NAA Industry Insider: U.S. Apartment Development to Taper in 2014?

 

Home Events Advertise Feedback

Yardi-Oct13
Top Story

Market Trend Insights

Deals and Transactions Lowe's

Industry Buzz

Legal/Legislative Did You Know  

NAA Announcements  


Top Story


TWCFEB13
U.S. Apartment Development to Taper in 2014?
Digested From "Apt. Development Seen Tapering in 2014"
GlobeSt.com (10/02/13) Bubny, Paul

Notwithstanding a wave of new units coming on line by the end of December, a new Axiometrics report shows that the pace of U.S. apartment development is moderating in the near term. The Dallas-based firm further noted that rent growth nationally moderated slightly during this year's July-through-September span. Researchers wrote: "Concern remains about which metropolitan statistical areas (MSAs) will become oversupplied due to new deliveries increasing more than demand or job growth. However, by the latter half of 2013, development of new apartment properties is expected to spread more broadly and to encompass a more generalized suburban sector." For the full year, Axiometrics is projecting delivery of 180,723 rental units across 192 MSAs -- an increase from 86,554 in 2012. Beginning in 2014, the research firm forecasts, "the development of new apartments will slow until investors and developers see new supply absorbed and market conditions recalibrated." Given the increases in construction and labor costs coupled with a slowdown in Class A rental growth, many planned apartment developments are no longer feasible at the current levels of rent and may not be started." That, in turn, should mitigate the threat of oversupply. The top five MSAs for apartment permitting for the 12 months ended August 31 were: New York City, with 19,718 rental units; Houston, 13,515 units; Austin, 11,672 units; Dallas, 9,502 units; and Los Angeles.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

Market Trend Insights


RealPageMay13
Orlando Is a Magic Kingdom for Apartment Developers
Digested From "Apartments Double Building Pace of 2012"
Orlando Sentinel (FL) (10/06/13) Shanklin, Mary

One of the biggest differences in the Orlando metro area's apartment sector from a year earlier is the amount of new construction. Last month, more than 6,100 rental units were in various stages of development in an area mainly consisting of Orange and Seminole counties -- twice the construction pace from September 2012, according to Real Data Apartment Market Research. The greatest amount of construction activity was measured in downtown Orlando and the area near the University of Central Florida. Another 5,000 apartments are proposed for development across the Orlando area in the coming months. Over the last year, Real Data adds, increasingly low vacancy rates have helped the market absorb 3,151 apartments. The added inventory has not hurt vacancy rates, which fell to 4.7 percent at the end of the third quarter from 5.8 percent a year ago. Meanwhile, the average rental rate for the area climbed to $943 in September from $906 in September 2012.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

Where Does Houston Rank in Apartment Vacancies?
Digested From "Apartment Vacancies in Houston Continue to Drop"
Houston Business Journal (10/02/13) Mitelman, Josh

Reis Inc. reports that apartment vacancies in Houston -- at 6.4 percent through Sept. 30 -- are down 1.2 percent from a year earlier. That is the fifth-biggest decrease among major markets in the country, notes Reis researchers. Vacancies in Houston are down 0.2 percent from the second quarter. However, Houston's apartment vacancy rate of 6.4 percent still remains fairly high, ranking 75th out of 79 markets. At the same time, rents in Houston continue to climb -- an increase of 4.4 percent year over year, the sixth-largest increase among major markets. Average monthly rent citywide through the third quarter was $810.72. By contrast, average rent in Austin rose 4.1 percent from the same period a year ago to $891.11, 3.4 percent in San Antonio to $749.14, and 3.1 percent in Dallas to $822.14. Posting the largest annual jump in rent was Seattle -- 7 percent to an average of $1,123.81 a month.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

U.S. Homeownership Keeps Falling
Digested From "Homeownership Keeps Falling"
Investor's Business Daily (10/04/13) P. A2

Based on Census statistics, Fannie Mae said the U.S. homeownership rate slipped to 63.9 percent last year. That is the lowest share on record of Americans who own their home, which ironically coincides with the highest level of housing affordability since 2005.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

Deals and Transactions


LowesAug2013
What Big City Is Canyon Fund Targeting Next?
Digested From "Canyon Acquires Two Apartment Communities in Chicago"
Enhanced Online News (10/02/13)

The Canyon Multifamily Impact Fund confirms that it has made its first investments in Illinois, acquiring a couple of apartment communities in the Chicago metro area for an undisclosed sum. The first is the 331-unit York Terrace on Chicago's southside. The second is the 662-unit Woodfield Crossing apartment community in northwest Chicago. Both will undergo a series of improvements over the next 12 months that will include new roofs and upgraded heating and plumbing systems for enhanced energy efficiency. The Canyon Multifamily Impact Fund is regarded as an innovative joint venture between Canyon Capital Realty Advisors and Citi Community Capital that addresses the need for higher quality workforce housing in underserved communities nationwide. The Fund's executive leadership is currently focused on investment opportunities in urban areas across t three states -- California, Illinois, and Texas. Individual investments have ranged in size from $20 million to $90 million for both individual apartment communities and multi-site portfolios.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

Oak Coast Goes West Coast With Latest Apt. Buying Spree
Digested From "Oak Coast Goes on Multifamily Buying Spree"
Multi-Housing News (09/13) Stribling, Dees

Los Angeles-based Oak Coast Properties has purchased two apartment communities in Northern California, paying $22.9 million. Both are located in Rohnert Park and together contain 202 rental units. The acquisitions are part of a larger drive to acquire apatments in the western states. Around the same time it made the Rohnert Park deal, the company also bought 10 Southern California apartment communities for another $19 million. Oak Coast Properties CEO Matthew Heslin says the company's goal is to seek value-add assets of more than 100 apartments, but mainly 200 to 250 units. He states, "We're always looking for properties to buy at less than replacement cost, in markets with sustainable economic growth." According to Heslin, the company plans to acquire an additional $150 million in apartment communities through the second quarter of next year. Oak Coast is currently scouting sites in seven states -- Arizona, California, Colorado, Oregon, Texas, Utah, and Washington. Heslin says the long-term prospects for apartment ownership are good partly because many younger workers have changed their thinking about the value of homeownership.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

Industry Buzz


National Exemption Service Inc.
Prolific Apartment Developer Glick Dies at 92
Digested From "Real Estate Developer, Philanthropist Glick Dies at 92"
Indianapolis Business Journal (10/02/13)

Eugene Biccard Glick, who built a fortune as a residential real estate developer in the Midwest before becoming better known as one Indianapolis' most generous philanthropists, died last week at 92. Glick had Alzheimer's disease and had been ill for some time. Glick and his late wife, Marilyn, donated millions of dollars over the last two decades to fund a broad array of civic and capital projects ranging from the Glick Eye Institute at the Indiana University School of Medicine to the Indianapolis Art Center. Not long after their wedding in 1947, the Glicks founded what would become known as the Gene B. Glick Co., which became the state's most prolific private developer of single-family residences. In the early 1960s, the firm shifted its focus to developing and managing apartment communities and now manages approximately 20,000 rental apartments in 10 states. "His business philosophy was consistent with his worldview," remarked David Barrett, president and CEO of Gene B. Glick Co. "He thought, 'Let me see how I can make things better for people.' . . . His goal was to provide affordable and market-rate housing to people, where they would truly find value."
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

Could Brookfield (Wis.) Be the Next Multifamily Boomtown?
Digested From "Multifamily Housing Could Be Town of Brookfield's Next Boom"
Brookfield Now (10/02/13) Linnane, Rory

The town of Brookfield, Wis., is exploring its options for expanding multifamily housing options within its borders as statistics suggest the market is blossoming. Vierbicher submitted a draft analysis of the market for multifamily housing to town officials on Sept. 24. The Madison-based community planning firm found that Brookfield could support creation of hundreds of new housing units over the next 15 years and suggested changes to zoning rules to accommodate them. "The town has recognized an increasing interest in higher-density multifamily housing of all sorts — elderly, assisted living and regular apartments at densities higher than our zoning codes allow," Gary Lake, town building and zoning administrator, commented. "We've also noticed increasing interest in similar developments in surrounding communities." Based on its projections for housing needs through 2030, the analysis found that the town could support 586 new multifamily rental units -- 362 new condominiums or townhomes and 144 new assisted-living units. Only one new home has been constructed in the town in the past two years, researchers note. According to the study, the Milwaukee metro area has been slower than the U.S. average in constructing multifamily housing since 2000. Recently, though, the market has seen a sharp increase in these types of residences. "In many ways, this upsurge in development is the market's way of playing catch-up for lack of past production," Vierbicher's analysis concludes. Milwaukee currently has the second smallest apartment vacancy rate nationally at 3.2 percent. The Brookfield/New Berlin submarket's rate is even lower, at 2.1 overall and less than 1 percent for newer units.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

Two Key Factors That Make TODs Work
Digested From "The Surprising Key to Making Transit-Oriented Development Work"
The Atlantic Cities (09/24/13) Jaffe, Eric

A new report by the Institute for Transportation and Development Policy reveals that transit quality ranks third in predicting the success of transit-oriented development (TOD). Government intervention is the most important factor, according to the report, which showed that TOD was successful when local governments rezoned a corridor to promote mixed-use development, created a comprehensive plan for the area, sought investors, marketed the program, and provided financial incentives, among other things. Land potential, including regional market strength and corridor quality, also ranked higher than transit quality. Thus, cities seeking TOD investments should consider transit quality only after developing a robust government intervention plan and identifying a corridor with great potential. Finally, they should be aware that light rail, bus-rapid transit, and streetcars had similar TOD investment outcomes.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

Legal/Legislative Did You Know


2013 Diamond Sponsors with correct Azuma logo
Recycling Comes to Austin Apartments
Digested From "Starting Today, 680 Austin Apartment Complexes Have to Offer Recycling"
KUT News (TX) (10/01/13) Alvarez, Matthew

Starting Oct. 1, a total of 680 Austin apartment communities began offering recycling as the second phase of the city's Universal Recycling Ordinance affecting businesses and multifamily housing. Among the properties affected are apartments and condominiums with 50 or more rental units and commercial offices that are 75,000 square feet or larger. Residents and workers in such settings must be offered recycling for a minimum of five materials: mixed paper, glass bottles and jars, aluminum cans, cardboard, and PETE and HPDE plastics. In addition, owners and managers are expected to have sufficient recycling capacity and signs in both English and Spanish.

Office and apartment recycling can be provided by any number of private firms. Austin Resource Recovery's Lauren Hammond remarks, "This really expands opportunity for people who aren't serviced by the City of Austin to make sure they have convenient access to recycling." The Universal Recycling Ordinance is being implemented in phases, starting with requirements for Austin's largest properties and eventually filtering down to smaller ones. The next phase goes into effect a year from now, and it mandates recycling be offered at apartment communities of 25 or more units and businesses 50,000 square feet and up. ll multifamily housing will have to offer recycling by 2016.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

Do You Have a Doctor's Note?
Digested From "Do You Have a Doctor's Note?"
The New York Times (09/29/13) P. RE1 Stellin, Susan

Increasingly, apartment residents are finding ways to bring pets into units that have no-pet policies by obtaining notes from physicians or therapists for physical and mental conditions that require multifamily housing owners to waive those policies. The broad definition of disability can be stretched to include those with serious depression, chronic pain, and other illnesses, allowing them to seek waivers from no-pet policies. Darryl Vernon, a partner in the law firm Vernon & Ginsburg, cautions that they must prove the disability meets the legal parameters and the pet is "medically helpful." No-pet apartment communities worry that granting too many waivers could encourage others to obtain doctors' notes. Owners and managers also must consider the sentiments of residents who chose a dog-free building because of allergies or other experiences. However, denying a waiver can open owners up to allegations of discriminatory conduct.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

How Outdated Codes Have Set Older Anchorage Apts Ablaze
Digested From "Older Apartment Complexes in Anchorage Susceptible to Fires Because of Lacking Code Standards"
The Republic (IN) (10/02/13)

A recent rash of fires in Anchorage has charred older apartment communities that use outdated fire-code standards. This year alone, there have been 20 fire calls at multifamily housing where the fire spread beyond the room where it started. -- nearly double the number of fires as last year and more than any other year over the last 10 years. Locally based fire investigator Brian Balega said some things could help prevent fires including sprinkler systems, building-wide fire alarms, and attic fire breaks (or "draft stops"). In Anchorage, older apartment communities are grandfathered in. According to Fire Marshal James Gray, Anchorage fire codes involve many stakeholders. "Correction of construction deficiencies, correction of fire sprinkler, lack of fire sprinkler, or lack of fire alarm are fairly onerous requirements to put on building owners," he states. "So they try to give credit for its many existing provisions that you have in the building and they don't make you put in those retroactive requirements until you hit a certain level."
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

Here's How the Government Shutdown Will Affect Housing
Digested From "Here's How the Government Shutdown Will Affect Housing"
Forbes (10/01/13) Brennan, Morgan

With the U.S. government underwriting, insuring, or owning more than 90 percent of all home loans, there is widespread concern that the federal shutdown will hurt housing -- access to financing, in particular. However, experts say that -- initially, at least -- the mortgage market will not be greatly affected. While the Department of Agriculture is suspending its home loan operations, user fees fund loans guaranteed by the VA and also support mortgages bought and securitized by Fannie Mae and Freddie Mac; therefore, those financing options will not be touched. Also, earlier media reports that the FHA would not be able to endorse any single-family loans have turned out to be false. Although the agency will be working with a skeleton staff, it has confirmed that it will remain open for business. Observers generally concur that housing will be relatively safe from the fallout of a shutdown, but only if the closure does not drag out for too long. "Because we are able to endorse loans, we don't expect the impact on the housing market to be significant, as long as the shutdown is brief," according to a HUD report. "If the shutdown lasts and our commitment authority runs out, we do expect that potential homeowners will be impacted, as well as home sellers and the entire housing market." In the short term, meanwhile, the one problem that the industry could encounter is a longer timetable for processing loans.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

Court Upholds Settlement Affecting 20,000 New Yorkers Who Rent
Digested From "Court Upholds a Settlement Affecting 20,000 City Renters"
The New York Times (10/02/13) Navarro, Mireya

On Sept. 30, the U.S. Second Circuit Court of Appeals upheld the 2011 settlement in a class-action lawsuit against New York City property owner Pinnacle Group, deeming it "fair, reasonable, and adequate." The ruling would allow more than 20,000 rent-regulated residents to seek individual compensation for rent overcharges and other complaints. A breakaway group appealed to have the settlement overturned because it excluded millions of dollars in other claims, and it wanted to renegotiate the agreement or go to trial. The 2007 lawsuit argued that Pinnacle violated the Racketeer Influenced and Corrupt Organizations Act by engaging in a conspiracy to fraudulently boost rents in its more than 400 apartment buildings in New York City. Depending on the number of residents who make claims, the settlement amount could top $10 million. The court ruled that new procedures and best practices for increasing rents and evicting those who have benefited all class members, and Pinnacle will allow a court-appointed administrator to hear complaints and determine compensation.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

NAA Announcements


Have Four Friends? Of Course You Do! Get Together With Them to Save $400 by Registering Now for the 2014 NAA Student Housing Conference

Plan to learn everything there is to know about housing the next generation—and make it a team effort—March 3-5, 2014, as NAA convenes the 2014 Student Housing Conference & Exposition in Las Vegas at the ARIA Resort.

For a limited time, save $300 on the cost of registration. And, to sweeten the deal, groups of five or more have the opportunity to save another $100 each by registering together.

Join more than 900 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. Position yourself at the top of this expanding sector of rental housing and better understand the next generation of residents—how they communicate, where to find them and what amenities will bring them to your community and keep them happy.

Visit the 2014 NAA Student Housing Conference website for registration, schedule and the latest announcements. Breathe easy—no admissions essay required!

Remember to use the official hashtag #NAAStudentConf to engage, discuss and follow the exciting news from this conference.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines
Get Connected to a Powerful Network on NAA Connect Today

Get the tools and the network you need to succeed on NAA Connect. Join the communities that match your interests or job function best and gain access to a library of best practices, sample documents and a network of like-minded NAA members you help you problem-solve whatever comes your way.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines
Calendar Alert: The Deadline to Participate in The 2014 NAA Education Conference & Exposition Call For Presentations is Oct. 18

Convinced 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.

Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines
2013 NAA Survey of Income & Expenses Data Now Available

The 2013 NAA Survey of Income & Expenses is now available. The survey includes an executive summary, detailed data, reports and charts about rental communities.
A total of 4,526 properties containing 1,138,056 units are represented in this year's report. Data was reported for 4,117 market rent properties containing 1,077,468 units and 409 subsidized properties containing 60,588 units. The executive summary appeared in the Sept. issue of units magazine. To order, please visit the NAA Store.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines
NAAEI's "CAMnesty" Program 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.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines
NAAEI Designation Courses Offered Near You!

CAM:

Roanoke Valley Apartment Association
November, 2013

CAM Online

CAMT:

Apartment Association of Greater Los Angeles
November - December, 2013

El Paso Apartment Association
January – April, 2014

Austin Apartment Association
February – March, 2014

Columbus Apartment Association
January – February, 2014

Lubbock Apartment Association
January – February, 2014

CAS:

Roanoke Valley Apartment Association
November, 2013

NALP Online

Find more courses in your area on the NAA website.

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


Abstract News © Copyright 2013 INFORMATION, INC.
Powered by Information, Inc.
October 8, 2013

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

Event Highlights

What Executives are Saying: NAAEI Leadership NOW Program

Learn what Executives are saying about the NAAEI Leadership NOW program  

NAAEI has partnered with Gallup to offer the NAAEI Leadership NOW Program, where executives learn how to maximize your people and solve current business challenges by driving employee engagement....