NAA Industry Insider: Real Estate Investors Get Hip to the Hipster Demographic | National Apartment Association

NAA Industry Insider: Real Estate Investors Get Hip to the Hipster Demographic

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Real Estate Investors Get Hip to the Hipster Demographic
Digested From "Real Estate Investors Can Benefit From 'Hipster' Market, Says RealtyTrac" (11/22/13)

A new study from RealtyTrac finds that the "hipster" demographic is having a significant and mostly positive impact on local real estate markets. The firm ranks the top 83 zip codes for rental returns in what the company calls "hipster hot spots" -- i.e., housing markets where at least a fifth of the population is between the ages of 25 and 34. RealtyTrac's Daren Blomquist observes, "Thanks to an influx of trendy restaurants, bars, coffee shops, and other amenities, a neighborhood branded as hipster is likely to see property values and rental rates rise while vacancies and foreclosures decline. As a nascent hipster market emerges, it can be an extremely appealing target for real estate investors looking to make some quick fix-and-flip profits or to purchase rental properties that provide a steady cash flow and the promise of strong appreciation going forward." The 83 zip codes were also limited to those where at least 50 percent of the housing is occupied by those who rent and where the rental vacancy rate is 5 percent or lower. St. Paul, Minn., where 35 percent of the population is in the hipster age demographic and 72 percent of all housing units are occupied by those who rent, headed the list. The gross rent yield in this zip code is 14 percent. Three other Minnesota zip codes -- all of them in the city of Minneapolis -- placed in the top 25. Other hot zip codes were in Pittsburgh, Chicago, and San Francisco.
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Market Trend Insights

Vacancies Slide as St. Louis Apartment Market Recovers
Digested From "Vacancies Slide as St. Louis Apartment Market Recovers"
St. Louis Post-Dispatch (12/01/13) Gallagher, Jim

The St. Louis metro area's apartment sector this year has seen slowly rising rents, falling vacancy rates, but little in the way of new construction. Reis Inc. confirms that apartment vacancies in the region were at 5 percent this summer -- a decrease from 5.9 percent a year earlier. Rents, meanwhile, are up an average of 2 percent year over year. Ryan Severino, senior economist at Reis, remarks, "We see St. Louis as generally recovering." Looking ahead, his forecast calls for vacancies to fall to 4.7 percent by 2015. Meanwhile, the local home sales market continues to rebound fast. Single-family home sales in St. Louis County have risen 11 percent since the first of the year and a whopping 22 percent in St. Charles County. It is an interesting phenomenon when both apartment owners and real estate agents are happy at the same time -- a phenomenon that may reflect a slight increase in the population of twentysomethings. It might also reflect the slowly improving employment market, which has allowed more younger people to move out of their parents' homes. However, Severino concludes that until apartment residents' incomes begin growing at a faster rate, apartment owners and managers will have a difficult time hiking rents.
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How Huntsville Became America's Apartment Boom Town
Digested From "Apartment Boom Town: Huntsville Nears 2,500 Units Approved or Under Construction Since 2012"
Huntsville Times (AL) (11/26/13) Doyle, Steve

In Alabama, Huntsville continues to be in the midst of an apartment boom. This past week, the city's Planning Commission signed off on the layout of a large apartment community to be built near the U.S. 72 West-Slaughter Road intersection. Dubbed Capital Park and Seventy Two, the 233-unit development marks the eighth apartment community that is either soon to break ground or is under construction throughout the city. Since 2012, local planning officials confirm that more than 2,400 new rental units have been given the green light. At least three apartment communities -- the Cottages at Watercress, Legacy at Jones Farm, and Beckman Place near a new Wal-Mart Supercenter on U.S. 72 West -- have received the required city approvals but have yet to break ground. Developed by Capital Park Apartments, Capital Park at Seventy Two is earmarked for 15 acres at the end of Caste Drive in Huntsville.
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Vacancies Outside Denver at Lowest Level in How Many Years?
Digested From "Colorado Apartment Vacancies Outside Denver at Lowest Level in 11 Years"
Denver Business Journal (11/29/13) Huspeni, Dennis

According to the newly released Colorado Multi-Family Vacancy and Rental Survey, the apartment vacancy rate for Colorado cities outside the Denver area stood flat at 4.5 percent as of Sept. 30. The report, produced by ARA and Pierce-Eislen for the Colorado Division of Housing, notes that the rate is the lowest in 11 years. The rate at the end of last year's third quarter was 4.6 percent. Monthly rents, meanwhile, continued to increase in most markets statewide. Apartment owners and managers in northwest Fort Collins reported the highest average rent rate in the state at $1,201.92 per month, a 7.8 percent year-over-year increase. Colorado Springs stood at $830.27 in the July-through-September period, a 5.2 percent increase from the same three-month period a year earlier. The report added: "Overall average rent per square foot ranges from a low of 55 cents in Sterling to a high of 141 cents in Aspen." The lowest monthly rent rates were reported in northwest Pueblo at $424.31.
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Report: Big Shift in US Housing Market in 2014
Digested From "Report: Big Shift in US Housing Market in 2014"
World Property Channel (11/20/13)

Freddie Mac forecasts that 2014 will mark the conclusion of the refinance boom and the beginning of a market dominated by purchase money lending -- the first such market in 14 years. The government-sponsored enterprise (GSE) also expects a "continued renaissance" in multifamily housing investments, as they become increasingly attractive. Frank Nothaft, chief economist at Freddie Mac, states, "With mortgage rates rising, we're also going to see the home-sales gains as well as the impressive house price growth begin to moderate to more sustainable levels." Interest rates are expected to climb gradually throughout 2014, possibly reaching 5 percent by year's end. Home values climbed nearly 14 percent this year; and next year, Freddie Mac expects the increase to be in the range of 5 percent to 6 percent.
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Deals and Transactions

Starlight Multifamily Fund Buys Texas Apartment Portfolio
Digested From "Starlight Multi-Family Fund Buys a Texas Portfolio"
Multi-Housing News (11/13)

Starlight U.S. Multi-Family No. 2 Core Fund, a Toronto-based apartment fund, has purchased a stake in a portfolio of two apartment communities in Houston and Austin. Combined, the two properties have 752 rental units and cost $63.6 million. The deal involved acquiring a 65 percent interest in the Falls at Eagle Creek located 16 miles northeast of downtown Houston. In addition, the fund indirectly acquired Palm Valley Apartments, located 19 miles north of downtown Austin in suburban Round Rock. The former is made up of 412 apartments in 18 three-story, walk-up buildings, while the latter is comprised of 340 apartments in 17 three-story, garden style buildings.
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Aimco Breaks Ground on $190M Apt. Community in Boston
Digested From "Aimco Breaks Ground on $190M M-F Project in Boston"
Commercial Property Executive (11/25/13) Loria, Keith

Aimco broke ground this month on One Canal Street, a $190 million apartment community in Boston's Bulfinch Triangle area. John Bezzant, the apartment giant's chief investment officer, remarks, "The appeal for Aimco is we own about $800 million of real estate around the Boston market, which runs from Nashua, N.H., to Providence, R.I., and we are looking to take some of that money and invest into Boston proper." Once completed, One Canal Street will offer 310 rental units and approximately 21,000 square feet of ground-floor retail space designed to accommodate a grocery store. Included in the mix will be one-, two- and three-bedroom apartments, offering such amenities as granite kitchen countertops and in-unit washing machines and dryers. Community amenities will include a state-of-the-art fitness facility, an on-site dog wash, a swimming pool, and a cooler for grocery deliveries. Aimco currently has ownership stakes in 11 apartment communities with more than 4,000 rental units throughout the Boston metro area. Systemwide, its total portfolio boasts more than 250 properties in 23 states, the nation's capital, and Puerto Rico.
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Industry Buzz

National Exemption Service Inc.
How Is NRP Group Standing Out From the Luxury Apt. Crowd?
Digested From "NRP Group Expands Its Market, Reach by Catering to Apartment Demand"
Crain's Cleveland Business (12/01/13) Bullard, Stan

NRP Group is an up-and-coming player in the nation's apartment sector. The Ohio-based developer and manager is active in 13 states and operates eight regional offices seeking out deals that have resulted in upscale apartment communities in Austin, Dallas and San Antonio, Texas; Raleigh and Charlotte, N.C., and St. Petersburg and Orlando, Fla., among other places. NRP's luxury offerings typically include big resort-style pools, fitness facilities that rival commercial operations, and rooms for residents to watch sporting events together or play computer games with friends. In San Antonio, the firm has introduced a room that residents can reserve as a dining room. That allows people who might have used a dining room once or twice a year in a house to have the same dinner parties at their apartment community. Other NRP communities include a meeting room that allows residents who work from their apartments to have a place to meet clients.

The surge in popularity of apartments nationwide has provided NRP an opportunity to accelerate rapidly its development pace. This year, NRP has broken ground on 10 market-rate luxury apartment communities and plans to start construction of seven more between now and next April. David Heller, NRP's president of property management, remarks, "We saw the opportunity created by the collapse of single-family housing combined with the demographics of empty nesters and the children of baby boomers who want to rent as a lifestyle."
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Look What Apartment REIT Is in Full Growth Mode
Digested From "Landmark Apartment Trust in a Growth Mode"
Richmond Times-Dispatch (VA) (12/02/13) Tupponce, Joan

Landmark Apartment Trust of America Inc. has been on a major acquisition spree in the second half of 2013. The Virginia-based REIT has acquired 15,000 apartments since August, raising its total number of units to approximately 19,000. It recently purchased four multifamily housing communities in three states -- Alabama, Florida, and Texas -- in two separate transactions totaling $98.2 million. The firm has grown a whopping 500 percent in properties in the first 10 months of the year versus the same time in 2012. Landmark CEO Stanley J. "Jay" Olander Jr. states, "We are still acquiring. We are looking to purchase an additional 5,000 apartments before year end." The REIT's roots date back to Grubb & Ellis Apartment REIT's formation in 2005's fourth quarter. The company was renamed Apartment Trust of America in early 2011. Last year, it underwent a major recapitalization and officially became known as Landmark Apartment Trust of America Inc. The company acquired 4,000 apartments in the South and Southeast from 2005 to last year. Olander remarks, "Our business strategy has been all along to buy property where people are moving to. There was a large migration from north to south. If you look at where we own properties, they are in some of the largest growth markets.” Landmark Apartment Trust currently owns a total of 59 apartment communities and manages another 38 properties owned by affiliates across the South. It has the most apartments in Texas, where it owns 20 communities with 5,373 rental units.
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Which Apartment REIT Filed for a $115 Million IPO?
Digested From "Apartment REIT Bluerock Residential Files for a $115 Million IPO"
NASDAQ (11/29/13)

Late last week, Bluerock Residential Growth REIT filed with the Securities and Exchange Commission to raise up to $115 million in an initial public offering. The New York-based company, which was founded in 2008, booked $28 million in sales for the year ended Sept. 30. It plans to list on the New York Stock Exchange under the symbol "BRG." Bluerock currently owns nine apartment communities throughout the Southeastern U.S.
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What Is America's 'Most Dense' City?
Digested From "L.A. Claims 'Most Dense' Title" (11/26/13) Borland, Kelsi Maree

Experts at the recent Impact on Density Symposium ranked Los Angeles as the nation’s most dense city. Defined as people per square mile, L.A. topped New York City and Chicago with 7,000 residents per square mile. By comparison, New York has 5,319 people per square mile. Symposium attendees concurred that L.A.'s density is increasing and the city needs to alter building codes to accommodate increased population growth. Architect Wade Killefer has proposed doubling floor-to-area ratios, currently at 6 to 1. He points to multiple high-rises having been built on the main Wilshire thoroughfare in the past five to 10 years because there is no height requirement. He notes, "Since developers respond to market and financing factors and construction costs for high-rise buildings, cost 25 percent to 35 percent more than mid-rise structures, smaller buildings are currently in vogue." Architect Bill Roschen, a former president of the Los Angeles Planning Commission, adds that public transportation also plays an important roll in accommodating increased density. To this end, he encourages linkages between developments and train stations so that more people can live closer to where they work. The Metro Gold Line Foothill Extension Construction Authority recently hosted a conference to encourage funding and support a 24-mile light rail extension that would link Glendora, San Dimas, La Verne, Pomona, and Claremont.
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Legal/Legislative Did You Know

2013 Diamond Sponsors with correct Azuma logo
Miss. County Wants Apartments to Be Down in the Dumpsters
Digested From "Lamar Weighs Dumpster Requirement at Apartments"
Hattiesburg American (Mississippi) (11/27/13) Doherty, Tim

In Mississippi, Lamar County supervisors are considering the creation of a countywide ordinance requiring apartment community owners to place on-site dumpsters on their properties. Among the biggest supporters is District 1 Supervisor Mike Backstrom. He states, "I'm just tired of the daily calls of trash and paper blowing all up and down these roads and up in people's yards and cemeteries and everywhere else. I just think it would help with the trash getting strewn around these larger apartment [communities]." The county currently handles all residential trash pickup. However, Lamar's growth has led to the construction of more multifamily housing, resulting in a bigger concentration of cans and bags in certain areas. District 4 Supervisor Phillip Carlisle said two apartment communities had installed on-site dumpsters after he had asked. "But I've got a couple that just won't do it," he added. "So, I would be very supportive of that." Senior planner Michael Hershman and attorney Perry Phillips are now researching how a dumpster ordinance might be drawn up. District 3 Supervisor Joe Bounds suggested the county could use the number of apartments in a community as a trigger for such a requirement. He remarks, "If it's over so many units, it would require a dumpster."
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Property Managers: Whose Dog Did the Doo?
Digested From "Property Managers: Whose Dog Did the Doo?" (11/27/13)

More and more apartment and condominium managers are turning to DNA testing to identify canines whose owners fail to clean up after them. This marks the latest twist in the long-running battle to keep dog waste off lawns, landscaping, hallways, elevators, and other common areas of animal-friendly, multifamily housing communities. DNA monitoring, for instance, has yielded immediate results in the Massachusetts condo community of Devon Wood. After testing was implemented at the beginning of this year's third quarter, the problem pretty much ceased. To date, just one resident dog has been identified as an offender. The testing involves registering the DNA of all dogs in an apartment or condo community by collecting samples of their cheek cells using a pair of sterile swabs. A sample of feces is then collected and sent to a laboratory for matching.
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L.A. Expects a Hard Year to Inspect All Soft-Story Buildings
Digested From "L.A. Needs at Least a Year to Find Quake-Vulnerable Wood Buildings"
Los Angeles Times (11/26/13) Xia, Rosanna; Lin II, Rong-Gong

Los Angeles city building officials last week concluded that it would take inspectors more than a year to identify all the apartment communities in the city that have a certain type of wood frame vulnerable to collapse in the event of a major earthquake. Staffers developed a plan to winnow out these "soft" story wood-frame structures among the 29,000 apartment communities citywide that were erected prior to 1978. Soft-story structures often are built over carports and held up with slender columns. This leaves the upper floors to crash into ground-floor apartments during extreme shaking. Currently, there are no city records available to easily identify which structures are wood-framed and soft-story. L.A.'s housing department has provided addresses to 29,226 apartment communities in the city built before 1978. Officials would then utilize mapping programs to narrow down which buildings need further field inspection. The report estimates that about 5,800 sites qualify as soft-story buildings, and an additional 11,690 buildings will need to be inspected on site to determine whether or not they are soft-story buildings.
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NAA Announcements

The Millennials Are Coming! Prepare for the Revolution at the 2014 NAA Student Housing Conference & Exposition

By 2020, Millennials are expected to comprise more than 40 percent of the workforce. Why wait six years to better understand your future residents and coworkers when you could attend the 2014 NAA Student Housing Conference & Exposition, March 3-5 in Las Vegas at the ARIA Resort, and gain key insights into the needs, wants and values of this dramatically different generation (and save $300 to boot)?

Recently announced sessions for this exciting event run the gamut from marketing, leasing and operations to executive strategy, revenue management and social media. Curious about strategies for managing student housing in secondary and tertiary markets? Need to know about building a social media ecosystem for your student housing community? How about marketing to a digital generation? NAA has you covered.

And, for a limited time, take $300 off the cost of registration as you prepare to 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. Breathe easy—no admissions essay required!
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Your First Professional Resolution for 2014: Register Now For the 2014 NAA Education Conference & Exposition

It’s never too early to start thinking of this year’s New Year’s resolutions, especially in light of the gluttony and merriment you know doubt experienced during the Thanksgiving holiday.

Professionally speaking, there is no better way to “Reach New Heights” in your career and for your company than by attending the 2014 NAA Education Conference & Exposition, June 18-24 in Denver. From world-famous speakers to the latest and greatest from multifamily supplier partners, if career enhancement is what you seek, then this is the one event you can’t afford to miss.

What are you waiting for? Grab a bottle of Tums and an Internet connection and invest in your company and your career today. Visit the NAA Education Conference website and 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.
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Connect in December and You Could Be a Winner

Have you checked out NAA Connect yet? If not, we’re offering the perfect incentive this month! Eight active Connect users will win just for collaborating, problem solving and networking. Prizes vary, and include a $200 Amazon gift card, a $100 gift card and a $20 Starbucks gift card. But don’t be late to the party—the contest runs throughout December, and the more active you are the more chances you’ll have to win. Learn more.
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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.
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NAAEI Designation Courses Offered Near You!


CAM Online


Columbus Apartment Association
January – February, 2014

El Paso Apartment Association
January – April, 2014

Austin Apartment Association
February – March, 2014

Roanoke Valley Apartment Association
February-March 2014


Apartment and Office Building Association of Metropolitan Washington
February, 2014

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.
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December 3, 2013

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