Friday, March 30, 2012

Multifamily Real Estate Taking Off via Financial Advisor Magazine

While the single-family housing market remains stagnant, demand for apartments is on a tear, making the multifamily segment very attractive for nontraded REIT investors, say executives at Orlando-based CNL Financial Group.

Jeff Shafer, group president of CNL Securities Corp., who is responsible for CNL’s capital-raising activities, says CNL looks for alternate real estate assets that can produce growth and capital appreciation.

“Suddenly, you have a tremendous demand for multifamily units,” says Rick Coe, principal managing director of investment for CNL Financial Commercial Real Estate. “In the past year, the vacancy rate of multifamily housing slipped to 5.2 percent compared to a historical average of 6.5 percent to 7 percent.”

Coe says the burgeoning demand for rental housing is fueled in part by baby boomers’ offspring, dubbed “echo boomers,” who either cannot afford to own a home, or prefer not to buy one. The rental boom, he says, is also a major bi-product of the 2008 financial market crash that has pushed echo boomers, baby boomers and others to pass on or get out of the housing market. “The supply and demand metric for multifamily housing has shifted over the last four to five years," he noted.

Read more...Multifamily Real Estate Taking Off via Financial Advisor Magazine

J.P. Morgan Revives Sales of Distressed Commercial-Mortgage Bonds via WSJ

J.P. Morgan Chase & Co. is bringing back sales of commercial mortgage-backed securities supported by mostly delinquent loans for the first time since the late 1990s, providing new incentives for buyers of distressed debt.

Thursday, J.P. Morgan told investors it will sell $132 million of bonds supported by nonperforming loans or other troubled debt purchased by Rialto Capital Management, a distressed investment firm owned by home-builder Lennar Corp.

The CMBS are the first of their type since regulators used similar methods to dispose of troubled assets after the savings-and-loan crisis. In the late 1980s and early 1990s, the government formed the Resolution Trust Corp. to work through hundreds of thousands of residential and commercial loans. The agency in 1992 began selling pools of bad debt carved up into bonds and was credited for helping to clear banks’ balance sheets and make way for a rebound.

“There is an estimated $75 billion to $100 billion of distressed commercial debt out there that has yet to be dealt with, so this could be part of the cleanup process,” said Tad Philipp, director of commercial-real-estate research at Moody’s.

Read more...J.P. Morgan Revives Sales of Distressed Commercial-Mortgage Bonds - Developments - WSJ

Houston construction contracts increase via Houston Business Journal

The Houston metropolitan area's total contract value for planned construction increased in February, making up for a decline in January.

February's total contract value of $809.2 million was up 20 percent from February 2011, data from the research and analytics unit of McGraw-Hill Construction shows. The nonresidential contract value increased 35 percent from the year before, and residential grew 9 percent.

Read more...Houston construction contracts increase - Houston Business Journal

NMHC, NAA Explore Impact of New Energy Codes via

New energy codes could add thousands of dollars to the construction costs of each individual apartment residence in a multifamily building, according to new research commissioned by the National Multi Housing Council (NMHC) and the National Apartment Association (NAA). The research examines the costs of adopting the 2009 and just released 2012 International Energy Conservation Code (IECC).

The latest IECC versions represent a significant departure from the 2006 IECC code, adding upwards of hundreds of thousands in additional costs to new construction. These new burdens come at a time when the U.S. is already suffering from a shortage of affordable housing.

“We support building efficiency,” said NMHC Director of Energy and Environmental Policy, Paula Cino in releasing the NMHC/NAA research. “Apartments are by definition more energy efficient than other residential options, such as single-family houses. But these codes are meant to set minimum requirements, and they set a very expensive minimum. In some cases it would take more than 200 years for the energy savings produced by the codes to pay for the required upgrades.”

Read more...NMHC, NAA Explore Impact of New Energy Codes - Multifamily News Headlines – Breaking News, Stories, Top Headlines ::

Thursday, March 29, 2012

Cash or Credit? - Rent Trends, Technology via Multifamily Executive Magazine

Rental payment history may be a more valuable metric than credit history in telling good rental prospects from bad.

Forget adjusting your credit parameters—apartment screening firms say rental payment history, not raw credit scores, has emerged as the preferred metric for approving apartment prospects during the screening process. While credit history is still an important consideration for leasing agents looking to approve would-be renters, screening companies suggest that, in some cases, it could be more beneficial to NOI and asset value if approvals are granted to prospects with stellar payment histories, even if their overall credit is lousy.

“Rental history is the most exciting data set we have. The end-all be-all and best predictor of how someone is going to pay their rent is how they have paid it in the past,” says David Carner, president of Carrollton, Texas–based RealPage’s LeasingDesk resident screening and rental insurance division. “The goal is to try to replace the people whom you’ve rented to [who have] good credit but a checkered payment history with people whom you probably wouldn’t have rented to because of sketchy credit but [who] for the last 18 months have paid their rent in full and on time every single month.”

Read more...Cash or Credit? - Rent Trends, Technology - Multifamily Executive Magazine

Austin Multifamily - Market shows extreme strength overall via

The Austin multifamily market is extremely strong overall, with the most robust submarkets found in the Central Business District, South Central and Southwest submarkets. Due to the number of previously shelved projects coming back online, potential deliveries in 2012 will likely be around 3,500 units, followed by another 5,500 units or so in 2013. However, there are no major projects scheduled to be completed in 2012 that will have a drastic effect on the market — most of the starts that have taken place will not come on line until the first part of 2013.

As a result, the upward push on occupancy and rental rates seen during 2011 will continue throughout 2012 — until the market sees some of these new projects coming online, owners of Austin multifamily properties will continue to be aggressive on rents and not offer concessions.

Read more...Austin Multifamily - Market shows extreme strength overall via

Apartment Market Delivering Strong Rent Growth via

In its latest research, Axiometrics Inc., a provider of data and advisory services on the apartment market, reports that sequential rent growth in February 2012 was the highest it has been since June 2011, with effective rent (rent net of concessions) increasing by 0.66% from January to February. Likewise, the national occupancy rate improved on a sequential basis for the first time since August 2011, increasing from 93.36% in January to 93.57% in February. This was the highest month-to-month gain since April 2011, and the third highest in the last 18 months. The combined effective rent and occupancy growth rates—0.87%—provide a potential monthly revenue growth figure, and exceed every month since May 2011.

Axiometrics also notes that Class A properties—which were the first to expand rents in the current apartment market recovery—are still increasing rents but at a slower pace, especially in some of the “early recovery” markets. In contrast, Class C properties will help increase overall rent growth numbers this year, rather than being a drag as they have been the past few years.

Read more...Apartment Market Delivering Strong Rent Growth - Multifamily News Headlines – Breaking News, Stories, Top Headlines ::

What does an ADA Survey cover? - The Science of Real Estate Article via

Accessibility Surveys or “ADA Surveys” are used during real estate transactions and development to identify potential accessibility issues with a property, often done during due diligence in conjunction with a Property Condition Report. Though not solely governed by the Americans with Disabilities Act (ADA) (there are many other accessibility codes that may apply depending on the state and local codes), an ADA Survey generally looks at the same main concerns regardless of the property location. The main items an ADA Survey covers are discussed below.

Route of travel: An accessible route of travel shall be provided to all portions of the building and from the public way to an accessible entrance. To the extent feasible, the route should coincide with the route typically used by the general public.

Bathing and Toilet Facilities (Sanitary Facilities): Where bathing facilities are provided, at least one shower or bathtub, toilet and lavoratory support facilities shall be accessible. No less than 1% of all facilities shall be accessible. In multi-accommodation spaces wheel chair maneuvering fixture clearances shall be provided.

Read - What does an ADA Survey cover? - The Science of Real Estate Article

Wednesday, March 28, 2012

ULI Survey Offers Optimistic Commercial Real Estate Forecast via

A new Urban Land Institute survey of leading real estate economists and analysts nationwide was optimistic about the overall economy and commercial real estate prospects. The results of the “ULI Real Estate Consensus Forecast,” presented via webinar on March 28, predicted CRE transaction volume to increase by nearly 50%; issuance of commercial mortgage-backed securities to more than double and the multifamily property sector to experience a continued drop in vacancy rates.

Other interesting tidbits from the survey, which was conducted by the ULI Center for Capital Markets and Real Estate among economists and real estate analysts between Feb. 23 and March 12, included a predicted vacancy rate drop of 1.2% to 3.7% for office, retail and industrial properties. Furthermore, rents are anticipated to increase for all property types; in 2012, the increases are anticipated to range from 0.8% (for retail) to 5% (for multifamily housing).

Read - ULI Survey Offers Optimistic Commercial Real Estate Forecast - Daily News Article

The Dangers of Data Breach via

Since 2005, data breaches have more than tripled as advances in technology have made the collection and sharing of information easier and more efficient. In 2011 alone, there were 558 reported U.S. data breaches resulting in the disclosure of personal information for more than 126 million people. As instances of data breach have skyrocketed, so have the costs; the Privacy Rights Clearing House estimates that data breach last year cost companies roughly $7.2 million per incident.

Nightmare scenarios look similar to Sony’s massive breach of its online video game network in 2011. That single breach led to the theft of names, addresses and credit card information of more than 100 million users and cost the company more than $171 million in damages. These frightening statistics led to 2011 being dubbed the “Year of the Data Breach.” However, increasingly smaller business operators are finding themselves facing similar issues, albeit on a more limited scale, as hackers and unscrupulous employees exploit weaknesses in their data and privacy systems.

Apartment owners and managers are particularly vulnerable to data breaches and the ensuing liabilities. They collect, use and maintain heaps of personal information through both renter and employee application processes, as well as other operational functions. Personal information typically includes the subject’s name, address, social security number and driver’s license number, as well as additional information found in leases, financial records, insurance records and other documentation.

Read more...The Dangers of Data Breach via

Multifamily Career Development: Eight Designations and Certifications Worth Investing In via Property Management Insider

Destiny is not a matter of chance; it is a matter of choice. It is not a thing to be waited for; it is a thing to be achieved.” – William Jennings Bryan

Property owners may have spent Apartment Career Month in February cultivating new talent into the multifamily industry, but promoting career development any time of the year for key leaders and managers already on board can be just as rewarding.

Achievements ring clear in the apartment industry through designations and certifications. These powerful tools, many of which are available through the National Apartment Association (NAA), National Affordable Housing Management Association (NAHMA), and Institute of Real Estate Management (IREM), can not only make a difference for the individual but also the property. A successful property isn’t always measured by its aesthetics or amenities but how well it’s managed in the eye of the resident. A trained, knowledgeable staff is essential.

Earning a certification gives your employees a competitive edge and distinguishes them from the rest as experts in the multifamily industry. Not only do certifications help professionally, but they are a personal benefit as well. Employees become more confident, driven, and have a sense of accomplishment. And an employee who knows the ropes can be an asset to property managers.

Read more...Multifamily Career Development: Eight Designations and Certifications Worth Investing In | Property Management Insider

Texas Ahead: Tracking the Texas Economy via Texas Comptroller Updated 3/23/12

Updated March 23, 2012.

Texas total nonfarm employment increased by 67,200 jobs during January 2012. Between January 2011 and January 2012, Texas added 258,200 nonfarm jobs, an increase of 2.5 percent. Over the past year, Texas added jobs in nine of the 11 major sectors, including professional and business services; trade, transportation and utilities; leisure and hospitality; mining and logging; Education and Health Services; Manufacturing; Financial Activities; construction; and Other Services.

* During the 12 months ending in January 2012, 32,203 multi-family housing building permits were issued, 71 percent more than one year ago.

* January 2012 home sales were 10 percent higher than in January 2011.

* In February 2012, the Texas foreclosure rate was one in every 1,044 mortgages, substantially better than Nevada's one in 278, California's one in 283, Arizona's one in 312 and Florida's one in 341.

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

Echo Boom Generation Fuels Multifamily via CCIM Institute

Make sure to read the RREEF Real Estate’s U.S. Real Estate Strategic Outlook, March 2012, pdf

Multifamily was the first sector to transition into recovery, due in part to demographic factors such as the Echo Boomer’s preference for renting rather than owning real estate. According to RREEF Real Estate’s U.S. Real Estate Strategic Outlook (pdf), demographics and formerly distressed homeowners should help to keep multifamily vacancy rates low and rental rates climbing through 2013.

Echo Boomers -- educated and recently employed children of baby boomers -- are benefitting from the uptick in employment. Paycheck in hand, this population is moving into cities that provide good jobs and a high quality of life. The cities that fit this criteria are coastal gateway markets and urban/infill submarkets, according to the report. Multifamily buildings that offer green amenities such as bike storage, recycling, and energy reduction are more attractive to this age group.

Read more...Echo Boom Generation Fuels Multifamily | CCIM Institute

Tuesday, March 27, 2012

Houston No. 1 relocation center, report says via Houston Business Journal

Houston is the No. 1 U.S. destination city to relocate to for the third year in a row, a report from U-Haul International Inc. shows.

The report, titled "The 2011 Top 50 U.S. Destination Cities," ranks destinations for movers traveling more than 50 miles, U-Haul said in a statement. Data was compiled from more than 1.6 million U-Haul truck transactions in 2011.

Every U.S. city is considered for the report, regardless of size, though data is not stated as a percentage of population nor is it reflective of overall growth, U-Haul said. Dallas and Austin also made the top 25 cities, and Plano and Fort Worth made the top 50.

Read more...Houston No. 1 relocation center, report says - Houston Business Journal

Strong Multifamily Market Triggers Risk Trends via

Fitch expects the positive operating performance of the multifamily sector to continue during the next 12 months and to continue contributing significantly to the performance of real estate investment trusts (REITs) that invest in those properties. However, we increasingly see risks forming in the sector's acquisition underwriting in addition to its growing sensitivity to an increase in interest rates, future supply, changes to the GSEs, and most importantly, improvements in the single-family residential market.

Recent trends in underwriting suggest risks for the sector beyond the 12-month range. Some borrowers (predominantly unrated private owners and operators) and lenders have resumed pro forma underwriting that was popular during the heyday of the bull market. This type of underwriting depends on low interest rates at refinancing to maintain capital values. Rising interest rates or a failure to achieve underwriting assumptions due to pressures related to rental affordability could create the difficult refinancing conditions other property sectors encountered in 2008-2011.

Read more...Strong Multifamily Market Triggers Risk Trends - Multifamily News Headlines – Breaking News, Stories, Top Headlines ::

Do Single-Family Rentals Really Compete With Apartments? via Property Management Insider

Thanks to one sentence uttered by Warren Buffett and some major overplay by the media, single-family rentals are a hot investment choice now. Thus, the analysts at MPF Research are fielding a constant stream of inquiries about whether the bulk sale of bank-owned single-family homes to investors who will operate them as rentals will impact the apartment sector.

Our take is that the world hasn’t changed much.

While apartments and for-lease single-family homes are both rental product types, they by and large appeal to different audiences. Urban core apartments feature mostly small units suitable for single-person households and childless couples who live in them in part for lifestyle reasons. Those apartment residents aren’t in the suburbs – where single-family rentals are clustered – by choice, and finances often don’t have anything to do with those decisions.

Read more...Do Single-Family Rentals Really Compete With Apartments? | Property Management Insider

Bifurcation Will Define CRE in 2012 via

“There is certainly a bifurcated real estate market.” So said Andrew Kirsh, a partner at law firm Raines Feldman LLP. “If you are buying multifamily in core areas, there are plenty of aggressive lending options for borrowers. However, it is still a challenge to finance other asset classes or less concentrated geographic areas.”

Kirsh served as moderator of the capital markets panel on Thursday at RealShare Real Estate 2012, an event produced by ALM's Real Estate Media Group, which drew a crowd of roughly 900. The good news, according to Kirsh, is that there are more private lenders than ever before who are real viable alternatives for borrowers.

Kirsh’s comments were on point with other panelists and moderators throughout the day. During the industry leaders panel, for example, John B. Kilroy Jr., president and CEO of Kilroy Realty Corp. also used the word bifurcated when talking about the office market. Office is hot in some markets today, he said. In places like San Francisco, for example, its tech demand that is driving it, he said.

Read - Bifurcation Will Define CRE in 2012 - Daily News Article

Trepp: $362B of Commercial Real Estate Debt Matures in 2012 via Citybizlist Baltimore

Trepp has updated its Commercial Mortgage Maturities outlook with fourth quarter 2011 data and now estimates that $362 billion of commercial real estate debt will be maturing in 2012. This is up from $346 billion in 2011.

For the five year period 2012 to 2016, Trepp estimates $1.73 trillion in commercial real estate maturities.

"Liquidity has improved in the last two years, but this will still be a tall order for the market to fill with the CMBS market not yet hitting its full stride and many balance-sheet lenders (banks) looking to trim their CRE exposure," said Matt Anderson, who leads Trepp's research team.

Read more...Trepp: $362B of Commercial Real Estate Debt Matures in 2012 - Citybizlist Baltimore

Monday, March 26, 2012

Opportunities Are Endless, But Do Your Homework via

If you want to know what the hottest categories are in terms of investment dollars chasing them, you should have been at RealShare Real Estate 2012 on Thursday, where moderator Tony Natsis, a partner at Allen Matkins, asked brokerage panelists that very question. On the retail side, Dennis Vaccaro, senior managing director of retail firm Faris Lee Investments, said that what’s hot in retail right now is the single-tenant net-lease category, where cap rates continue to be compressed down.

Panelist Lew Horne, an executive managing director at CBRE, talked about anything related to tech, or that is empty and next door to tech being hot. “If you look what is happening in San Jose, the Bay Area, and down in San Diego, those markets are hot and there is a lot of funding,” he said. “The bay area has turned around in the last 18 months that we never thought it would happen that quickly.”

But one of the best investments (no surprise) is multifamily, which has recovered substantially in A markets, according to Darrell Levonian, executive managing director of Charles Dunn Co. “They are very active and full of opportunity.”

Read - Opportunities Are Endless, But Do Your Homework - Daily News Article

Apartment Market Statistics: April 2012 via

Apartment market statistics showed minimal improvements in the April 2012 issue of Multi-Housing News. Multifamily financing volume and apartment traffic improved, and condo sales made some headway for 2011 (though not compared to 2010), but total apartment investment returns continued to decline.

Financing jumped from index of 140 to 181 in Q4, according to Mortgage Bankers Association (MBA), after being relatively flat in the third and fourth quarters. Apartment total returns fell from 3.60 in the third quarter to 3.48 in the fourth quarter, according to the National Council of Real Estate Investment Fiduciaries (NCREIF).

According to the National Association of Home Builders (NAHB), multifamily starts declined from January to February. However overall multifamily starts for 2011 are still 60 percent above the 2010 levels. And statistics for permits in December are encouraging. They registered at a level of 209,000 units, which is “a relatively healthy number” according to NAHB.

Condo median sales price finished the year at $160,000, higher than the $153,500 level in January. Nevertheless, condo sales price is at “its weakest reading since the first quarter of 2011,” and is 3.1 lower than in December 2010, according to NAHB. And NAHB notes that condo and coop sales volume are still lower than levels from a year ago.

Read more...APARTMENT MARKET STATISTICS: April 2012 via

Dialing Down Debt: Road to Recovery Begins at Home via Real Estate Center at Texas A&M University

It is time for an honest discussion about household debt levels in the United States. How much debt are households carrying? Will they be able to pay it back? What happens if they can’t? How will it impact banks?

Bank expectations of future losses are reflected in the level of loan loss provisions made on their financial statements. Banks have so aggressively released loan loss reserves in the past year that the positive impact on earnings has covered the weakness from revenue declines caused by falling loan balances. The FDIC’s Quarterly Banking Profile for first quarter 2011 reports banks reduced loss reserves by $30.9 billion, or nearly 60 percent, in the prior 12 months. Total provisions for losses are now at $20.7 billion, the lowest level since third quarter 2007. Current household debt is very high by historical standards. Do banks really think households will successfully pay down their current debts? If households can’t pay, is $20.7 billion enough to absorb all the losses that might occur?

Read more..."Dialing Down Debt: Road to Recovery Begins at Home via Real Estate Center at Texas A&M University"

FDIC Structured Sales Program Evolves, Investors Take Advantage via

In January, Sabal Financing Group LP, a Newport Beach, CA-based financing services management firm that specializes in the acquisition and valuation of portfolios of real estate loans, acquired a $204-million portfolio of performing and non-performing loans. The firm would provide loan servicing and asset management for the portfolio.

Consisting of mainly commercial and resident acquisition, development and construction loans, the acquired portfolio was secured by properties across the US, and “represents the distress in the market that is ailing banks across the country and abroad,” according to the firm.

The acquisition was part of a portfolio sale mandated by the FDIC for the assets of more than 50 recently failed banking institutions throughout the US. It was Sabal’s fourth FDIC transaction. In October, the firm acquired a $385-million portfolio of performing and non-performing loans, which was also part of the ongoing structure sales program with the FDIC.

Read - FDIC Structured Sales Program Evolves, Investors Take Advantage - Daily News Article

Friday, March 23, 2012

A Taste for Risk Will Come Back in 2012 via

Despite the negatives that are still out there, RealShare Real Estate 2012 panelist Michael Cohen, global strategist of Property & Portfolio Research, said that it has been a solid year against a modest year for job growth, and he predicts great opportunity in 2012. “The US is looking pretty good right now relative to particularly Europe,” he said.

Cohen joined 900 attendees, panelists and moderator Scott Farb, managing principal of the Reznick Group, who kicked off the “Deal Street Economics panel” here at the Westin Bonaventure in Downtown L.A. on Thursday. The RealShare event is produced by ALM's Real Estate Media Group.

When asked about the performance of core versus secondary property, Cohen said that “it’s not all about core…It has been about core with regard to office and maybe the highest quality warehouse, but with apartment, it is anything people can land their hands on.”

Read - A Taste for Risk Will Come Back in 2012 - Daily News Article via

Economic Trends Remain Key Story in Commercial Real Estate - YouTube via

Macroeconomic trends continue to be the big story in the world of commercial real estate, according to Bob O'Brien, U.S. real estate services leader at Deloitte.

In a video interview with at NAREIT's Washington Leadership Forum, O'Brien discussed some of the key themes in the commercial real estate industry. He noted a number of concerning developments related to the economic recovery. He pointed out that while job growth has increased in early 2012, unemployment remains high and consumer incomes are stagnant.

"This economic recovery is still very fragile," he said.

O'Brien also highlighted the ongoing issues in the commercial mortgage-backed securities (CMBS) market as another major story. The signs of life in CMBS represent a positive sign for the industry, he said.

Watch the Video...Economic Trends Remain Key Story in Commercial Real Estate - YouTube via

Strong Shifts in Multifamily, Retail Real Estate Sectors via

The multifamily sector is poised to take advantage of positive fundamentals as demographics continue to favor renting over buying, according to Edward Kobel, president and chief operating officer of the Tampa-based DeBartolo Development.

Among the company’s investment sectors, which include multifamily, limited service hotels, anchored retail and a “special situations” category that primarily consists of land, Kobel said in a video interview with at the Akerman U.S. Real Estate Summit this month in Miami that the highest returns have been in the multifamily sector.

”The fundamentals in the multifamily space are a long-term paradigm shift for America,” he said. “We now have renters by choice.”

Read more...Strong Shifts in Multifamily, Retail Real Estate Sectors via

Solar Capital Funds Largest Commercial Solar Installation in Arlington via CoStar Group

Solar Capital Group has funded the installation of a 205 kw solar array comprised of both roof-top and parking lot structures at Brandon Oaks Apartment Complex in Arlington, Texas. Building inspectors with the City of Arlington identified the large-scale installation as the largest commercial photovoltaic system to have been installed via building permit in the City of Arlington.

The 24-building, 200-unit, 151,000-square-foot apartment complex was built in 1969 on 10.7 acres in the Arlington / Mansfield submarket of Tarrant County

read more...Solar Capital Funds Largest Commercial Solar Installation in Arlington - CoStar Group

Multifamily Anticipates New Development via

A limited supply of new development coupled with a growing number of college graduate renters will ensure continued strength in the multifamily sector, according to Susan Ansel, executive vice president and chief operating officer of Gables Residential.

“We have the demographics behind us with the age cohorts, and we’ll continue to grow into the foreseeable future,” Ansel said during a video interview with at the Akerman U.S. Real Estate Summit this month in Miami.

Ansel said Gables Residential has a number of new projects already under construction in light of the favorable market dynamics.

“That will be a big part of our growth, but we anticipate strong growth from our stable, core properties as well,” she said.

Read more...Multifamily Anticipates New Development via

Capital Streams Grow for Rehab - Apartment Renovation, Debt via Multifamily Executive Magazine

Just two years ago, it was hard to find money if you wanted to buy and rehab an apartment building. But as rents have recovered, the opportunity for rehab has opened up. That's brought money back in the game.

“There was a time period when rehab really didn’t make sense financially,” says Kevin Smith, a director at New York–based Centerline Capital Group, which opened an Alternative Capital Markets division to source nonagency money for its clients. “That’s changed dramatically since last year.”

Rising rents plus the availability of capital and the need to fix deferred-maintenance issues have helped drive the return of rehab. “There are opportunities to go in and do a minor rehab or a major rehab and see a decent return on your investment,” Smith says.

Read more...Capital Streams Grow for Rehab - Apartment Renovation, Debt - Multifamily Executive Magazine

Thursday, March 22, 2012

Multifamily Mortgage Activity Enjoys Upswing after 3-Year Slump via CoStar Group

The multifamily mortgage market continues to experience an increase in lending activity from a variety of participants. Although the GSEs and FHA have been the primary participants, there has also been renewed interest from portfolio lenders, banks and thrifts and commercial mortgage-backed securities issuers, according to new research from Fannie Mae.

Based on publicly-available company reports, Kim Betancourt, director multifamily economics and market research for Fannie Mae, said Fannie Mae and Freddie Mac saw the first increase in their total dollar volume of multifamily mortgage and securities acquisitions (purchases and securitizations) last year after three consecutive years of declines. In 2011, Fannie Mae acquired $24.4 billion in multifamily mortgage loans and Freddie Mac acquired $20.3 billion.

Read more...Multifamily Mortgage Activity Enjoys Upswing after 3-Year Slump - CoStar Group

Wednesday, March 21, 2012

Choosing the Road to Prosperity: Why We Must End Too Big to Fail--Now via Dallas Fed

2011 Annual Report
Federal Reserve Bank of Dallas
The too-big-to-fail institutions that amplified and prolonged the
recent financial crisis remain a hindrance to full economic recovery
and to the very ideal of American capitalism. It is imperative that
we break up the big banks.

Read more...Federal Reserve Bank of Dallas Annual Report - Dallas Fed

New Fannie Mae Loan Documents: 10 Issues for Multifamily Borrowers via

Fannie Mae introduced a new set of form multifamily loan documents in 2011. These new documents reflect a major overhaul of the previous Fannie Mae loan documents in both form and substance and they include several additional provisions that materially expand the risks of recourse exposure to borrowers and loan guarantors.

As many multifamily professions are probably aware, the most apparent change in the new loan documents is structural. Fannie Mae consolidated a number of the previously standard loan documents, including its Replacement Reserve and Security Agreement, Completion/Repair Agreement, and Certificate of Borrower, into one document: the Loan and Security Agreement. This “Loan Agreement,” along with the Security Instrument and the Environmental Indemnity Agreement, contain all most all of the substantive loan provisions. The Note and the Guaranty round out the list of core Fannie Mae loan documents.

While the structural changes to the Fannie Mae loan documents are noteworthy, there are a number of more important substantive changes that are worthy of consideration. The following is a list of the top 10 issues we believe borrowers should focus on as they evaluate the new Fannie Mae loan documents.

Read more...New Fannie Mae Loan Documents: 10 Issues for Multifamily Borrowers via

Apartment Loans by Agencies Creating Bubble, Chandan Says via Bloomberg

Low-cost financing backed by the U.S. government is inflating the values of apartment buildings and threatening to create a bubble, according to a report by Sam Chandan, a real estate economist.

Multifamily loans issued by government-sponsored agencies Fannie Mae and Freddie Mac are buoying the price of apartment buildings to the point that buyers may not be able to refinance once interest rates rise, according to the report by New York- based Chandan Economics LLC, released today.

Getting a new, pricier loan for an apartment property bought at today’s prices would require an income increase “stronger than what we think of as a sustainable level of rent growth,” Chandan said in an interview. “Are we making loans today that we are not able to easily finance when they mature? The finding is yes.”

Read more...Apartment Loans by Agencies Creating Bubble, Chandan Says - Bloomberg

Rainwater Toilets in Apartments Add Premium for U.S. Developers via Businessweek

The 22-story apartment tower in Portland, Oregon, has a roof garden that funnels rainwater to its public toilets. Because the water isn’t treated, state law requires “Do Not Drink” warning signs.

“Just in case your dog can read,” said Dennis Wilde, chief sustainability officer for Gerding Edlen, the Portland- based builder of the development called Indigo @ Twelve|West.

Green features, such as reusing rainwater and generating about 1 percent of the tower’s electricity with four rooftop windmills, help the Indigo’s bottom line by saving energy and attracting tenants who pay a premium to live an eco-friendly urban lifestyle, said Mark Edlen, chief executive officer of the closely held company that’s developed $5 billion of residential and commercial real estate since 1996.

Read more...Rainwater Toilets in Apartments Add Premium for U.S. Developers - Businessweek

Buying cheaper than renting in nearly 100 major U.S. markets: Trulia via HousingWire

Buying is more affordable than renting in 98 out of the nation's 100 largest metropolitan areas — even in New York, Los Angeles and Boston, according to real estate company Trulia's rent vs. buy index.

The index is based on asking prices for rental units and homes for sale on the company's website between Dec. 1, 2011, and Feb. 29.

“As rents rise and prices stagnate, homeownership is becoming even more affordable, but rising rents create a dilemma for people who can’t afford to buy yet,” says Jed Kolko, Trulia’s chief economist. “Rising rents make it harder for people to save for a down payment, which is the biggest barrier to buying a home that aspiring homeowners face.”

Homeowners are choosing, or being forced, to rent rather than buy even though the latter is cheaper in key markets Trulia reviewed.

Read more...Buying cheaper than renting in nearly 100 major U.S. markets: Trulia | HousingWire

IPD Conference: Unfinished Business Hampers Cap Markets’ Rebound via

Real estate capital markets present a mixed bag of promise and unresolved issues left over from the Great Recession, according to the leading economists, analysts and financiers who spoke at a forum sponsored by IPD in New York City.

Bob White, president of Real Capital Analytics, projected that transaction volume could reach $300 billion this year, representing a 50 percent gain over 2011 volume. Much of that growth will take place in the second half of the year, as the market gradually returns from the slowdown during the second half of 2011.

According to Brian Valenti, a senior analyst for the Federal Reserve, “2012 will be interesting for special servicers.” Data offered by other speakers bolstered that prediction. Bill Looney, president of Debt X, predicted that distressed asset sales will reach $100 billion this year, up from $80 billion in 2011.

One concern is the volume of problem loans held by small commercial banks. Commercial real estate makes up 28 percent of their assets nationally, and many of those assets represent unresolved distress. “Five years into it, we still haven’t shed a lot of these assets,” noted Mark Eppli, professor of finance at Marquette University. Refinancing will be a particular problem for 5-year floating rate loans issued during the peak of the market in 2007 that are maturing. The next 12 to 18 months present a window of opportunity “to get things right,” Eppli added.

Read more...IPD Conference: Unfinished Business Hampers Cap Markets’ Rebound via

Tuesday, March 20, 2012

Small(er) Markets, Big Opportunities via CCIM Institute

Commercial real estate investors are ready for a bit of risk. According to a 2011 Colliers survey, more than half of U.S. investors surveyed are prepared to move out of their comfort zones in search of higher returns. Their adventures will lead them straight to non-core markets.

And with pricing still below replacement costs in many second- and third-tier cities, properties that fit investors’ criteria are already generating a lot of interest. Transaction volume in secondary and tertiary markets reached more than $57 billion in 2011, according to Real Capital Analytics, which tracks property sales valued at or above $2.5 million. Private investors were by far the most active, closing 2,398 deals totaling nearly $22 billion. Cross-border investors, non-listed real estate investment trusts, and equity fund investors accounted for many of the remaining transactions. As expected, multifamily properties were the primary targets.

Though bargains can be found in some secondary and tertiary markets, today’s savvy investors aren’t just looking at price. “They’re tired of waiting, and they want to find properties with good leases, strong tenants, and a good ROI,” says Jim Baker, CCIM, president of Baker Commercial Real Estate in Jeffersonville, Ind. “Plus, inflation may be just around the corner, and having assets is better than having cash.”

If it’s the right asset in the right market, that is.

Read more...Small(er) Markets, Big Opportunities | CCIM Institute

Winning the Rental Game - Leasing And Concessions, Property Management, Rent Trends via Multifamily Executive Magazine

Demand may dwarf supply; the economy may show signs of life; holders of cash may be falling all over themselves to invest it in new and improved multifamily communities; homeownership may even lose its dominance as the American Dream incarnate. Still, as any smart property manager can tell you, a good year is made, not born.

Like early 2011, this year’s onset has shaped up like gangbusters—fundamentals, sentiment, and economic drivers are kicking in nicely. However, also like last year, property managers are going to have to navigate some tricky, possibly treacherous, waters to bring in the payload owners and stakeholders expect.

“We are cautiously optimistic,” says Keith Dodds, senior vice president of marketing for Denver-based real estate investment trust Aimco.

Caution? Last year, the pros called for average rent growth of more than 4 percent nationwide. Properties here and there achieved that kind of growth.

Most didn’t. Overall effective rents grew by an average of just 2.3 percent last year, according to New York–based market research firm Reis.

Read more...Winning the Rental Game - Leasing And Concessions, Property Management, Rent Trends - Multifamily Executive Magazine

Regional Economy Still Improving via Dallas Fed

The regional economy has grown at a moderate pace over the past six weeks, with gradual but broad-based improvement evident. Although employment growth was modest at the end of 2011, Texas Business Outlook Survey labor-market indicators rose in February to their highest levels in at least four years, and other survey indicators were also positive. Exports, manufacturing and service-sector activity all improved somewhat, and the Texas Leading Index is pointing toward moderate growth in the spring.

Read more...Regional Economy Still Improving - Dallas Fed

Fannie: Single-Family Rental Growth Won't Infringe on Multifamily via

As the government begins to tiptoe into the REO-to-rental arena after many months’ deliberation and input from thousands of industry participants, Fannie Mae released a data note on the single-family rental market.

Overall, single-family renters increased by 2.7 percentage points from 2005 to 2010, according to data Fannie Mae compiled from the American Community Survey.

However, the percentage of single-family renters varied greatly from market-to-market, with 9.8 percent in the New York City metro area and 57.8 percent in the Stockton metro area.

Read more...Fannie: Single-Family Rental Growth Won't Infringe on Multifamily via

Monday, March 19, 2012

Planning and Preparation Critical for Handling Natural Disasters via

As we near the spring tornado and summer hurricane seasons, emergency preparedness experts say many property management companies need to pay close attention to their disaster plans. Effective preparedness starts with evaluating the risks, securing the property, putting together a written plan and having a strong commitment to disaster planning at all levels of the organization.

Put your plans in writing
Scott McCurdy, co-owner of Coastal Reconstruction Group in Winter Park, Fla., is an associate member of the Greater Orlando Apartment Association and conducts disaster preparedness seminars around the state. He says disaster and emergency planning starts at the top and needs to be made a priority throughout all levels of the organization. According to McCurdy, having an emergency manual or handbook is critical because it lays out expectations, responsibilities and proper procedures for on-site multi-housing managers.

Gerry Henigsman, Executive Vice President of the Apartment Association of Greater Dallas, adds that emergency plans should clearly identify the roles and responsibilities of the management and staff before, during and after the disaster. This should include plans for preparing the property, communicating with residents and dealing with the aftermath.

Read more...Planning and Preparation Critical for Handling Natural Disasters via

MFE Vail 2012, Truly a Peak Leadership Experience - Multifamily Trends via Multifamily Executive Magazine

In case you were unable to take part in what has become one of the multifamily industry’s annual highlight-reel leadership events-- the just-concluded Multifamily Executive Summit in Vail, Colo.--we wanted to share a flavor of the conference, while observing the off-the-record ground rules we set up so that our executive speakers can talk freely and frankly with one another. The top-line take-aways went something like this.

You could say that the theme that over-arched the MFE Vail Summit was a blend of a “follow the money” notion, and--more powerfully--take some chances with capital and other invested resources, based on the swell of demand for multifamily housing that has changed the sector’s mentality from defensive to an offensive mode. Even as property owners and managers test the elasticity and proficiency of their operations in a relentless pursuit of net operating income, the imperative is to be aggressive early. Debt and the fresh memories of its damage still weigh heavily on past, present, and prospective investors and lenders. However, barring event-risk driven disruptions to current trends and traction, the market’s pointing to big-time opportunity—but not necessarily for one and all. More than ever, the enemy is a lack of intelligence into how to leverage net operating income excellence into sound new investment tactics.

Read more...MFE Vail 2012, Truly a Peak Leadership Experience - Multifamily Trends - Multifamily Executive Magazine

In Fits and Starts, Homeownership Gives Multifamily a Challenge via

March wasn’t a stellar month for home ownership, given statistics from the newly-released Improving Markets Index, a joint venture of the National Association of Home Builders and First American Title. The newly-released Index shows that the number of housing markets tweaked up just a bit—to 99 in March, remaining virtually flat.

Currently 33 states, including the District of Columbia, are represented by at least one market on the list. New entrants on the IMI in March include Orlando; Rochester, NY; Columbus, OH; and Austin and San Antonio, TX. The index gauges these markets through several markers including housing permits, employment and house prices.

NAHB chief economist David Crowe notes that, after an extended period of growth, the March IMI held virtually flat at just under 100 metros. “This is consistent with NAHB’s projections for a gradual but patchy recovery in which some month-to-month softening is likely, particularly in places where the measurable gains have been very small,” he says. “The bottom line is that roughly one quarter of all US metropolitan areas are showing signs that their housing markets have turned the corner, which is a very positive development.”

Read - In Fits and Starts, Homeownership Gives Multifamily a Challenge - Daily News Article

CMBS Slows as Maturities, Capital Vehicles Grow via

Most CMBS specialists agree about a few facts for 2012: The 2007 loans will bring more maturities this year; fewer delinquencies are matching the better job market; and there is increased capital available for deals as life firms and banks step up lending again. Even though some disagree whether there will be more originations than 2011, which saw about $30 billion, that figure isn’t expected to change much this year.

Andrew Wright, CEO and managing partner of Tampa-based Franklin Street, tells that from a structural delivery standpoint, he believes 2012 will be better than last year. “There’s a lot of capital flowing in, and the tremendous amount of maturities will make deals a lot more accessible to investors.”

About a trillion dollars of debt, loans done at the peak of the commercial real estate bubble, is maturing during the next three-to-four years, though CMBS represents a relatively small portion of the loans coming due. There’s about $79 billion of CMBS maturing in the remainder of 2012 and about $50 billion maturing in 2013.

Read - CMBS Slows as Maturities, Capital Vehicles Grow - Daily News Article

Friday, March 16, 2012

Cities With the Most New Construction via Forbes

Thanks to the housing bubble, Phoenix garnered a reputation for dusty abandoned homes and half-built tracts of retail sprawl. Arizona’s biggest city suffered a 55% drop in home prices since the 2006 peak and it consistently ranks among the country’s 20 worst cities in terms of foreclosures. Yet a recent rebound in home sales — and more modestly in home prices — has spurred talk of a recovery there.

Turns out that budding rebound extends out into overall construction, too. In 2011, the Phoenix metro area welcomed a 41% increase in new construction, totaling $5.3 billion in new starts for both residential and non-residential building projects. “In the case of markets that were categorized by the housing boom and bust, that [construction] correction has already occurred,” explains Robert Murray, vice president of economic affairs at McGraw-Hill Construction, a New York City-based construction data firm. “Now areas like Phoenix are in the process of seeing an upturn in new structures – that aren’t even necessarily housing.”In Phoenix, that construction spending jump comes in part from a new $5 billion Intel semiconductor manufacturing facility for which $1.5 billion worth of building began last year. The up-and-coming facility, located outside of city limits in nearby Chandler, Ariz., helped thrust the Phoenix Metropolitan Statistical Area into the No. 8 spot on Forbes’ list of the American Cities with the Most New Construction.

Read more...Cities With the Most New Construction - Forbes

New ACH Rule Makes Electronic Payments More "Personal" via Property Management Insider

A day in the life of a property manager is never boring. Between answering phone calls, showing units, following up on emails, managing service requests, and dealing with move-outs and renewals, there is never a dull moment. Smart property managers are always on the lookout for new ways to improve efficiency and free up time for important tasks.

Converting paper checks to electronic ACH payments is a great way to boost productivity by eliminating daily trips to the bank. Over the last decade, more and more property management companies have recognized this opportunity and deployed electronic payment solutions at their sites. By scanning paper checks to process as electronic ACH debits, on-site staff finds more time to serve residents, fill vacant units, and increase revenue.

Read more...New ACH Rule Makes Electronic Payments More "Personal" | Property Management Insider

Freddie Refocuses on Preservation, Starts Green Refi Program - Affordable Housing via Multifamily Executive Magazine

Fannie Mae and Freddie Mac’s affordable housing divisions went their separate ways last year.

Fannie’s business model was to focus on a long-term horizon, particularly on preservation deals—what’s called “year-11” deals, in the low-income housing tax credit (LIHTC) world. A property financed through LIHTCs undergoes a 10-year credit period, then needs to refinance. And a giant wave of expiring LIHTC properties are expected to look for permanent debt over the next few years.

Freddie instead focused on bond deals, with a heavy emphasis on the New Issue Bond Program (NIBP), a limited-time stimulus program from the Treasury Department. The NIBP program expires at the end of this year, making it a short-term play.

Read more...Freddie Refocuses on Preservation, Starts Green Refi Program - Affordable Housing - Multifamily Executive Magazine

Don't Count Out the CBD via

Anyone familiar with commercial real estate in the Dallas-Fort Worth area can become skeptical when the topic turns to the resurgence of downtown Dallas. The resurgence has been a story for a lot of years, but when one examines the continued higher-than-regional average office building vacancies in the CBD, there’s a good reason for the skepticism.

“When you ask people about the CBD, they’ll talk about a tale of two cities. Ross Avenue north and Ross Avenue south. Or DART line north and DART line south (the light rail),” comments Ramsey March, Stream Realty Partners LP’s vice president.

But March and Jim Graham, executive vice president with Colliers International, tell that downtown Dallas is actually poised for some nice commercial real estate growth. Not necessarily booming, red-hot growth. But growth nonetheless.

Read - Don't Count Out the CBD - Daily News Article

The Smartest Money’s Looking for the Next Opportunity to Move Aggressively Early via Multifamily Executive Magazine

Sometimes things work the opposite of the way they should. Now, for instance. If apartment finance worked as it should, lenders’ and investors’ money would find its way naturally into solid business opportunities.

But, that’s not the way most of our audiences would say things work in the real world. Two major obstacles here: Wall Street and Capitol Hill.

Big-money real estate, such as it is, is a risk–reward hodgepodge of speculation, local idiosyncrasies, policy, and, now, a global economic tidal wave that crashes through every part of the broader economic and housing landscapes. So, what constitutes a good business—or could potentially perform a solid operation that meets a market need, pencils profitably, and runs well—does not necessarily bubble up among capital’s Wall Street gatekeepers. Nor do the projects where the need and opportunity stars align work much magic among policymakers who may lack the political will to channel Uncle Sam–backed dollars.

Read more...Apartment Finance Now—The Smartest Money’s Looking for the Next Opportunity to Move Aggressively Early - Finance - Multifamily Executive Magazine

Thursday, March 15, 2012

U.S. apartment sector in ‘full expansion’ - Lansner on Real Estate via The Orange County Register

Apartments are becoming scarce in most U.S. housing markets, resulting in rent hikes throughout the nation, a new apartment outlook states.

Broker Marcus & Millichap’s 2012 National Apartment Report forecasts that employment and average rents will go up this year in all 44 U.S. metro areas it tracks.

“Recovery has moved beyond the cyclical surge in demand to a more sustainable expansion, as remarkable shifts in demographic, economic and social patterns underpin demand for rental housing,” the report said.

America created 900,000 new households last year, in part due to 20- to 34-year-olds taking 70% of the new jobs and moving out on their own, the report said.

Foreclosures, tight credit for home purchases, and people choosing renting over buying as a lifestyle preference “contributed to a net rise in rental households,” the report said.

Specifically, the report said.

Read more...U.S. apartment sector in ‘full expansion’ - Lansner on Real Estate : The Orange County Register

7 capital market trends to watch in 2012 via Kimco Realty Blog

Several factors are converging in 2012 to help the capital markets stabilize after experiencing significant volatility last year. Although some issues remain uncertain — particularly Europe’s financial struggles — several areas of the market are rebounding and gaining momentum. Here are seven capital market trends Kimco is watching in 2012, and how we see them impacting retail real estate throughout the year.

1. Spreads will continue to compress in the unsecured bond market. The unsecured bond market experienced an enormous amount of volatility in 2011. Spreads compressed significantly in the first half of the year, then widened as concerns about Europe’s debt crisis mounted — in Kimco’s case to in excess of 300 basis points over 10-year paper. The bond market was extremely weak over the summer, until late September when Deutsche Bank sold 1.5 billion euros in unsecured bonds. Since then, the market has been open. Volatility remains, although we’ve seen spreads start to compress again. Even at spreads of 200-250 basis points, with the 10-year bond trading somewhere around 2 percent, you’re still looking at 10-year financing in the low 4 percent area for a company like ours. That’s pretty attractive debt that is easy to access, so the unsecured bond market is clearly open and available. As we look into 2012, we expect to see further spread compression as we get more clarity around the European financial crisis and U.S. economic recovery. This should create opportunity for all REITs to opportunistically tap the unsecured bond market.

Read more...7 capital market trends to watch in 2012 | Kimco Realty Blog

Distressed Sales Volume Remains at Elevated Levels Despite Big Boost in Non-Distressed Sales in Recovering Economy via CoStar Group

2012 Could Match $21 Billion in Distressed CRE Property Sales Last Year -- But It Hasn't Proved To Be Easy Money. Distressed trading volume has stabilized but continues to remain at elevated levels, increasing by approximately 2% last year over 2010. However, a surge in non-distressed property trading driven by improving economic conditions has begun to mitigate its impact on commercial real estate pricing levels overall.

According to CoStar Group data, the volume of distressed transactions in December 2011 remained well above the average monthly volume for the full year, yet the distress percentage of total observed transaction volume fell 30.1% in January 2011 to 21.1% in January 2012.

By way of comparison, distressed sales made up less than 3% of total sales volume in 2008.

Read more...Distressed Sales Volume Remains at Elevated Levels Despite Big Boost in Non-Distressed Sales in Recovering Economy - CoStar Group

Plenty of Recession Damage Still Left To Undo via CoStar Group

Level of Distressed Properties, Loans Double at What They Were Two Years Ago

The commercial real estate rubble still left over from the Great Recession continues to exact a punishing toll on property values and owners' and lenders' books.

In this statistical state analysis, CoStar Group has identified 168,580 office, flex, industrial and retail properties in its national property database with a vacancy rate of 60% or more. The number of properties by type at this level of vacancy distress is as follows:

Read more...Plenty of Recession Damage Still Left To Undo - CoStar Group

Rising Rents, but Not Everywhere - Graphic via

In some cities like Washington, San Francisco and New York, the cost of renting an apartment has been rising sharply. In other cities, though, like Las Vegas, Los Angeles and Orlando, Fla., which are still struggling with a glut of housing, rents are rising slowly, if at all

Read more...Rising Rents, but Not Everywhere - Graphic -

Survey: Access to Capital, Gov’t Policy, Remains CRE’s Most Pressing Issues via

Despite growing confidence and improving fundamentals in the commercial real estate sector, access to capital and uncertainty of government policy remain the chief concerns of senior-level executives in the industry. A survey of 150 respondents following Akerman Senterfitt’s third annual US Real Estate Summit found revealed that while 82% expressed greater confidence in the market – an increase of 6% from last year – the recent recovery is still tenuous.

“People are more comfortable year-over-year,” Rich Bezold, chair of Akerman’s national real estate practice group, tells “That is a good sign, but when you’ve got global economic uncertainty, I think everybody has their eye on what’s going on in Europe and in other parts of the world. This being an election year, there probably won’t be a whole lot that happens, with concerns that 2012 will be a little stale until people have certainty one way or another.”

Read - Survey: Access to Capital, Gov’t Policy, Remains CRE’s Most Pressing Issues - Daily News Article

Wednesday, March 14, 2012

HUD Offers $25 Million to Convert Multifamily Apartment Buildings into Assisted Living Facilities via

The U.S. Department of Housing and Urban Development today announced the availability of up to $25 million to help convert multifamily apartment complexes into assisted living facilities or service-enriched housing for low-income senior citizens. The funding offered through HUD’s Assisted Living Conversion Program will provide grants for the physical conversion of eligible multifamily assisted housing projects (or portions of projects) to assisted living facilities or service-enriched housing. Read the funding notice published today.

“These grants offer an opportunity for low-income seniors to remain living independently in their homes while still receiving the services they need on a day-to-day basis. Most importantly, they will not have to move from their familiar surroundings as they become older and need supportive services,” said HUD Secretary Shaun Donovan.

Assisted living facilities are designed to accommodate low-income frail elderly persons and persons with disabilities who can live independently but need assistance with the activities of daily living such as help with eating, bathing, dressing and home management activities. These affordable facilities directly provide or facilitate the delivery of support services such as personal care, transportation, meals, and housekeeping.


Texas Ahead: Tracking the Texas Economy via Susan Combs, Texas Comptroller

Updated March 9, 2012

As of December 2011, all of the total number of jobs shed by Texas employers during the recession have been replaced. Nationally, only 39 percent of recession-hit jobs had been recovered through February 2012.

* Between January 2011 and January 2012, Texas gained 258,200 jobs. Total nonfarm employment increased by 67,200 jobs from December 2011 to January 2012.
* The Texas unemployment rate dropped to 7.3 percent for January 2012, down from 7.4 percent in December 2011. The Texas unemployment rate has been at or below the national average for 61 consecutive months.
Our new, expanded tables give you a more in-depth look at Texas economic data that now goes back several years. Find more detailed information on Texas and U.S nonfarm employment.

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

Resident Retention: When a $10 Rent Increase Can Feel Like $100 via Property Management Insider

In my past life as an assistant manager, I remember having a long conversation with a resident about her renewal notice. The notice offered her another 12-month agreement with a relatively small increase of $10 per month. Now, while I was accustomed to the traditional debate regarding rent increases for amounts such as $50 and more, this was my first time negotiating over a $10 increase.

I went through all of the customary measures—explaining cost of moving, reviewing the options available for different lease lengths, and comparing the resident’s $10 increase to what we would offer a new move-in for her apartment. After laying out what I thought was a good case for renewing, the resident simply responded, “but my stove is still broken.” Caught completely off-guard, I asked her how long had her stove been out of service, to which she replied “longer than it took you guys to type this letter and stuff it in my door.”

Needless to say, that conversation didn’t go as smoothly as planned. When I pulled up her service request history, I noticed that she had in fact reported multiple problems with her stove. I also noticed that each request had been closed out with notes such as “work completed” and “done.” Not a whole lot of information to go on, right?

Read more...Resident Retention: When a $10 Rent Increase Can Feel Like $100 | Property Management Insider

U.S. Metro Cap Rates Decline via NREIonline

U.S. metro average cap rates declined 30 basis points year-over-year from 5.6 percent in the fourth quarter of 2010 to 5.3 percent in the comparable period last year. The greatest compression was observed in the South, where cap rates fell 50 basis points to 5.7 percent. A surge in Denver investment activity contributed to a 40 basis point dip in the West. Cap rates in the Midwest fell 20 basis points to 5.2 percent and Northeast cap rates were virtually unchanged year-over-year.

Read more...U.S. Metro Cap Rates Decline via NREIonline

Neighborhood Pay Services Launches Rent Assurance via

Neighborhood Pay Services, LLC (NPS), a financial service provider for the multifamily housing industry, today announced its first program to transform the resident credit-performance paradigm -- Rent Assurance. The NPS Rent Assurance program enables property companies to capture incremental occupancy by providing conditionally approved applicants with a simple “hands-off” system to assure that rent is paid on time.

The NPS program is unique to the multifamily industry and utilizes a proprietary direct deposit platform that benefits both the property company and the resident. Property clients deploy the cloud-based services with zero start-up costs or technology integration requirements, while rental applicants essentially submit a simple form.

“We see a need in multifamily markets for proactive solutions rather than focusing on recovery after problems occur, which is why NPS is helping property companies get in front of rent-related financial performance issues,” said Richard Calmas, founder and CEO, NPS. “We do this by making rent ‘first in line’ as a voluntary deposit from a resident's payroll every time they’re paid. This gives property clients assurance of consistent resident performance after the lease is signed.”

Read more...Neighborhood Pay Services Launches Rent Assurance - Multifamily News Headlines – Breaking News, Stories, Top Headlines ::

Tuesday, March 13, 2012

Lenders Lose Less on Multifamily Loans, MBA Says via MHNonline

The Mortgage Bankers Association has reported that lenders lost less on multifamily mortgages in 2011 than they did in 2010, another sign of the increasing strength of the multifamily market. In a Research DataNote analyzing year-end data from the FDIC, MBA found that in 2011, banks and thrifts charged off 0.74 percent of their multifamily mortgages, compared with 1.24 percent in 2010.

The charge-off rate for multifamily loans for banks and thrifts was also low in 2011 compared to other kinds of loans. Lenders charged off 0.89 percent of their balance of commercial real estate loans; about 1.43 percent of their one-four family residential loans; 1.25 percent of other (non-credit card) loans to individuals; 3.33 percent of their construction loans; and 5.45 percent of their credit card loans, according to the MBA.

Read more...Lenders Lose Less on Multifamily Loans, MBA Says via MHNonline

HUD Program Seeks Energy Efficiency In Multifamily Housing via MortgageOrb

The U.S. Department of Housing and Urban Development (HUD) has awarded nearly $23 million to a dozen organizations as part of a pilot program to bring energy-saving solutions to the multifamily housing market.

According to HUD, the grant recipients are affordable housing providers, technology firms, academic institutions and philanthropic organizations that will test new approaches to implement and to pay for energy-saving upgrades that may become the model for financing these "retrofits" on a wider scale in the future. The federal grants are directly leveraging an additional $60 million in philanthropic, local and private capital.

Read more...MortgageOrb: Content / Commercial Mortgage / HUD Program Seeks Energy Efficiency In Multifamily Housing

Fannie & Freddie Won’t Go Away via GlobeSt.TV

Matthew McManus, senior director at Marcus & Millichap Capital Corp., was recently interviewed at RealShare Philadelphia 2012 at the Union League. McManus assists M&M clients secure debt and equity financing for acquisitions and refinancing. He explained why Fannie Mae and Freddie Mac will always play a role in the multifamily market despite stalls and bickering in Congress.

He also discussed:

-The return of CMBS.
-Activity from life companies.
-Philadelphia’s overall office forecast.

Watch - Fannie & Freddie Won’t Go Away iRealShare Video/i - GlobeSt.TV Article

Monday, March 12, 2012

Identifying Problem Renters Before They Even Sign the Lease via MHNonline

Do you really know who’s living in your apartments? MHN interviewed Joseph Killinger, founder and CEO of real estate investment company Learning Links Centers LLC, who, with his partner George Pino, recently launched the Rent Rite Directory. Killinger explains how the free directory can help property managers know if a perspective resident has a problematic renting history or a criminal record. Additionally, Killinger explains how his system can benefit the community.

MHN: Give us a little background on the Rent Rite Directory service.

Killinger: We have an investment company, started in Los Angeles. We moved to the Dallas market a few years ago, and we were having some issues on a property. Now our company, called the Learning Links Centers, mostly focuses on B and C assets—lower- to moderate-income areas. A big part of that in Dallas is that people in these multifamily properties run these specials—$99 to move you in and then the next month you pay your full rent. A lot of people will move in on those $99 [deals] and on their fourth or fifth week when they’re getting ready to pay their full month’s rent, they’ll just take off in the middle of the night and go to a building right next door or a property right down the street. Typically, those are the people who are not doing a lot for the community; they’re typically the ones who are committing crimes. The Learning Links Centers is a socially responsible real estate investment company geared towards tutoring inner-city kids, so it’s kind of a hot spot for us. We thought, there’s got to be somebody tracking these people, so we started searching it, and there was nobody doing that.

Read more...MHN Interview: Identifying Problem Renters Before They Even Sign the Lease

Trepp: 61.1% Of CMBS Loans Reached Balloon Payoff Date In February via MortgageOrb

Commercial mortgage-backed securities (CMBS) loans paying off on their balloon date have posted their second-highest reading since December 2008, according to new data from Trepp LLC.

In February, 61.6% of loans reaching their balloon date paid off. Only September 2011 had a better reading since the credit crisis began - in that month, the payoff level was 64.4%.

According to Trepp, February marks only the fourth time since late 2008 that the percentage cracked 50%. The 61.6% payoff number was almost 21 points higher than the January reading.

Read more...MortgageOrb: Content / Commercial Mortgage / Trepp: 61.1% Of CMBS Loans Reached Balloon Payoff Date In February

Apartments: The Belle of the Ball, Except for CMBS via

By any measure—except one—multifamily is the belle of the ball in commercial real estate. It’s the asset class domestic and foreign investors alike are clamoring for; it’s considered to be more immune to the vagaries of the economy than, say, office or retail; it’s the sector for which still-cautious lenders are ponying up construction financing. And, as NAREIT’s Calvin Schnure told earlier this month, it’s also leading the REIT parade, with apartment REIT price returns up 225% since the market trough of March 2009.

However, it’s also the sector with the highest CMBS delinquency rate. Fitch Ratings on Friday said late-pays for loans backed by apartment assets rose last month to 13.30% of Fitch-rated CMBS in the sector, up from 13.04% in January. Standard & Poor’s put it at 13.58% at the end of December 2011. At the start of the previous recession, that delinquency rate was 1.10%.

As Jerry Seinfeld used to say, “What’s up with that?” S&P credit analyst Larry Kay offers some insights: although the multifamily delinquency rate has improved somewhat in recent months, “we believe that a significant decline will remain elusive until rents firm and there are fewer concessions available among class B and C apartments, the weakest housing markets strengthen and troubled New York City rental conversion projects resolve their issues,” Kay says in a statement. “The path to recovery for multifamily CMBS will also depend on the level of job growth in the various markets, which will influence the timing and extent of the local property markets’ progress.”

Read - Apartments: The Belle of the Ball, Except for CMBS - Daily News Article

Fourth Quarter Indices Show Optimistic Outlook for Apartment and Condominium Market via NAHB

The Multifamily Production Index (MPI), a leading indicator for the multifamily market released by the National Association of Home Builders (NAHB) today, showed steady improvement in the apartment and condominium housing market for a sixth consecutive quarter.

The MPI, which measures builder and developer sentiment about current conditions in the multifamily market on a scale of 0 to 100, increased from 47.3 in the third quarter to 48.9 in the fourth quarter—the highest reading since the fourth quarter of 2005.

The index provides a composite measure of three key elements of the multifamily housing market: construction of low-rent units, market-rate rental units and “for-sale" units, or condominiums. The index and all of its components are scaled so that any number over 50 indicates that more respondents report conditions are improving than report conditions are getting worse. In the fourth quarter of 2011, the MPI component tracking builder and developer perceptions of market-rate rental properties recorded an all-time high of 64.3, while low-rent units increased as well to 55.5. For-sale units remained steady at 30.6.

Read more...NAHB: Fourth Quarter Indices Show Optimistic Outlook for Apartment and Condominium Market

Investors Expect Performing NPL Market This Year via

The fourth time—or, in this case, fourth year—looks like the charm for investors hoping to acquire some of the billions of dollars in non-performing loans. While they’ve held out such hopes since 2009, when Ernst & Young began its Real Estate Nonperforming Loan Investor Survey, the volume of maturing commercial real estate debt has begun at last to spur banks to step up their efforts at getting the NPLs off their books, even as their profits have increased. That prompted investors to increase their allocations for buying distressed debt in 2011, and their success rate at buying the loans also increased, suggesting more price agreement.

In fact, in this election year, another figure of speech is apt: four more years. Or, more precisely, between two and four more years. That’s how long 82% of investors expect the NPL market to remain active, according to the 2012 edition of E&Y’s survey, released late last week.

Read - Investors Expect Performing NPL Market This Year - Daily News Article

Moving Toward a Greener Texas Via

Mention the word “Texas” and the response you might get is pretty straightforward: Cowboys, wide open spaces, no change of seasons . . . and oil derricks. It’s true Texas is best-known for bringing oil up from the ground – but experts tell that this is also a state with a focus on sustainability initiatives and, to an extent, work with alternative fuels.

Austin is at the forefront of a sustainable vision for the Lone Star State; in 2007, the city’s controversial mayor, Will Wynn, oversaw passage of a resolution dubbed the Energy Conservation and Disclosure Ordinance. This outlined sustainability mandates for everything from home-building, to energy use in commercial real estate, to use of alternative fuels. The end goal is a 35% use of renewable energy by 2020.

However, John Sutton, BOMA Austin’s Energy Sustainability Committee Chairman says that, even before these issues were formalized through a municipal ordinance, conservation was on everyone’s mind. “Before it became popular, we had groups intent on protecting the (Edwards) Aquifer here,” he comments. Additionally, Austin has carved out a reputation for greenbelts, city parks and natural lakes and “there’s been a push to keep those things pristine,” Sutton says.

Read - Moving Toward a Greener Texas - Daily News Article

Friday, March 9, 2012

Property Management Tips: Tracking Appliances on Apartment Properties via Property Management Insider

A stainless steel side-by-side refrigerator or other top-line appliances can be a deal maker for many residents when choosing the right apartment community. Property owners can easily invest $2,000-$3,000 per unit in the latest kitchen equipment in an attempt to stay one step ahead in the amenity game.

But with each refrigerator, microwave oven, stove top and dishwasher comes a potential long list of paperwork and management headache, especially if the appliance is defective, out of warranty and worn out, or has been recalled by the manufacturer. Keeping track of every unit is essential, especially when defects send millions of appliances to recall lists, as Consumer Reports Magazine reports in their article “Appliance fires: Is your home safe?”

According to the article, more than 15 million appliance units – about half of them dishwashers – have been recalled in the past five years for defects that cause fire. The complexity of today’s appliances can lead to problems, according to industry experts. Features such as push buttons, digital touch-pad controls, and other refined operating features – you name it – are just some of the things that can go wrong.

Read more...Property Management Tips: Tracking Appliances on Apartment Properties | Property Management Insider

Outstanding CMBS: Down 25% and Still Falling via Commercial Mortgage Alert

The balance of outstanding U.S. commercial MBS continues to fall, as issuance lags behind the pace at which seasoned paper is being retired.

The balance last month dipped below $600 billion, down 25% from the peak of almost $800 billion at yearend 2007, according to Trepp. And as the universe has shriveled, so has the CMBS share of the fixed-income market. CMBS now makes up just 2% of the widely followed Barclays U.S. Aggregate Bond Index, well below the high of about 6% in early 2008.

The steadily decreasing volume of CMBS in the hands of investors hasn’t yet sunk to an alarming level, analysts said. Indeed, the pinch in supply has even served to prop up prices on recent offerings.

But the decline is certainly not a sign of the sector’s health. And market pros said the risk is that the balance will eventually fall to a level too low to sustain the interest of investors. “I think it’s in the back of everybody’s minds,” said Richard Parkus, a CMBS analyst at Morgan Stanley.

Read more...Outstanding CMBS: Down 25% and Still Falling via Commercial Mortgage Alert - Commercial Mortgage Brokers - Commercial Mortgage Lenders

The Home Depot and U.S. Green Building Council Launch New Database of Green Building Products via Multi-Housing News Online

The U.S. Green Building Council (USGBC), in conjunction with The Home Depot, has launched an online green home products database. The database: is a microsite within that features products geared toward green home building, many of which may contribute towards earning LEED points and prerequisites for the LEED for Homes program, making it easier for homeowners and builders to find the products they need. Currently, more than 2,500 products sold at The Home Depot are listed on the website.

The green housing market is growing rapidly, having tripled since 2008. Green homes, which comprised 17 percent of new residential construction last year, are expected to increase by 29 percent to 38 percent of the market by 2016, according to a report last week by McGraw-Hill Construction, a part of The McGraw-Hill Companies.

Read more...The Home Depot and U.S. Green Building Council Launch New Database of Green Building Products | Multi-Housing News Online

Lending Is Returing Carefully And With Limits - The Ross Rant Article via

Lending of all types is returning, although, it is still limited and to some extent, still bifurcated. CMBS 2.0 is starting to ramp up again, although it is likely not to exceed $40-45 billion this year. The first pool of 2012 should happen very shortly with four others to follow soon after. The size is likely to stay around $1.0-$1.2 billion per pool. Average loan size will most likely stay moderate and be around $25-$35 million, with an average of about 50 to 60 loans per pool. There is not likely to be a lot of very small conduit loans this year. There will probably be fewer of the single asset or single borrower, mega loans than there were. However, the total volume will remain far below what is required to refinance the maturing loans of both CMBS and bank loans. There are not a lot of CMBS lenders active at the moment, but several are sitting on the side at the moment waiting to see how the market and the economy develop over the next few months.

Read - Lending Is Returing Carefully And With Limits - The Ross Rant Article

Overheated Core: Multifamily Values Flatten in Top Markets - Cap Rates via Multifamily Executive Magazine

With the exception of Manhattan—a market that’s the exception to many rules—the nation’s core coastal markets saw little, if any, cap rate compression last year.

The data, below, reflects the fact that those markets were already pretty heated in 2010, so cap rates didn’t have far to fall, even during a year in which interest rates fell to historic lows. While cap rates fell 100 basis points in Manhattan last year, the average cap rate actually increased in Boston and San Francisco. And there isn’t expected to be much of a rise in values in the nation’s core markets this year.

“Frankly, I don’t know that you can squeeze any more out of those markets,” says Greg Willett, vice president of research for Carrollton, Texas-based MPF Research. “At this point, you’re certainly paying enough for those properties that you have to question the return. The next phase, after you’ve bought up the best product in the most desirable markets, is to take that capital and put it into development.”

Read more...Overheated Core: Multifamily Values Flatten in Top Markets - Cap Rates - Multifamily Executive Magazine

Ancillary Services are Adding to NOI via Multifamily Executive Magazine

A delicate balance exists for multifamily companies when determining a pricing structure for ancillary services. That balance basically straddles the line between leaving money on the table by pricing too low and driving tenants away by hiking rates too high. Although substantial differences won’t always be seen from a small increase here and a slight reduction there, additional revenue derived from smart ancillary pricing can have a meaningful impact when spread across an entire portfolio of properties.

“Simply having an ancillary service in place does not guarantee success,” says Gardner Rees, executive vice president of ancillary services at Dallas-based Riverstone Residential Group. “But a strategically implemented and managed ancillary service may have a major impact and continue to drive higher NOI.”

Among the things Riverstone is capitalizing on is technology. Rees cites online leasing and online renter’s insurance signup for their use of paperless systems, esignatures, storage and retrieval as a way to keep service prices lower by reducing administrative manpower. “The adoption of technology helps tremendously, as most of the newer services are far less labor intensive and thus can be provided to our clients at a lower cost,” said Rees. Riverstone has also seen positive NOI at the properties for their clients, thanks to its introduction of a telecommunications group implementing a program which can add $150 to $250 per unit annually in revenue.

Read more...Ancillary Services are Adding to NOI - Noi - Multifamily Executive Magazine

Thursday, March 8, 2012

Corpus Christi multifamily 4Q 2011 via Texas A&M Real Estate Center

The Corpus Christi MSA’s average market rent has grown 11.48 percent over a four-year span, or $662 per unit to $738 per unit, from 4Q 2007 to 4Q 2011.

The average occupancy during the same time period was 92.7 percent, with a low of 90.8 percent in 4Q 2009 and a high of 93.8 percent in 4Q 2011.

At the end of 2011, the Corpus Christi MSA was reporting an average occupancy of 93.8 percent, a slight improvement from 2Q 2011 reported occupancy of 93.5 percent.

Average market rent for the entire MSA was $738 per unit, or $0.89 psf., with units averaging 826 sf.

Read more...Corpus Christi multifamily 4Q 2011 via Texas A&M Real Estate Center

Banks Returning to CRE Lending via Multifamily, Owner-Occupied Properties via CoStar Group

It's not a big hook to hang a hat on, but the small increase in some commercial real estate loan balances on bank books at the end of the year serves as yet another indication of thawing lending markets for property investors.

Overall loan balances on bank books posted their largest real growth in four years, according to year-end numbers released this past week by the Federal Deposit Insurance Corp. (FDIC).

As far as CRE lending goes, it was a 50/50 split between good and bad news. Total loans outstanding for owner-occupied CRE and multifamily properties saw a modest increase year over year -- from $452.6 billion to $457.2 billion for owner-occupied and from $212.7 billion to $218.5 billion for multifamily.

Read more...Banks Returning to CRE Lending via Multifamily, Owner-Occupied Properties - CoStar Group

Legislative Update on the state of the EB-5 Immigrant Investor Program | Akerman Senterfitt via JDSupra

The EB-5 program has received growing attention in recent weeks. In these days of tight credit, particularly for commercial real estate development, the EB-5 Program provides an attractive alternative to conventional real estate finance for a wide variety of projects. The program creates foreign investment by allowing a person, with qualifying immediate family members, to obtain permanent resident (green card) status by investing in a new U.S. commercial enterprise, and creating or saving 10 full time U.S. jobs. The usual required investment is $1 million, but this amount is reduced to $500,000 if the investment is made in a rural area or area of high unemployment. The EB-5 Regional Center Pilot Program permits the U.S. Citizenship and Immigration Services (USCIS) to designate qualified applicants as regional centers eligible to accept EB-5 investments from foreign investors to generate job creating economic development within the United States. Through the Regional Centers, the job creation requirement can be met either directly or indirectly, through the establishment of sufficient economic activity to permit USCIS to conclude that the job creation requirement will be met. After the investment is approved by USCIS, the investor receives conditional residence status for a period of two years. This conditional status is removed and the unconditional permanent resident status is awarded, if the investor shows at the end of such period that the investment has been maintained and that the required jobs have been created or saved. The time to attain this status is relatively short compared to other green card application options.

Read more...Legislative Update on the state of the EB-5 Immigrant Investor Program | Akerman Senterfitt - JDSupra

Apartment Owners Tackle Negative Reviews on Apartment Ratings and Social Media via Multifamily Executive Magazine

How does your community handle negative reviews and comments posted to online or social media outlets? has long been considered the most controversial of the ratings websites out there. Many managers and owners consider it a hotbed for resident hostility. In a recent survey distributed and compiled by Memphis-based Multifamily Insiders and sponsored by Lutherville, Md.-based SatisFacts Research and Corralville, Iowa-based Apartment Grade, 58 percent of respondents said they felt they received a false rating.

“ has a reputation for being the site where everyone goes to complain,” says Greg Benson, senior director of marketing at Charleston, SC-based Greystar. “That’s in part because as an industry, we haven’t done enough to nurture positive feedback.”But they can’t ignore the negative feedback, whether its own, Yelp, or social media.

“If it’s out there, we’re not the only ones that know it’s there,” says Julie Brawn-Whitesides, executive vice president of Folsom, Calif.,-based FPI Management. “If our residents and clients check the feedback, it’s relevant. We try to take a proactive approach to it.”

Read more...Apartment Owners Tackle Negative Reviews on Apartment Ratings and Social Media - Technology - Multifamily Executive Magazine

Apartment Marketing Cited Source Comparison – 2011 Update via Mark Juleen

This is an interesting article about a topic that every property should track. How do your traffic statistics compare?

Last August I wrote a post comparing cited marketing sources from 2007-2010 for the J.C. Hart portfolio as a whole. The purpose of the post was to show off how our shifted marketing spend away from print has resulted in successes from reinvestment into our own websites and search engine optimization efforts. In the last couple years we have also reduced our ILS spend and allocated more of our marketing budget to our online efforts. In my previous post I included some partial data from 2011, but wanted to share where we ended up the year.

In 2011 we continued to see print slip down. We used print on very limited number properties. The majority of those investments were from brand new lease-up communities in suburban Indianapolis. We actually had fewer leases attributed to the print guides in 2011 vs. 2010. This was very interesting as we completed construction and the lease up of 2 properties in 2011 and used print throughout the year for each property. In 2010 we did not use print through out the year for both communities but saw more success. It’s pretty clear that print’s no longer the source it once was, and this was just one more way to prove it to me.

Read more...Apartment Marketing Cited Source Comparison – 2011 Update | Mark Juleen