Friday, August 31, 2012

Job Growth is Driving a Healthy Multifamily Market in Houston via REBusinessOnline.com

Currently, the Houston multifamily market is in the best shape that we’ve seen in a long time. For example, rents are increasing across the board, particularly in Class A properties. In addition, occupancy is at its highest point in years. We’re still trying to backfill supply into a market that has seen historically low deliveries over the last three years, and Houston is creating serious demand for new units. We use the rule of thumb that for every six or seven new jobs created, there is demand for one new apartment. Thus, Houston has added more than 90,000 jobs in the last 12 months, which tells us that we need to add 12-15,000 units annually just to keep up with current demand. So, all in all, Houston’s multifamily market is healthy right now.

read more...Job Growth is Driving a Healthy Multifamily Market in Houston via REBusinessOnline.com

Houston construction contracts July 2012 via NewsTalk Texas

Contracts for future residential construction grew 12.9 percent July 2012 compared to July 2011, while nonresidential contracts fell 37.7 percent and total construction fell 8.3 percent.

McGraw Hill has revised residential and non-residential construction substantially upward for July ’11. As a result, construction activity last year was actually $123.0 million better than originally reported, as can be seen in the table below

Year to date, more than $5.9 billion in total contracts were awarded, up 12 percent from the more than $5.2 billion awarded year to date as of July 2011.

Read more...Houston construction contracts July 2012 via NewsTalk Texas

Your Home May Be Your Castle, But Your Rental Unit Is Not via Multi-Housing News Online

When Tenants Reach Beyond the Four Walls they Lease, Landlords Need Full Protection under Insurance Policies

The rental market for residential housing is an unexpected beneficiary of the nationwide mortgage crisis. Demand for rental housing is at a high, with rental units filled with one-time homeowners who recently lost their own houses to foreclosure.

Many of these new renters have long been accustomed to using their living areas as they see fit. As homeowners, they could – if they chose to do so – take advantage of spaces under floorboards, behind drywall or in between ceiling joists. Except for highly unusual situations, their homes were their castles.

Read more...Your Home May Be Your Castle, But Your Rental Unit Is Not | Multi-Housing News Online

Occupancy Rates Stabilize, Rent Growth Slows via NREIonline.com

Apartment rents are still growing across the country, but not as quickly as they were in the summer of 2011, when growth in effective rents peaked.

“Things have slowed since a year ago,” says Jay Denton, vice president of research for data firm Axiometrics Inc., based in Salt Lake City. “The growth rate has slowed for rents... The growth for occupancies is starting to flatten out.”

Axiometrics predicts that average apartment rents will settle into a steady pace of growth over the next few years, similar to rental markets in the mid-1990s, as occupancy rates stay very high.

Read more...Occupancy Rates Stabilize, Rent Growth Slows via NREIonline.com

Alternatively Built Multifamily Development Uses Upcycling as a Hook via Multi-Housing News Online

South Africa is the latest country to embrace the emerging trend of alternative building for multifamily developments. As previously reported on CPE and MHN’s City Pages, San Francisco has seen the development of a smaller, prefabricated apartment building providing quick solutions for multifamily infill projects. Citiq Property Developers has taken another path to alternative development, using shipping containers in the process, while not jeopardizing the overall quality of the building.

The company recently announced the fact that its newly finished apartment block in the South African city of Johannesburg, SixtyOne on Countesses, was completed in record time. The shipping container technology has been used before for portable retail areas in festivals and smaller bars but its practicality for development in general might have been underrated. The original purpose shipping containers have also recommends them durability-wise, and the use of still seaworthy units guarantees that the alloys they are made from will hold on for a great amount of time. This process is known as upcycling, which is essentially the conversion of waste materials or currently useless products into new products of better quality or better environmental value.

Read more...Alternatively Built Multifamily Development Uses Upcycling as a Hook | Multi-Housing News Online

VIDEO: Don’t Overbuild, Multifamily Developers via GlobeSt.TV

With the multifamily sector continuing to gain momentum, Jay Blasberg of Alliant Capital cautions developers not to get overzealous with construction and to practice some conservatism. Blasberg spoke with Carrie Rossenfeld during RealShare Orange County 2012 and also spoke on the panel, “Multifamily Outlook in Orange County.” In the video, Blasberg also discusses:

* Why the residential market needs to pay better attention to creditworthiness
* How multifamily meets the needs of current residents
* How the multifamily sector will change as we continue to move out of the recession

Watch video...GlobeSt.com - VIDEO: Don’t Overbuild, Multifamily Developers - GlobeSt.TV Article

MBA Reports That Commercial and Multifamily Mortgage Delinquency Rates Drop For Banks But Rise For CMBS via LoanSafe

Commercial and multifamily mortgage delinquency rates continued to drop for banks and rise for commercial mortgage backed securities (CMBS) during the second quarter of 2012. Delinquency rates also declined for Fannie Mae during the second quarter, and increased by 0.01 percentage points for life companies and 0.04 percentage points for Freddie Mac according to the Mortgage Bankers Association’s (MBA) Commercial/Multifamily Delinquency Report.

“Commercial and multifamily delinquency rates for life companies, Fannie Mae and Freddie Mac all remain quite low, and the delinquency rate for bank-held loans continues to decline,” said Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research. “The delinquency rate for loans in CMBS continues to show higher and more sustained aggregate delinquency rates, much of which is driven by the large share of these loans in foreclosure or REO.”

Read more...MBA Reports That Commercial and Multifamily Mortgage Delinquency Rates Drop For Banks But Rise For CMBS | LoanSafe

Market Is Ripe For Buying Foreclosures as Rentals via GlobeSt.com

Now may be the time for those interested in buying homes for rental purposes to get into the market. According to RealtyTrac’s recently released Foreclosure News Report, the high number of foreclosed properties on the market, along with the wealth of would-be investors kicking tires, means the market could be ripe for this type of investment.

Joel Cone, a staff writer for the report, tells GlobeSt.com that many homeowners are underwater and would appreciate investors seeking rental properties coming in and making them an offer. “An investor can come in and help them out of the distressed situation and get a property that will be a good rental property.”

Read more...GlobeSt.com - Market Is Ripe For Buying Foreclosures as Rentals - Daily News Article

Thursday, August 30, 2012

Commercial Real Estate Remains Highest Rated Investment Alternative via CCIM Institute

Despite declining economic conditions, sector provides long-term stability, according to CCIM and RERC data. 

Despite the declining economy and investment environment, CCIM members report that investors continue to seek apartments, medical office buildings, land, and agricultural properties, according to CCIM Institute and Real Estate Research Corp.’s 3Q12 RERC/CCIM Investment Trends Quarterly. CCIMs also reported upticks in retail and office activity in isolated regions.

Read more...Commercial Real Estate Remains Highest Rated Investment Alternative | CCIM Institute

New Deliveries Fail to Impact Rent Growth… Yet via Multifamily Executive Magazine

Dallas-based Axiometrics recently released its latest monthly market performance data and the results show that new units hitting the market have not really made a dent in rent growth thus far.

According to the report, national effective rents increased by only 0.54 percent in July. That makes the year-to-date increase in rents 4.42 percent. But if you look at last summer, the growth is a bit behind this year. Last July was the peak of rent increases, with a 5.32 percent figure. Since last November, rent growth has consistently hovered around the 4 percent mark.

Read more...New Deliveries Fail to Impact Rent Growth… Yet - Rent Trends - Multifamily Executive Magazine

Reports: CRE Lending Returns to Health via GlobeSt.com

It’s official. The commercial real estate lending market has returned to health, or at least is on the cusp of doing so, according to two separate reports, one by SNL Financial, the other by Chandan Economics. Both note that loan delinquencies are reaching post-crisis lows and that lending is increasing at a health clip.

SNL reports that U.S. commercial banks reported a 14-quarter low delinquency rate of 5.28% on commercial real estate loans as of the end of June, and that the ratio of bad CRE loans has more than halved from the peak of 10.76% nine quarters ago. A number of banks, many based in California, have a clean bill of health now in terms of faulty CRE loans. In California, for example, three of the five banks studied had zero delinquent loans. One of these was Santa Barbara, Calif.-based Montecito Bank & Trust and its CRE loan sector accounted for 40% of its portfolio. Based on SNL’s analysis of median CRE delinquency rates Delaware, Iowa, Kansas, Massachusetts, Nebraska and South Dakota are on top of the list with “impeccable asset quality,” it said.

Read more...GlobeSt.com - Reports: CRE Lending Returns to Health - Daily News Article

Wednesday, August 29, 2012

Dallas Beige Book via Dallas Fed

The Eleventh District economy grew at a moderate pace over the past six weeks. Manufacturing activity continued to expand, demand for business services remained solid, and transportation services activity increased. Respondents said retail sales edged up, while automobile sales held steady. The housing and commercial real estate markets remained healthy. Financial firms noted softening loan demand. Energy activity remained robust, and agricultural conditions improved slightly. Employment levels were steady to slightly higher. Wage and price pressures were modest. Most contacts noted that European debt issues and the upcoming national elections added uncertainty to their outlooks.

Read more...Dallas Beige Book - Dallas Fed

Fannie Mae and Freddie Mac: Back to black via The Economist

SINCE 2008 Fannie Mae and Freddie Mac, America’s two housing-finance giants, have been on life support, spared from insolvency by an intravenous drip of taxpayer cash. Lately, however, the companies have shown signs of life: earlier this month both reported their biggest profits since being forced into “conservatorship” four years ago (see chart).

That has sent a frisson through investors clutching preferred shares issued back when the companies minted money by using their quasi-governmental status to borrow cheap and buy or guarantee most residential mortgages in America. Between March and early August, many of Fannie’s old preferred shares, which now trade over the counter, jumped from around $1.50 to more than $3 (still a fraction of their $25 par value).

Read more...Fannie Mae and Freddie Mac: Back to black | The Economist

'Real' Homeownership Rate at Nearly 50-Year Low via Businessweek

So much for President George W. Bush’s “ownership society.” The real rate of homeownership—subtracting people who are about to be ejected for not paying their mortgage—has fallen to lows not seen since the mid-1960s, according to a new analysis.

The decline in the Census Bureau’s official measure of homeownership is bad enough. It slid to 65 percent this year from 69 percent in 2005 and 2006, at the peak of the housing bubble, when buying a home was universally considered a sensible way to secure one’s fortune. But things look even worse when you strip out homeowners whose homes are in foreclosure or who are headed for foreclosure because they are 90 days or more delinquent on mortgage payments.

The “real” homeownership rate, adjusted for foreclosures and serious delinquencies, stood at just 62.1 percent in the second quarter of 2012, down from a peak of 68.3 percent reached during a couple of quarters in 2004 and 2005, according to an analysis by Sean Fergus, manager of research at John Burns Real Estate Consulting. That sets it back to levels last seen in 1965.

Read more...'Real' Homeownership Rate at Nearly 50-Year Low - Businessweek

HUD Study Finds Most LIHTC Properties Still Affordable via Multi-Housing News Online

A new report by the HUD has found that that after an initial 15-year required “affordability period,” most Low-Income Housing Tax Credit (LIHTC) Program properties remain affordable. Since its inception, LIHTC has helped produce about 2.2 million affordable apartment units, or about one-third of all multi-family rental housing built between 1987 and 2006—arguably the largest rental housing production program in history. The study covered properties using LIHTC between 1987 and 1994, all of which had reached the 15-year point by 2009.

Under LIHTC, either 20 percent of a property’s units must be occupied by residents with incomes of less than 50 percent of area median income (AMI), or 40 percent occupied by tenants with incomes of less than 60 percent AMI. Those restrictions remain in place for 15 years, and the tax credits themselves are parceled out to developers annually for 10 years.

Read more...HUD Study Finds Most LIHTC Properties Still Affordable | Multi-Housing News Online

The CMBS Market Has Weathered the Summer's Economic Storms via NREIonline.com

As the summer comes to a close, CMBS players are breathing a sigh of relief.

Although the industry has experienced some turbulence this year, it was lucky enough to avoid a crash like it went through last summer due to the European debt crisis and the drama surrounding the U.S. debt ceiling. The CMBS market has finally stabilized, experts say, leaving lenders, borrowers and investors quite content with current conditions.

“It’s night and day compared to this time last year,” says Doug Mazer, co-head of Wells Fargo’s CMBS lending group. “Right now we’re in a period of relative stability. The last two CMBS pools in the market were oversubscribed, and a lot of that has to do with the fact that we’re in a period of relative calm.”

Read more...The CMBS Market Has Weathered the Summer's Economic Storms via NREIonline.com

Slowing Job Creation Impacts CRE Recovery via CCIM Institute

A slowdown in job creation, along with elusive financing, affected most commercial real estate sectors in 2Q12, according to the National Association of Realtors’ latest commercial real estate forecast. “Job creation in the second quarter was about half of what we saw in the first quarter, which is moderating demand in the office sector,” said Lawrence Yun, NAR’s chief economist. “Industrial and warehouse space is holding on better because imports and exports have advanced. While exports to Europe generally are down, trade has been robust with India, China, and other Asian nations, along with Brazil, Mexico, and our strongest trading partner — Canada.” Dampened demand is moderating rent growth across the office, industrial, and retail sectors. Multifamily is the only sector currently seeing strong rent growth and development activity.

Read more...Slowing Job Creation Impacts CRE Recovery | CCIM Institute

Tuesday, August 28, 2012

Getting Premium Rents for Taking the LEED via Multifamily Executive Magazine

David Zucker’s interest in green building started in a Dumpster.

“Every Friday, I’d see a container full of what I knew was usable stuff being hauled away to the landfill,” he recalls of watching (and paying for) the weekly disposal of construction waste from one of his early multifamily projects. “I just wanted to save some money on building materials by trying to be less wasteful.”

That purely proprietary goal quickly evolved into a wholesale commitment to green building, one that has resulted in sky-high returns and retention rates, lower operating costs, higher rents, and satisfied tenants and investors—all for a premium of less than 2 percent of overall development costs.

Read more...Getting Premium Rents for Taking the LEED - Green Building - Multifamily Executive Magazine

Demand for apartments drives commercial real estate performance via HousingWire

A slowdown in job creation and ongoing tight loan availability has tempered growth in some of the major commercial real estate sectors, according to the National Association of Realtors quarterly commercial real estate forecast.

Although still positive, dampened demand is slightly moderating rent growth with the exception of the multifamily market. “Sharply higher demand for apartments is causing rents to rise at faster rates,” NAR Chief Economist Lawrence Yun says.

Read more...HousingWire | Demand for apartments drives commercial real estate performance

Monday, August 27, 2012

Why Home Prices Are Rising: The ‘Distressed Share’ via WSJ

Tuesday’s measure of June home prices from the S&P/Case-Shiller 20-city index is likely to turn positive when compared with one year ago for the first time in two years, according to a forecast by Zillow Inc.

Prices have risen this summer for a simple reason: more buyers have chased fewer properties. But the drop in supply and the boost in demand isn’t the only reason that Case-Shiller is now turning positive. Another related factor is that the share of non-distressed home sales is rising and the share of distressed sales—foreclosures and short sales, mostly—is falling.

Read more...Why Home Prices Are Rising: The ‘Distressed Share’ - Developments - WSJ

Texas Manufacturing Outlook Survey August 27, 2012 via Dallas Fed

Texas factory activity increased but at a slower pace in August, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, fell from 12 to 6.4, suggesting softer output growth.

Other indexes of current manufacturing activity also declined in August. The new orders index edged down to a reading of zero, suggesting flat demand. The capacity utilization index fell from 8.7 to 1.7, reaching its lowest reading since April. Shipments declined slightly in August; the index dipped into negative territory, with more than a quarter of manufacturers noting a decrease in shipment volumes.

Read more...Texas Manufacturing Outlook Survey - Dallas Fed

Huge Job Growth Propels Big Revenue Jump for Corpus Christi Apartments via Property Management Insider

Corpus Christi led the nation with its job base expanding 4.0% year-over-year. And as a result, Corpus Christi ranks as one of the very best secondary apartment markets anywhere in the country.

Watch video...Huge Job Growth Propels Big Revenue Jump for Corpus Christi Apartments [Video] | Property Management Insider

New Apartment Unit Deliveries Still Accelerating via MultifamilyBiz.com

The latest monthly apartment market report from Axiometrics Inc. notes that national effective rents (rents net of concessions) increased 0.54% from June to July, bringing year-to-date (YTD) effective rent growth up to 4.42%. Annualized, the effective rent growth rate has moderated from the peak rate of 5.32% set in July 2011, reaching a point of relative stability around 4.0% for every month since November 2011. While new apartment deliveries have yet to impact rent growth, the rate of new deliveries is accelerating with approximately 56,000 units being delivered in the last six months of 2012 and approximately 129,000 units going online in 2013.

Read more...New Apartment Unit Deliveries Still Accelerating - Multifamily News Headlines – Breaking News, Stories, Top Headlines :: MultifamilyBiz.com

NAR Research: Commercial Real Estate Recovering at a Slower Pace via realtor.org

Positive underlying fundamentals continue to support all of the major commercial real estate sectors, but a slowdown in job creation and ongoing tight loan availability has tempered growth in some areas, according to the National Association of Realtors® quarterly commercial real estate forecast.

Lawrence Yun, NAR chief economist, said there are mixed results among the commercial sectors. “Job creation in the second quarter was about half of what we saw in the first quarter, which is moderating demand in the office sector,” he said. “Industrial and warehouse space is holding on better because imports and exports have advanced. While exports to Europe generally are down, trade has been robust with India, China and other Asian nations, along with Brazil, Mexico and our strongest trading partner – Canada.”

Read more...NAR Research: Commercial Real Estate Recovering at a Slower Pace | realtor.org

Friday, August 24, 2012

Commercial Mortgage Late Payments Decline Led By 2007 Loans via Bloomberg

The delinquency rate on U.S. commercial-mortgages packaged into bonds declined in August, led by loans from the market’s peak five years ago, according to Morgan Stanley.

Payments more than 30 days late fell 8 basis points to a 12.13 percent rate this month, Morgan Stanley analysts said in a report today. The measure for deals issued at the height of the nation’s property bubble fell 23 basis points to 15.53 percent, the New York-based analysts led by Richard Parkus said.

Property owners have struggled to pay off maturing debt taken on in 2007 when commercial-mortgage bond sales surged to a record $232 billion and real estate values peaked. The performance of loans from that year, which has been “extremely” poor, the analysts said, improved this month as fewer borrowers needed to refinance.

Read more...Commercial Mortgage Late Payments Decline Led By 2007 Loans - Bloomberg

Slumping Commercial Real Estate Sales Are Latest Flashing Red Non-Recovery Indicator via ZeroHedge

Real Capital Analytics (RCA) released their US commercial real estate transaction data for July last night. The only way to interpret the data is - ugly. After a dismal June (down 33% YoY), July did not see any bounce and in fact plunged 20% YoY with transactions totaling $14.6bn. As Barclays notes, the takeaway is generally negative, as the growth trend has weakened considerably since March ( which was +62% YoY). What is interesting to us is that with Treasury yields so low, the cap-rate 'spread' makes commercial real estate relatively attractive and yet no-one's buying.

Read more...Slumping Commercial Real Estate Sales Are Latest Flashing Red Non-Recovery Indicator | ZeroHedge

Thursday, August 23, 2012

Household formation among young adults shows no sign of recovery via HousingWire

The rate at which Americans formed households fell sharply during the Great Recession, with the greatest shortfall among young adults squeezed financially by the weak economy, according to an economic commentary from a Cleveland Federal Reserve official.

Tighter lending standards are further complicating the housing sector's ability to recover by reducing access to mortgage credit, the commentary said.

“This may have increased the incentive of individuals to delay household formation in order to save for a down payment, build credit histories, or repair tarnished credit scores,” said Tim Dunne, a researcher at the Federal Reserve Bank of Cleveland, who wrote the commentary.

Read more...HousingWire | Household formation among young adults shows no sign of recovery

Multifamily Permits Up for July via Multifamily Executive Magazine

The number of building permits issued last month made July one of the strongest months for the multifamily industry so far this year, the U.S. Census Bureau reports.

About 299,000 new permits were issued for the month, with 25,000 for buildings with 2 to 4 units and 274,000 for buildings with 5+ units. That’s an 11.2 percent increase from June, according to the National Association of Home Builders (NAHB).

Read more...Multifamily Permits Up for July - Multifamily Building - Multifamily Executive Magazine

Wednesday, August 22, 2012

Will Fall-Off In CMBS Loan Modifications Shake Up Special Servicers? via CoStar Group

he number of CMBS loan modifications and liquidations has declined compared to 2011, but the fall-off in modifications is far outpacing the decline in liquidations. As a result, the liquidation-to-modification ratio for 2012 is currently around 4:1 versus 3:1 for 2011.

Through July 2012, Wells Fargo Securities LLC Structured Products Research identified 190 modifications and 853 liquidations, compared to 355 modifications and 1,075 liquidations for the same period in 2011.

There also continues to be a substantial gap in terms of average loan size for liquidations and modifications. Smaller loans are getting liquidated, while the larger ones are being modified.

Read more...Will Fall-Off In CMBS Loan Modifications Shake Up Special Servicers? - CoStar Group

Nearly half of Fannie Mae REO unable to reach market via HousingWire

Only half of the previously foreclosed homes owned by Fannie Mae are either on the market or being prepared for sale. The remaining properties are currently locked away in some step of the foreclosure system.

The National Association of Realtors said in its existing home sales report Wednesday that its officials were pressuring government agencies to release more of their REO in markets short of inventory.

Many market participants long claimed the government – including Fannie, Freddie Mac and the Department of Housing and Urban Development – are deliberately holding these homes off the market in order to get more for them when home prices recover.

Read more...HousingWire | Nearly half of Fannie Mae REO unable to reach market:

'via Blog this'

Private Equity Funds Target Foreclosed Homes As Rental Play via NREIonline.com

Private equity investors have been pouring into the battered housing market in recent months as investors seize opportunities to buy distressed single-family homes and convert them to rental properties.

The single-family home rental market is a segment that has, historically, been very fragmented both in its ownership and operations. The investment capital now flowing into this sector is changing that dynamic.

“What you’re going to see is a creation of much more professionally managed single-family inventory,” says Gary Beasley, a managing director at Waypoint Real Estate Group in Oakland, Calif. Waypoint came out of the gate early with its REO to rental strategy.

Read more...Private Equity Funds Target Foreclosed Homes As Rental Play via NREIonline.com

Monthly Review of Texas Economy, August 2012 via Real Estate Center at Texas A&M University

The Texas economy continues to grow at a rate higher than the national average. The state gained 226,800 nonagricultural jobs from July 2011 to July 2012, an annual growth rate of 2.2 percent compared with 1.4 percent for the United States. The state's nongovernment sector added 260,400 jobs, an annual growth rate of 3 percent compared with 1.8 percent for the nation's private sector.

Read more...Monthly Review of Texas Economy, August 2012 -- Real Estate Center at Texas A&M University

LNR’s ‘Window’ Goes Live in Bid to Appease Investors via WSJ

LNR Property LLC, the largest servicer of distressed loans in commercial mortgage-backed securities, on Tuesday took a new tack in defense of its methods to fix defaults on loans by increasing the transparency of practices often scorned by investors.

Tobin Cobb, LNR’s charismatic co-chief who helped lead Deutsche Bank’s commercial real estate group through the real estate boom, has been known to personally challenge analysts who publish notes questioning loan modifications by LNR. Now, with the firm up for sale and drawing bids of at least $1 billion, it is taking new pains to tell its side of the story.

LNR, which is engaged with more than $22 billion of distressed loans, and other “special servicers” have been criticized for going too easy on indebted borrowers or for conflicts of interest that undermine their job of representing debt holders when a loan goes into default.

Read more...LNR’s ‘Window’ Goes Live in Bid to Appease Investors - Developments - WSJ

How to Capitalize on Multifamily Investment via GlobeSt.com

The high tide of single-family home foreclosures has turned five million homeowners to renters, and likely longer-term, if not permanent, renters. So says Eric Sussman, managing partner at Sequoia Real Estate Partners. Sussman recently chatted with GlobeSt.com on the subject of multifamily investment and how investors can capitalize.

GlobeSt.com: Why is there now a greater window of opportunity for investors to capitalize on multifamily housing investment?

Eric Sussman: Generally, commercial real estate has offered reasonable risk and stable returns over the long term, providing cash flows and the opportunity for growth, all while providing a hedge against inflation. We view multifamily housing as being far better positioned presently than other commercial real estate classes—office, retail, industrial, etc. for several reasons.

Read more...GlobeSt.com - How to Capitalize on Multifamily Investment - Daily News Article

Tuesday, August 21, 2012

Tight credit is throttling consumer spending, U.S. Fed says via Reuters

Bankers' reluctance to lend to people with less-than-pristine credit histories is restraining the U.S. economic recovery by holding back consumer borrowing and spending, new research from the San Francisco Federal Reserve Bank shows.

The study, published on Monday in the regional Fed bank's Economic Letter, adds to evidence that tighter credit, not just consumers' reluctance to pile on more debt, is impeding household spending.

Read more...Tight credit is throttling consumer spending, U.S. Fed says | Reuters

Bibby: Spin Out the GSE Multifamily Divisions via Multifamily Executive Magazine

Ever since the federal government bailed out Fannie Mae and Freddie Mac in 2008, policymakers and stakeholders have struggled with the question of what to do with these challenged but fundamental components of the nation’s mortgage finance system.

Most generally agree that the two government-sponsored enterprises (GSEs) can’t survive in their present form. Finding the right fix, however, is anything but simple, given the size of the GSEs’ footprint in housing finance.

Read more...Bibby: Spin Out the GSE Multifamily Divisions - Finance - Multifamily Executive Magazine

Fannie’s, Freddie’s Woes Don’t Extend to M-F Side via Commercial Property Executive

Given the attention put on new changes to Fannie Mae’s and Freddie Mac’s situation, Commercial Property Executive spoke with two Fannie/Freddie experts at NorthMarq Capital, Bloomington, Minn., to get some insights focusing on the two GSEs’ specific relevance to commercial real estate.

On Friday, the Treasury Department announced changes to the Preferred Stock Purchase Agreements between itself and the Federal Housing Finance Agency, which has been the conservator of Fannie Mae and Freddie Mac since September 2008. The modifications will accelerate the wind-down of the two entities.

Read more...Fannie’s, Freddie’s Woes Don’t Extend to M-F Side | Commercial Property Executive

Multifamily Mortgage Insurance Premiums to Increase via NMHC

Despite substantial comments from apartment, seniors and health care industries opposing rate increases, HUD announced that, as planned, it will increase in mortgage insurance premiums (MIPs) on all conventional loans insured by FHA on apartment, nursing and health care facilities and hospitals beginning Oct. 1. In the final rule published on Aug. 15 (77 CFR 49007), HUD maintained the increases announced on April 10, 2011. The agency argues the increases are necessary to protect against potential credit losses and to make FHA more in-line with market mortgage and construction financing interest rates.

Read more...Multifamily Mortgage Insurance Premiums to Increase via NMHC:

Monday, August 20, 2012

A Way Out - Finance via Multifamily Executive Magazine

Ever since the federal government bailed out Fannie Mae and Freddie Mac in 2008, policymakers and stakeholders have struggled with the question of what to do with these challenged but fundamental components of the nation’s mortgage finance system. Most generally agree that the two government-sponsored enterprises (GSEs) can’t survive in their present form. Finding the right fix, however, is anything but simple, given the size of the GSEs’ footprint in housing finance.

Fannie and Freddie’s multifamily lending may make up a smaller portion of their portfolios than their single-family businesses, but the GSEs’ multifamily programs have been quite successful. They have default rates of less than 1 percent—just a tenth of the default rates in the single-family sector—and have produced roughly $7 billion in profits for the federal government since being placed in conservatorship. But the gravity of the problems with Fannie and Freddie’s single-family mortgage financing programs is overshadowing this proven multifamily track record. And as GSE reform evolves, a single-family focus could cost the apartment industry a critical source of financing, undercutting its ability to provide quality housing for the nearly 100 million Americans who rent.

Read more...A Way Out - Finance - Multifamily Executive Magazine

Fed Studies Show Damage to Labor Market Is Reversible via Bloomberg

Most of the damage inflicted on the U.S. labor market by the recession is reversible, according to Federal Reserve research, leaving open the possibility that additional stimulus will be effective in reducing joblessness.

About one-third, or 1.5 percentage points, of the jump in unemployment from 5 percent as the economic slump began to its 10 percent peak in October 2009 can be traced to a mismatch between the supply of labor and job openings, according to a study released this month by the Federal Reserve Bank of New York. That leaves the remainder due mainly to a lack of demand.

“There is still considerable weakness in the labor market,” Aysegul Sahin, one of the authors and a New York Fed economist, said in an interview. “We see that the weakness in the labor market is not specific to certain groups, such as certain occupations or certain locations. This points to a case where labor market weakness can be attributable to the overall weakness in the economy.”

Read more...Fed Studies Show Damage to Labor Market Is Reversible - Bloomberg

Apartment Production Up Strongly Year Over Year via NAHB Eye on Housing

The Census Bureau’s preliminary estimate for starts in buildings with five or more apartments in July came in at 229,000 units (at a seasonally adjusted annual rate), up 9.6 percent from the revised figure for June (revisions to the May and June numbers were minor).

The 3-month moving average has been very stable, hovering between 205,000 and 210,000 for the past quarter. Production in this range is a substantial improvement over the roughly 100,000 five-plus starts recorded in 2009 and 2010, or even the 167,000 last year. The industry was consistently hitting production targets in the neighborhood of 300,000 a year for the entire decade of 1997-2006, however, so there still appears to be substantial room for improvement before apartment construction returns to a long-run sustainable rate.

Read more...Apartment Production Up Strongly Year Over Year « Eye on Housing

Friday, August 17, 2012

GSEs expected to unload delinquent loans after Treasury change via HousingWire

Analysts expect Fannie Mae and Freddie Mac to begin unloading more distressed mortgages from their portfolios after the Treasury Department accelerated their wind down.

Both government-sponsored enterprises will now be required to cut their retained portfolios by 15% annually over the next several years until hitting $250 billion. Treasury increased this from a 10% annual reduction. Fannie holds $672 billion and Freddie has $581 billion in their portfolios as of June, according to their latest monthly summary reports.

"However, it should be noted that the GSEs are currently reducing their investment portfolio at least this much," said analyst Sarah Hu of RBS Securities.

Read more...GSEs expected to unload delinquent loans after Treasury change | HousingWire

Distressed Office Properties Start to Move in Dallas via NREIonline.com

Good news and bad news for the Dallas office market: Banks and investors are finally resolving some high-profile problems as huge, distressed office towers change hands.

Cousins Properties Inc. announced its purchase of 2100 Ross Avenue, or Ross Tower, at a foreclosure auction this month. Cousins paid $59.2 million for the 844,000-sq.-ft. property, or $70 per sq. ft. “This is the point of the cycle when some existing owners capitulate,” says Dan Fasulo, managing director for data firm Real Capital Analytics, regarding the deal. “For investors, this is the time to pounce.”

Investors are paying much less than replacement cost for assets like Ross Tower and the overall Dallas office market growing stronger, according to local experts. However, the market may experience some strain as big, partly-empty buildings like Ross Tower come out of foreclosure and slash their rents to regain occupancy.

Read more...Distressed Office Properties Start to Move in Dallas via NREIonline.com

Fasten Your Seat Belts via ReisReports

In the latest Reis Quarterly Briefing, Vice President of Research and Economics, Dr. Victor Calanog, discusses what’s driving the economy and the real estate markets these days, and where they both may be headed. Over the next few days, we will share highlights from that briefing beginning with some macro economic trends.

The Economy- It’s different this time around
One need only look around to see that economic growth in the first half of the year has been sluggish. GDP has remained frustratingly low; with the first quarter rate coming in at just 2.0% followed by preliminary second quarter growth of just 1.5%. To make any traction, these numbers would need to come in at around 2.4% to 2.5%. Missing is the boost that traditionally comes from the housing sector, which continues to be a drag on the economy; and consumer spending, which has been anything but robust.

Read more...Fasten Your Seat Belts | ReisReports

Capital Shortfall: Is There Sufficient Senior Debt Financing? via Commercial Property Executive

Is there enough first-position debt capital to meet the needs of expiring commercial property loans in the next few years?

In the larger universe of non-bank lenders, Mortgage Bankers Association data shows mortgage expirations of $151 billion in 2012, dropping to $108 billion in 2013 and and $109 billion in 2014 before hitting $163 billion in 2015, $215 billion in 2016 and $199 billion in 2017 (see chart).

Regarding the supply of debt capital to refinance these loans, Jamie Woodwell, MBA vice president of commercial and multi-family research and economics, noted that lending sources increased their holdings by $8 billion to a total of $2.4 trillion in the first quarter, compared to the fourth quarter of 2011. That means there has been an overall net increase in lending in the market, whereby the amount of originations and refinancing exceed that of loans that are being paid off.

Read more...Capital Shortfall: Is There Sufficient Senior Debt Financing? | Commercial Property Executive

Software Solutions: Challenges in Asset Management of MultiFamily Property via Commercial Property Executive

With apartment properties, asset and property management functions often overlap. The attraction and retention of creditworthy tenants, for instance, can be thought of as pure property management, but the tenants generate revenue streams that are the basis of value in income-producing properties. In that case, the importance of software to facilitate best practices when it comes to tenants cannot be overstated.

“One of the most sought-after features that we’re seeing in property managers’ inquiries is that of automated tenant application services,” independent facilities management analyst Ashley Halligan said. “It allows a prospective tenant to fill out an online application so the property management company can quickly automate background checks and approval procedures. Companies like Point2 and AppFolio offer this feature.”

Read more...Software Solutions: Challenges in Asset Management of Multi-Family Property | Commercial Property Executive

Commercial Rebounding With Less-Than-$5 Million Sales: Mortgages via Bloomberg

Broker Connie de la Garza has been trying to sell an empty medical-office building in Harlingen, Texas, for six months. He’s finally getting offers after slashing the asking price by 26 percent to $1.4 million.

“That’s when the real activity happened,” said de la Garza, the owner of Bahnman Realty Inc., who is marketing the property along with Brandon Beeson of Edge Realty Capital Markets. After two bids that were “absolutely ridiculous,” the third “is something that we can work with,” he said.

Sales of small buildings across the U.S. have risen this year to the highest since 2008 as buyers take advantage of prices that have yet to rebound from the property crash and increased access to financing. Improved demand would help broaden a commercial real estate recovery that’s so far been confined to trophy office towers, apartments and malls to a broader swath of the market. Loans for properties valued at less than $1 million account for almost a third of com

Read more...Commercial Rebounding With Less-Than-$5 Million Sales: Mortgages - Bloomberg

Thursday, August 16, 2012

Houston Economic Update August 2012 via FRB of Dallas

The Federal Reserve Bank of Dallas business-cycle index indicates economic activity in the Houston metropolitan area grew at an annualized rate of 2.8 percent in June. Estimates of weak employment growth for June may be weighing on the index, but key area industries continue to perform well despite eroding national and international expectations. Real estate markets are improving and seeing strong activity levels, energy prices are mostly in healthy territory and retail indicators are looking strong. Thus, the outlook for Houston in the coming months remains positive.

Seasonally adjusted home sales declined an average of 2.46 percent over the three months ending in June. Single-family housing permits and starts were down in June, but trends remain flat to positive. Multifamily occupancy was 89.4 percent in the second quarter, and lease rates were up for all apartment classes over the last year and quarter. Industrial vacancy rates fell to 5.3 percent in the second quarter, a decline both year to year and from the first quarter, and CBRE cites 4.5 million square feet under construction. Office space continues to outperform, with lease rates up and vacancy rates down from the first quarter to 13.9 percent.

Read more...Houston Economic Update August 2012 via FRB of Dallas

Tech Markets Are Leading the Recovery in CRE Fundamentals via NREIonline.com

Amid a backdrop of sluggish economic growth and lackluster payroll figures, one sector of the economy continues to shine: technology.

The vibrancy of technology in the U.S. permeates beyond the financial outlook of firms in the sector. It directly influences commercial real estate in metro areas where tech firms are the most active. In fact, an analysis of tech-heavy metros reveals that multifamily and office properties are among the many beneficiaries of a dynamic local technology cluster.

Nine metros were identified for this analysis, each of which boasts a tech sector that is a major driving force in the local economy. The metros selected include: Austin, Texas; Boston; Denver; Portland, Ore.; Raleigh-Durham, N.C.; San Diego; San Francisco; San Jose, Calif.; and Seattle.

Read more...Tech Markets Are Leading the Recovery in CRE Fundamentals via NREIonline.com

Wednesday, August 15, 2012

Is Now a Good Time to Sell Your Apartment Property? via Commercial Property Executive

The right time to sell a property depends on when it was purchased, the seller’s tax status and the opportunities for reinvestment, among other factors. One factor that should be part of the decision is the stage of the real estate cycle, and by that measure, now is a good time to sell. Consider the following:

The apartment market has seen some good appreciation recently. Real Capital Analytics reports that the average price per unit paid for an apartment property in the second quarter was $101,412, up by 8.4 percent from the second quarter of 2011 and 35 percent above the recent trough in the third quarter of 2009. Similarly, the average cap rate per unit was 6.2 percent in the second quarter, down from 6.4 percent in the year-ago quarter, and the recent trough of 7.1 percent in the third quarter of 2009.

Read more...Is Now a Good Time to Sell Your Apartment Property? | Commercial Property Executive

What's Driving Apartment Demand? The Answer May Surprise You via YouTube

Despite new interest in apartment living, the demand isn't coming from a downturn in single family homes. NMHC President Doug Bibby provides insight into what's behind the surge in apartment living: mobility, changing households and new thinking about home ownership.

Watch video...What's Driving Apartment Demand? The Answer May Surprise You - YouTube

In Downtown Austin, a Wave of Construction via NYTimes.com

Amit Sudharshan, 28, dons shorts and flip flops to walk the two blocks from his downtown apartment here to his job as a quantitative researcher at RGM Advisors.

The high-frequency trading company based here shares a floor of the Chase Bank Tower with the more conservatively dressed workers at the offices of United States Senator John Cornyn.

Mr. Sudharshan and his wife, Megan Guse Sudharshan, are among the wave of young residents who have embraced a fledgling urban lifestyle in Texas’s capital, where Cirrus Logic recently constructed a new downtown headquarters and Facebook, Google and other high-tech employers have set up shop alongside the lobbyists, lawyers and professional service providers who have traditionally filled office space in the central business district.

The combination of a diversifying business center and Austin’s renowned entertainment scene has recently drawn an influx of young and highly educated workers downtown.

Read more...In Downtown Austin, a Wave of Construction - NYTimes.com

Training Property Managers | The Balance Sheet via Yardi Corporate Blog

As property managers are increasingly asked to behave like asset managers, their training is taking a unique turn. Third-party management firms and management departments within investment firms alike are coming up with more comprehensive and sophisticated approaches to upgrade their teams’ abilities.

One particularly innovative effort is a training facility created by Cooper Square Realty Inc. in its office at 622 Third Ave. in Manhattan. Along with the customary trappings of a property management company’s headquarters, the multi-family specialist is installing a 1,500-square-foot training center geared to the needs of managers and superintendents. Seventeen stations provide working models of boilers, burners, elevator cabs, electrical systems, water tanks and roofs. The facility will come complete with a model lobby desk that provides the basis for a discussion about reception and the role of the doorman. Managers-in-training receive instruction in the different equipment through a combination of presentations from experts and video segments. Candidates for manager positions must pass tests on all 17 systems.

Read more...Training Property Managers | The Balance Sheet - Yardi Corporate Blog

Green Buildings: Boost Business and Neighborhoods via IREMfirst.org

Developers and commercial building owners are increasingly using sustainable, environmentally friendly and energy efficient practices to lower costs, and the practice is spreading to include entire communities.

The U.S. Green Building Council just announced that the total footprint of commercial projects certified under its LEED (Leadership in Energy and Environmental Design) green building program surpassed 2 billion square feet. An additional 7 billion square feet is currently in the pipeline across the globe, the council reports.


Read more...Green Buildings: Boost Business and Neighborhoods via iremfirst.org

Tuesday, August 14, 2012

ALN Monthly Newsletter August 2012 via ALN Apartment Data

ALN Data just released their July 2012 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.

Read more...ALN Monthly Newsletter August 2012

Creative Retention | The Balance Sheet via Yardi Corporate Blog

Hanging on to the multifamily residents you have is always high on the priority list of property managers. Turning apartments is nearly always a revenue loss, and keeping the tenants you have reduces workload for everyone on the site staff.

Getting creative with retention strategies is a challenge for property managers, who must constantly update their techniques to keep tenants happy and 30-day notices at bay. Recent survey results indicate that this is more challenging than ever – in March, a multifamily survey found that 58.5 percent of renters said they “definitely” or “probably” would renew their leases, a drop of more than 6 percentage points from a previous survey.

So how to best combat renter wanderlust? We went digging for some creative retention offerings from property management professionals. Here are some of the strategies they’re employing:

Read more...Creative Retention | The Balance Sheet - Yardi Corporate Blog

A Flexible But Enforceable Green Building Code via GlobeSt.com

As energy costs approach record levels, towns and municipalities are striving to establish standards and increase their sustainability profile. Currently, there is no lack of confusion on how best to make buildings energy-efficient and sustainable using regulatory approaches. With a plethora of checklists and rating systems (and a lot of debate as to what approach is truly effective) it is imperative that local governments have a credible, enforceable and adoptable code in place. It is through the effective application and enforcement of standardized codes that the most meaningful improvements to the health, safety and welfare of the public have been achieved.

That’s why the International Green Construction Code, which was finalized and issued in late March by the International Code Council, the leading code-authoring organization in cooperation with the American Institute of Architects and the American Society for Testing and Materials is so important. The product of a public process including comment periods and hearings throughout 2010 and 2011, the IgCC, otherwise known as the Green Code, is the first real attempt to codify an enforceable standard for how to achieve energy savings in the biggest consumers of energy in the United States: commercial buildings.

Read more...GlobeSt.com - A Flexible But Enforceable Green Building Code - Commentary Article

Monday, August 13, 2012

It’s Greener to Retrofit than Build New, Report Finds via NREIonline.com

Brand new green buildings are always white hot.

But experts have long been touting the environmental benefit of green buildings’ slightly less sexy cousin: Retrofitting existing buildings with green upgrades.

Now there is proof.

A groundbreaking report released earlier this year found that it is unequivocally greener to retrofit an old building than construct a new green building, no matter how many high-tech bells and whistles are in the new construction. “The Greenest Building: Quantifying the Environmental Value of Building Reuse,” was commissioned by Preservation Green Lab, a project of the National Trust for Historic Preservation with support from The Summit Foundation and in partnership with four companies, including Skanska Group.

Read more...It’s Greener to Retrofit than Build New, Report Finds

Texas No. 2 for job gains in the past year via Dallas Business Journal

Texas is one of four states leading the way in terms of expanding employment bases in the past year, according to the latest figures from the U.S. Bureau of Labor Statistics.

California led the way, adding 279,100 jobs since mid-2011, followed by Texas (up 231,800), New York (up 136,900) and Ohio (up 100,000).

Read more...Texas No. 2 for job gains in the past year - Dallas Business Journal

North Texas existing home sales up 23 percent in July via Star-Telegram.com

Existing homes sales in North Texas continued to rebound in July with sales figures showing another double-digit increase from a year ago, according to the latest monthly housing activity report.

Real estate agents sold 7,487 homes in the 29-county North Texas area, a 23 percent jump from July of 2012, according to the report compiled by sales numbers through the multiple listing service by the Texas A&M Real Estate Center.

And through July, 43,420 homes were sold, a 16 percent increase from year-to-date totals of 2012, the report said.

Read more...North Texas existing home sales up 23 percent in July - Tarrant Business

Creating Commercial Real Estate Alpha via NREI Readers Write

In modern portfolio theory, Alpha is the excess return of an investment above the market or benchmark return. In the capital markets, Alpha is the excess return of common stocks above a benchmark like the S&P 500 Index or the excess return of a portfolio of REIT stocks above the FTSE NAREIT Index.

In CRE, Alpha is the excess return generated by the investment owner/manager above the market return like the NCREIF NPI Index (see the June 15, 2012 VOM for current returns). The Alpha return in CRE as opposed to stocks and bonds is primarily generated by the investment owner/manager through its control of the real estate asset. This hands-on control of the real estate asset, leases, income/expenses and capital structure enables the owner/manager to generate Alpha return.

Read more...Creating Commercial Real Estate Alpha | NREI Readers Write:

'via Blog this'

Friday, August 10, 2012

Valuations Expected to Climb in Second Half via REIT.com

Look for continued growth in valuations and operating income in the commercial real estate industry during the second half of 2012, according to Paul Whyte, managing director with Credit Suisse.

Whyte heads Credit Suisse’s real estate investment banking division. In a video interview with REIT.com in New York at REITWorld 2012: NAREIT’s Investor Forum, Whyte offered his near-term outlook for REIT investment in the United States. He also discussed some of the potential pitfalls in both the real estate market and financial system that could give REIT investors problems.

Whyte said he expects the gains will be “spotty.” He also said he expects investors to keep up the ongoing “flight to quality” in terms targeting trophy assets.

Watch video...Valuations Expected to Climb in Second Half via REIT.com

Should Apartment Owners be Worried About Rising Home Sales in Texas? via Multi-Housing News Online

In a report that might have long-term implications for the multifamily industry in Texas, which has been having a very good run lately, single-family home sale momentum seems to be returning to the state. At least, that’s the conclusion of the latest Texas Quarterly Housing Report issued today by the Texas Association of Realtors. Compared with the same quarter last year, second quarter 2012 single-family home sales were up significantly.

During 2Q12, 67,334 single-family homes were sold in Texas, an increase of 13.04 percent over the second quarter of 2011 according to the report. In addition, the median price in the second quarter of 2012 was $161,400, which is 7.45 percent higher than during 2Q11.

The growth in sales and prices wasn’t limited to a handful of markets, according to the Realtors, but was broad-based. Statewide results can be dominated by large-market trends (Houston, DFW, San Antonio, Austin) because of high volume, but this time around increases in both sales volume and median price were seen throughout most of the 48 Texas markets included in the report.

Read more...Should Apartment Owners be Worried About Rising Home Sales in Texas? | Multi-Housing News Online

Rental-History Technology Helps Nab Serial Skippers via Multifamily Executive Magazine

For years, glacial reporting times kept serial skippers one step ahead of apartment operators. Now, with better technology emerging, the chase may finally be over.

By the time the resident’s balance had reached several thousand dollars, the management team had no choice but to start eviction proceedings. That was in April 2011, after the resident had already lived in the Dallas community for several months.

Over the next 120 days or so, on-site personnel watched in dismay as the resident came and went in her car, a sleek, late-model Jaguar, with little apparent concern that her crystal, fine china, and urbane furnishings would end up on the street. Perhaps her carefree attitude came from a well-developed knowledge of eviction proceedings.

Read more...Rental-History Technology Helps Nab Serial Skippers - Rents, Technology, Legal Issues - Multifamily Executive Magazine

5 Smart Social Media Strategies - Marketing via Multifamily Executive Magazine

Here’s a newsflash about social media for apartment operators: it’s not just about how many “likes” you have on Facebook. Instead, it’s about connecting with your residents (and hence, their networks) to make sure your real-life communities are as sticky as possible.

“You shouldn’t really be using your Facebook page or Twitter as a classified ad or a way to sell apartments,” says Melissa Deen, marketing director for San Diego-based Sunrise Management, which runs 9,000 units across Southern California and Arizona.

It’s about more than that, says Joe Greenblatt, Sunrise Management’s CEO. “At the end of the day, it’s all about engagement, which leads to more traffic and higher retention. Engagement with residents is a good thing.”

Here are five smart ways companies are thinking about social media:

Read more...5 Smart Social Media Strategies - Marketing - Multifamily Executive Magazine

Submetering: Adding Value in New Construction via American Building Today

roperty managers continue to realize the financial and environmental value of utilizing submetering to bill residents for utility costs. Over the last several years, due to regulatory requirements in some cities and states and the recognition of this value, multifamily investors and owners across the industry are purchasing properties already equipped with submeters or retrofitting older complexes.

As more property owners move toward the submetered approach, it remains and grows in importance as builders include submeters in new construction – increasing the value of the property and enabling owners to purchase and immediately begin recouping utility costs from residents. As an indication of the nationwide shift within the multifamily industry, the percentage of newly constructed properties with submetering systems that are serviced by NWP have doubled over the past 5 years versus those without submetering systems.

Read more...Submetering: Adding Value in New Construction | American Building Today

Thursday, August 9, 2012

Rental Trends: Online Self-Service Features are the Top Factors Impacting Rental Decisions via Property Management Insider

When it comes to succeeding in business, nothing is more important than knowing what your customers want and adapting to changes in customer demand. In our industry, as renter preferences develop, we have to work hard to stay ahead of the curve, or we will fall far behind.

A recent survey of renter attitudes, published in the June issue of UNITS magazine, highlighted some new shifts in resident demands that every property manager needs to take into consideration. The results suggest that a robust online resident portal is not only important to residents, but that it is quickly becoming essential to competing in an increasingly digital rental market.

Apartment Renters Demand Online Self Service

Read more...Rental Trends: Online Self-Service Features are the Top Factors Impacting Rental Decisions | Property Management Insider

CMBS Delinquencies Increase for the Fifth Consecutive Month via GlobeSt.com

After predicting that the CMBS delinquency rate would plateau following a four-month-straight climb, the latest numbers from Trepp LLC show that the numbers are still steadily rising. In its latest monthly report, Trepp reports that the CMBS delinquency rate rose to 10.34% in July, an increase of 18 basis points from June (10.16%), and a rise of 97 basis points since February (9.52%).

Manus Clancy, senior managing director at Trepp, tells GlobeSt.com that the company previously forecasted that the troublesome class of 2007 loans that had reached their balloon dates but were not refinanced would hit a peak by the first half 2012 and level off in the second half. But after the rate cracked 10% in May and continues to creep up, Clancy says it may take a little more time for the rate to normalize once again.

Read more...GlobeSt.com - CMBS Delinquencies Increase for the Fifth Consecutive Month - Daily News Article

Apt. Recovery Shifts Into Expansion Mode As Developers Step Up Delivery of New Projects via CoStar Group

Apartment market fundamentals continued to be rock solid through the second quarter, becoming the first CRE property sector to make the full transition from recovery mode into expansion and see increasing rents, declining vacancy and a burst of new construction.

Of the four major property types, apartments possess the best recovery story with vacancy rates compressing by 190 basis points since the beginning of 2010. Rents have recovered in 30 of the 54 largest U.S. markets.

"Apartments continue to have very solid fundamentals. There’s no lack of demand, and we’re starting to see supply coming online," commented senior real estate economist Erica Champion this week during CoStar’s Mid-Year 2012 Multifamily Review and Outlook.

Read more...Apt. Recovery Shifts Into Expansion Mode As Developers Step Up Delivery of New Projects - CoStar Group

Wednesday, August 8, 2012

APARTMENT MARKET STATISTICS: September 2012 via Multi-Housing News Online

Permits for 5+ buildings surged by nearly 18 percent in May, according to the National Association of Home Builders (NAHB). Multifamily permits, says NAHB, have averaged 258,000 units over the past three months—“pointing to continued strength in multifamily construction going forward.”

NAHB’s shelter index, which measures overall housing costs, increased for the 11th time in 12 months. The largest rent jump since late 2008—6 percent on an annualized basis‑occurred in May 2012.

Read more...APARTMENT MARKET STATISTICS: September 2012 | Multi-Housing News Online

Recession Generation Opts to Rent Not Buy Houses to Cars via Bloomberg

The day Michael Anselmo signed a lease on his first apartment in New York City, he lost his job at Buck Consultants LLC. He spent about 10 months struggling to pay rent with unemployment benefits. Two years later he’s still hesitant to buy a home or even a road bike.

“Every decision that I have made since I lost my job has been colored by that insecurity I feel about the future,” said Anselmo, 28, who now rents an apartment in Austin, Texas, and works as a consultant for UnitedHealth Group Inc. “Buying a house is just further out on the timeline for me than it used to be.”

Anselmo and many of his peers are wary about making large purchases after entering adulthood in the deepest recession and weakest recovery since World War II. Confronting a jobless rate above 8 percent since 2009 and student-loan debt hitting about $1 trillion, 20-to-34-year-olds are renting apartments, cars and even clothing to save money and stay flexible.

Read more...Recession Generation Opts to Rent Not Buy Houses to Cars - Bloomberg

Deja Vu All Over Again? CRE Whipsaws Up and Down In Face of Economic Uncertainty via CoStar Group

This time last year, the CRE industry was mired in a summer funk, buzzing over the potential negative effects of the European debt crisis, the U.S. debt crisis and slower-than-expected economic growth following a series of strong year-end indicators fueled property demand growth that picked up speed through the beginning of the year.

The latest crop of national investors surveys and leading indicators released over the last few days shows that same confused sentiment has returned, less than three months ahead of another historic U.S. presidential election. Sifting through current and leading indicators and sentiment survey finds a similarly murky picture of conditions in U.S. commercial real estate property markets and capital conditions.

First, The Good News

Read more...Deja Vu All Over Again? CRE Whipsaws Up and Down In Face of Economic Uncertainty - CoStar Group

Multifamily Permits Continue to Rise on Annual Basis via Multi-Housing News Online

Recent trends in multifamily permitting, which is a volatile indicator of multifamily construction, nevertheless show that there’s strong developer interest in building apartments in the post-Great Recession environment. The U.S. Census Bureau reported recently that June residential permitting numbers were actually down compared with May (there’s the volatility), but consistently up during most of 2012 when compared with last year.

Privately owned multi-housing units authorized by building permits in June were at an annualized rate of 755,000 units, down 3.7 percent from the revised May rate of 784,000 but 19.3 percent above the June 2011 rate, according to the bureau. The June multifamily permit number of 220,787 marks eight consecutive months of permitting above 200,000 levels, driven by developers and investors gearing up to take advantage of the strong apartment market fundamentals.

Read more...Multifamily Permits Continue to Rise on Annual Basis | Multi-Housing News Online

Percentage Of Commercial Loans Paying Off Hits 12-Month Low via MortgageOrb

The percentage of commercial real estate loans paying off on their balloon date hit a 12-month low last month, according to new data from Trepp LLC.

Trepp reports only 26.3% of loans reaching their balloon date paid off. This is well under the 12-month average of 41.6%. By loan count (as opposed to balance), 53.3% of loans paid off. On the basis of loan count, the 12-month rolling average is now 52.2%.

Read more...MortgageOrb: Percentage Of Commercial Loans Paying Off Hits 12-Month Low

Regional Economic Growth Decelerates via Dallas Fed

Regional indicators point to a slowing in economic growth. Texas employment growth was more modest in the second quarter than in the first, although growth is still outpacing the nation due in part to strength in the energy sector. The recent slowdown appears to be related to weaknesses in the global economy and general uncertainty about the pace of the current U.S. expansion.

Read more...Regional Economic Growth Decelerates - Dallas Fed

Tuesday, August 7, 2012

Dallas, 3 other Texas cities lead South in population growth via Dallas Business Journal

Dallas added 25,413 new residents between April 2010 and July 2011 to join Houston, San Antonio and Austin in leading the southern United States in population growth.

On Numbers reported that Houston increased by 45,716 people in 15 months, while San Antonio grew by 32,152 and Austin by 30,221 people. The population data came from estimates by the U.S. Census Bureau.

Texas has the strongest economy in the South, so it's no surprise that the state would lead in population growth, too, On Numbers reported.

Read more...Dallas, 3 other Texas cities lead South in population growth - Dallas Business Journal

USGBC Partner WegoWise Makes Utility Tracking a Breeze via Multi-Housing News Online

The focus on sustainable development that has grown in both the single and multifamily sectors in recent decades has made it imperative to track and understand building energy and resource use. After all, there is no use in spending the resources to develop an extremely efficient property only to have something so simple as leaking toilets eating away at your bottom line.

The problem is that it is both complicated and expensive to track building energy use in real time. While there are a plethora of companies that will come in and install sensors to ensure that your LEED asset is performing up to standards, this blind approach will prove extremely costly in a large portfolio that may only have a handful of buildings are operating inefficiently.

Read more...USGBC Partner WegoWise Makes Utility Tracking a Breeze | Multi-Housing News Online

Corpus Christi apartment 1Q 2012: Hendricks & Partners via Real Estate Center at Texas A&M University

Apartment absorption for first quarter 2012 was 144 units, an increase of 45 percent from 1Q 2011 and the strongest first quarter since 2008, according to Hendricks & Partners.

Apartment developers produced no major projects in 1Q 2012. In the previous year, builders delivered 690 units, the largest quarterly supply increase of the past five years.

Builders requested permits for 55 multifamily units in 1Q 2012, compared to 224 in 1Q 2011.

Read more...Corpus Christi apartment 1Q 2012: Hendricks & Partners via Real Estate Center at Texas A&M University

Monday, August 6, 2012

El Paso apartment 1Q 2012: Hendricks & Partners via Real Estate Center at Texas A&M University

Net apartment move-ins declined to 128 units in first quarter 2012, down from the 856 units absorbed during the same period in 2011, according to Hendricks & Partners.

New apartment construction fell to 32 units 1Q 2012, well below the 762 units delivered to the market 1Q 2011. No new permits were issued for multifamily units 1Q 2012, down from 63 units permitted 1Q 2011.

No new permits were issued for multifamily units in first quarter 2012, down from 63 units permitted a year prior.

The average vacancy rate for the local multifamily was 4.2 percent for first quarter 2012, from 2.5 percent a year earlier.

Read more...El Paso apartment 1Q 2012: Hendricks & Partners via Real Estate Center at Texas A&M University

Apartment Market Continues to Tighten via REIT.com

Showing no signs of slowing down, market conditions continued to grow more favorable for property owners in the apartment sector for the sixth consecutive quarter, according to data from the National Multi Housing Council (NMHC).

“The apartment sector’s strength continues unabated,” said Mark Obrinsky, NMHC’s chief economist. “Even as new construction ramps up, higher demand for apartment residences still outstrips new supply with no letup in sight.”

Read more...Apartment Market Continues to Tighten via REIT.com

A Trying 12 Months Ahead for Maturing CMBS via GlobeSt.com

It’s looking like some heavy weather in the forecast for legacy CMBS: over the next 12 months, $24 billion in securitized CRE loans rated by Fitch Ratings is set to mature. The New York City-based ratings agency said Friday that as much as 41% of the 1,900 fixed-rate conduit loans coming due, or 59% of the total by balance, would be unable to refinance.

Unsurprisingly, the numbers look worse for CMBS loans originated at the height of the market. Fitch says that based on its surveillance methodology, which assumes a debt service coverage ratio of less than 1.25x, 80% of all circa-‘07 loans that mature in the next 12 months would be unable to refinance at maturity. By contrast, just 27% of the seasoned 10-year loans from 2002 will face that quandary.

Read more...GlobeSt.com - A Trying 12 Months Ahead for Maturing CMBS - Daily News Article

Friday, August 3, 2012

Basel III: What You Need to Know via CCIM Institute

he Basel Capital Accords have been around for over two decades. The Group of Ten countries first adopted the Basel Capital Accord in 1988 to ensure banks hold more capital for high risk loans under the presumption that it would prevent catastrophe global economic failures. There have been several stages of the Basel Capital Accord, including Basel II and Basel III.

Three U.S. federal agencies — Office of the Comptroller of the Currency, Federal Reserve System, and the Federal Deposit Insurance Corporation — have proposed rules based off Basel III and reforms required by the Dodd-Frank Act. CCIM Institute was among several commercial real estate organizations that submitted a comment letter on the proposed rules (See Basel III letter below).

Read more...Basel III: What You Need to Know | CCIM Institute

The Green Leasing Office via MultifamilyBiz.com

If you work in a leasing office, it’s the little things that count, especially when it comes to your daily routine in the work place. Simple changes of habit can save energy and resources, improve your health, and reduce costs.

RECONSIDER YOUR COMMUTE

Don’t wait to get to the leasing office to do your part; you can do it in transit. Americans spend an average of 47 hours per year commuting through rush hour traffic, amounting to 23 billion gallons of gas wasted in traffic each year (Source: 2011 Annual Urban Mobility Report). Try your best to carpool, bike or take public transportation to work and/or telecommute when possible. If you need to drive, consider joining a car-sharing service like Zipcar or invest in an energy-efficient vehicle.

Read more...The Green Leasing Office - Multifamily Blogs – Experts – Technology, Products :: MultifamilyBiz.com

Fits and Starts for Commercial Real Estate Volume via NREIonline.com

The commercial real estate recovery, like the rest of the economy, had a late spring slowdown. “We had a strong first quarter and a softer second quarter as investors became concerned about sovereign debt issues,” says Janice Stanton, senior managing director of Capital Markets for commercial real estate broker Cushman & Wakefield.

Commercial real estate brokers and researchers see a similar stall in momentum. The strongest activity is still confined to a few large cities, but large parts of the rest of the country are still working out the wreckage of the real estate crash.

Read more...Fits and Starts for Commercial Real Estate Volume via NREIonline.com

Brian O’Boyle: Demand for Multifamily Deals at Peak Levels via Dmagazine.com

Multifamily interest continues to remain strong; the demand for deals appears to be at peak levels. We are seeing the return of “pre-sale” transactions—a trend that we haven’t experienced in years. Buyers are also focusing on suburban deals, another trend that is gaining momentum as cap rates on infill locations fall below the 5 percent mark.

The most sought-after deals are where a “value-added” story exists, especially the early 1990s vintage product, where kitchens and baths can be updated. We’ve seen several recent deals where a new buyer has gone in and updated these rooms then realized significant rental increases. There is tremendous equity available in the marketplace for deals with a story.

Read more...Real Points » Blog Archive » Brian O’Boyle: Demand for Multifamily Deals at Peak Levels via Dmagazine.com

The housing market: Pulling its weight at last via The Economist

STEVE SCHMITZ surveys the street outside his newly bought four-bedroom house and enthuses over what he sees. Stucco houses with tidy gardens, just like his, line the road. A minivan is parked outside one, an SUV sits in the driveway of another. An elementary school is just a few blocks away. It is as idyllic as a new homeowner could wish in this western suburb of Phoenix.

Mr Schmitz, however, is no ordinary homeowner. The house is just one of more than 1,000 which his company, American Residential Properties, has acquired since 2008 in Phoenix, Las Vegas and California. ARP bought the house for roughly half its peak selling price of more than $300,000 in a “short sale”: in essence, a sale forced on the owner to avoid foreclosure. After carpet cleaning and repainting it was quickly rented for $1,300 a month, about half what the original owner had been paying for a mortgage.

Read more...The housing market: Pulling its weight at last | The Economist

CoreLogic Releases Multifamily Applicant Risk Index via MultifamilyBiz.com

CoreLogic, a leading provider of information, analytics and business services, today announced that CoreLogic SafeRent, provider of the nation's leading suite of screening and risk management services designed for the multifamily housing industry, released its second quarter 2012 multifamily applicant risk (MAR) index report including new renter trends. The second quarter MAR Index value increased six points from the first quarter 2012 and three points from a year ago, indicating an increase in national renter credit quality and applicant pool quality.

The MAR Index for second quarter 2012 is based exclusively on applicant traffic credit quality scores from the CoreLogic SafeRent statistical lease screening model (Registry ScorePLUS®). The MAR Index is updated quarterly to provide property owners and managers with a benchmark against which to evaluate their applicant credit quality trends against market-based MAR Index trends. This comparison indicates the relative strength of their property portfolio to attract and secure applicants with higher credit quality and an increased likelihood of fulfilling lease obligations.

Read more...CoreLogic Releases Multifamily Applicant Risk Index - Multifamily News Headlines – Breaking News, Stories, Top Headlines :: MultifamilyBiz.com

IKEA Plugs-in Solar Panels at Dallas-Area Store in Frisco, TX As Company Progresses Towards Being State's Largest Solar Owner via MarketWatch

IKEA, the world's leading home furnishings retailer, today officially plugged-in the solar energy system installed at its Dallas-area store in Frisco, Texas - which, when combined with projects completed in Houston and underway in Round Rock, make IKEA the state's largest private solar owner. IKEA Frisco's 114,000-square-foot photovoltaic (PV) array consists of a 912-kW system, built with 3,780 panels, and will produce approximately 1,336,300 kWh of clean electricity annually, the equivalent of reducing 1,016 tons of carbon dioxide (CO2), eliminating the emissions of 181 cars or powering 115 homes yearly (calculating clean energy equivalents at www.epa.gov/cleanenergy/energy-resources/calculator.html ).

Read more...IKEA Plugs-in Solar Panels at Dallas-Area Store in Frisco, TX As Company Progresses Towards Being State's Largest Solar Owner - MarketWatch

Solar Capital Funds Installation in Arlington via CoStar Group

Solar Capital Group has again arranged funding for the installation of a large-scale solar panel installation at an Arlington multifamily complex.

Right Choice Industrial Automation (RCIAC) has installed a 290kw system to service the 423 apartment units at Spanish Oaks, located at 3025 E. Park Row in in the Arlington/Mansfield submarket of Tarrant County.

The system is comprised of both roof-top and parking lot structures. It features micro-inverters, which collect and relay production data in real time to a monitoring service.

Read more...Solar Capital Funds Installation in Arlington - CoStar Group

Thursday, August 2, 2012

Seeing Green via Apartment Finance Today Magazine

When it comes to greening an apartment community, developers and owners are often of two minds. Many believe it’s the right thing to do—the tougher nut to crack is figuring out whether it’s the smart thing to do.

On the front end, owners and developers have a hard time finding the capital to finance green construction or retrofits. The problem hasn’t been as severe on the aff ordable housing side, as there are many federal, state, and city financial incentives to help a green deal pencil out. And in the luxury apartment space, the higher level of rents can off set the relatively high cost of achieving a green certification.

But for the vast majority of those caught in between —conventional market-rate developers—it’s tough to find financial incentives to go green. Many lenders aren’t willing to off er better rates and terms to a green project, because the evidence of a return on investment just isn’t there.

Read more...Seeing Green - Apartment Finance Today Online Article - Apartment Finance Today Magazine

San Antonio apartment 1Q 2012: Hendricks & Partners via Real Estate Center at Texas A&M University

Net absorption in the first three month of 2012 was 1,811 units, the strongest first quarter in over ten years, according to Hendricks & Partners.

No major projects were delivered first quarter 2012, marking the first quarter since 2004 where no new stock was brought online. Builders requested permits for 790 multifamily units 1Q 2012, compared to 394 units for 1Q 2011.

Read more...San Antonio apartment 1Q 2012: Hendricks & Partners via Real Estate Center at Texas A&M University

Muoio: Why (and When) the Recovery Will Lose Steam via Multifamily Executive Magazine

There’s no doubt about it: The apartment market remains robust.

Vacancies have fallen below 5 percent for the first time since 2001, while rents continue to increase and have already surpassed the previous peak level. Yet, amid this standout success, we are now seeing some of the demand dynamics shift.

The reason the apartment market could sustain such a robust recovery—especially in the face of such a disappointing economic backdrop—was the decoupling of demand from broader economic trends. Most of the incredible absorption that has driven vacancies so low, so fast, has been powered by the shift from homeownership to renting.

Read more...Muoio: Why (and When) the Recovery Will Lose Steam - Economics - Multifamily Executive Magazine

Wednesday, August 1, 2012

CMBS Market Active, But Volume Still Dashes Hopes via NREIonline

CMBS lenders are putting together new deals, but issuance for the full year 2012 will likely once again fall below expectations.

Year-to-date, the U.S. commercial real estate market saw $22.5 billion in new CMBS issuance, according to Commercial Mortgage Alert, an industry newsletter. Somewhere close to $10 billion in additional deals might come to market in the coming months, according to Commercial Real Estate Direct, another industry publication. That would put 2012’s non-agency CMBS volume on par with 2011’s $32.9 billion, but fall $15 to $20 billion short of earlier expectations, according to Ken Cheng, managing director for CMBS new issuance ratings with Horsham, Pa.-based Morningstar Credit Ratings LLC.

Read more...CMBS Market Active, But Volume Still Dashes Hopes

Strong Job Growth Fuels Apartment Demand in Houston via Property Management Insider

Houston’s booming economy has helped top-tier apartments fill up, and that’s now triggering demand for the metro’s long-ailing bottom-tier apartment properties.

Watch video...Strong Job Growth Fuels Apartment Demand in Houston | Property Management Insider

LEED and Beyond via Multi-Housing News Online

The green stamp of approval—practically everybody wants it in one form or another. In the multifamily sector, with builders catering to residents’ growing demand for green features and municipalities stepping up requirements, property rating systems have become increasingly important to the industry. While certain labels are more recognizable than others, certification options abound.

Official sustainable development certification by any name centers on a basic premise: do no harm—to the environment. From minimizing waste or repurposing wood in the construction process to installing energy-efficient appliances and lighting in the residential units, multifamily property certification can be achieved through a variety of means, all with the goal of diminishing emissions, decreasing energy consumption and conserving water. Criteria for green certification differ from rating system to rating system, of which there are plenty.

Read more...LEED and Beyond | Multi-Housing News Online

Basel III's Impact on Construction Lending via Commercial Property Executive

In early June, the Federal Reserve and other banking agencies issued three notices of proposed rulemaking that would, in large measure, implement new international banking standards known as “Basel III.” The new standards are anticipated to be adopted and would become effective in 2015.

At least one of the proposed rules will affect real estate finance markets. The regulatory agencies are specifically focused on construction lending and will impose greater balance-sheet scrutiny on construction loans by imposing a higher risk weighting on construction loans than other loans. The higher capital ratios will apply with respect to so-called “high volatility commercial real estate exposures.” HVCREs are loans that finance or financed the acquisition, development or construction of real property.

Read more...Basel III's Impact on Construction Lending | Commercial Property Executive:

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June Apartment Market Results Soften Slightly via MultifamilyBiz.com

Axiometrics Inc. reports that most apartment markets across the country, while still strong by historical standards, have moderated from peak effective rent growth levels recorded last summer. Weak job growth, as recently reported by the Bureau of Labor Statistics (BLS), appears to be having an impact on the apartment market as national sequential effective rent growth from May to June was just 0.52%, as compared to 0.76% in the same period of 2011. Still, despite the most recent slowdown, 2012 could be the third consecutive year that the national apartment market posts effective rent growth of 4.0% or more.

Read more...June Apartment Market Results Soften Slightly - Multifamily News Headlines – Breaking News, Stories, Top Headlines :: MultifamilyBiz.com