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Apartment REIT CEOs Upbeat on Prospects
Industry News
Job Growth Will Drive Central Florida Apartments
Fort Collins Posts Low Vacancy Rate in Colorado
Apartment Resident Praises Sen. Scott Brown the Apartment Owner
Former Treasury Head Comments on Renting Vs. Owning
Associated Estates Realty Posts Lower Q4 2009 Results
Post Properties and Cousins Post Different Results for '09
MBA Survey Shows Originations of Multifamily Loans Increase
Premier Apartment Team Joins Cornish & Carey
AvalonBay Announces Retirement of Gilbert Meyer from Board
Legislative/Legal News
Opt-Out Waterline Insurance in Pittsburgh Affects Apartments
Third-Hand Smoke a Danger in Multifamily Housing Settings 
Bedbugs, Water Conservation Still on Agenda for N.J. Apartments
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Apartment REIT CEOs Upbeat on Prospects
Digested From "Multifamily REIT CEOs Upbeat On Apt. Prospects Despite Bleak Fundamentals"
CoStar Group (02/10/10) by Randyl Drummer
Even though apartment vacancies remain high in certain markets, executives at the nation's largest publicly traded apartment REITs are predicting a slow and steady improvement in 2010. Companies such as Avalon Bay and Equity Residential have based these projections on capital raising, acquisition, development and other growth plans. Meanwhile, some companies like Camden Property Trust are more reserved and have shelved development plans in order to focus on recovery. Private local buyers are accounting for a small rise in investment activity, and their cautious return may bring about a bargain-hunting approach over the wait-and-see of the recent past. Most apartment REITs have chosen to hold back on their plans for new construction. New development activity has dipped to a 15-year low, constituting a mere 0.5 percent of existing inventory. Equity Residential President and CEO David Neithercut states, "This is all good news for the apartment business. I'm not suggesting that we're experiencing any kind of sharp inflection here. I would rather say we think we are at the beginning of a period of slowly, and I do mean slowly, improving fundamentals. But . . . if you add job growth to that picture, we believe that will quickly turn into one of the best operating periods in our history."
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Industry News
Job Growth Will Drive Central Florida Apartments
Digested From "Job Growth Will Drive Central Florida Apartments"
GlobeSt.com (02/08/10) by Carl Cronan
Central Florida's apartment market is expected to rebound this year as job growth returns in the third and fourth quarters. Analysts expect the supply of rental units will also be absorbed as construction slows, while the pace of investment in multifamily housing begins to recover. Although average occupancy in the Orlando metro area remains just above the 90 percent mark, various brokerages forecast that average monthly rents will decline to as low as $800. Shelton Granade, a senior vice president in CB Richard Ellis' Orlando office, notes, "It's still a very competitive leasing environment." Concessions remain prevalent in most submarkets, though they declined through the latter half of 2009. Orlando is on pace to gain approximately 8,000 new jobs through this year and more than 161,000 over the next five years, reports CBRE and MPF Research. At the same time, apartment construction in the Orlando market has slowed to only 600 projected units this year. That is less than 50 percent of what was delivered last year, reports Marcus & Millichap Real Estate Investment Services.
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Fort Collins Posts Low Vacancy Rate in Colorado
Digested From "Vacancy Rates, Rents Up"
Coloradoan (02/12/10) by David Young
Apartment vacancy rates in Fort Collins, Colo., have been increasing in recent years, but the metro area has just recently reported the lowest vacancy rate among large metro areas in the state. Most of Colorado's metro areas had vacancies of 7 percent or more, while Fort Collins was only 6.3 percent. Gordon Von Stroh, professor of business at the University of Denver and the author of a report, added that the economy of the Fort Collins area is doing fairly well despite a lag in the state's overall economy. An added benefit for Fort Collins is the presence of Colorado State University, which provides a significant renting population of students.
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Apartment Resident Praises Sen. Scott Brown the Apartment Owner
Digested From "Tenant Warmed up to Fast-Acting Landlord"
Boston Herald (01/21/10) by Marie Szaniszlo
Nermeen Hamam, a registered Democrat, had no problem voting for Republican Scott Brown in last month's special election. As the owner of her apartment community, she says the next Massachusetts U.S. senator has never delayed in responding to any maintenace and repair requests. In fact, Brown personally called Hamam shortly after maintenace restored heat to her rental unit earlier this winter and told her to contact him directly if there were any problems in the future. Hamm states, "I was shocked. It's just comforting, knowing I can call him. I had past landlords where I had to wait weeks for things to get done." Brown owns a total of three apartment communities in the Brighton neighborhood of Boston.
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Former Treasury Head Comments on Renting Vs. Owning
Digested From "Hank Paulson Doesn't Do 'Second-Guessing'"
CNN Money (02/10/10) by Christine Romans
Former Treasury Secretary Henry Paulson said he would rather be remembered for his integral part in the federal bailout money than as someone in leadership during a second Great Depression. Paulson suggests that global imbalances must be addressed at home, with Americans saving more and spending less and other nations saving less and spending more. Touching on the issue of renting versus homeownership, he said, "We have a tax system that really discourages savings and investments and punishes them, and we have a tax system that really encourages consumption. We have housing policies [that] penalize renters relative to homeowners, and then when you look at it globally we have nations in Asia, China, Japan . . . and others that don't have enough domestic consumption. They need to consume more and they need to save less."
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Associated Estates Realty Posts Lower Q4 2009 Results
Digested From "Associated Estates Realty Reports Lower Fourth-Quarter Results"
Crain's Cleveland Business (02/09/10)
Associated Estates Realty Corp. is forecasting that its funds from operations in 2010 will be less on a per-share basis than in 2009 after reporting lowered Q4 '09 results. The Ohio-based apartment REIT's funds from operations fell 45 percent to $4.3 million in the October-through-December period from $7.8 million a year earlier.
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Post Properties and Cousins Post Different Results for '09
Digested From "REITs Show Different Results for 2009"
GlobeSt.com (02/10/10) by Carl Cronan
A couple of Atlanta-based REITs posted opposite results in 2009. Post Properties Inc. recorded a net loss of $10.9 million for last year, including net gains of $79.4 million on the sale of three apartment communities. Gains were offset by non-cash impairment charges of $76.3 million relating to the company's investment in a condominium development, another $4.8 million in severance charges and a $3.3-million loss related to early debt settlement. Post, which owns 55 apartment communities with nearly 20,000 rental units, expects to sell up to four million shares of common stock from time to time. Proceeds will go towards general corporate purposes. Meanwhile, Cousins Properties Inc.'s net income rose 13 percent to $29.5 million from a year earlier despite $142 million in impairment charges. Cousins invests in various commercial real estate sectors.
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MBA Survey Shows Originations of Multifamily Loans Increase
Digested From "MBA Survey: Originations of Commercial and MF Increase"
National Mortgage News (02/08/10) Vol. 34, No. 19, P. 9
Data from the Mortgage Bankers Association shows that 2009 fourth-quarter commercial and multifamily loan originations were 15 percent higher than during the third quarter and 12 percent higher than during the last three months of 2008. The gain was driven by increased originations for all property types, with the exception of multifamily housing.
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Premier Apartment Team Joins Cornish & Carey
Digested From "Premier Apartment Team Joins Cornish & Carey"
GlobeSt.com (02/11/10) by Bob Howard
Premier Apartment Advisors has joined Cornish & Carey to expand the latter's multifamily housing investment services group in Northern California. This entails bringing a seven-member team to Cornish & Carey, six of whom will be based in Cornish & Carey's Oakland office. The seventh will work out of the firm's Santa Clara office. The Premier Apartment Advisor team is currently active in all nine Bay Area counties, along with the Northern Central Valley and Sacramento.
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AvalonBay Announces Retirement of Gilbert Meyer from Board
Digested From "AvalonBay Communities Announces Planned Retirement of Gilbert M. Meyer from the Board"
Business Wire (02/10/10)
AvalonBay Communities Inc. reports that Gilbert M. Meyer will retire from the apartment REIT's board of directors at the completion of his current term. Meyer founded Bay Apartment Communities Inc. 32 years ago, then took the company public in 1994. Four years later, Bay Apartment Communities and Avalon Properties merged to form AvalonBay Communities Inc. At that time, Meyer stayed on as executive chairman until 2000. Thereafter, he served the company as a board member and major shareholder. He comments, "As I approach age 65, I feel it is the right time to step down. I am looking forward to retirement. I wish the company, its board, its management and all of its associates ongoing success." As of the end of last year, AvalonBay held ownership stakes in 172 apartment communities containing more than 50,300 rental units. The various communities are spread throughout 10 states and the nation's capital.
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Legislative/Legal News
Opt-Out Waterline Insurance in Pittsburgh Affects Apartments
Digested From "Lawsuit Filed Over Opt-Out Waterline Insurance"
Pittsburgh Post-Gazette (02/12/10) by Rich Lord
Pipe warranties given out by the Pittsburgh Water and Sewer Authority are creating conflict for some apartment owners, who say they should not have been charged for a warranty which won't cover them based on the size of their pipes. The warranties will not cover water pipes wider than two inches and sewer pipes larger than eight inches in diameter. Residents are seeking class-action suits against the authority, alleging that people whose pipes would not qualify -- specifically many apartment community owners -- were deceived by the opt-in and opt-out procedures. James Eichenlaub, acting executive director of the Apartment Association of Metropolitan Pittsburgh, remarks, "We wouldn't have this problem if it was an opt-in instead of an opt-out."
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Third-Hand Smoke a Danger in Multifamily Housing Settings
Digested From "Third-Hand Smoke a Danger to Babies, Toddlers"
MSNBC (02/09/10)
New research shows that third-hand smoke -- the smoke residue left over on surfaces -- can react with other chemicals in the air to form potentially harmful carcinogens. These carcinogens pose especially dire threats to babies and toddlers. The third-hand smoke is what remains from the second-hand smoke and can persist on apartment walls, floors, carpeting, drapes, and furniture for months. Ambient nitrous acid, which comes from unvented gas appliances, causes the most drastic reaction in the remaining nicotine. Opening a window while smoking does not create that drastic of a difference in residue buildup, and smoking outside merely causes the same buildup on a smoker's skin and clothing. The surest way to limit the impact of third-hand smoke is to create 100 percent smoke-free environments. In apartment communities where smoking is/was prevalent, it is best to replace all furnishings, carpets, and wallboards.
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Bedbugs, Water Conservation Still on Agenda for N.J. Apartments
Digested From "Bedbugs, Water Conservation Still on Landlord-Tenant Agenda "
NorthJersey.com (01/03/10) by Donna Rolando
Major legislation involving bedbugs and water conservation were overlooked this past year in New Jersey, but both apartment managers and residents are still hoping the bills can turn into laws. Assemblywoman Joan M. Quigley (D-Hudson) has committed to a model legislation that would unite owners and residents in the fight against resilient bedbugs. Conor Fennessy, vice president of government affairs for the New Jersey Apartment Association, and New Jersey Tenants Organization President Matt Shapiro both say the bill is a good step, but added that it could go further by regulating mattress clean-up, stricter rules for used furniture purchases, and harsher punishment for not cooperating. The second issue -- that of conserving water -- began with submetering and has moved to low-flow toilets and shower heads being the responsibility of apartment community owners. The installation of these are ultimately a good investment for owners, and the reintroduction of bills for water conservation is likely to make the topic seem more favorable.
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