Tuesday, January 31, 2012

Austin Multifamily Outlook: Employment High, Vacancies Low via REAL ESTATE CENTER AT TEXAS A&M UNIVERSITY

Expect widespread job growth in Austin to bring apartment vacancy to its lowest level in more than a decade, says Marcus & Millichap in its 2012 multifamily market forecast.

According to the report, "The professional and business services sector will be the primary generator of top-tier apartment demand as relocating and growing firms add to payrolls. Several major tech companies have already announced expansion plans, offsetting losses in the public sector."

Among those is Rackspace, which Marcus & Millichap said plans to triple its local workforce over the next few years, supporting Class-A operations.

Meanwhile, "Class B- and -C apartments will benefit from job growth in the typically lower-paying leisure and hospitality and trade, transportation and utilities sectors, which will add 6,000 jobs. As operations improve, developers will begin moving projects through the planning stages to capture elevated demand."

Read more...Austin Multifamily Outlook: Employment High, Vacancies Low via REAL ESTATE CENTER AT TEXAS A&M UNIVERSITY

Apartment Extras: Generating ROI via MHNonline

Which amenities will “pack in the prospects” and ultimately make a real difference to the bottom line? For Paladin Realty Partners LLC, an apartment investor, amenities provide the “wow” factor that brings in apartment prospects.

“The challenge is to make the properties stand out. Like any retailer, you try to get the customer into the store. Once they come in, you want to make the sale,” says Bill Dunbar, managing director at Paladin Realty.

The common list of amenities, it seems, has become a standard requirement in Class A and Class B apartments in this day and age, and many of them may not necessarily generate extra rents or increase property value. However, because your competition has them, you’d better have them, too. Pools, fitness centers, recreation rooms and decks in urban properties may be the minimum amenities that all top-echelon apartments are required to offer.

Read more...Apartment Extras: Generating ROI via MHNonline.com

Case Shiller Home-Price Index Falls 3.7% via Bloomberg

Residential real estate prices fell more than forecast in November, showing distressed properties are hampering improvement in the U.S. housing market.

The S&P/Case-Shiller index of property values in 20 cities declined 3.7 percent from November 2010 after decreasing 3.4 percent in the year ended in October, the group said today in New York. Economists projected a 3.3 percent drop, according to the median estimate in a Bloomberg News survey.

Another wave of foreclosures threatens to keep the pressure on prices and delay recovery in the industry that precipitated the last recession, underscoring the Federal Reserve ’s view that housing “remains depressed.” More stability in real-estate values may be needed to persuade Americans to take advantage of record-low mortgage rates.

Read more...Case Shiller Home-Price Index Falls 3.7% via Bloomberg

Texas Economic Outlook Is Positive - January 2012 via FRB Dallas

The Texas economy continues to expand at a moderate pace. Texas employment grew at a 2 percent rate in 2011. Government employment rose in November and December following four months of sharp declines. Housing indicators suggest that the sector continues to heal, and energy activity remains strong. However, a general slowing of exports has recently led to weakness in manufacturing activity, although exports rebounded somewhat in November. Jobs are projected to grow at about a 2 percent pace in 2012.

Read more...Texas Economic Outlook Is Positive - January 2012 - Economic Research - FRB Dallas

Seize the Day via AFT Online Article

A YEAR AGO, nobody thought they’d ever see it again. A year later, everybody’s wondering how long it can last.

The permanent-debt market has featured some of the lowest interest rates in history over the past 18 months. Long-term fixed rates in the low–4 percent range have helped push cap rates down to pre-recession lows in some markets, while driving a wave of refinancing.

The yield on the 10-year Treasury entered uncharted waters in 2011, dipping to 1.67 percent in September, and hovering around 2 percent well into December. Not even a downgrade of our nation’s credit rating could stop the benchmark’s downward march.

Fannie Mae and Freddie Mac again captured about two-thirds of the market for permanent debt in 2011. Life insurance companies grew more active, the banking sector got its appetite back, and there was even a brief window in the spring when it seemed like commercial mortgage-backed securities (CMBS) had come back for good.

Read more...Seize the Day via AFT Online Article

Monday, January 30, 2012

Up the Stack and Back via AFT Online Article

The demand for structured-finance products such as mezzanine and preferred equity is expected to balloon in 2012, for reasons of both exuberance and fear.

As fundamentals improve, developers are furiously sketching out plans for new construction and value-add deals. But many financiers, still nursing a hangover from the downturn, are only willing to lend or invest so far up the capital stack. So mortgage brokers are reporting an uptick in mezz and preferred-equity activity on the vanguard of optimism.

But a greater need lurks at the other end of the spectrum, as a wave of maturing, overly aggressive debt comes due. In 2007, nearly $230 billion in commercial mortgage-backed securities (CMBS) was issued as the commercial real estate markets soared. A full reckoning starts this year—a slew of five-year balloon loans taken at the height of the market will soon pop.

“We’ve all seen the charts regarding maturities scheduled between now and 2017—it’s like a hockey stick,” says Kevin Smith, who leads the Alternative Capital Division of New York–based Centerline Capital Group. “There’s going to be a huge gap between where deals are underwritten today and the equity that’s provided—there’s going to be a huge need for preferred equity or mezz.”

Read more...Up the Stack and Back via AFT Online Article

Loan Delinquencies Show Moderation (except for real estate loans) via Real Estate Center at Texas A&M University

by Dr. Mark Dotzour Chief Economist and Director of Research

Federal Reserve data indicate that the credit health of Americans is improving in several categories. The delinquency rate on consumer loans is falling nicely. Business loan delinquency is declining in a similar fashion.

However, high delinquency rates still burden real estate loans.

First, the good news. Consumer loan delinquency dropped 37 percent in the past year from a peak of $59.8 billion on Jan. 1, 2010, to $37.6 billion in July 2011 (the most recent numbers posted). Another $10 to $15 billion of troubled consumer loans have to be resolved to get back to previous norms, but the trajectory of recovery is fast.

Read more...Loan Delinquencies Show Moderation (except for real estate loans)- The Blog of the Real Estate Center | Real Estate Center at Texas A&M University

Study: Energy Efficiency in Apartments Could Save $3.4 Billion via Forbes

Energy-efficiency upgrades in U.S. apartment buildings could cut energy bills by almost $3.4 billion annually nationwide, according to a new report this week from think tanks CNT Energy and the American Council for an Energy-Efficient Economy.

The estimate includes $2.03 billion in potential electricity savings and $1.34 billion in potential natural-gas savings from retrofits such as more efficient lighting, appliances and air- and water-heating systems.

These types of measures could slash utility bills for multifamily buildings – in this case, defined as those with at least five rental units – by 15-30 percent, the study finds. That could be welcome news for apartment-building owners, who often get squeezed when energy prices rise

Read more...Study: Energy Efficiency in Apartments Could Save $3.4 Billion via Forbes

Texas Manufacturing Outlook Survey, January 2012 via FRB Dallas

Texas factory activity increased in January, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose from 0.2 to 5.8, suggesting growth resumed this month.

Other measures of current manufacturing conditions also indicated growth in January. The new orders index jumped to 9.5, its highest reading in six months, after two months in negative territory. Similarly, the shipments index turned positive after two negative readings, rising from –1.1 to 6.1. Capacity utilization increased further in January; the index moved up from 4 to 8.5. Twenty-eight percent of manufacturers noted higher capacity utilization, the highest share in nine months.

Read more...Texas Manufacturing Outlook Survey, January 2012 - Economic Data via FRB Dallas

Fitch: More Loans Transfer to Special Servicing via Globest.com

The number of CMBS loans of $20 million or more going into special servicing climbed sharply in the fourth quarter of 2011 to 340 from 299 the previous quarter, and all signs point to this escalation continuing as we move through 2012, Fitch Ratings said Friday. Office and retail remain the sectors most at risk of having to transfer to special servicing, says Mary MacNeill, managing director at New York City-based Fitch.

MacNeill tells Distressed Asset Investments the drop-off prior to Q4 of last year was most likely due to additional liquidity and optimism. "The fourth-quarter spike may be due to five-year loans inching closer to their '12 maturity dates, a trend which we do expect to continue, although lending has picked up as well," she says.

Fitch says approximately 16%, or 199, of the Fitch-rated loans that transferred in ‘11 are now classified as past maturity. This rate is expected to rise this year as five-year 2007 vintage loans reach their maturity date without a refinancing commitment.

Read more...GlobeSt.com - Fitch: More Loans Transfer to Special Servicing - Daily News Article via Globest.com

ALN Monthly Newsletter January 2012

ALNData just released their December 2011 stats on occupancy and rents for 23 markets. In Texas, it includes DFW, Austin, Houston, San Antonio, Lubbock, Amarillo, Abilene and Corpus Christi. It is a great read from a great provider of apartment data.

ALN Monthly Newsletter January 2012

Friday, January 27, 2012

7 Green Certifications the Multifamily Industry Should Know | Property Management Insider

Many multifamily property management companies want to be more environmentally responsible and are taking everything from baby steps to giant leaps to become more green. One such way is to purchase more environmentally friendly products for their properties, such as light bulbs and appliances. Typically, these items come with a green certification label of some kind.

But how you know a product is really green? As more and more products and services proclaim they are green, how do you verify their credibility?

Here are seven reputable agencies and programs that HD Supply Facilities Maintenance uses as benchmarks in various environmental areas that you should know before purchasing green products.

Read more...7 Green Certifications the Multifamily Industry Should Know | Property Management Insider

Insurance News - NO SUCH THING AS Normal [Mortgage Banking] via Insurancenewsnet.com

For the commercial real estate and multifamily finance markets, the term "normal" doesn't really apply. Each new cycle brings its own dynamics.

As the commercial/multifamily real estate finance market climbs out of the depths of the Great Recession, some wonder what the "new nor~ maP' will look like. But for there to be a new normal would imply that there was an old normal. * With continuous changes in the supply of capital, demand for capital, space needs, construction and many other key market drivers, it seems fair to say there is no such thing as normal when it comes to commercial/multifamily real estate finance.


At the beginning of the 1980s, the 10-year Treasury stood at 10.3 percent, the homeownership rate was 65.5 percent and the commercial mortgage-backed securities (CMBS) market as we know it had not yet been established.

At the beginning of the 1990s, the 10-year Treasury stood at 7.9 percent, the homeownership rate was 64.1 percent and the CMBS market accounted for less than 1 percent of the Federal Reserve Board's estimate of commercial and multifamily mortgage debt outstanding.

Read more...Insurance News - NO SUCH THING AS Normal [Mortgage Banking] via Insurancenewsnet.com

Special Report: ‘Capital is Constrained’ Says NMHC Apartment Strategies Panel via MHNonline.com

n Part 2 of MHN’s Special Report from the NMHC Annual Meeting, the industry opines on the availability of infill sites, the dangers of overbuilding and opportunities in tertiary markets. Click here for Part 1 “Special Report: What’s Next for the Apartment Recovery?”

Boca Raton, Fla.—As attitudes towards homeownership continue to change, multi-housing is poised for another good year. “It’s not only OK to live in an apartment, it’s smart to do so. It’s the preferred type of home for a growing segment of the society,” said Tom Bozzuto, CEO, The Bozzuto Group, to industry colleagues at the 2012 National Multi Housing Council annual meeting.

“We can debate whether this [preference] will last for more than a few years. [But] my principal focus as NMHC Chairman will be to push for a balanced housing policy [that ensures] renters are not the subject of economic discrimination as they have been for the past quarter century. It’s incumbent on us to create awareness that rental housing, by its nature, is an important component of affordable housing.”

For many Americans, apartment living is fundamentally a lifestyle choice. But there are other factors at play. College debt is on the rise and making it harder to save and make the jump from renting to homeownership. The days of Mom and Dad gifting a portion of the down payment for a house are over for many young Americans, because their parents’ nest egg took a hit in the stock market… or perhaps Mom and Dad are unemployed.

Read more...Special Report: ‘Capital is Constrained’ Says NMHC Apartment Strategies Panel via MHNonline.com

Lowering Utility Costs in Apartments via National Real Estate Investor

Older article but still very applicable today!

When Greystar Real Estate Partners acquired three apartment properties last year in Raleigh-Durham, N.C., the new owner installed submeters in each unit in order to gauge water consumption and bill residents directly for their actual usage. That method marked a major departure from the previous landlord who relied exclusively on rent to cover the cost of utilities.

The result? Water and sewer costs dropped by at least 75% at the three properties because the owner passed on a portion of the utility costs to renters and encouraged residents to curb wasteful practices, like letting leaky toilets go unreported. Owners at submetered properties still pay utilities for common areas, and often choose to pay an additional portion of total utility costs so residents aren't paying for energy lost through insufficient insulation or single-pane windows.

Actual savings for Greystar varies by property, but submetering at a typical 300-unit complex reduces annual water and sewer charges by $60,000 to $70,000. That savings goes right to the bottom line, according to Mark Hafner, a principal at the Charleston, S.C.-based company.

Read more...Lowering Utility Costs in Apartments via National Real Estate Investor

Sustainability of Rent Momentum is Uncertain - Rent Trends via Multifamily Executive Magazine

In 2010 and 2011, rents went up 2.3 and 4.7 percent across the country, according to Carrollton, Texas-based rental data provider MPF Research. However, during that same time frame, wages only jumped two percent from the third quarter of 2010 to the third quarter of 2011, according to the Bureau of Labor Statistics. That’s led a number of industry observers to ask an obvious question: how long can rent growth continue without an improvement in wages?

“At what point do individual renters feel they’ve hit the wall with they can afford,” says Greg Willett, who heads the research and analysis team at MPF Research. “It is really hard to calculate when that picks up. In the long term, over the remainder if the decade, I think that’s our key challenge.”

Read more...Sustainability of Rent Momentum is Uncertain - Rent Trends - Multifamily Executive Magazine

Where From here - The Ross Rant Article via GlobeSt.com

We all know 2012 is a year of maximum uncertainty. To help sort through the fog here are some stats and some thoughts as to where we are and what might be the events of 2012 or not. GDP is likely to end 2012 between 2% and 2.5%. There is nothing on the horizon to suggest a major good news event. However there are numerous black swans that could cause this to be less. Iran, the removal of Greece from the Euro, a collapse of a French or Italian bank, some really dumb event staged by North Korea trying to get attention.

Foreclosures are likely to increase now that the servicing robo signing hoopla by Washington seems to be more under control. It was never a real problem but it made the administration and Cordray happy to create an issue. There are about 3.5 million homes in foreclosure, down form 4 million, but still a very long way to go. As a result house prices will decline another 3%-5% in 2012 so lot prices will not likely rise much for now. With ownership no longer the goal of many and so many houses coming back to market for rent, then add a lot of multi which will get built over the next several years, and homebuilding and lots will not likely be a good place to be.

Read more...GlobeSt.com - Where From here - The Ross Rant Article

Thursday, January 26, 2012

Resident Renewal Intent Falls Below 60% (Multifamily Trends) via Kingsley Insight

Apartment resident renewal intent continued its downward slide during Q4 2011 as the year ended with only 59.5 percent of renters indicating they “definitely” or “probably” would renew their lease. This figure, based on Kingsley Associates’ latest resident survey results, represents a new three-year low and is down from a high of 65.0 percent reported as of June 30, 2010.

While renewal intent trended down in 2011, overall resident satisfaction remained stable. For the most recent four quarters, 76.2 percent of residents rated their overall satisfaction as “excellent” or “good,” compared to 76.3 percent for the prior period and 76.0 percent at the end of Q2 2011.

“In many ways, multifamily real estate has led the economic recovery,” comments John Falco, Principal, Kingsley Associates. “As renters themselves recover, there are indications that more of them are renting by choice. They aren’t unhappy – just choosy.”

Read more...Resident Renewal Intent Falls Below 60% (Multifamily Trends) | Kingsley Insight

Supply Shortfall Persists for Apartments via WSJ

Little new apartment construction and surging demand has created a shortfall of 2.5 million units, the largest the nation has seen in more than a half-century, according to research from Nareit, a trade group for real-estate investment trusts.

As we’ve reported, apartment landlords are seeing vacancy rates decline as more Americans rent by choice or necessity. In the fourth quarter, apartment vacancy fell to the lowest rate since late 2001, with the national rate dropping to 5.2% from 6.6% a year earlier, according to Reis Inc. The vacancy rate had risen as high as 8% in 2009.

Pent-up demand could pull that rate even lower. According to Nareit, the normal rate of household formation is about 1.2% annually. But, with the sour economy in the last four years, the rate plunged to about 0.5%, as people delayed moving out and opted to live with roommates and parents longer.

This has created an unmet demand of about 2 million households, “about three times what it has been in previous business cycles,” says Calvin Schnure, vice president of research and industry information at Nareit. He expects many of these people to eventually turn to the rental market.

Read more...Supply Shortfall Persists for Apartments - Developments - WSJ

Pension Funds Still Greatest Source of U.S. CRE Equity via CoStar Group

Leaders in real estate capital raising and capital deployment say pension plans (directly or through investment advisors) will continue to be the leading source of U.S. real estate equity capital in 2012 and that capitalization rates will remain flat in 2012, according to a Goodwin Procter study, Real Estate Capital Markets Snapshot 2012: A Survey of Opinion Leaders.

More than 45% of respondents see recapitalization of existing investments as their greatest commercial real estate investment opportunity in 2012, followed by property acquisitions from third parties (29%) and distressed debt acquisitions (21%).

Respondents continue to say they believe overwhelmingly that job creation is the single most important economic factor required to drive improved U.S. commercial real estate values in 2012.

Read more...Pension Funds Still Greatest Source of U.S. CRE Equity - CoStar Group

Fed to keep interest rates low until late 2014 via CNN.com

The economy is improving, the Federal Reserve said Wednesday, but not enough to warrant higher interest rates for at least two-and-a-half more years.

The central bank indicated that it expects to keep the federal funds rate near historic lows until late 2014 -- an extension from the Fed's original pledge to keep rates low through mid 2013.

"[T]he economy has been expanding moderately, notwithstanding some slowing in global growth," the Fed said in a statement Wednesday. Meanwhile, the program known as Operation Twist remains in place.

Read more...Fed to keep interest rates low until late 2014 - Jan. 25, 2012 via CNN.com

Wednesday, January 25, 2012

Apartments Remain a Strong Bet via GlobeSt.TV

There is no doubt that multifamily real estate is the hottest sector in the industry right now. But will it overheat?

Not as long as problems in home ownership continue, says Alan Feldman, chief executive officer of Resource Real Estate. He still sees more people heading to apartments and a shift from owning to renting. Feldman came to the GlobeSt.com headquarters recently and spoke with editor Ian Ritter.

They also discussed:

* The potential of the housing market and economy coming back.
* How the CMBS market is doing right now and where it is headed.
* The competition for value-added multifamily acquisitions.
* The regions of the country where there are good opportunities.

Watch the Video...GlobeSt.com - Apartments Remain a Strong Bet iExclusive Video/i - GlobeSt.TV Article

Texas and U.S. nonfarm employment via Texas Comptroller

As of December 2011, all of the total jobs shed by Texas employers during the recession have been replaced. Nationally, only 30 percent of recession-hit jobs had been recovered through December 2011.

Between December 2010 and December 2011, Texas gained 204,500 jobs. Total nonfarm employment increased by 20,200 jobs from November to December 2011.

The Texas unemployment rate dropped to 7.8 percent for December 2011, down from 8.1 percent in November 2011. The Texas unemployment rate has been at or below the national rate for 60 consecutive months.

Read more...Texas and U.S. nonfarm employment via Texas Comptroller

As Five-Year Debt Comes Due, CMBS Sector Faces New Challenges via NREIonline.com

For much of the past few years, the CMBS delinquency rate has climbed to vertiginous heights, breaking all futility records in the process.

After bottoming at 0.28 percent in June 2007, according to Morningstar, the CMBS delinquency rate began to rise soon after commercial real estate values and vacancy rates fell. The rate peaked at 8.43 percent in July 2011 and as of the end of November had retreated mildly to 8.19 percent. Loans originated with aggressive underwriting assumptions about future occupancies, rents and values turned sour quickly. And even though quite a few troubled loans were “extended and pretended,” that practice didn’t prevent many loans from going bad.

In 2011, things stabilized a bit. While the delinquency rate continued to climb, it was not in the large monthly jumps that marked previous years. And some of the troubled loans were even being resolved.

But 2012 begins a dangerous new stage for the CMBS sector. That’s because some of the most aggressive loans written in 2007 are now coming due. Five-year debt originated at the peak of the market is hitting its maturity, and there are real questions as to whether much of it can be paid down or refinanced.

Read more...As Five-Year Debt Comes Due, CMBS Sector Faces New Challenges via NREIonline.com

Fannie Mae Multifamily MBS Issuance Up in 2011 via MultifamilyBiz.com

Fannie Mae announced that the company issued $7.2 billion multifamily MBS in the fourth quarter of 2011, the highest quarterly issuance since Fannie Mae began reinvigorating its multifamily MBS business in 2009. Total new issuance for 2011 was $23.8 billion, up from $16.4 billion in 2010. Fannie Mae also resecuritized $6.0 billion of DUS MBS through its Fannie Mae Guaranteed Multifamily Structures (Fannie Mae GeMS) program in 2011.

"Market activity in our multifamily securities is clearly gaining momentum. Tradable float, the volume of securities available to investors, has increased significantly over the past few years. Fannie Mae's multifamily MBS outstanding has grown to over $100 billion. As volumes increase and liquidity rises, we expect market participants will focus on Agency multifamily securities in the coming year," said Kimberly Johnson, Fannie Mae Vice President of Multifamily Capital Markets.

Read more...Fannie Mae Multifamily MBS Issuance Up in 2011 - Multifamily News Headlines – Breaking News, Stories, Top Headlines :: MultifamilyBiz.com

SPECIAL REPORT: What’s Next for the Apartment Recovery? via MHNonline

The mood was optimistic as multifamily executives assembled at the National Multi Housing Council (NMHC) Apartment Strategies Conference for a look ahead at what’s next for the industry in 2012 and beyond. The pace of rent growth is expected to ease in 2012 but still maintain levels above the trend. “The recovery that was predicted a couple of years ago has come to pass. Now the question is whether it will be as good as we predicted,” said Mark Obrinsky, vice president of research and chief economist, NMHC, who moderated “Looking Ahead: What’s Next for the Apartment Recovery?”

“The general forecast as consensus would have it,” added Obrinsky, “seems reasonable to me.” Provided there’s no economic meltdown in China and no break-up of the Euro Zone, we can expect GDP growth that’s better this year than in 2011; but at 2.5 percent, that would be a bit less than the long-term average.

Read more...SPECIAL REPORT: What’s Next for the Apartment Recovery? via MHNonline

Tuesday, January 24, 2012

Resident Retention Strategies: Three Tips to Kick Off a Strong 2012

by Ashley Halligan, an analyst for a property management software guide

It’s no secret that the costs associated with tenant turnover can be exorbitant. A 2011 SatisFacts study estimates move-out costs average around $3,900 per unit, which includes, among other items, $1,200 in lost rental income, nearly $800 in concessions and more than $700 in maintenance, readying and repairs. So, what can property managers do to encourage lease renewal? After interviewing property managers and retention research experts, I’ve collected a mix of three common sense and creative strategies to increase resident retention.

Start With Customer Service
A 2010 SatisFacts study found that 54 percent of residents choose not to renew leases based on controllable reasons. Poor customer service, lack of responsiveness and dissatisfaction with maintenance requests were cited as the main drivers of resident turnover. Contrary to popular belief, lucrative property amenities don’t make up for deficiencies in service. So, it’s critical that property managers address these issues.

Read more...Resident Retention Strategies: Three Tips to Kick Off a Strong 2012 by Ashley Halligan, an analyst for a property management software guide

The Greening of the Real Estate Industry via Urban Land Institute

Nothing demonstrates the disconnect between politicians and the marketplace more than the current debate about climate change and U.S. energy policy.

Before Christmas, Congress passed a measure barring the U.S. Department of Energy from enforcing a ban on incandescent lightbulbs. The original measure, passed in 2007 with bipartisan support and signed into law by President George W. Bush, required a switch to more energy-efficient bulbs beginning in January 2012. Following this directive, the U.S. lighting industry began to produce a wide array of new energy-efficient lightbulbs that save consumers money (almost $90 per year) and have gained market share.

Read more...The Greening of the Real Estate Industry via Urban Land Institute

Investors eagerly eye U.S. foreclosure rental plan via MarketWatch

Matt Martin, CEO of Matt Martin Real Estate Management, is eagerly awaiting the introduction of a program that the Obama administration hopes will transform foreclosed properties into rehabilitated rental units and kick-start the economy.

He says he’s not alone. “There is a large chunk of capital, billions of dollars, sitting on the sidelines waiting to see what kind of program the government comes up with,” Martin said.

At issue is a Federal Housing Finance Agency push to develop a program that is expected to use government financing or guarantees to attract investors to buy up big regional or national pools of foreclosed properties currently owned by government seized housing giants Fannie Mae and Freddie Mac. The plan would be to convert these properties into rentals, a market that has strengthened recently. See story from August on foreclosure-to-rental program

Some analysts say President Barack Obama may discuss the initiative at his State of the Union Tuesday, with a focus on how to convert empty homes into productive engines of the economy. Read State of Union preview.

So far, the FHFA has received over 4,000 comments on how it should go about developing the program from a wide variety of groups including Martin and investors such as Fortress Investment Group FIG -1.10% , Chelsea Investment Corp. and the Association of Mortgage Investors.

The FHFA noted that most respondents suggested strategies that involved renting properties for some time. The agency added that many respondents “demonstrated their technical and financial capability to engage in large-scale transactions” with Fannie, Freddie and FHA.

The number of foreclosed properties is big and growing. Fannie Mae, Freddie Mac as well as the Federal Housing Administration currently have about 200,000 foreclosed properties on their books. However, Bank of America Merrill Lynch predicts that Fannie, Freddie and FHA will need to sell 3.4 million foreclosed properties in the future. Banks also have thousands of foreclosures on their books, and regulators are seeking to ease efforts to rent those out.

Read more...Investors eagerly eye U.S. foreclosure rental plan via MarketWatch

Social Media Helps Market New Dallas Apartments via MHNonline

Wood Partners, the developer of Alta Henderson, a new apartment property in Dallas, reports that after only eight weeks, the property is 60 percent leased—pretty strong evidence that the demand for apartments in that city is strong, as it is in a lot of places. But the company isn’t just relying on the strength of the local market to get renters to sign on the dotted line—it’s also pursuing a vigorous marketing campaign, including the use of social media, which the company says has been effective.

In fact, Alta Henderson is the first of Wood Partners’ developments to feature a social media/leasing associate as part of the lease-up staff. The company says that a number of leases have originated through its Facebook and Twitter accounts alone, which are typically used for branding and communication rather than a source of leases.

Read more...Social Media Helps Market New Dallas Apartments via MHNonline

No Takers for Texas as NYC Trophies Find Refinancing: Mortgages - BusinessWeek

When it comes to the commercial- mortgage bond market these days, location is everything.

From Webster, Texas to Providence, Rhode Island, borrowers in the U.S. are coming up short, unable to get new loans as about $59 billion in mortgages packaged into bonds comes due in 2012, according to data compiled by Bloomberg. In contrast, $930 million has been refinanced on two New York skyscrapers in the past month; Vornado Realty Trust's Park Avenue tower and Sheldon Solow's 9 West 57th Street, home to Chanel SA and KKR & Co.

Lenders are reluctant to venture from major urban centers, making it harder for property owners in smaller cities to refinance even as unemployment falls to the lowest since February 2009 and confidence in the economic recovery grows. Banks and insurance companies are funneling cash to a select pool of borrowers as mortgages from the real-estate boom start maturing after values fell 42 percent since 2007.

Read more...No Takers for Texas as NYC Trophies Find Refinancing: Mortgages - BusinessWeek

PE investors troll for single-family properties - The Deal Pipeline

Oaktree Capital Management LP has teamed with property manager Carrington Holding Co. to buy up to $450 million in distressed single-family homes in what's seen as an evolving interest among private equity groups in the troubled housing sector.

The Los Angeles private equity firm, a specialist in distressed investing, and Santa Ana, Calif.-based Carrington believe that by acquiring lender-owned, distressed single-family units and renting them out will help strengthen the housing market.

"Anything that the industry can do to remove distressed properties from the sales inventory will reduce some of the price pressure that the housing market is suffering from right now and help prices appreciate again," said Rick Sharga, executive vice president at Carrington. "There is a market for single-family home rentals as home ownership rates continue to decline and more families are interested in renting at least for the next several years."

Read more...PE investors troll for single-family properties - The Deal Pipeline www.thedeal.com

Our Role State-by-State via Freddie Mac

One of Freddie Mac's key priorities is providing constant, stable support to the housing market. Since we were created, we've continued to supply an ongoing stream of funding for mortgages, every day, in all geographic markets, and in good times and bad. Over the past decade, Freddie Mac has invested approximately $5.1 trillion in home loans, helping 34,724,321 families in the United States own or rent a home.

Click on a map location to update the tabs below

See the map here...Our Role State-by-State - Freddie Mac

Monday, January 23, 2012

Arlington TX planning meeting regarding Apartment Redevelopment

Notice of Public Meeting - 1/23/2012 - 6:00pm at the Arlington Convention Center, Salon A, located at 1200 Ballpark Way, Arlington, TX.

Please join us for an engaging and informative panel of experts from real estate, banking, and government who will discuss the present and future for apartment redevelopment in North Arlington. The Lamar Collins Mixed Use Zoning Overlay was established 5 years ago to encourage redevelopment north of I30 by allowing increased density. Designed to benefit citizens, business, and other stakeholders, the panel will ask the question: Where do we go from here?

Read more...Arlington Apartment Redevelopment in Lamar Collins: How Do We Make it Happen?

Moody's: CMBS Delinquency Rates Continue To Rise via MortgageOrb

The delinquency rate on loans included in U.S. commercial mortgage-backed securities (CMBS) conduit and fusion transactions increased by 5 basis points (bps) in December to 9.32%, according to Moody's Investors Service's Delinquency Tracker (DQT). The rate of loans in special servicing, as measured by Moody's Specially Serviced Loan Tracker, declined by 13 bps in December, to 11.97%.

December was the 12th consecutive month that delinquencies in the U.S. have been above 9%, according to Moody's. New delinquencies in December slightly exceeded the resolutions of delinquent loans. Specifically, in December, there were $3.7 billion of newly delinquent loans, while $3.5 billion in loans were resolved or worked out.

Read more...MortgageOrb: Content / Commercial Mortgage / Moody's: CMBS Delinquency Rates Continue To Rise

Follow the money by Lawrence Berry, CPM Resident Retention via Multifamily Insiders

Let me start out by saying I know Brent is going to say this is too long. However, tried shortening and it just doesn't have the same impact...so here goes.

Never will you hear an owner or supervisor say, "It's about the people...not the money." That being said, it is about having the right people to insure NOI increases and the property is profitable. Our job is to increase property values with one of the primary way being the increase of Net Operating Income. We look at how we can improve NOI with the obvious being rent increases. We do this through several key factors, however, we do not always keep them in mind as our site personnel go about their daily tasks.

* The first and most important way is through resident retention. In no other area can we have such a positive impact on income and expenses both. This is done through exceeding resident expectations, providing "WOW" customer service, effective communications, and insuring all of the team contributes and understands the critical nature of how it impacts the bottom line. We preach resident retention, however, I suggest we don't practice it on an every day basis. This is where having the right people, the right training, the right follow-up, and the right attitude will make the difference between success or failure.

* Second, keeping your eye on the market and your finger on the rent button. Managers for some reason are hesitant to raise rents. They perceive this and believe it will drive prospects and residents away. They also believed we would have empty properties when we started charging for water, sewer, and trash, only to find out it didn't happen. This is where a good regional or district manager through conditioning can eliminate that fear, and then passing on that conditioning to the leasing staff. Get a manager who resists changes to rents, and you will more than likely get those working with that manager to feel the same way. By keeping your eye on the market, knowing your product and the product of your competition, you can maximize rents in any market. Teach your team to be pro-active and the leader in the market, and you will probably find other properties wanting to be like you and following suit.

Read more...Follow the money by Lawrence Berry, CPM | Apartment Marketing | Apartment Leasing | Resident Retention | Apartment Investment | Apartment Jobs via multifamilyinsiders.com

FASB Takes New Look at Investment Property Entities via GlobeSt.com

In a previous article, I discussed some recent regulatory changes related to troubled debt restructurings. Continuing on the theme of regulatory changes, I would like to focus on another potential change and how that might impact real estate investors. The Financial Accounting Standards Board has released a new exposure draft on investment property entities, with one goal being to continue to promote transparency.

Periodically, the FASB releases new guidance, and does this through a process where they first release their proposed guidance in the form of an “exposure draft.” After releasing the exposure draft, the board obtains and considers feedback from many firms and then potentially adopt some version of what it originally proposed. In October, the FASB released its expected investment property entity exposure draft. This proposal would change the way many entities that invest in real estate account for their investments, potentially creating additional data gathering efforts and requiring them to implement significant process changes.

Read more...FASB Takes New Look at Investment Property Entities via GlobeSt.com

This Year to Be Worry-Free for Multifamily via GlobeSt.com

When it comes to regional markets, the tide will lift all boats this year. In fact, the apartment market will have few worries until 2013 or 2014, when homeownership begins to improve and new deliveries start coming to the market. That was the main takeaway from the discussion on apartment markets across the country, during the National Multi Housing Council’s Apartment Strategies Conference. It was held on Tuesday immediately preceding NMHC’s 2012 Annual Meeting, which drew over 2,000 industry professionals.

Moderator Hessam Nadji, managing director of Marcus & Millichap, kicked off the discussion with a presentation on current conditions. He noted that nearly every apartment market across the country has improved since hitting the bottom in 2009, with the US average vacancy dropping 260 basis points since then. Austin, TX; Jacksonville, FL; Charlotte, NC; Phoenix; and Dallas/Ft. Worth all showed the greatest improvement in vacancy, with declines ranging from 510 to 440 basis point over the past two years. Sacramento, Salt Lake City, San Jose, Chicago and Washington, DC showed the least improvement in vacancy.

Read more...GlobeSt.com - This Year to Be Worry-Free for Multifamily via GlobeSt.com

Apartment Marketers are Listening to Resident Chatter via MHNonline.com

Do your apartment communities have a targeted marketing theme for 2012? Once you create that message, you’ll want to push it across all your marketing channels and obtain widespread buy-in. “Marketing plans that don’t succeed are typically ones that don’t think ‘big picture’ by taking into account the other departments that will be required to implement the plan. For example, if your theme revolves around customer service (“we will not rest until we’ve done our best”), it will impact corporate policy and even human resources,” says multifamily marketing consultant Kate Good, who recently shared a number of tips during a webcast “Essential Elements of a Successful Marketing Plan” produced by Multifamily Insiders and sponsored by VaultWare.

“Don’t stack everything at the beginning of the year,” says Good. “Spread actions over the 12 months. Do a Gant chart so you can see where your holes are, and make sure you have staffing where you need it. Once you have an approved plan in place, stick to it—and delegate. Get all team members on board.”
Social media is a must

If your 2012 marketing plan doesn’t include social media, your business is going to get left behind, according to Good. “So many of our residents spend more time reading blogs, on social media sites, and using search engines than they do on their email,” explains Good.

Read more...Apartment Marketers are Listening to Resident Chatter via MHNonline.com

Friday, January 20, 2012

Texas Apartment Market Update December 2011 via oconnordata.com

December 2011 Texas Apartment Market Stats for DFW, Houston, Austin and San Antonio from O'Connor & Associates. They are a great resource for apartment data in Texas.

Read more...Texas Apartment Market Update December 2011 via oconnordata.com

Moody's: CMBS delinquency rate higher than 9% through 2011 via HousingWire

The delinquency rate of loans in commercial mortgage-backed securities bounced higher in December and remained above 9% all year.

Moody's Investors Service said the rate rose to 9.32% last month from 9.27% in November and from 8.79% a year earlier. (Click on chart to expand.)

The ratings agency said there were $3.7 billion of newly delinquent loans in December, including Bank of America Plaza in Atlanta, while $3.5 billion were resolved or worked out. The $1.4 billion of new CMBS deals was more than offset by $5.5 billion of seasoned loan dispositions and payoffs, pushing the CMBS universe to $582.8 billion, analysts said.

Read more...Moody's: CMBS delinquency rate higher than 9% through 2011 « HousingWire

As Home Buying Returns, Do Apartments Face a Bubble? via CNBC

A huge surge in rental demand and comparatively little apartment supply created a boom in multi-family construction in the last year, but with the single family housing market slowly beginning to show signs of life, the concern among banks and investors is that all that supply will hit the market just as rental demand drops off.

Based on preliminary estimates of Q4 '11 activity, multi-family loan origination volume increased to $82 billion in 2011, up from $50 billion in 2010, according to Chandan Economics. Understandably, some lenders and investors are starting to ask questions.

"While 2012 should be another good year for apartment REITs, there is concern amongst some investors and managements that market expectations may be hard to beat," say analysts at Sandler O'Neill. "Based on discussions with managements, revenue growth should match sentiment but expense growth may be the wildcard."

Read more...As Home Buying Returns, Do Apartments Face a Bubble? - CNBC

CRE Investment Dollars Continue To Dwindle via CoStar Group

Companies and funds reported raising $21.47 billion from investors in the fourth quarter of 2011 for real estate-related deals and refinancings, a 7% drop from the third quarter when $23.18 billion was raised and a 39% drop from the second quarter of 2011.

The amount of real estate-directed funding raised in the fourth quarter brings the total inflow for all of 2011 to more than $103.4 billion completed by more than 1,900 funds and firms.

CoStar Group tracks the fundraising activity of more 3,400 entities on an ongoing basis and adds about 125 new entities per month.

Of the money raised in the fourth quarter, about $17.3 billion was to be used primarily for investments and acquisitions. That is 14% less than in the third quarter. The remaining $4.16 billion in funds was primarily targeted for repaying debt.

Read more...CRE Investment Dollars Continue To Dwindle - CoStar Group

Apartment Sector Will Continue to be Job Generator via MHNonline

Most sectors of the U.S. economy continue to show sluggish rates of employment growth, but according to the nonprofit National Apartment Association Education Institute, the prospect of employment growth in the apartment industry is strong. Moreover, the demand for employees in the sector is expected to increase as more Americans opt to rent apartments.

Currently the multifamily housing industry employs more than 1 million people, besides the thousands working in industries that provide products and services to apartment properties, according to the association. Large national apartment management companies may hire as many as 2,000 new employees in any given year. These employees often come from a variety of college backgrounds, including business, marketing, communications or facilities maintenance.

Managing apartment communities requires a group of employees performing a variety of functions such as management, customer service, accounting, business analysis and preventive maintenance. A recent search of job postings on ApartmentCareers.com by the association highlighted open positions for an accountant, webmaster, maintenance technician, housekeeper and regional marketing director.

Read more...Apartment Sector Will Continue to be Job Generator via MHNonline.com

CRE Price Index Rises for Seventh Consecutive Month via CoStar Group

The CoStar National Composite Index of commercial real estate pricing rose for the seventh straight month since last spring as investment-grade sales made solid pricing gains in November 2011, and the level of distressed sale transactions continued to decline during the month.

The composite index rose 0.6% in November from the previous month, with prices now an average 1.8% higher compared to the same period a year ago, according to this month’s release of the CoStar Commercial Repeat Sale Index (CCRSI), which tracks sale pair transaction data through Nov. 30.

November also brought the second consecutive year-over-year increase in the composite index. Last month, CoStar reported that the index rose 2.2% in October from the same period a year earlier, the first year-over-year improvement in the composite since the U.S. economy took a dive in 2008.

Read more...CRE Price Index Rises for Seventh Consecutive Month - CoStar Group

Multifamily Production Down from Previous Month, but Still Up Year-Over-Year via Eye on Housing

The Census Bureau’s preliminary estimate for starts in buildings with five or more apartments in December came in at 164,000 units (at a seasonally adjusted annual rate). Although there is no hard and fast rule, buildings with at least five apartments are generally the universe of interest to businesses that specialize in building, owning, and managing multifamily housing.

At 164,000, the five-plus starts rate is down 28 percent from the revised rate for November (with November being a 3-year high point that was clearly unsustainable). On a year-over-year basis, however, the December 2011 five-plus starts rate was actually up 69 percent. Moreover, the December rate is close to the total of 167,000 five-plus units started in calendar year 2011 (also a preliminary number that will be subject to a couple months of revisions), which is up 60 percent over 2010. Given that five-plus production is only a year removed from a historically low period (when the starts rate often dipped below 100,000), the overall upward trend in the annual numbers is a welcome sign.

Read more...Multifamily Production Down from Previous Month, but Still Up Year-Over-Year via Eye on Housing

Thursday, January 19, 2012

GSEs Capture More Than 60 Percent of Market in 2011 via Multifamily Executive Magazine

Fannie Mae and Freddie Mac, combined, again captured the lion’s share of the market for permanent multifamily debt in 2011—and that level of dominance will continue this year.

Balance-sheet lenders bounced back in a big way in 2011, as life companies slugged it out at the upper tier of the market and many regional and national banks began winning more short-term business. There was even a brief window in the spring when it seemed like conduit lenders had come back for good.

Despite the increased competition, the government-sponsored enterprises (GSEs) were able to maintain, and maybe even grow, their market share last year, as the overall market grew too. Freddie Mac estimates that its volume accounted for at least 30 percent of the market last year, and Fannie Mae likely recorded a little more than that, the companies are expected to announce at next month’s MBA CREF conference.

Read more...GSEs Capture More Than 60 Percent of Market in 2011 - Debt - Multifamily Executive Magazine

Small-Loan Market Heats Up via Multifamily Executive Magazine

The small-loan market heated up in a big way last year, and that momentum has carried over into 2012.

Fannie Mae’s small-loan program continues to dominate the market, offering some of the best rates available for deals of $5 million or less. But more balance-sheet lenders, mainly national, regional, and community banks, are pecking away at Fannie’s market share.

Chase Commercial Term Lending continues to be one of the most active small-loan lenders, especially in major markets on the West Coast and Chicago. And though most life insurance companies favor large loans, there are a few, including Symetra, StanCorp, and Protective Life, that have an appetite for deals below $5 million.

“A lot of multifamily bank lenders got back into the game last year,” says Rick Warren, a managing director who runs the small-loan business line for New York–based Fannie Mae lender Centerline Capital Group. “We saw competition come back very strong in the small-loan space—a lot more competition than I think anybody had anticipated.”

Read more...Small-Loan Market Heats Up - Debt - Multifamily Executive Magazine

Texas Ahead: Tracking the Texas Economy January 13, 2012 via Susan Combs, Texas Comptroller

Susan Combs, Texas Comptroller Updated January 13, 2012

Texas total nonfarm employment increased by 20,800 from October to November. Between November 2010 and November 2011, Texas gained 226,000 jobs, a 2.2 percent increase.
Over the past year, Texas added jobs in nine of the eleven major industries sectors, including educational and health services, professional and business services, trade, transportation and utilities, leisure and hospitality, manufacturing and mining and logging.

Read more...Texas Ahead: Tracking the Texas Economy via Susan Combs, Texas Comptroller

U.S. Housing Starts Drop 4.1%, Worse Than Forecast via Bloomberg

Builders began work on fewer houses than forecast in December, capping the worst year on record for single-family home construction and signaling recovery in the industry will take time.

Housing starts dropped 4.1 percent to a 657,000 annual rate last month, reflecting a slump in multifamily dwellings, Commerce Department figures showed today in Washington. Building permits, a proxy for future construction, were little changed.

Four years after housing helped spark the last recession, falling home prices and ongoing foreclosures are hampering an industry-wide recovery. For all of 2011, work was started on 428,600 single-family homes as construction competed with the surfeit of previously owned dwellings.

“There’s little reason for builders to ramp up residential construction in any strong way until we work off more of the existing supply of homes,” said Sam Bullard, a senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina, who projected a rate of 660,000 starts for December. “There’s still issues with foreclosures. We suspect prices are going to go down another 5 to 6 percent, but we do expect them to bottom this year and gradually pick up from there.”

Read more...U.S. Housing Starts Drop 4.1%, Worse Than Forecast - Bloomberg

FRB: Beige Book--Dallas--January 11, 2012

The Eleventh District economy grew at a moderate pace since the last report. Manufacturing activity was mixed. Contacts said retail sales were robust and automobile sales held steady. Demand for business services was solid, and activity in transportation services rose modestly. Housing and commercial real estate markets continued to improve slightly. Construction activity remained subdued, with apartment construction being the major exception. Financial services respondents said overall loan demand was flat to up slightly. Energy activity slowed somewhat, but respondents expect strong growth in activity in 2012. Agricultural conditions remained weak. Employment levels were mostly unchanged. Price and wage pressures were subdued.

Read more...FRB: Beige Book--Dallas--January 11, 2012

Do I Really Need a Phase 1 Environmental Site Assessment? via GlobeSt.com

As a nationwide provider of environmental and engineering due diligence reports, including Phase 1 ESAs, I often get asked the question from my clients “Do I really need a Phase 1?”. The answer may surprise you. Of course, the simple answer is YES, only a Phase 1 ESA to ASTM E1527-05 and the Environmental Protection Agency’s (EPA) All Appropriate Inquiry (AAI) standard can protect the User of the report against CERCLA liability. HOWEVER, there are many other limited environmental assessments that are used in the industry as a business decision tool for buying and/or lending on properties. These assessments, being limited in nature are generally faster and cheaper than a Phase 1 ESA. This is because these assessments are, for the most part, “pieces” of the Phase 1. For instance the Environmental Transaction Screen (ETS), which is so common it has its own ASTM standard (E1526-08), is a “mini” Phase 1 ESA of sorts. It includes a lot of the same elements, such as the database review, site reconnaissance and some limited historical review. Other assessments combine one or two of the Phase 1 Environmental scope items to tailor make the limited report. Prices range from $250 to $1400 depending on what is included, the site visit portion being the biggest driver of cost.

Read more...GlobeSt.com - Do I Really Need a Phase 1 Environmental Site Assessment? - The Science of Real Estate Article via GlobeSt.com

Wednesday, January 18, 2012

The Trouble with Troubled Assets via Real Estate Center at Texas A&M University

By Dr. Harold Hunt, Research Economist published in TIERRA GRANDE January 2012

Investors are still expecting a deluge of distressed commercial real estate to pour into the market. The question remains: "When?"

Overall, commercial real estate sales are on an upswing. According to Real Capital Analytics, national sales volume for 2011 should top out near the $200 billion mark. Although that is only a third of the 2007 peak, it is significantly higher than 2010’s $120 billion.

Meanwhile, signals regarding the sale of distressed commercial property are more mixed. A variety of factors are affecting sales volume,including property location, type and the availability of financing. To understand the dynamics of this sector, the Center consulted several Texas-based commercial real estate professionals.

Read more..."The Trouble with Troubled Assets via Real Estate Center at Texas A&M University"

2012 Could Be Multifamily’s Best Year via GlobeSt

Barring an economic meltdown—or continued stagnancy—2012 is on track to be a great year for multifamily. That was one of the points speakers agreed upon at the National Multi Housing Council’s 2012 Apartment Strategies Conference yesterday. The conference immediately preceded NMHC’s Annual Meeting, which drew over 2,100 attendees to the Boca Raton Resort & Club here.

In the opening session moderated by Mark Obrinsky, NMHC’s vice president of research, Jay Lybik, vice president of market research for Equity Residential, and Ron Witten, president of Witten Advisors, discussed what’s next for apartment recovery.

The decline in the homeownership rate has benefited the sector, but not to a great extent. These days, it’s demographics and household formation that are driving demand for apartments. And even if the for-sale housing market improves, the ownership rate likely won’t hit the 69% peak again but rather, stay in the 64% to 65% range. Additionally, young adults—especially single women—are putting off marriage and home purchases in favor of renting.

Read more...GlobeSt.com - 2012 Could Be Multifamily’s Best Year - Daily News Article

No Danger of Overbuilding in Multifamily Sector Until 2013 via NREIonline.com

With the increasing popularity of multifamily properties as an investment class, some industry pros are beginning to question whether the sector might end up overbuilt.

So far during this real estate cycle, developers have been extremely conservative in delivering new product to the market. In 2011, less than 40,000 units came on line, the lowest figure in more than 30 years, according to Reis Inc., a New York City-based research firm. Marcus & Millichap Real Estate Investment Services, an Encino, Calif.-based brokerage firm, estimates that multifamily construction completions last year totaled just 35,000 units.

Yet going forward, construction activity in the sector will undoubtedly expand.

In October, 47 percent of respondents to a quarterly survey administered by the National Multi-Housing Council (NMHC), a Washington, D.C.-based trade group, reported a substantial pick-up in land acquisitions, financing deals and permit applications for multifamily properties in their local markets. In 2012, Reis expects to see between 72,000 and 85,000 newly completed units, while Marcus & Millichap anticipates 85,000 new unit deliveries.

Given the abundance of demand for new apartments, that still won’t put the sector in danger of overbuilding in 2012. In 2011, the national vacancy rate for multifamily properties declined 120 basis points from the year prior, to 5.4 percent, Marcus & Millichap reports. Effective monthly rents rose 4 percent, to $995 per unit. This year, multifamily vacancy should fall another 40 basis points, to 5 percent, in Marcus & Millichap’s estimates. Effective rents will likely rise 4.8 percent.

Read more...No Danger of Overbuilding in Multifamily Sector Until 2013 via NREIonline.com

State of Commercial Distressed Assets from the Bank Prospective - Raymond Lowe Managing Director Wells Fargo Banking Group via CREPIG.com

Interesting take on distressed asset sales from the point of a bank. More foreclosures and pricing pressure on B or C class properties coming over the next few years. From the point of view of Raymond Lowe. He manages the Downtown Los Angeles offices of Wells Fargo’s Commercial Real Estate Banking Group, a commercial real estate lender for medium and larger-sized customers.

These videos are worth watching.

Watch Videos...State of Commercial Distressed Assets from the Bank Prospective - Raymond Lowe Managing Director Wells Fargo Banking Group - Commercial Real Estate Professionals & Investors Group

Multifamily Property Management: Five Signs You Have a Bed Bug Infestation via Property Management Insider

Colder winter temperatures mean turning up the heat, and that means an open invitation for bed bugs in apartments and dormitories. Although excessive heat can be deadly to bed bugs ( See “Turning Up The Heat on Bed Bugs in Apartment Units”), they are most at home in cozy, warmer climates like heating ducts, electrical outlets, bedding and warm electronics. These are perfect places for the tiny creatures to colonize and multiply.

Because bed bugs are so small, an infestation is often difficult to see. Although they can live a year without feeding, bed bugs seek food about once per week; human and animal blood is their ideal meal. Typically, bed bugs don’t stray far from their food source, and with a five-week cycle from egg to maturity, a small dinner party can turn into a banquet if an infestation isn’t quickly identified.

Bed bugs may feed at night and thus are seldom seen, but they leave noticeable evidence. Here are five signs, based on my experience, of a bed bug infestation in an apartment unit:

Read more...Multifamily Property Management: Five Signs You Have a Bed Bug Infestation via Property Management Insider

Austin water creeps closer to Stage 3 via KXAN News

Stage 3 water restrictions could be just months away in Austin, if the drought persists. On Tuesday, top water officials discussed the possibility during a Leadership Austin forum.

"We're actually in the process now of receiving public input and thoughts of how we might craft a Stage 3 water restriction scenario,” said Austin Water Utility Director Greg Meszaros. “We have never had to implement Stage 3."

Read more...Austin water creeps closer to Stage 3 via KXAN News

World Bank Cuts World Growth Forecast to 2.5% via MHNonline

The World Bank revised its prediction for the growth of the global economy in 2012 on Tuesday, and it wasn’t a change toward the upside. In fact, the transnational organization said that it believes that the world economy will grow only 2.5 percent this year. Last summer, the World Bank had predicted a growth rate of 3.8 percent for the entire world.

The re-jiggering of the forecast was mainly, but not entirely, a function of the crisis in Europe. Rather than the previous anemic 1.8 percent estimate for European growth, the World Bank is now predicting that the euro zone will go retrograde and contract by 0.3 percent during 2012. The United States was revised downward as well, from 2.9 percent to 2.2 percent, but at least that’s some growth, rather than anti-growth.

Slower growth is already visible in weakening global trade and commodity prices, the organization also reported. Worldwide exports of goods and services expanded an estimated 6.6 percent in 2011—down from 12.4 percent in 2010—and are projected to rise by only 4.7 percent in 2012. Meanwhile, global prices of energy, metals and minerals, and agricultural products are down 10 percent, 25 percent and 19 percent respectively since peaks in early 2011. That’s emblematic of a slowing world economy, but it does have a silver lining, namely that declining commodity prices have contributed to an easing of headline inflation in most developing countries.

Read more...Economy Watch: World Bank Cuts World Growth Forecast to 2.5 Percent via MHNonline

Freddie Mac Announces K-705 Offering of K Certificates Backed Only by 7-Year Multifamily Mortgages via MarketWatch

Freddie Mac FMCC +4.00% today announced its fifth offering of Structured Pass-Through Certificates ("K Certificates") backed exclusively by multifamily mortgages with a 7-year term. The company expects to offer approximately $1.0 billion in K Certificates ("K-705 Certificates"), which are expected to price the week of January 16, 2012, and settle on or about February 7, 2012.

The K-705 Certificates will be offered to the market by a syndicate of dealers led by Credit Suisse Securities (USA) LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated as co-lead managers and joint bookrunners for the transaction. Barclays Capital Inc., CastleOak Securities, L.P., Jefferies & Company, Inc., and J.P. Morgan Securities LLC will serve as co-managers for the transaction. The K-705 Certificates are backed by 70 recently-originated multifamily mortgages and are guaranteed by Freddie Mac. Rating agencies Fitch, Inc. and Moody's Investors Service, Inc. have been engaged to rate the three senior classes of K-705 Certificates, which are each expected to receive a rating of "AAA(sf)" and "Aaa(sf)", respectively, subject to on-going monitoring.

"This is our first K-Deal offering of the year," said Mitch Resnick, co-head of Multifamily Capital Markets for Freddie Mac. "In 2011, we were one of the top issuers in the CMBS market with 12 K-Deals, representing almost $14 billion in securities. We expect to issue at least as many deals in 2012 as our program continues to grow."

Read more...Freddie Mac Announces K-705 Offering of K Certificates Backed Only by 7-Year Multifamily Mortgages - MarketWatch

A Strong Close to 2011 Confirms Improving Outlook for 2012 via GlobeSt

The latter part of 2011 brought a steady stream of relatively positive readings for the U.S. economy and commercial real estate. The data points failed to shatter any recovery records but they reaffirmed that the economy and the CRE sector are still headed in a positive direction. As recently as the third quarter of 2011, prospects for the continuation of the recovery were being questioned by a number of economists and market participants, and mounting evidence that a retraction is far from occurring is encouraging, especially when it comes to consumer and business sentiment.

The underlying data on jobs, core retail sales and corporate profits beat expectations by a healthy enough margin to substantially reduce recession fears. Private sector hiring in the fourth quarter totaled 466,000, up from 438,000 in 4Q 2010, which helped push private sectoring hiring to 1.8 million for the year. Government job losses appear to be easing and the prior months’ overall job readings have consistently been revised upward for several months. Core retail sales continue to show year-over-year growth in the 5% to 6% range and holiday sales grew by 3.8% over 2010. Consumers are still under tremendous pressure but have shown significant resilience amid the financial-market turmoil and recession talk of the past five months.

Read more...GlobeSt.com - A Strong Close to 2011 Confirms Improving Outlook for 2012 - StreetSmart Article

Tuesday, January 17, 2012

The Allure of Apartments via NREI Institutional Outlook

Apartment fundamentals have improved significantly and are outpacing the recovery of other property types. After peaking at 8.0 percent in the first quarter of 2010, the national apartment vacancy rate declined 240 basis points to 5.6 percent as of the third quarter of 2011, according to Reis.

In addition to positive net absorption, an improving job market and favorable demographics have supported a sharp rise in apartment rents. Reis reported that effective rents increased by 2.3 percent in 2010, and we expect rent growth to accelerate through 2013 as demand remains strong and construction remains below its historical long-term average.

As a result of the quick recovery of apartment fundamentals, interest in purchasing core assets has driven up the pricing of class-A apartments in primary markets to near pre-crisis levels in both cap rates and price per unit. As of the second quarter of 2011, the average transaction cap rate, including all asset classes, declined by about 20 basis points to 6.6 percent, while average cap rates for class-A apartments in primary markets declined to 4.7 percent, according to Witten Advisors.

The apartment sector’s robust recovery is supported by favorable demographic trends (echo boomers), declining homeownership, a limited supply pipeline, and attractive government-sponsored entity (GSE) financing. Based on these demand drivers, we believe the apartment market will likely experience a continuation of improvement in vacancy and rent growth over the next three to four years.

Read more...The Allure of Apartments via National Real Estate Investor Institutional

Extend and Pretend (and Pray?) - Commentary Article via GlobeSt

Today’s depressed real estate values and tight credit markets have created a perfect storm, preventing commercial property owners from refinancing their debt as it matures. Yet, the mass of foreclosures that many feared has not yet occurred and the so-called “Great Wall of Maturities” has not come crashing down, as many have predicted. The Wall is supported, for the time being, by the lenders’ policy of “extend and pretend.” Property owners and lenders share the hope that real estate values and credit markets will change, permitting refinancing and preventing the massive transfer of distressed assets.

The Wall of Maturities is staggering; by some estimates $1.1 trillion in commercial real estate loans are set to become due through 2015. The peak year for maturities is expected to be 2013, when $311.8 billion will become due. Maturities will decrease to $286.5 billion in 2014, and continue to subside. Much of that debt was originated at the peak of the past market cycle. It is not surprising that lenders continue to extend and pretend, given the number of troubled loans and how far underwater they are. If lenders chose to foreclose, the losses could significantly erode, and in many cases totally eliminate, lenders’ capital—leaving many insolvent.

As vacancy rates increase and rents and property values continue to decline, lenders fear the risk of a default at the loan’s maturity and the risk that borrowers will be unable to continue to pay monthly debt service payments. This would end the policy of extend and pretend. Property owners face an equity gap because property values have plummeted and banks have toughened underwriting standards, no longer lending at pre-bubble loan-to-value ratios. Will this result in the borrowers’ inability to renew or refinance and result in more commercial loan defaults? Will this trigger a double dip recession?

Read more...GlobeSt.com - Extend and Pretend (and Pray?) - Commentary Article

10 Green Building Predictions for 2012 from Earth Advantage Institute via MarketWatch

Earth Advantage Institute, a nonprofit green building resource that has certified more than 12,000 homes, announced its annual prediction of 10 green building trends to watch in 2012.

The trends, which range from a boom in certified multi-family construction to the advent of consumer friendly home energy technology, were identified by Earth Advantage Institute based on discussions with a broad range of audiences over the latter part of 2011. These sectors included policymakers, builders, developers, architects, real estate brokers, appraisers, lenders, and homeowners.

"While the economy has not been kind to most new home builders, we have seen a surging interest in home energy management and energy improvement among homeowners," said Sean Penrith, executive director, Earth Advantage Institute. "Those builders and remodelers who have adopted a transparent green message have been quite successful."

Read more...10 Green Building Predictions for 2012 from Earth Advantage Institute via MarketWatch

U.S. Better Off “Thinking Big” about Energy Efficiency Instead of Focusing First on Development of New Energy Sources via ACEEE

America is thinking too small when it comes to energy efficiency, while also making the mistake of “crowding out” economically beneficial investments in energy efficiency by focusing on riskier and more expensive bids to develop new energy sources, according to a major new report from the American Council for an Energy-Efficient Economy (ACEEE).

Titled The Long-Term Energy Efficiency Potential: What the Evidence Suggests, the new ACEEE report outlines three scenarios under which the U.S. could either continue on its current path or cut energy consumption by the year 2050 almost 60 percent, add nearly two million net jobs in 2050, and save energy consumers as much as $400 billion per year (the equivalent of $2600 per household annually).

According to ACEEE, the secret to major economic gains from energy efficiency is a more productive investment pattern of increased investments in energy efficiency, which would allow lower investments in power plants and other supply infrastructure, thereby substantially lowering overall energy expenditures on an economy-wide basis in the residential, commercial, industrial, transportation, and electric power sectors.

Read more...ACEEE | ACEEE Report: U.S. Better Off “Thinking Big” about Energy Efficiency Instead of Focusing First on Development of New Energy Sources

Record Rent Growth in San Antonio Corresponds to Market Evolution via Property Management Insider

San Antonio has been one of the nation’s most consistent apartment market performers over the course of the past decade, with occupancy rarely straying very far from its average of roughly 93 percent and annual rent growth rarely getting drastically out of line with its norm near 2 percent.

But if you’ve heard anyone from the MPF Research team talk about this metro at our annual Texas/Southwest Apartment Markets Conference or other events, you know that we expect the highs and lows to get somewhat more wide-ranging in the future. Rent growth results for the past year perhaps give the first particularly strong indication that the expected evolution in the market’s performance is really starting to happen.

Effective rents for new leases in San Antonio jumped 4.6 percent during calendar 2011, more than doubling the historical norm even though current occupancy of 92.9 percent is virtually identical to the past average.

A couple of factors appear to be playing significant roles in the more aggressive rent positioning that registers in the Alamo City.

Read more...Record Rent Growth in San Antonio Corresponds to Market Evolution via Property Management Insider

How to Fix a (Really) Troubled Asset via GlobeSt

As sure as the winter snow finally has finally arrived, it’s clear that the commercial real estate market will soon be hit again this year by a gale force of mortgage delinquencies--and the representatives for both sides will continue to learn more tricks to bringing property back from the dead.

The past couple of years have brought more workouts than expected, though these deals to keep a site afloat between borrower and lender are typically more for the better class A and B properties. It’s not going to get easier, however, as Trepp estimates there will be about $350 billion in bad loans maturing in the United States each year for the next three to five years. Worst hit will be the older, more troubled assets, which present much trickier challenges to work out.

Asset managers, including the down-and-dirty types who represent the borrower on each property and the managers who represent the lenders, agree that there are three mantras, the three “Be”s that both sides should remember when trying to fix an underwater asset: Be quick, be prepared and be smart.

Read more...GlobeSt.com - How to Fix a (Really) Troubled Asset - Daily News Article

Monday, January 16, 2012

Current Commercial Thinking via the Blog of the Real Estate Center

By Dr. Mark Dotzour Chief Economist and Director of Research, Real Estate Center at Texas A&M University.

I recently gave a speech at a two-day conference in Dallas. The event was the Texas Bank and Financial Institutions Special Asset Executive Conference on Real Estate Workouts. The central focus of the event was how banks and CMBS (commercial mortgage-backed securities) servicers are handling the disposition of troubled real estate loans.

This topic is of keen interest to many who are trying to find distressed real estate to purchase. I sat in on the conference produced by the International Marketing Network for the full two days because the panels were full of global caliber speakers (except of course for me). Their comments provide a snapshot of the current sentiment of the top professionals that are daily making decisions whether to continue to “extend and pretend” or move forward with foreclosure. Here are my notes.

Read more...Current Commercial Thinking | the Blog of the Real Estate Center

Housing: The one bailout America could really use via CNNMoney

Laurie Goodman is an apolitical number cruncher who has spent most of her 28-year career out of the public view, studying the minutiae of mortgage-backed securities (MBS) for big investment banks. She's long been a star among Wall Street insiders, however. She holds the record for the most top rankings for fixed-in-come research from the trade bible Institutional Investor.

While Goodman concedes she underestimated the impact of the housing bubble's bursting early on, by mid-2007 she was warning investors to prepare for a deep downturn. She prepared herself as well.

After her employer at the time, UBS, shut down its mortgage trading desk in 2008, she jumped to Amherst Securities, a small company that serves as an MBS broker-dealer for big investors. From there she's published research that has raised her profile and made her an oft-cited source by would-be housing reformers in both the private and public sectors. If she is underestimating the problems the housing market has now, we're all in trouble.

Goodman often pauses several seconds before speaking, choosing her words deliberately. So it is especially distressing to hear her warn of a potential housing "death spiral."

On top of the 2.5 million homes that have already fallen to foreclosure since the bubble burst, another 4.5 million mortgage holders have given up paying and are likely to lose their homes, she calculates.

'Shareholders of the world unite'

Millions more are underwater -- owing more than their home is worth -- and may give up if things don't improve soon. All told, Goodman warns that more than 10 million of the nation's 55 million mortgage holders could default by 2018. If home prices fall much more than the 6% or so she's projecting over the next 12 to 18 months, the picture worsens, as more foreclosures drive prices down further, in turn causing more sheriffs' sales.

Goodman's research into who defaults shows that many governmental and private efforts at saving borrowers -- and reducing investors' losses -- by modifying mortgages weren't helping because they only extended payments or reduced interest rates. They didn't fix the fundamental problem of unsupportable debt loads.

Read more...Revolt of the insider - housing analyst Laurie Goodman - Jan. 16, 2012

Fannie, Freddie overhaul unlikely via The Hill's On The Money

An overhaul of Fannie Mae and Freddie Mac is unlikely again this year despite recent Republican efforts to move the issue up the agenda.

Congressional Republicans, along with some Democrats — and even GOP presidential candidate Newt Gingrich — are renewing calls to craft an agreement to reduce the involvement of Fannie and Freddie in the nation's mortgage market.

But without a broader accord, passage of any legislation this year is slim, housing experts say.

Read more...Fannie, Freddie overhaul unlikely - The Hill's On The Money

Apartment Occupancies Set to Hit Historical Highs via Multifamily Executive Magazine

Apartment pundits question traditional occupancy thresholds as vacancies trend toward historic lows.

Could the blistering pace of multifamily rent increases get even better? If new development doesn’t catch up with demand, operators are likely going to be in the sweetest of spots as mounting national occupancy looks to trend above 95 percent, according to data released in November by the Washington, D.C.–based National Association of Realtors (NAR). According to the NAR’s fourth quarter 2011 Commercial Real Estate Outlook? report, the apartment rental market is expected to see vacancy rates fall to 4.3 percent by the fourth quarter of 2012 (down from 5 percent in the previous year’s fourth quarter).

Vacancy rates below 5 percent indicate a landlord’s market, with demand justifying higher rents, the NAR report notes. The market with the lowest apartment vacancies for the fourth quarter of 2011 was Minneapolis (2.4 percent).

“Across all commercial real estate sectors, vacancy rates are expected to trend lower, and rents should rise modestly next year,” says NAR chief economist Lawrence Yun. “In the multifamily market, apartment rents will be rising at faster rates in most of the country next year. If new multifamily construction doesn’t ramp up, rent growth could potentially approach 7 percent over the next two years.”

Read more...Apartment Occupancies Set to Hit Historical Highs - Occupancy And Vacancy Rate, Rents, Rent Trends, Multifamily, Revenue Management - Multifamily Executive Magazine

Apartment Living Could Lead to Greater Wealth Creation Than Owning via Multifamily Executive Magazine

Michael Pestronk picked a funny time to begin an apartment company. “It was 2007, and every single person wanted to buy,” says the president of Philadelphia-based Post Brothers, which has since built a portfolio of 1,500 rental units in and around the City of Brotherly Love. “People just wanted to own. They overlooked rational analysis. Now, people are realizing, ‘Wow, if I want to own, it’s going to cost more per month compared to a rental, and if I need to move in the next five years, I’m not going to make out well on the investment.’?”

Call it a readjustment to rationality. Call it renter nation. But whatever you call it, consumers seem to be finding more economic value renting right now as opposed to buying. “People have begun to realize that the for-sale market [has] real risks associated with it,” says Christine Aragon, president of Santa Monica, Calif.–based apartment ILS Rent.com. “I think that’s the more permanent shift. Whether people will have a long-term, sustained preference for renting versus owning is going a little too far out on a limb.”

Read more...Apartment Living Could Lead to Greater Wealth Creation Than Owning - Equity, Housing Trends, Rent Trends, Multifamily via Multifamily Executive Magazine

Friday, January 13, 2012

Real Capital Analytics' 2012 predictions via Grubb & Ellis Atlanta

Real Capital Analytics just came out with its 2012 predictions, and the news is… (drum roll, please)… good!

· RCA expects the dollar volume of transactions to reach $300 billion in 2012, a 50 percent increase from last year’s $200 billion. Maturing loans and a gradual improvement in leasing market fundamentals will drive deal volume. (Grubb & Ellis forecasts a more modest gain of 25 percent in 2012.)

· New instances of distressed commercial assets totaled $56 billion in 2011, down from $92 billion in 2010 and $140 billion in 2009. Despite the pattern of decline, RCA notes that new instances of defaults and delinquencies will remain “material” in 2012.

Read more...Good News Friday | Grubb & Ellis Atlanta

Preserving Affordable Housing via The HUDdle

Public housing is at a crossroads. With a capital needs backlog of $26 billion and chronic funding shortfalls, we have already lost 150,000 units in the past 15 years. At the same time, with 7 million households paying more than half their income for housing, living in substandard housing, or both, the need for affordable housing is growing.

That’s why the Rental Assistance Demonstration is so important. This demonstration will allow housing authorities and owners to leverage private funding to address the capital needs of tens of thousands of publicly owned homes across the country – helping federal dollars go further in today’s tight budget environment. And today, HUD is pleased to announce the launch of the Rental Assistance Demonstration (RAD) website – the best resource for background materials, authorizing legislation, and examples of the transformation that RAD promises for communities across the country. As a key feature of the Department’s rental housing preservation strategy, this demonstration will work to preserve our stock of deeply affordable rental housing, promote efficiency within and among HUD guidelines, and build strong, stable communities for the families that call public housing home.

Read more...Preserving Affordable Housing | The HUDdle

Market-Peak CMBS Could See 30% Default via GlobeSt

The years between 2006 and 2008 were the peak period for CMBS issuance, and by several metrics these years also represented the trough of underwriting. Given the still-sluggish recovery in commercial real estate fundamentals, it stands to reason that clouds loom over securitized loans from the market’s peak, with the potential for inclement weather sooner (in the case of loans with five-year maturities) or later (for 10-year debt coming due in 2016 and 2017). Already the most troubled vintages, ’06-’08 CMBS loans could see a cumulative default rate as high as 30%, Fitch Ratings said in a report last week.

And while they didn’t put specific numbers on the extent of the trouble they foresee, both of the other major rating agencies have pointed to continuing strife in boom-period CMBS. Standard & Poor’s notes that of the ’07-vintage CMBS maturities, $19 billion are five-year term loans, approximately 85% of which are scheduled to mature in the first half of 2012.

Read more...GlobeSt.com - Market-Peak CMBS Could See 30% Default - Daily News Article

Resident Retention Begins on Move-In Day via Property Management Insider

We’ve been fortunate in our industry to see the markets begin to improve. However, there is still a lot of uncertainty regarding the economy, so resident retention continues to be “Mission Critical” in order to increase or, at least, protect net operating income (NOI) no matter what occurs in our market. SatisFacts’ research shows that the average cost of turnover is now approximately $3,900 per move-out. To put it in perspective, even if you were able to re-rent that apartment for $50 more per month, it would take 78 months, or 6.5 years, to recoup that initial loss! The good news is that there are basic strategies to put in place to increase retention dramatically, and often they can be implemented beginning on move-in day!

After reviewing the results from the nearly half million units utilizing various SatisFacts survey programs, the data continues to show that maintenance issues at move in have an immediate impact on a new resident’s likelihood to renew. In fact, new residents (those who have moved in within the past 3 months) with an unresolved maintenance issue are one-quarter less likely to renew their lease than longer term residents.

Read more...Resident Retention Begins on Move-In Day Property Management Insider

Inside the Fed in 2006 - A Coming Crisis, and Banter via NYTimes

As the housing bubble entered its waning hours in 2006, top Federal Reserve officials marveled at the desperate antics of home builders seeking to lure buyers.

The officials laughed about the cars that builders were offering as signing bonuses, and about efforts to make empty homes look occupied. They joked about one builder who said that inventory was “rising through the roof.”

But the officials, meeting every six weeks to discuss the health of the nation’s economy, gave little credence to the possibility that the faltering housing market would weigh on the broader economy, according to transcripts that the Fed released Thursday. Instead they continued to tell one another throughout 2006 that the greatest danger was inflation — the possibility that the economy would grow too fast.

Read more...Inside the Fed in 2006 - A Coming Crisis, and Banter - NYTimes.com

The Danger Posed By The Too-Big-To-Fails via MortgageOrb

By Richard W. Fisher on Friday 13 January 2012 Just as health authorities in the U.S. are waging a campaign against the plague of obesity, banking regulators must do the same with regard to oversized banks that undermine the nation’s financial health and are a potential threat to economic stability.

Aspiring politicians do not have to be part of the Occupy Wall Street movement or be advocates for the Tea Party to recognize that government-assisted bailouts of reckless financial institutions are sociologically and politically offensive; they stand the concept of American social justice on its head.

Business school students will understand that bailouts of errant banks are questionable from the standpoint of the efficient workings of capitalism, for they run the risk of institutionalizing a practice that distorts the discipline of the marketplace and interferes with the transmission of monetary policy.

I argue that sustaining too-big-to-fail-ism and maintaining the cocoon of protection of the "systemically important financial institutions" (SIFIs) is counterproductive, expensive and socially questionable. Financial booms and busts are a recurring theme throughout history, and bankers and their regulators suffer from recurring amnesia. They periodically forget the past and all the lessons of history, tuck into some new financial, quick-profit fantasy - like the slicing and dicing and packaging of mortgage financing - and underestimate the risk of growing into unmanageable and unsustainable size, scale and complexity as they overindulge in that new financial fantasy.

Read more...MortgageOrb: Content / Word On The Street / The Danger Posed By The Too-Big-To-Fails

Thursday, January 12, 2012

Recognizing the Benefits of Energy Efficiency in Multifamily Underwriting via Deutsche Bank

Interesting concept with some ideas that merit a closer look.

Deutsche Bank Americas Foundation instigated this project to encourage the financial industry to scale up financing of building energy efficiency retrofits. Deutsche Bank has a long history of supporting multifamily / affordable housing through its community development finance capabilities, and throughout the world the Bank has played a leadership role on climate issues. Scaling up building retrofits has become a compelling aspiration for the Bank, because of the alignment between our carbon reduction and community development goals.

Building scientists, auditors, enlightened building owners, and contractors have been retrofitting multifamily buildings in New York City for many decades, but the retrofit industry has largely relied on public subsidies, a limited resource that has constrained the industry’s ability to scale. Private capital, if it could be deployed for retrofits, could prove transformational in achieving significant carbon reductions while upgrading multifamily buildings and stimulating much-needed job creation.

Read more...Recognizing the Benefits of Energy Efficiency in Multifamily Underwriting

A Tale of Two Loan Sales Strategies via GlobeSt

Banks continued to analyze their balance sheets carefully in 2011, evaluating the delicate relationship between moving loans to the held-for-sale accounting category and its potential impact on their stock price. For the most part, analysts viewed these activities positively provided the institution had adequate capital. In 2011, compared to 2010, the additional capital and losses taken translated into more transactions.

But despite these positive actions to clean up non-performing commercial loans, there remains a staggering volume of non-performing residential loans on both the books of banks and GSEs Fannie Mae and Freddie Mac. According to a recent white paper from the Federal Reserve, currently, about 12 million homeowners are underwater on their mortgages—more than one out of five homes with a mortgage.

Read more...GlobeSt.com - A Tale of Two Loan Sales Strategies - Commentary Article