NAA Industry Insider: U.S. Rents Rise Again as Market Tightens | National Apartment Association

NAA Industry Insider: U.S. Rents Rise Again as Market Tightens

Home Events Advertise Feedback

Top Story

Market Trend Insights

Deals and Transactions Lowe's

Industry Buzz  

Legal/Legislative Did You Know  

NAA Announcements  

Top Story

U.S. Rents Rise Again as Market Tightens
Digested From "U.S. Rents Rise Again as Market Tightens"
Wall Street Journal (01/07/14) Wotapka, Dawn

New Reis Inc. research shows that apartment owners and managers continued to push through higher rents in many cities during 2013's fourth quarter, offering little relief for residents who have seen increases in recent years. Nationwide, owners hiked rents by an average of 0.8 percent to $1,083 a month from October through December. While that is under the previous quarter's 1 percent increase, Reis researchers note that it is above the 0.6 percent gain seen in the last three months of 2012. Looking at the full-year 2013, rents rose 3.2 percent. Meanwhile, the U.S. apartment vacancy rate dipped to 4.1 percent in the fourth quarter from 4.6 percent year over year. Reis senior economist Ryan Severino comments, "Demand for apartments remains strong. Not even the seasonal weakness normally observed during the fourth quarters of calendar years had much if any impact on the market dynamics." Apartment owners have had the advantage since the housing boom went bust, as increased interest from those in need of rental units coincided with little new supply of apartments. Now, developers are racing to deliver new communities, raising the prospect that rental increases will slow or flatten amid a flood of new construction. Approximately 42,000 apartments were completed from October through December, the most since the same period in 2003. In the new year, Reis forecasts that completions should total more than 160,000 apartments -- or roughly 33 percent more than the long-term historical average.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

Market Trend Insights

Seattle Could Be One of '14's Shining Apartment Markets
Digested From "Seattle-Area Apartment Rents May Stabilize, Even Dip in 2014"
Seattle Times (01/02/14) Bhatt, Sanjay

Apartment Insights is reporting that apartment rents rose 6.5 percent last year to $1,214 a month in Washington State's King and Snohomish counties. Tenants, however, should see market rents remain level or even decline in 2014. After climbing 3 percent in 2013's April-through-June period and 2.4 percent in the following quarter, the average monthly rent in the Seattle metro area actually dipped in the fourth quarter by $5. Meanwhile, the vacancy rate climbed to 4.6 percent in the October-through-December period -- an increase from 4.4 percent the previous three months. More apartment communities in the region offered increasingly enticing concessions, noted Tom Cain, principal of the Seattle firm. He added, "It's a clear signal of the market softening." The Seattle metropolitan area is in the middle of the largest apartment construction boom in two decades thanks to robust job growth that have pushed vacancy rates to all-time lows. This, in turn, has placed Seattle among the worst American cities for recent rent hikes. The 6.5 percent growth in rent last year ranked as the highest annual increase since the previous employment boom. Bellevue is the region's priciest market for a one-bedroom unit, with average rent clocking at $1,434 a month. However, downtown Seattle ranks as the priciest submarket at $1,624 a month, according to Apartment Insights.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

Why Has Population Growth Slowed to a Snail's Pace?
Digested From "Population Growth Slows to Snail's Pace"
Wall Street Journal (12/31/13) P. A2 Shah, Neil

While the national economy is gaining momentum, the U.S. Census Bureau reports a sluggish pace of population growth. The country added 2,255,154 people between July 2012 and July 2013, for a gain of just 0.72 percent -- the slowest pace since the Great Depression. Population growth has been held back in recent years due to recession and an unsteady recovery, which have discouraged immigrants from moving into the country and also have kept existing residents from having children or relocating across state lines. Middle-aged and older Americans now are starting to move more, but younger people -- who normally move around the most -- are mostly staying in place.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

Will Denver Rents Soar Mile High in 2014?
Digested From "Denver-Area Apartment Rents Are Expected to Keep Climbing in 2014"
Denver Business Journal (12/31/13) Huspeni, Dennis

Apartment rents in the seven-county Denver area are expected to grow 4.9 percent by the end of the new year, despite some 7,400 new market-rate units becoming available in the area, according to Hendricks-Berkadia's "Forecast 2014" report. The research report forecasts: "Construction output will peak [in 2014] as builders add 7,400 market-rate rentals. Deliveries will fall to an estimated 5,500 units [in 2015]." For its results, the Phoenix-based firm tracked the area's job growth, multifamily permits, and average rent and vacancy rates. Researchers found that the "occupied stock" of apartments in metro Denver climbed by 6,840 apartments throughout last year versus 3,325 in 2012. The market has averaged 4,200 rental units being absorbed annually over the last decade. Furthermore, builders delivered 5,560 new apartments in 2013, which was substantially more than the 2,170 units delivered in 2012. The report concluded: "At the close of 2013, there were more than 11,000 apartments under construction, with many more set to be in the planning pipeline."
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

Triangle Apartment Sales Land Square in Record Territory
Digested From "Real Deals: Triangle Apartment Sales Hit Record High in 2013"
Raleigh News & Observer (North Carolina) (01/01/14) Bracken, David

For the second year in a row, North Carolina's Triangle region has set a record for the total dollar amount of apartment transactions completed in a single year. A total of 49 apartment communities sold for $1.334 billion in 2013, estimates CBRE. That total isn't the final exact tally for the year, but it tops the previous all-time high of $1.16 billion set in 2012. The big question now is whether investors' interest in the Triangle's multifamily housing sector will cool in the new year as the market absorbs a big number of new rental units that are set to be completed between now and the end of December. The inventory of apartments in the region is indeed on track to expand by 6.8 percent over the next 12 months -- the fastest rate of expansion of any market in the country, notes MPF Research. In the short-term, that will almost certainly put downward pressure on both rental rates and occupancy levels.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

Why Is Austin the Capital of Limited Apt. Availability?
Digested From "Apartment Availability in Austin Limited"
My Fox - Austin (01/06/2014)

Throughout Austin, apartment communities are more than 95 percent occupied, causing monthly rents to rise and making it difficult for some to find an affordable place to live. An estimated 100 to 200 people are now moving to Austin on a daily basis. Local experts say each apartment is most likely being looked at by at least five different interested parties. According to Capitol Market Research, rental rates have increased in all parts of Texas' state capital over the past year. A two-bedroom unit costs in the $1,100-per-month range in North Austin. It's slightly higher in South Austin, and it's double in Downtown Austin. Some folks don't mind paying more. Downtown apartment resident Andrew Chartrand states, "You don't have to worry about other expenses such as getting taxis and things like that when you choose to go out. It's nice because you're paying for the location and so you know exactly what you're getting. Because you are downtown, you get benefits with the local restaurants and stores." With a number of apartment communities still under construction, research shows there will be more than 7,000 new rental units available by the end of this year. In 2015, more than 800 more are expected. The metro area's apartment occupancy rate, meanwhile, is expected to remain in the 96 percent to 97 percent range.
Share Facebook  LinkedIn  Twitter  | [video]Watch Video | Return to Headlines

Soaring Rents Leave No Room in Marin
Digested From "Priced Out of Marin: Soaring Rents Leave No Room at the Inn"
Marin Independent Journal (CA) (01/05/14) Mara, Janis

California's Marin County boasts one of the priciest apartment markets in the country. Nick Grotjahn, spokesman for RealFacts, notes, "Out of the apartments that we keep track of [in Marin], there is nothing under the asking price of $1,150. We have one for $1,150, a studio in Novato." Asking rents in Marin rose 7.3 percent in the last three months of 2013 to an average of $2,130 a month versus the same period a year earlier. Average asking rent in 2012's fourth quarter was $1,985 a month. "The key reason rents are still going up in Marin is the vacancy rate," remarks Michael Burke, a Coldwell Banker agent who has specialized in Marin apartment sales for two decades. As the number of available apartments and rental homes on the market diminished, Burke added, this placed an incredible amount of pressure on rents to rise. The Marin apartments tracked by RealFacts are 97.1 percent occupied.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

Deals and Transactions

Four Sources Lead the Apt. Financing Charge in MN
Digested From "Financing Still Flowing for Apartments"
Finance & Commerce (12/26/13) Mattson-Teig, Beth

The availability of financing has been strong for new apartment construction in the Minneapolis-St. Paul area from such sources as government-sponsored entities (GSEs), life insurance companies, banks, and CMBS lenders. "Particularly for fully stabilized deals, there is no shortage of capital," says Dan Trebil, a senior vice president and senior director at NorthMarq Capital LLC. Despite the expanding pipeline of new development, the absorption rate is still good and vacancies remain remarkably low. The Twin Cities apartment-vacancy rate is one of the lowest in the country at about 2.8 percent, according to a midyear market report released by Cushman & Wakefield/NorthMarq. As a result, borrowers are finding several alternatives along with terms and underwriting that are favorable compared with other commercial property types. GSEs such as Fannie Mae and Freddie Mac and mortgage-backed securities represent the largest share of the existing multifamily debt outstanding, at $391 billion or 44 percent. Banks and thrifts make up the second largest stake at 28 percent, followed by other key stakeholders, asset-based securities (including commercial mortgage-backed securities and collateralized debt obligations) at 9 percent, and life insurance companies at 6 percent, according to the MBA. Roughly 2,800 new units are expected to be completed in the Twin Cities by the end of 2013, along with another 4,300 units in the pipeline to be built in 2014, according to C&W/NorthMarq. In the luxury apartment niche in particular, there are several new apartments being built that are now getting rents of $210 to $250 per foot, notes Ken Dayton at Oak Grove Capital.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

Seven Milwaukee Apartments Sell in Portfolio Deal
Digested From "Seven Milwaukee Apartments Sell in $3.55M Portfolio Deal"
Milwaukee Business Journal (01/03/14) Ryan, Sean

A team of local investors has acquired a portfolio of 121 bank-owned apartments split between seven Milwaukee communities for $3.55 million. According to Siegel-Gallagher, an affiliate of BMO Harris Bank of Chicago sold them. The buyer is a team that includes Milwaukee-based Berrada Properties Management Inc. and 76th Street CG LLC. The portfolio, which is comprised of Class B and C apartment communities, generated a mix of interest from buyers who offered to buy one asset and others wanting the entire portfolio. Patrick Gallagher, president and CEO of locally based Siegel-Gallagher, says the interest from investors looking to buy rental apartments still exceeds the supply of units on the market.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

Industry Buzz

Fewer Single People Are Buying Their Own Home
Digested From "Fewer Single People Are Buying Their Own Home"
Minneapolis Star Tribune (MN) (12/25/13) Buchta, Jim

Although more Americans are living alone these days, fewer of them are doing so in owner-occupied housing. Real estate firm Redfin reports that the share of homes bought by singles is down 10 percentage points since 2006 on a nationwide basis. While the numbers may defy demographic patterns, they also reflect an environment where tougher mortgage rules and escalating property prices are making homeownership more elusive and where uncertainty over jobs and the economy has many people questioning whether they want to buy right now. Among young singles, many are delaying homeownership in order to put a dent in their massive student loan debt. Some are moving back in with their parents or doubling up to rent with friends even after graduating from college and entering the work force. Meanwhile, some singles like the flexibility and amenities that come with renting.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

Downtown Des Moines Buildings Gain New Life as Apts
Digested From "Downtown Des Moines Buildings to Gain New Life as Apartments"
Des Moines Register (01/04/14) Aschbrenner, Joel

Nationwide, a number of cities are seeing developers rush to convert aging buildings into hip downtown apartments. This is especially evident in downtown Des Moines, where several of the city's most historic buildings are getting face-lifts. This comes as developers are scrambling to meet the demand for downtown housing. Some 1,500 rental apartments are now in the works. Some say the historic renovations could kick-start efforts to create a 24-hour downtown -- a place where people live, work, and play that remains active even after the end of each workday. Jonathan Rosenbloom, a Drake University Law School professor who teaches about development, remarks, "If it's successful, it could create this entire area of downtown that is exciting and vibrant and new and that will help make a great city."

Fueled partly by historic tax credits, other U.S. cities have seen the push to turn historic buildings into apartments take off in the last five to 10 years. Rosenbloom notes that Des Moines is different in how quickly large renovation projects are popping up. Among the buildings being converted into apartments include some of the city's most storied properties, chiefly The Equitable Building. The 19-story brick tower opened in 1924 as home to the Equitable insurance company and ranked as the city's tallest building for five decades.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

Legal/Legislative Did You Know

Ohio Suburb Imposes New Detector Rules on Apartments
Digested From "New Smoke Detector Rules Aim to Increase Safety"
Hamilton Journal News (OH) (01/03/14) Robinette, Eric

Oxford, Ohio, may soon require apartment owners to install a specific type of smoke detector based, in part, on testimony from residents who have lost relatives in fires. The City Council was initially scheduled to pass the legislation at its Dec. 17 meeting. But council members asked city staff to revise the bill and bring it back for the Jan. 7 meeting so it would require photo-electric smoke detectors, which have been proven to be more reliable. According to Jung-Han Chen, the city's director of development, Oxford's building code requires smoke detectors to be hard-wired into residential structures rather than battery-operated units. However, the current code does not require a specific type of detector. Chen said the rule change would give building owners up to three years to install them if another type of smoke detector was already in place.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

Omaha Apartments Join Smoke-Free Movement
Digested From "Apartments at Midtown Crossing Join Smoke-Free Movement"
Omaha World-Herald (01/01/14) Gonzalez, Cindy

Mutual of Omaha this month joined the smoke-free apartment-living movement, adding one of its Midtown Crossing communities to the smokeless list starting New Year's Day. The National Apartment Association ranks Omaha as the No. 2 city in the availability of smoke-free options for residents. The decision to prohibit smoking at the site came after a survey of residents. Molly Skold of East Campus Realty, Mutual's real estate arm, remarks, "This policy change is a great way to reduce fire risks that can come from smoking and protect staff and residents from the dangers of secondhand smoke." Douglas County's Health Department and the Metro Omaha Tobacco Action Coalition worked with Mutual to provide surveys and other health information to area residents. Aja Anderson, the county's community health educator, remarks, "Mutual of Omaha's decision will likely encourage others to join efforts to provide smoke-free living." County officials, in coordination with the tobacco action coalition, aims to broaden their smoke-free reach to 129 apartment communities by the end of this year's third quarter. Currently, 74 Douglas County apartment communities have at least one building on site that is designated as a smoke-free zone. The movement gained steam in 2012 when the county was granted a federal "community transformation grant" to focus on smoke in apartments.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

Is HUD Overreaching Again?
Digested From "HUD Proposal Slammed as Fair Housing Act Overreach"
Investor's Business Daily (12/31/13) P. A1 Sperry, Paul

A group of U.S. mayors has called on HUD to scrap a proposed housing regulation, expected to be finalized in the first quarter, that requires them to "reduce segregation and promote integration" in their cities. They contend that the agency is overstepping its legal authority under the 1968 Fair Housing Act -- which bars racial bias in the sale, rental, and financing of housing. HUD, which enforces the civil rights law, wants to expand it to include policing neighborhoods for racial diversity. Metro areas that show the worst segregation -- including Charlotte, Chicago, Cincinnati, Cleveland, Columbus, Dallas, Houston, and Los Angeles -- will face enforcement action. The proposed rule specifically takes aim at "exclusionary zoning," defined as any local zoning code that limits development of affordable housing. The proposal contends that such laws create geographic barriers that impede urban minorities' chances of success. Opponents counter that HUD fails to recognize that many people may opt to live in a homogeneous community without any action or intent to exclude others and that racial clustering often occurs naturally, such as in cities like L.A. with majority-minority populations.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

NAA Announcements

2014 Jan. Mission & Partner Sponsors
300 Reasons to Register by this Friday for the 2014 NAA Student Housing Conference

OK, so it’s one reason 300 times, but that doesn’t change the fact that this Friday is the last day to take advantage of a $300 savings on the price of admission to 2014 NAA Student Housing Conference & Exposition, March 3-5 in Las Vegas at the ARIA Resort.

The return on investment is unparalleled: Where else can full registration get you all general sessions (featuring world-class speakers like Peter Sheahan all breakout education sessions (check out the entire lineup, Welcome Reception, Trade Show Floor Access and lunch on Tuesday and Wednesday, all for one low investment?

Awaiting you is actionable intelligence and turnkey solutions useful in helping you achieve your personal and professional goals. Register today and keep checking for schedule, housing and the latest announcements. And remember to use the official hashtag #NAAStudentConf to engage, discuss and follow the conference.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines
This Year, Resolve To Reach New Heights. Step 1: Register for the 2014 NAA Education Conference & Exposition

January 1 may already be in the rearview mirror, but when it comes to your career, it’s never too late to resolve to “Reach New Heights.” The first step in the new you? Registering now for the largest, most important event in the rental housing industry: the 2014 NAA Education Conference & Exposition, June 18-21 in Denver.

From world-famous speakers to the latest and greatest from multifamily supplier partners, if career enhancement is what you seek, then this is the one event you can’t afford to miss. Want to talk ROI? Where else can you get benefits like these for one low investment:

** General sessions led by world-renowned speakers—representative of some of the greatest minds and business entrepreneurs in the world—the value of which alone covers the price of admission.

** More than 40 breakout sessions covering the gamut of multifamily housing operations and ownership, including marketing, sales, technology, industry trends, executive issues and so much more.

** Two days of NAA Exposition exploration featuring the newest, most innovative products and services from hundreds of leading-edge rental housing supplier partners.

** Receptions, meetings and interactive education sessions where attendees can share ideas and build their network of professional colleagues and potential service partners.

** Six available continuing-education credits offer NAA designates the chance to reach their designation renewal goal (not to mention the career investment) in one place and at one time, saving time and money.

What are you waiting for? Invest in your company and your career today. Visit the NAA Education Conference website and remember that the largest discounts go to those who register early. Have four friends? Register as a group to take advantage of even more savings!

And, make sure to book your housing as soon as you register—rooms will go fast and you will be unable to book without first registering. Visit the Education Conference website for information and reservations for all official NAA Education Conference hotels.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines
Former Sen. Alan Simpson to Speak at NAA Capitol Conference

Former U.S. Sen. Alan Simpson (R-Wyo.) will provide a candid look on politics, the economy and the hard choices that America’s leaders face during the 2014 NAA Capitol Conference’s keynote luncheon on March 11. His address is entitled “The Moment of Truth: Confronting Issues in America.” Known for his quick wit, Simpson addresses controversial topics on the national agenda with honesty and provides sensible solutions for moving the country forward.

Invest in your political capital by participating in the 2014 NAA Capitol Conference – the only national event focused on apartment industry advocacy. The annual conference will be held on March 11 in Washington, D.C., followed by the industry’s Lobby Day on Capitol Hill on March 12 (The spring NAA Board of Directors and committee meetings precede the conference on March 9 and 10.). Registration is now open.

The NAA Capitol Conference will prepare you to carry your message on major industry issues as an informed, effective, confident advocate. This year there will be a new special event, expert national speakers on policy and politics, and more training and educational sessions for new and long-time attendees alike.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines
Be Part of the 2014 Get Reel Video Challenge

In honor of Apartment Careers Month in February, The National Apartment Association Education Institute (NAAEI) is calling for video submissions for it's 2014 Get Reel Video Challenge. Aimed at promoting careers in the apartment industry in Management, Leasing and Maintenance, videos should highlight a day in your work life and show what you love about your job and the industry. A panel of industry experts will judge all entries and choose the winner who will receive a trip to the NAA Education Conference in June in Denver! View more details on rules and how to enter on the NAA website.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines
2014 Goal: Earn Your IROP Designation

The Independent Rental Owner Professional (IROP) designation program is offered to the rental owner who manages their personally-held multifamily property or properties. The independent rental owner serves several roles in property management, public relations specialist, administrator, chief financial officer, marketing director and operations manager. Independent rental owners who take the IROP course will learn the many business practices of professional property managers and can now earn the IROP designation after completing the course of study and passing the online exam. With the help of other independent rental owners who devoted their time and expertise to this program, you will receive an "insider's view" of property ownership and management practices.

The Independent Rental Owner Professional (IROP) course will be offered as a webinar series from 1 - 4 p.m. ET on the following days:

January 22
January 29
February 5
February 12

Don't wait, register today.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines
NAAEI Designation Courses Offered Near You!


Apartment Association of Greater Omaha & Lincoln
March – April, 2014

CAM Online


Apartment Association of Greater Omaha & Lincoln
March – April, 2014


Columbus Apartment Association
January – February, 2014

Austin Apartment Association
February – March, 2014

Roanoke Valley Apartment Association
February-March 2014

Rental Housing Association of Boston
April – May, 2014

Chicagoland Apartment Association
May – June, 2014

Apartment Association of Southeast Texas
May – June, 2014


Chicagoland Apartment Association
October, 2014


Apartment and Office Building Association of Metropolitan Washington
February, 2014

NALP Online

Find more courses in your area on the NAA website.

For more information about any of the classes listed, please contact Kimberly McCrossen at 703/518-6141 ext. 121.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

Abstract News © Copyright 2014 INFORMATION, INC.
Powered by Information, Inc.
January 7, 2014

Follow NAA Online
facebook Twitter LinkedIn
NAA's YouTube Channel NAA Photo Collection NAA Meetup Group

Event Highlights

A Career with Growth & Opportunity

Career Growth and Opportunity  

Learn about the perks and benefits of working in residential property management and some of the reasons the industry provides career growth, stability and endless opportunities.