Why Is Philly's Apartment Sector Such a Force?
Digested From "With Multifamily Sector Growing, Trade Group Takes Stock of Impact"
Philadelphia Business Journal (03/07/13) Kostelni, Natalie
According to a new study by the National Apartment Association and the National Multi Housing Council, multifamily housing construction and related operations added $3.5 billion to the Philadelphia metro area's economy in 2011. Researchers say the report highlights what an economic force the apartment sector has become in recent years as an more and more people have shunned or been denied homeownership. Regionwide, a total of $152 million was spent on apartment construction in 2011, supporting approximately 2,400 local jobs and creating a total economic contribution of $331 million. Also, apartment communities and their residents contributed $28.6 billion to Pennsylvania's economy and the management of the multifamily sector helped employ 28,000 people across the region.
Market Trend Insights
Reasons Why It's No Fun in the Sun for Fla. Apartment Residents
Digested From "Renters Paying More Amid Growing Demand for Apartments"
South Florida Sun-Sentinel (03/08/13) Owers, Paul
South Florida apartment residents are forking over more for rent each month as robust demand has allowed owners and managers to seize control of the market. New CBRE data shows that the average monthly apartment rent in Palm Beach County was $1,154 in 2012 -- a 4 percent increase since 2008. The firm further predicts a double-digit increase through 2017. Throughout the South Florida region, young professionals are finding increasingly higher rents and a crowded market. Those leasing single-family homes, condominums, and townhomes locally are also feeling the pinch. Saul Cooper, a 39-year-old Deerfield Beach sales manager, has been renting a three-bedroom townhome in Boca Raton for five years. He said he dealt with small annual rent hikes until last year, when he had to pay a whopping $250 more a month. Cooper laments, "They can get away with it because there's never any vacancy."
Three Reasons Why Apartments Are on the Rise in Chattanooga
Digested From "Apartments on the Rise in Chattanooga"
Chattanooga Times Free Press (Tennessee) (03/10/13) Bradbury, Shelly
Such factors as strong job growth, high occupancy rates, and pent-up demand are driving developers to Chattanooga, said Woody McLaughlin, an apartment investor who served on the Tennessee Apartment Association's board of directors for two decades. McLaughlin remarks, "As far as apartments go, Chattanooga has had probably the best rent growth and best occupancy of any of the apartment markets in Tennessee and is one of the best in the Southeast. And job growth has a lot to do with apartment demand." A couple of out-of-town developers are planning major apartment communities in East Brainerd that will add more than 500 units to the metro area's rental housing stock. These communities are part of a host of new apartment communities set to open in the next year as more and more developers aim to capitalize on the city's booming multifamily housing market. New York-based Rohdie Group is planning the smaller of the two communities -- a proposed, 16.5-acre complex that will offer one-, two-. and three-bedroom rental units in 10 buildings circling a retention pond. The larger community, dubbed The Landing at Ashwood," is being built by Murfreesboro-based TDK Construction. It will also include one-, two-, and three-bedroom apartment options. Apartment occupancy rates are up statewide, McLaughlin added. Nashville, for instance, is at about 95 percent and has approximately 10,000 apartments in various stages of planning and development. "So while Chattanooga has leaped into that category," McLaughlin concluded, "it's not just Chattanooga."
How High Will Rents Go in Tight St. Louis Market?
Digested From "Rents Up, Vacancies Stable in St. Louis Apartment Market"
St. Louis Post-Dispatch (03/06/13) Gallagher, Jim
The latest CBRE report shows that the St. Louis-area apartment market saw monthly rents increase 2.3 percent in 2012 amid a stable vacancy rate. Researchers indeed found that vacancies averaged 6.8 percent as of Dec. 31, although there is wide variance across the region. The highest vacancy rate -- 8.8 percent -- was in north St. Louis County. The lowest, at 4.9 percent, was in west St. Louis County. The city of St. Louis, meanwhile, had an 8.3 percent apartment vacancy rate. CBRE officials who specialize in apartments are forecasting more rent hikes. Matt Bukhshtaber, first vice president, wrote: "This year, rent growth in St. Louis will be one of the strongest in the Midwest as demand for existing rental product will outpace supply. It will take the next two years before new product can balance the demand." He adds that the area's average monthly rents range from $1,191 in the Central West End to $634 in north St. Louis County.
Where There's No Smoke, There's a Red-Hot Raleigh Apt. Market
Digested From "Raleigh's Smoke-Free Apartment Communities in High Demand"
Commercial Property Executive (03/08/13) Pop, Adriana
More and more smoke-free apartment communities are popping up in the Raleigh, N.C., market. Among the most recent is the new, 60-unit Water Garden Village community in the city's northwest corridor. The entire, 11-acre property is 100 percent smoke-free and was fully leased within nearly a month of opening. Water Garden Village's non-smoking policy extends beyond apartment walls to include the on-site fitness center, the clubhouse, the playground, and even the laundry facilities. Experts say the popularity of such communities marks the beginning of a potential smoke-free rental housing boom. A similar community to Water Garden Village, dubbed the Wilmont, opened two years ago. It remains in high demand.
What Factors Affect Residential Parking Demand?
Digested From "Do Land Use, Transit, and Walk Access Affect Residential Parking Demand?"
ITE Journal (02/13) Vol. 83, No. 2, P. 24 Rowe, Daniel; McCort, Ransford; Morse, Stephanie; et al.
A study in King County, Wash, was conducted to unearth the factors that contribute to increases and decreases in parking use for multifamily housing. The areas examined were parking supply and price, property characteristics, neighborhood household characteristics, accessibility, and development patterns. A total of 208 sites were used in the study that represented a variety of multifamily developments. The results of extensive research found that households with lower car ownership choose areas with adequate transportation options. In contrast areas with little transit, high supply of parking spaces, and poor walking conditions see more households with multiple cars. An area with numerous parking spaces showed a consistent relationship high demand for parking. This means data and facts show land use, transit options, and walkable areas do affect parking demand. The study by King County ultimately created the Right Size Parking project, which provides indicators of where a low supply of parking can be provided and where it cannot. The Right Size Parking project can fill parking needs more accurately using data from land use, transit options, and walkable neighborhoods.
Which Markets Are Seeing Private Equity Investment?
Digested From "Commercial Real Estate Investors Seek Bigger Gains"
NuWire Investor (03/06/13) Mattson-Teig, Beth
The push for larger returns is prompting private equity investors to expand their target markets and move away from the relative "safety" of core properties in major metro areas and top secondary markets. The investment shift into secondary markets is already going strong. Dan Fasulo, managing director at New York–based Real Capital Analytics (RCA), noted that the major year-over-year volume gains in 2012 were not in major markets such as New York City and Washington, D.C., but rather were in the secondary markets. Seattle, for instance, saw a 123 percent jump in multifamily and commercial investment sales last year to reach $10.5 billion in sales, according to RCA. Multifamily is still the most sought-after investment type. Even though cap rates on apartments are falling, investors are still betting that rents will increase. Several factors are buoying that sustained demand, including strong fundamentals in many sectors stemming from rising occupancies and rents.
Deals and Transactions
Two Reasons Why Jacksonville's Apt. Market Thrives
Digested From "Jacksonville Apartment Market Still the 'Darling' of Commercial Property"
Jacksonville Business Journal (FL) (03/04/13) Kritzer, Ashley Gurbal
Property professionals report that Jacksonville's apartment market has continued its hot streak in the first quarter of 2013, propelled by two main factors -- new household formation and the continued tight lending restrictions on single-family mortgages. Matt Wilcox, a vice president with Apartment Realty Advisors (ARA) locally, states, "Multifamily remains and probably will continue to be the darling of the commercial property sector. . . . There are several deals under agreement right now and you will see continued transaction activity this year, probably with the same number of closings, but maybe not as heavy a dollar volume." ARA continues to be among the most active, recently closing a total of $74 million in apartment transactions in the Jacksonville area. Not to be outdone, Tampa-based Landmark Residential recently purchased two more apartment communities from Equity Residential (EQR), which is exiting several markets including Jacksonville. Late last year, Landmark acquired a $72.5 million Jacksonville apartment portfolio from EQR.
Virginia Firm Buys Three Charlotte Apartment Communities
Digested From "Virginia Firm Buys Three Charlotte Apartment Complexes"
Charlotte Business Journal (03/07/13) Boye, Will
Landmark Apartment Trust of America Inc. has acquired a trio of apartment communities in Charlotte -- the Mallard Creek, Abbington Place and Ashley Court -- for approximately $83 million. Together, the three properties contain 795 rental units and are 93 percent occupied. Landmark CEO Stanley J. Olander remarks, "The acquisition of these three high-quality properties significantly expands our operations in Charlotte and aligns with our disciplined investment strategy of acquiring attractive assets at a discount to replacement cost. We believe these assets offer strong unrealized cash flow potential that we plan to unlock by implementing our proven operating platform and renovation and repositioning strategy." The Virginia-based multifamily REIT now owns and manages over 11,000 apartments across the Southeast.
What's for Breakfast at These Apartments? Resident Retention!
Digested From "In Tough Times, Local Apartments Find a Creative Way to Give Back to Residents"
Seattle Post-Intelligencer (03/10/13)
A trio of Phoenix-area apartment communities have come up with a unique way to create "value" in apartment living. Starting this past fall, the three communities -- Aspire Pinnacle Peak in Phoenix, and Visions Energy and Visions Serenity in suburban Peoria -- started serving hot breakfasts to their residents each weekday morning. Managed by Weidner Apartment Homes, the communities have dubbed the program "Wake Up with Weidner." The meals consist of everything from eggs and bacon to pancakes and waffles. There is even a vegetarian option. The communities are presently hosting more than 100 residents every morning. Community Director Lisa Stoss comments, "We started the 'Wake Up with Weidner' program as a way to give something back to our residents, something special. It has become so much bigger than we had envisioned; it has made a real difference in the lives of so many here." In addition to the increased value to residents, the most common compliments have been about making new friends and getting free meals in such cash-strapped times.
Why Are These Apartment Owners Calling the Cops?
Digested From "Police Collaboration for Safer Apartments"
KEPR19 (03/08/13) Acone, Abby
In Washington state, apartment owners and managers in the Tri-Cities market of Richland, Kennewick, and Pasco are partnering with police in an effort to minimize criminal activity in their communities. The Crime-Resistant Community Living program kicks off in April with a seminar that will discuss how to prevent liability claims and improve overall security. Many of the owners that have agreed to attend have apartment communities across the Tri-Cities. Consequently, the program should offer easier access to resources designed to combat crime. Pasco police officer Johnathan Davis states, "It's been shown time after time that these methods work. If implemented correctly, it reduces the crime in the apartment complexes or rental property -- and it gives the landlord knowledge."
What Is the 'Sharing Economy' and How Do Apartments Fit In?
Digested From "Share Everything: Why the Way We Consume Has Changed Forever"
The Atlantic Cities (03/04/13) Badger, Emily
In what is being called the rise of the "sharing economy," more people are seeking to share living spaces, cars, bikes, and even kitchen space. Over the last few years, changes in the economy, technological advances, and the allure of cities have spurred a shift from personal ownership to sharing. Airbnb is a short-term rental property website that allows property owners to rent out vacant apartments or spare rooms, helping them to earn extra money while at the same time serving a freelance workforce that relocates from city to city to follow the jobs. In response, some observers say cities will have to rethink their perception of public space and recognize the difference between people recouping the cost of ownership through sharing and those turning a big profit by doing so.
MBA Report Details Q4 Multifamily Mortgage Activity
Digested From "Commercial, Multifamily Delinquency Rates Decline: MBA"
Housing Wire (03/05/13) Mlynski, Christina
The Mortgage Bankers Association's latest delinquency report shows that late-pays for commercial and multifamily mortgages continued to decline in last year's October-through-December period. Jamie Woodwell, MBA's vice president of commercial real estate research, notes that improving property fundamentals coupled with a strong finance market to drive the continued decrease. MBA research shows that delinquency rates for commercial and multifamily mortgages held in life insurance company portfolios slipped 7.45 percentage points from record highs of 7.53 percent during the second quarter of 1992. At the same time, the delinquency rate for multifamily loans held by Freddie Mac fell 6.62 percentage points from highs of 6.81 percent reported in the last three months of 1992. In addition, the delinquency rate for multifamily loans held by Fannie Mae fell 3.38 percentage points from a high of 3.62 percent in the fourth quarter of 1991. Finally, the rate for commercial and multifamily mortgages held by banks and thrifts was 3.96 percentage points lower than the 6.58 percent series high measured in the second quarter of 1991.
Fannie, Freddie to Cut Multifamily Loans by 10 Percent
Digested From "Fannie, Freddie to Create Joint Firm"
Wall Street Journal (03/04/13) Timiraos, Nick
As part of its plan to reform the government-sponsored enterprises, the Federal Housing Finance Agency will create a company jointly owned by Fannie Mae and Freddie Mac to consolidate certain "back-office" functions. The FHFA also says Fannie and Freddie must cut their backing of rental apartment loans by 10 percent from 2012 levels and sell a portion of the whole loans or other illiquid securities on their balance sheets. Typically, they have met requirements to reduce those portfolios by 15 percent per year through the normal maturity of various mortgage investments.
Legal/Legislative Did You Know
Albany Defies Apartment Owners, Hikes Inpsection Fees
Digested From "Albany Hikes Rental Safety Fees"
Albany Times Union (NY) (03/05/13) Carleo-Evangelist, Jordan
In New York, Albany city legislators hiked fees for rental property inspections this past week for the first time in 17 years. Local apartment owners objected, though, contending that the increase is too sudden and too steep. Apartment inspections will now cost $50 apiece. The plan replaces a more complicated fee schedule that ranged from $30 per unit for the smallest apartment communities to a $250 fee plus $15 per unit for the biggest. For the owner of a 15-apartment community, it would amount to an almost 88 percent hike. For a 25-apartment community, the hike would be 100 percent. Officials state that larger apartment properties will be hit harder because they previously benefited from a sliding scale that lowered the per-unit fee as the number of apartments rises. The vote came as the New York Capital Region Apartment Association said it thought it had reached a compromise to phase the increase in over the next five years. Association President Judd Feinman said the group believed it had reached a deal with Mayor Jerry Jennings. However, that compromise apparently fell apart when Councilman Joseph Igoe, the ordinance's sponsor, said he could not back a plan that charged two different rates for the same inspection.
Cincinnati to Require New Smoke Alarms in All Apartments
Digested From "Cincinnati Requires New Smoke Alarms"
Columbus Dispatch (OH) (03/04/13) Weiker, Jim
The city of Cincinnati is requiring all rental apatments to have photoelectric smoke alarms. The ordinance unanimously passed the Cincinnati City Council this past week. It was prompted by recent studies that show photoelectric detectors being more successful in detecting smoke than the most common type of detectors, which rely on ionization technology. The rule, which could be the first of many in the Buckeye State, was supported by both the Cincinnati-area apartment association and Cincinnati Fire Chief Richard Braun. The ordinance requires photoelectric detectors to be installed outside bedrooms and in common areas. Owners and managers would be mandated to install the detectors in apartment communities with a dozen or fewer rental units within six months of the proposal's adoption and in communities with 13 or more apartments within two years.
Members Learn, Laugh About Politics, Advocacy at NAA Capitol Conference
Sorry we missed you during the annual NAA Capitol Conference, which continues through Wednesday in Washington, D.C. A record turnout of nearly 500 members, including more than 100 first-time attendees enjoyed networking events and presentations that shared insight and a bit of humor about today's political landscape. Read the highlights from March 10 and 11.
Research From 2013 NAA Student Housing Conference & Exposition Keynote Now Available
The research conducted by Christian Ruzich of TRU, presenter of “The Millennial Immersion” closing keynote session at the 2013 NAA Student Housing Conference & Exposition, is now available on the NAA Student Housing website. You can also review the education sessions and presentations on the website, too.
Want more great information affecting the student housing industry? Save the date for the 2014 NAA Student Housing Conference & Exposition, March 3-5 at the ARIA Resort in Las Vegas.
Attend the 2013 NAA Green Conference: Your Residents—and Your Bottom Line—Will Thank You
Attendees of the 2013 NAA Green Conference, April 15-17 at the Baltimore Marriott Waterfront, stand to reap huge savings on energy and utility expenses from the knowledge and insight delivered by the apartment management professionals scheduled to share their proven methods for cost reduction.
But don’t be intimidated by the perceived costs of sustainable community improvements—many of the savings strategies promised at the 2013 NAA Green Conference are ideal for small and mid-sized owners.
“To anyone who says they can’t afford to be green, I say, ‘You can,’’ says Villas at Chase Oaks Property Manager, Tina Paysinger, CAM, who recently identified easier, more affordable ways to green her Plano, Texas, community.
Using a few simple steps, from replacement lighting (an annual savings of $14,067) to programmable thermostats (a $16,077 yearly savings), Paysinger was able to save her community $50,000 by going green (visit the NAA website to see what owners can do to achieve similar bottom line savings).
The best part? You can, too, by attending the 2013 NAA Green Conference. And, to help you begin saving money right away, act now for a $100 discount off the onsite registration rate before April 5. Don't forget to book your hotel room, too - the hotel room cut-off date is Monday, March 25.
Only 99 Days Until the 2013 NAA Education Conference & Exposition
Do you hear that? It’s the buzz building as the multifamily housing industry readies itself for the largest event of the year: the 2013 NAA Education Conference & Exposition, June 19-22 in San Diego.
Take advantage of the opportunity for inspiration, innovation and connection as you join more than 6,200 of your closest friends for insight from world-class speakers, including Virgin Group Chairman Sir Richard Branson, Life is good® co-founder Bert Jacobs and entrepreneur, author and artist extraordinaire Erik Wahl, to the latest and greatest from the multifamily supplier partners in an exhibit space equal to that of four football fields.
The benefits of attendance don’t end there—awaiting you in San Diego are practical, take-home tactics from the more than 40 breakout sessions, as well as the opportunity to engage like-minded professionals during the plethora of networking events NAA has scheduled.
Catching this wave doesn’t require a surfboard, but you will need to register. Visit the Education Conference website and remember to consider group discounts: register five or more attendees and save your organization up to $400!
New NAA Website to Debut
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 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. 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.
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 protected] or 703/518-6141 ext. 121.
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