Thursday, May 31, 2012

Property Management: The Impact of Convenience Fees on Online Payments via Property Management Insider

When it comes to accepting electronic or online rent payments, every property management company (PMC) wants the same things: maximum convenience and choice for residents at minimal cost to property owners and staff. More than ever before, residents demand the ability to pay online – or even with their mobile phones – any way they choose.

As PMCs adapt to changing resident demand, convenience fees have become a key component of the industry’s payments strategy. Many PMCs now charge a convenience fee to offset their processing costs – especially for more expensive credit or debit card transactions. When formulating a payments strategy, it’s important to understand the rules governing convenience fees, as well as the impact of convenience fees on transaction volume, before determining the best strategy for your communities.

Read more...Property Management: The Impact of Convenience Fees on Online Payments | Property Management Insider

Riverstone to Report Resident Rental Payment History to Experian via Multifamily Executive Magazine

Dallas-based Riverstone Residential Group announced Wednesday that all of its properties will now report resident payments to Experian RentBureau, a company that collects updated rental histories from property management companies every 24 hours and makes its rental history data available to other multifamily owners and managers.

Riverstone argues that storing this data will encourage residents to pay their rent on time. It will identify residents who might have great credit but delinquent rents payments, but also those who have poor credit but always pay their rent on time. Mark Stringer , senior vice president of Riverstone Screening Services and Riverstone Receivables, thinks collecting this information is a positive move for the company.

Read more...Riverstone to Report Resident Rental Payment History to Experian - Rent Trends - Multifamily Executive Magazine

Industry Experts Reveal Current Trends in Apartment Living via NAHB

The location of an apartment building remains the most important feature for renters when choosing where they want to live, according to industry experts during a recent webinar hosted by the National Association of Home Builders (NAHB). The experts also discussed key market trends emerging in interior, exterior and outdoor living and how generational differences affect apartment design.

Multifamily builders and developers are focusing more on urban projects that are near public transportation hubs as Millennials—the largest segment of the renting population—want to spend less time commuting and more time creating a balance between career and lifestyle.

Read more...NAHB: Industry Experts Reveal Current Trends in Apartment Living

Multifamily Housing Construction to Remain Strong via

TD Economics, an affiliate of TD Bank, America's Most Convenient Bank, released a new research report outlining the positive prospects for the U.S. multifamily housing market.

Between 2009 and 2011, nationwide multifamily housing starts rose 59% while single family starts declined 2% as high unemployment, falling home prices and increased foreclosures strengthened rental demand. According to the TD Economics report, favorable demographics and years of underinvestment have primed the South Atlantic for a sustained rebound in multifamily housing construction. Meanwhile, the Northeast is also on a path of recovery, but will lack the South Atlantic's vigor because of slower population growth and lower rates of household formation.

Read more...Multifamily Housing Construction to Remain Strong - Multifamily News Headlines – Breaking News, Stories, Top Headlines ::

The Road Ahead: Economic Outlook via

Little has occurred in the first part of 2012 to alter the view that the recovery of the real estate industry will be a long, hard slog. “My belief is we’re still in the third inning of a nine-inning game,” said Howard Roth, head of Ernst & Young’s commercial real estate advisory practice. The consensus view of most economists is that growth will finally start picking up speed in 2014.

Many economists expect a return to robust economic growth by 2014. The Urban Land Institute’s most recent survey of real estate economists projects a 50 percent increase in transaction volume by 2014 as CMBS volume doubles over the same period. Vacancy rates will drop between 1.2 and 3.7 percent for office, retail and industrial and remain low for multi-family properties.

Read more...The Road Ahead: Economic Outlook via

Wednesday, May 30, 2012

Top 25 Financial Intermediaries in Commercial Real Estate via

The following rankings are based on responses to NREI’s 21st annual Top Lenders Survey and reflect total dollars financed or arranged in commercial real estate during the 2011 calendar year.

Read more...Top 25 Financial Intermediaries in Commercial Real Estate Top 25 Direct Lenders in Commercial Real Estate via

Top 25 Direct Lenders in Commercial Real Estate via

The following rankings are based on responses to NREI’s 21st annual Top Lenders Survey and reflect total dollars financed or arranged in commercial real estate during the 2011 calendar year.

Read more...Top 25 Direct Lenders in Commercial Real Estate via

HUD Issuing New Physical Needs Assessment & Energy Audit Requirements via

New requirements are on the way for how HUD Public Housing Authorities are to conduct Physical Needs Assessments and Energy Audits. The U.S. Department of Housing and Urban Development’s (HUD) Office of Public and Indian Housing is issuing a rule in summer 2012 to require synchronization of Energy Audits and Physical Needs Assessments into the Green Physical Needs Assessment (Green PNA), and will require measurement of the cost effectiveness of energy conservation measures.

Under current requirement 24 CFR 905 & CFR 965 Subpart C, Public Housing Authorities (PHAs) are required to have an Energy Audit performed every five years and Public housing Authorities greater than 250 units are also required to perform a Physical Needs Assessment every five years, with no minimum staff qualifications to perform either the Energy Audit or PNA. New requirements are requiring all Public Housing Authorities, regardless of size, to perform a Physical Needs Assessment in conjunction with an Energy Audit every five years.

Read - HUD Issuing New Physical Needs Assessment and Energy Audit Requirements - The Science of Real Estate Article

Delinquency Rate Hits All-Time High for CMBS via WSJ

A surge in maturities for troubled loans has pushed the delinquency rate for commercial mortgage-backed securities to an all-time high of 10.04% for May, according to a loan-research service.

That’s the first time the rate passed the 10% mark, fed largely by five-year loans that were made in 2007 — when standards were at their weakest — and are now coming due, according to Trepp LLC. Landlords have had difficulty paying these off given that standards and values are far more stringent now, with more properties falling into default. (Loans are delinquent when at least 30 days past due.)

Tens of billions of commercial-property loans that were securitized have run into trouble in recent years, as a drop in rents and values during the downturn pushed many landlords into trouble, unable to pay off their debts.

Read more...Delinquency Rate Hits All-Time High for CMBS - Developments - WSJ

DFW's rapid population growth puts it atop nation's metros via Dallas Business Journal

Don't blink. You might miss the new person coming to the Dallas-Fort Worth area.

According to an analysis of data from the U.S. Census Bureau by On Numbers, the Dallas-Fort Worth metropolitan area gains another person every four minutes and 10 seconds. That makes DFW the fastest-growing metropolitan area in the nation, according to On Numbers.

Dallas-Fort Worth added 126,037 residents between July 1, 2010, and the same date in 2011, said On Numbers, which used those estimates to generate daily growth rates for the country's top 366 metropolitan areas.

Read more...DFW's rapid population growth puts it atop nation's metros - Dallas Business Journal

Tuesday, May 29, 2012

Maintenance Requests via MHNonline

MHN teamed up again this month with research and consulting services firm Kingsley Associates—which surveys over 1 million residents each year. Sentiments range from enthusiastic satisfaction to immense frustration and, as with most things, convenience is a primary factor. New technologies make available and, in some cases, necessitate new approaches to how repairs and services requests are handled. Many renters now expect to be able to send maintenance requests via their computers or mobile devices, and while this is just one element of convenience, it also conveys the impression that the community overall is keeping up with the times. Promptness of response still remains a crucial element, as well as how carefully maintenance team members perform their work inside an individual unit. Cleanliness, consideration and attention to detail are rules to live by in this particular area of apartment management.

Read more...Maintenance Requests via MHNonline & CareerBuilder Reveal Fifth Annual Top 10 Best Cities for New Grads via Blog

As the class of 2012 turns their tassels and leave campus life, savvy grads are finding they still have some homework to do to identify the cities that offer the best opportunity for employment, a place to live and the best quality of life as a young professional. To help give these newly minted grads a leg up in both a competitive job and rental market, and CareerBuilder teamed up for the fifth year in a row to reveal the Top 10 Best Cities for College Graduates list. Backed by our expertise in apartments and jobs, we tailored our list to what matters most to new grads—a place to live that affords them a lifestyle they can enjoy and the best overall opportunity.

Check out the infographic below to see the top 10 cities for new grads, average cost of rent for a one bedroom apartment, hottest jobs and more. Did your city make the list? Even if it didn’t, tell us why your hometown is a fabulous place for new grads to settle down in the comments section.

Read and CareerBuilder Reveal Fifth Annual Top 10 Best Cities for New Grads | Blog

Investors, Servicers Alike Can Mine Value-Add Gold via

As of April 30, more than $80 billion in CMBS loans backing US commercial real estate assets is in the hands of special servicers for a variety of reasons, according to Trepp data (see chart below)—from maturing loans made at the height of the market in 2007 that are having difficulty finding refinancing to truly distressed assets that are not generating enough income to cover their debt. Approximately 60% of loans maturing in the first quarter of 2012 were not paid off; the result is that situations arise where a special servicer, a controlling debt holder or an opportunistic investor who purchases a controlling debt position can take strategic action to create value.

In analyzing a given loan, a special servicer’s obligation to the trust requires it to evaluate viable alternatives and determine strategies that maximize the recovery on a net present value basis while also considering execution risk. A distressed investor’s fiduciary obligations lead it to undertake a similar analysis. In performing a risk-reward analysis, consideration must be given to property-specific execution risk, as well as larger economic and geopolitical risks that could impact future cap rates.

Read - Investors, Servicers Alike Can Mine Value-Add Gold - Daily News Article

DFW commercial real estate developers adjusting to new market via

Vandergriff Town Center was seen as vital to the redevelopment of downtown Arlington.

In 2006, developers borrowed $3.9 million and built a two-story, 30,000-square-foot brick office building with a 70-foot clock tower just east of the historic Vandergriff Chevrolet dealership building on Division Street. The ground floor offered space for shops and restaurants as the city worked to draw commerce to the fledgling business district, not far from the gleaming Cowboys Stadium.

But now the property has been posted for foreclosure, yet another victim of the sagging economy. Its major tenant downsized and moved out, and it's been difficult to find another, the developer said.

Read more...DFW commercial real estate developers adjusting to new market via

Friday, May 25, 2012

US bank industry posts highest earnings since 2007 via Reuters

The U.S. banking industry for the first quarter reported its highest quarterly earnings since the first half of 2007, but there remain signs that the industry is having trouble fully recovering from the financial crisis, according to data released on Thursday by the Federal Deposit Insurance Corp.

The FDIC quarterly report showed the industry earned $35.3 billion in the first quarter, up $6.6 billion, or 22.9 percent, from a year earlier. However, the increase was largely due to banks setting aside less money to guard against loan losses.

Banks pulled back on lending during the first quarter as loan balances dropped for the first time in four quarters.

Read more...US bank industry posts highest earnings since 2007 | Reuters

No Evidence of Any Recession for the Dallas Apartment Market via ReisReports

Evident signs of the recession have long since vanished from the Dallas area apartment market as the convergence of growing strength in economic fundamentals and persistent troubles in the single-family market provides a strong demand flow. Nearly all recession-related job losses have been redeemed thanks to high rates of population in-migration, a diverse economic base that includes substantial energy, high-tech and distribution components, and expanding and relocating businesses in the Dallas area. Absorption numbers, accordingly, have been very high; vacancy now at its lowest level in about a decade has declined sharply; and rents show strong annual gains with even larger ones expected. With demand fundamentals as strong as they are, the coming increases in construction, which are not excessive, do not appear to threaten the good health of the market.

Read more...No Evidence of Any Recession for the Dallas Apartment Market | ReisReports

Winning the War on Pests via

As a property manager, you work hard to attract residents to your property and, once they’re there, to keep them happy. Amenities like a pool and fitness center may be highlights of your property for a prospective resident, but the fact is—not even a wide array of attractive amenities can counteract the reputation of a property that has been skewed by pest sightings.

Pests are more than just a nuisance. They can carry and spread diseases, contaminate food and even cause expensive structural damage. Unfortunately, many properties provide the conditions necessary for these undesired occupants to survive.

The characteristics of a multifamily environment, with its varying resident lifestyles, lack of uniform cleaning standards and the close proximity of units, can present unique challenges in detecting and remediating pests. Unsanitary conditions in one unit may attract pests that can quickly spread to other parts of the community. In addition, frequent arrivals of new residents offer additional opportunities for pests to make themselves at home in your property.

Read more...Winning the War on Pests via

FHA Looks to Raise Mortgage Insurance Premiums… Again via Multifamily Executive Magazine

The Federal Housing Administration (FHA), the branch of the Department of Housing and Urban Development (HUD) that insures multifamily loans, issued a notice last month that it will be increasing mortgage insurance premiums (MIPs) in 2013.

This is not the first time, and it’s probably not the last time, the FHA has looked to raise MIPs, but the multifamily industry is in an uproar and they're letting the agency hear about it.

Read more...FHA Looks to Raise Mortgage Insurance Premiums… Again - Mortgages And Banking - Multifamily Executive Magazine

Multifamily only unit to generate profit for GSEs since 2008 via HousingWire

The only profits Fannie Mae and Freddie Mac generated since entering conservatorship in 2008 came from financing multifamily mortgages, according to the inspector general of the Federal Housing Finance Agency.

The GSEs earned a $7 billion gain from their multifamily division between 2008 and the first quarter of 2012. It's more than overwhelmed by the $208 billion in total losses from the single-family mortgage business, $4 billion in investment losses and $16 billion in what the FHFA OIG called "other losses," according to a report released Thursday.

As of March 31, both GSEs drew more than $188.4 billion in bailouts from the Treasury Department and paid back $41 billion in dividend payments, according to their financial filings.

Read more...Multifamily only unit to generate profit for GSEs since 2008 | HousingWire

Thursday, May 24, 2012

Apartment Distress Falling Farther, 2 Reports Show via Multifamily Executive Magazine

Two different reports paint an improving picture of apartment distress.

In the most recent quarterly report from New York–based Real Capital Analytics (RCA), the market research firm said that new instances of apartment-market distress fell to $1.5 billion in the first quarter of 2012, the lowest quarterly total since 2007. Most of those cases are coming from maturity defaults of CMBS loans. Work-out activity also slowed last quarter, totaling $1.9 billion after coming in at $5.2 billion for the first quarter of 2011, according to RCA.

Work-outs exceed inflows of distress as lenders have reduced apartment distress by 14 percent over the past year. Domestic banks and agencies have led the pack by reducing their distress by more than 20 percent over the past year. They’ve cleared 60 percent of their problem loans since the downturn began. CMBS lenders are behind them, clearing only about 40 percent of distress, according to RCA.

Read more...Apartment Distress Falling Farther, 2 Reports Show - Distressed Assets - Multifamily Executive Magazine

NAR Research: All Commercial Real Estate Sectors Continue to Improve, Multifamily Strong via

Shaking off a prolonged impact from the recession, fundamentals are gradually improving in all of the major commercial real estate sectors, according to the National Association of Realtors® quarterly commercial real estate forecast. The apartment rental sector has fully recovered and is growing.

The findings also are confirmed in NAR's recent quarterly Commercial Real Estate Market Survey, which collects data from members about market activity.

Lawrence Yun, NAR chief economist, said new jobs are the key. "Ongoing job creation, which is at a higher level this year, is fueling an underlying demand for commercial real estate space, assisted by a steady increase in consumer spending," he said. "The pattern shows gradually declining commercial vacancy rates, with consequential but generally modest rent growth."

Read more...NAR Research: All Commercial Real Estate Sectors Continue to Improve, Multifamily Strong |

A green future starts at home for Californians via San Francisco Chronicle

Can other states be far behind?

To its great credit, the California Energy Commission has enlisted the support of major stakeholders who are often at odds - builders, utilities, environmental groups - for its proposed building efficiency standards.

Now, if the commission could only persuade our teenagers to take shorter showers, unplug their chargers and turn off the lights when they leave the house ... then this state would truly redefine the cutting edge of resource conservation.

On May 31, the commission is expected to approve the nation's most stringent energy efficiency standards for residential and commercial buildings. The new rules would apply to new construction and take effect on Jan. 1, 2014. They are expected to cut energy use 25 percent in homes, 30 percent in commercial buildings and 14 percent in multifamily residences.

Read more...A green future starts at home for Californians via San Francisco Chronicle

Wall Street CMBS Allure Fades as Volatility Surges: Mortgages via Bloomberg

Wall Street’s on-again, off-again love affair with commercial-mortgage-backed securities is on the rocks as markets get whipsawed by Europe’s debt crisis.

Goldman Sachs Group Inc. (GS), Deutsche Bank AG (DBK) and other banks sold $2.4 billion of new deals this month with the widest spreads this year. An index tied to lower-rated bonds issued before the financial crisis fell 7.4 percent to 56 cents on the dollar, approaching the lowest level in almost six months.

Market volatility, which rose the most last week since January, makes it harder to gauge investor demand for bonds tied to everything from shopping malls to mobile home parks. Lenders hold commercial mortgages for several months before selling them as securities, which means swings in values as they accumulate debt can eat into profits and thwart efforts to boost sales.

Read more...Wall Street CMBS Allure Fades as Volatility Surges: Mortgages - Bloomberg

CMBS Class of 2007: The Smaller They Are, The Harder They Fall via CoStar Group

While the CMBS class of 2007 is full of delinquents, the creditworthiness for some of the loans made during that frothy era is actually holding up, particularly on large office deals.

This year (2012) was widely viewed as the year of reckoning for the class of 2007 originated loans as the five-year balloon loans made at the height of the commercial real estate bubble come due.

The 2007 vintage was considered the weakest in terms of underwriting standards and analysts expected that many of these loans would have trouble paying off their balances or securing refinancing at their balloon date. In total, about $15.5 billion of these loans were expected to come due this year, with the majority reaching their balloon dates in the first six months.

Read more...CMBS Class of 2007: The Smaller They Are, The Harder They Fall - CoStar Group

Wednesday, May 23, 2012

Apartment Building Investment Values & Cap Rates In Context via Ashworth Partners

A very interesting report on apartment building investment posted on the Freddie Mac website discussing Current Multifamily Values & Cap Rates In Historical Context explores where the market is today and where it is likely to be in five years under a number of different interest rate scenarios. Freddie doesn’t do loans smaller than $5 million (implying a minimum deal size of $6.6-7 million) and many of their borrowers are large institutional investors but the forecasting methods and valuation models they use are applicable to apartment building investing on any scale.

Read more...Apartment Building Investment Values & Cap Rates In Context | Ashworth Partners

Financing Green Part III: Real World Sustainable Funding for the Tenant or End-User via CoStar Group

Those that physically occupy commercial space have a vested interest in the benefits of green building improvements. Lower energy bills, increased productivity, higher employee satisfaction levels as well as enhanced corporate responsibility in the community top the 'want' lists of many corporate end-users. However, tenants often don’t have or don’t wish to spend a lot of money for their office build-out.

This can be short-sighted, according to Marisa Manley, president of Commercial Tenant Real Estate Representation (CTTR) in New York. "Going green can provide big-time savings - big enough to pay back all of the up-front costs of going green," Manley said. She adds some words of caution though, "Not all that is done or proposed in the name of green pays for itself, so a careful analysis of each segment of each project should be made before doing any work."

Read more...Financing Green Part III: Real World Sustainable Funding for the Tenant or End-User - CoStar Group

CREShow: Borrowers, Lenders Need to Get Real about Troubled Loans via Citybizlist Atlanta

Be prepared and be realistic. That's the advice offered to borrowers and lenders dealing with troubled loans in the latest episode of "America's Commercial Real Estate Show."

In the episode, show host Michael Bull and his guests take a detailed look at loan workout strategies and the various issues surrounding non-performing loans.

Non-performing loans continue to plague the commercial real estate sector, noted Tom Fink, senior vice president for Trepp LLC. Approximately 10 percent of CMBS loans are delinquent, and the total value of such loans is about $60 billion, he said.

Read more...CREShow: Borrowers, Lenders Need to Get Real about Troubled Loans - Citybizlist Atlanta

CMBS conflicts to linger for another year via HousingWire

Distrust between commercial mortgage bond investors and special servicers, due to perceived conflicts, could remain for another year and even amplify as more loans fall into trouble.

The amount of delinquent commercial loans backing these bonds ticked down slightly in April to less than $8.2 billion, according to Michael Merriam, senior vice president of operational risk assessment at Morningstar Credit Ratings.

But take out CMBS issued by Fannie Mae and Freddie Mac, and the delinquency rate spikes. Even more trouble could be coming as loans originated during the housing bubble mature in the next few years.

Read more...CMBS conflicts to linger for another year | HousingWire

Rent Growth Levels Hit 17-Year High in San Antonio [Video] via Property Management Insider

New supply in San Antonio fell to a 17-year low, while rent growth measured a 17-year high. And it’s the bottom end of the market now showing the biggest revenue improvement.

Watch video...Rent Growth Levels Hit 17-Year High in San Antonio [Video] | Property Management Insider

Tuesday, May 22, 2012

Multifamily Mojo via Apartment Finance Today Magazine

As those in the multifamily industry have happily known for some time now, the apartment market has experienced a dramatic resurgence in the past two years. Fundamentals have improved for nine straight quarters since reaching their nadir at the end of 2009, and the national vacancy rate stood at 4.9 percent as of the first quarter of this year, its lowest level in more than 10 years.

This is a spectacular result given the rather weak performance of the economy over the same time period, when gross domestic product (GDP) grew at an annualized rate greater than 3 percent only twice in eight quarters in 2010 and 2011. Indeed, by historical standards, we’re experiencing an anemic recovery.

The job market has fared even worse than the economy in this time frame. As of March 2012, we had regained only 3.5 million of the 8.6 million jobs that were lost due to the recession.

Read more...Multifamily Mojo - Apartment Finance Today Online Article - Apartment Finance Today Magazine

Austin's Universal Recycling Ordinance via

Beginning October 1, 2012, more Austin residents residing in multifamily communities will have access to onsite recycling.

The Commercial Multifamily Recycling Ordinance (CMFRO) was enacted in 1999, which established recycling in multifamily communities with over 100 units. The program required that apartments collect a minimum of four materials. The Austin City Council approved changes to the CMFRO on November 4, 2010. The revised ordinance detailed a four year phase-in to service more multifamily properties and was renamed the Universal Recycling Ordinance.

The Universal Recycling Ordinance demonstrates Austin’s commitment to reach its Zero Waste goal by 2040. This goal would reduce the amount of trash sent to landfills by 90 percent, making Austin the nation’s Zero Waste leader. California is a close second at a 75 percent recycling goal. According to Austin’s Resource Recovery Director, Bob Gedert, the Zero Waste goal will reduce the City’s dependence on landfills, reduce its greenhouse gasses, and generate new green jobs in the community.

Read more...Austin's Universal Recycling Ordinance - Multifamily Blogs – Experts – Technology, Products ::

Houston Area Apartment 1Q 2012: Marcus & Millichap via Real Estate Center at Texas A&M University

Tightening conditions will prompt owners to raise rents and reduce concessions in 2012. For the year, asking rents will increase 3.1 percent to $805 per month, while effective rents advance 4.1 percent to $739 per month, according to the Marcus & Millichap Apartment Research Report for second quarter 2012.

With residential lending standards still tight, the addition of more than 90,000 jobs will undoubtedly strengthen apartment demand in the metro.

At the same time, apartment completions in 2012 will fall well below the long-term average, resulting in another year of declining vacancy and accelerating rent growth.

Read more...Houston Area Apartment 1Q 2012: Marcus & Millichap via Real Estate Center at Texas A&M University

Monday, May 21, 2012

HUD multifamily handbook to get update after 20 years via HousingWire

A crucial handbook that provides general guidance for tasks associated with the Department of Housing and Urban Development involvement in multifamily projects will be revised by October.

The book of policies and procedures, titled HUD Handbook 4350.1, hasn’t been updated since 1992.

Loan management multifamily officers use it in carrying out asset management and loan servicing in helping owners and managing agents maintain projects in good physical and financial condition.

Read more...HUD multifamily handbook to get update after 20 years | HousingWire

Modest Recovery Continues, According to Reis via

Terrible headlines from overseas are weighing down our recovery … again. If we aren’t worried about Greece leaving the Euro (February), we’re worrying about international oil and gas prices (April) or Spanish sovereign default (late April). Now Greece is in the headlines again—and that’s bad news for commercial real estate.

“It certainly increases the risk that we are going to have another fairly unspectacular year,” says Ryan Severino, senior economist for New York-based real estate research firm Reis LLC.

“Fairly unspectacular” seems to be the theme behind the numbers in the first quarter reports from Reis. Our modest recovery will continue to be modest until severe uncertainty ends and strong job growth returns, says Severino

Read more...Modest Recovery Continues, According to Reis via

REIT Update: REITs Go On a Spending Spree via

REITs are on the rise again. They’ve raised billions of capital in the past few years, and many are seeing strong returns.

In fact, NAREIT reports that the total return of the US REIT market outpaced the broader equity market in the past year. With returns of 11.29%, REITs beat out the S&P 500’s 8.54%. All the while, REITs are still raising significant dollars. They raised $21.1 billion in the first quarter of 2012, including $10.6 billion of equity, NAREIT reports. That compares to $51.3 billion in all of 2011.

The question now is, how are REITs spending all this cash? The answer is varied. Although some are refinancing debt or doing mergers, most are acquiring or developing properties—or both. With distressed assets still up for grabs and new development opportunities arising in certain sectors, REITs are putting their cash to use in 2012.

Read - REIT Update: REITs Go On a Spending Spree - Daily News Article

Future of U.S. Housing Markets Depends Largely on Echo Boomers via RealEstateRama

The next two decades in housing markets depends largely on the Echo Boomers. That’s according to panelists at the “Shifting Demographics and Housing Choice: A Whole New World?” session today during the Realtors® 2012 Midyear Legislative Meetings & Trade Expo here.

There are approximately 62 million echo boomers in the U.S. Also called “millennials,” echo boomers are currently ages 17-31. According to the 2011 National Association of Realtors® Profile of Home Buyers and Sellers, younger home buyers – those ages 18-34 – represent 31 percent of all recent home purchases.

“We know that although many young people may be delaying home purchases in today’s economic climate, most of them still aspire to homeownership,” said NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami. “Realtors® are committed to ensuring that the dream of homeownership can become a reality for generations of Americans to come.”

Read more...Future of U.S. Housing Markets Depends Largely on Echo Boomers | RealEstateRama

Financing Green Part II: The Role of Data in Financing Green Improvements via CoStar Group

Following the Second Annual Conference on Sustainable Real Estate hosted by NYU Schack Institute of Real Estate, CoStar News interviewed Constantine E. Kontokosta, PhD, PE, clinical associate professor and director of the Center for the Sustainable Built Environment at New York University Schack Institute of Real Estate. An expert on green buildings in his own right, Dr. Kontokosta is the founding director of the interdisciplinary research center at NYU focused on applied research, practice and technology in real estate and construction. He plays a critical role in advancing policy and finance issues related to green building technologies as a member of the executive team of the NYC Urban Technology Innovation Center. He has been named to the United Nations Environment Programme Sustainable Buildings and Climate Initiative, and is a member of the Clinton Global Initiative Scaling Sustainable Buildings Action Network.

Kontokosta is also principal and founder of the New York-based KACE Group, a real estate development and investment firm focusing on equity, sustainability and economic feasibility. The firm has more than 450 affordable and senior housing units intended to receive Energy Star or LEED certification. He has received numerous degrees in various fields, including a Ph.D. in urban planning from Columbia University, and has written several research papers on urban systems theory and smart cities, land use and sustainable development, and technological innovation. His paper, Greening the Regulatory Landscape, was published in the Journal of Sustainable Real Estate (JOSRE) and is available here.

Read more...Financing Green Part II: The Role of Data in Financing Green Improvements - CoStar Group

Friday, May 18, 2012

Lack of Capital Hinders Commercial Markets via

National Association of Realtors Chief Economist Lawrence Yun presented a modest and hopeful outlook for the commercial real estate market during the Economic Issues and Commercial Business Trends Forum at the Realtor Midyear Legislative Meetings & Trade Expo in Washington, D.C. today.

"The commercial market has displayed modest growth lately," said Yun. "Commercial real estate is the basis for much of the growth in the American economy, however challenges continue to exist. Despite this there are hopeful signs that the market might be slowly recovering due to recent job creation and an increase in consumer spending, among other indicators."

Read more...Lack of Capital Hinders Commercial Markets - Multifamily News Headlines – Breaking News, Stories, Top Headlines ::

Austin jobless rate drops again via Austin Business Journal

The Austin-area unemployment rate dropped in April to 5.5 percent, the lowest the regional unemployment rate has been in more than three years, the Workforce Solutions Capital Area Workforce Board said Friday.

The unemployment rate for the area in March was 6 percent.

The Austin metropolitan area is hot for economic growth, drawing new business and adding jobs, Alan Miller, executive director of Workforce Solutions Capital Area said.

Read more...Austin jobless rate drops again - Austin Business Journal

Financial Barometer Indicates Heavy Weather Ahead via the Blog of the Real Estate Center

A few Americans are worried about deflation. A lot of Americans are worried about inflation. Some Americans are worried about hyperinflation.

The Federal Reserve is clearly worried about deflation. That’s why your CDs and money market accounts have earned virtually nothing for the past three years. That’s why they are unlikely to earn anything for another two years, at least. Quantitative easing (QE) is the snappy way to say that the Fed prints money and then buys something with the new money. QE is the Fed response to fears of deflation. As long as interest rates are near zero, the Fed is worried about deflation.

Almost everyone in America is worried about inflation. They see it every day when they go to the grocery store. They see it every day when they see the posted price for gasoline. Insurance costs are higher. So are medical costs.

Read more...Financial Barometer Indicates Heavy Weather Ahead | the Blog of the Real Estate Center

Property Management: There’s No Such Thing as a Difficult Resident via Property Management Insider

I’m sure, in reading the title of this article; your first thought was something along the lines of “Really? She can’t be serious.” You may even be thinking of a particular resident who you would say is the true definition of the word “difficult.”

Residents are not born difficult – they do not move into your community with a ready-made chip on their shoulders. Residents become difficult when our performance negatively impacts their overall living experience. Think about that resident who you would consider to be your most “difficult.” Now, think back to that person’s move-in day. Was s/he full of negativity and impossible to please? Did this person question your every move and show no trust or faith in the management team? Probably not. So what were the circumstances that led to this change?

Read more...Property Management: There’s No Such Thing as a Difficult Resident | Property Management Insider

Financing Green Part I: Funding Energy Efficient Retrofits and Overcoming Uncertainty via CoStar Group

It has become increasingly evident to those in the commercial real estate industry that improving building energy performance and making other sustainable and green improvements can impact property values and balance sheets. To some degree, building owners find themselves caught in a 'Catch 22' situation. On one hand, buildings that are slow to adopt these changes and implement green retrofits and more efficient operations are seen as being at a competitive disadvantage in the market. On the other hand, lenders willing to finance such green improvements are few and far between.

How do stakeholders in this profit-driven industry go about financing these building improvements in an uncertain economy?

Read more...Financing Green Part I: Funding Energy Efficient Retrofits and Overcoming Uncertainty - CoStar Group

Latest CoStar Commercial Repeat-Sale Analysis: Commercial Property Pricing Recovery Continues Despite Seasonal Volatility via MarketWatch

This month's CoStar Commercial Repeat Sale Indices (CCRSI) provide the market's first look at commercial real estate pricing through March 2012. Based on 885 repeat property sales in March and more than 100,000 repeat sales since 1996, the CCRSI offers the broadest measure of commercial real estate repeat sales activity. Also, this release includes First Quarter 2012 sub-index results by property type and by region.

May 2012 National Results Highlights

Read more...Latest CoStar Commercial Repeat-Sale Analysis: Commercial Property Pricing Recovery Continues Despite Seasonal Volatility - MarketWatch

Four Surprises from the NMHC Apartment Strategies/Finance Conference via Multifamily Executive Magazine

At the beginning of Wednesday’s 2012 NMHC Apartment Strategies/Finance Conference, the council’s chief economist, Mark Obrinsky, set the stage for the day’s discussion when he some noted some hesitation with the economy after a strong winter.

“There seem to be a few doubts sneaking into the discussion,” he said.

The panelists at yesterday’s conference overwhelmingly remained steadfast in their belief that the apartment industry is due for a nice run over the next few years, although it may be difficult to keep pushing rent increases as a number of markets like Washington, D.C., New York, Boston, San Francisco, Minneapolis, Miami, Philadelphia and Detroit pushed past pre-recession rent levels.

Here were four surprises from the day:

Read more...Four Surprises from the NMHC Apartment Strategies/Finance Conference - Debt - Multifamily Executive Magazine

Thursday, May 17, 2012

Multifamily Quarterly: Urban Invasion via

The American dream has always been to own a big home on a sprawling lot out in the suburbs. However, that dream appears to be drastically changing. The recession, foreclosure crisis and ever-increasing gas prices have slowed demand for housing in many of the nation’s fringe suburbs. Simultaneously, demographic trends are starting to push aging baby boomers, looking to downsize from big, suburban homes, while young Generation Y-ers are also looking to cities as they pursue hip, cool lifestyles.

This is all good news for apartment owners and developers building in urban cores and inner-ring suburbs. The National Multi Housing Council reports that the US is on the cusp of a “fundamental change in its housing dynamics.” Changing demographics and the housing crash have shifted more people away from buying suburban homes and created increasing rental demand, particularly in urban core and inner-ring markets. Many of tomorrow’s households, the Washington, DC-based organization says, are looking for more choices and are drawn to the attractive amenities like nearby retail, restaurants, entertainment and mass transit that come with urban living.

According to NHMC, up to half of all households created in the next decade could be renters, meaning upwards of seven million new renter households. “There’s a noticeable shift toward an urban lifestyle,” says John McIlwain, senior resident fellow at Urban Land Institute who holds the ULI/J. Ronald Terwilliger chair for housing.”

Read - Multifamily Quarterly: Urban Invasion - Daily News Article

Top 10 Cities for Multifamily Building Permits for 5 + units in 2011 - Building Permits via Multifamily Executive Magazine

On the heels of Wednesday’s release of April housing starts data, a lot of talk in the apartment industry has been surrounding what companies have in their development pipeline. And in the multifamily industry, it has been and will remain a numbers game when it comes to how many units companies can get to market. Especially now. To get a better idea of where developers are looking to add supply to the rental market, let’s take a look at the metro areas where the most building permits for 5-plus unit structure were issued in 2011.

Read more...Top 10 Cities for Multifamily Building Permits for 5 + units in 2011 - Building Permits - Multifamily Executive Magazine

What to Consider About Property Taxes During Underwriting via

According to Real Capital Analytics, the volume of trades in multifamily is currently the highest it’s been since 2007. In the same vein, assets are trading at cap rates that are at the lowest level since 2007. Class A assets are regularly trading in the 5 percent range and even lower in the CBD’s of major metropolitan areas. As cap rates reach a stabilized level, owners will have to singularly rely on property performance to increase the asset value. For acquirers, the emphasis on accurate underwriting becomes even more critical.

Of all the major asset classes, multifamily properties are the ones most consistently seeing increases in value validated by the trade volume and cap rates. For this reason, they have become a target for the local budget-starved taxing entities. In many parts of the country, apartment owners are starting to feel the pinch. Those that did not budget properly are experiencing negative variances and taxes that offset any increases in revenue.

Read more...What to Consider About Property Taxes During Underwriting

Retaining Residents Gets More Challenging via

Fewer and fewer apartment residents are indicating intent to renew their leases. For the four quarters ending on March 31, 2012, only 58.5 percent of renters said they "definitely" or "probably" would renew, according to Kingsley Associates' latest resident survey results. This proportion has declined for five consecutive quarters and is 6.5 percentage points below the high of 65.0 percent observed less than two years ago.

This trend continued despite stabilization in overall resident satisfaction. For the period, 76.1 percent of residents rated their overall satisfaction as "excellent" or "good." While below the levels of satisfaction reported throughout 2009 and 2010, this figure has been fairly consistent for the past year.

Read more...Retaining Residents Gets More Challenging - Multifamily News Headlines – Breaking News, Stories, Top Headlines ::

Utility Ecosystem Key to Energy Efficiency via

Sen. Mark Warner (D-VA) would like to rebrand the energy efficiency movement. It started out as a push for energy conservation several decades ago, he noted, and that term was never well-received by most consumers. ‘Energy efficiency’ is better, but Warner bets that a movement dubbed energy productivity would be eagerly embraced by both businesses and consumers.

Warner made his comments as keynote speaker at a half-day event here hosted by the Alliance to Save Energy. While his comments were somewhat in jest, he was quite serious about their larger point. “The future of energy efficiency is bright, but I do have concerns,” he said. “It seems like the financial case for energy efficiency would be a no-brainer, but we haven’t been able to fully make the case why this is important.”

Read - Utility Ecosystem Key to Energy Efficiency - Daily News Article

Wednesday, May 16, 2012

Apartment Market Shifting Focus To New Supply via CoStar Group

The ongoing recovery of the U.S. apartment market is entering a new phase, one marked by an increasing level of permits and construction starts for multifamily development projects. The upwelling in new development is expected to increase supply across many markets starting in 2013 after years of almost zero growth.

The new phase follows the dramatic vacancy declines and strong apartment rent growth that has occurred in the tightest and more desirable coastal markets, and a rare moment of solid income growth even in vacancy-challenged markets.

The rising supply pipeline, coupled with the gradually improving market for single-family housing, is expected to help bring some equilibrium to an apartment market which experienced strong renter demand and plunging vacancies from late 2009 through middle to late 2011.

Read more...Apartment Market Shifting Focus To New Supply - CoStar Group

U.S. Housing Market Finally Reaches a Turning Point via

Home valuations will start to climb again while adjacent consumer industries will capture significant new growth opportunities in 2012 and beyond as the U.S. housing market finally turns the corner, concludes a major new study released today by The Demand Institute. The recovery of the housing market will have far-reaching impacts in the coming years across the United States and international markets as U.S. consumers increase their spending on buying, renovating, furnishing and maintaining their homes.

Launched in February 2012 and jointly operated by The Conference Board and Nielsen, The Demand Institute is a non-profit, non-advocacy organization with a mission to illuminate where consumer demand is headed around the world.

The new report, The Shifting Nature of U.S. Housing Demand, predicts that average home prices will increase by up to 1 percent in the second half of 2012. By 2014, home prices will increase by as much as 2.5 percent. From 2015 to 2017, the study projects annual increases between 3 and 4 percent. This recovery will not be uniform across the country, and the strongest markets could capture average gains of 5 percent or more in the coming years.

Read more...U.S. Housing Market Finally Reaches a Turning Point - Multifamily News Headlines – Breaking News, Stories, Top Headlines ::

Multifamily supply could hinder rent growth by 2013 in some markets via HousingWire

Starts and permits in multifamily construction continue to outpace year-ago totals, though remain below 20-year averages. Multifamily starts increased 75% in April from the year-ago period while permits rose 12.5%, according to Census Bureau data released Wednesday.

KBW analysts expect apartment construction growth to continue, though it could hamper rising rental costs by 2014 as more supply hits the market.

But in areas with new supply expected by next year — including Dallas, Seattle, Raleigh, N.C., San Jose, Calif., and Austin, Texas — rental costs could taper off earlier.

Read more...Multifamily supply could hinder rent growth by 2013 in some markets | HousingWire

Metro Matters: First Quarter 2012 Multifamily Investment Returns Outlook via Red Capital Group

First Quarter Performance Stronger than Expected

RCR forecasting models anticipated faster rent growth and falling vacancy in the first quarter 2012, but not to the degree actually observed in the period. Apartment demand was exceptionally strong during the seasonally-soft winter quarter while supply totals were at another record-low.

During the first quarter, property managers net leased 30,095 apartment units in the 45 markets covered by RCR, approximately twice the number we forecasted in February. Robust job creation was primarily responsible. U.S. payroll headcounts advanced at a 1.5% year-over-year rate in 1Q12, exceeding our forecast by 30 basis points. Likewise, households continued to shift their tenancy preference in favor of rentals as evidenced by the latest homeownership data released by the Census Bureau in April (see Exhibit 1).

Read more...Metro Matters: First Quarter 2012 Multifamily Investment Returns Outlook via Red Capital Group

Technology: Students Want It, Developers/Owners Must Offer It via

Though much of RealShare Student Housing focused on issues ranging from acquisition opportunities (they're definitely out there near flagship, secondary and tertiary campuses) to financing (lenders and equity partners seem like this sector), one trend repeatedly focused was that of technology as a student housing amenity. The concept was so important, two of the May 15 presentations at the Four Seasons Resort delved into the need for enough bandwidth to power the variety of devices students haul to college.

"When I was in college, I had a personal computer. That was it," said Real Estate Forum editor Sule Aygoren Carranza, who moderated the afternoon panel appropriately entitled "Adapt or Die: How Technology is Changing the Student Housing Business."

But according to panelists Luca Finocchiaro, Greystar's director of real estate-student living and Richard Holtz, CEO of InfiniSys Electronic Architects, the wheelbarrow of broadband-hungry items students cart to college these days include televisions, receivers, gaming systems, Apple TV – and cell phones, computers, laptops, tablets . . . and so on.

Read - Technology: Students Want It, Developers/Owners Must Offer It - Daily News Article

Tuesday, May 15, 2012

Multifamily lending accelerates 45% in 1Q via HousingWire

Bolstered by record-low interest rates, multifamily mortgage originations spiked 45% in the first quarter from year-ago levels, according to the Mortgage Bankers Association.

The rise in multifamily lending helped boost overall commercial and multifamily activity 36% from a year earlier, the MBA found in its quarterly survey.

From the fourth quarter, overall originations are down 12%, reflecting the industry’s usual push to finalize deals before the end of the year and subsequent dropoffs in first-quarter numbers. Multifamily lending fell 22% from the fourth quarter.

Read more...Multifamily lending accelerates 45% in 1Q | HousingWire

Houston Economic Update May 2012 via FRB of Dallas

According to the Federal Reserve Bank of Dallas business-cycle index, economic activity in the Houston metropolitan area grew at an annualized rate of 4.6 percent in March. The global economy continues to decelerate, but emerging economies are expected to remain primary drivers of demand growth for energy and exports. Furthermore, local real estate markets, save for single family and retail, seem to be shedding the last shadows of the Great Recession. Given strengthening real estate, good energy prices and resilient international trade, the outlook for Houston remains positive..

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

The Valuation Trap via CCIM Institute

Appraisals in today’s market are not for the faint of heart. Comparable sales are scarce, markets are changing quickly, and rules and regulations are stricter than ever. One false step could imperil even the most solid transactions.

“Today, there can be significant gaps in valuation metrics across property classes and among the various markets and submarkets,” says Von Moody III, CCIM, CRE, MAI, senior manager of Thomson Reuters in Denver, N.C. “These gaps can create hazards.”

And these hazards can create angry brokers.

Mind the Gaps
“Lack of comparables has appraisers using properties that would never have been accepted four years ago,” says Eric R. Rehn, CCIM, vice president of Cassidy Turley in Walnut Creek, Calif. Rehn sees appraisers using comps from other markets, not giving credit if a comp is a “fire sale” or real estate-owned, and underestimating values by as much as 25 percent. But such practices aren’t just common in Walnut Creek.

Read more...The Valuation Trap | CCIM Institute

FY2012 Fair Market Rents Via

The FMR Documentation Systems are intended to provide an in-depth exposition of the methodology used to generate Fair Market Rents for a given geographic area selected by the user. The actual FMRs published in the Federal Register are computed using data on rent distributions that are prohibited from public release under Title XIII to protect the confidentiality of respondents. The documentation systems re-calculate Fair Market Rents based on publically available data from the 2000 Census. These data contain rounded distributions to assure the confidentiality of respondents. Calculations using the rounded data may not produce the same result as calculations using the protected data. Consequently, the documentation system provides a demonstration of the methodology and results that are close to, but in some cases different from, the official FMRs published for a given year. The difference between HUD's actual results and those demonstrated here are inversely related to the size of the FMR area. That is, the larger the area, the closer the calculation based on the rounded data is likely to be to the census base rent computed from the protected data.

Read more...Fair Market Rents | HUD USER

Shadow Inventory: 46 Months to Clear Distressed Housing Supply via

It will take 46 months to clear the market’s supply of distressed homes, or the shadow inventory, according to estimates from Standard & Poor’s Rating Services based on first-quarter 2012 data.

The agency’s latest estimate came in one month shy of the liquidation timeline determined in the fourth quarter of 2011.

While national residential mortgage liquidation rates appeared stable over the first three months of this year, these rates varied widely between local markets, which prevented any significant reduction in S&P’s months-to-clear estimate, the agency explained in its report.

Read more...Shadow Inventory: 46 Months to Clear Distressed Housing Supply via

Monday, May 14, 2012

SPECIAL REPORT: Financing Availability, Low Interest Rates Drive CRE Markets via

Debt financing has returned to the commercial real estate markets, deleveraging will likely continue over the next years, and the stream of distressed loans will continue to flow into the market, according to speakers on financing panels at the 2012 ULI Spring Meeting held last week.

At a session titled “Full Court Press on Commercial/Apartment Debt: A Competitive Financing Debate,” Kevin Pivnick, managing director at Deutsche Bank, said that the CMBS industry is experiencing a shortage of demand, not supply. The CMBS market is very healthy today, said Pivnick. Pivnick reported that there is currently robust investor demand for all CMBS bond issuances.

He said, however, that CMBS lenders are still wishing for greater levels of demand from borrowers. He added that 80 percent of the loans his company has seen last year are refinancings rather than acquisitions, and that lenders would like there to be a greater amount of acquisition activities in the CRE space.

Read more...SPECIAL REPORT: Financing Availability, Low Interest Rates Drive CRE Markets via

Small commercial real estate loans prove tough to get via

There apears to be a dividing line at $2.5 million for commercial real estate transactions.

Over that amount, bank financing seems abundant; under it, there is so little financing available that many deals fall apart.

Those are the National Association of Realtors' findings in its Commercial Real Estate 2012 Lending Survey, conducted last month.

This split helps explain why the number of deals above $2.5 million jumped 50 percent nationally in 2011, and why a "major portion" of transactions under that amount were scuttled, the Realtors association said.

Small commercial real estate loans prove tough to get |

High CMBS Delinquency Rate Returns via NuWire

Just when it appeared that CMBS delinquencies might have been stabilizing, the delinquency rate leaped in April and is now back near its highest reading of all-time reached last July, according to Trepp LLC. The delinquency rate jumped 12 basis points in April to 9.80 percent.

If defeased loans were taken out of the equation, the overall delinquency rate would be 10.26 percent—up 14 basis points. The percentage of loans seriously delinquent (60+ days delinquent, in foreclosure, REO, or non-performing balloons) is at 9.41 percent--up 31 basis points.

By property type, the office delinquency rate leaped 82 basis points to a new all-time high for the sector of 10.23 percent. Rates fell for the other major property types—down 21 basis points in the multifamily sector to 15.18 percent, down 26 basis points in the retail space to 7.98 percent, down 18 basis points in the industrial sector to 12.36 percent and down 8 basis points in the hotel sector to 10.55 percent.

Read more...High CMBS Delinquency Rate Returns via NuWire

Austin Multifamily: Developers Step Up to Meet Demand via Real estate Center at Texas A&M University

Tuesday's RECON included an article about pent-up demand in Austin's apartment market.

That could change soon, says Marcus & Millichap in the firm's second quarter 2012 Austin apartment market report.

According to the report, "tight conditions and rising rents have prompted a turnaround in Austin apartment development, with completions in 2012 expected to reach 3,000 units after slipping to a nearly 20-year low last year."

Other findings from the report:

Read more...Austin Multifamily: Developers Step Up to Meet Demand via Real estate Center at Texas A&M University

Friday, May 11, 2012

Fitch:REOs now reach one-third of all U.S. CMBS delinquencies via Reuters

U.S. CMBS delinquencies rose for the second straight month while the volume of real estate-owned (REO) assets continued to climb, according to the latest index results from Fitch Ratings.

Late-pays rose 10 basis points (bps) in April to 8.53% from 8.43% in March. This was largely expected with five-year loans originated in 2007 now starting to come due.

Another notable trend is the increased amount of REO assets, which are making up a larger share of the index. REO assets climbed again and now represent one-third of all delinquencies, reaching $11.1 billion in scheduled loan balance in April.

Read more...TEXT-Fitch:REOs now reach one-third of all U.S. CMBS delinquencies | Reuters

New Report Predicts 'Robust' Year For Multifamily Housing via MortgageOrb

This year promises to be a "robust" period for the multifamily housing sector, according to the "Spring 2012 U.S. Multifamily Report" published by Cassidy Turley.

"Of the 50 major markets that we track, 26 areas closed 2011 with vacancy rates below the 5 percent mark," says the report. Yet, despite the fact that 5 percent vacancy is typically the threshold for rent growth, every metropolitan area in our survey posted rent increases over the past year. With early indications that job creation is accelerating in 2012, there will be no letdown in demand for apartments this year.

Read more...MortgageOrb: New Report Predicts 'Robust' Year For Multifamily Housing

Commercial Real Estate Mending, But Still Vulnerable to Ongoing Economic, Political Risks, Roundtable Survey Shows via MarketWatch

Without Stronger Job Creation, More Stable Policies from Washington, CRE Markets Likely to Bump Along at Low Level, Especially in Non-Gateway Areas

Commercial real estate executives participating in The Real Estate Roundtable's latest quarterly Sentiment Survey generally said market conditions have improved since a year ago, but signaled a lack of confidence in the outlook for the coming year, citing global economic risks, Washington's ability to deal with looming budget and tax issues, ongoing Euro zone turmoil, and the vast amount of commercial mortgages maturing this year and beyond.

"Although more respondents in our Q2 survey see current conditions, asset values and capital availability as being better than a year ago, anecdotal responses continue to show a high level of uncertainty about economic conditions here and abroad, as well as tremendous concern about the array of policy issues awaiting action or clarification by U.S. policymakers," said Roundtable President and CEO Jeffrey DeBoer. "Add to that growing concern over borrowers' ability to refinance vast amounts of maturing commercial mortgage debt, and it's no surprise that expectations for the year ahead are relatively flat," he added.

Read more...Commercial Real Estate Mending, But Still Vulnerable to Ongoing Economic, Political Risks, Roundtable Survey Shows - MarketWatch

VIDEO: Special Servicer Roles Shift - via GlobeSt.TV Article

One of the most popular sessions at the annual RealShare Distressed Assets Conference is the Special Servicers Power Panel, perennially hosted by Steve Pumper, executive managing director of Transwestern. Steve discusses the shifting role of the special servicer in a slowly recovering market.

You'll also hear:

The evolution of the special servicer role as note sales grow;
The Long-term outlook for CMBS
And more.

Watch - VIDEO: Special Servicer Roles Shift - GlobeSt.TV Article

Thursday, May 10, 2012

Fannie Mae posts biggest profit since 2007 via

In a potential turning point for one of the biggest financial crisis bailouts, Fannie Mae reported a first-quarter profit and — for the first time since the government seized it in 2008 — does not need a quarterly infusion of taxpayer money.

The $2.7-billion profit that the giant housing finance company posted Wednesday was its largest since the housing bubble burst in 2007 and is another signal that the real estate market finally might have hit bottom.

"It's always hard to call a turn until everything is in the rear-view mirror," said Susan McFarland, Fannie Mae's chief financial officer. "It's certainly a positive indication that if we haven't turned the corner, we're pretty darn close to turning the corner because you now can see the earnings potential of the company and our ability to repay the taxpayer."

Read more...Fannie Mae posts biggest profit since 2007 -

Economic Outlook | The Texas Economy via Texas Comptroller

Job growth, sales tax collections — both from business and consumer purchases — as well as automobile sales, signal that the Texas economy has emerged from the recent recession.

Another indicator that the state’s economy has been comparatively healthy was the U.S. Census Bureau report that Texas added more people (421,000) than any other state from 2010 to 2011. Although Texas has only 8 percent of the nation’s population, the state added nearly 19 percent of the nation’s population growth for the year.

By December 2011, Texas employers replaced all 427,600 jobs shed during the recession as our economy rebounded more quickly than the U.S. as a whole, and continues to add jobs. Nationally, through March 2012 only 41 percent of recession-hit jobs have been recovered.

Texas and the nation returned to economic growth in 2010 and 2011. In 2011, Texas real gross domestic product grew by 2.4 percent, compared with 1.6 percent GDP growth for the nation.

Read more...Economic Outlook | The Texas Economy via Texas Comptroller

Houston Multifamily Investing Heats Up via Real Estate Center at Texas A&M University

Nearly 2,000 multifamily units have changed hands recently in the Houston area. Among the transactions:

Read more...Houston Multifamily Investing Heats Up via Real Estate Center at Texas A&M University

Korman Sees Demand for Eco-Friendly Apartments via

Philadelphia-based multifamily property management firm Korman Residential has converted hundreds of apartments into KindSpace earth-friendly apartments in Pennsylvania, New Jersey, Delaware, and Florida. These KindSpace apartments incorporate renewable materials, energy efficiency, water conservation, and a reduced carbon footprint thanks to locally sourced materials.

"The KindSpace program has greatly outperformed our projections. Customer demand for sustainable, earth-friendly apartments is growing stronger every day," explains John Korman, CEO of Korman Residential.

Each of the KindSpace apartments save over 4,000 gallons of water annually, the paint contains 0% volatile organic compounds to reduce smog, and even the tiles, counters, carpets, and stainless steel backsplashes contain recycled material.

Read more...Korman Sees Demand for Eco-Friendly Apartments - Multifamily News Headlines – Breaking News, Stories, Top Headlines ::

Wednesday, May 9, 2012

Loan Market Needs 'Creative Destruction' via

The market for distressed commercial real estate loans could benefit from some “creative destruction,” according to Tobin Cobb, co-CEO of LNR Property.

In a video interview with at a Real Estate Luminaries Series event on April 19 at Georgetown sponsored by NAREIT in conjunction with the McDonough School of Business, Cobb offered his insight on the state of the commercial real estate loan market. He noted that those who had lived through the Resolution Trust Corp. era were expecting a higher level of activity in the market.

“We haven’t, obviously, seen anywhere near the level of liquidations of distressed debt that we collectively had expected based on the majority of our experiences collectively from the Resolution Trust era,” Cobb said. “A great deal of capital was raised to face off against that pending opportunity, which clearly has not taken place.”

Watch video...Loan Market Needs 'Creative Destruction' via

ALN Monthly Newsletter May 2012

ALN Data just released their April 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 May 2012

Economist: Recovery boosts Houston real estate market via a blog

Area housing prices will rise this year amid a strong local job market and a lack of new supply, economist Ted C. Jones said today at an annual symposium on real estate and the economy.

“This market is back,” Jones, chief economist for Stewart Title Guaranty Co., said at the spring luncheon hosted by the Hobby Center for Public Policy’s Institute for Regional Forecasting at the University of Houston.

Despite continuing economic troubles nationwide and internationally, Jones gushed about the local economy. He even gave a plug to Southwest Airlines, which wants to build an international terminal at Hobby Airport.

Apartment rents will go up as much as 10 percent this year, which will encourage more people to become homeowners. The median price of a house will rise about three percent, Jones said. The increases should continue into 2013.

Read more...Economist: Recovery boosts Houston real estate market | Prime Property | a blog

Top 15 Cities for Yearly Rent Growth - Rent Trends via Multifamily Executive Magazine

RealFacts recently released its survey results of 2012 first quarter rental rate changes survey in 47 metro statistical areas. All but three of the metros managed to increase rental rates on a quarterly average basis. And all but two markets (Reno and Las Vegas) were able to show growth on a year-over-year basis. Some regions, like Silicon Valley and San Francisco, have seen rental growth explode since this time last year. And according to the company, it's a trend that shows no sign of slowing during the next several quarters Here’s a look at the figures that RealFacts collected in its Q1 survey:

Read more...Top 15 Cities for Yearly Rent Growth - Rent Trends - Multifamily Executive Magazine

Appraisals Overvalue Real Estate, Study Finds via

In the recent economic crisis, commercial landlords and lenders discovered myriad ways to find themselves on the brink of financial disaster. Excessive purchase prices — many based on faulty property appraisals — were a major factor, specialists say.

Now, a new study has found just how inaccurate these appraisals can be. Using data from thousands of securitized real estate bonds in which the properties were foreclosed on and liquidated, the study, by KC Conway, an executive managing director at the brokerage firm Colliers International, and Brian F. Olasov, a managing director at the law firm McKenna Long & Aldridge, found a wide discrepancy between the appraisal values and the eventual sales prices of the properties.

“This study confirms what many of us have thought but heretofore have only known anecdotally: That appraisals are not very accurate,” Mr. Conway said. It was published in the winter edition of CRE Finance World, the publication of the CRE Finance Council, and is based on data from the research company Trepp L.L.C. for March 2007 through September 2011.

Read more...Appraisals Overvalue Real Estate, Study Finds -

Tuesday, May 8, 2012

Volume, Severity of CMBS Losses Revert to the Mean in April via Citybizlist New York

After two months in which CMBS investors saw loss severities fall sharply, the numbers reverted to the mean in April, both in terms of loss severity and volume of loans resolved, according to Trepp.

At $1.4 billion, liquidations were about 9 percent higher than the 12 month moving average of $1.31 billion per month. In comparison to liquidations in February and March, this number is much closer to the 12 month moving average.

In February, the volume of liquidations was only 68 percent of the 12 month moving average. In March, it was only 77 percent of the average.

Read more...Volume, Severity of CMBS Losses Revert to the Mean in April - Citybizlist New York

Alamo City Apartment Snapshot via Real Estate Center at Texas A&M University

Apartment Data Services Inc. has released the Greater San Antonio area market performance for May 2012. Below is an excerpt of the report.

Read more...Alamo City Apartment Snapshot via Real Estate Center at Texas A&M University

Multifamily Momentum Will Continue via

The multifamily sector is in good shape for the foreseeable future, according to Calvin Schnure, NAREIT’s vice president of research and industry information, despite some market concerns about a rebound in new construction. He pointed out that there are approximately 3 million households that have “doubled up” since 2008, and many of those residents will be looking for a place of their own as the job market improves.

The vacancy rate for apartments fell 60 basis points in the first quarter, to 8.8 percent. Schnure said that’s down more than 2 percentage points from its 2009 peak. Additionally, he said that in the first quarter alone, the number of occupied apartments jumped 8 percent, the strongest growth in demand for rental apartments since 1993.

“So we’re seeing that the apartment sector still has quite a bit of momentum,” he explained.

Watch video...Multifamily Momentum Will Continue via

Austin apartment complexes fill to 95 percent via Real Estate Center at Texas A&M University

Apartments are 95 percent full in the Capital City, according to Austin Investor Interests LLC.

In first quarter 2012, only 94 new apartment units were added, raising the average rent to $899 per month. Rent is even higher the closer you move to downtown, according to Natalie Young of A+ Apartment Locators.

Read more...Austin apartment complexes fill to 95 percent via Real Estate Center at Texas A&M University

More than 200 Banks Pose High Risk of Failure: Trepp via

While the pace of bank closings has slowed this year compared to the year before, in its bank failure report, Trepp noted that there are still more than 200 banks at high risk of failure as of the first quarter of 2012.

More specifically, 209 banks are considered to be at high risk of failure on the Trepp Watchlist, three of which failed in April, leaving 204.

The high-risk banks are more heavily concentrated in Georgia (41 banks), followed by Florida (32), Illinois (24), Minnesota (12), North Carolina (11), Tennessee (9) and Missouri (9).

Read more...More than 200 Banks Pose High Risk of Failure: Trepp via

TransUnion Lists 10 Major Metro Rental Changes in Q1 via Multifamily Executive Magazine

A recently released TransUnion rental screening report reveals that not every hot apartment market started out 2012 with the same force it enjoyed in early 2011. The report shows that on a national average, rental rates for major metro areas during the first quarter of 2012 went up by 4.4 percent, from $829 to $865. But in some of the most sought after markets it appears concessions were in fact being made based on the year-over-year analysis, at least by property managers using TransUnion’s multifamily services. The data analysis for the report was conducted by collecting data from property managers using TransUnion’s rental screening solutions. The report included data from more than 130,000 rental applications. Here’s a look at how things changed over the past year:

Read more...TransUnion Lists 10 Major Metro Rental Changes in Q1 - Rents - Multifamily Executive Magazine

Fort Worth ranks as fourth-best city in U.S. for job growth via

Texas cities, both large and small, once again lead the pack in a new ranking of the best places for jobs.

Austin-Round Rock-San Marcos topped the chart for the fourth straight year among the nation's 65 biggest metro areas. Houston-Sugar Land-Baytown was ranked second, followed by No. 3 Salt Lake City, according to, a site which analyzes economic, demographic and urban issues.

Fort Worth-Arlington jumped to No. 4 among big cities, climbing 11 spots from 2011. Dallas-Plano-Irving dipped from fifth to sixth on the 2012 list released this week.

Read more...Fort Worth ranks as fourth-best city in U.S. for job growth | Business | Dallas Business via

Monday, May 7, 2012

Ways to Improve the Security Deposit Process via

One of the most contentious aspects for both property managers and tenants is the handling of a security deposit. Designed as a way to protect property managers and owners against possible damages, security deposits are not designed to be used as last month’s rent, and the majority of rental leases state that up front. What continually causes problems are the way that security deposits are handled upon a tenant’s move-out. While laws vary from state to state, the majority state that a property manager must provide their former tenant with either their security deposit returned in full, or an accompanying statement if a portion or all is used to compensate the management company for damages incurred.

The problem occurs when management companies simply decide to keep a portion (or all) of a deposit without any explanation. This happens more frequently than you would expect, and many individuals that did damage the unit in some way have been awarded their full deposit back after taking management companies to court over that lack of statement. While to some managers, the damages may seem obvious, a statement explaining what the security deposit was used for is required. A statement saying ‘repaired damages’ is not sufficient. All of this can be avoided by taking a few extra precautions that are designed to protect your property and your tenant’s rights.

Read more...Ways to Improve the Security Deposit Process |

Special Servicers Are Ready to Sell via

LNR has a loan portfolio of $245 million poised for sale. CWCapital has one priced at more than $340 million. If there was a buzz around RealShare Distressed Assets, held here on Friday, it was that special servicers are getting ready to hang the ‘For Sale’ sign on their notes, and the wave is going to be huge. RealShare is produced by ALM’s Real Estate Media Group, which also publishes Real Estate Forum and Some 200 people were in attendance at this fourth annual event.

“Note sales move back fast to the master servicers,” commented David Bornheimer of Midland Loan Services, which reports a current portfolio of $4.7 billion. He was one of five experts on the event’s Special Servicer Power Panel, not all of whom fully embraced the success of note sales. Not so with Tom Shearer of the aforementioned CWC, who obviously attested to having “a lot of success in note sales.”

Read - Special Servicers Are Ready to Sell - Daily News Article

Trepp: High CMBS multifamily delinquency rate unusual via HousingWire

Of the five major commercial property types, CMBS multifamily delinquencies are the highest, an aberration that’s not representative of the broader multifamily market, according to analytics firm Trepp.

Just two months after matching its lowest reading in a year, the nation’s overall CMBS delinquency rate reversed course, jumping 12 basis points in April to 9.8%, the second highest rate ever, according to Trepp.

Trepp Managing Director Matthew Anderson tells HousingWire “the delinquency rates for bank multifamily loans have been much lower and have recovered more than all other commercial (non-residential) loans.”

Read more...Trepp: High CMBS multifamily delinquency rate unusual | HousingWire

Multifamily Construction, Vacancy Rates Fall via

Reis Inc., a commercial real estate data provider, report that only 7,342 apartment units were completed in the 78 primary and secondary metro markets it covers during the first quarter 2012, the lowest figure recorded since the firm began publishing quarterly data in 1999. Due in part to low supply, apartment vacancy in the top metro markets declined to one of the lowest levels ever registered by the firm.

Read more...Multifamily Construction, Vacancy Rates Fall via

Friday, May 4, 2012

Texas Housing Market Picking Up via Real Estate Center at Texas A&M University

The Texas real estate market gained positive momentum in first quarter 2012, according to the Texas Association of Realtors’ latest Texas Quarterly Housing Report, which was issued this week.

For January through March 2012, the volume of single-family home sales in Texas was 45,502, 12 percent more than the same quarter in 2011. The median price for Texas homes during the quarter was $147,100, up 2.7 percent more than a year ago.

Months inventory was at six months. Experts say a 6.5-month inventory represents a balanced market.

Read more...Texas Housing Market Picking Up via Real Estate Center at Texas A&M University

Inside Note Sales—Growth Ahead for Strong-Willed Players via

As in all aspects of business, there are risks in buying loans, but in interviews that took place during the fourth annual RealShare Distressed Assets Conference, it became clear that for those with strong constitutions, there’s money and growth to be made. The RealShare Conference Series is produced by the ALM’s Real Estate Media Group, which also publishes Real Estate Forum and

In an interview with Bob Kline, principal and CEO of RW Kline Cos., he told that the growth is there, and he sees the market expanding easily for another two to two and a half years, for paper backed by assets of all stripes and located all over.

In fact, his shop alone did $356 million in Q1 alone and is eyeing a $2 billion year. “And what we can’t sell, the lenders and servicers will convert to REO,” he states.

Read - Inside Note Sales—Growth Ahead for Strong-Willed Players - Daily News Article

Lender Training Begins for HUD's Multifamily LIHTC Pilot via

The 20 lenders selected to participate in a pilot program the US Department of Housing and Urban Development launched in February—the Multifamily Low Income Housing Tax Credit pilot—are set to begin training Friday. Once the session is complete, lenders will be qualified to start processing applications.

A HUD spokeswoman tells that any deals in these lenders’ pipelines that fit the program’s criteria can transfer to the pilot. She declined to comment what that amount may be.

One lender in the program, CWCapital, has about $50 million worth of transactions it hopes to transfer. “We have about six or seven loans and we expect to add more,” Ellen Kantrowitz, managing director and head of CWCapital’s FHA group, tells “We plan to market the program to clients that have properties that meet the criteria.”

Read - Lender Training Begins for HUD's Multifamily LIHTC Pilot - Daily News Article

Dallas ALN apartment news April 2012 via Real Estate Center at Texas A&M University

ALN Apartment Data has released the April apartment occupancy, effective rent data and more for apartments in the Dallas market.

Read more...Dallas ALN apartment news April 2012 via Real Estate Center at Texas A&M University

Austin ALN apartment news April 2012 via Real Estate Center at Texas A&M University

ALN Apartment Data has released the April occupancy and effective rent data for apartments in the Austin market.

Read more...Austin ALN apartment news April 2012 via Real Estate Center at Texas A&M University

Houston ALN apartment news April 2012 via Real Estate Center at Texas A&M University

ALN Apartment Data has released the April occupancy, effective rent, and more for apartments in the Houston market.

Read more...Houston ALN apartment news April 2012 via Real Estate Center at Texas A&M University

Thursday, May 3, 2012

Quality and Value Driving Growth in the Green Building Market, According to New SmartMarket Report via RealEstateRama

McGraw-Hill Construction, part of The McGraw-Hill Companies (NYSE: MHP), today released its latest SmartMarket Report: New and Remodeled Green Homes: Transforming the Residential Market at the National Association of Home Builders’ (NAHB) National Green Building Conference and Expo. The report includes McGraw-Hill Construction’s estimate that the green homes share of the construction market was 17% in 2011, equating to $17 billion, and expected to rise 29%-38% by 2016, potentially a $87–114 billion opportunity, based on the five-year forecast for overall residential construction.

The report reveals that two of the key factors driving this market growth are the fact that green homes are seen as having higher quality and that they save consumers money.

“In the current residential market, there is an enormous need to differentiate your homes for consumers,” says Harvey Bernstein, Vice President of Industry Insights and Alliances at McGraw-Hill Construction. “When builders are able to offer homes that not only are green, but also offer the combination of higher quality and better value, they have a major competitive edge over those building traditional homes.”

Read more...Quality and Value Driving Growth in the Green Building Market, According to New SmartMarket Report | RealEstateRama

Multifamily May Thrive on Pinterest via

At this point, it’s beyond apparent that information sharing is a different animal than back in the days of AOL and dial-up modems. And with these changes comes a new set of networks. The wave kicked off with the now-ghost town of Myspace, slid into the sometimes too-social Facebook, and then exploded in under 140-character bursts on Twitter. Now there’s the entirely graphic Pinterest, which can seem like a collection of pretty pictures at first glance. However, one commercial real estate -related company has found that behind these eye-catching images is a powerful marketing tool – and one that is well-suited to the modern multifamily industry.

The New Orleans-based 365 Connect, a company that provides technology solutions for the multifamily sector, recently integrated client images and sites with Pinterest. It’s special and pertinent to the multifamily industry, according to 365 Connect President and CEO Kerry Kirby, because the platform fills the “need to broadcast information constantly” - a desire that those born and bred in this internet age not only require, but demand.

“Social media’s a great marketing avenue for apartments,” Kirby says, “especially with what we call ‘today’s renter.’ There have been a huge influx of Generation Y renters [recently]. My feeling is that you need to go to them, they’re not going to come to you.”

Read - Multifamily May Thrive on Pinterest - Daily News Article

Property tax valuations rise for some apartments, hotels via Dallas Business Journal

Property tax valuations have risen in Dallas-Fort Worth this year for apartments, hotels and well-located land — reflecting activity in the real estate market.

The valuations are dependent opon the class of the apartments, or the revenue of the hotels, but appraisal districts are upping the value of these properties, said Amish Gupta, chief operating officer at Real Estate Tax Consultants Group.

The firm, which is headed up by Gupta's father, Virendra K. Gupta, reviews property tax valuations for about 5,000 properties each year.

"In 2012, we are anticipating that property values will be back up this year, especially for multifamily and hospitality properties," Gupta said. "The biggest mistake a property owner can make is not looking at their property taxes."

Read more...Property tax valuations rise for some apartments, hotels - Dallas Business Journal

Expense Management: City Ordinances Requiring Energy Benchmarking Gaining Momentum via Property Management Insider

The trend toward mandated energy usage benchmarking is gaining traction among U.S. cities. In the last few years, several cities have passed ordinances requiring existing buildings—including in some cases multifamily buildings—to track energy usage. Some of the cities that recently implemented or are starting to implement benchmarking requirements include New York City, Washington, D.C., Seattle, and Austin, just to name a few. Several states are also moving toward mandated benchmarking and others are sure to follow.

Differences may exist among the various ordinances—some benchmark both water and energy or have a phased approach for implementation, for example. But overall, these new requirements require owners to report their buildings’ utility usage data, which can then be compared to data from buildings of a similar size and function as well as to past data from the same buildings.

Read more...Expense Management: City Ordinances Requiring Energy Benchmarking Gaining Momentum | Property Management Insider

Renters More Optimistic About Buying via Builder Magazine

They may have watched the value of their parents’ homes soar then crash. And, chances are, they know someone who is losing their home to foreclosure. Still, the hope of homeownership is alive among people who rent and want to buy, according to a recent survey by PulteGroup.

The home builder’s survey results showed that 60% of renters who say they want to buy a home in the future have increased their intent to buy compared to a year ago. And 61% of that group says they plan to purchase a home within the next two years.

It also indicates that homeownership continues to be as much an emotional desire as a practical one. Nearly half said they wanted to own a home because they would like being able to call themselves homeowners.

Read more...Renters More Optimistic About Buying - Consumer Sentiment, Rental And Staging - Builder Magazine

CMBS Resolutions Seen Rising as Losses Start Declining via

Special servicers have been able to handle more CMBS loan resolutions each year since 2009, and Fitch Ratings expects that trend to continue throughout 2012. At the same time, loss severities appear to be on the wane after hitting a high water mark of 45%, the ratings agency said in its annual US CMBS Loss Study issued earlier this week.

Throughout 2011, loss severities actually declined in most major property types, aside from hotels, where severities rose to 55.4%, coming in second behind retail with 56.4%. Looking ahead, Fitch has a wary eye on office, currently the only CMBS asset type that it’s assigned a negative outlook. "Office loans and properties along with tertiary markets are Fitch’s chief concerns with respect to loss severities in 2012,” says senior director Adam Fox in a release.

It’s increased volume driving the trend toward stabilization in loss severities. The number of resolved Fitch-rated CMBS loans climbed nearly 14% in ’11, for 1,620 loans totaling $19.6 billion, including 951 mostly smaller-balance loans disposed of with losses. In the prior year, it was 1,427 loans totaling $19.4 billion. Going in the opposite direction are loan modifications granted by special servicers: 244 Fitch-rated loans representing $6.1 billion modified last year, compared with 343 loans representing $10.8 billion in 2010.

Read - CMBS Resolutions Seen Rising as Losses Start Declining - Daily News Article