NAA Industry Insider: Greystar Acquires $460 Million Portfolio of Multifamily Assets

 

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TWCFEB13
Greystar Acquires $460 Million Portfolio of Multifamily Assets
Digested From "Greystar Acquires $460 Million Portfolio of Multifamily Assets"
Greystar News Release (09/03/13)

Greystar Real Estate Partners has acquired a $460 million portfolio of multifamily housing assets from Inland American Real Estate Trust Inc. The deal was structured as a two-staged close with the second closing taking place on Aug. 28. The portfolio consists of 14 apartment communities containing 4,371 rental units. The various communities are spread across five major markets -- Dallas, Houston, Louisville, Oklahoma City, and San Antonio -- each of which has exposure to America's growing domestic energy industry. Wes Fuller, Greystar's Executive Director of Investments, comments, "We are excited with the opportunity as the portfolio of stable, income-producing properties fits well within our investment strategy of acquiring assets with strong existing cash flow at values below replacement cost and in markets experiencing significant employment and population growth."
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Market Trend Insights


RealPageMay13
Looking for a Back-to-School Bargain? Residents Try Off-Campus Housing
Digested From "Student Off-Campus Housing Is Back-to-School Bargain"
Wall Street Journal (08/27/13) Wotapka, Dawn

Apartment owners nationwide are cutting rents due to an oversupply of student housing in some college towns. Since 2010, private-equity firms, private developers, and REITs have been cranking up delivery of off-campus housing communities, often rich with such upscale amenities as swimming pools, ice-skating rinks, and screening rooms. That has stoked fears of a glut in certain markets. This, in turn, has sparked a rout in the stocks of developers specializing in student housing. Axiometrics Inc. states that a record 51,000 new off-campus beds are projected to be delivered in college towns nationwide this year. Developer interest in the sector has been on the rise due to the widely held belief that enrollment was outpacing the ability of budget-constrained schools to build or modernize their on-campus housing. Unfortunately, developers have overshot the mark in numerous markets, with more than a few failing to take into account other construction that was planned. Others were off on their estimates of future enrollments, while still others misjudged the willingness of students to pay more for off-campus living at a time when many households are still reeling from the Great Recession. With vacancy rates on the rise because of the new supply, new and existing communities near such colleges as Florida State University and Arizona State University have had no choice but to slash rents. Competition is especially acute among developers of upscale communities who are hoping to charge premium rents for their plethora of amenities. In some cases, the rent can be well above $1,000 a month, while shared dorm rooms can run as low as $500 a month. To be sure, some developers have fared better than others. Landmark Properties recently opened three new communities that were fully leased before the doors even opened. In Pennsylvania, Landmark was able to raise rents three times without slowing demand. The company is planning four new communities for next year.
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Grand Forks Could Be the Next Hot Apartment Market
Digested From "Renters Have Trouble in Grand Forks"
Associated Press (08/27/13)

While an increasing number of contractors are building apartments in Grand Forks, N.D., officials say the area is experiencing its lowest apartment vacancy rates in at least a decade. The Greater Grand Forks Apartment Association cites a July survey showing that 4 percent of apartments in the metro area were vacant, down 3 percent from a July 2011 survey. "We can't explain it," said John Colter, the association's executive director. Documents from the city's planning and zoning department show that 168 units have been completed this year and another 1,115 are under review, under construction, or have already been built.
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How the Dip in Homeownership Is Changing Neighborhoods
Digested From "As Renters Move In, Some Homeowners Fret"
New York Times (08/29/13) P. B1 Dewan, Shaila

Nationwide, a growing number of single-family rentals are providing an option for many who lost their homes during the economic downturn through foreclosure and for those who cannot obtain a mortgage under today's tighter lending conditions. However, the decline in homeownership is also dramatically changing many neighborhoods by lowering property values, undermining social stability, reducing voter turnout, and increasing crime. William M. Rohe, a professor at the University of North Carolina at Chapel Hill, states, "When there are fewer homeowners, there is less 'self-help,' like park and neighborhood cleanup, neighborhood watch." In hundreds of neighborhoods that once attracted first-time home buyers, investors have bought up tens of thousands of homes and turned them into rental units. On the positive side, the trend has helped put paying residents in many homes that previously sat vacant and/or had become eyesores. But some homeowners lament that their once-stable subdivisions are now seeing a steady stream of strangers.
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Deals and Transactions


LowesAug2013
American Communities Waves the Acquisition Flag in Texas
Digested From "American Communities Buys 3 North Texas Properties"
Dallas Business Journal (08/27/13) Carlisle, Candace

Texas-based American Communities recently purchased three apartment three communities in its home state for an undisclosed sum. The transaction marks American Communities' seventh property acquisition in the past 18 months. The company plans to renovate and upgrade each of the communities, all of which are located in North Texass, in a similar fashion to the firm's popular Bel Air Las Colinas. In addition, the three assets will be renamed under the Bel Air moniker after the renovations are completed.
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Apartments in Four States Help Secure Big-Dollar Loan
Digested From "Northwestern Mutual Provides Gables with a $233 Million Refinance"
Multi-Housing News (08/13)

Northwestern Mutual recently refinanced a $233 million tranche of a $460 million portfolio loan secured by 19 apartment communities in four states across the Sun Belt and the West Coast. The borrower was Gables Residential. "The strength of our general account portfolio allows us the flexibility to execute such a complex transaction which will provide long-term value for our policy owners," said Felix Figueroa, director of Northwestern Mutual Real Estate Investments. The 19 communities include: three each in Atlanta, Dallas, and Southern California; four each in Dallas and South Florida; and two in Austin. "The communities included in this transaction are diversified, well located, and have proven historical success," Figueroa said.
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Industry Buzz


Sherwin-WilliamsSept13
Seeking the Adult-Proof Carpet
Digested From "Seeking the Adult-Proof Carpet"
Wall Street Journal (08/29/13) Abkowitz, Alyssa

Apartment owners and managers take note. Approximately 58 percent of the carpet manufactured in the United States is nylon, which is more durable than polyester. However, it's not as stain resistant. Consequently, carpet makers are scrambling to develop new stain-proofing treatments, technologies, and fibers. Earlier this year, Beaulieu of America introduced Indulgence, a new line of carpet made of solution-dyed nylon. According to CEO Ralph Boe, wine spilled on a carpet dyed with the treatment will stay on top of the fiber instead of penetrating deep into the carpet. Shaw Industries, meanwhile, uses the R2X stain and soil treatment that injects a chemical into the fiber from its top to its base rather than treating it topically. For its part, Milliken & Co. uses a clear dye known as StainMaster that has a negative charge against the nylon, preventing a stain such as fruit juice from seeping in. Finally, Mohawk Industries' SmartStrand carpet uses a material known as Triexta, a plant-based polymer that has built-in stain protection. Developed by DuPont and exclusively marketed by Mohawk, the fiber is approaching $1 billion in sales. SmartStrand has proven very effective in fighting blueberry and soil stains when treated with water and a mild detergent. However, mustard and wine stains tend to linger in sample tests.
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When Living Close to the Highway Is NOT a Sellable Point
Digested From "Sherman Oaks Apartment Complex Draws Criticisms Over Health Concerns"
Los Angeles Daily News (08/27/13) Smith, Dakota

Developer M. David Paul's plans to build a 325-unit apartment community in Sherman Oaks, Calif., is drawing criticism over possible health risks. Paul is looking to provide sorely needed housing for locals who work in the area. But critics cite studies linking autism to living adjacent to bustling public highways to support their claims that building next to the 101 and 405 freeways is not safe. The project would be located just 35 feet from the freeway, much closer than the 300- to 500-foot buffer recommended by California's air quality board. The developer argues that the health risks have been addressed. Apartment windows facing the freeway will not open, and an extensive filtering system is planned. The City Council plans to vote on the matter soon.
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A Tough Day at the Office ... er, Apartment
Digested From "From Desks to Beds: Landlords Convert Offices Into Apartments"
Stamford Advocate (CT) (08/28/13) Just, Olivia

Some Stamford, Conn., office building owners are working to convert their space into apartments due to a difficult office sector and the hot rental housing market. According to Jones Lang LaSalle, the vacancy rate for Class A office space in Stamford's central business district is hovering around 26.4 percent, while the rate for Class B space is approximately 13.7 percent. The opportunity to convert an under-utilized commercial building in need of improvement into apartments is hard to resist, said Russell Munz, co-owner and president of Pyramid Real Estate Group, a Stamford-based commercial real estate company. Experts say the trend is ongoing because lenders are more willing to lend for apartment construction and because the buildings are often in prime locations.
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SummerHill to Focus on SoCal This Fall and Winter and Beyond
Digested From "SummerHill Apartments Expands to Southern California"
San Francisco Business Journal (08/28/13) Torres, Blanca

SummerHill Apartment Communities is breaking up its California operations and opening a new Irvine location to focus on Southern California. "Southern California is a big and robust market," said President and CEO Robert Freed. "We think there's room for our niche, which is more urban in-fill and doing entitlements versus buying projects that are shovel-ready." The firm recently wrapped up construction on the Paragon Apartments, a 301-unit property in downtown Fremont. Its portfolio is bursting with other communities under construction, including the 300-unit Brio in Walnut Creek, the 147-unit Venue Apartments in Mission Bay, and the 193-unit Demus on the Boulevard in Mountain View.
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Legal/Legislative Did You Know


2013 Diamond Sponsors with correct Azuma logo
What New Law Has Boston Apt. Owners & Residents Lamenting?
Digested From "Landlords Resist Apartment Registration Law"
WBUR.org (08/29/13)

Boston apartment owners have until Aug. 31 to register their rental units with the city. Under a law meant to make the city's apartments safer, any housing unit not occupied by the owner needs to be registered. Inspectors will check out most rental units once every five years to ensure the apartments are up to code. Owner-occupied communities with fewer than seven units and apartments owned by the city, the state, or the federal government will not have to register. Owners will be required to pay a $25 registration fee for each apartment during the first year, and $15 per unit the following year. Many tenants are concerned that -- in an already pricey rental housing market -- registration and inspection fees will be passed along to them in the form of higher monthly rents.
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In What Calif. City Are Apartments Getting Their Murals Back?
Digested From "Los Angeles Close to Erasing Ban on Murals"
Associated Press (08/28/13)

In a victory for wall artists, the Los Angeles City Council this week tentatively decided to lift a decade-long ban on private murals that erased the colorful exterior paintings from stores, office buildings, and apartment communities throughout the city. The council voted to permit new murals in business and industrial zones if an artist registers a project with the city and pays a $60 fee. According to Isabel Rojas-Williams, executive director of the Mural Conservancy of Los Angeles, the changes will free a new generation of muralists to "reclaim our legacy as a mural capital of the world." The city banned private murals in 2002 to curb proliferating advertising.
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New Illinois Law Protects Those Who Rent
Digested From "New Illinois Law Protects Renters in Foreclosures"
Southern Illinoisan (08/22/13)

Illinois Gov. Pat Quinn recently signed into law a bill that protects those who rent if their landlord's property is foreclosed on. The measure, which goes into effect in three months, stipulates that buyers of foreclosed multifamily housing should either honor existing leases or give residents 90 days to move. The original bill was sponsored by state Sen. Jacqueline Collins and state Rep. Kelly Cassidy, who pointed out that about 40 percent of families affected by foreclosure are residents who may not be aware that their property's owners failed to make mortgage payments.
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NAA Announcements


Behr.July13
Apartment Revenue Management Conference Is Just Three Short Weeks Away

Apartment Revenue Management Conference Is Just Three Short Weeks Away

It’s time to move quick: register now for the 2013 Apartment Revenue Management Conference—just three short weeks away—September 23-25 at the Turnberry Isle Resort in Miami.

The 2013 Apartment Revenue Management Conference, now in its third year, is the multifamily housing industry’s sole event dedicated to staying ahead of the ever-evolving operational curve and universally recognized as a tremendous value for rental housing professionals. Nowhere else can you find world-class education and first-rate networking, as well as ideas and strategies for boosting net operating income.

In addition to benchmarking and best practices, attendees can look forward to an expanded program focusing on new topics such as ancillary revenue, expense management and business intelligence. Keynote speaker Greg Cross, Senior Vice President of Revenue Management for Hyatt Hotels Corporation, will share current trends in lodging and potential parallels in the multifamily marketplace.

“NOI is Everywhere,” as the conference’s theme promises; but there is only one place to learn all about it. Register before it’s too late!
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Win Your Own Erik Wahl Masterpiece and Support NAA Advocacy Efforts

Participate in the Wahl to Wall advocacy campaign and support the NAAPAC or the NAA Better Government Fund. All you need to do is guess how many pennies are in the jar. The jar of pennies was displayed at the Education Conference in June and can be viewed online. Start guessing today! Questions? Contact NAA’s Kathleen Gamble.
Owners, Make the NAA Lease Program Work For You—Watch the Latest IROC Webinar and Learn How

If you missed last month’s IROC Webinar it’s not too late to learn how the NAA Lease Program can work for owners of all sizes. Get a demonstration of how it works, see how to integrate the lease with your property management software and learn why owners like you are making the NAA Lease Program the most widely-used residential lease forms in the country. To see what you missed, join the IRO Community today and watch the Webinar from Aug. 20.
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Don't Despair! Individual Education Sessions Are Available

Couldn’t attend the 2013 NAA Education Conference & Exposition in San Diego, or missed a great session? Don’t despair—you still can enjoy the best education sessions in the apartment industry, including video!

NAA’s Education Institute (NAAEI) is once again presenting its “Rewind” program, offering 21 recorded video sessions and 20 PowerPoint-synced audio sessions from the 2013 NAA Education Conference & Exposition—all for just $299!
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Attention Affordable Housing Management Professionals!

Take advantage of this convenient, affordable way to prepare to earn the Specialist in Housing Credit Management (SHCM) certification entirely online.

The Webinar series starts on September 12 and runs each Thursday in September.

The cost for the course, including the SHCM exam, is $599 for non members and $549 for members. Individual Webinars can be purchased at $99 each.

Don't wait, register today!
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"Get Your Wheels Turning" With This Week's Webinar Wednesday Presentation

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.

Upcoming Webinars:

9/4/13 Mike Whaling - Get Yours Wheels Turning! HOW TO: Apply and Measure the “Hub-and-Spoke” Model of Online Marketing to Apartment Marketing

9/18/13 Eric Broughton - Beyond Craigslist

Learn more and register today!
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NAAEI Designation Courses Offered Near You!

CAM:

Nevada State Apartment Association
September, 2013

Roanoke Valley Apartment Association
November, 2013

CAM Online

CAMT:

Central Iowa Apartment Alliance
September - October, 2013

Hampton Roads Apartment Council
October - December, 2013

Greater Charlotte Apartment Association
October - November, 2013

Apartment Association of Greater Los Angeles
November - December, 2013

CAS:

Nevada State Apartment Association
September, 2013

Roanoke Valley Apartment Association
November, 2013

NALP Online

NALP:

Roanoke Valley Apartment Association
September, 2013

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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September 3, 2013

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2013 Apartment Revenue Management Conference

Event Highlights

Take Your Creativity to the Bank: Five Minutes of Creativity Could Win You $5,000 in Cash

Do You Have What It Takes To Swim With Sharks?  

Do you have what it takes to swim with the sharks? If you do, you could win $5,000 and be a star at the 2014 NAA Education Conference & Exposition in Denver. Learn more and enter.