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Multifamily Housing Developers Inch Back Into the Game
Industry News
REIT Returns Recover From Dip in January, Led by Apartments
Depressed L.A. Apartment Market Attracts Adventurous Investors
For Generation Y, American Dream Becomes an Apartment in the City
Washington State's Job Numbers Grow for the First Time Since Late '08
Equity Residential Declares First Quarter Dividends
Veteran Multifamily Housing Exec Duke Joins SARES REGIS Group
Older Apartment Communities Draw Little Interest in Columbus Area
High Vacancy Rates Make for a Renters Market
Legislative/Legal News
Water Meter Use Could Be Required in San Diego Apartments
Md. Senate Kills Door-to-Door Apartment Campaigning Measure
Wisconsin Proposal Would Help Students Before They Are Pushed to Sign New Lease
Menlo Park Introduces Beefed-Up Apartment Smoking Ordinance
Secret Letter Written by Utah Apartment Association Discovered 
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Multifamily Housing Developers Inch Back Into the Game
Digested From "Builders Get Back in Game"
Wall Street Journal (03/03/10) P. C9; by Dawn Wotapka
REITs are expected to break ground on nearly $1 billion in new multifamily housing in 2010, reports Green Street Advisors. While still below average, the estimate is a marked jump over the $100 million of construction starts last year. Apartment operators are betting that limited new supply, coupled with a mending economy, will produce ideal market conditions nationwide beginning next year or in 2012. From then until 2015, REIT analyst Haendel St. Juste reports, "Apartment REITs may generate the best property net operating income growth that they've seen in a very long time, maybe ever."
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REIT Returns Recover From Dip in January, Led by Apartments
Digested From "REIT Returns Recover From Dip in January"
GlobeSt.com (03/07/10) by Erika Morphy
New National Association of Real Estate Investment Trusts (NAREIT) data shows that U.S. REIT returns recorded a 5.06 percent gain last month after reporting a more than 4 percent loss a month earlier. The rise in the FTSE NAREIT All REIT Index offset January's 4.68 percent decrease, leaving a gain of nearly 1 percent year to date. Looking at individual sectors, apartment REITs were up 8 percent in February, retail REITs gained more than 10 percent and lodging REITs rose 6 percent. Investors have a number of theories as to why REITs continue to perform so well. In 2009, REITs' financial activity was hallmarked by record equity raising and the recycling of capital to bolster its bottom line. This year, the consensus is that REITs are no longer tapping equity markets to survive. Instead, they are turning to unsecured capital for more growth-oriented goals. Last week, for instance, Colonial Properties Trust filed the necessary regulatory paperwork to sell up to $50 million worth of its common shares with some of the proceeds to fund new acquisitions.
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Depressed L.A. Apartment Market Attracts Adventurous Investors
Digested From "Braving a Dismal Apartment Market"
Los Angeles Times (03/07/10) by Morris Newman
Apartment investors in Los Angeles County are dealing with a market in which rents are down, prices are down and vacancy rates are up. Falling apartment values have brought out their fair share of small investors in search of inexpensive buys. Last year, these sized investors ruled the investment market for multifamily housing, with apartment communities with five to 49 units capturing a lopsided share of new investments in the Los Angeles County apartment sector last year. According to Marcus & Millichap figures, there were 552 apartment sales in L.A. County in 2009. By comparison, only 15 communities with 50 to 100 units changed hands, and 16 with 100 units or more sold. State law requires larger communities to have an on-site manager, an added cost that some investors shun. The biggest communities are favored by such institutional investors as pension funds and insurance companies. For the most part, those big investors are sitting out the market for good reason as they typically want deals that conform to specific investment criteria.
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For Generation Y, American Dream Becomes an Apartment in the City
Digested From "For Generation Y, American Dream Becomes an Apartment in the City"
Journal Times (Wis.) (03/02/10) by Bill Glauber
Generation Y, roughly characterized as those individuals born between 1980 and 2000, are showing different habits than their parents when it comes to homeownership and where they want to live. John McIlwain, a senior resident fellow with the Urban Land Institute, says Gen Y will be renting "far longer than past generations," especially since they have witnessed the mortgage meltdown. Many other considerations factor into this ongoing trend, such as economic restrictions like high unemployment and debt from college loans. Many people in this age range simply don't have the resources to get started on homeownership right away, so rentals and apartment sharing will be common in the short and medium term until they look to buy homes and settle down. "It's only a good investment if it fits in that lifestyle you're leading at that time," says 26-year-old Milwaukee renter Clarissa Mankus. "I'm not ready to sacrifice certain things, like travel and graduate school." However, many people just prefer the urban lifestyle to owning a house in the suburbs. As a group, twentysomethings and recent college graduates anticipate higher job turnover and getting married later than their parents, so they like to have flexible living arrangements in lively, urban areas.
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Washington State's Job Numbers Grow for the First Time Since Late '08
Digested From "State's Job Numbers Grow for the First Time Since Late '08"
Seattle Times (03/03/10) by Drew DeSilver
Washington state added 12,400 new payroll jobs in January, marking the state's biggest one-month gain in nearly three years and the first increase since November 2008. Demand in the professional and business services will likely increase this year, according to economist Steven Frable. Forecasts expect the state's jobs to grow by 1.42 percent in 2010. January was a good indicator for the forecast, with nearly all sectors of the economy adding jobs. Unemployment in the state rose one-tenth of a percentage point, but labor economist Dave Wallace said it was not unusual for unemployment and payroll figures to point in opposite directions when people are returning to work faster than jobs are being created.
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Equity Residential Declares First Quarter Dividends
Digested From "Equity Residential Declares First Quarter Dividends"
Business Wire (03/02/10)
Equity Residential has declared a quarterly common share dividend of $0.3375, which will be payable on April 9 to shareholders of record as of March 15. Equity Residential currently has ownership interests in 137,007 rental units in 495 apartment communities. The Chicago-based REIT is set to hold its annual shareholders meeting on June 16. Shareholders of record at the close of business on March 31 will be eligible to vote at the meeting.
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Veteran Multifamily Housing Exec Duke Joins SARES REGIS Group
Digested From "Veteran Multifamily Executive Joins SARES REGIS Group as Company Expands Into the Northwest United States"
Marketwire (03/03/10)
SARES REGIS Group (SRG) has announced that Gail Duke, an experienced multifamily housing management and marketing executive, will join the company as a senior vice president. Her main task will be to establish an office in Seattle in order to help with the company's expansion into the Pacific Northwest market. Duke's career has included a stint as president and COO at Trammell Crow Residential Services, where she was business development director and vice president of property operations before becoming president and COO. SRG is a leading developer and manager of apartments in California, Colorado, and Arizona. The decision to expand to the Pacific Northwest was made to serve existing clients and other investors in that area. The company's Multifamily Property Management Division currently boasts 16,180 properties, with 60 percent of the portfolio under third-party management.
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Older Apartment Communities Draw Little Interest in Columbus Area
Digested From "Little Interest in Big, Old Apartment Units"
Columbus Dispatch (OH) (03/02/10) by Mark Ferenchik
There are currently a half-dozen large apartment communities for sale in the Columbus, Ohio, metro area. However, local professionals like Rob Vogt, a partner in VWB Research, see little if any solution to moving them off the market. The six communities are older and mostly vacant, with two of them boasting a 40 percent vacancy rate and one with 75 percent vacancy. Vogt calls them "functionally obsolete," suggesting that residents are looking for newer units with more amenities or single-family homes that are for rent. The city prefers to preserve federally subsidized housing and plans to spend around $2.5 million in federal funds to do so. Locally, though, there has been a growing trend of older communities being boarded up and even demolished when they fall into disuse. Edward W. Hill, dean of the Maxine Goodman Levin College of Urban Affairs at Cleveland State University, says the four- and five-story apartment buildings that were staples in the 1950s, 1960s, and 1970s are no longer appealing to today's apartment residents.
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High Vacancy Rates Make for a Renters Market
Digested From "Apartment Complexes Offer Incentives To Pull In Renters"
KERO News (03/01/10) by Erin Briscoe
The Bakersfield, Calif., metro area currently boasts one of the most resident-friendly apartment markets in recent memory. Apartment owners and managers are offering record incentives to lure residents to their communities that, as a group, are between 9 percent and 10 percent vacant. Jackie Gorman, manager at The Springs, suggests that some owners are using monetary incentives or offering new amenities to make their community stand out. She adds, "We are losing a lot of people to buying homes, either short sales or foreclosures, we are also losing a lot of people to home consolidation. So, we are really competing to losing to areas we haven't lost to in the past."
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Legislative/Legal News
Water Meter Use Could Be Required in San Diego Apartments
Digested From "Water Meter Use Could Be Required"
San Diego Union-Tribune (03/08/10) by Mike Lee
San Diego is on the verge of setting a regional water conservation benchmark by forcing developers of new apartment and mixed-use communities to install water meters for each unit. The City Council is due to take up a proposed ordinance this week after several months of fine-tuning. The proposal, which is widely expected to pass, aims to create what several water experts said would be a first in the county. It would require submetering for new communities with three or more apartments and in cases when an entire interior drinking water system is replaced for a community with three or more units. Alan Pentico, director of public affairs of the San Diego County Apartment Association, states, "We wanted it to be good enough that others in the county use it and follow it." Pentico is concerned about the possible costs and complications for high-rise apartment developers. Otherwise, he said, "It's a great thing." City leaders, meanwhile, said the measure will encourage water savings in a sector of the population that to date has been mostly overlooked when it comes to reducing water use. Similar rules being crafted in the state capital attempt to do the same on a statewide level.
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Md. Senate Kills Door-to-Door Apartment Campaigning Measure
Digested From "Md. Senate Kills Door-to-Door Campaigning Measure"
WTOP News (03/06/10) by Meg Tully
Late last week, the Maryland Senate killed a measure that would have allowed political candidates access to apartment communities. The measure was introduced after more and more homeowners associations and condominium boards complained about turning away political candidates. The measure, which failed by a 26-21 vote, would have allowed associations and boards to set reasonable restrictions, such as disallowing campaigning at late hours. Debate centered around legislators raising concerns about the security of gated neighborhoods, apartment communities and senior citizen homes if they were forced to allow people in. Sen. James Rosapepe, a Democrat who represents Prince George's and Anne Arundel counties, said the bill would benefit working-class people who live in apartment communities. He said apartment owners could deny access to a county executive candidate who looks out for residents who rent and allow the opponent access instead. Rosapepe concludes, "Under current law, this can be totally to the benefit of the owner of the apartment building at the expense of the renters."
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Wisconsin Proposal Would Help Students Before They Are Pushed to Sign New Lease
Digested From "Proposal Would Help Student Renters Before They're Pushed to Sign New Lease"
Madison Capital Times (WI) (03/04/10) by Kristin Czubkowski
Bridget Maniaci, who holds Madison's District 2 city council seat, is looking to change the law that allows apartment owners to begin showing and leasing rental units after only one-fourth of the current lease has expired. In a college town like Madison, where students control a majority of the area rental stock, that means that most reisdents in downtown apartments have to make a decision about next year's living situation on or around Nov. 15. Maniaci believes that this is not enough time for residents to make an informed decision about whether or not to renew, adding, "I don't think it's unreasonable to make sure that renters have good information to base their decisions of renewal upon." She also believes that by pushing back the new date to February, it will both alleviate the pressure on non-students to make decisions based on the student calendar "and also give freshmen ample time to decide what their renting plans will be before the other students rush to claim the highest quality units." The Apartment Association of South Central Wisconsin has voiced its opposition to the proposal, saying that it will do nothing but delay the annual housing rush and shorten the amount of time that apartment owners have to market their less-sought-after units.
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Menlo Park Introduces Beefed-Up Apartment Smoking Ordinance
Digested From "Menlo Park Introduces Beefed-Up Smoking Ordinance"
San Jose Mercury News (CA) (03/03/10) by Jessica Bernstein-Wax
In California, Menlo Park's city council recently voted 4-1 to strengthen the city's 17-year-old smoking ordinance by instituting a $500 fine for smoking in apartment community swimming pools and common areas of multi-level apartment and condo buildings. "This is a huge improvement from where we are today," Council Member Kelly Fergusson said before the vote. "Does it go as far as I'd like to see? Maybe not. I hope in the future there would be room for making it stronger." Some residents would like to see the ban include smoking on balconies, patios and private residences. Many apartment owners would prefer to have municipalities defer to them on deciding what the smoking policy and enforcement is. "The challenge with any of these smoking ordinances that impact rental housing is the issue of enforcement," said Joshua Howard, executive director of the California Apartment Association's San Mateo, Santa Clara and Santa Cruz county division. "Our goal, No. 1, is to have some level of consistency among the ordinances in San Mateo County and also to clarify the role of the [landlord]."
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Secret Letter Written by Utah Apartment Association Discovered
Digested From "KSL 5 News Uncovers Secret Letter Written by Utah Apartment Association"
KSL.com (UT) (03/02/10) by Lori Prichard
Kyle Adams, owner and operator of Low Cost Decontamination, has refused to sign a contract written by Utah Apartment Association Executive Director Paul Smith which states that all contractors are bound to not tell health officials about meth contamination without permission from the apartment owner. Smith remarks, "This letter basically says the law changed. We want to make sure that you are aware of it, and we would like to know if you are going to follow it." Meanwhile, state Rep. Steve Mascaro (R-West Jordan) is currently sponsoring a bill to accelerate disclosure of meth contaminated property. He claims that the letter was simply intended to prevent apartment owners from having to disclose any meth contamination to the public. He further plans to turn the letter over to the Legislature's legal department to take a look at it.
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