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Small Apartment Communities Emerge as Smart Investments
Industry News
S&P Lifts Outlook On Aimco on Improved Rental Trends
D.C.-Area Class B Apartments in the Spotlight
What's Behind San Diego's Improving Apartment Market?
CalPERS Puts Its Apt Portfolio Under New Management
Bozzuto Adds Electric Vehicle Charging Stations in Md.
Essex Property Raises $150 Million
Dallas-Fort Worth Apartment Construction on the Rise
LEED Green Apartments Come To Denver
Ground Zero Reinvented by New York Apartment Developers
NAA Education Courses Turn Landlords into Rental Industry Professionals
Legislative/Legal News
Divisions Emerge in Congress on Fannie, Freddie Overhaul
Are Web Users Comfortable Sharing Personal Data?
Readers Respond to WSJ Article on Web Advertisers
Smoking Ban Could Reach Apts in Maryland County
Harrisonburg (Va.) Cops Increase Weekend Presence in Apts 
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Small Apartment Communities Emerge as Smart Investments
Digested From "Are Small Apartment Buildings A Smart Investment?"
Investor's Business Daily (03/31/11) by Kathleen Doler
Such factors as rising occupancy rates and rents and low sales prices are prompting more investors to become apartment owners. One of the hottest niches for smaller investors has been multi-unit buildings with up to four rental units as this size of apartment community can qualify for conventional financing backed by Fannie Mae and Freddie Mac with 20 percent to 25 percent down. Additionally, when the owner lives in one of the apartments, financing insured by the FHA may be available with as little as 3.5 percent down. Lesley Deutch, vice president of John Burns Real Estate Consulting, observes, "I'm seeing rents go up in the markets where employment is strong: New York City, Seattle, Washington, D.C. All markets will be on the positive side this year." Real Capital Analytics states that sales of apartment portfolios priced $2.5 million and up soared 50 percent in February from a year earlier to top the $2 billion mark. However, it's still just a fraction of the activity seen a few years ago. In addition, research shows that distressed properties accounted for 41% of February's sales. Meanwhile, Real Capital's analysis of large apartment deals found investor demand outstripping offerings around the District of Columbia; Boston; Southern California's Orange County; San Francisco; Raleigh, N.C., and several Florida markets.
Industry News
S&P Lifts Outlook On Aimco on Improved Rental Trends
Digested From "S&P Lifts Outlook On Apartment Investment On Improved Rental Trends"
Wall Street Journal (03/31/11) by John Kell
Late last week, Standard & Poor's Ratings Services raised its outlook on Apartment Investment & Management Co. (Aimco) to "stable," reasoning that multifamily housing fundamentals have been strengthening since the first quarter of last year and rental rate trends are positive. S&P wrote: "We feel that operating conditions will remain favorable in 2011 supporting rental rate growth." According to the ratings agency, cash flows for rated apartment REITs should continue to improve as existing leases are renewed or replaced at higher current rates. Aimco, which focuses on owning and managing apartment communities in the nation's 20 largest markets, has benefited from the economic recovery relatively quickly. This is because the leases it offers are generally for shorter terms than those for office, industrial, or retail space. Other apartment REITs have reaped similar rewards. S&P currently rates Aimco at "BB-plus," which is just under investment-grade territory. According to analyst George Skoufis, the rating reflects the company's significant financial profile and higher-than-average leverage. Howeverm he also noted that Aimco's portfolio quality has improved in recent months, most notably its conventional apartment portfolio.
D.C.-Area Class B Apartments in the Spotlight
Digested From "Class B Apartments in the Spotlight"
Washington Business Journal (04/01/2011) by Tierney Plumb
Delta Associates Inc. reports that Washington, D.C.-area rents at Class B apartment communities are up almost 9 percent in the past year. The Virginia-based firm puts the vacancy rate for such communities at 2.3 percent and the average effective rent at $1,516 a month. Class B apartment owners are finding that renovations are a quick way to add value to their offerings. Throughout the D.C. area, Delta researchers calculate that there are 24,516 Class B units with substantial renovations or upgrades in the works, up from 16,422 such apartments a year ago.
What's Behind San Diego's Improving Apartment Market?
Digested From "What's Making San Diego County Rents Go Up?"
Sign-on San Diego (03/31/11) by Lily Leung
According to numbers from a twice-yearly rental report from MarketPointe Realty Advisors, the average monthly rent in California's San Diego County increased 1.5 percent to $1,335 in March from $1,315 the same time last year. The rise was primarily driven by three factors: minor traction in the local job market, an uptick in distressed homeowners having to lease again, and more young adults leaving home after a brief post-college stay. The report also showed the average vacancy rate in the county is 5.1 percent, an increase from 4.8 percent a year ago fueled by an autumn infusion of 679 units from failed condo projects. For the most part, analysts say San Diego's market is stable and should see steady improvement in the months to come. Peter Dennehy, a vice president of John Burns Real Estate Consulting, says the local market echoes what is happening nationwide as apartment rents increase with the strengthening economy. In addition to those who find themselves in favorable financial situations, people in financial distress are also driving the rental market, particularly those who are shifting back to renting after struggling to pay their mortgage and going through foreclosure. Finally, college graduates who moved back in with their parents after graduation are now moving out after saving for a few years.
CalPERS Puts Its Apt Portfolio Under New Management
Digested From "CalPERS Puts $570 Million Real Estate Portfolio Under New Management"
Sacramento Bee (04/02/11) by Dale Kasler
Late last week, the California Public Employees' Retirement System (CalPERS) announced that it is switching management of a $570 million property portfolio to Los Angeles-based Canyon Capital Realty Advisors. The portfolio, which includes everything from apartment communities to office buildings to industrial facilities, has been managed by Deutsche Bank subsidiary RREEF. CalPERS has yet to disclose the reasoning behind the switch, and both Canyon and RREEF have declined comment on the matter. The pension fund has been in the process of overhauling its battered real estate portfolio for some time, though. In the last year and a half, it has dumped several big outside partners, most notably Blackrock and LaSalle Investment Management.
Bozzuto Adds Electric Vehicle Charging Stations in Md.
Digested From "Maryland's First Residential Community Electric Vehicle Charging Stations"
Examiner.com (04/01/11) by Ann Egerton
The Bozzuto Group recently took the wraps off and demonstrated a couple of electric vehicle (EV) charging stations at its Fitzgerald Apartments community near Baltimore. Developed by Annapolis-based SemaConnect, these charging stations are the first public electric vehicle charging stations in a residential community in the state. Each can be used for any mass-produced electric or plug-in hybrid vehicle, such as the Chevrolet Volt or the plug-in Toyota Prius. The ChargePro charging stations feature a plug that looks sort of like a gas pump and a display light that turns green to indicate when a vehicle is fully charged. EV owners will be required to sign up for an account with SemaConnect before using them. They will then be supplied with a "smart" card to activate the plug. According to Bozzuto officials, fully charging a vehicle can take anywhere from four to eight hours depending on the model. Fitzgerald Apartments can add at least two more stations as demand warrants. For its part, The Bozzuto Group plans to add charging stations to some of its other existing apartment communities and make them a standard feature of all of its future developments. Based in Washington, D.C., The Bozzuto Group has developed, acquired, and built more than 31,000 houses and apartments since being founded in the 1980s.
Essex Property Raises $150 Million
Digested From "Essex Property Raises $150M"
Silicon Valley/San Jose Business Journal (03/31/11) by Eli Segall
Essex Property Trust Inc. confirms that it has raised $150 million of new capital. The California-based apartment REIT raised the money with its operating partnership, Essex Portfolio LP, via a private placement unsecured bond offering. The five-year bonds, which have an interest rate of 4.36 percent, mature at the end of March 2016. According to Essex, proceeds will be used for general corporate purposes and to repay a portion of the company's outstanding debt under its $275 million unsecured credit line. The REIT currently has ownership stakes in 147 apartment communities nationwide and another two properties still in development.
Dallas-Fort Worth Apartment Construction on the Rise
Digested From "Dallas-Fort Worth Apartment Construction on the Rise"
Star-Telegram (03/30/11) by Sandra Baker
According to a report by MPF Research, strong demand for high-end apartment communities across the Dallas-Fort Worth market has sparked an uptick in construction. In just the past six months, work began on 3,233 rental units at 20 apartment communities. That number is high compared with the rest of the nation. Greg Willett, MPF Research's vice president of research, comments, "Financing sources are willing to green-light new apartment projects in North Texas, but you can tell we're not quite back to business as usual by the comparatively small sizes of most of the properties getting started." In the first quarter, demand for apartments slightly topped completions, and rents reached their highest level since the fall of 2008.
LEED Green Apartments Come To Denver
Digested From "LEED Green Apartments Come To Denver"
Earth Techling (04/03/2011) by Susan DeFreitas
The new Solera apartment development in downtown Denver holds the distinction of being the region's only LEED Gold certified apartment community. Boasting 120 one- and two-bedroom apartments that range in rent from $1,035 to $2,990 a month, Solera is looking to appeal to a wide range of environmentally conscious residents. Green features range from low-e windows and Energy Star appliances to high-efficiency lighting and dual flush toilets. As an added bonus, solar power accounts for nearly one-tenth of the power used in the development as a whole. Managers note that another notable green amenity is known as TED–The Energy Device, a real-time power usage display tool that helps apartment residents make informed decisions about their energy usage and monthly utility bills.
Ground Zero Reinvented by New York Apartment Developers
Digested From "Ground Zero Reinvented by New York Apartment Developers"
The Move Channel (03/30/11)
A wave of new-build apartments in the area deemed "'Ground Zero" after the Sept. 11, 2001, terrorist attacks has led to more and more professionals calling this part of the Big Apple home. U.S. census details show that there are 23,000 additional people living in the financial district of Manhattan south of Chambers Street than there were in 2001, signaling that population in that area has almost doubled. This increase is due mainly to the exodus of banks from surrounding office premises immediately after the attacks, which permitted redevelopment of neighborhoods into multifamily housing In response to these new residents, three new schools and a plethora of new shops have opened in the district. In fact, the area now includes the tallest apartment tower in the Western Hemisphere, comprising 76 stories and 900 new rental units.
NAA Education Courses Turn Landlords into Rental Industry Professionals
Digested From "Landlord or Multifamily Housing Professional?"
Multi-Housing News (03/11) by Thomas Gibbons
Thomas Gibbons of Legacy Partners writes: "One of the most important decisions I have made in my career is to pursue my Certified Apartment Manager (CAM) and Certified Apartment Property Supervisor (CAPS) designations through the National Apartment Association Education Institute (NAAEI)." He applauds NAAEI for providing a key component to his and others' success in the multifamily housing industry in a rental housing market that is experiencing exponential growth. He states even when top-flight amenities, attractive rents, and curb appeal, an apartment community's on-site team must still provide exceptional customer service and value. "So this is where the difference from the typical landlord and a multifamily housing professional come into play," he notes. Gibbons concludes, "Whether you are a first-time renter moving away from home, a savvy business person who has just been transferred to a new city, or someone needing more space to accommodate your growing family, apartments are still and will continue to be the most viable option for many individuals in this society."
Legislative/Legal News
Divisions Emerge in Congress on Fannie, Freddie Overhaul
Digested From "Divisions Emerge in Congress on Fannie, Freddie Overhaul"
Wall Street Journal (03/30/11) by Alan Zibel; Jeffrey Sparshott
A rift among Capitol Hill legislators over the speed with which the mortgage market should be revamped is evident, as House Republicans introduced eight new bills seeking to overhaul the sector even as senators from both parties warned against moving too fast. The divide is another sign of how difficult it will be to pass legislation to replace Fannie Mae and Freddie Mac. House Republicans say government involvement in the housing market was a key cause of the financial crisis, adding that other nations have been able to achieve comparable rates of homeownership without a similar level of federal support.
Are Web Users Comfortable Sharing Personal Data?
Digested From "The 0.00002 Percent Privacy Solution "
Wall Street Journal (03/28/11) by L. Gordon Crovitz
A newly released study by Arbitron and Edison Research shows that over 50 percent of Americans age 12 and older now have Facebook accounts. The research, though, raises this question: "If most Americans are happy to have Facebook accounts, knowingly trading personal information for other benefits, why is Washington so focused on new privacy laws?" Indeed, there is little evidence that people are clamoring for such rules. The Federal Trade Commission, though, has proposed regulations limiting how advertisers use behavioral and other tracking systems to deliver more targeted ads. Some Capitol Hill lawmakers are calling for a Do Not Track system, which would be similar to the Do Not Call rules that limit nuisance phone calls. Again, though, the public seems largely relaxed about behavioral targeting. The advertising industry, meanwhile, is utilizing the so-called TRUSTe service, which adds an icon to Web-based ads giving consumers the chance to learn more about how they are being tracked and to opt out. A recent DoubleVerify study determined that of five billion advertising impressions, only around 100,000 -- or 0.002 percent -- resulted in a click on the icon to learn more about the advertising system serving the advertisement. Finally, of those who clicked to learn more about information being collected about them, just 1 percent subsequently opted out of behavior targeted advertising -- an opt-out rate of just 0.00002 percent.
Readers Respond to WSJ Article on Web Advertisers
Digested From "Web Advertisers: Leave Us Alone"
Wall Street Journal (04/01/11)
Several Wall Street Journal readers wrote letters to the editor in response to the above article by L. Gordon Crovitz. Ricky Gerontis of Seattle raged: "The premise and foundation of the article is all wrong. It is not right for advertisers to assume the public wants their 'help.' It's pompous and inherently condescending to assume that anyone knows what someone else wants or cares about. Advertisers do not care about the public's happiness, contentment or well-being; they only care about money and about acquiring as much of your money as possible." Karen Kukas or Orangevale, Calif., wrote that Crovitz's "assumption that the low opt-out rate means we have adjusted is just plain wrong. I try to opt out every chance I get. My last website attempt left me with 30 companies to which the website streams that I would have had to personally contact to successfully opt out." Finally, Betty Stacey of McLean, Va., concluded: "Kindly tell Mr. Crovitz that there are many of us who will not use Facebook and who do not text because we like our privacy. We interact with our friends through personal contact, telephone, e-mail, and even snail mail."
Smoking Ban Could Reach Apts in Maryland County
Digested From "Lawmaker Proposes Extending Smoking Ban In Montgomery County"
WAMU 88.5 (03/29/11) by Matt Bush
Smoking is already banned in all workplaces, bars, and restaurants throughout Montgomery County, Md. Now, County Council Member George Leventhal is pushing to extend the ban to public areas of apartment and townhouse communities where smoking is currently permitted. Leventhal says his efforts are in response complaints from residents, adding, "We had one constituent tell us that one of her neighbors, his wife has emphysema, and he cannot smoke in his own apartment. So the guy goes out in the hallway frequently and fills it with his cigarette smoke and inflicts it on other people. That's rude, but it's also unhealthy and a public health hazard." The proposal Leventhal is proposing would also extend the ban to playgrounds within apartment communities.
Harrisonburg (Va.) Cops Increase Weekend Presence in Apts
Digested From "HPD Increasing Weekend Presence in Apartment Complexes"
WHSv.com (VA) (03/29/11)
In Virginia, the Harrisonburg Police Department (HPD) is increasing its presence in local apartment communities for the next several weekends to avoid a repeat of last year's unlawful block party. Known as Springfest, the massive gathering was heavily populated by James Madison University students. HPD will have not only have extra police officers on patrol in apartment communities, but other law enforcement agencies are also joining in the crackdown. Officers have been ordered to strictly enforce laws and ordinances regarding drinking or being drunk in public, individuals with open containers of alcohol, underage drinking, urinating in public, noise, and civil disturbances. Police spokeswoman Mary Hope Vass has called on Harrisonburg citizens to play a role, too. Students are taking heed. Hannah Tatum, a JMU student who attended Springfest last year, states, "It probably wouldn't be in any of our best interest to get in any more trouble, so I think I'm gonna stay away from the cops this year."
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