One Strike and Your Apartment Is Out in Wilkes-Barre?!
Digested From "One Strike Rental Ordinance Enforced For First Time"
WNEP.com (PA) (09/13/13) Wadell, Bill
In Pennsylvania, Wilkes-Barre officials enforced a new rental ordinance for the first time on Sept. 13, shutting down an apartment unit following a drug raid. According to Mayor Tom Leighton, three people were arrested on Wednesday after police officers found cocaine and cash from an alleged drug dealing operation inside an apartment on Carlisle Street. Under the ordinance, the apartment owner will not be allowed to rent out the unit for six months. Leighton vowed, "If we have to shut down a unit a day, we're going to do it until we clean this city up." Wilkes-Barre Police Chief Gerry Dessoye adds that the crackdown on drugs will help in the city's ongoing war against gun violence. "People are settling things through violence, through extreme violence," he laments.
Market Trend Insights
Will Too Many Apts Turn Charm City Into Harm City?
Digested From "Baltimore's Luxury Apartment Market Is Hot, but Questions Remain"
Baltimore Business Journal (09/13/13) Litten, Kevin
As many as 5,000 new rental apartments are now in the pipeline for Baltimore. This, of course, raises the possibility that the market may become saturated to the point where monthly rents decline. In addition, some are questioning whether the Downtown Partnership of Baltimore Inc.'s 2012 study that projected demand for 5,800 apartments painted too rosy a picture. Anirban Basu, CEO of Sage Policy Group, is among those who think so. Basu remarks, "We're talking about a city where the mayor has set the goal of 10,000 new families in the next decade and the Downtown Partnership is talking about 5,800 units? That number sounds a bit optimistic. The question is: 'Can Downtown Baltimore generate the kind of buzz in other cities?'" Companies have not been rushing to snap up office space in the central business district (CBD). The office vacancy rate downtown has hovered at 17 percent for the last couple of years. Now, T. Rowe Price Group Inc. -- one of downtown's largest employers -- is weighing a possible move out of the CBD. Regardless, Downtown Partnership President Kirby Fowler stands behind his group's 2012 report. He points out that over the past 10 years, there's been a 130 percent increase in residents. So our current experience justifies adding to the current supply."
Downtown Indianapolis Apartment Market to Stay Strong
Digested From "Experts: Downtown Apartment Market to Stay Strong"
Indianapolis Business Journal (09/13/13) Olson, Scott
Analysts and property professionals are forecasting that downtown Indianapolis' apartment market will continue thriving despite thousands of new rental units that are set to be added in the coming months and years. Among them is Ambrose Property Group President Aasif Bade, who says, "The downtown apartment market is very, very strong, with seemingly very high pent-up demand." Ambrose is one of several developers building rental units in the downtown corridor. Major projects in the works are expected to add at least 2,700 apartments within the next several years. Ambrose also contributed to the 1,400-plus apartments built in 2012 at a cost of $176.7 million. At the end of last year, the total number of downtown apartments topped 4,700 -- a 70-percent increase from 2000, states multifamily brokerage Tikijian Associates. John Crisp, a principal for Cassidy Turley, notes that demand is strong among young professionals and empty-nesters thanks to downtown's access to professional sporting events and restaurants. Perhaps the most telling statistic illustrating demand for downtown Indianapolis apartments is the current vacancy rate, which decreased from 6.9 percent in 2009 to 3.5 percent as of Dec. 31.
Which Part of Houston Is Seeing an Apartment Boom?
Digested From "Uptown in Apartment Boom"
Houston Chronicle (09/10/13) Meeks, Flori
Houston's Uptown area has emerged as a hot spot for apartment development. Numerous apartment communities have opened there in recent months and years, and more are in various stages of planning and development. Among the planned apartment communities is a 355-unit residential tower being developed by Hanover Co., which will be part of Phase II of Wulfe & Co.'s BLVD Place project. Also coming is WaterWall Place, a seven-story luxury community with 322 rental units. Uptown Association President and CEO John Breeding remarks, "There's a very strong appetite for urban development." He estimates that the area has seen more than 27 residential developments since 2000. The Uptown area offers some key attributes that entice multifamily housing developers. Breeding notes, "This area is safe. It's green. It's near entertainment, and it's near work."
Deals and Transactions
Goodman Makes It Rain in Seattle With Apt. Sales
Digested From "$41M Payday: Goodman Real Estate Sells 2 Apartment Buildings"
Puget Sound Business Journal (09/12/13) Stiles, Marc
Late last week, a couple of limited liability companies -- both with the same address as Boston-based Intercontinental Real Estate Corp. -- paid $41.1 million for two new apartment communities in Seattle's Ballard area. Both were developed by Goodman Real Estate in 2012. The Belay has around 100 rental units, while the Noba has 60 apartments. They are both more than 95 percent leased. Intercontinental has a wide array of clients, ranging from corporations and foreign governments to pension plans and high-net-worth individuals. For its part, Goodman is a privately held company with a market value of more than $2.5 billion and apartment communities in Seattle, Kent, and Bellevue.
Nine-State Apartment Portfolio Hits the Sales Block
Digested From "Nine-State Apt. Portfolio Hits the Sales Block"
GlobeSt.com (09/11/13) Bubny, Paul
A court-appointed receiver has tapped Hendricks-Berkadia to market a group of 31 apartment communities in nine states. The communities will be sold in three portfolios. They are going on the selling block via a court-ordered disposition due to a civil lawsuit filed by the SEC against Management Solutions Inc. Hendricks-Berkadia President Brent Long notes that the availability of these assets, which together contain 5,704 apartments, represent "something of an anomaly and a unique opportunity in the current investment market. This court-mandated sale is driving a large number of top-quality, operationally sound properties onto the market, where investment demand far exceeds supply." Analysts calculate that their combined values could top $500 million. Occupancy across the three portfolios averages 90 percent. The first portfolio will be made up of nine communities containing over 2,150 rental units located in Texas and Louisiana. Mark Rohr, a regional partner who works out of Hendricks-Berkadia's Detroit office, has agreed to spearhead the Midwest effort to market the eight Ohio apartment communities. That portfolio consists of 2,150 rental units all of which are located within the Columbus metropolitan area. Finally, the third portfolio includes 14 communities totaling 1,400 apartments across seven states -- Texas, Tennessee, Idaho, Iowa, Kansas, Colorado, and Oklahoma. This group may also be sold in smaller segments.
Phoenix Developers to Put Help Wanted Sign Out at Fair
Digested From "Phoenix Apartment Developers to Hold Job Fair, Seek to Hire 400"
Phoenix Business Journal (09/13/13) Hansen, Kristena
With dozens of new apartment communities in the pipeline in and around Phoenix, about 20 of the area's biggest management firms will be looking to fill around 400 job openings at an upcoming employment fair. The event, hosted by the Arizona Multihousing Association (AMA), is scheduled for Oct. 15 at the Phoenix Convention Center. Among the participating employers are Alliance Residential Co., Equity Residential, Greystar, and Mark-Taylor Residential. AMA President and CEO Tim Simplot states, "Every year, this event gets better and better. Hundreds come out, and we have folks getting hired at the event and scheduling interviews after. It's a win-win for these growing apartment communities and for people looking for their next opportunity." The Phoenix metro area's apartment sector was among the first to see a rebound and has since accelerated at a blistering pace. There are currently more than 70 such developments now in the pipeline locally, which will deliver approximately 19,000 total apartments once completed.
Who Is Riverstone Residential Group's New CEO?
Digested From "Riverstone Residential Group Names New CEO"
Dallas Business Journal (09/11/13) Carlisle, Candace
Riverstone Residential Group LLC has appointed its founder and President Terry Danner to the additional post of CEO. Danner has been in a leadership position at the Dallas-based, third-party multifamily housing firm since its 2006 founding. He will be taking the reins from Walt Smith, who has served as chief executive since 2009. Smith recently announced his exit in order to join Investors Capital Group, but has agreed to assist Danner in the transition. Danner also expects to draw on the expertise of Riverstone's tenured regional and divisional leadership team, stating, "I am confident that their expertise will continue to serve us well as we expand as a company, add to our leadership team, and maintain a focus on our core business of property management and operations oversight.
AvalonBay Communities Declares Q3 2013 Dividend
Digested From "AvalonBay Communities, Inc. Declares Third Quarter 2013 Dividends"
Daily Finance (09/10/13)
AvalonBay Communities Inc.'s board of directors has declared a third-quarter cash dividend of $1.07 per common share, which will be payable Oct. 15 to shareholders of record as of Sept. 30. As of the end of this year's second quarter, the REIT owned or had ownership stakes in 273 apartment communities containing 81,499 rental units. These communities are spread throughout a dozen states and the nation's capital. AvalonBay is especially focused on operating in high barrier-to-entry markets of the United States.
Looking for Cost-Efficient Apt. Construction? Knock on Wood!
Digested From "Where Structure Meets Style"
Structural Engineer (08/13) Podesto, Lisa
The designers of the new Stella apartment community in Marina del Rey, Calif., were able to use savings realized with cost-efficient wood framing to add resort-style amenities more typical of luxury developments. The development is comprised of a couple of nested, wood-framed, L-shaped structures, oriented for maximum access to light and views. The buildings are set atop a concrete podium housing 9,000 square feet of ground floor retail space and 578 parking stalls. One of the L-shaped buildings is five stories of wood, while the other is four stories. The taller wood buildings allowed designers to leverage wood's affordability, while supplying the framework for increased density while still complying with all structural, fire, and other mandates. The wood-framed segment of the complex consisted of Douglas fir dimension lumber along with parallel strand lumber, laminated veneer lumber, glued laminated timber beams, and engineered wood I-joists for the floor and roof structures. They also employed plywood and oriented strand board structural wood sheathing. The Stella's balconies limited the amount of exterior shear walls, which were specified to include fire-retardant-treated (FRT) rim boards and plywood. The designers utilized larger dimension lumber sizes for the FRT lumber than would otherwise have been required due to the reduction in shear capacity based on the FRT used.
Legal/Legislative Did You Know
Ky. Apartment Owners' Latest Emergency Is Fighting 911 Tax
Digested From "Apartment Owners Trying to Stop Campbell 911 Tax"
Cincinnati Enquirer (09/13/13) Mayhew, Chris
In Kentucky, apartment owners are teaming up to fight Campbell County Fiscal Court over the new 911 property tax fee on the grounds it is unconstitutional. The Greater Cincinnati/Northern Kentucky Apartment Association last week filed a complaint in county circuit court along with nine apartment ownership groups and the owner of an occupied individual residential unit. The suit charges that Campbell County has no authority under the state Constitution to charge the $45 per commercial or residential unit property tax fee approved by Fiscal Court back in August. The suit is petitioning a judge to stop the county from collecting the fee and to award damages "in the form of refunds in an amount to be determined." Charles Tassell, director of government affairs for the association, said the larger issue is how local governments throughout Kentucky are trying to deal with a decreasing use of landlines because the state's legislature has not addressed the issue. He says the apartment association is willing to work with municipalities and has proposed a number of solutions to county officials. One of the main issues that must be addressed is how cell phones are charged a 70 cents per month state fee and landlines are charged a $3 fee. Tassell concludes, "It's an issue the state needs to work on as a whole."
Christie Veto Affects Rent Control in Senior Communities
Digested From "Christie Conditionally Vetoes Bill Looking to Uphold Rent Control in Senior Complexes"
Newark Star-Ledger (NJ) (09/09/13) De Poto, Tom
New Jersey Gov. Chris Christie last week conditionally vetoed a bill that would have extended rent control protection for a handful of senior citizen communities. Reasoning that “rent control distorts the market for rental housing and depresses the housing supply,” Christie urged the state's Department of Community Affairs to review rent control ordinances, especially as they relate to communities and buildings primarily comprised of residents age 55 and older. The legislation sprung from complaints by Woodbridge Hills Estates residents when they were hit with a series of sharp rent hikes. However, a 1997 state law enacted to encourage construction of multifamily housing exempted owners of the new building from rent control laws for 30 years. The New Jersey Apartment Association opposed the measure and called on Christie to fully veto the bill. NJAA President Brent Kohere states, "This legislation was bad from the start, but thankfully the governor was there to protect our economy, defend rental housing, and preserve the future of multifamily housing." The association claimed the bill jeopardized future apartment construction for seniors by "hamstringing" owners. An NJAA statement read: "Scores of buildings that are now home to thousands of New Jersey's working families would not have been possible without this commitment from the state to safeguard new construction from the well-known ills of local rent control."
What Calif. Town Is Looking to Snuff Out Smoking in Apartments?
Digested From "Oakley Council Wants to Curb Smoking in Apartment Complex"
Contra Costa Times (CA) (09/11/13) Coetsee, Rowena
In California, the city of Oakley will be pursuing an ordinance that regulates smoking in apartment communities in an effort to safeguard the public's health. This past week, the City Council directed its lawyer to draft an ordinance that would apply to multi-unit residences -- and not only to tobacco users, but those who smoke marijuana for medicinal purposes. Apartment owners still would have the freedom to designate where people can and can't light up. However, the ordinance would require those communities that do not currently have a smoking policy to adopt one. City Council members are expected to review a draft of the ordinance in October.
DOJ Files Suit Against Owners and Builders of (MT) Apts
Digested From "DOJ Files Lawsuit Against Owners & Builders of Apartment Complex for Fair Housing Act Violations"
LoanSafe.org (09/13/2013) Bedard, Evan
The Department of Justice (DOJ) filed a lawsuit late last week against the owners, designers, and builders of an eight-unit apartment community in Helena, Mont., for violations of the Fair Housing Act. The lawsuit alleges that the defendants violated the law when they designed and built the community with barriers that make it inaccessible to persons with disabilities. Jocelyn Samuels, Acting Assistant Attorney General for the DOJ's Civil Rights Division, notes, "Since 1991, the Fair Housing Act has required that when new multifamily housing is built, it must be accessible to persons with disabilities. When apartment complexes are built with steps and other barriers, those with disabilities are denied that equal housing opportunity.” The suit alleges that various barriers at the Helena property deny those with disabilities equal access to four ground-floor apartments, along with the associated public and common use areas. These barriers range from inaccessible building entrances to insufficient accessible routes into and through the rental units. Some of the apartment interiors also reportedly have kitchens that are inaccessible to anyone in a wheelchair. Michael Cotter, U.S. Attorney for the District of Montana, states, "This case serves as a reminder that persons with disabilities -- including the elderly, veterans, and those with a disability from birth or from an accident -- should enjoy as much as possible the same access to multiple family housing as persons without such disabilities."
Freddie Mac's K-Deals: A Model for Secondary Market Reform?
Digested From "Freddie Mac's K-Deals; a Model for Secondary Market Reform?"
Mortgage News Daily (09/09/13) Swanson, Jann
David Brickman, senior vice president at Freddie Mac, believes its model for securitizing multifamily loans could be a model for secondary market reform, satisfying the need for a system under which private capital takes on most of the risk and the government serves as a backstop. According to Brickman, private purchasers of guaranteed senior or subordinate bonds account for the first 7.5 percent of the K-Deal mortgage pool, with holders of unguaranteed or mezzanine bonds representing another 5 percent to 10 percent of the mortgage pool. Even if half of the loans defaulted, he says the aggregate 15 percent or so of the pool could absorb the losses. "Given that our current loan delinquency rate is just 0.06 percent and our loss rate is a microscopic 0.01 percent, 15 percent is a very big level of protection. Thus, the senior bonds we guarantee, where the risk is borne by U.S. taxpayers, have so little risk exposure that they, in effect, function more like catastrophic insurance for investors," Brickman remarks. "By its program structure, K-Deals offer one proof point that mortgage securitization, if done right, can attract substantial private investment while assuring market support for affordable rental housing."
Will We See You Next Week in Miami?
Don’t look now, but it’s officially the last minute to register for the rental housing industry’s sole event dedicated to staying ahead of the ever-evolving operational curve: The 2013 Apartment Revenue Management Conference, September 23-25 at the Turnberry Isle Resort in Miami.
Nowhere else can you find world-class education combined with first-rate networking, as well as ideas and strategies for boosting net operating income.
Plus, this year’s program has been radically expanded to include ancillary revenue, expense management and business intelligence. Seeking out-of-the-box ideas? You’re in luck: Keynote speaker Greg Cross, Senior Vice President of Revenue Management for Hyatt Hotels Corporation, will share with attendees the current trends in lodging and all the potential parallels in the multifamily housing 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!
New This Year! Brand-new this year, rental housing owner, operator and property manager attendees will have unique access to insight on operational best practices, supplier and system recommendations, ideal benchmarking metrics and loads more during the exclusive “Owner’s-Only Revenue Management Roundtable” closed-door session. Learn more about this session and how it will provide the information, insight and answers to questions necessary to boost your bottom line.
Participate to Win An 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.
Registration for the 2014 NAA Student Housing Conference Opens September 26; Call for Presentation Deadline Is September 30
Plan to be at the head of the class from March 3-5, 2014, as NAA convenes the 2014 Student Housing Conference & Exposition in Las Vegas at the ARIA Resort.
Join other star pupils for two days chock-full of education and networking opportunities, from general and breakout sessions led by recognized experts in the student housing business, to reception and time spent interacting with exhibitors on the trade show floor.
Beginning September 26, visit the Student Housing Conference website for registration, schedule and the latest announcements. Breathe easy—no admissions essay required!
And, if you are interested in presenting at the 2014 Student Housing Conference, please visit the Call for Presentations website for directions. Don’t be tardy—the deadline for proposals is Monday, Sept. 30, 2013 by Midnight ET.
And don’t forget to use the official hashtag #NAAStudentConf to engage, discuss and follow the exciting news from this conference.
2014 NAA Education Conference & Exposition Call For Presentations Now Open
Think you have a fantastic session idea for the 2014 NAA Education Conference & Exposition? Don’t keep it to yourself! The online Call for Presentations for the 2014 NAA Education Conference, June 18-21, 2014 in Denver, is now open for education session submissions.
A few notes: Education session proposal submissions are limited to four per individual and/or company (including subsidiaries); no paper documents accepted; you will be required to submit all requested information, and incomplete submissions will not be accepted or reviewed; and the deadline to submit is October 18, 2013.
"CAMnesty" Gives CAM Students a Second Chance
CAMnesty is a new program that offers individuals who have started but may not have completed their Certified Apartment Manager (CAM) designation the opportunity to pick up where they left off and earn the CAM designation. Learn more about the CAMnesty program.
Best Days of the Month? 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.
9/18/13 Eric Broughton - Beyond Craigslist
Learn more and register today!
NAAEI Designation Courses Offered Near You!
Nevada State Apartment Association
Roanoke Valley Apartment Association
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
Nevada State Apartment Association
Roanoke Valley 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.
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