Rental-Market Growth Loses Speed
Digested From "Rental-Market Growth Loses Speed"
Wall Street Journal (10/03/12) by Dawn Wotapka
A new Reis Inc. report found that the apartment-rental market remained robust in the third quarter, but the sector is showing signs of losing steam as the real estate market improves. Reis said the vacancy rate fell from 4.7 percent in the April-though-June period to 4.6 percent in the third quarter -- the smallest quarterly improvement since the sector started recovering in 2010. Additionally, rents rose 0.8 percent in the third quarter to an average of $1,090 a month, which is strong compared with historical averages. Reis researchers said there are signs of cooling in the market, which has been one of the strongest real-estate sectors in recent years. The firm's report added that as the housing market improves and interest rates are low, many individuals and families may decide purchase a home instead of renting.
MBA: Multifamily Originations Up 60 Percent In 2011
Digested From "MBA: Multifamily Originations Up 60 Percent In 2011"
The Mortgage Bankers Association's Annual Report on Multifamily Lending shows that last year saw $110.1 billion in new mortgages for apartment housing with five or more units, a 60 percent increase from 2010 levels. Although more than 2,650 different multifamily lenders were active, 72 percent originated five or fewer such loans in 2011. Wells Fargo Bank NA, JP Morgan Chase, and CBRE Capital Markets Inc. were among the top multifamily lenders as measured by total dollar volume. Jamie Woodwell, the MBA's vice president of commercial real estate research, concludes, "The growth is a testament to the improvements in both the underlying multifamily property markets and the broader capital markets."
Blackstone Makes $1 Billion Bet on Foreclosed Family Homes
Digested From "Rental Market's Big Buyers"
Wall Street Journal (10/04/12) by Craig Karmin; Robbie Whelan; Jeannette Neumann
Blackstone Group LP has emerged as the nation's largest investor in single-family rental homes. In fact, it has spent more than $1 billion since the beginning of this year to acquire more than 6,500 foreclosed houses in eight major metro areas. The firm is also finalizing a loan for at least $300 million from Deutsche Bank to support this business. A number of private-equity companies have crowded into the market, some as early as last year, looking for a way to bet on the recovery of the housing market. Blackstone's growing commitment to this strategy offers fresh proof that the purchases of foreclosed residences is gaining legitimacy among the largest private-equity firms. The demand from these and other investors could help bolster the housing recovery. Earlier this year, the Federal Reserve expressed support for the strategy as a way to clear the backlog of foreclosures that has weighed down the market. Blackstone has previously stated that it expects to achieve initial yields of 6 percent to 7 percent on rental income. However, the firm also will need rents and home values to rise if it is going to hit the double-digit returns that it typically promises its investors.
San Diego Apartment Sales Market Remains Tight
Digested From "Market in Apartment Buildings Tight"
San Diego Union Tribune (10/05/12) by Lily Leung
A top San Diego real estate expert said recently that a lack of inventory is evident in the local apartment sector. Robert Vallera, senior vice president of commercial real estate firm Voit Real Estate Services, said that while investors are increasingly trying to snap up area apartment communities, there are not enough people selling. "What we're lacking is motivated sellers. It's holding the volume down, and the sales are only going to the most aggressive buyers," Vallera observed. Russ Valone, president and CEO of real estate tracker Market Pointe, estimates that more than 1,200 rental apartments have come online in San Diego County this year, which is far lower than the original estimate of 2,650 units in May.
Thurston (Wash.) Apartment Vacancy Rate Slips to 7.36 Percent
Digested From "Thurston Apartment Vacancy Rate Slips to 7.36 Percent"
Olympian (WA) (10/07/12) by Rolf Boone
New data from Apartment Insights of Seattle shows that apartment vacancy rates fell to 7.36 percent in Washington state's Thurston County during the third quarter. "Thurston continues to languish," said Tom Cain, principal at Apartment Insights. The decline marks the third consecutive quarterly decrease since a 6.56 percent rate in the final three months of last year. However, apartment rents showed a slight improvement for local residents, falling $1 to 836 per month.
Hunt Sells $139M in Institutional Apartment Communities
Digested From "Hunt Sells $139M in Institutional Apartment Properties"
Commercial Property Executive (10/05/12) by Keith Loria
On behalf of various clients, Hunt Investment Management sold three West Coast apartment communities from its institutional portfolios for a total of $139 million. The properties include Waterstone Santa Clara in Santa Clara, Calif.; Montebello in Kirkland, Wash.; and Axcess 15 near downtown Portland, Ore. "Hunt Investment Management sold the investment to capitalize on successfully implemented value-add programs significantly ahead of schedule," said Ed Oprindick, Hunt Investment Management's executive vice president. The three communities were originally acquired by Hunt in 2010.
Charlotte Apartment Market Continues to Sizzle
Digested From "Charlotte Apartment Market Continues to Sizzle"
The latest Real Data study shows that Charlotte's hot apartment market shows no sign of losing momentum anytime soon. Over the last six months, the average vacancy rate for Charlotte-area apartments continued to improve to 5.8 percent -- a decrease from a high of almost 14 percent in February 2010. Rental rates have also shown solid growth, rising 5 percent to an average $839 a month. One-bedroom rents average $746 a month, two-bedroom apartments average $855 a month, and three-bedrooms average $995 a month. New development continues with 1,608 new rental units finished during the past six months. Currently, there are 4,329 apartments being built and more than 11,200 units proposed. Many are in the uptown, Northlake, South End, and University City areas of Charlotte. Apartment developers have been able to find capital for projects despite subdued lending for many types of commercial projects. Real Data researchers say rents are forecast to grow 5 percent in the next year as average occupancy is on pace to top 95 percent.
Burdened by Old Mortgages, Banks Are Slow to Lend Now
Digested From "Burdened by Old Mortgages, Banks Are Slow to Lend Now"
Wall Street Journal (10/04/12) by Nick Timiraos
Thousands of aspiring homeowners are being locked out of the market as Fannie Mae and Freddie Mac force banks to buy back loans made during the boom years and sold to the two firms. According to Inside Mortgage Finance, they have asked banks to repurchase $66 billion in loans made between 2006 and 2008. Banks are tightening underwriting in order to ward off such demands in the future
Where Downtown Housing is Hot, and Where it's Not
Digested From "Where Downtown Housing is Hot, and Where it's Not"
MarketWatch (10/02/12) by Amy Hoak
Over the past decade, a recent U.S. Census Bureau report found that downtown Chicago's population grew by a new 48,000 residents as new condominiums and apartment communities accommodated young professionals and empty nesters. The increase was the largest numeric gain of downtown residents seen in cities throughout the nation. Metropolitan areas with 5 million or more people saw double-digit population growth rates in their downturns during the time period. The Census Bureau found that New York, Philadelphia, San Francisco, and Washington saw significant boosts in the number of residents living within a two-mile radius of City Hall. However, not all cities saw growth. Baltimore and New Orleans actually saw their populations dip. The Census report also found that, across the country, most of the growth in downtown markets has been due to non-Hispanic whites moving into the areas, with the exception of the Washington metro area.
Sterling Construction in Joint Venture to Build in North Dakota
Digested From "Sterling Construction in Joint Venture for New Development in North Dakota"
Multi-Housing News (10/12) by Jessica Fiur
Due to a local oil boom of the Bakken Shale Formation, Dickinson, N.D., has emerged as a booming residential area. So much so that Sterling Construction has tapped the town as the ideal location for its new $32.3 million community. Sterling recently broke ground on Sierra Ridge, a 278-unit Class-A apartment community, which represents a partnership between Braxton Development, Sterling Development, and Baledge LLC. Once completed, Sierra Ridge will consist of a dozen buildings with seven different one-, two-, and three-bedroom floor plans. The apartments will range from 685 to 1,305 square feet, with monthly rents ranging from $1,800 to $3,300. Apartment amenities will include in-unit washers and dryers, along with fully equipped kitchens and walk-in closets. In addition, there will be a locker area in each of the buildings, which residents will be able to rent for storage of items that have oil residue.
Get Ready for a Shift in Apartment Demand Dynamics
Digested From "Get Ready for a Shift in Dynamics"
Housing Finance (10/01/12) by Peter Muoio
Apartment vacancies have fallen below 5 percent for the first time since 2001 and rents continue to rise. Even so, argues Maximus Advisors Senior Principal Peter Muoio, "We're now seeing some of the demand dynamics shift." Muoio says the market may be approaching the range where the massive rent-to-own shift will fade out, as the past two quarters show signs that the household-formation 'bubble' may soon pop. Household formations gained momentum in 2011 and continued at a fast clip into the first three months of this year, with the number of U.S. households up to a whopping 1.8 million from the year prior. Another factor impacting the household formation explosion is the newly stalled labor market, Muoio notes. New multifamily housing development starts, meanwhile, averaged a 212,000-unit annual rate -- up from 177,750 last year and nearly twice the 50-year low of just over 110,000 units for 2009. Though this is still well below the historical rate of about 350,000 units a year, Muoio says he expects the number of starts to increase.
Citizens' Increases Put Multifamily Sales at Risk
Digested From "Citizens' Increases Put Home Sales at Risk"
Sarasota Herald-Tribune (FL) (10/04/12) by John Hielscher
Real estate agents and lenders in Florida warn that Citizens Property Insurance Corp.'s planned double-digit rate hikes, slated to take effect in 2013, could choke the market for home sales. Buyers at the high end are likely to be somewhat insulated by the rate increases. But the typical buyer will be squeezed. So, too, will anyone purchasing a condominium unit, multifamily housing, or waterfront property.
Columbus Offering Incentives for Energy-Efficient Multifamily
Digested From "Columbus Offering Incentives for Energy-Efficient Apartments, Condos"
Columbus Business First (10/02/12) by Evan Weese
With the passage of a Columbus, Ohio, city ordinance, apartment and condominium developers will be eligible for more financial incentives for erecting green buildings. Sponsored by the AEP Ohio and Columbia Gas of Ohio, the measure provides builders of energy-efficient apartments and condos with a 25 percent cash reimbursement. The program is an extension of the AEP Ohio/Columbia Gas of Ohio Energy Star initiative. Now, the builders have the ability to double-dip and earn up to 25 percent back from the Columbus Green Fund. Previously, the fund only applied to only commercial LEED-certified building projects. But now the fund extends to multifamily housing built within a specified area in and around downtown Columbus. The city will use $50,000 of the current fund's $1 million per year allotment for the new project, according to city council environmental steward Erin Miller. However, she noted that the number could increase if more funding is needed.
La Crosse (Wis.) Cracking Down on Unregistered Apartments
Digested From "City Cracking Down on Unregistered Apartments"
Lacrosse Tribune (10/05/12) by Allison Geyer
In Wisconsin, La Crosse city officials say they are making every effort to crack down on problematic unregistered apartment communities. The issue came to the forefront after a second-level floor collapsed last month at an unregistered local apartment, injuring three people. According to the Apartment Association of La Crosse Area President Pamela Strittmater, registration is an essential part of being a responsible apartment owner. Strittmater said owners avoid registering for several reasons, including the need for improvement and not wanting to pay the inspection fees. Additionally, she said that some may simply not know about the inspection and registration requirements.
Anchorage Housing Voucher Program Re-opens with Lottery System
Digested From "Anchorage Housing Voucher Program Re-opens With Lottery System"
Alaska Public Radio Network (10/04/12) by Daysha Eaton
With a tight vacancy rate, the average monthly rent for a one-bedroom apartment in Anchorage is around $950. Now, a new Housing Choice Voucher Program could help those Alaska residents having a tough time paying such high monthly rent. The Alaska Housing Finance Corporation recently opened a new lottery system for the vouchers that will be used in Anchorage first. Advocates say it will not only speed things up, but also become a model for other communities. To clear out a backlog, the Alaska Housing Finance Corporation stopped taking applications for their housing assistance waiting list in 2011. This past week, they started accepting applications again, but with one significant change. Alaska Housing Authority Director Katherine Stone explains, "The lottery system that we're going to is something that's been used in the Lower 48 for several years, with a lot of success. We get the applications; we process them; and then we do a computerized, randomized lottery. And it's a little more fair so people know where they are on the list and can expect that their number will be called in a certain order."
Fannie Mae Tightens Underwriting Rules for Condos
Digested From "Fannie Mae Tightens Underwriting Rules for Condo, Refinance Loans, Borderline Borrowers"
Realty Times (10/03/12) by Shashank Shekhar
Starting on Oct. 20, certain applicants seeking Fannie Mae-backed loans will face stiffer underwriting standards. Among them are condominium buyers, more of whom will have to fill out a two-page questionnaire about the homeowner association's financials and submit by-laws, a copy of the master insurance policy, and additional documentation. The requirement previously applied only to condo buyers putting down less than 10 percent but going forward will be in place for those with down payments of less than 20 percent. The various changes, intended to mitigate Fannie Mae's growing exposure to risk, will force more borrowers to shop around for a loan.
2012 Apartment Revenue Management Conference: Register Today!
Revenue management in an up market! But how high can it go? Be sure to attend the 2012 Apartment Revenue Management Conference, October 15-17 at the Omni Dallas to hear from your peers about yield optimization in a booming market – developers are leaning on revenue management insights to break through their pro-formas. Are you also looking for new progressive offerings in the realm of revenue management? Learn about the new products, services and companies in the space that help drive revenue and analytical capability from executives from leading providers of price optimization software. The session New Revenue Management Products, Services and Companies, along with the other 12 insightful sessions are a can’t miss for all those intimately involved with all things pricing.
This October, Re:Source Your Resources
Join NAA’s drive to add 50 member-submitted materials to the Online Resource Center this October. You probably have materials in your office that can be resourced as learning materials for other NAA members right now!
All materials that are not commercial in nature are welcome to be submitted, especially sample forms, policies, training guidelines and best practices.
Full Re:Source details are available online.
2012 NAA Survey of Income & Expenses Data Now Available
The 2012 NAA Survey of Income & Expenses is now available. The survey includes an executive summary, detailed data, reports and charts about rental communities. A total of 4,645 properties containing 1,159,874 units are represented in this year’s report. Data was reported for 4,114 market rent properties containing 1,087,228 units and 531 subsidized properties containing 72,646 units. The executive summary appeared in the Aug. issue of units magazine. To order, please visit the NAA Store.
Independent Rental Owner (IROP) Certification Available Online
Prepare for your IROP Certificate entirely online!
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
This course is ideal for Independent Rental Owners or anyone who manages their own personally-held rental properties.
The Webinar series will begin on Thursday October 11, 2012 and will run every Thursday through November 1. All Webinars will be held from 2 p.m. to 5 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. NAAEI is offering revenue shares to Affiliates.
Supplier Success Webinar Series
The Supplier Success course is designed to offer an overview of the apartment industry and recommends ways that suppliers can maximize partnerships with apartment owners, apartment management companies and apartment association members.
The course will be held between 2:00 and 4:00 PM ET on the following days:
Tuesday, October 30, Wednesday, October 31 and Tuesday, November 6
Supplier Success Course Objectives include:
• Understand how economic conditions have impacted the apartment industry;
• Define various types of multifamily housing;
• Describe measures of apartment community success;
• Understand the impact of pricing and lease management on a property’s financial performance and much more.
The cost is $99 for members and $129 for non-members.
Make Plans to Vote in This Fall’s Elections
No matter which side of the political aisle you’re on, your vote is needed on Election Day, Tuesday, Nov. 6. A lot is at stake – the next occupant of the White House, control of the House and Senate, control of governors’ mansions, state legislatures, city councils and mayors’ offices, 166 statewide initiatives in 35 states and a staggering number of local community questions.
If you aren’t a registered voter, Register Today. Check here to see if you live in one of 12 states that allow Online Voter Registration.
Find an NAAEI Designation Course Near You!
Roanoke Valley Apartment Association
Washington Multifamily Housing Association
November – December, 2012
Roanoke Valley Apartment Association
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 2012 INFORMATION, INC.