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NAA Survey Finds More Say Renting Trumps Owning
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NAA Survey Finds More Say Renting Trumps Owning
Industry News
NAR Forecast Points to a Drop in Apartment Vacancies
Owners of Major San Fran Apartments Vow to Survive Loan Woes
Orlando Apartment Market Still Tepid, Marcus & Millichap Reports
Unemployment Rates, by State: Most Regions Register Improvement
Judge OKs Restructuring Plan for Charlotte Developer Crescent Resources
Texas Apartment Association Program Aims to Prevent Heat-Related Injuries
April's Apartment Vacancy Rate Drops in Manhattan
Southern Nevada's Apartment Vacancy Rate Shrinks in Q1 2010
New York City Apartment Residents to Pay Fees Again
Douglas Emmett, Inc. Announces Quarterly Cash Dividend
Legislative/Legal News
Cary, N.C., Police Aim to Keep Apartment Residents Safe
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NAA Survey Finds More Say Renting Trumps Owning
Digested From "Survey: More Say Renting Trumps Owning"
Inman News (05/25/10)
Most consumers consider renting a better shelter option than buying given current market conditions, according to a recent poll conducted by Harris Interactive on behalf of the National Apartment Association. The results show that 76 percent of more than 2,100 consumers polled agree that renting is best right now, up 5 percentage points from 2008. Just 12 percent of those who rent -- compared to 17 percent in 2008 -- said they intend to purchase a new home this year. Survey respondents named freedom from repairs and maintenance (64 percent) and financial benefits (50 percent) as the primary reasons for renting. The ability to change locations easily also is a factor, according to NAA President Douglas Culkin. "The simple fact remains that in a bad economy, people must make whatever changes necessary to improve their situation, especially if they have lost their job," he explains. "Sometimes this might mean moving to another city where there is more opportunity, and if you're tied to a mortgage, you don't have the same ease of mobility as you do if you lease your home."
Industry News
NAR Forecast Points to a Drop in Apartment Vacancies
Digested From "More US Commercial Property Vacancies Ahead -- Group"
Reuters (05/26/10) by Al Yoon
The lingering effects of recession will show up in commercial real estate in the form of higher vacancy rates, the National Association of Realtors predicts. The group's latest forecast expects vacancies to climb into next year, with the exception of apartment communities -- which could register a drop in empty units as well as a rise in rents. "The multifamily sector can expect increased demand as the economy creates jobs and new households are formed," explains NAR chief economist Lawrence Yun, "likely in the second half of this year." Vacancies at office properties, meanwhile, probably will drift up to 17.6 percent in the first quarter of next year from 16.9 percent in the comparable period of 2010 while rents in the segment fall.
Owners of Major San Fran Apartments Vow to Survive Loan Woes
Digested From "Parkmerced Owners Say They'll Survive Loan Woes"
San Francisco Chronicle -- 10 (05/27/10) by Andrew S. Ross
The commercial real estate meltdown has caught up with Parkmerced in San Francisco -- one of the nation's biggest apartment communities. According to the development's owner, the loan on the property is headed for default. Seth Mallen, executive vice president of Stellar Management, co-owner of Parkmerced, issued a statement on Wednesday that read: "Parkmerced and its lenders engaged a special servicer (a company that specializes in handling loans in default) to support the payments of the loan on the property." While the statement did not disclose the amount owed, real estate analysts have said there are two notes amounting to $500 million or more. P.J. Johnston, a spokesman for Stellar Management, remarks, "This may cause some anxiety to some residents. But we are reassuring them this will not impact their daily lives here." Ted Gullicksen, director of the San Francisco Tenants Union, has vowed that residents will be protected from exorbitant rent hikes or eviction.
Orlando Apartment Market Still Tepid, Marcus & Millichap Reports
Digested From "Orlando Apartment Market Still Tepid"
GlobeSt.com (05/24/10) by Hortense Leon
According to Marcus & Millichap's Market Update on the Orlando apartment market for the first quarter, the area's apartment stock continues to struggle with rents falling and vacancy rates still on the rise. Researchers say a number of trends are keeping the downward momentum going in the Orlando apartment sector. First, declines in both hospitality and leisure employment have negatively affected Class B and C communities. At the same time, resident demand for Class A product has remained fairly strong. Five of Orlando's 11 submarkets posted apartment vacancy rates of less than 10 percent in this year's January-through-March swing. The lower rates, though, may have been achieved via concessions. Only 950 rental apartments are on track for a 2010 completion versus 2,176 last year and more than 3,700 units in 2008. This would be welcome news for the apartment sector, except for the fact that there is a significant pipeline of stalled, planned communities and shadow stock in some submarkets. Marcus & Millichap notes that could put brakes on any recovery.
Unemployment Rates, by State: Most Regions Register Improvement
Digested From "Unemployment Rates, by State: Most Regions Register Improvement"
Wall Street Journal (05/21/10) by Sara Murray
New Labor Department statistics show that the jobless rate in 34 states and the nation's capital fell during the month of April compared to March, even as the country's unemployment rate rose to 9.9 percent. Over that same time span, a half-dozen states recorded unemployment rate increases, while the rate was unchanged in the other 10 states. Michigan had the highest unemployment rate nationwide, at 14 percent. However, it nudged down a tenth of a percentage point from a month earlier. Other states with very high jobless rates included Nevada, California, and Rhode Island. At the opposite end, North Dakota and South Dakota had the lowest jobless rates at 3.8 percent and 4.7 percent, respectively. Even more states recorded gains in payrolls. Nonfarm payrolls rose in 38 states and the District of Columbia, while dropping in the 12 other states. Ohio added the most amount of jobs (37,300), followed by Pennsylvania.
Judge OKs Restructuring Plan for Charlotte Developer Crescent Resources
Digested From "Judge OKs Restructuring Plan for Charlotte Developer Crescent Resources"
Builder (05/10) by Kerry Singe
Charlotte-based Crescent Resources plans to exit Chapter 11 bankruptcy almost a year after seeking court protection. The restructuring sheds $1 billion in debt, cuts the company's value by two-thirds, and puts the developer back on track to resume building across the Carolinas. Secured creditors will be paid 38 cents on the dollar and will takeover ownership of the company, which will be worth about $650 million. CEO Andrew Hede said the company will continue developing apartment communities, commercial projects, and other developments with a distinct focus on apartments and homes. In addition, it will exit Arizona and cut spending in Florida. The company expects to post a loss of $119 million this year, but Hede says he expects it to turn a profit in 2011.
Texas Apartment Association Program Aims to Prevent Heat-Related Injuries
Digested From "TAA's 'Neighbors CARE' Program Helps Prevent Heat-Related Injuries to Residents"
Business Wire (05/26/10)
Preparing for a long and hot summer, the Texas Apartment Association (TAA) is urging its more than 10,500 members to promote its "Neighbors CARE" program to residents of rental housing. Established in 1998, the program advocates awareness of heat stress symptoms and encourages residents to keep a close eye on their neighbors at risk of heat stress. George B. Allen, TAA's executive vice president, remarks, "Experts tell us one of the best ways to prevent heat-related tragedies is for neighbors to look out for each other and check on each other regularly. That’s what we're asking our members to encourage their residents to do." Indeed, the Neighbors CARE program encourages rental housing residents to check on your neighbors daily, especially elderly ones; take precautions to prevent heat stress; and to report any problems or concerns regarding air conditioning equipment promptly to management. Allen adds, "We're also asking our members and their residents to support, where available and possible, the utility company bill check-off programs that allow individuals to contribute money to assist with the utility bills of those less fortunate. We're asking members to support fan collection and distribution drives, as well."
April's Apartment Vacancy Rate Drops in Manhattan
Digested From "April Vacancy Rate Drops in Manhattan"
Wall Street Journal (05/25/10) P. A24; by Dawn Wotapka
Citi Habitats reports that Manhattan's vacancy rate for rental apartments declined in April to the lowest level since June 2008. Researchers say this is the latest sign that the city's economy is on the upswing. Citi Habitats' research shows that just 1.23 percent of apartments in Manhattan were vacant last month, a sharp decline from 2.28 percent during the same month a year earlier. Looking at the city's individual neighborhoods, SoHo/Tribeca boasted the lowest vacancy rate at 0.52 percent. Midtown East registered the highest, meanwhile, but only at 1.7 percent. This is, of course, not the best news for anyone looking for a desirable apartment in the area of their choice. Julie Wiener, co-founder of brokerage First Properties of New York, concludes, "There's very little availability. The market is definitely shifting." Declining vacancies are due partly to a strengthening jobs market, as New York City employers added approximately 21,000 private-sector jobs in April.
Southern Nevada's Apartment Vacancy Rate Shrinks in Q1 2010
Digested From "Apartment Vacancy Shrinks Locally in First Quarter"
Las Vegas Business Press (05/24/10) by Tony Illia
Vacancy rates in Southern Nevada dropped to 10.2 percent during the first quarter, and average rents increased for the first time in a year and a half. This, in turn, has signaled a surprise uptick in the rental market. CB Richard Ellis senior vice president Spencer Ballif remarks, "It still isn't a healthy market, but it's better than what it was." Nevada had the nation's highest state foreclosure rate for the 40th consecutive month in April, and apartment industry experts suspect the increase in rental households was driven by people losing or selling their homes. The average asking rent was $777 a month in the first quarter, up 1 percent from last quarter. Bentley Group President Christopher Bentley said he expects to see a return to normal underwriting and rent growths of 2 percent to 5 percent annually. Approximately three-quarters of Southern Nevada's apartment communities are still offering concessions, such as move-in specials.
New York City Apartment Residents to Pay Fees Again
Digested From "Renters to Pay Fees Again"
Wall Street Journal (05/25/10) P. A21; by Dawn Wotapka
At least three major Manhattan apartment owners have opted to stop paying broker's fees on some of their properties. As a result, many people will need to brace themselves for extra expenses when apartment shopping -- a shift from 2009 when desperate owners would cover the broker's fee, which was typically one month's rent. However, with demand for apartments rising and vacancy rates on their way down, some of New York's largest apartment owners have notified brokers that they will no longer pick up the fee. Citi Habitats President Gary Malin remarks, "The pendulum is swinging back to a landlord's market. Owners are going to do what's in their power to stop overpaying, in their eyes, to attract clientele." Ogden CAP Properties LLC, for instance, has said it will not pay fees at such properties as Normandie Court on East 95th Street and One Lincoln Plaza on West 64th Street. Another large apartment owner, Pan Am Equities Inc., says it will stop paying fees starting June 1.
Douglas Emmett, Inc. Announces Quarterly Cash Dividend
Digested From "Douglas Emmett, Inc. Announces Quarterly Cash Dividend"
Business Wire (05/28/10)
Douglas Emmett Inc. 's board of directors has approved a quarterly cash dividend of $0.10 per share, which will be payable on July 15 to shareholders of record as of June 30. The California-based REIT ranks as one of the biggest owners and operators of high-quality office buildings and multifamily housing in the premier submarkets of Southern California and Hawaii. Its properties are concentrated in ten major submarkets, including Beverly Hills, Burbank, Century City, Santa Monica, Beverly Hills, and Honolulu.
Legislative/Legal News
Cary, N.C., Police Aim to Keep Apartment Residents Safe
Digested From "Cary Police Aim to Keep Renters Safe"
Raleigh News & Observer (NC) (05/27/10) by Sadia Latifi
In Cary, N.C., the town's proposed fiscal 2011 budget calls for the hiring of three new police officers to launch a "crime-free neighborhood program," which will focus on preventing illegal activity at area apartment communities. Cary Police Capt. Tracy Jernigan states, "This is really a partnership between the police department and property managers who want to be crime-free properties so that they can solicit more tenants who want to live there." The program would offer specialized training to apartment owners and their residents on crime awareness and prevention. Perhaps the biggest draw for apartment managers would be an enhanced ability to evict problem residents. To this end, program participants can learn how to add addendums to lease agreements that would force an incoming resident to sign a contract that says he or she or any guests would not commit any crimes while living on the property.
According to the Triangle Apartment Association, roughly 17 percent of the Triangle region's 98,176 apartments are in Cary, Morrisville, or Apex.
Abstract News © Copyright 2010 INFORMATION, INC.
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