Apartment Residents More Likely to Say, 'See Ya!' Sooner
Digested From "Survey Finds: Single Family Renters More Likely to Stay in Place"
National Mortgage Professional (02/25/13)
A new national opinion survey released by ORC International for Premier Property Management shows that single-family home tenants are 18 percent more likely than apartment residents to remain in their current living quarters five years or longer. The finding suggests that demand for single-family homes, the fastest-growing rental category, will be more stable than multifamily housing demand. The data shows that 26 percent of single-family tenants plan to remain in place five years or more versus just 22 percent of apartment residents. Good property management has played a major role. Some 80 percent of those who rent single-family homes said their property management was "good" or "excellent." That compares to only 63 percent of apartment dwellers. Furthermore, 26 percent of apartment residents rated their management as only "adequate." More than half of those who rent -- 52 percent -- said they anticipate becoming homeowners in the next five years.
Market Trend Insights
Why 2012 Was a Golden Year for Freddie Mac Multifamily
Digested From "Freddie Mac Calls 2012 a Golden Year for Multifamily"
Housing Wire (02/27/13) Mlynski, Christina
Freddie Mac says its multifamily housing business volume, including both loan purchases and bond guarantees, hit an all-time high of $28.8 billion in 2012. That is a 42 percent jump from $20.3 billion in 2011 and breaks the previous record of $24 billion in 2008. David Brickman, senior vice president of Freddie Mac Multifamily, calls 2012 "a phenomenal year. We achieved record volume while maintaining strong credit discipline and providing essential liquidity to the growing multifamily mortgage market. In the fourth quarter, we completed about 33 percent of our yearly volume -- approximately $10 billion in multifamily mortgages." Brickman notes that demographic trends, household formations, higher credit standards for residential mortgages, and changing attitudes about homeownership have boosted rental housing affordability.
Who's the Big Man on Off-Campus Housing?
Digested From "Big Real-Estate Firms Are Going to School"
Wall Street Journal (02/26/13) Wotapka, Dawn
Some of the nation's biggest homebuilders are branching out into off-campus housing as part of a plan to diversify into more recession-proof markets, and at the same time, established players in the sector are increasing purchases to remain competitive. ARA Student Housing says student-housing property sales last year rose 95 percent to a record $3.7 billion. Lennar Corp., is building its first off-campus apartment community near the University of Texas at Austin, and Toll Brothers Inc. plans to build student housing near the University of Maryland in College Park and Penn State University. To bolster rents, many of these communities feature such upscale amenities as tanning beds, resort-style pools, ice skating rinks, and a separate bedroom and bathroom for each resident. However, there are concerns that developers are entering the student housing market at a time when there is much debate about soaring tuition costs and college enrollment is on the decline. Although there is some talk about overbuilding, some analysts insist supply is finally catching up to demand, with Michael Gallis & Associates estimating a shortage of 1.5 million to 2.15 million beds.
What's Behind Mass. Multifamily Permits Doubling in 2012?
Digested From "Bay State Multi-Family Housing Permits Nearly Double in 2012"
Boston Business Journal (02/26/13) Grillo, Thomas
The number of multifamily housing permits in Massachusetts last year nearly doubled from 2011, reflecting widespread demand for rental housing. "The American dream of owning your own home has become a nightmare and more people are choosing to rent," said Karl Case, co-creator of the Standard & Poor's Case-Shiller Index. According to the U.S. Census Bureau's Building Permit Survey, there were 5,019 multi-family permits granted in Massachusetts in 2012, up from 2,752 in 2011, an 84 percent increase. Case said the other factors fueling multi-family starts is that families who lost their homes through foreclosure have become renters. "They have to live somewhere," he said. The increase in multifamily housing permits last year was supported by significant gains in Boston, Natick, Cambridge, Saugus, Concord and Lakeville. Twenty-four communities pulled more than 50 multifamily permits last year.
Four Reasons Why Apartments See Green in Green Retrofits
Digested From "The Housing Market Is on the Rise: Opportunities in Green Building"
Triple Pundit (02/27/13) Wee, Tali
Green businesses are finding new investment opportunities in the reviving housing market. Some REITs are purchasing foreclosed properties, investing in green retrofits and green certifications, and then reaping profits from the resale of the home. Apartment owners are also retrofitting their communities, citing four main reasons. One is to increase resale value. In addition, retrofitting can lower their buildings' carbon footprint and and reduce their energy and maintenance costs. Fourth, owners and managers investing in retrofits find they can charge premiums for green apartments. Rents in LEED and Energy Star-certified apartment communities are an average of 3 percent higher than those in equivalent non-green buildings, according to one study.
NAHB Study Differs From Long-Held Apartment Industry Beliefs
Digested From "What Home Buyers Want"
CNBC Europe (02/25/13) Olick, Diana
With the U.S. housing market finally picking back up, the National Association of Home Builders (NAHB) conducted a large study to pinpoint how recession may have influenced consumers' lifestyle preferences and home wish lists. Released this month, the survey found that Americans desire Energy Star appliances above all else, followed by energy-efficient laundry rooms, high-end amenities such as kitchens with double sinks, and whole-house technology. NAHB also determined that the outer suburbs are favored when it comes to home location, with just 8 percent of those queried citing a preference for living in a city center. That is a departure from what those in the apartment sector believe: that recession and escalating gasoline prices are creating demand for urban lifestyles.
Is That an Echo Boomer I Hear in the Rental Housing Market?
Digested From "National Homeownership Rate to Remain Above 60 Percent"
Housing Wire (02/25/13) Hopkins, Megan
New research gathered by the Bipartisan Policy Housing Commission (BPC) forecasts that the U.S. homeownership rate will remain above the 60 percent mark for at least the foreseeable future. The BPC asserts that the way to ensure that homeownership remains a viable wealth-building option is a combination of regulation and adequate liquidity coupled with the appropriate incentives in the private market. Renter-households, meanwhile, continue to make up 35 percent of the American population. They are expected to continue growing as Echo Boomers start to form their own households just as Baby Boomers are beginning to downsize.
Deals and Transactions
Which Apartment Megadeal Reached Completion Last Week?
Digested From "AvalonBay Equity Residential Complete Archstone Acquisition"
Washington Business Journal (02/27/13) Clabaugh, Jeff
AvalonBay Communities Inc. and Equity Residential this past week completed their $16 billion acquisition of Archstone Enterprise LP from Lehman Brothers Holdings Inc. The total deal includes cash and stock, along with the assumption of debt. In the joint venture partnership, Virginia-based AvalonBay gets 40 percent of Archstone's properties, or 60 apartment communities. Chicago-based Equity Residential gets the remaining 60 percent, which equates to 78 apartment communities. The acquistion will significantly boost the holdings of AvalonBay, in particular. Already one of the biggest apartment owners in the country, its portfolio includes ownership interests in 203 apartment communities as of the end of last year.
Two Reasons Why San Diego OK'ed Big Apartment Community
Digested From "Largest Apartment Complex in San Diego Approved"
NBCSandiego.com (03/01/13) Taylor, Tiana
Civic San Diego cited two main reasons for recently approving plans for the city's largest apartment community. One, there is a growing lack of housing options for young, single residents. And, two, San Diego has one of the lowest apartment vacancy rates in the nation. The $300 million development, called Blue Sky, is indeed aimed at attracting young, single residents. The plans show that the comunity will be mostly made up of hundreds of studio apartments and one-bedroom rental units. A 2015 grand opening is planned. With local lowest vacancy rates low, the city is eager to welcome the 900-unit community. The developers are hoping to obtain the final permits within the next 90 days and begin construction this summer.
CBRE Arranges $1 Billion Apartment Sale
Digested From "CBRE Arranges $1B For 27-Asset EQR Sale"
GlobeSt.com (02/25/13) Phillips, David
CBRE Capital markets' Debt & Equity Finance group recently arranged multiple loans exceeding a total of $1 billion to finance the acquisition of a portfolio of 27 multifamily housing assets located in eight markets across the U.S. The portfolio will be closed and funded in two stages, the first being Feb. 12 and the second in late March. CBRE worked exclusively on behalf of a joint venture between Goldman, Sachs & Co. and Greystar to arrange the 27 individual Freddie Mac loans. The portfolio was purchased from Equity Residential for $1.5 billion, or approximately $187,000 per unit. The portfolio includes 8,010 apartments, with communities located in Phoenix, Southern California, the San Francisco Bay Area, Denver, Orlando, South Florida, the nation's capital, and northern New Jersey.
How MacDowell and Sons Are Trying to Fill Boston Apt. Niche
Digested From "Apartment Projects Look to Fill Housing Need"
MetroWest Daily News (MA) (02/24/13) Ameden, Danielle
Roy MacDowell Jr. and his sons Roy III and Todd are among the multifamily developers capitalizing on the demand for apartments in the Greater Boston area. In Framingham, the MacDowells are seeking a zoning variance to convert 66 percent of the 360 housing units they want to build on the Wayland line into rentals. Some neighbors are opposed, citing the town's Planned Unit Development bylaw, which calls for a ceiling of 20 percent. Jennifer Raitt, chief housing planner with the Metropolitan Area Planning Council, said that the American Community Survey found that there are only 84 rentals available in MetroWest for every 100 households in the moderate and middle-income bracket seeking housing. The MacDowells point to a recent report by the National Apartment Association and the National Multi Housing Council, which shows that one in three Americans are renters and about 7 million new households will seek out apartments this decade.
Why Does Carlyle LOVE Apartments Over Single-Family Rentals?
Digested From "Carlyle Picks Multifamily Over Untested Rentals: Mortgages"
San Francisco Chronicle (03/01/13) Yu, Hui-yong
Carlyle Group LP has spent nearly $2.5 billion betting on the U.S. housing recovery since the fourth quarter of 2008. Of that, the second-largest private equity firm by assets has spent only $10 million for single-family homes. Instead, the firm has been buying and building apartment communities over the last couple of years, reports Robert Stuckey, Carlyle's head of U.S. real-estate investing. Washington-based Carlyle's focus on apartments separates it from such competitors as Blackstone Group LP and Colony Capital that are scrambling to buy up foreclosed single-family homes to rent. "Our posture is there are better ways to play the housing recovery," stated Stuckey. "[With the bond investments,] our approach enabled us to buy at about 30 percent of replacement cost, marketable securities, and we don't have to mow the lawn." In fact, Carlyle has used nearly 50 percent of its current $2.34 billion Carlyle Realty Partners VI fund for multifamily housing after initially investing in the sector 13 years ago. The plan has been to deploy capital from New York to Dallas to Seattle after demand for rental housing soared when millions of people lost homes to foreclosure and lenders tightened their criteria for home loans.
The Haves and Have Nots Have Fewer Places to Rent
Digested From "The U.S. Simply Doesn't Have Enough Available Rental Housing, Whether You're Rich or Poor"
The Atlantic Cities (02/25/13) Badger, Emily
According to the U.S. Census Bureau, there are approximately 41 million renter households in the country, and that number is expected to grow over the next 10 years as housing demand from Baby Boomers and their children overlaps. To meet demand, an estimated 3 million new rental apartments must be built over that period. A report from the Bipartisan Policy Center reveals that only 3.7 million such units are available for the 10.3 million households currently living in extreme poverty. The report adds that nearly 80 percent of these households spend 30 percent or more of their income on housing, but federal housing assistance only helps about 25 percent of those eligible for aid due to a disparity between demand and supply. With rents rising faster than income throughout the United States, cities will need to focus on affordable housing, especially if strong competition results in upgrades to older units and places them out of reach for low-income households.
How Did a Black Market for Studio Apts Form in Virginia?
Digested From "Fairfax Battles Black Market for Studio Apartments"
Washington Examiner (02/28/13) Holland, Taylor
A lack of affordable housing in Fairfax County, Va., has spawned a black market for studio apartments. County officials are now scrambling to shut down the illegal rental business without undermining the supply of more affordable housing. Responding to a jump in demand for studio apartments in the D.C. suburb, county residents have started building illegal studios in their homes and renting them to people who have shunned the more expensive one- and two-bedroom apartments that dominate the local market. While residents are not banned from having renters, they are required to go through a permit process to ensure the space is safe and conditions are liveable. The county has begun work on new rules for studio apartments, which would require each studio to have its own kitchen and bathroom. County officials say they have found entire families living in closets and crawl spaces that were converted into miniature apartments.
Legal/Legislative Did You Know
Calif. Bill to Renter Households: Don't Smoke 'Em If Ya Got 'Em!
Digested From "Smoking Ban Impact on Modesto-Area Rentals Is Uneven"
Modesto Bee (California) (03/04/13) Rowland, Marijke
In California, apartment owners and managers are split on the merits of proposed legislation that would ban smoking in all of the state's multiunit dwellings. VIP Management property manager Chad Brown, for example, states, "It's tough to make a decision that says we require every smoker to stop smoking immediately in their home. . . . I'd love to do that, but it doesn't seem practical." A week ago, Assemblyman Marc Levine (D-San Rafael) introduced Assembly Bill 746 that endeavors to restrict smoking in owner-occupied residences and rental units. The legislation, which is in its early stages, would have a lot of hurdles to pass before becoming law. But it could have a major impact on millions of Californians who no longer would be able to legally light up in their rental apartments, condominiums, or duplexes. It should be noted that stand-alone rental homes are not included in the legislation.
A Little Something For Everybody at the 2013 NAA Green Conference
The 2013 NAA Green Conference, convening April 15-17 at the Baltimore Marriott Waterfront in Baltimore, Md., offers multifamily professionals—from onsite staff to suppliers to developers and rehabilitators—the same world-class experience synonymous with NAA conferences. Join others like yourself seeking to improve their energy efficiency and reduce expenses through eco-friendly actions and policies.
For onsite staff, the 2013 NAA Green Conference promises best practices derived from actual case studies from communities that have realized impressive ROI by working toward saving money and energy while at the same time satisfying their environmentally conscious residents.
Suppliers will find that the 2013 NAA Green Conference creates opportunities to share how their products and services can affordably and reliably reduce energy expenditures, as well as offers the chance to share the best practices witnessed in their clients’ efforts.
For developers and rehabilitators, the 2013 NAA Green Conference pledges educational content advising on the processes required to design and construct communities that fulfill sustainability goals, as well as spotlight industry professionals who have helped improve the efficiency of existing communities through retrofitting.
From new construction, utilities, green amenities and building certifications to maintenance, operations and retrofits, the 2013 NAA Green Conference will offer the latest intelligence and insight into the most pressing trends and topics driving sustainability in the multifamily industry. Visit the Green Conference website for all session descriptions and speakers.
And, act now to save $100 off the onsite registration rate by registering before April 5.
Get Your Tool Belts and Work Orders Ready: Maintenance Mania® National Championship To Be Held During the 2013 NAA Education Conference & Exposition
Maintenance Mania®, the national program offered by NAA and presented by HD Supply, will host its National Championship from 5 p.m. to 6:15 p.m. on Thursday, June 20, during the 2013 NAA Education Conference & Exposition, June 19-22, in San Diego, Calif.
Throughout the year, NAA affiliates host Maintenance Mania® events across the country to recognize the skill and speed with which apartment maintenance technicians keep their communities running smooth. Winners from each local event then get a chance to qualify for a spot at the National Championship.
The championship will feature games developed from standard events, and the quickest competitors from each of the 10 NAA regions, as well as wild-card competitors with the top times nationally, will compete to see who will be crowned 2013’s Maintenance Mania® Champion.
Be sure to check out what Maintenance Mania® is all about—then make plans to come cheer on your favorite competitors. While in San Diego, make sure to stay for the world-class education, second-to-none networking and all the latest and greatest products and services offered by multifamily housing supplier partners on the trade show floor at the 2013 NAA Education Conference & Exposition.
Register now for the 2013 NAA Education Conference & Exposition and remember to consider group discounts: register five or more attendees and save your organization up to $400!
NAA Lobby Day is Wednesday, March 13
Give the apartment industry a stronger voice by investing your time at the 2013 NAA Capitol Conference. With the theme, “Make an Investment in Advocacy,” the event will feature concentrated advocacy and legislative sessions leading up to Lobby Day on March 13. The Capitol Conference is the apartment industry’s only national event focused on educating our members on critical federal legislative and regulatory issues impacting your businesses and the industry at large.
Due to a high increase in demand, the Omni has sold out of rooms for Tuesday night, March 12. We encourage you to make reservations at the Omni Shoreham for all other dates needed and to make a reservation for Tuesday night at an alternate hotel. We recommend the Marriott Wardman Park or the Churchill Hotel. Please note that NAA cannot guarantee rates at either of these properties. Register now!
New NAA Website to Debut
A new and improved NAA website will make its debut this spring, with a renewed emphasis on search functionality. Just how will your search be improved?
• A new taxonomy with 10 times as many terms than the current site will be included with te site.
• Documents will be included in your search results.
• The most searched topics will be featured on the homepage.
• An easy-to-find search box will be on every page in the site.
More information on the new website (including a top five list) can be found online, and you can also follow the hashtag #ANewNAAhq on Twitter for updates.
NAAEI Designation Courses Offered Near You!
South Dakota Multi-Housing Association
Greater Charlotte Apartment Association
South Dakota Multi-Housing Association
February – March, 2013
Rental Housing Association of Boston
April – May, 2013
Apartment and Office Building Association of Metropolitan Washington
Rental Housing Association of Boston
To find more courses in your area, click here.
For more information about any of the classes listed, please contact Kimberly McCrossen at email@example.com or 703/518-6141 ext. 121.
Abstract News © Copyright 2013 INFORMATION, INC.