Lennar Wants to Own the Rental Apartment Sector

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Lennar Wants to Own the Rental Apartment Sector
Digested From "Plots & Ploys: Lennar to Sell and Rent"
Wall Street Journal (01/16/13) by Robbie Whelan

Lennar Corp., the nation's third-biggest home builder by sales, this week surprised many when it announced that it is expanding into rental housing. Officials say the move is an attempt to capitalize on rising rents and growing demand for apartments. Lennar noted that it has a construction pipeline of $1 billion for apartments to be built over the next three years. Nearly 50 percent of the 6,500 rental units planned will be started this year. Lennar CEO Stuart Miller remarks that it is his belief that the housing recovery will be "moderated" by tight lending standards, driving more households into the rental market. He added, "There will consistently be a large group of people who simply can't buy a home [in the near term]." It is also the company's hope that Lennar renters will become Lennar home buyers down the road.
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Market Trend Insights


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13 Housing Trends You Need to Watch for in 2013
Digested From "Better Keys to Housing Market in 2013"
Hispanic Business (01/21/13) by Jonathan Lansner; Jeff Collins

There are more than a dozen economic patterns that real estate fans should be keeping an eye on this year. Irvine Co. Apartment Communities President Kevin Baldridge urges a close watch on the pace of people switching from home renter to homeowner. He remarks, "My sense is there's pent-up demand [for buying]. People have been saving their money and are finally confident enough about the recovery to make the leap." At the same time, many say the drivers behind the burgeoning demand for single-family homes will also support apartment fundamentals. Baldridge agrees, predictting, "A recovering economy and optimistic consumer bode well for all sectors of housing." Tricia Esser, CEO of architects KTGY Group, recommends keeping an eye on what apartment owners and managers are charging in monthly rent. She states, "We watch apartment rental rates; when those get to a certain level, buyers will come back to the for-sale market." She also expects cities will get more creative in their redevelopment efforts in the coming year. Nick Lieberman, treasurer of the Apartment Association of Orange County, adds that it will be interesting to see what people do with investments in the low-rate climate of 2013. He concludes, "There will be a point when people become so fed up with what amounts to zero or negative return . . . that they will feel compelled to act. The greater the public's aggravation with miniscule yields on liquid assets, the greater the propensity to deploy funds into real estate."
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Three Big Reasons Why Micro Apartments May Be Our Future
Digested From "Micro Apartments Are the Future in New York"
USA Today (01/22/13)

The Museum of the City of New York has built a full-size micro apartment to showcase the need for smaller living spaces. City planners say there are numerous reasons why the number of singles and couples living in big cities is growing. First and foremost, more people are simply looking to live the urban lifestyle, which puts them closer to work, entertainment, and cultural opportunities. Second, the simple fact of the matter is that more people are living alone in New York and other major cities and don't need a lot of space. Sarah Watson of the Citizens Housing and Planning Council states that roughly 50 percent of the housing in Manhattan has "a single person living by themselves." A third reason is affordability. That said, those who opt for this kind of living space have to really think about what objects they really want in their micro-apartments and what objects they really need. Such units are definitely not for those who like to entertain.
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Why More Americans Are Finally Leaving the Parental Nest
Digested From "Analysis: More Americans Leave Parental Nest in Boost for Housing"
Reuters (01/18/13) by Lucia Mutikani

Household formation, which stagnated when the recession kept many young Americans from leaving their parents' home or forced others to return to them, is finally on the rise. The number of households increased 1.1 million in 2011 and nearly 1.2 million last year. Two reasons for this are the gradual labor market gains and steady economic improvement. The gains are being felt the most in the rental market, where rising demand has triggered a spike in new apartment construction. By comparison, the U.S. homeownership rate has not risen much from a 15-year low reached in the first quarter of last year. Gary Painter, a public policy professor at the University of Southern California, forecasts, "We are going to see more recovery in the rental market, in the very short run. As the market improves, people will start to face higher rents and over time, that will spill over into the owner-occupied market."
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Apartment Construction Drives Rally, But Is a Stall on the Horizon?
Digested From "Apartments Lift Construction Report"
Wall Street Journal (01/18/13) P. A2; by Robbie Whelan

The U.S. Census Bureau reports that housing starts surged last month to the highest level since June 2008, as builders broke ground at a seasonally adjusted annual rate of 954,000 units. The December tally was up 12 percent from the month before and 37 percent from December 2011. The rally was driven primarily by apartment construction, with starts up 116 percent for communities with five or more rental units. Such buildings comprised 35 percent of all new residential projects, and developers expect that demand for rental housing will continue to thrive in the coming years. Wells Fargo senior economist Mark Vitner said that absorption of apartments remains well ahead of the rate at which apartment builders are completing projects. Consequently, apartment vacancy rates should continue to decline -- and rents to rise -- for the next year. Home building, though, is on the rose also. Construction of single-family homes jumped 18.5 percent year over year, with the biggest gains observed in the West -- where starts surged 43.3 percent.
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1 Big Way Your Community Can Appeal to Bicycle-Loving Residents
Digested From "America Pedaling Toward More Bike-Friendly Housing as More Commuters Cycle"
Washington Post (01/15/13) by Terrence Petty

As more and more Americans opt to commute via bicycle, demand is growing for housing that can accommodate the needs of these residents. Apartment developers in bike-friendly cities like Seattle, Denver, and Portland are responding by providing secure storage space for bikes and equipment. Examples include the Solera apartment community in Denver, which features a "velo room" where resident cyclists can repair flats, pump tires, clean bike chains, and perform other maintenance.
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Axiometrics Expects Continued Growth of Apartment Markets
Digested From "Axiometrics Forecasts Continued Growth Across Most Apartment Market Areas in 2013"
Marketwire (01/17/13)

Axiometrics reported Thursday that the national apartment market averaged a healthy 3.85 percent rent growth rate in 2012, down slightly from an average of 4.75 percent in 2011. While the firm expects some moderation across different markets this year, it is predicting that effective rent growth will remain positive in 2013 at an average rate of 3.6 percent. Axiometrics also said it is tracking nearly 164,000 new rental units scheduled for delivery in 2013. "Overall rent growth in 2013 is forecasted to be relatively the same as it was in 2012, but we expect to see more variation across MSAs as effective rent growth increases in some markets but moderates in others," said Axiometrics CEO Ron Johnsey. He adds that the national occupancy rate inched up in 2012, averaging 94.2 percent compared to 93.9 percent in 2011 -- the first time the rate has finished the year above 94.0 percent since 2006.
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Beige Book Has Real Estate Interests Seeing Red
Digested From "Beige Book Notes Momentum in Mortgage Demand, Real Estate"
Housing Wire (01/16/13) by Christina Mlynski

According to December's Beige Book, the 12 Federal Reserve districts saw "modest" or "moderate" expansion in economic activity compared to the previous report. Demand for residential mortgages generally improved in Chicago, Cleveland, Atlanta, Kansas City, Dallas, and San Francisco. On the downside, lenders in San Francisco remained skittish about lending to property investors outside of the multifamily sector. Real estate activity, as indicated by existing home sales and leasing, picked up or held steady in 11 of the 12 districts.
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Deals


AvalonBay Makes Waves With Virginia Beach Expansion
Digested From "Company to Expand in Virginia Beach"
WAVY-TV (Hampton Roads, VA) (01/15/13)

AvalonBay Communities Inc. has announced plans to expand in Virginia Beach, Va., and will add 85 new jobs in the process. The Northern Virginia firm is set to expand its Corporate Shared Services Center in Virginia Beach, which opened in 2007. It will be expanded by 17,509 square feet. "AvalonBay's Virginia Beach location provides vital financial and management support for its apartment communities across the country," Warren Harris, director of Virginia Beach Economic Development comments. "It has made a significant investment in our city not only in terms of its physical size, but also in its investment to hire and train a very competent workforce." In turn, the City of Virginia Beach awarded AvalonBay with an Economic Development Investment Program grant of $25,000.
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First K.C., Then the Country for Irongate!
Digested From "Irongate Pays $98M for Kansas City Multifamily Portfolio"
Commercial Property Executive (01/11/13) by Georgiana Mihaila

In a step towards its goal of increasing holdings throughout the nation, Irongate Realty Partners recently acquired three apartment communities in Kansas City for $98.65 million. The Class A portfolio consists of 846 rental units and more than 950,000 square feet. The three luxury communities -- Villas at Carrington Square, Carrington Place and Carrington Park -- offer residents everything from gourmet kitchens to private entries to walk-in closets. "We purchased all three of these luxury properties from a local builder," said Robert Mascaro, vice president of acquisitions.
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Legislative/Legal News


New Recycling Law Keeps Del. Apartments Down in the Dumpsters
Digested From "New Law Requires Apartment Complexes to Provide Recycling Receptacles"
Newark Post (DE) (01/17/13) by Ryan Marshall

Effective Jan. 1, Newark, Del., city streets got a little bit greener. That was the date a universal recycling law kicked in, requiring all apartment owners and managers to have recycling dumpsters available to residents. Newark Public Works Director Richard Lapointe said the city tried to be proactive, stating, "We don't have any way of measuring it per site at this point, but all of our multifamily units did purchase carts to participate in that program." But while the law requires Newark apartment communities to provide the recycling bin, apartment management gets to decide how to enforce the use of the recycling dumpster.
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Three Hot Tips to Prevent Apartment Crimes
Digested From "Apartment Complexes Focus on Prevention"
WANE-TV (Fort Wayne, IN) (01/16/13)

After several recent apartment robberies in Fort Wayne, Ind., city officials and the Apartment Association of Fort Wayne and Northeast Indiana are seeking to prevent similar crimes from happening. Beth Wyatt, executive director of the apartment organization, says two things apartment communities can do is up their exterior lighting and make sure there is good visibility around corners and buildings. She adds that a third tip is for residents to put together regular community meetings and involve the local police department. Cops can be invited to speak about apartment residents can be more safe. "By nature of how [apartments] are built," Wyatt states, "there's a lot of people in one place, so there is an opportunity for things like this to happen."
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HUD Secretary Donovan to Stay On
Digested From "Housing Secretary to Stay On"
Wall Street Journal (01/16/13) by Nick Timiraos

Department of Housing and Urban Development head Shaun Donovan will lead the agency for a second term under President Barack Obama. He oversaw the department during the worst housing crisis since the Great Depression and was instrumental in guiding a $25 billion settlement between 49 state attorneys general, five large U.S. banks, and the Obama administration over foreclosure abuses. One of Donovan's biggest challenges in the new year will be managing the Federal Housing Administration, which could draw on taxpayer funding for the first time in its 79-year history. Ballooning losses on loans it insured as the housing market crumbled are threatening to deplete its reserves.
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Texas Apartment Association Gives Member Dues Their Due
Digested From "Membership Dues: What Does the Future Hold?"
Association News (01/13) by Steven Hacker

There is mounting proof of trade groups and other organizations beset by changing circumstances that render the traditional membership-dues model "out of step." Fortunately, some associations are innovating structural change and benefiting as a result. The Texas Apartment Association (TAA), for example, has not increased members' dues in a decade. Yet, the association has managed to achieve a market penetration of 85 percent to 90 percent and has never suffered a notable decrease in its membership numbers. George Allen, TAA executive vice president, reasons, "We are frugal with members' dues, and we provide essential services and products that are unavailable elsewhere." Indeed, key product offerings range from online legal guides and industry-specific support services.
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Greenwich Oaks Residents to Chop Down Owner Over Rent Hikes
Digested From "Lawsuit Alleges Unfair Apartment Rent Hikes"
Greenwich Time (CT) (01/12/13) by David Hennessey

In Greenwich, Conn., more than 20 residents of the Greenwich Oaks apartment community are suing the property's parent company, accusing it of attempting to levy excessive rent hikes against some of them. The complaint document claims: "The defendant has attempted to raise the rent of each of the plaintiffs by an amount which exceeds that which is fair and equitable [based on state law]. The defendant is attempting to raise the rents of each plaintiff to unconscionable levels in order to force the plaintiffs to vacate their apartments and create a more youthful appear in the rental complex." Several years back, Greenwich Oaks residents complained of age discrimination when an ill-fated condominium conversion collapsed after the property's mostly elderly residents claimed they were being strong-armed out of their rental apartments to make way for a younger clientele. The lawsuit does not specify how much current residents now pay a month or how much the apartment owner wants to raise rents.
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NAA Announcements


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Less Than Two Weeks Remain to Take Advantage of Big Savings for the 2013 NAA Education Conference & Exposition


Save up to $400 by registering by February 4 for the largest and most exciting multifamily housing event of the year: the 2013 NAA Education Conference & Exposition, June 19-22 in San Diego.

Actually, you can’t afford not to attend: Nowhere else will you find world-renowned and innovative speakers, such as Sir Richard Branson, Erik Wahl and Bert Jacobs, to name just a few (visit the NAA Education Conference website to preview these and other speakers), as well as unparalleled education opportunities with more than 50 breakout sessions covering all the industry’s hottest trends and topics. Add in dozens of chances to network and hundreds of supplier partners demonstrating the latest and greatest in products, technologies and services and the decision to attend quickly becomes a no-brainer.

Make sure to book your housing as soon as you register—rooms are going fast. Visit the NAA Education Conference & Exposition website for information and reservations for all official conference hotels.

And, remember to consider group discounts: Register five or more attendees and save your company up to $500! More information is available.

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Discover the Mind of the Millennial at the 2013 NAA Student Housing Conference & Exposition


Plan to better understand what makes Millennials tick Feb. 25-27 as NAA convenes the 2013 NAA Student Housing Conference & Exposition in Las Vegas at the ARIA Resort.

Millennials’ attitudes toward higher education evolve faster than their smartphone models, making it critical to understand the needs and expectations of future students now so as to be prepared to engage them when they arrive on campus.

Michael Wood, Senior Vice President at TRU, one of the world’s leading research firms specializing in teens and 20-somethings, will headline the keynote session “Youth Truths: The Millennial State of Mind.” Wood's presentation is one of many learning opportunities during two days full of education and networking, from general and breakout sessions to receptions and time spent interacting with exhibitors on the trade show floor.

Wood says understanding teens’ attitudes and expectations is critical when preparing to meet their housing needs in college (and beyond). Want to know why? Read “Millennial State of Mind” in the January issue of units.

And, remember to bring a group and save! NAA is offering discounts for groups of five or more attendees. Visit the NAA Student Housing Conference website for further details.

Visit NAA's Student Housing Conference website for registration, schedule, housing and the latest announcements. And remember to use the official hashtag #NAAStudentConf to engage, discuss and follow the conference.

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2013 Green Conference Latest in World-Class Events Offered by NAA

Don’t miss the chance to register today for the 2013 NAA Green Conference, April 15-17, in Baltimore.

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

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.

Save $200 off the onsite registration rate before Feb. 15 by registering at the NAA Green Conference website.
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Come Hear Comeback America CEO Speak at 2013 NAA Capitol Conference

David M. Walker, founder and CEO of the Comeback America Initiative, will be a keynote speaker at the 2013 NAA Capitol Conference in Washington, D.C. Walker will share how the fiscal crisis can be fixed to ensure that the United States enjoys a sustainable economy at the Government Affairs Roundtable Luncheon on Tuesday, March 12. Walker is a former U.S. comptroller general and subject of the critically acclaimed documentary, “I.O.U.S.A.” Register now.
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Apartment All-Stars, Multifamily Insiders Join NAAEI Program

NAAEI joins forces with Apartment All Stars and Multifamily Insiders to host Webinar Wednesday Training Series.

NAAEI is teaming up in 2013 with the largest premium webinar series in the industry to provide state and local association members with access to industry thought leaders to discuss innovative ideas, best practices and emerging industry trends. These webinars will give participants the tools they need to become industry superstars in their own right. The Webinars:

• will cover industry trends and timely topics that benefit both on- and off-site staff
• are available at a one-time or subscription price
• offer NAAEI Continuing Education Credits (CEC)

Cost: The webinar series averages two webinars per month, and for a limited time, we have discounted this subscription rate to $49.99/month, a discount of 17%.

Learn more today!
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Best of the Best? Enter 2013 NAA PARAGON Awards Competition

The Call for Entries for the 2013 PARAGON Awards is now open! If you would like to nominate an individual, an affiliated association or a community that represents our industry's models of excellence, please visit the PARAGON Awards Overview page. Entries must be received by Monday, March 18, 2013. Winners will receive their PARAGON award during the NAA Awards Celebration breakfast with Bert Jacobs during the 2013 NAA Education Conference & Exposition, Saturday, June 22, in San Diego. They will also be featured in the September 2013 issue of units Magazine, NAA’s monthly publication that reports on the apartment industry.
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Find an NAAEI Designation Course Near You!

CAM:

Roanoke Valley Apartment Association
January, 2013

South Dakota Multi-Housing Association
March, 2013

Greater Charlotte Apartment Association
April, 2013

CAM Online

CAMT:

Austin Apartment Association
January – February, 2013

Apartment and Office Building Association of Metropolitan Washington
February – March, 2013

South Dakota Multi-Housing Association
February – March, 2013

Rental Housing Association of Boston
April – May, 2013

CAS:

Roanoke Valley Apartment Association
January, 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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January 22, 2013

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Do you have what it takes to swim with the sharks? If you do, you could win $5,000 and be a star at the 2014 NAA Education Conference & Exposition in Denver. Learn more and enter.