Does MAA/Colonial Deal Signal Onset of Renewed Apartment M&A?
Digested From "Does Mid-America/Colonial Deal Signal Onset of Renewed Apartment M&A?"
CoStar Group (06/05/13) Drummer, Randyl
The apartment industry remains abuzz in the wake of last week's announced merger of Colonial Properties Trust and Mid-America Apartment Communities Inc. The move will create the second-largest U.S. multifamily housing REIT with over 85,000 rental units in 285 communities, ranking behind only Equity Residential. The newly merged company will have a total market capitalization of $8.6 billion. Analysts say the deal demonstrates that there is an appetite for apartments in the Sun Belt, which has experienced above-average employment and population growth. Cantor Fitzgerald REIT analyst David Toti says, "We believe that the merger announcement could be a positive catalyst for the [multifamily REITs], especially if investors speculate on prospects of additional public-to-public mergers in the apartment space." Other potential public-public consolidation or private-equity targets cited by analysts include Post Properties Inc., BRE, and HME. Sandler O'Neill analyst Alexander Goldfarb indicates that merger-and-acquisition activity is likely to rise, mostly in the REIT sector, especially among firms with complementary platforms.
Market Trend Insights
No Truth to Increased Home Sales Leading to Increased Apt. Vacancies
Digested From "Analysts: No Oversupply of US Apartments"
World Property Channel (06/07/13) Brass, Kevin
At the latest National Association of Real Estate Editors conference, the idea that increases in house sales will lead to increases in apartment vacancy rates was debunked. National Multi Housing Council (NMHC) Chief Economist and Vice President of Research Mark Obrinsky said the market needs between 300,000 to 400,000 new apartments to meet current demand. MPF Research, meanwhile, estimates that there are about 150,000 apartments due for delivery this year, with another 275,000 under construction. Apartment demand is not only linked to the health of the homeownership market, but also other demographic factors, analysts said. Finally, it was stated that between 75,000 and 125,000 aging apartment units are destroyed each year.
Is San Diego's Apartment Market Holding Steady?
Digested From "Apartment Rents Up, Vacancies Steady, Survey Shows"
San Diego Union Tribune (06/04/13) Showley, Roger
The latest survey of the San Diego County Apartment Association shows that apartment vacancies are holding steady locally. The group reported a 4.5 percent rate, which was unchanged from its spring and fall 2012 studies. However, average monthly rents have crept up over the past year to $1,330 versus $1,232 a year earlier and $1,288 last fall. Alan Pentico, the association's executive director, said declining rents and rising vacancies would seem likely with the local homeownership market rebounding from a six-year slump. "But in spite of that, rental vacancies have held steady," Pentico noted. "That's impressive." The association's survey is based on the responses from approximately 6,000 apartment owners and managers, who together are responsible for nearly 27,000 rental units.
How Much Did New Single-Family and Apt. Spending Rise in April?
Digested From "US Construction Spending Up 0.4 Percent in April"
Las Vegas Sun (06/04/13)
Spending on new single-family homes and apartments increased in April from March, but private residential construction dipped 0.1 percent due to fewer remodeling projects, according to the Commerce Department. Residential activity stood at a seasonally adjusted annual rate of $301.9 billion, up 18.8 percent from a year ago and the biggest gain of any major category in the report. The small contraction in private residential activity was likely to be temporary, based on all the indications of a strong rebound in housing over the past year. Housing has helped to support building activity in the face of a weakness in government projects.
Which Md. County Is Seeing a Boom in Multifamily?
Digested From "Boom in Multifamily Housing Moving to Frederick"
Gazette.Net (Maryland) (06/07/13) Goldreich, Sonny
The nationwide boom in multifamily housing construction has reached Maryland's Frederick County. In that market, rising rents have coupled with falling vacancy rates to produce a surge in development activity. After a period of little action after the 2008 real estate collapse and financing crisis, the county is seeing renewed interest in construction and a jump in rental housing units in the supply pipeline, notes an analysis by MacRo Ltd. Frederick County's apartment vacancy rate is currently around 2.3 percent and has dipped by more than half since the 4.9-percent rate measured in 2010. During that same time span, average monthly apartment rents countywide have risen nearly 6 percent. There are 6,061 apartments currently in Frederick's planning and development pipeline, with 4,069 rental units in the city of Frederick alone. Observers note that this is a slow-moving construction boom that could take until at least 2030 to be completed. MacRo owner Rocky Mackintosh concludes, "Apartments are more stable than office buildings and more stable than shopping centers and malls, and lenders are more willing to finance them."
Who's Behind the Rise in House Prices? Wall Street Buyers!
Digested From "Behind the Rise in House Prices, Wall Street Buyers"
New York Times (06/04/13) Popper, Nathaniel
Over the past year, big investment firms have dedicated billions of dollars to purchasing houses in some of the country's most downtrodden areas. Most of the firms are renting out the properties, with the possibility of unloading them at a profit when prices climb high enough. Some view the emergence of Wall Street buyers as a market-driven response to the country's housing woes. After all, the various companies are buying up rundown houses at a time when regular buyers either cannot or will not. Across the United States, more than two-thirds of damaged residences sold during April went to investors, reports Campbell HousingPulse. The influx has been so great -- and the resulting price gains so large -- that a growing number of ordinary buyers are being muscled out. However, there also is growing concern that prices will slump again if deep-pocketed speculators pull out. Wall Street played a big part in the previous housing boom by supplying easy mortgage financing. Now, such investment firms as the Blackstone Group are acquiring thousands of homes in the same areas where the financial meltdown hit hardest. Blackstone has bought approximately 26,000 homes in nine states. For its part, Los Angeles-based Colony Capital is spending $250 million a month and currently owns an estimated 10,000 residences.
Deals and Transactions
Two Reasons Why LYND Hired to Manage Colorado Apartments
Digested From "LYND Tapped to Manage Colorado Apartment Communities"
San Antonio Business Journal (06/04/13) Aldridge, James
Confluence Cos. has chosen the Denver office of national real estate company LYND to manage a trio of apartment communities in the Denver metro area and Boulder County. Confluence President Tim Walsh listed two main reasons for choosing LYND. "They have more than 30 years in the business managing multifamily properties and have a great resume handling lease ups," he said. "They've also developed and managed their own projects, so they think like an owner and understand the importance of providing value." Specifically, San Antonio-based LYND has agreed to manage the North Main Apartments at Steel Ranch, which is now under construction, and two more apartment communities still in the planning stage. In total, LYND will manage 578 rental units. North Main is situated in Louisville, Colo., featuring 228 garden-style apartments. The other two properties will be in suburban Golden and Lakewood.
Buyers Discover Three Columbus Apartment Communities
Digested From "‘Ton of Offers’ Pour in for 3 Apartment Complexes Put Up for Sale in Columbus"
Columbus Business First (06/04/13) Ball, Brian R.
The Audubon Road Associates affiliate of Eastern Property Real Estate has sold off its three Columbus apartment communities containing 696 rental units to a trio of investment groups. The Massachusetts-based investor sold off the 352-unit Twin Creek Apartments along with the Gaslight Village Apartments and Northland Arms properties in the Northland area. Champion Real Estate Services' Hilliard Village Apartments LLC affiliate paid $10.1 million for the Twin Creek community and financed it through KeyBank for almost $10.5 million. Northern Isles LLC, meanwhile, purchased the 240-unit Northland Arms for $1.9 million. Meanwhile, FT and Company LLC of Delaware acquired Gaslight Village for $2.1 million. The Barron Burkons & Wintermute Group out of Marcus & Millichap Real Estate Investment Services' Cleveland office marketed the various communities. Team partner Michael Barron states that investors from nine states made nearly two dozen offers. Those offers, he added, were a combination of those interested in the Eastern Property portfolio and the individual properties. "Ultimately," he said, "the seller's net proceeds ended up higher selling them individually."
Where in Canada Has Killam Made Its Latest Apartment Buy?
Digested From "Killam Buys Eight Apartment Buildings"
Guardian (CAN) (06/04/13) Stewart, Dave
Killam Properties Inc. this past week spent C$18.5 million to purchase eight apartment communities on Prince Edward Island (P.E.I.) in Canada, increasing its multifamily housing portfolio by 172 rental units. TS Magnum was the seller. Most of the apartment communities are located in Stratford. Tim Banks, a director with Killam, states, "We have quite a few properties on P.E.I. already. We like the marketplace and the whole industry is having a bit of a flight to better quality in terms of buildings and that's where our portfolio is." He notes that the demand for high-quality apartments is soaring throughout the market, as more and more Canadians are opting to downsize from a house and all the responsibilities that go with homeownership. He adds, "A lot of senior people are selling their homes and they're moving into a building where there's less maintenance and more efficiency in their heating. Not so much for them to manage."
Bozzuto Champions Apartment Sector on Capitol Hill
Digested From "NMHC Chair Cites Multifamily Strength Amid Supply 'Lag'"
Housing Wire (06/04/13)
During a recent U.S. House Energy and Commerce Subcommittee hearing, National Multi Housing Council Chair Tom Bozzuto noted that multifamily development is one key part of a thriving economy. In 2012, he said there was a 50 percent lag between the supply of new apartments and the demand level of 300,000. "The apartment industry is a competitive and robust $1.1 trillion industry that helps 35 million renters live in a home that's right for them. In an environmentally sound way, we help build vibrant communities by offering housing choice, supporting local small businesses, creating millions of jobs, and contributing to the fabric of communities across the country," he said.
More High Density Apartments Coming to Calif. Market
Digested From "More High Density Apartment Complexes Coming to Pleasanton"
Pleasanton Weekly (06/06/13) Bling, Jeb
Pleasanton, Calif., continues to see its local apartment sector thrive. St. Anton Partners is close to receiving final approval from the Pleasanton Planning Commission to build a 168-unit apartment community there. The City Council has already approved the project. However, the California-based multifamily development and investment firm is also seeking a development pact that will "memorialize" some of the commitments St. Anton has made in return for a longer expiration date on the project approval. St. Anton Partners' apartment community is the third in a string of high-density apartment developments approved by council members, with two similar proposals on track to follow shortly. In 2012, the council approved a BRE Properties proposal for high-density apartment communities with 498 units -- all in the Hacienda Business Park. The developer is expected to break ground on those rental units by the end of this summer. Earlier this spring, the council gave the green light to a new multi-story, high-density apartment community and adjoining retail center for a section of California Center. The project will include a total of five residential buildings containing 305 studio, one-, two-, and three-bedroom apartments.
How Multifamily Is Paving the Way for Increased Cement Use
Digested From "PCA Remains Optimistic; Expects Strong Growth in Cement"
Structural Engineer (06/13)
The latest Portland Cement Association (PCA) projection anticipates cement consumption growth continuing this year with a 6.2 percent gain, with the bulk of the market rebound transpiring in the second half of the year. The recession has generated a pent-up demand for consumer products as well as construction. PCA expects housing starts to total almost 1 million in 2013, while multifamily housing construction's strong rate of growth should be sustained as positive fundamentals drive the sector. PCA anticipates 318,000 multifamily units in 2013, comprising a 29 percent increase over 2012.
Legal/Legislative Did You Know
Abolish Fannie and Freddie? It Could Happen!
Digested From "Senators Are Nearing a Plan to Abolish Fannie and Freddie"
Washington Post (06/04/13) P. A12
A bipartisan group of senators could introduce legislation this month that would abolish Fannie Mae and Freddie Mac. The proposal would replace them with a government reinsurer of mortgage securities behind private capital. Private financiers would be required to take a first-loss position adequate to cover price declines as deep as those seen during recessions over the past century. Fannie Mae and Freddie Mac would be liquidated within five years, and the U.S. Treasury would assume responsibility for their existing mortgage guarantees. The new agency would work to build a common securitization platform and would have the capacity to help small lenders issue securities. Sens. Bob Corker (R-Tenn.) and Mark Warner (D-Va.) are writing the bill with input from other senators.
Smoke-Free Apartments in Utah May Be the New Habit
Digested From "Layton Landlord: Quit Smoking or Move Out of HUD Housing"
Salt Lake Tribune (UT) (06/07/13) McKitrick, Cathy
In the past few years, many of Utah's government-subsidized apartment communities have adopted indoor smoking prohibitions. In Layton, though, one housing manager is looking to implement the nicotine ban across his entire property. Randy Banks, manager of the 111-unit Skyline View Apartments, states, "We made a policy of 25 feet off our grounds, and our property ends one inch inside the sidewalk." HUD began "strongly encouraging" public housing authorities to implement smoke-free policies as early as 2009. Several have done so in Utah. Doug Carlson, executive director of the Provo City Housing Authority, said clean-air policies are now in place within his city's 350 units. To accommodate those residents who do still light up, Carlson has approved the installation of sheds or gazebos in some apartment communities where people can smoke and be protected from inclement weather. Meanwhile, Salt Lake County's Housing Authority confirms that several communities have gone smoke-free, most notably the new, 134-unit Bud Bailey Apartments for low-income refugees, homeless families and youth, and people with disabilities.
Could D.C. Help Apartment Owners Enforce Parking Bans?
Digested From "Could D.C. Help Apartment Buildings Enforce Parking Bans?"
Curbed DC (06/05/13) Paschall, Valerie
In Washington, D.C, City Councilmember Tommy Wells has introduced The Neighborhood Parking Protection Act of 2013. This new legislation would allow the mayor's office to help apartment owners and managers enforce a building's residential parking permit ban. While such legislation would certainly appease neighbors who charge that certain city streets are already too crowded with vehicles, Wells introduced a very similar bill in 2012 that failed to garner public or political support. Some question whether enough D.C. residents will ultimately be willing to go carless and still fill apartment communities near Metro subway stops. Their support is crucial for the bill to become law.
Reasons Why North American Cites Are Relaxing Codes
Digested From "The Latest Urban Development Trend: Less Elbow Room"
Wall Street Journal (06/04/13) P. A1 Dougherty, Conor
More and more cities throughout the United States and Canada are relaxing zoning codes to permit multiple dwellings on a single lot. Planners prefer these "accessory units" because they direct growth to already developed land and infrastructure, thus reducing the cost of city services. Such dwellings are smaller and cheaper, too, assisting city officials in their efforts to create more affordable housing. In late 2012, for instance, Salt Lake City passed an ordinance to allow accessory units within a half mile of the city's two dozen light-rail stations. Planners in Washington, D.C., meanwhile, are recommending giving owners that already have an accessory structure in place the right to rent it out without zoning approval. For its part, Seattle has permitted backyard cottages for the past four years; and homeowners have applied to build 168 of them. Silicon Valley cities are also looking to increase the stock of affordable housing. Some have used a combination of incentives to encourage single-family homeowners to build rental units, including reducing permit fees and eliminating red tape. Now, businesses are getting into the act. Portland-based Advantis Credit Union late last year began marketing mortgages that allow homeowners to build accessory units. Finally, such home builders as Lennar Corp. are touting "multigenerational" homes that have separate quarters for a family member.
The 2013 NAA Education Conference & Exposition is Next Week: Pick the Registration That Works Best for You
No matter your schedule or budget, NAA offers a range of registration options (http://educonf.naahq.org/onlinereg) for the 2013 NAA Education Conference & Exposition, June 19-22 in San Diego.
Multifamily housing is a $1 trillion industry, and the 2013 NAA Education Conference & Exposition is the largest, most important gathering of stakeholders all year. Are you sure you want to miss this? Here’s a sampling of what’s in store next week:
• More than 40 education sessions offering the latest trends and hot topics in all areas of rental housing management, from marketing and leasing to operations and management.
• Eight world-renowned featured speakers, including Sir Richard Branson, international business magnate and founder of Virgin Group, one of the most recognized and respected brands in the world, whose session will be moderated by Bill Rancic, who joined the ranks of famed entrepreneurs after winning the first season of Donald Trump’s “The Apprentice.”
• Attending the 2013 NAA Education Conference & Exposition will give you up to six continuing education credits—all that you need to reach your NAA professional designation renewal goal.
• Four days of awe-inspiring networking events, from the Conference Kick-Off Celebration on Wednesday, June 19, the “NAA Rocks The Block: Sparking Connections” Opening Party (where two whole blocks of San Diego’s Gaslamp District —including restaurants and shops—will be closed to the public) to the Saturday NAA Awards Breakfast Celebration, featuring special guest speaker Bert Jacobs from Life is good®.
• More than 380 multifamily service partners in the NAA Exposition, a space equivalent to four football fields chalk full of the latest and greatest products and services available to the rental housing industry. And, new this year, extended hours!
And the list just keeps going. Between the scheduled events and surprises in store, missing this event might just be the biggest mistake in your professional career. Read more about what to expect in San Diego.
Maximize Your ROI During the 2013 NAA Education Conference & Exposition
You have your business cards packed, elevator speech set and are ready to network—but don’t wait to touch down in San Diego for the 2013 NAA Education Conference & Exposition to get to work.
With more than 6,200 attendees, 40+ breakout sessions and four football fields-worth of multifamily housing supplier partners exhibiting, you’ll want to heed the following four steps to make the most of your experience.
1. Use myNAAPlanner
A convenient tool that offers attendees the ability to schedule their conference experience in advance, choosing the plan that offers the best return on your time and money investments.
2. Download the mobile app. The NAA Education Conference and Exposition app, sponsored by Apartment Guide, is available for Apple and Android smart phones and tablets, and offers a conference dashboard, scheduling functionality, event overviews and much more.
Visit the mobile app webpage for downloading instructions.
3. Keep An Eye on #naaeduconf Get yourself and your tweets in front of influential multifamily housing professionals, follow what’s trending and be the first to know of special announcements and offers.
4. Join the National Apartment Association Community on LinkedIn and become a fan of NAA on Facebook. Use social media to its fullest potential: communicate with like-minded peers and connect with each other before arriving onsite.
Catching this wave doesn’t require a surfboard, but you will need to register.
Registration Now Open for the 2013 Apartment Revenue Management Conference
In its third year, the Apartment Revenue Management (ARM) Conference®, September 23-25 in Miami, is the apartment industry’s sole event dedicated to staying ahead of the ever-changing operational curve.
Interested in strategies and tactics to improve revenue generation? Are you responsible for ancillary income? You’re not alone. The ARM Conference® is the place to be for revenue managers, operations executives, marketing directors, risk managers, rental housing business intelligence experts, pricing managers, investors, asset managers and anyone else who understands (or wants to learn about) the value inherent in revenue management.
Learn more about the ARM Conference® and register today!
2013 ARM Conference: Call For Presentations Due June 14
Speaker Call For Presentations for the 2013 Apartment Revenue Management Conference education sessions, co-produced by National Apartment Association and the Joshua Tree Conference Group (JTCG), are due by 11:59 p.m. ET on June 14.
The ARM Conference®, convening Sept. 23 – 25, 2013 at the Turnberry Isle Resort in Miami, is the only apartment industry event dedicated to the science of revenue management and attracts expert speakers consulting on the latest trends ranging from ancillary management and asset management to business intelligence.
Speakers do not have to propose session topics; rather, they are asked to identify topics in which they desire to cover and provide a statement of interest and background, as well as a brief elaboration on the proposed topic to demonstrate mastery of the concepts. Details on anticipated sessions can be found on NAA’s website.
The number of sessions that an individual and/or company will be allowed to present will be limited to two. This includes appearances as a presenter and as a panelist.
No paper documents will be accepted. You will be required to submit all requested information via email, and incomplete submissions will not be accepted or reviewed.
Please send completed proposal forms to NAA Education Programming Coordinator Sarah Laws.
Last Call to Order 2013 NAA Education Conference Sessions for Only $199
It’s not too late to pre-order REWIND, the Education Sessions from the 2013 NAA Education Conference & Exposition. Now through June 6, you can purchase 21 video and 20 PowerPoint-synced audio sessions for only $199.
Order your sessions today!
Look Who’s Joining Us at the NAA Advocacy Lounge!
Get your picture taken with President and Mrs. Obama with the Oval Office in the background! Your photo op with cardboard cutouts of the President and First Lady will be one of many activities in the NAA Advocacy Lounge from Tuesday through Friday at the NAA Education Conference. The lounge will be located in the San Diego Convention Center lobby adjacent to the conference registration area.
Since education is the key to being an effective advocate for the apartment industry, the NAA Advocacy Lounge will be THE place to be! Learn about all the activities at the NAA Advocacy Lounge.
Looking for a Few More Great Companies!
Exhibit at the 2013 NAAEI Military Career Fair in San Diego and fill those open positions with veterans, military spouses and transitioning military members who are looking for a career “back home”.
When: Wednesday, June 19, 2013
Time: 9 a.m. to 3 p.m.
Where: San Diego Convention Center
A special thanks to the following companies for their participation:
Alliance Residential Company, American Campus Communities, Appliance Warehouse of America, Inc., AvalonBay Communities, Inc., Balfour Beatty Communities, Camden Property Trust, Equity Residential, Forest City Residential Management, Gables Residential, Greystar, H. G. Fenton, HD Supply – Facilities Maintenance, Liberty Group, Lincoln Property Conventional, Lincoln Military Housing, Madera Residential, McKinley, Inc., Olympus Property, The Dolben Company, Inc., The Kamson Corporation, Waterton Residential, WinnResidential, Winthrop Management
Register for a booth at the Apartment Careers website.
For more information, contact Vicki Sharp at 512/550-2021.
Webinar Wednesdays with NAAEI, Apartment All Stars and Multifamily Insiders
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.
- will cover industry trends and timely topics that benefit both on and offsite staff
are available at a one-time or subscription price
- offer NAAEI Continuing Education Credits (CEC)
Cost: The webinar series averages two webinars per month, and for a limited time, we have discounted this subscription rate to $39.99/month, a discount of 17%.
NAAEI Designation Courses Offered Near You!
Nevada State Apartment Association
Roanoke Valley Apartment Association
Chicagoland Apartment Association
July - August, 2013
Central Iowa Apartment Alliance
September - October, 2013
Hampton Roads Apartment Council
September – October, 2013
Greater Charlotte Apartment Association
October - November, 2013
Apartment Association of Greater Los Angeles
November - December, 2013
Nevada State Apartment Association
Roanoke Valley Apartment Association
Greater Charlotte Apartment Association
Roanoke Valley 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.
Abstract News © Copyright 2013 INFORMATION, INC.