NAA Industry Insider: Life At The Office? Apartments Arise in Old Work Digs

 

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
Life At The Office? Apartments Arise in Old Work Digs
Digested From "Life At The Office? Apartments Arise in Old Work Digs"
Investor's Business Daily (12/06/13) P. A10 Much, Marilyn

With multifamily housing increasingly popular, more office property owners are converting office buildings into round-the-clock residences that offer an exciting urban lifestyle. The trend is emerging across the United States despite an office market rebound in many metro areas. Many people now prefer city living, both for work and for urban amenities like restaurants and the arts scene. At the same time, demographics show the typical apartment-age population is expanding. A large number of people are forfeiting single-family homeownership in order to remain flexible in their lifestyle, while others simply cannot afford to become homeowners or cannot quality for a mortgage. John Sikaitis, managing director of local markets and office research at Jones Lang LaSalle, comments, "We're definitely seeing this trend from office to multifamily continue to kick up. We're seeing the amount of geographies participating starting to widen."

Los Angeles and Lower Manhattan have led the trend, recording a combined 18.1 million square feet of conversions in the last 10 years. Sikaitis adds that conversions have been happening "more aggressively" the past couple of years in such cities as Baltimore and Philadelphia. Condo and apartment conversions constitute more than a third of the lost office space in CoStar's database. According to a CoStar study, another 13 percent of office space has been demolished to make way for new residential buildings.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

Market Trend Insights


RealPageMay13
Look Who Is Embracing Rental Housing
Digested From "Home Buyers Are Scarce, So Renters Take Their Place"
New York Times (12/05/13) P. B1 Dewan, Shaila

An increasing number of builders and investors are seeing the wisdom in constructing homes to lease, instead of sell, as the pool of qualified first-time buyers has dried up. The share of homes built specifically as rentals is still relatively small at 6.2 percent last year but nonetheless represents an all-time high. Such houses are going up in the same communities that catered to first-time buyers prior to the housing market's crash five years ago. Today, such buyers are scarcer due to lower wages and higher joblessness -- especially among young adults. In addition, tightened standards for home loans have kept many potential buyers on the sidelines, making single-family home rentals the more attractive option. People turn to rental homes for a variety of reasons. Those with large families crave the space and extra rooms. Others want to live in an actual house, but do not want to be on the hook for repairs and upkeep.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

Oil Boom Fuels Fargo-Moorhead Apartment Boom
Digested From "Oil Boom, Vacancy Rates Drive F-M Apartment Building Boom"
INFORUM (12/06/13) Olson, Dave

The ongoing oil boom in North Dakota is driving an apartment construction boom in the Fargo-Moorhead market. A mammoth community of more than 320 apartments being erected in West Fargo is reportedly the largest of its kind in the city and perhaps the biggest in the entire Fargo-Moorhead market. Fargo, in particular, expects to see sprawling apartment communities going up in the near future. Moorhead and Fargo building permit information shows both cities have set all-time highs in 2013 for the number of rental units approved, with Fargo approving 1,170 apartments and Moorhead 274. By contrast, Fargo approved 743 units in 2012 and Moorhead approved just 60. So, what’s fueling the boom? In addition to job growth related to the oil boom, attractive borrowing rates for builders and low vacancy rates in the existing apartment market are also proving to be particularly powerful drivers. Neal Eriksmoen, owner of Appraisal Services Inc., conducts periodic surveys of apartment owners and managers in the Fargo-Moorhead market. A recent study of his firm's showed apartment vacancy rates of 2.4 percent for Fargo, 4.1 percent for Moorhead, 2.1 percent for West Fargo, and 3.4 percent for Dilworth. Overall, the apartment vacancy rate for the entire metro area is 2.6 percent. For the full year, the metro area is on pace to approve permits for more than 1,600 apartments.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

What Does the Surge in New Portland Apartments Mean?
Digested From "Surge in New Apartment Buildings Means More Move-In Specials"
Oregonian (OR) (12/04/13) Njus, Elliot

In the Portland, Ore., market, the apartment vacancy rate has hovered in the 3 percent to 4 percent range for more than two years. This has resulted in rising rents and apartments being snapped up soon after being vacated. Interestingly, more and more owners of new apartment communities are offering incentives to get prospective residents into long-term leases. That is because the tight apartment market has led to a wave of new construction and a lot of rental units coming to the market at the same time. In an effort to hurry the initial lease-up, many owners and managers in and around Portland are offering move-in concessions to get people into long-term leases. For instance, the slow winter moving season has brought a new round of free-rent specials to bridge the gap before spring rolls around with its traditionally more active market. The Emery, which opened back in September, recently started offering a free month's rent through the end of the year for residents who sign 16-month leases. The 118-unit community is around 40 percent occupied.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

Deals and Transactions


LowesAug2013
Essex Property Said to Offer About $5 Billion to Buy BRE
Digested From "Essex Property Said to Offer About $5 Billion to Buy BRE"
Business Week (12/04/13) Monks, Matthew; McCracken, Jeffrey; Carmiel, Oshrat

Essex Property Trust Inc. has reportedly offered to acquire BRE Properties Inc. for about $5 billion. The offer is higher than a $60 a share bid for San Francisco-based BRE made by Land & Buildings and an investor group earlier in the year. Essex, which develops and manages apartments throughout California and in Seattle, will issue stock and sell assets to pay for the deal in addition to bank financing. BRE has been working with Wells Fargo & Co. to evaluate options, including a potential sale. For BRE, the biggest share of its net operating income -- 28 percent -- is derived from apartment communities in the Bay area. The REIT had ownership stakes in more than 21,000 apartments as of Sept. 30. "The world doesn't need two West Coast apartment companies,” remarks Alexander Goldfarb, a REIT analyst at Sandler O’Neill & Partners in New York. "You’ve got two companies with basically the same properties, yet the public costs are elevated because you have two sets of management teams and you have two sets of property operations."
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

What N.C. Market is Charter Properties Looking to for Growth?
Digested From "Charter Properties Sells Charlotte-Area Apartment Communities for $96 Million"
Charlotte Business Journal (12/09/13) Boye, Will

Charter Properties Inc. has sold three apartment communities totaling more than 800 rental units to an Atlanta-based property investment firm for $96 million. Centennial Holding Co. purchased the Long Creek Club and Longview apartment communities in the Northlake area and The Paddock at Springfield community in nearby Fort Mill and rebranded them. John Porter, a partner at Charter, remarks, "Charlotte is very well considered. This is really someone who wanted to be in Charlotte with Class-A assets as much as anything else."
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

New Real Estate Partnership Makes Its First Buy in Dallas
Digested From "New Real Estate Partnership Makes Its First Buy in Dallas"
Dallas Business Journal (12/02/13) Carlisle, Candace

A newly formed real estate partnership has purchased its first of many apartment communities in Dallas, which are expected to range from $10 million to $20 million. Terms of the deal were not disclosed. Dallas-based Performance Properties LLC acquired the 416-unit Vista Buena Apartment Homes in North Dallas, which is 98 percent leased. David McQuaid, a principal of Performance Properties, started the new partnership with Todd White. According to McQuaid, the partnership plans to acquire 750 to 1,000 apartments a year for the next five to 10 years.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

Industry Buzz


National Exemption Service Inc.
Philly LEEDs the Way With New Community
Digested From "The Very First Platinum LEED Neighborhood Development Is Located in Philly, Dedicated Today"
Curbed Philly (12/03/13) Webb, Molly

Philadelphia's Paseo Verde, the nation's first LEED Platinum certified Neighborhood Development, hosted a ribbon cutting ceremony to celebrate its achievement. The mixed-use, mixed-income community is an eco-friendly, transit-focused project with a mission to provide a healthy living environment for residents through sustainable practices, as well as cost savings through effective reduction in energy use. Although the most expensive apartments are not luxury-priced, they offer a fitness center, community rooms, a technology center, gardening plots, and green roofs. The community is located next to train tracks and a few blocks from the Broad Street Line, allowing it to be "transit-oriented." With limited off-street parking, the community has a car-sharing program, and bike storage is provided. Eco-friendly building materials used to build the apartments are all formaldehyde-free. The complex has 67 moderately-priced one- and two-bedroom apartments available for $1,155 to $1,450 a month. In addition, there are 53 one-, two-, and three-bedroom rent-restricted apartments that are offered on a sliding scale depending on the residents' income, renting for $218 to $1,050 a month.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

People Who Live in Glass Tower Apartments Shouldn't...
Digested From "Glass Tower Residents Forego the Curtains at Their Own Risk"
The Real Deal (12/06/13) Strickland, Julie

Glass tower apartments often tout panoramic views in their marketing to prospective residents. Yet, a whopping 60 percent of residents in such modern digs draw the curtains, according to a new Urban Green Council study. "It's a contradiction," Russell Unger, executive director of the Urban Green Council. "People say they like glass buildlings for the views, but they can't enjoy them." The modern glass towers can be a source of of unwanted heat, too, some residents lament. Sun exposure in all-glass buildings can bake the interiors. In other cases, they can reflect rays in directions that prove problematic for automobiles, other buildings, and even pedestrians. In the end, though, these potential downsides are proving to be not much of a deterrent. "I swore I'd never live in a modern building, but now I wouldn't want to live anywhere else," Elizabeth Johnson, a Brown Harris Stevens broker who lives in such a building in New York. "It's so nice to walk in and have the whole city right there in front of you."
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

Allen Morris Launches Residential Division
Digested From "Allen Morris Launches Residential Division"
GlobeSt.com (12/02/13) LeClaire, Jennifer

The Allen Morris Company, one of the largest commercial property firms in the Southeast, has launched its new Allen Morris Residential division in response to what it calls "increased market demand for residential projects." Dennis Suarez, who is currently director of development at Allen Morris, has agreed to serve as managing director of the new division. Allen Morris currently boasts a portfolio of 79 office, retail, and industrial developments. The company’s work includes AT&T's Florida headquarters, along with the the regional headquarters of IBM, CBS, and the Federal Reserve Bank of Miami. Suarez previously served as vice president of the Southeast region for Archstone, the nation's second-biggest multifamily housing developer. Prior to that, he held senior management positions at JPI and Trammell Crow Residential. His more than three decades of experience in the design and development of multifamily residential units includes the construction of 15,000 apartments.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

AvalonBay Prices $350 Million Unsecured Notes Offering
Digested From "AvalonBay Communities Prices $350 Million Unsecured Notes Offering"
Wall Street Journal (12/05/13)

AvalonBay Communities Inc. last week priced a $350 million offering of unsecured notes with a maturity of Dec. 15, 2023, under its existing shelf registration statement. According to the REIT, interest on the notes will be paid semi-annually on June 15 and Dec. 15. The first payment will be made on June 15, 2014. Settlement is set for next Monday, Dec. 16. AvalonBay expects to use a portion of the net proceeds from the sale to repay a trio of currently outstanding secured debt financings. The rest of the proceeds will go for general corporate purposes, which may include the acquisition, development, and redevelopment of apartment communities. As of the end of this year's third quarter, the REIT had ownership stakes in 276 apartment communities containing 82,584 rental units. These communities are spread throughout a dozen states and Washington, D.C.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

Legal/Legislative Did You Know


2013 Diamond Sponsors with correct Azuma logo
Berkeley Bans Tobacco Smoking in Apartments, Condos
Digested From "Berkeley Bans Tobacco Smoking in Apartments, Condos"
Berkeleyside (12/05/13) Raguso, Emilie

Smoking will no longer be permitted inside apartments in Berkeley, Calif., effective May 2014, following a unanimous vote by the Berkeley City Council last week. Once it is adopted on second reading, the council decision would prohibit tobacco smoke inside all buildings that have more than one unit and in all common areas of those properties, as well. After considering the issue twice earlier in the year, council members voted -- on first reading -- to approve the new ordinance. The ordinance includes processes for residents to get smoking cessation services, along with an outreach and education campaign about the law that will be in effect through the fourth quarter of 2016. Starting in May, new leases for all residents will include mandatory non-smoking clauses. Existing residents will be offered a voluntary, non-smoking addendum to their lease agreements.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

HUD Expands Energy Conservation Challenge to Apartments
Digested From "HUD Expands Energy Conservation Challenge to Apartments"
Housing Wire (12/03/13) Swanson, Brena

The White House is adding onto its energy conservation efforts in the commercial real estate space with the roll-out of the Better Buildings Accelerators program, which targets energy conservation initiatives at apartment and condominium communities. The new campaign expands a program launched by HUD and the Department of Energy to enhance the energy efficiency of commercial structures. Known as the Better Buildings Challenge, that effort has already secured $2 billion in financing commitments from the private sector to enhance energy initiatives within commercial properties. The latest initiative aims to support local and state government-led campaigns to reduce energy waste and eliminate market and technical obstacles to greater building efficiency. Additionally, the Obama administration next plans to challenge federal agencies to further expand their use of performance-based contracts through 2016 as a means of upgrading the energy efficiency of federal buildings.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

Fire Code Deadline Extension Turns Up Heat on Mo. Apts
Digested From "Deadline Extended for Handful of Apartment Complexes to Meet Fire Code"
Columbia Daily Tribune (MO) (12/06/13) Burdziak, Alan

In Missouri, the deadline for several apartment communities to reach compliance with the city of Columbia's fire code was extended after all remaining apartment owners submitted plans that showed they were making progress toward doing so. According to Columbia Fire Department Battalion Chief Brad Fraizer, owners of 27 communities were notified in 2012's fourth quarter that they would have one year to bring their sites up to code. Five owners of eight locally based apartment communities have yet to finish the work, and their deadline is now the end of 2014's first quarter. The 2009 International Fire Code mandates that all apartment communities that are either more than three stories in height or have 16 or more units in one building had to have automatic fire alarms or manual pull stations near the exits. Exemptions were offered for those buildings that have sprinkler systems or those with fire walls that can withstand a blaze for 45 minutes. The goal has been voluntary compliance. Frazier remarks, "Knowing that this could have a significant financial impact on some property owners and understanding that they're working with contractors and submitting plans, it was the right thing to do to go ahead and give them that additional time to get these systems installed." Frazier insists that it is a one-time extension and meant to avoid putting the owners through the complications that prosecution would bring. Violators would be subject to fines of up to $1,000 a day per violation.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines

NAA Announcements


Looking for Hot Topics and Trends? Your Search Ends At The 2014 NAA Student Housing Conference & Exposition

From ground-floor construction of your community’s social media ecosystem to wrapping your head around the digitally savvy college student, the education lineup at the 2014 NAA Student Housing Conference & Exposition, March 3-5 in Las Vegas at the ARIA Resort, promises a wealth of knowledge designed to give you a leg up on the competition in this rapidly growing niche of the rental housing.

And, for a limited time, take $300 off the cost of registration (http://shce-naa.naahq.org/attend-student-housing/register) as you prepare to join more than 900 star pupils for two days chock-full of cutting-edge insight into the mind and behavior of the next generation of residents.

Recently announced sessions for this exciting event run the gamut from marketing, leasing and operations to executive strategy, revenue management and social media, like:

1. Text ‘Em, Chat ‘Em and Most of All—Challenge Them! The Millennials Are Coming! Are You Ready for This Revolution? Be in the audience for new trends in job descriptions, career tracks, product design, communication, privacy, tenure and more.

2. Marketing To the Digital Generation. Start here for features and amenities students look for when deciding on a place to live; insights into marketing channels most effective among students seeking an apartment; digital marketing; and whert to put your marketing budget.

3. Facebook? So Yesterday. New Ways to Reach, Engage and Win Over Students. Forward-thinking management firms are using hot new tools to lead the student housing push. Don’t miss this session for successful interactive campaigns and strategies you can implement right away to attract students, boost search results and grow your audience.

Awaiting you is actionable intelligence and turnkey solutions useful in helping you achieve your personal and professional goals. Check out the NAA website.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines
NAAEI Opens New Path for Lapsed Students Through 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.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines
NAAEI Designation Courses Offered Near You!

CAM:

CAM Online

CAMT:

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

NALP:

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.
Share Facebook  LinkedIn  Twitter  | Web Link | Return to Headlines


Abstract News © Copyright 2013 INFORMATION, INC.
Powered by Information, Inc.
December 10, 2013

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

2014 Student Housing Conference
2014 Education Conference

Event Highlights

2014 NAATV: Festivals of Colorado Opening Party

2014 NAATV: Festivals of Colorado Opening Party  

Food, drinks, networking and fun at the 2014 NAA Opening Party - Festivals of Colorado. It was a blast had by all!Bookmark www.naahq.org/educonf for save the date information for the 2015 NAA...