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Freddie Mac Announces Mezzanine Program for Multifamily Mortgages
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Freddie Mac Announces Mezzanine Program for Multifamily Mortgages
Industry News
Apartment REITs Scout for Deals on Busted Condos
Millennials Cite Factors Other Than Work Ethic as Their Claim to Fame
Dallas-Fort Worth Apartment Sector Improves
Effort to Reduce Crime at San Diego Apartments Praised
Leaders Need Followers Who Know Their Roles and Are Happy to Fill Them
BRE Properties Announces Pricing of Common Stock Offering
Apartment Rents Cheaper Than Stays in Homeless Shelters
Camden Property Launches Mobile Web Sites
Southern Nevada Apartment Market Said to Need Decade to Recover
Fannie Mae Poll Shows Faith in Homeownership Drops
Legislative/Legal News
Houston Apartments to Be Randomly Inspected 
CA Budget Shortfalls Stalled Low-Income Housing Construction
Apartment Owners Look to Improve Satellite TV Reception
New York Apartment Owners Could Face Workers Strike
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Freddie Mac Announces Mezzanine Program for Multifamily Mortgages
Digested From "Freddie Mac Announces Mezzanine Program for Multifamily Mortgages"
DSNews (04/05/2010) by Carrie Bay
Freddie Mac is rolling out a program to ensure strapped apartment owners have a means to refinance debt. Under it, the firm will allow mezzanine debt on qualifying multifamily first mortgages that it buys. Freddie Mac's multifamily lenders will originate a first mortgage with a loan-to-value ratio of up to 75 percent, then work with a mezzanine lender to provide additional leverage up to another 15 percent. The goal is to recapitalize multifamily housing for borrowers on solid financial footing.
Industry News
Apartment REITs Scout for Deals on Busted Condos
Digested From "Apartment REITs Scout for Deals on Busted Condos"
Wall Street Journal (03/29/10) by Dawn Wotapka
Around the country, apartment operators are sifting through the bargain-priced remnants of the housing boom to scoop up failed condominium projects. Such companies can boost their rental income without incurring the steep costs and uncertainty of a multi-year development project. Equity Residential, for one, is close to acquiring a 550-unit development in Washington, D.C., out of a bankruptcy proceeding. Essex Property Trust, meanwhile, said it was buying two Orange County, Calif., condo developments for a combined $155 million. That total sum was 55 percent of the original construction costs, reports Green Street Advisors. Chicago-based Equity Residential appears especially confident with this course of action. In fact, it is already advertising its newly acquired development on its Web site, event though the move-in date is still unclear. Alexander Goldfarb, a REIT analyst with Sandler O’Neill + Partners, concludes, "One of the beauties of apartments is you can always cut the rent. Even if you do a month free, you're still looking a decent return for the current environment."
Millennials Cite Factors Other Than Work Ethic as Their Claim to Fame
Digested From "Millennials Accused of Lax Work Ethic Say It's Not All About 9-to-5"
Washington Post (04/03/10) by Ian Shapira
A new Pew Research Center study shows the millennial generation -- approximately 50 million people between the ages of 18 and 29 -- is the only age group in the country that does not cite work ethic as one of its "principal claims to distinctiveness." Titled "Millennials: Confident. Connected. Open to Change," the report found that millennials picked other traits to define themselves. Specifically, 24 percent said "technology use," 11 percent cited "music/pop culture," 7 percent went with "liberal/tolerant," and 6 percent said "smarter." In fact, only 5 percent noted their generation's "work ethic" -- the same percentage that selected "clothes." Among older generations, at least double that portion cited "work ethic" as indicative of their age group's identity: 17 percent of boomers, 11 percent of Gen Xers and 10 percent of those 65 and older. The survey concluded, "Millennials may be a self-confident generation, but they display little appetite for claims of moral superiority."
Dallas-Fort Worth Apartment Sector Improves
Digested From "DFW Apartment Market Improves"
GlobeSt.com (04/02/10) by Jennifer Duell Popovec
According to a new MPF Research study, demand for apartments in the Dallas/Fort Worth area is growing as new construction dwindles. During this year's first quarter, apartment residents absorbed 6,520 rental units -- the best quarterly demand performance seen since fall 2007. The number of occupied apartments rose 9,970 units between March 2009 and the end of this year's first quarter. MPF Research Vice President Greg Willett attributes the better numbers to a corresponding improvement in the local economy coupled with a large influx of people who have moved to the Metroplex in recent months. He adds, "Despite the fact that Texas lost jobs last year, Dallas/Fort Worth had an in-migration of 100,000 people. We continue to attract new households because the job prospects, and once we get in the upside of the cycle, the recovery will be comparatively fast." As of the end of last month, Dallas/Fort Worth's apartment occupancy rate stood at 89.3 percent -- an increase of 0.5 points since December.
Effort to Reduce Crime at San Diego Apartments Praised
Digested From "Effort to Reduce Crime at Apartments Praised"
San Diego Union-Tribune (04/03/10) by Anne Krueger
An effort to reduce crime at troubled apartment communities throughout California's East County was recognized this past week at a special meeting of the East County Public Safety Task Force. The task force was established a year ago to work with apartment owners with chronic crime problems. A total of six apartment communities -- three in Spring Valley, two in Lakeside and one in the unincorporated area of the county just outside El Cajon -- have taken part in the voluntary program to date. Under the program, apartment owners and managers agree to undergo training on everything from crime prevention to fire safety to how to identify drug and gang activity. In addition, their residents are required to sign addendums to their leases requiring them to move if they or any of their guests commit a crime on or near community grounds. East County officials say the program has been successful in reducing crime and making apartment residents feel safer.
Leaders Need Followers Who Know Their Roles and Are Happy to Fill Them
Digested From "Do Something: Let's Hear It for the Little Guys"
Fast Company (04/10) by Nancy Lublin
Nancy Lublin, founder of Dress for Success and CEO of DoSomething, writes: "We glorify our leaders and praise our visionary entrepreneurs, but . . . we should focus [more] on the followers -- the people who get things done." Her stance is that the world needs people who can follow orders intelligently. "The key word is 'intelligently,'" she reports. "Good followers ask good questions. They probe their leaders. They crunch the numbers to ensure that their visionary boss's gorgeous plan actually works." Change needs to start at an organizational level, she adds. While CEOs represent the smallest portion of the nation's labor pyramid, a disproportionate amount of time and money is spent grooming them and then honoring their achievements with hefty pay packages. Lublin concludes, "Not everyone can create the Google of the future, and many of those who don't will think they're failures. . . . The working world would be a happier place if more of us aspired to roles that were just right -- if we valued job fit and performance at every level and stopped overemphasizing the very top."
BRE Properties Announces Pricing of Common Stock Offering
Digested From "BRE Properties Announces Pricing of Common Stock Offering"
Business Wire (03/31/10)
BRE Properties Inc. announced the pricing of its public offering of 7 million common shares at $34.25 per share. The San Francisco-based apartment REIT has granted the underwriters a 30-day option to purchase up to an additional 1,050,000 shares of common stock to cover any over-allotments. BRE expects to use the net proceeds for general corporate purposes, which may include financing for acquisitions of rental properties, funding for development activity and the redemption or other repurchase of outstanding debt or equity securities. As of the end of last year, BRE's multifamily housing portfolio had assets with a net book value of approximately $2.9 billion. They included 73 wholly or majority owned communities in California, Washington and Arizona; ownership stakes in 13 stabilized apartment communities owned through joint ventures comprised of 4,080 apartment units; and, finally, a half-dozen apartment communities in various stages of development.
Apartment Rents Cheaper Than Stays in Homeless Shelters
Digested From "Apartment Rents Cheaper Than Stays in Homeless Shelters"
USA Today (03/25/10) by Marisol Bello
A new HUD report shows that cities, states and the federal government pay more to provide the homeless with short-term shelter and services than what it would cost to rent permanent housing. The agency surveyed approximately 9,000 families and individuals to determine that costs to house the newly homeless vary widely, depending on the type of shelter and social services provided by the half-dozen cities in the report. Emergency shelter for families was deemed to be the most costly. For example, the average bill for a month in an emergency shelter ranges from $2,500 to $3,700 in Washington, D.C. In Houston, by contrast, the average is $1,391. Dennis Culhane, a University of Pennsylvania professor who studies housing policies, notes that many communities are simply unaware they are spending as much "to maintain a cot in a gymnasium with 100 other cots" as it would cost to rent an efficiency apartment. Culhane says the study bolsters a move by the White House to focus on helping the homeless get permanent housing. The federal stimulus act in 2009 allocated $1.5 billion to prevent homelessness by helping people pay rent, utility bills, moving costs or security deposits.
Camden Property Launches Mobile Web Sites
Digested From "Camden Property Launches Mobile Websites"
Houston Business Journal (03/30/10)
Camden Property Trust this past week launched new mobile Web sites that aim to make it easier for prospective apartment residents to find out important information about its various communities. The sites are designed for users of such mobile devices as the iPhone, the Blackberry, Droid and Palm Pre. Users can use the technology to view floor plans, as well as reserve apartments from their handheld devices without having to download any apps. John Selindh, Camden's vice president of marketing, reports, "If prospects are driving through a neighborhood and see an apartment community they are interested in, they can now instantly connect to our mobile sites for more information." Camden is a Houston-based REIT that owns stakes in and manages 183 apartment communities containing more than 63,200 rental units nationwide.
Southern Nevada Apartment Market Said to Need Decade to Recover
Digested From "Apartment Market Said to Need Decade to Recover"
Las Vegas Business Press (03/30/10) by Tony Illia
Southern Nevada's beleaguered apartment sector is looking for bright spots, but there may not be many for a while. Local apartments suffered an ugly downturn last year, with plummeting rents, soaring vacancies and little in the way of sales activity. Hendricks & Partners apartment specialist Carl Sims says a return to normalcy could take a decade or more. He adds, "Our forecast is it could take 10 years for things to return to normal. Prices are back to 2003 on a per square foot basis. There were only three sales of apartment complexes in 2009 with 100 units or more." One to three months free rent has become standard across all apartment classes to entice new residents. Move-in specials have also become common incentives. Southern Nevada is a market where distressed single-family homes are now competing directly with apartments for residents. Last month, for instance, there were more than 20,000 homes listed for sale -- more than a year's supply of inventory, reports the Multiple Listing Service.
Fannie Mae Poll Shows Faith in Homeownership Drops
Digested From "Faith in Homeownership Drops, Fannie Mae Poll Shows"
Washington Post (04/06/10) by Renae Merle
A new Fannie Mae survey shows that, despite turbulence in the housing market over the last three years, a majority of people still think homeownership is important and preferable to renting. However, the research also shows that many remain skeptical that home prices will recover anytime soon. The poll is the government-sponsored enterprise's first attempt to gauge how the foreclosure crisis has affected public attitudes about homeownership. With so many homeowners feeling stung by the housing crisis, the survey found that many people are less likely to take risks related to purchasing a home. Among the major shifts the survey found is that the public is less likely to view a house as a safe investment. In 2003, 83 percent of those polled in a similar Fannie Mae study said real estate was a safe investment versus only around 70 percent in the most recent survey. Doug Duncan, Fannie Mae's chief economist, remarks, "That is one of the big changes we have seen in attitudes. We need to figure out whether this is a sustainable shift." Researchers interviewed more than 3,000 people, most of them homeowners, for its findings.
Legislative/Legal News
Houston Apartments to Be Randomly Inspected
Digested From "Apartments To Be Randomly Inspected"
Click2Houston.com (04/01/10)
In an effort to keep residents safe, the city of Houston will soon begin randomly inspecting apartment communities. April 1 was the deadline for all 5,300 apartment communities citywide to register for the new inspection program. In previous years, city inspectors only followed up on complaints. That all changed after two boys perished when a stairwell collapsed back in June 2008. the city will now randomly inspect apartment communities for such things as stairs, plumbing and electrical issues. Houston official Alvin Wright remarks, "The city wants to make sure that the apartment managers are abiding by the codes and the standards set by the city and the city council to make sure that the residents have a decent place to live when they go to live in an apartment [community]. It's important because more than half of our residents in the city live in apartment [communities]."
CA Budget Shortfalls Stalled Low-Income Housing Construction
Digested From "Instead of an Economic Shot in the Arm, a Shot in the Foot"
Los Angeles Times (03/30/10) by Shane Goldmacher
Plans to build more than 16,000 housing units in California, many of them for low-income residents, have been frozen in bureaucratic limbo since July. Voters approved $2.85 billion in bonds for affordable-housing construction in 2006. Last July, California leaders selected the 121 projects they want to build. However, none of the $714 million in bond money earmarked for construction has been spent as a result of state officials' chronic inability to balance the budget. A state office that once provided bridge loans for construction projects has since closed its doors, drained of its funding by California's budget shortfalls. At the same time, Wall Street lenders have been reluctant to lend money for such projects until state finances can be sorted out. Christopher Thornberg, a founder of Beacon Economics in Los Angeles, laments, "It's a shame they didn't get started on this. If you're even going to think about doing affordable housing, this is the time to do it: Labor is cheap, land is cheap." Officials estimated the new projects would create approximately 22,000 jobs statewide.
Apartment Owners Look to Improve Satellite TV Reception
Digested From "Improving Reception to Satellite TV "
NorthJersey.com (04/04/10) by Donna Rolando
Some apartment communities may not be able to have a satellite dish at all. Under the Telecommunications Act of 1996, Congress directed the FCC to adopt the Over-the-Air Reception Devices rule banning most restrictions on the ability to see satellite TV. While property owners had made their own decisions about satellite dishes and antennas before, the Telecommunications Act changed all that. According to the National Real Estate Investor, before the act, "apartment owners and managers could, and usually did, say no to renters wishing to install an individual satellite dish or antennas. From the owner's standpoint, the satellite dishes were not only ugly, but they also represented a safety and liability concern if they were to fall on people." Although the legislation prohibited owners from blocking the installation or use of satellite dishes, some exceptions were put into place. Betsy Feigin Befus of the National Multi Housing Council notes, "Generally speaking, apartment residents may install a properly sized satellite dish within the area that is covered by the resident's lease, but not in common areas and spaces beyond the resident's roof line or balcony. The dish must be properly installed and safely secured in compliance with applicable building codes." The problem for some apartment communities is ignorance or disregard for these provisions. Problems have included installers drilling into brick or sliding glass doors, causing damage. Michael Beirne, a member of the New Jersey Apartment Association's board of directors, says owners are frequently pressed to try and smooth over conflicts with residents who want their own dish. He concludes, "By FCC rules, we can't tell them no."
New York Apartment Owners Could Face Workers Strike
Digested From "Bldgs. Union Trash Talk in Strike Vote"
New York Post (04/02/10) by Tom Topousis
Residents at approximately 3,200 New York apartment buildings could be opening doors and hauling trash for themselves later this month after union members voted on April 1 to authorize a strike. The vote by members of the approximately 30,000 residential-building workers union gives their negotiating committee the power to call the union's first residential strike in 19 years. The current agreement is due to expire on April 20. Local 32BJ of the Service Employees International Union has been calling for wage hikes. At the same time, they have been rallying against apartment owners' calls to have doormen, custodial workers and other service employees contribute to the cost of their health insurance and pensions, among other benefits. Union members for at least the past quarter-century have voted to authorize a strike during contract negotiations. Only in 1991 did residential buildings actually strike. That protest lasted 11 days. Five years later, workers at New York's commercial buildings walked.
Abstract News © Copyright 2010 INFORMATION, INC.
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