Headlines
Top Story
Wave of Apartment Construction Set to Sweep South Florida
Industry News
Demand Rises for Quality Apartments in Atlanta
Hartz Banks on Apartments in New Jersey
Economy Leads Many to Rent
Apartment Vacancies Drop in Triad, More Units Being Built 
Hines Is Bullish on BRIC Countries, Apartments in U.S.
Central Fla. Apartments See Flow of Capital Investment
Essex Property Trust Sets up Deal to Borrow up to $500 Million
Redmond Apartments Sold to Essex for $150.1 Million
Seattle Area Apartment Market Slows Slightly in Third Quarter
Housing Starts Fall 5 Percent in August
Legislative/Legal News
New Energy Efficiency Measures in Local Apartment Communities
Staffing Woes Harm Fannie and Freddie Oversight
Apartment Company Receives HUD Funds
Top Story
Time Warner Cable Community Solutions has proven success partnering with MDU owners, providing quality voice/video/data products to their residents.
Wave of Apartment Construction Set to Sweep South Florida
Digested From "Wave of Apartment Construction Set to Sweep South Florida"
South Florida Sun-Sentinel (09/25/11) by Scott Wyman; Paul Owers
South Florida is poised for a multifamily housing boom, as a number of developers preparing to build more than 4,000 rental apartments across the region. It has been five years since the housing market's collapse brought an end to the area's condo construction craze. Many of South Florida's apartment communities were converted to condos during the boom years, but that trend is now reversing. Potential residents range from young professionals skittish about homeownership and former homeowners forced out of their houses they could no longer afford. Among the most popular options are higher-end apartment communities where the monthly rent for a one-bedroom unit will top $1,000. Jorge Perez, whose Miami-based Related Group is behind new apartment development in Fort Lauderdale and Plantation, states, "People are doing away with large homes and like the freedom of being in places with no down payment where things are totally taken care of. If the A/C goes out, you don't have to worry about calling the air conditioning guy." In turn, developers are scouting sites they previously considered for hotels and shopping centers as locations for new apartments. For instance, Alliance Residential is proposing a 414-unit apartment community in Coconut Creek on the site of an old mobile-home park that had previously been cleared for commercial development. Many of the proposals are also situated near entertainment or business districts that allow residents to walk to work and/or night life. Critics, though, say the new apartment housing means fewer affordable digs for such groups as starting teachers, retail salespeople, and restaurant workers. Others are concerned about possible overdevelopment.
Industry News
Demand Rises for Quality Apartments in Atlanta
Digested From "Demand Rises for Quality Apartments"
Atlanta Business Chronicle (09/23/11) by Lisa R. Schoolcraft
The Atlanta metropolitan area is seeing a rise in buyer demand for quality apartment communities. Throughout the market, apartment brokers say even lesser communities are getting a second look from investors. Best of all, not all of the properties in demand are bank-owned. Among the most active is The RADCO Cos., which is in the process of closing on three apartment buys in metro Atlanta. For Norman Radow, CEO of the locally based property firm, these recent purchases are a return to the company's acquisition platform. Radow caught the buying bug back in May, after clients began asking for apartment acquisitions as more and more bank-owned assets flowed into the market.
Hartz Banks on Apartments in New Jersey
Digested From "Hartz Banks on Apartments"
NorthJersey.com (09/25/11) by Andrew Tangel
Hartz Mountain Industries Inc. is looking to be a force in the apartment sector. Starting last year, the company acquired a portfolio of four apartment communities in Westwood and River Vale, N.J. They were the first in a buying spree that has seen the firm acquire ownership stakes in nine total apartment assets worth $600 million -- including a $300 million luxury community in Chicago. For the Windy City deal, Hartz used proceeds from the sale of two prime office buildings located on the Jersey City waterfront, paying double the highest price the company has ever paid for a single property. Encouraged by its success in the sector, Hartz recently put in bids for two additional apartment communities. The company is hardly alone in pursuing apartments, as the multifamily housing market has emerged as one of commercial real estate's few bright spots. Hartz has been especially active in the Garden State, enticed by the fact that just 4.4 percent of North Jersey's apartments were vacant in this year's second quarter, reports Reis Inc. Researchers add that the region's apartments commanded an average effective rent of $1,464 for the April-through-June period, up from $1,423 in the previous quarter for all types of apartments.
Economy Leads Many to Rent
Digested From "A Fading American Dream: Economy Leads Many to Rent"
Colorado Springs Gazette (09/16/11) by Rich Laden
Experts say renting has gained popularity as people worry about job security, lose houses to foreclosure, or find it difficult to obtain a mortgage. More people are choosing to rent, regardless of their financial situation. Oliver Chang, head of U.S. housing strategy at Morgan Stanley, says, "Even in cases where it might make more financial sense, or it might actually be cheaper on a monthly basis to own a house rather than to rent one, a lot of people are not making that purchase." According to Census data, the U.S. homeownership rate dropped to 65.9 percent in the second quarter from a high of 69.2 percent in 2004. In markets across the country, rental vacancy rates have hit lows not seen in years, and developers are breaking ground on new apartment communities. Rents are on the rise as well. Morgan Stanley research states, "The combination of falling house prices, limited mortgage credit, continued liquidations and better rental options is fundamentally changing the way Americans live." Meanwhile, Fannie Mae indicates in a recent survey that people are opting to rent rather than buy. "People who believe owning is a better deal than renting are nonetheless planning to rent, at least until things improve," says Fannie Mae Chief Economist Doug Duncan.
Apartment Vacancies Drop in Triad, More Units Being Built
Digested From "Apartment Vacancies Drop in Triad, More Units Being Built"
Fox 8 News (WGHP) (09/19/11)
The number of empty apartments in North Carolina's Triad region has decreased by 33 percent in the last two years. In 2009, the region's vacancy rate climbed to 14 percent. But that rate now sits comfortably at around 9 percent, and analysts are forecasting it could fall as low as 7 percent. Jon Lowder with the Piedmont Triad Apartment Association states, "We are seeing an increase in demand. We are also seeing an increase in rents over the last six months to a year, a natural evolution of the market." The occupancy jump is attributed to the region's falling home sales and a general lack of new apartment construction. But Lowder notes that 1,200 new rental units will open in the area over the next year.
Hines Is Bullish on BRIC Countries, Apartments in U.S.
Digested From "Hines Is Bullish on BRIC Countries, Apartments in U.S."
Wall Street Journal (09/21/11) by Kris Hudson
Hines continues to navigate the tricky waters of the global economy, with roughly $25 billion in property assets under management on four continents. The company has been in hot pursuit of opportunities in the wake of the recession, focusing on such emerging markets such as Brazil where double-digit returns are common. Hines CEO Jeff Hines, son of founder Gerald Hines, remarks, "Over the last 10 years, certainly a lot of success has been in the emerging markets. In Brazil, we generally have returns north of 30 percent. We've invested, say, $1.5 billion of equity in Brazil." Other countries of interest include Russia, India, and China. On the domestic front, it expects to turn its development efforts toward apartment communities. He concludes, "We've made some big hires, and we really like that sector. Even with the storm clouds on the horizon, we still like that sector a lot. We're going to be pretty aggressive in developing on the multifamily front." Moving forward, Hines expects his company's underwriting will be more conservative. He and his staff have also vowed to be more conservative on projecting absorption and apartment rental rate increases.
Central Fla. Apartments See Flow of Capital Investment
Digested From "Central FL Multifamily Sees Flow of Capital Investment"
GlobeSt.com (09/23/11) by Jennifer LeClaire
More and more capital groups are taking notice of Central Florida's apartment sector. Two apartment communities -- the Harbours Apartments in Melbourne and Pine Harbour in Orlando -- recently sold for $48.34 million and both through Freddie Mac. According to the government-sponsored enterprise, the combined financing was $35 million. Both acquisitions mark their respective buyers first entry into the Central Florida multifamily housing market. Dennis Jimenez, the CBRE Capital Markets exec who secured the financing for the buyers in both transactions, remarks, "The apartment fundamentals in the Central Florida market have improved considerably, with average vacancies across many submarkets of less than 6 percent. Rents are also starting to show growth, and more importantly, Orlando finally is creating some jobs, which is the main driver apartment demand." According to Jimenez, these factors combined with very little new construction activity make for a compelling offering for apartment investors. Looking ahead, Jimenez is forecasting strong rent growth as Central Florida's apartment demand outpaces supply.
Essex Property Trust Sets up Deal to Borrow up to $500 Million
Digested From "Essex Property Trust Sets up Deal to Borrow up to $500 Million"
San Francisco Business Journal (09/19/11)
Essex Property Trust confirms that it has set up a $425 million unsecured revolving credit facility. Among the lenders in the deal are Bank of Montreal, Bank of the West, Capital One, Comerica Bank, Union Bank, US Bank, and Wells Fargo. PNC Capital Markets arranged the deal, with PNC Bank serving as administrator. The California-based apartment REIT has disclosed that it is a three-year deal, with two extension periods of a year possible if it chooses. A so-called "accordion feature" enables Essex to increase the amount it can borrow to $500 million. Essex recorded second-quarter earnings of $10.3 million on revenue of $117.2 million. As of June 30, it had ownership interests in 149 apartment communities with 30,557 rental units.
Redmond Apartments Sold to Essex for $150.1 Million
Digested From "Redmond Apartments Sold for $150.1 Million"
Puget Sound Business Journal (Seattle) (09/21/11) by Jeanne Lang Jones
Archstone confirms that it has sold the largest apartment community in Washington state to Essex Property Trust for $150.1 million. Dubbed the Archstone Redmond Hill, this apartment community is comprised of 882 rental units located on 42 acres of land. The deal is indeed the biggest apartment sale in the state and third largest real estate transaction overall in 2011. The property was put on the selling block back in June, with more than 40 prospective buyers visiting. Over half of them reportedly made offers.
Seattle Area Apartment Market Slows Slightly in Third Quarter
Digested From "Seattle Area Apartment Market Slows Slightly in Third Quarter"
Puget Sound Business Journal (Seattle) (09/19/11) by Jeanne Lang Jones
After two consecutive years of declines in the number of available apartments in the Seattle metropolitan area, the rental housing market has witnessed a brief increase in this year's third quarter. The vacancy rate increased from 4.69 percent to 4.74 percent, while monthly rents climbed from $1,072 per unit in the second quarter to $1,076. Tom Cain of Apartment Insights described the slight increase as a pause in the downward movement of apartment vacancies. Additionally, fewer apartment owners are offering residents and prospective residents lease incentives. The tightest submarkets are currently east Bellevue and Seattle's First Hill neighborhoods, where vacancies stood at 3.5 percent.
Housing Starts Fall 5 Percent in August
Digested From "Housing Starts Fall 5 Percent in August"
Washington Post (09/21/11) P. A14
Housing starts tumbled 5 percent in August to an annual rate of 571,000, the lowest level in three months, reports the Commerce Department. Groundbreaking on single-family homes declined 1.4 percent last month to an annual rate of 417,000, while construction of multifamily units decreased 12.4 percent across the country.
Legislative/Legal News
New Energy Efficiency Measures in Local Apartment Communities
Digested From "New Energy Efficiency Measures in Local Apartment Complexes"
WILX10 (09/26/11) by Caroline Vandergriff
In Central Michigan, Consumers Energy is partnering with area apartment owners and managers to install new light bulbs, faucet aerators, and energy-efficient showerheads in apartment communities as part of a larger effort to save energy. Sandy Wymer, an Energy Efficiency program manager for Consumers Energy, remarks, "We really want to help all of our property owners have apartments that a consumer is going to be excited about using less energy in." According to Wymer, the switch to the new bulbs, faucet aerators, and showerheads will help residents save money. She notes, "You can have up to 75 percent savings on CFL bulbs versus incandescent, up to 40 percent savings with the showerhead, and up to 31 percent savings with the aerators." The apartment community program was launched two years ago, but has really taken off in 2011. To date, Consumers Energy has worked with the Lansing Board of Water and Light to install these new measures in 23 apartment communities throughout the Lansing area. Statewide, more than 52,000 apartment communities have made such changes.
Staffing Woes Harm Fannie and Freddie Oversight
Digested From "Staffing Woes Harm Fannie and Freddie Oversight, Government Watchdog Says"
Bloomberg (09/23/11) by Lorraine Woellert
A study by the Federal Housing Finance Agency's Office of Inspector General finds that regulators lack the staff to effectively oversee Fannie Mae and Freddie Mac and consequently have dialed down scrutiny of the government-sponsored enterprises. The report singles out the FHFA's monitoring of housing inventory owned by the GSEs. Despite a surge in foreclosures that has boosted Fannie Mae's inventory sixfold in the past four years, the study states that "FHFA has yet to conduct a targeted examination" of how the companies manage seized properties.
Apartment Company Receives HUD Funds
Digested From "Apartment Company Receives HUD Funds"
Inside Indiana Business (09/20/11)
An Indianapolis-based property management company has been awarded $5.1 million in grants by the U.S. Department of Housing and Urban Development. The funds were awarded to the Gene B. Glick Company, to be used to provide greater access to key services for residents at 22 government-subsidized properties. The grants will allow the company to hire one service coordinator for each of the communities and will fund the positions for the three-year period. The service coordinators will monitor residents to ensure they receive any support services that they need. HUD announced the grants as part of its Multifamily Housing Service Coordinator Program.
|