Pa. Board Denies Appeal of Apartment Shutdown
Digested From "Board Denies Appeal of Apartment Shutdown"
Wilkes-Barre Times Leader (Pennsylvania) (11/20/13) O'Boyle, Bill
In Wilkes-Barre, Pa., the city's Housing Appeals Board this past week unanimously denied an appeal of a local apartment owner whose rental unit was shut down, setting up a legal battle on the constitutionality of the action. Adam Peters appealed the Sept. 13 decision of the city code enforcement office to shut down an apartment in his two-unit building. Under Wilkes-Barre's new one-strike ordinance targeting what officials consider problem communities, the unit was closed for six months until March 2014. Peters said he is losing $625 a month in rent as a result. City police counter that they seized cocaine and almost $30,000 in cash in the second-floor apartment that Peters had rented to a woman. Peters denied knowledge of any other people residing in the unit or if the resident had sublet it. Assistant City Attorney William Vinsko asked Peters and his maintenance man, Frank Rudis, if they were aware one of the men arrested was living there on a permanent basis. Both men answered "No." Rudis said he went to the apartment to post an eviction notice and the man answered the door and paid the rent in cash. Passed in August, the ordinance allows the city to shut down a rental apartment for six months if it is the scene of a drug or weapons violation. City officials have received a letter from the American Civil Liberties Union charging that the ordinance violates the First, Fifth and 14th amendments of the U.S. Constitution.
Market Trend Insights
Competition Is Coming Full Circle in Triangle's Apartment Sector
Digested From "Another 9,000 Apartment Units in Triangle Slated to Open in 2014"
Triangle Business Journal (11/24/13) Hoyle, Amanda Jones
In North Carolina, competition is intensifying in the Triangle's apartment sector. In the last six months, a total of 15 new apartment communities have opened throughout the region, adding another 2,899 rental units to the market's inventory. According to the semi-annual Triangle Apartment Market Report by the Karnes research firm and the Triangle Apartment Association, the region's apartment vacancy rate has subsequently increased to 5.9 percent from 5.5 percent vacancy rate as of March 31. Researchers note that this is still well under the market's 10-year average 7.5 percent vacancy rate. They add that total net absorption of apartments for the six months ended Sept. 30 was 2,305 units. Multifamily housing developers have another 9,336 apartments that are under construction and slated to open by the first quarter of 2015. The report forecasts: "An increase in supply-side pressure from projects under construction ... will continue to test the apartment market over the next six months. Continued uncertainty in the housing and credit markets should, however, help to mitigate supply concerns."
What Are Tampa Apartment Residents Giving Up for Location?
Digested From "Tampa Renters Give Up Bedrooms for Better Apartment Location"
Tampa Tribune (11/18/13) Wiatrowski, Kevin
Tampa's recent boom in urban living has resulted in thousands of apartment hunters opting for smaller units over larger digs elsewhere. Long a staple of housing in such major cities as New York and Chicago, studio apartments or efficiencies have become a growing part of Tampa's housing mix. Jennifer Doerful, executive vice president of the Tampa Bay Builders Association, remarks, "They're really about lifestyle choice. Most people in an urban area aren't buying space to entertain." Indeed, if city apartment residents want to mix and mingle, they are doing so outside their apartments in the expanding communal areas within their apartment communities or at the growing number of bars and eateries popping up in and around downtown. Recently released census data shows that Tampa has tripled its supply of studio apartments. The city currently has approximately 6,000 households renting apartments that have no bedrooms. Throughout Hillsborough County, the number is more than 13,000 -- quadruple the 2007 total. Studios are turning up in apartment communities in the West Shore Business District, in downtown, and throughout the Channel District. In all three submarkets, apartment owners and managers are chasing the rising demand for city living. Downtown's two apartment towers -- The Element and Skypoint -- each have studios.
Studios are also part of the offerings at the Residences at the Riverwalk, a new apartment tower in the planning stages by Intown/Framework. Framework President Phillip Smith notes that his company's small units are being marketed as one-bedrooms because they have walls that frame a sleeping area. However, because building codes require a bedroom to have a window, the apartments are technically listed as studios. With the increase in smaller living spaces, common areas are being given more attention. At Pierhouse, a newly opened apartment community in the Channel District, an open-air sculpture garden runs through the center of the property. A 540-square-foot studio at Pierhouse currently rents for $1,270 a month. Studios at the Carlton Arms North community in Lutz rent for about half that price. However, they are also a lot farther from downtown's dining and entertainment scene.
Three Factors Driving Boston's Hot Apartment Market
Digested From "Survey: Boston Apartment Market Stays Hot, Despite Building Glut"
Boston Business Journal (11/21/13) Grillo, Thomas
Greater Boston's apartment sector continued to expand during this year's July-through-September period thanks to three factors -- rising rents, improved job growth, and increased construction. On the downside, there is a glut of new apartments in development that some fear will stall the rental market's momentum in the years to come. According to a new report from ARA Real Estate Investment Services, vacancy rates in the region rose by 0.2 percentage points to 3.8 percent in the third quarter as 1,100 new rental units hit the market. The vacancy rate will likely approach 4 percent by Dec. 31 as another 600 apartments are set to hit the Greater Boston market. By 2015, more than 8,000 new rental apartments are slated to be built between Boston and the Route 495. Consequently, the vacancy rate is likely to remain in the 4 percent range for at least the next couple of years, researchers forecast. The highest rents are in the Back Bay and Beacon Hill, where the average apartment goes for $2,809 a month -- an almost 3 percent increase from the second quarter. Brookline, Brighton, and Newton ranked second with rents around $1,944 a month.
Young Adults' Mobility Continues to Be Limited, Census Shows
Digested From "New Census Numbers Show That Fewer Young Adults Are Buying Homes, Able to Move"
Associated Press (11/14/13)
New Census data offers more insight into just how much the struggling economy is affecting young adults -- many of whom are putting off major life developments like launching a career, forming their own household, and starting a family. Four years out of the recession, circumstances have not improved much for this group, who remain immobilized in living situations with parents or roommates as they try to find decent full-time jobs while juggling student loans and other debt. Just 23.3 percent of U.S. adults between the ages of 25 and 29 moved in the 12-month period ended March 2013 -- a decrease from 24.6 percent who did so a year earlier and the lowest level in five decades. Homeownership among this demographic, meanwhile, sank to 34.3 percent last year from 40.6 percent in 2007. "The post-recession period has given a bigger boost to seniors than to young adults in their willingness to try out new places for retirement," remarked Brookings Institution demographer William Frey. "Many young adults, especially those without college degrees, are still stuck in place. For them, low mobility might be more than a temporary lull and could turn into the 'new normal.'"
Deals and Transactions
Phoenix Firm 'Goes Hokies' Buying Va. Tech Student-Housing Apts
Digested From "Phoenix-Based Real Estate Investment Firm Acquires Largest Student-Housing Community At Virginia Tech University"
Sacramento Bee (11/26/13)
Virginia Tech Investors has acquired Terrace View Apartments, a 756-unit and 1,720-bed student-housing community located less than a mile from Virginia Tech University. Terms of the deal were not disclosed. With 81 residential buildings on more than 43 acres of property, Terrace View Apartments is a highly sought-after location that has maintained full occupancy for the last six years. Virginia Tech Investors is managed by Phoenix-based Mica Creek-Sagamore (MCS) Capital Partners, whose student housing portfolio includes properties at the University of Arizona, and Florida State University, among others. MCS Chairman Charles Dubroff comments, "We're thrilled to add Terrace View Apartments to our portfolio, as we plan to continue to acquire well-located assets which meet our investment criteria in the next 12 months."
Big $324 Million Sale Includes Two N.C. Apartment Communities
Digested From "Northwood Ravin Sells Two Triangle Apartment Communities As Part of $324M Sale"
Triangle Business Journal (11/20/13) Hoyle, Amanda Jones
It did not take long for Charlotte-based Northwood Ravin to find a buyer for the new Lofts at Weston Lakeside apartment community in Cary, N.C., and the St. Mary’s Square apartment community in nearby Raleigh. The former opened during this year's first quarter and is already 80 percent leased. The latter opened in June and is 90 percent leased. This past Wednesday, Associated Estates Realty Corp. agreed to pay a combined $65.6 million for both apartment communities, or an average $187,679 per rental unit. The two acquisitions were part of a total $324 million portfolio sale that Northwood Ravin agreed to earlier this fall. As part of the transaction, Associated is buying from Northwood Ravin two other apartment communities in Charlotte, another property in Atlanta, and a fourth in Tampa before the end of next year. Northwood Ravin President and CEO David Ravin remarks, "There's a lot of eyes on the performance of apartments right now. These all have opened with results behind them."
Craigslist Is on Apartment List's Hit List
Digested From "Apartment List Raises $15 Million to Take on Craigslist"
Forbes (11/20/13) Roof, Katie
Apartment List has raised $15 million in a venture financing round led by Matrix Partners. The startup digital platform aims to vie with Craigslist in carving out a new forum for apartment hunters. Only two years old, Apartment List has $18 million in annual revenue and has 1.5 million U.S. visitors each month. In addition, the website currently has the most listings in 72 of the top 100 rental marketplaces. Apartment List focuses exclusively on those who rent housing. Apartment List CEO John Kobs notes that the "organizational focus is the biggest differentiator between us and the competition." Along with rental listings, the site includes apartment reviews and a service to help residents find a roommate. Apartment List has also developed a mobile Roommates app that enables users to swipe through profiles, making a snap judgment about potential matches. When there is a mutual "yes" swipe, users are notified and can begin communication about rooming. The San Francisco-based company also has a more traditional rental app, enabling users to search for nearby apartments that meet their criterion. Having launched four months ago, it already boasts more than 150,000 downloads and drives 43 percent of Apartment List's traffic. In other developments, Apartment List recently acquired Rent Advisor to enhance its ratings and reviews section. Looking ahead, the website hopes to evolve into a one-stop-shop for those who rent, with the capability to pay rent through the site and to store all apartment application information.
UW Student Residents Get High Marks for Sustainability
Digested From "HFS Offers Certification for Students Practicing Sustainability"
The Daily UW (11/19/13)
A new partnership between the University of Washington's Housing & Food Services (HFS) and Students Expressing Environmental Dediciation (SEED) is enabling students living on-campus to be recognized for their sustainability efforts. The Green Endorsement program offers a certification for residents in on-campus residence halls and apartments if their room meets certain sustainability standards. Qualifying residents are given a placard to post on their door acknowledging their efforts. According to SEED Executive Director Grady McDonald, there are four different certifications available: bronze, silver, gold, and purple. Each requires an increased number of sustainability practices within a unit. To apply for the certification, residents must meet a list of requirements that includes recycling, printing double sided, and eating at least one vegetarian meal per week. Clive Pursehouse, administrator for west campus and sustainability initiatives, and his team endeavored to create a system based off of Green Office certifications offered outside of the university.
What Are the Top Apartment Amenities Desired by Residents?
Digested From "Top Apartment Amenities Identified by Landmark Resident Survey"
LoanSafe.org (11/22/2013) Ferreras, Alex
A new survey by Kingsley Associates and the National Multi Housing Council (NMHC) shows that the top amenities for apartment residents include high-speed Internet access, a patio or balcony, and in-unit washer/dryers. The poll included a responses from a sampling of residents from a dozen industry-leading apartment firms who own and/or manage more than 550,000 rental units nationwide. Researchers gathered nearly 15,000 resident responses from over 1,400 apartment communities. A whopping 88 percent of respondents rated the three above features as either "important" or "very important." By contrast, just 70 percent rate cable TV as important or very important -- less than features like a ceiling fan, granite counter tops, or a walk-in pantry. The most popular apartment community amenitie was an on-site fitness facility (84 percent rated it important or very important), followed by a package delivery room (78 percent) and community-wide Internet access (70 percent). Finally, despite the interest in online access, only 30 percent of residents polled expect their apartment community to have a Facebook page.
Apartments Leading the Car Charge in Calif.
Digested From "Just 10 Percent of Electric Car Charging Stations Calif. Promised in Legal Deal Are Ready"
Minneapolis Star Tribue (Minnesota) (11/21/13)
NRG Energy Inc., the New Jersey company required by an unusual legal settlement to build a network of electric car chargers throughout California, has been able to deliver just 10 percent of what it promised in the first year. NRG eVgo, the subsidiary responsible for building the stations over four years, blames a reluctance among owners of apartment communities, shopping malls, and office buildings to provide space for the chargers as one of the main reasons for the slow rollout -- even when the company subsidizes their cost. So far, few sites have been transformed with the exception of a few apartment parking lots. For instance, the settlement envisioned that by Dec. 5, there would be 1,000 "Level 2" chargers that supply enough electricity for 12 to 24 road miles for each hour of charging. To date, just 103 are operational, including 40 at a single, high-end apartment community in San Diego. The settlement between NRG and California energy regulators was billed as the key to jump-starting enthusiasm for the non-polluting vehicles. The thinking was that more people would have confidence that they won't get stranded by a dead battery if they had more places to "refuel." Unfortunately, only 110 of the 1,040 stations that NRG committed to installing by early next month are now operational.
Which Apartment REIT's CFO Is Retiring?
Digested From "AvalonBay Communities CFO to Retire"
Business Week (11/20/13)
AvalonBay Communities Inc. confirms that its CFO Thomas Sargeant will retire in May. The 54-year-old has been with the company for 28 years, including 19 as chief financial officer. AvalonBay has appointed Kevin O'Shea, its executive vice president of capital markets, to succeed him. The 48-year-old O'Shea is a 10-year company veteran who was brought on board in 2003 to establish AvalonBay's investment management fund platform. Since then, he has held a number of financial and supervisory posts. The Virginia-based REIT has ownership stakes in 276 apartment communities nationwide.
Legal/Legislative Did You Know
Augusta Council Approves Apartment Inspection Ordinance
Digested From "Augusta Council Approves Apartment Inspection Ordinance"
Morning Sentinel (ME) (11/22/13) Edwards, Keith
In Augusta, Maine, city councilors this past week unanimously approved an ordinance that gives the city the right to inspect apartments to make sure they are safe when city money helps pay the rent. The new ordinance will require apartment owners who rent to people who receive General Assistance housing money from the city to allow city employees in to inspect those units and the common areas to make sure they meet safety codes. The ordinance faced no opposition when councilors approved it on Nov. 21. Local apartment owners and managers, though, have expressed some concerns about it. It should be noted that the requirement that rental units meet safety codes is not new. In fact, apartment communities are already required to meet them. What is new is the requirement that the city be permitted to inspect them, even without a resident complaint. Councilor Michael Byron contended that some residents may fear being evicted if they report a potential safety code violation. In the past year, city officials have shut down 11 apartment communities and a floor of a 12th for what staffers deemed serious safety code violations.
FHFA Faces Pushback on Cuts to Fannie Mae Apartment Lending
Digested From "FHFA Faces Pushback on Cuts to Fannie Mae Apartment Lending"
Bloomberg (11/21/13) Benson, Clea
The Federal Housing Finance Agency (FHFA), which regulates Fannie Mae and Freddie Mac, is set to proceed with plans to scale back the government-sponsored enterprises' financing of apartment-building loans in 2014. The firms, which back about 45 percent of the multifamily housing market, already have reduced their apartment financing by 10 percent made this year. Lenders, developers, and others have pushed back against the FHFA plan, noting it could deprive rural areas and smaller cities of rental housing. Fannie Mae and Freddie Mac's multifamily holdings are still larger than their 30 percent market share before the financial crisis, and that the market absorbed this year's cuts "without major disruption," FHFA Acting Director Edward J. DeMarco said. Delinquencies in the apartment portfolio remain below 1 percent, and both firms have said that their multifamily operations would have little value without their existing government guarantee and should not be sold to private interests.
Benchmarking Laws Try to Shame Owners
Digested From "Benchmarking Laws Try to Shame Owners"
UNITS Exclusive (11/01/13) Berry, Alison
As the trend toward greater energy conservation begins to take hold, the multifamily housing industry may pay a higher price for compliance due to older buildings. Energy benchmarking involves tracking a building's progress from a baseline compared to other buildings similar in use, size, and age in the same city or within a property portfolio. If the trend holds, benchmarking will be one of the top local legislative challenges facing the apartment industry over the next few years. The combination of these ordinances and aging rental housing stock could lead to market discrimination of older apartment communities. Also, older sites cost more to retrofit than building anew in the same market. A study conducted by Harvard economist Robert Stavins for the Greater Boston Real Estate Board found that such programs may not just decrease property values for an individual building, but for a whole neighborhood. Of the nine cities throughout the U.S. that require buildings to meet the benchmark, six of them explicitly apply to multifamily rental housing.
Find Out What Happens When Generations Connect at the 2014 NAA Student Housing Conference & Exposition General Session Luncheon
Where it concerns generational differences in the workforce, it used to be that veteran employees were in sole possession of all the answers, with less seasoned colleagues following orders. My how things have changed, says Seth Mattison, internationally renowned expert on workforce trends and generational dynamics and Chief Movement Officer of FutureSight Labs, who will keynote the General Session Luncheon at the 2014 NAA Student Housing Conference & Exposition, March 3-5 at the ARIA Resort in Las Vegas.
Mattison, recently named an Editors’ Pick for Favorite Speaker for 2013 by MeetingsNet, will entertain attendees with his presentation, “When Generations Connect,” from noon to 1:30 p.m., Wed, March 5.
Mattison, who advises many of the world’s leading brands and organizations on the shifts occurring in talent management, innovation, leadership and the future of work, says that with four generations vying for a place at the conference table, roles, rules and responsibilities have seemingly changed overnight.
Whether you’re an accomplished multihousing industry professional managing younger co-workers, a skilled Gen Xer up-managing or a Millennial new to the workplace, Mattison’s insights will aid you develop a working knowledge of the generations operating in today’s workplace; diagnose critical generational gaps that can lead to conflict and challenges; overcome key roadblocks to creating stronger engagement with each generation; and apply a variety of solutions to more effectively communicate and collaborate to increase innovation and productivity.
And, for a limited time, save $300 by registering now for the 2014 NAA Student Housing Conference & Exposition. Don’t delay—unlike the information gleaned from Mattison’s presentation, this discount won’t last forever.
Executives, Meet Your Customers at the 2014 NAA Student Housing Conference & Exposition
Exchange & Engage, consistently rated as one of NAA’s most popular sessions—makes its return in 2014 at the NAA Student Housing Conference & Exposition, March 3-5 at the ARIA Resort in Las Vegas.
Join this panel of Chief Operating Offices representing large, mid-size and small operators, Tuesday, March 4, from 4:15 p.m. to 5:30 p.m., as they share the stage with student residents to discuss current approaches to development, marketing and operations.
In addition to the student and executive panelists, this information-packed session will incorporate video from student housing residents in different markets sharing their perspective on the same topics addressed by the panelists. The session will include an open Q&A allowing time for attendees to ask questions and exchange and engage with both the executives and students.
High-caliber sessions, great networking opportunities and the latest technology await you in Las Vegas March 3-5, 2014. ?Visit the NAA Student Housing website for registration, schedule and the latest announcements, and remember to use the official hashtag #NAAStudentConf to engage, discuss and follow the exciting news from this Conference.
It’s Time to Talk Turkey: Register Now for the 2014 NAA Education Conference & Exposition and Put That Savings Toward Something Nice for the Holidays
As we prep to give thanks on Thursday before heading off to fight the Black Friday crowds, NAA would like to take this opportunity to remind you to get yourself a little something special with all the money you’ll be saving on registration to the 2014 NAA Education Conference & Exposition, June 18-21 in Denver.
In keeping with the spirit of the holiday, attendees of the 2014 NAA Education Conference & Exposition may be expressing gratitude next year at their dinner tables for these key Conference benefits:
** General sessions led by world-renowned speakers—representative of some of the greatest minds and business entrepreneurs in the world—the value of which alone covers the price of admission.
** More than 40 breakout sessions covering the gamut of multifamily housing operations and ownership, including marketing, sales, technology, industry trends, executive issues and so much more.
** Two days of NAA Exposition exploration featuring the newest, most innovative products and services from hundreds of leading-edge rental housing supplier partners.
** Receptions, meetings and interactive education sessions where attendees can share ideas and build their network of professional colleagues and potential service partners.
** Six available continuing-education credits offer NAA designates the chance to reach their designation renewal goal (not to mention the career investment) in one place and at one time, saving time and money.
What are you waiting for? Invest in your company and your career today. Remember that the largest discounts go to those who register early. Have four friends? Register as a group to take advantage of even more savings!
And, make sure to book your housing as soon as you register—rooms will go fast and you will be unable to book without first registering. Visit the Education Conference website for information and reservations for all official NAA Education Conference hotels.
Students Get a Second Chance with NAAEI's CAMnesty Program
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.
NAAEI Designation Courses Offered Near You!
Columbus Apartment Association
January – February, 2014
El Paso Apartment Association
January – April, 2014
Austin Apartment Association
February – March, 2014
Roanoke Valley Apartment Association
Apartment and Office Building Association of Metropolitan Washington
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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