Freddie Mac Forecasts More Golden Years for Multifamily

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TWCFEB13
Freddie Mac Forecasts More Golden Years for Multifamily
Digested From "Freddie Mac: Multifamily Affordability Is Now a Key Focus"
Housing Wire (02/18/13) Mlynski, Christina

Freddie Mac reports that residents of apartment communities of five or more rental units currently make up 15 million U.S. households -- a figure that is expected to climb with shifting demographics and shelter preferences. Such factors as demographic trends, household formations, higher credit standards for home loans, and changing attitudes about homeownership are driving the increase in rental housing affordability, notes Freddie Mac senior vice president of multifamily David Brickman. At the same time, though, affordable rental housing is becoming more elusive in certain parts of the country because of gross rent, or rent plus resident-paid utilities. More than half of all people who rent spend more than 30 percent of their income on housing -- an increase from 40 percent in 2000. Low-income households tend to spend even larger portions of their incomes on rent, based on the U.S. Census Bureau's American Community Survey 2000-2011. Brickman asserts that Freddie Mac remains dedicated to supporting affordable rental housing. He concludes, "Working closely with multifamily property owner/borrowers and our network of lenders, Freddie Mac Multifamily structures financings in a way that lets us offer very competitive, long-term rates.
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Market Trend Insights


RealPage
Housing Starts Drop Due to Volatile Multifamily Sector
Digested From "Housing Starts Drop on Multi-family; Permits at Four-Year High"
Reuters (02/20/13) Lange, Jason

Newly released Commerce Department data shows that groundbreaking to build new U.S. homes fell last month. Starts at building sites for homes fell 8.5 percent in January to a 890,000-unit annual rate mainly because of a sharp drop in multifamily housing. The volatile category fell 24.1 percent in the month. Starts for single-family units, meanwhile, edged up 0.8 percent to their highest level since July 2008. Finally, permits for future home construction climbed to a 925,000-unit rate -- the fastest since June 2008.
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Multifamily Housing Growth Poised to Continue in 2013
Digested From "Multifamily Housing Growth Poised to Continue in 2013"
U.S. News & World Report (02/13/13) Dietz, Robert

Home building is once again contributing to the nation's economic growth, and a major factor behind that growth has been the expansion of multifamily construction such as apartment communities and for-sale condominiums. Homeownership remains down, especially among younger households. Additionally, the overall number of households -- homeowners and renters combined -- is lower than it should be considering U.S. population growth. With a boom in household formation expected in the years to come, most of them are expected to start out as renters as economic and labor market conditions improve. The result for the building industry has been an increase in the demand for rental units, which in turn has reduced rental vacancy rates and propelled new multifamily construction. There are some potential "wild cards" in the multifamily housing forecast. The future of the Low-Income Housing Tax Credit, for instance, could be affected by tax reform on Capitol Hill. The tax credit has been a major development tool that ensures the financing of affordable housing.
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What Are the Five Signs for Smart Apartment Investment?
Digested From "Five Signs for Apartment Market Growth"
NuWire Investor (02/14/13) Popovec, Jennifer

Experts say there are five signs that lead to smart apartment property investment. The first is strong population growth. Markets experiencing substantial influxes of new residents are the best locales for apartment investment, according to Steadfast Income REIT President Ella Shaw Neyland. The second sign is a high concentration of young, mobile residents. Jeffrey Friedman, chairman and CEO of Associated Estates Realty Corp., reasons that younger residents tend to be home renters instead of homebuyers since they want to maintain mobility for employment. Third, an expanding employment base is a must. Friedman and other industry experts point out that job growth plays a big role in creating demand for the apartment sector. To this end, multifamily housing investors are keen to put their money into markets that have a strong and expanding employment base. Tight submarkets factor into the fourth sign smart apartment investors look for. Finally, an educated work force will make for a crop of reliable and steady apartment residents. Axiometrics President Ronald Johnsey notes that the top-performing U.S. apartment markets -- from an occupancy and rental rate growth perspective, that is -- are also the places that are home to the most educated populations.
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Des Moines' Apartment Vacancies Hit 18-Year Low
Digested From "Report: Des Moines Area Apartment Vacancy Rates Hit 18-Year Low, Pushing Rents Higher"
Des Moines Register (02/21/13) Eller, Donnelle

A new CBRE/Hubbell Commercial study found that apartment vacancy rates in the Des Moines, Iowa, area has hit an 18-year low, and some rents increased as much as 6 percent on average as a result. Apartment vacancies eased slightly in downtown Des Moines, pushing up 2.7 percent this year from 2.1 percent last year. Overall, the city's vacancies tumbled to 4.2 percent this year from 5.3 percent last year -- the lowest vacancy rate since 1996, Hubbell's report shows. Tighter vacancies are driving rents higher, with prices climbing 5.7 percent on average for residents looking at one-bedroom apartments in the metro region.
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Reasons Why Micro Apartments Are Good for Multifamily REITs
Digested From "Micro Apartments Good For REITs"
Insider Monkey (02/11/13)

Micro apartments are becoming increasingly attractive to the major multifamily REITs for a number of reasons. One, young adults are increasingly flocking to major cities to live, work, and play. However, in the downtown markets of such big metros as New York, Boston, and San Francisco, space is severely constrained. Simply put, there just aren't enough apartments for everyone who wants one, especially those on a budget. This is one big reason why these cities regularly see young folks banding together and sharing apartments. Now, more and more cities are considering plans to allow ever-smaller apartments. New York City is set to allow rental units as small as 250 square feet, with San Francisco going even smaller at 220 square feet. New York expects the smallest apartments to rent for around $1,000 a month. Larger units -- at around 370 square feet -- could fetch monthly rents of as much as $1,875. Enter REITs like Equity Residential whose portfolio is concentrated in "high-barrier, high-growth markets" like Boston, Seattle, and the District of Columbia. Other players that will likely be embracing micro-apartment opportunities in the near future are AvalonBay Communities Inc. and Apartment Investment and Management Co.
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Pet Friendly Apartments Becoming the Cat's Meow in Big Cities
Digested From "Apartments: Wooing Dogs and Their Owners"
CNBC.com (02/11/13) Olick, Diana

The pet business in America is a $50 billion a year market, and apartment owners are trying to woo pet owners by offering them the amenities they desire. Mark Hannan, manager at Senate Square apartments in Washington, D.C., states, "You've really got to figure out what adds the most value for what the residents want, and for right now, in a setting like this, especially in a dog-friendly building, it's 'what can you do for my pet?'" Senate Square offers a rooftop dog park featuring puppy-sized playground equipment and water fountains designed for use by both dog and owner. In large urban markets where the apartment sector is thriving, more apartment owners are catering to pets. For instance, Fisher Brothers is in the process of breaking ground on a new apartment community in Washington, D.C., featuring an interior pet spa and exterior dog walk. Meanwhile, Spot Experience has agreed to provide pet services -- dog walking, daycare, grooming, and so forth -- to 30 residential buildings in Manhattan.
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Foreign Buyers Say 'Hola!' and 'G'Day, Mate!' to U.S. Rentals
Digested From "Foreign Buyers Hop on Rental Trend"
Wall Street Journal (02/20/13) P. C1 Whelan, Robbie

The market for buying and renting houses has often been dominated by local mom-and-pop investors. More recently, institutional and foreign investors are getting in the game. U.S. firms have sought higher returns through their REO-to-rent investments, and foreign investors from countries with strong currencies have found they can outbid U.S. investors. Keefe, Bruyette & Woods estimated in January that institutional investors had raised between $6 billion and $9 billion, and experts say the funds from offshore are rising. "Investors are a huge benefit to the market in that they help work off that excess inventory through transferring them to rentals while owner-occupant demand rebuilds," says Doug Duncan, chief economist for Fannie Mae. Lisa Marquis Jackson, senior vice president with John Burns Estate Consulting LLC, conurs. "If I'm a foreign investor and I'm not entirely confident in my own economy," she concludes, "of all the places that I could put my money, U.S. housing looks like a really attractive place."
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Deals and Transactions


Lowe'sFeb13-II
Calif. County's Biggest Apartment Developer Goes Even Bigger
Digested From "Irvine Co. to Open Largest Apartment Complex in Orange County"
Los Angeles Times (02/21/13) Vincent, Roger

Orange County's largest developer is on the verge of unveiling the county's largest apartment community. The Irvine Co. plans to open the first phase of Los Olivos Apartment Village on March 2. The 1,750-unit community is connected by a walkway to Irvine Spectrum Center, a regional mall and entertainment center, which was also developed by Irvine. The apartment community will boast a half-dozen saltwater swimming pools, along with four fitness centers and a central "great lawn." According to the company. the entire community is expected to be completed by the end of 2013. Rents will range from $1,650 to $2,950 per month.
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Industry Buzz


National Exemption Service Inc.
Historic Mall Makes History by Converting to ... Apartments?!
Digested From "One of America's Oldest Shopping Malls Converts to Micro-Apartments"
Atlantic Cities (02/21/13) Anderson, Lamar

A Providence, R.I., shopping mall that has been refashioned from an 1828 structure will be converted into two stories of micro-apartments above ground-floor micro-retail. Developers Evan Granoff and J. Michael Abbott of Northeast Collaborative Architects has divided up the top floor of the shuttered shopping center, a casualty of the 2008-09 economic crisis, into 48 apartments. Thirty-eight are micro units -- between 225 and 450 square feet -- and will rent for $550 a month. The units come with built-in beds, full baths, some storage space, and a microwave, but no range due to space constraints. The project is among those featured in the Museum of the City of New York's "Making Room" exhibition. Columnist Lamar Anderson writes that in order for the micro model to make any sense at all -- and to keep residents from getting cabin fever -- "micro-dwellings must be plugged into a livable urban grid, with decent walkability, transportation access, and nearby shops and services." A mall certainly meets these criteria as it is car-friendly by nature. As for location, it is located in downtown Providence and has a spot on the National Historic Landmark list.
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Portland Apartments Take Modular Approach in Going Green
Digested From "Portland Affordable Housing Complex Takes Modular Approach to Green"
Sustainable Business Oregon (02/15/13) Williams, Christina

Portland's first modular housing development, Kah San Chako Haws, opened earlier this month. The LEED Gold-certified apartment community is designed to provide Native Americans living in poverty with energy-efficient housing. Ray Espana, director of community development for the Native American Youth and Family Center, notes, "This is the first modular housing development that is made up of stacked modular units in an apartment style." The development features a mix of studio apartments and one- and two-bedroom rental units.
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Legal/Legislative Did You Know


Breaking Up Is Hard to Do ... Especially for Apt. Residents!
Digested From "Study: Breaking Up Hurts Housing, Wallet"
CBS MoneyWatch (02/25/13) Glink, Ilyce

A new Rent.com survey shows that nearly 40 percent of those who rent have ended a relationship while living together, and 62 percent of those who broke up with their significant other stayed in the same living quarters for at least a month following the breakup. The research further determined that 40 percent of people who rent their homes continued living together for approximately three to 12 months after breaking up, with 13 percent staying with their ex at least a year. In other findings, female respondents were especially quick to move out, with 40 percent packing up and leaving within two weeks compared to only 34 percent of their male counterparts. Interestingly, out of the 13 percent who stayed at least a year, 65 percent were female. More than half of all renters, in all income brackets polled, stated that actually dividing and moving all of their possessions was the hardest part of the breakup. Also a factor was separating the financial responsibilities of running the combined household. Finally, Rent.com is reporting that 32 percent of respondents said if they opted to live with a significant other in the future, they would save more money before moving in. In addition, around 21 percent said next time they would take out the apartment in their name so they'd have more control.
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Rape Victim Leads Charge to Change Wash. Apartment Law
Digested From "Richland Rape Victim Pushing for Law Change in Olympia"
KNDO (Wash.) (02/05/13) Loevsky, Lisa

Three years after a maintenance man broke into Dana Widrig's Richland, Wash., apartment and raped her, she is using the tragedy to push for change in state laws. "She will never live in an apartment ever again," said Kristi McKennon, Widrig's lawyer. "In this case, at four in the morning, a drunk maintenance man was able to walk into the manager's office and pull the key to Dana's apartment and get in," said Jay Flynn, her other attorney. The lawyers said the assailant was able to gain entry to Widrig's apartment at Villas at Meadow Springs because the apartment management did not have any safety measures in place. "Frankly, I have to tell you we were shocked to find that there wasn't some law on the books that says a landlord has a particular duty to protect these keys," said McKennon. McKennon and Widrig recently introduced House Bill 1647, a bill that would change the Landlord Tenant Act to require apartment ownerss to use "utmost care" when protecting and securing duplicate resident keys.
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Philadelphia: The City of Brotherly Rent Hikes?
Digested From "As Taxes Rise, So May Rents"
Philadelphia Inquirer (02/22/13) Walsh, Sean C.

Apartment owners and managers in Philadelphia will likely see higher bills next year under the city's new property-tax system, and many say they may pass at least part of the tab on to their residents. "We ate the last two [property-tax] increases over the last two years -- the landlords at that -- but this one is really going to be a problem," said Victor Pinckney, a former president of the Homeowners Association of Philadelphia, which represents small apartment owners and management firms. Overall, Actual Value Initiative (AVI) shifts much of the city's property-tax burden from commercial properties to residential owners. But because many residential owners are able to get relief because of the homestead exemption, many apartment owners and managers feel they are getting "the short end of the AVI stick." Many members of the Apartment Association of Greater Philadelphia believe they will have higher taxes under AVI and are now determining whether and how much they will need to increase rents, reports Christine Young-Gertz, the group's government-affairs director.
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NAA Announcements


2013 NAA Green Conference Discounted Registration Offer Ends This Friday

Want to be in attendance at the 2013 NAA Green Conference, April 15-17, 2013, at the Marriott Baltimore Waterfront Hotel in Baltimore, Md., but hate paying full price? Act now and save $200 by registering today.

Join forward-thinking industry colleagues and learn ways to improve your community’s energy efficiency and bottom-line performance through a leading-edge lineup of education topics and panel presentations.

From new construction, utilities, green amenities and building certifications to maintenance, operations and retrofits, the NAA Green Conference promises to offer the latest intelligence and insight into the most pressing trends and topics driving sustainability in the multifamily industry. Visit the NAA Green Conference website for session descriptions and speakers.

Come learn from acclaimed green-industry expert Andrew Winston, a best-selling author of “Green to Gold” and “Green Recovery,” who will serve as the event’s keynote speaker. Find out how your business can profit from environmental thinking as Winston guides you about what works—and what doesn’t—when companies go green.
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Need Continuing Education Credits? Why Not Earn Them at the 2013 NAA Education Conference & Exposition?

With six continuing education credits (CECs) available at the 2013 NAA Education Conference & Exposition, June 19-22 in San, Diego, Calif., NAA designates can earn all the credit required to renew their designations in one place and at one time, saving time and money.

Attending the 2013 NAA Education Conference & Exposition will net you up to six credits—exactly enough to reach your renewal goal—as well as a great investment in your career. Attend and earn or renew your Certified Apartment Manager (CAM), Certificate for Apartment Maintenance Technician (CAMT), Certified Apartment Portfolio Supervisor (CAPS), Certified Apartment Supplier (CAS), or National Apartment Leasing Professional (NALP) designation. Visit the NAA Education Institute website to review designation requirements and submit CECs.

What a great offer, right? Well, only if you’re registered for the 2013 NAA Education Conference & Exposition. Visit the conference website for more information and remember to consider group discounts: register five or more attendees and save your organization up to $400!

Make sure to book your housing as soon as you register—rooms are going fast. Visit the Education Conference website for information and reservations for all official NAA Education Conference hotels.
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Make an investment in advocacy at the 2013 NAA Capitol Conference

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!
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NAA Connect to Replace NAA Community on New NAA Website

A new home for discussions, networking and collaborating with other NAA members is on its way. NAA Connect will launch with the newly redesigned NAA website this spring. Some of the exciting features and noticeable improvements you’ll see on the new NAA Connect include:

• Discussion threads in forums that are easy to find, easy to create and easy to join.
• Mobile-friendly views for all devices.
• Everything will be on the same website! You will no longer need to bounce back and forth between websites, or sign in more than once.

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.
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Next NAAEI IROP Course Scheduled for April

Target Audience: Independent Rental Owners or anyone who manages their own personally-held rental properties.

Series Description: Prepare to earn the Independent Rental Owner Professional (IROP) Designation entirely online. Webinar content is based on the Independent Rental Owner Professional Course which covers the following:

• Media relations
• Personal safety
• Emergency response and disaster planning
• Human resource management
• Physical versus economic occupancy
• Alternative income opportunities
• Scheduling move-ins/outs
• Lease terminations (military and domestic violence situations)
• Key control
• Resident and neighbor relations

When: This Webinar series will begin on Tuesday April 2, 2013 and will run every Tuesday through April 23. All Webinars will be held from 1 p.m. to 4 p.m. ET and includes time for Q&A.

Cost: $349 for members or $499 for non-members. Module prices are or $99 for members or $125 for non-members.

Register Online!
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NAAEI Designation Courses Offered Near You!

CAM:

South Dakota Multi-Housing Association
March, 2013

Greater Charlotte Apartment Association
April, 2013

CAM Online

CAMT:

South Dakota Multi-Housing Association
February – March, 2013

Rental Housing Association of Boston
April – May, 2013

NALP:

Apartment and Office Building Association of Metropolitan Washington
April 2013

NALP Online

To find more courses in your area, click here.

For more information about any of the classes listed, please contact Kimberly McCrossen at kimberlymccrossen@naahq.org or 703/518-6141 ext. 121.
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February 26, 2013

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Making the Change to an Apartment Career

Making the Change to an Apartment Career  

Many of the most successful people working in the apartment industry started in another field before switching to an apartment career. Other industries provide skills and experience that can be...

 

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