance Fee Targets Dirty Apartments in San Francisco
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FBR Capital Markets: U.S. Policy to Favor Apartments Over Houses
Digested From "U.S. Policy to Favor Apartments Over Houses"
Philadelphia Inquirer (10/05/10) by Joseph N. DiStefano
A report by FBR Capital Markets says Congress will push for Fannie Mae, Freddie Mac, or whatever entity results from the reform of housing finance to increase investment in apartment construction and sales. Apartment investors will find it less expensive to build new apartment communities or purchase existing ones, according to FBR Capital Markets Analyst Paul Miller. More and more investors are turning their attention to the multifamily housing sector, with apartment funds returning 33 percent on average this year.
Industry News
Oregon Researchers Say Multifamily Housing Should Connect Residents to Shopping
Digested From "Multifamily Housing Should Connect Residents to Shopping"
University of Oregon (10/12/10)
University of Oregon architecture researchers and planners hypothesize that if residents of multifamily housing were better connected to commercial areas by pathways, they would walk or use their bikes more frequently to access those areas. As it stands now, too many commercial areas are too far away from apartment communites. Single-family and multifamily housing have traditionally been separated from commercial areas as a result of the long-held belief that people do not walk anywhere in suburbia. This assumption may not be accurate anymore. Nico Larco, professor of architecture and co-director of the University of Oregon's Sustainable Cities Initiative, led a study on the matter and explained the results: "The concept for years has been that you always put higher density housing developments around the commercial areas. The idea has been that this approach makes a great buffer between commercial areas and single-family homes that they don't want to back up to strip malls. So we have a charged condition of density right next to commercial areas, grocery stores, drug stores, laundromats, banks and coffee shops. When you look at design, however, any notion of sustainability falls absolutely flat." The demographic of multifamily housing has been largely misunderstood, and Larco concluded that well-connected apartment communities would spur more biking and walking. An increase in those activities, he notes, "reduces vehicle miles traveled, greenhouse gas emissions and helps to address the obesity epidemic by burning calories. And it also provides independence for the elderly."
Demand Rebounds for Rentals Across Greater Cincinnati and Northern Kentucky
Digested From "Demand Rebounds for Rentals"
Cincinnati Enquirer (10/17/10) by Lisa Bernard-Kuhn
After a year of record-high vacancy rates and shrinking monthly rents, CB Richard Ellis' Cincinnati office reports that there are early signs of stability emerging for apartment communities throughout Greater Cincinnati and Northern Kentucky. According to CBRE researchers, just under 10 percent of the region's multifamily housing sat vacant during July, down from almost 12 percent at the end of last year. At the same time, average rents have increased more than 3 percent to $696 a month. The gains are the first posted since the apartment market began a steep decline in the third and fourth quarters of 2008 as the impact of the recession took hold locally. As unemployment topped the 10 percent mark, the region's apartment vacancy rate increased to 11.6 percent at the end of 2009 -- a seven-year high. David P. Lockard, a vice president with CB Richard Ellis' multi-housing group, comments, "We didn't see [rental] demand swell, because at the same time the economy was shrinking. Demand was softened by the doubling up of roommates and people who moved back in with family. We're just starting to see that trend reversing, and we've started seeing some firming in the market."
Post Properties Unit Raises $150 Million
Digested From "Post Apartments Raises $150M"
Emii.com (10/14/10)
Post Apartment Homes, an operating unit of Post Properties, confirms that it has raised $150 million in a sale of senior unsecured notes. The bonds, which will mature on Oct. 15, 2017, carry a coupon rate of 4.75 percent. JP Morgan, Wells Fargo Securities, and Deutsche Bank are serving as the joint book-running managers for the transaction. Post Properties is an Atlanta-based REIT that focuses on developing and managing garden-style and high-density urban apartments.
New Missouri State University Apartments Under Consideration
Digested From "New MSU Apartments Under Consideration"
Springfield News-Leader (MO) (10/17/10) by Didi Tang
To accommodate and attract more upperclassmen, graduate students, and non-traditional students to live on campus, Missouri State University (MSU) is considering borrowing money and building new apartments on campus. If planning goes well, hundreds more beds in apartment and suite-style housing could be available as early as 2012's fall semester. Susie Kekec, president of Residence Hall Association, states, "Students want to live in [apartments]. Potentially there is more growth in the future, and I'd like to see that goal furthered." For now, MSU students have three options in campus apartments and the waiting list can be long for each.
Campus Crest Communities Schedules IPO for 3rd Time
Digested From "Campus Crest Schedules IPO for 3rd Time"
Business Week (10/13/10)
Campus Crest Communities Inc. hopes to raise about $382.5 million in an initial public offering, its third attempt in as many weeks. Terms of the offering -- more than 28 million shares for $12.50 to $14.50 each -- have not changed. The Charlotte, N.C.-based student housing developer develops and manages apartment communities for college students in 11 states. Campus Crest believes it will be able to build five to seven new housing communities per year as college enrollment increases. At the same time, government funding to public universities continues to be cut as state budgets are slashed. Campus Crest's plan is to offer more beds as schools are forced to cut spending on dormitories.
Boston Capital Closes Major Apartment Fund
Digested From "Boston Capital Closes Major Fund"
Affordable Housing Finance (10/10)
Boston Capital this past week announced the closing of Boston Capital Tax Credit Fund XXXIII, a nationally diversified portfolio of 49 affordable apartment communities in 20 states and Washington, D.C. The fund is one of the largest the company has closed in years, reports President and CEO Jack Manning. The latest fund includes 30 apartment communities for families and 19 seniors housing developments in such states as California, Delaware, Florida, Massachusetts, Maine, Maryland, Montana, North Carolina, New York, Texas, and Virginia. The properties add more than 4,200 apartments to Boston Capital's portfolio, which include more than 162,600 apartments.
Dallas-Fort Worth Apartment Occupancy Grows Slightly in Q3 2010
Digested From "Metroplex Apartment Occupancy Grows Slightly in Third Quarter"
Star-Telegram (TX) (10/10/10) by Sandra Baker
Occupancy at Dallas-Fort Worth apartment communities grew slightly to 91.5 percent during this year's third quarter, with an additional 7,800 additional apartments leased in the Metroplex between July and September. Rents also increased, rising 1.5 percent since the middle of the year. Occupancy in the area is still below the national average, but an improving local economy is expected to bring new residents.
Rockford (Ill.) Apartment Assoc. Launches Web Site
Digested From "Rockford Property Owner Directory Launched "
WIFR.com (IL) (10/12/10) by Tina Stein
The Rockford Apartment Association in Illinois has launched a Web site to help keep absentee apartment managers accountable to residents by providing managers' names and contact information. The site will be a tool for residents to report issues involving their communities, including crime, disrepair, and aesthetic concerns. Orchid Neighborhood Group Vice President Joe Owen added that the site would help managers better protect their investment while also keeping neighborhoods safer. Neighbors will also be able to contact one another using the directory, and it is up to residents to sign up.
UDR Senior VP W. Mark Wallis Set to Retire
Digested From "UDR Senior Executive Vice President W. Mark Wallis Announces Plans to Retire"
MarketWatch (10/12/10)
W. Mark Wallis has announced his retirement as senior executive vice president of UDR Inc. after a decade with the apartment REIT. Wallis will remain in his position through the end of this year and will then serve as a consultant with the company through 2011. During his time at UDR, the 60-year-old helped establish a strong management team that will continue to carry out the company's vision of providing quality apartments and create long-term shareholder value. During his 10-year tenure with UDR, Wallis managed more than $10 billion in transactions. Tom Toomey, president and chief executive at UDR, comments, "Mark's been a great business partner and an even better friend, and I fully respect his decision to retire so he can spend more time with his family and charitable work." He adds that Wallis' responsibilities will be absorbed by other senior executives. As of the end of this year's second quarter, UDR had ownership stakes in 51,823 apartments including 748 rental units under development.
Late Loan for Sale on South Side Chicago Apartments
Digested From "Late Loan for Sale on South Side Apartments"
Chicago Real Estate Daily (10/14/10) by Alby Gallun
A delinquent $11.1-million loan secured by 11 apartment communities on Chicago's South Side is now on the selling block, with New York-based Mission Capital Advisors marketing the debt. Originated in 2006, the loan was pooled with other loans and sold off in a commercial mortgage-backed securities offering by Bank of America. Initial bids are due Nov. 2, with a planned closing date of Nov. 29. The apartment portfolio is concentrated in the city's Auburn Gresham neighborhood. The owner of the various apartments is an MGP Global Real Estate affiliate. It stopped making loan payments three years ago, according to a Bloomberg loan report.
San Francisco Investor Buys 3 Denver Apartment Communities for $62 Million
Digested From "San Francisco Investor Buys 3 Denver Apartment Complexes for $62M"
Denver Business Journal (10/11/10) by Paula Moore
San Francisco-based Jackson Square Partners LLC has acquired three Denver-area apartment communities for $62 million. Jackson Square is a leading investor in the apartment sector, acquiring more than 10,500 rental units since 2004. Most of its communities are in the Southwest and Western U.S., including Arizona, California, Nevada, Texas, and Utah. It should be noted that Jackson Square partnered with PCCP LLC of San Francisco in the Denver-area deal.
The Texting Revolution Is Here
Digested From "Y U Luv Texts, H8 Calls"
Wall Street Journal (10/14/10) by Katherine Rosman
The Nielsen Co. reports that the average 13- to 17-year-old sends and receives 3,339 texts a month -- more than 100 per day. Adults are not too far behind. People from ages 45 to 54 sent and received 323 texts a month in the second quarter of 2010, an increase of 75 percent from a year earlier. Analysts say a fundamental shift in how we view our mobile devices is behind the texting explosion. On the downside, the more we text, the greater the opportunity for misunderstanding. To be sure, part of what is driving the texting surge among adults is the popularity of social media. Such sites as Twitter, with postings of no more than 140 characters, are creating and reinforcing the habit of communicating in micro-bursts. In addition, many Facebook and Twitter devotees create settings that alert them, via text message, every time a tweet or message is earmarked for them.
Legislative/Legal News
Nuisance Fee Targets Dirty Apartments in San Francisco
Digested From "Nuisance Fee Targets Dirty City Buildings"
San Francisco Examiner (10/17/10) by Joshua Sabatini
San Francisco's Public Health Department is pushing tougher enforcement powers to ensure apartments and single-room occupancy hotels remain free of such nuisances as bed bugs, cockroaches, and rats. Legislation introduced by Supervisor John Avalos would allow the city agency to fine apartment owners who fail to address such nuisances in a timely manner, requiring them to register and provide contact information so the department can more easily track them down. The city's Board of Supervisors is expected to vote on the bill next week. Among the opponents is the San Francisco Apartment Association. Executive director Janan New argues, "It's just a piling on by the Department of Public Health. Bed bugs are a national epidemic. They can't be the sole responsibility of rental-housing providers."
Charleston Council Delays Nuisance Proposal
Digested From "Council Delays Nuisance Proposal"
Post and Courier (SC) (10/13/2010) by David Slade
In South Carolina, the Charleston City Concil has delayed a plan to hold apartment managers criminally liable for residents' nuisance behavior. The ordinance was urged by homeowners in the downtown area, which is close to the College of Charleston. They claim absentee managers turn a blind eye to street-side piles of trash, late-night noise, and other annoyances caused by those who rent. South Carolina Apartment Association President Victoria Cowart is opposed to the plan, remarking, "The problem here is, we have confused landlording with parenting. . . . We're greatly concerned that we could be held criminally liable for the actions of adults not under our control." The originally proposed ordinance would have exposed managers to a misdemeanor if residents created a nuisance, but a revised version said penalties would follow three notices of a public nuisance.
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