The Art of Networking
Digested From "The Art of Networking"
Wall Street Journal (03/20/14) Vaynerchuk, Gary
Anyone who has been to a lot of networking events, conferences, and other things of that nature will typically come away from them with a pocket full of business cards. Wall Street Journal columnist Gary Vaynerchuk writes: "I am completely baffled by the number of people who think 'good networking' is predicated on the distribution of business cards; that giving a card to anybody in the room is somehow meaningful or useful. This is a massive misconception." He offers some suggestions for better networking, such as go and find other like-minded individuals, invite them out to dinner as a group, and then pick up the check. Vaynerchuk goes on to write that networking is something that he takes a lot of pride in. "I've learned the true secret to networking is gaining the first-mover's advantage: leverage," he states. "The right kind of leverage in a relationship allows you to extract value over time." Acquiring that kind of leverage entails being the first person in the relationship to provide value. In his career, there have been at least 500 times where he claims to have approached someone, done something for him or her, and then figuratively walked away and expected nothing in return. "Yet they have been, by far, the interactions that have driven my career and my companies forward," he concludes.
Market Trend Insights
Multiple Factors Fuel Boston's Luxury Apt. Building Boom
Digested From "Boom in Boston Luxury Apartments Tests Market"
Boston Globe (03/25/14) Ross, Casey
Analysts and property professionals agree that a two-year boom in residential real estate construction is about to test the limits of Boston's demand for ultra-high-priced apartment living. The sudden construction boom is being fueled by several factors. One, Boston's population rose 3.1 percent between 2010 and the fourth quarter of 2012. At the same time, hardly any new apartments were erected during that period because of lingering weakness in the economy. This imbalance between supply and demand grew wider and caused average rents to soar nearly 20 percent, adds Jones Lang LaSalle (JLL). That, in turn, made new apartment towers even more attractive to investors. In downtown Boston alone, 12 large apartment buildings are now in various stages of planning and development. More than 8,000 rental units are on track to be built citywide over the next three years. The unprecedented burst of construction will double the supply of rental units built in large, luxury communities since 1960, reports JLL. The new construction will feature everything from rooftop decks to yoga lounges. But rents will be quite high. At Avalon Exeter, a tower rising in Boston's Back Bay, one-bedroom apartments measuring 800 square feet begin at $4,000 a month. At the recently completed 315 on A Street in South Boston, slightly smaller apartments go for $3,700 a month. "The big question everyone has is, is the [luxury] market deep enough?" remarks David Begelfer, chief executive of NAIOP Massachusetts. "We know there is tremendous demand at various income levels, but all the production is aimed at the higher end of the market."
Sellers Have Nothing to Whine About Marin's Apt. Market
Digested From "Strong Sellers' Market for Marin Apartments"
Marin Independent Journal (CA) (03/24/14) Higgins, Katherine
California's Marin County apartment sector continued to strongly favor sellers last year, with high prices per unit and capitalization rates as low as 4 percent in many markets. With low inventory, prices are now at the peak levels of 2005–07, with multiple offers on many apartment communities that hit the selling block. In the two- to four-unit category, inventory remains at all-time lows, and prices in Southern Marin are commanding as much as $425,000 per apartment. In the five-unit-plus category, a number of large sales have been completed in the last year. Among them was the 284-unit luxury apartment community at The Cove in Tiburon, which sold for $138 million to a Boston-based investment group. Monthly apartment rents in southern Marin are now up to $2,500 a month for one-bedroom units and approaching $3,000 for two bedrooms. In central Marin, meanwhile, several large apartment sales included 48 units in Fairfax that sold for more than $10.2 million after only one week on the market. The article's author, a San Rafael-based broker associate who specializes in the sales of apartment communities in Marin County, writes: "Investors can expect to see a continuing strong sellers' market in 2014 as inventory remains tight and many units are selling off market right now."
Two Reasons Why Interest in Lehigh Valley Apts Is So High
Digested From "Lehigh Valley Apartments Draw More Interest From Builders Than Houses, Study Shows"
Lehigh Valley Live (PA) (03/29/14) Falsone, Nick
The latest trends show that Pennsylvania's Lehigh Valley has emerged as the latest hotbed for new apartment development. According to a study released late last week by the Lehigh Valley Planning Commission, developers in 2013 proposed more new construction projects in the Lehigh Valley than they did the year before -- the first time that has happened since prior to the recession. Last year, the Lehigh Valley witnessed a jump in the number of apartment plans submitted. Furthermore, 2013 marked the sixth consecutive year in which developers proposed more plans for apartments than they did for single-family residences. Prior to 2008, proposals for single-family homes had outpaced proposals for apartment communities every year since 1984 -- the first year planning commissioners compiled such data. Commission Executive Director Becky Bradley commented, "If you look at the national conversation, everyone is talking about apartments, apartments, apartments." This comes despite mortgage rates that are still near all-time lows, a quirk that property professionals attribute to two reasons: a generation coming of age with much greater college debt and fewer stable employment prospects than their parents and grandparents. "People aren't staying in the same jobs," Bradley summed up. "People want more mobility and they aren't buying homes."
Is Demand for Apartments Going Down in Upstate SC?
Digested From "Demand for Apartments Eases in Upstate Region"
Greenville News (SC) (03/26/14) Davis, Angelia
More apartments are proposed for Greenville, S.C., as demand for rental units in the region may be starting to cool. According to Real Data, there were 597 new apartments under construction and 1,794 rental units proposed in the Greenville-Spartanburg-Anderson area by the end of last year. Due to the fact that there have been so many new units added to the market, the vacancy rate has climbed to 7.8 percent. Charles Dalton, Real Data principal, observes that the region has enjoyed a "very, very strong" demand for apartments over the last several years. Now, he said, "I think it's kind of easing back a little bit to a more sustainable level, but it’s still very healthy." Ross Coulter, a spokesman for Axiometrics Inc., confirms that occupancy is down on a year-over-year basis in the Greenville area. He noted that Greenville’s annual effective rent growth rate in February was 1.41 percent, slightly higher than the 0.32 percent posted the month before, but well under the 4.73 percent from the same month a year earlier. He cited supply as the main reason for the substantial decrease. According to an Axiometrics report, a total of 1,237 new units were delivered to market in 2013. The Axiometrics study states that "2014 is likely to be a year during which the market works to absorb the new supply, meaning effective rent growth and occupancy will likely remain flat."
It's Steady as She Goes in Des Moines' Apartment Market
Digested From "Consistency is the Story in the Des Moines Apartment Market"
Property Management Insider (03/26/14) Parsons, Jay
While the chances of Des Moines ranking as one of the nation's top-performing apartment markets are likely remote, the metro area is consistently solid when it comes to multifamily housing fundamentals. Due to decent job growth of 1 percent to 2 percent annually over the past couple of years, the local economy is doing well. As a result, apartment occupancy has been consistent, posting a rate of 95.6 percent as of the end of last year. Rent growth has been consistent, as well. Annual same-store rents have increased between 2 percent and 3 percent, a pattern that has played out over the past two-plus years. MPF Research said that because of the consistency in Des Moines' apartment sector overall, there is really no reason why the current pattern should change in the next couple of years.
Deals and Transactions
Colony Plans $513.6 Million of Debt Tied to Rental Payments
Digested From "Colony Plans $513.6 Million of Debt Tied to Rental Payments"
Bloomberg (03/20/14) Perlberg, Heather
Earlier in March, Colony American Homes Inc. announced that it is selling $513.6 million of bonds tied to rental payments. The securities are linked to 3,399 properties in 20 metro areas spread across seven states, and the homes were fully leased as of Feb. 1. The deal would rank as the second connected to rental homes after Blackstone Group LP, the largest single-family landlord, issued the first such bond in 2013. California-based Colony ranks as the country's third-biggest single-family landlord. It owns more than 15,600 homes. In total, private equity firms, hedge funds, and REITs have acquired as many as 200,000 houses over the last couple of years. Most are looking to profit from rebounding prices and climbing demand for rentals among millions of Americans who endured foreclosure or have been unable to qualify for a mortgage. A Moody's Investors Service statement read: "[Colony] has demonstrated its ability to effectively handle the day-to-day business of managing a national single-family rental platform."
As Money Flows, Downtown Motown Becomes Apt. Boomtown
Digested From "Easier Financing Rejuvenates Downtown Apartment Market"
Crain's Detroit Business (03/30/14) Pinho, Kirk
Easier financing has revived downtown Detroit's apartment sector. Of the 10,558 downtown apartments, only 3.1 percent are currently vacant, states CoStar Group Inc. In 2009, by contrast, the vacancy rate was almost 15 percent. The average asking rent is now $608 for a studio apartment, $846 for a one-bedroom unit, and $1,328 for a two-bedroom, states CoStar researchers. One such project, The Griswold, is to be financed with HUD funding, equity, and the state brownfield tax credit from the condominium development previously planned at the site. Another nearby apartment community is being funded with a bank loan, with the rest coming from private equity. The two projects are "a great thing because with apartments, you're bringing a younger workforce downtown, which drives your entertainment districts and you have employment to support them," states Kevin Dillon, a partner at Hendricks-Berkadia Apartment Real Estate Advisors. Financing is becoming easier thanks to lender acknowledgment of the increased demand for central business district rental housing. David Di Rita, principal of The Roxbury Group, concludes, "When you look at the rental project, you're looking at a debt project. The bank is counting on income from the project for many years."
Investors Finds This OK Apartment Market A-OK to Buy In
Digested From "Two Tulsa Apartments Purchased by California Company"
Tulsa World (03/25/14) Evatt, Robert
A couple of Tulsa-area apartment communities were purchased last week by investors for more than $16 million. The two properties were Canyon Creek Apartments and Foxfire Apartments. The former was bought for $9.6 million in a joint venture by Investors Properties Services (IPS) of Irvine, Calif., and Oro Capital Advisors of Los Angeles. Michael Chesser, president of apartment income investors for IPS, said the company was attracted to Canyon Creek due to its overall favorable impression of Tulsa. He adds, "We own properties all over the country, and we're interested in Tulsa because of its stability and the favorable economic conditions there." In fact, Chesser expects his firm will soon close on four more apartment communities in and around Tulsa during April. Chesser expects his team will undertake some upgrades to keep the property fresh and attractive to current and prospective residents. "We think with some unit upgrades, we should be able to keep the property full," he stated. Foxfire Apartments, meanwhile, was purchased for $8.6 million by locally based Capital Assets. The community, which was built in 1983, has a taxable value of $10.6 million.
How to Put the Wow Factor in Apartment Design
Digested From "Putting the Wow Factor in Apartment Design"
Daily Journal of Commerce (03/27/14) Chell, Robin; Surdyke, Scott
Apartment developers are looking to distinguish their new communities from the rest by telling a story or creating a sense of place. This is especially evident in Seattle, which is in the midst of a major apartment boom following years of little or no multifamily housing being delivered because of the recession. A challenge for developers will be to differentiate their projects from each other, especially with most vying for the key demographic of mid-20 to mid-30s techies who are willing to pay rent of $3 per square foot for new product. Unit finishes that until recently were used only in for-sale condominiums have now become standard in many rental apartments. These range from quartz countertops to tile backsplashes to luxury vinyl plank flooring. Meanwhile, in markets like Seattle, the traditional studio apartment has largely been replaced by the "urban one-bedroom" unit, with a fully separated sleeping area and a size that typically ranges from 525 to 575 square feet. Dining rooms have become much smaller or eliminated altogether in new units designs. This is in response to smaller households and a preference for grab-and-go options instead of cooking at home.
A notable change in the evolution of apartments in downtown Seattle is the design and quality of the lobby, amenities, and common areas. Everything from modern fireplaces and stone veneer to site-specific artwork and interactive video systems are changing the face of these common areas. To achieve the all-important "wow" factor, designers are drawing inspiration from industrial warehouses, breweries, restaurants, and boutique hotels to make that first impression and create an impactful central "memory point." Apartment owners and managers need to know that there is only one chance to make a first impression, and on any given day prospective residents may be touring three or more properties. Finally, unique on-site fitness amenities such as basketball courts, rock climbing walls, and yoga studios are beginning to appear as new apartment communities step up and embrace a more neighborhood vibe. From a competitive standpoint, the design approach of incorporating a sense of place and developing a unique theme can help distinguish new apartment communities from each other.
What Makes Morgan Properties Such a Great Place to Work?
Digested From "Morgan Properties Named to The Philly.com 2014 Top Workplaces"
Business Wire (03/30/14)
Morgan Properties has been chosen as one of The Philly.com's Top Workplaces, which are determined based solely on employee feedback. The survey is conducted by WorkplaceDynamics, LLP, which conducts regional Top Workplaces programs with 40 major publishing partners nationwide. Morgan Properties boasts that it had 172 out of 232 Delaware Valley employees take part in the research -- a 74 percent response rate. The Pennsylvania-based company scored higher than the real estate industry benchmark in such categories as career advancement, strong management, employee engagement, and the growth and future direction of the organization. Morgan Properties CEO Mitchell Morgan, who also founded the company, remarks, "Our [corporate] culture is based on integrity and social responsibility in an environment of communication, collaboration, and respect. This award reflects the culture we have built and the satisfaction of our team members." Morgan Properties ranks as one of America's biggest and fastest-growing apartment owners and managers. Established in 1985, it now owns and manages 107 apartment communities with more than 27,500 rental units in 10 states.
Bluerock Residential REIT Prices IPO at $14.50
Digested From "Bluerock Residential REIT Prices IPO at $14.50"
Bluerock Residential Growth REIT confirms that it raised $48 million by offering 3.3 million shares at $14.50 last week, below the expected $15 price. The REIT plans to list on the New York Stock Exchange under the symbol "BRG." Wunderlich Securities served as the lead manager on the deal. Bluerock owns nine apartment communities throughout the southeastern United States.
Legal/Legislative Did You Know
Columbia Fire Dept. Says All Apartments Will Be Up to Code
Digested From "Columbia Fire Department: All Complexes Will Meet Fire Code"
KQFX-TV (Columbia, Mo.) (03/24/14) Fertig, Jillian
All Columbia, Mo., apartment communities will be up to fire code by this week's deadline, according to the Columbia Fire Department. In December 2012, Columbia fire officials sent notices to 30 apartment communities citywide, informing them that they had one year to bring their properties up to code. In April of last year, a fire at Ash Street Place Apartments left the structure uninhabitable. It was one of the 30 that were not up to code. As of late last year, eight apartment communities had still not installed manual pull stations. However, because all communities had submitted a plan, Columbia extended the deadline to April 1. Fire Department officials now say they believe everyone will be up to code by Tuesday. "There's one apartment complex that's still working as we speak to get their alarm system installed, but everyone has complied," reported Battalion Chief Brad Fraizer. "We're confident they're going to have theirs done." Fraizer added that bringing all apartment owners and managers up to compliance was a huge step forward for Columbia. He concluded, "This apartment manual pull station compliance issue was big. It's going a long ways to make our community safer."
What'll Happen If 30,000 NYC Apt. Staffers Go on Strike?
Digested From "What You'll Live Without If 30,000 Building Staffers Go on Strike"
Brick Underground (03/27/14) Blatter, Lucy C.
New York City apartment building owners and managers have started preparing for a possible citywide strike by doormen, porters, handymen, and superintendents. Officials from the union and the group that represents management, 32BJ and the Realty Advisory Board on Labor Relations, maintain that negotiations have been productive. However, the two sides have not reached an agreement and if they fail to do so by April 21, approximately 30,000 building staff members could strike. This could affect residents of apartments and condos in everything from moving in to regular maintenance. There a number of things residents should be made aware of in case the worst transpires. Compactor rooms may be closed, which means residents will have to haul their own trash and recyclables to street level. Some building owners and managers may ask for volunteers to help out with everything from security to cleaning hallways to organizing and distributing parcels. And, of course, all residents should be reminded to pay their entire rent as usual. A strike does not mean the monthly payment is delayed until further notice.
Texas City OKs Incentives for $45 Million Apartment Community
Digested From "Arlington Approves Incentives for $45 Million Apartment Complex Near UTA"
Dallas Morning News (03/26/14)
The City Council of Arlington, Texas, voted 6-3 last week to reimburse Dallas-based multifamily housing developer Maxum + Mint $1 million for tearing down three aging apartment communities near the University of Texas at Arlington to make way for more student housing. In doing so, council members approved economic development incentives for Maxum + Mint to proceed with its proposed Sapphire Inspired Living project. Construction for the $45 million high-density apartment community is scheduled to commence in April. Once completed, Sapphire will increase the taxable value of the 4.5-acre site tenfold, Economic Development Manager Bruce Payne calculates. Besides reimbursing some of the demolition costs, city officials agreed to waive up to $450,000 in development-related fees. The new apartment community will offer 254 units.
Take a Moment to REWIND back to the 2014 NAA Student Housing Conference & Exposition and Receive Members-Only Pricing
Professionals in the student housing industry seeking to enhance their careers and better prepare for housing the next generation of residents should act now to take advantage of the top-level insight delivered during the 2014 NAA Student Housing Conference & Exposition, all for just $149!
NAAEI invites you to enjoy actionable intelligence and turnkey solutions perfect for helping you achieve your personal and professional goals—and earn continuing education credits while you’re at it—with REWIND’s 11 PowerPoint-synced audio sessions from the 2014 NAA Student Housing Conference & Exposition.
Take advantage of thought-provoking sessions on critical student housing issues—from better understanding student residents to achieving a firmer grasp on the technology on which they rely, to name just a few—and make sure to stay tuned for more on the REWIND Program and other strategic takeaways from the 2014 NAA Student Housing Conference & Exposition.
5 Never-Before-Seen Reasons to Attend the 2014 NAA Education Conference & Exposition
It’s the largest, most important event of the year for multifamily housing professionals, and even if this isn’t the first time you’ve attend the 2014 NAA Education Conference & Exposition—June18-21 in Denver—it’s a guarantee that NAA has arranged some new events that create more value for you as an attendee and contribute to what is no doubt going to be an unforgettable experience.
1. NAA Learning Zones. Three Learning Zones, focused on technology, sustainability and marketing, can be found in the NAA Exposition. These 15- to 20-minute presentations offer attendees an opportunity to study up on leading issues of the day in a solution-oriented environment.
2. Maintenance Mania National Championship Moves to Friday. Maintenance Mania®, the national program offered by NAA and presented by HD Supply, will host its National Championship from 12:30 p.m. to 1:45 p.m. on Friday, June 20. Come marvel as the nation’s premiere maintenance technicians vie for thousands in prizes and the title of National Champion.
3. Property Tours.While not technically “new” this year, it’s been some time since attendees had the opportunity to tour local-market communities. This year’s tour features a walk around Denver’s up-and-coming Union Station neighborhood, a development that has contributed to the biggest building boom the city has ever witnessed.
4. UNSESSIONS. These aren’t your grandfather’s breakout sessions—UNSESSIONS are anti-panel, crowd-sourced topics and formats that are designed to inspire interaction between attendees. Take a break from the traditional and learn the ropes of multifamily housing in a completely new way.
5. Sink or Swim: NAA Innovation Tank. In a first-of-its-kind NAA event, ABC hit reality TV show “Shark Tank” co-hosts Barbara Corcoran and Daymond John will judge live pitches from three innovative NAA attendees, with one lucky winner taking home the $5,000 grand prize!
Invest in your company and your career today. Register now and remember that the largest discounts go to those who sign-up early. Have four friends? Register as a group to take advantage of even more savings!
Advance Your Career with Webinar Wednesdays
Join NAAEI, Apartment All Stars and Multifamily Insiders for Webinar Wednesdays, the largest premium webinar series in the industry to provide state and local association members with access to industry thought leaders to discuss innovative ideas, best practices and emerging industry trends. These webinars will give participants the tools they need to become industry superstars in their own right.
March 26, 2014
The Five Keys to Increasing Sales with Tech-Savvy Prospects
Presenter: Donald Davidoff
April 9, 2014
Think You Know Fair Housing? Guess Again!
Presenter: Anne Sadovsky
Participate in the 2014 NAA Survey of Income and Expenses
It’s a win-win when your company participates in the 2014 NAA Survey of Income & Expenses in Rental Apartment Communities.
All participants receive a complimentary copy (a $599 value) of the final report which contains:
•Valuable information your staff needs to prepare for the upcoming budget season.
•Detailed local market and national economic analysis that will help ensure accurate financial and benchmarking information for your company.
•Data that will help you compare your community’s performance against your peers.
There are two methods for your company to complete the survey including using our designated Excel file to download data directly from your internal data systems or using our secure survey website.
Contact Janet Gora of CEL at 310-207-7328 to determine the best response method for your company (via Excel or Online). If your company has previously participated, be sure to contact Janet via email before you get started as she can also assist in pre-loading base property data for you.
If you missed last year’s 2013 NAA Income & Expense Survey—here’s the 2013 IES Executive Summary. To purchase your copy today, visit the NAA Bookstore.
NAAEI Designation Courses Offered Near You!
Apartment Association of Greater Omaha & Lincoln
Apartment Association of Greater Omaha & Lincoln
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
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.
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