Menu
|
|
Redevelopment, Incentives Have Renters Eyeing Detroit
|
| | Home | Events | Advertise | Feedback | |
Headlines
Top Story
Redevelopment, Incentives Have Renters Eyeing Detroit
Industry News
Coral Gables Experiencing Mini Building Boom
S.F. Apartment Rent Rises as Vacancy Rates Fall
Manhattan Vacancies Scarce
San Francisco Community Sells for $50 Million
Mass. Developer's 40B Plan Receives Mixed Reviews
July a Hot One for the Apartment Market Too
Lehman Estate Eyes Disposal of Archstone
Tax Increment Financing OKd for Maywood Apartments
Colorado REIT Bets On Lower Manhattan
To Prevent Turnover, Apartment Owner Uses Popsicles, Laundry
Legislative/Legal News
Vernon Could Sell Its Controversial Homes and Apts
Rental Options Sought on Foreclosed Homes
Top Story
Time Warner Cable Community Solutions has proven success partnering with MDU owners, providing quality voice/video/data products to their residents.
Redevelopment, Incentives Have Renters Eyeing Detroit
Digested From "Redevelopment, Incentives Have Renters Eyeing Detroit"
Detroit News (08/11/11) by Louis Aguilar
Several rental housing buildings in downtown Detroit are reporting occupancy of 90 percent or more, with the outlook remaining rosy for the foreseeable future. The market is getting a big boost from redevelopment projects as well as from a month-old, $4 million incentive program designed to attract more residents to the central business district. Live Downtown is the brainchild of local firms Quicken Loans, Compuware Corp., Blue Cross Blue Shield of Michigan, DTE Energy Co., and Strategic Staffing Solutions Inc. -- which are offering cash incentives of up to $20,000 to employees who purchase a home downtown or in select neighborhoods and up to $3,500 for those who rent in those communities. There will be more options to choose from in the near future, as plans to redevelop the David Whitney Building and former Detroit Free Press space shape up. High-end properties will play a part in downtown's revival, as well, with 127 units coming soon from the redevelopment of the Broderick in Grand Circus Park.
Industry News
Coral Gables Experiencing Mini Building Boom
Digested From "Coral Gables Experiencing Mini Building Boom"
Miami Herald (08/14/11) by Toluse Olorunnipa
Backed by a quarter-billion dollars in fresh financing, a handful of developers are building again in Coral Gables, Florida. The downtown section of Coral Gables is the epicenter of the mini-building boom, with luxury apartments and office buildings taking center stage. More than two million square feet of new space is set to hit the market over the next three years, coming in the form of newly minted offices and luxury apartment communities. The new projects could create up to 1,000 additional residential units and house dozens of additional companies and restaurants. Banks are pumping hundreds of millions of dollars into Gables development while much of the greater South Florida market remains lacking in financing. At least $250 million in construction financing is backing the projects in the pipeline. According to a recent report by commercial real estate firm Studley, Coral Gables' Class A office vacancy rate stands at 18.9 percent, an above-average figure that could be pushed higher when new projects come online. Average monthly rental rates are about $32 per square foot, and many of the new developers are hoping to get $40 to $55 when their projects open. Diana Parker, a director with Cushman & Wakefield, said those prices will begin to look more realistic as the economy improves over the next few years. "To be clear, it is still a tenant's market today," she says. "But it is not the bloodbath market that the landlords experienced this time last year. We're very bullish on the future of Miami's office market." Analysts are even more optimistic about the rental market, where demand is already rising rapidly and apartment owners are cashing in on increasing rent prices. A recent report by real estate firm Marcus & Millichap forecasts sustained growth in the rental market as vacancies fall and prices improve in the luxury sector.
S.F. Apartment Rent Rises as Vacancy Rates Fall
Digested From "S.F. Apartment Rent Rises as Vacancy Rates Fall"
San Francisco Chronicle (08/11/11) by Carolyn Said
Apartment hunting in San Francisco has turned into a competitive sport with hopeful renters swarming open houses and experiencing a lot of rejections. Driving the demand is a new wave of tech workers at the city's rapidly growing social media and technology companies, which are bringing Generation Y into the housing market. According to Sarah Bridge, owner of RealFacts, a Novato firm that tracks the apartment market, "Their preference is to live in the heart of a vital, thriving community like San Francisco. They want to be where the action is, and they don't mind being in a small studio apartment as long as it's well-located." Only about a third of San Francisco's residents are homeowners - half the national homeownership rate. "Part of the preference to rent is tied to demographics and changes in attitudes," said Hessam Nadji, managing director at Marcus & Millichap, a real estate investment firm. "The housing crash is still fresh, and homes are not being viewed as an attractive investment. Renters like the flexibility and mobility of being an apartment dweller, being close to work, and the benefits of the urban lifestyle." The result of this trend is that vacancy rates are falling and rents are rising in the city. Outside of the city, in the East Bay, the rental market is not as hot, with rates and vacancies holding steady, but tech-dense Santa Clara County rents grew 6.6 percent, from $1,650 a month to $1,759 on average, according to RealFacts. Apartment hunters said they spend much of their time compulsively checking listings on Craigslist, eager to be the first respondent. Some say driving around and looking for "For rent" signs; working a personal network; listening for scuttlebutt about people getting ready to move; and going directly to apartment management companies are better approaches than Craigslist. With the surge in applicants for few vacancies, property managers have narrowed the parameters they use to choose tenants. Some say credit score is paramount, others look at income, and some still use a first-come, first-serve basis after checking basic criteria.
Manhattan Vacancies Scarce
Digested From "Manhattan Vacancies Scarce"
Wall Street Journal (08/10/11) by Joseph De Avila
The apartment vacancy rate in New York City continues to be the lowest in the nation, according to a report by Marcus & Millichap, real-estate investment firm. Only 2.8 percent of the city's apartments were vacant during the second quarter; Minneapolis came in second in the nation for low vacancy rates at 2.9 percent, and San Jose was third at 3.2 percent. Potential homeowners who are opting to rent rather than buy are in part driving the lower vacancy rates, said Hessam Nadji, managing director of Marcus & Millichap. Lower vacancy rates are driving rents up. After the start of the financial downturn, landlords offered lavish incentives to woo renters, but with fewer vacant apartments, landlord concessions in the form of a free month's rent or payment of broker fees are all but gone. Whether the trend continues is "really going to depend on how long and deep this current situation is," says Gary Malin, president of Citi Habitats. But if the economy falls back into a recession, "historically the vacancy rates do rise and rents become more negotiable," he adds.
San Francisco Community Sells for $50 Million
Digested From "Multifamily Complex Changes Hands for Close to $50 Million"
GlobeSt.com (08/14/11) by Natalie Dolce
Bascom Northwest Ventures has reportedly sold the Lafayette Highlands apartments in San Francisco for $48.75 million to a publicly traded REIT, according to GlobeSt.com, after acquiring the property for $29.4 million in 2005 with its partner Capri Urban Capital from Lafayette Highlands LLC. The partnership invested nearly $5.4 million upgrading the property during its ownership. The price per unit of $325,000 sets a record for the East Bay market, according to Bascom. Marcus & Millichap Real Estate Investment Services reports that transaction velocity has steadily increased in recent quarters and will continue to rise as investors seek East Bay apartment opportunities ahead of the next strong upturn in rents, already being seen in San Francisco. The firm predicts that through 2011, sales will remain concentrated at either end of the pricing spectrum. Occupancy should reach levels last achieved at the previous cyclical peak in mid-2008, according to Marcus & Millichap, thanks to a rebound in renter demand. "Healthy apartment absorption can be attributed to rising payrolls in typically lower-paying industries, such as trade and hospitality, and declining homeownership rates amid weak housing market conditions and elevated foreclosures," the firm states. "Minimal new apartment construction has also contributed to tighter conditions."
Mass. Developer's 40B Plan Receives Mixed Reviews
Digested From "Developer's 40B Plan Receives Mixed Reviews in Southborough"
Milford Daily News (MA) (08/15/11) by Brad Petrishen
Westborough, Mass., developer Robert Moss presented detailed plans of his proposed Chapter 40B project last week after announcing in May that he intended to build 140 apartments on Rte. 9 East, a quarter of which will be rented as affordable under state law. MassHousing, the state's affordable housing bank, approved a 200-home complex at the same site in 2007 that was proposed by AvalonBay, but the company walked away from the proposal during the recession. Moss told selectmen on Aug. 9 that he reduced the number of apartments on the 16.7-acre lot by 60 and plans to market the remaining homes to small families or singles to fill what he sees as a housing niche and to make the project more palatable to neighbors. The complex would feature 84 one-bedroom apartments, 56 two-bedroom apartments and, unlike the previous proposal, no three-bedroom homes. "The goal here is to minimize the number of large bedroom units, which should have a drastic effect on school kids within the project," he said. Residents have said before that they fear that 40B projects would overburden the school system. Moss said he's including offices in each apartment to cater to professionals and will refuse to rent any rooms to students. "It will be the most high-end luxury product in all of central Massachusetts," he said of the complex, which would also feature 43 exterior garages and more than 244 parking spaces in all. In accordance with 40B law - which allows developers to bypass many zoning regulations if at least 25 percent of the proposed homes are priced at affordable rates set by the state - 35 of the 140 apartments would be affordable.
July a Hot One for the Apartment Market Too
Digested From "July a Hot One for the Apartment Market Too"
Crain's New York Business (NY) (08/10/11) by Amanda Fung
Citi Habitats says the Manhattan apartment market showed an 8 percent gain in the average monthly rent to a near record of $3,258 in July. Rents edged up 7 percent to $1,953 for studios, 7 percent to $2,672 for one-bedrooms, 9 percent to $3,754 for two-bedrooms, and 9 percent to $5,052 for three-bedrooms. Citi Habitats President Gary Malin attributes the increases to the absence of concessions and lower vacancy rates. The vacancy rate slipped to 0.86 percent from 0.88 percent a year ago, and transactions brokered by the firm that offered concessions fell to 7 percent from 25 percent over the same period. With regard to newly built doorman buildings, the average monthly rent declined 4 percent to $5,370 year-over-year, which Malin attributes to the trend of high-end developments "pushing the limits very fast" before lowering rents to more realistic levels. The July report does not take recent stock market fluctuations or concerns about a double-dip recession into consideration.
Lehman Estate Eyes Disposal of Archstone
Digested From "Lehman Estate Eyes Disposal of Archstone"
Financial Times (08/09/11) by Helen Thomas; Telis Demos
The Lehman Brothers estate is moving forward with efforts to sell or list Archstone, the apartment company that it took private in 2007 for $22 billion at the height of the property boom. The current market turmoil is complicating discussions about how to proceed with Bank of America and Barclays, who also own sizeable stakes in the company. The banks are said to be working on documents for an initial offering, which could be filed by the end of the month. JPMorgan Chase has been retained to assist with a possible float. The group has also reportedly started discussions about a potential sale of Archstone, which could be valued at as much as $20 billion including debt, or just a stake, with a select group of potential buyers. AvalonBay, Blackstone, Brookfield Asset Management, and EQR are said to be among the potential buyers. The estate of Lehman currently holds about 47 percent, while Bank of America owns 28 percent and Barclays 25 percent. Barclays and Bank of America are reportedly leaning towards a faster solution, suggesting a sale rather than a lengthy IPO process. However, the market turmoil has the potential to shift the dynamic, as it makes the prospect of achieving a full IPO valuation more challenging.
Tax Increment Financing OKd for Maywood Apartments
Digested From "Tax Increment Financing OKd for Maywood Apartments"
Oklahoman (08/10/11) by Steve Lackmeyer
The Oklahoma Economic Development Trust will help spur development of the 139-unit, $18 million Maywood Apartments in Deep Deuce by approving $1 million in tax increment financing. Before developer Jason Bradshaw can receive the tax increment financing payment, the project -- which will break ground this fall -- must be completed, on the county assessment roll, and 40 percent occupied. Additionally, the project's ownership must remain the same for at least five years. Bradshaw says the project, comprised of four-story buildings and two levels of underground parking, would not be possible without the tax increment financing. Before construction can commence, the project requires the Oklahoma City Urban Renewal Authority to approve the designs and the U.S. Department of Housing and Urban Development to approve the financing. The project will take about 18 months to complete, and the units will rent for $700 to $1,200 per month.
Colorado REIT Bets On Lower Manhattan
Digested From "Colorado REIT Bets On Lower Manhattan"
Wall Street Journal (08/09/11) by Dawn Wotapka
UDR Inc. has agreed to buy an upscale downtown Manhattan apartment building in a $325 million deal that company officials say reflects the real-estate investment trust's efforts to become a major player in the lucrative coastal markets. Denver-based UDR, one of the country's largest publicly held apartment owners, has agreed to buy the 500-unit building at 95 Wall Street from the Moinian Group. The deal marks the fourth Manhattan deal this year for UDR for a total of $1.2 billion. UDR was founded as United Dominion Realty Trust in 1972, and by the turn-of-the-century it owned more than 100,000 units in 63 markets. However, the company decided to pull out of much of Middle America to focus on coastal cities where younger renters would pay more rent, and sold approximately 40 percent of its portfolio in March 2008. "We think it's a good time to buy New York," says Tom Toomey, UDR's chief executive. Downtown Manhattan has seen its residential population grow steadily, and the transaction is occurring at a time when investors are rushing to buy apartment buildings nationwide, betting that rents will rise as more Americans decide to rent instead of buy homes. Reis Inc. reports that just 5.9 percent of apartment units are vacant nationwide, down from 7.8 percent a year earlier. Some industry watchers have expressed concern that the buying spree might force apartment owners to bring back profit-reducing incentives to prevent tenants from moving out if the economy weakens further. "If the economy falls into another recession, plain and simple, these significant investments they're making could very well fall apart on them," says Rich Anderson, a REIT analyst with BMO Capital Markets. Toomey says UDR says is not worried, noting the financial district "is coming back. The restaurants will come. The retail will be there. With all that vibrancy, I think it's going to be a great spot to have rental properties."
To Prevent Turnover, Apartment Owner Uses Popsicles, Laundry
Digested From "To Prevent Turnover, Apartment Landlord Uses Popsicles, Laundry"
Wall Street Journal (08/10/11) by Dawn Wotapka
Vacancies are down and rents are up nationwide, indicating for the most part that apartment managers do not have to offer too many added incentives to keep their tenants happy. However, Home Properties has taken a different approach, recently holding a series of “appreciation days” at its 118 communities stretching primarily from Boston to the to the Washington, D.C. area. Events included movie trivia, kids’ safety day, free use of laundry facilities, and free Popsicles by the pool every Saturday in June. Home’s goal is to encourage tenants to renew once their lease expires, said Charis Warshof, Home’s vice president of investor relations. Whether such events work is difficult to prove. “Some things are tough to pin to down,” Ms. Warshof said. “If people are happy they’re going to stay longer. They’re also going to tell their friends.” Last year, resident referrals accounted for 27 percent of new leases, and one resident even wrote a letter of appreciation.
Legislative/Legal News
Vernon Could Sell Its Controversial Homes and Apts
Digested From "Vernon Considers Selling Its Controversial Homes and Apartments"
Los Angeles Times (08/13/11) by Sam Allen
Members of the newly formed Vernon, Calif., Housing Commission say they will consider selling the homes and apartments owned by the city to assuage controversy about its voting population. The commission is the centerpiece of a governmental reform effort launched in response to a state bill calling for Vernon to be disbanded. The industrial city south of downtown Los Angeles has been mired in a series of corruption scandals in recent years. Nearly all of Vernon's residents have lived in 26 homes and apartments owned and managed by City Hall, an arrangement that state lawmakers say has enabled a small group of leaders to control Vernon's government with few checks and balances. Now the homes will be overseen by the commission, which includes the city's mayor, three local businessmen, two residents and an employee of one of Vernon's largest companies. The commission will also formulate a conflict-of-interest policy for future lessees. The Los Angeles Times reported last year that more than a dozen relatives of city officials were awarded leases at subsidized rates.
Rental Options Sought on Foreclosed Homes
Digested From "Rental Options Sought on Foreclosed Homes"
Wall Street Journal (08/10/11) P. A2; by Nick Timiraos
To prevent further drops in home prices and reduce the glut of foreclosed properties on the market, the Obama administration will consider investors' ideas for converting thousands of foreclosures owned by Fannie Mae, Freddie Mac, and the FHA into rentals. HUD favors a proposal to sell hundreds or thousands of foreclosed homes in packages to investors who would rent them out. The administration is willing to field other proposals from nonprofit and for-profit investor groups -- including options that may allow distressed borrowers to remain in place, but as renters instead of owners.
Abstract News © Copyright 2011 INFORMATION, INC.
|
|
|