Tuesday, July 31, 2012

Dallas gas drilling debate focuses on setbacks, floodplain, parks via Dallas Business Journal

As the Dallas City Council considers new regulations for natural gas drilling, it must navigate debate over setback requirements, and rules for drilling in public parks and in floodplains.

The Dallas City Council is scheduled Wednesday to discuss recommendations for an updated city drilling ordinance. A specially formed Dallas Gas Drilling Task Force crafted the recommendations and submitted them to the Council in May.

The Council has yet to vote on the recommendations. On Wednesday, it will hear presentations from two differing viewpoints: Ed Ireland, executive director of the Barnett Shale Energy Education Council, an industry group, and Terry Welch, a municipal law attorney with Brown & Hofmeister who served on the task force as a subject matter expert.

Read more...Dallas gas drilling debate focuses on setbacks, floodplain, parks - Dallas Business Journal

Texas Dept. of Housing and Community Affairs lets $48.6M via Real Estate Center at Texas A&M University

The Texas Department of Housing and Community Affairs (TDHCA) has allocated $48.6 million in housing tax credits to developers of affordable rental properties. The awards, made through the 2012 Housing Tax Credit Program, are projected to help finance the construction or rehabilitation of 45 properties comprising 4,773 affordable rental units.

Read more...Texas Dept. of Housing and Community Affairs lets $48.6M via Real Estate Center at Texas A&M University

Foolproof Your Disaster Plan via Multi-Housing News Online

As we enter the summer hurricane season, 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.

Read more...Foolproof Your Disaster Plan | Multi-Housing News Online

Second Quarter Commercial/Multifamily Mortgage Originations Up 25 Percent from Q2 2011 via Multi-Housing News Online

Commercial/multifamily mortgage origination volumes during the second quarter of 2012 were up 25 percent from second quarter 2011 levels, and up 39 percent from the first quarter of 2012, according to the Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations.

The 25 percent overall increase in commercial/multifamily lending volume, when compared to the second quarter of 2011, was driven by increases in originations for retail and hotel properties. The increase included a 56 percent increase in the dollar volume of loans for retail properties, a 22 percent increase for hotel properties, a 19 percent increase for multifamily properties, a 15 percent increase for office properties, an 11 percent increase in health care property loans. These gains offset a 5 percent decrease in industrial property loans.

Read more...Second Quarter Commercial/Multifamily Mortgage Originations Up 25 Percent from Q2 2011 | Multi-Housing News Online

Apartment Market Trends: What Spots Are Vulnerable to Overbuilding? via Property Management Insider

Examined in the initial two parts of this national apartment construction analysis, total building activity in the U.S. remains reasonably tame for the most part, and there are reasons to think we won’t push new supply drastically beyond absorption capabilities in the near term.

Still, there are individual metros and particularly specific neighborhoods where development activity is getting fairly aggressive. Those areas could see occupancy backtrack a bit over the near term. And, even if that’s not the case, considerable product moving through the initial lease-up process likely will have a cooling effect on the rent growth trend.

Listed below, four of the nation’s major metros – defined as those with at least 100,000 apartment units – register ongoing construction that will grow their total stocks by 3 to 4 percent.

Read more...Apartment Market Trends: What Spots Are Vulnerable to Overbuilding? | Property Management Insider

Monday, July 30, 2012

July Trepp CMBS Delinquency Rate Hits New All-Time High Once Again via Trepp

Trepp, LLC, the leading provider of information, analytics and technology to the CMBS, commercial real estate and banking markets, released its July 2012 U.S. CMBS Delinquency Report today (available at http://www.trepp.com/knowledge/research).

In July, the U.S. CMBS delinquency rate set an all-time high once again, moving up another 18 basis points to 10.36%. This latest move puts the delinquency level up 97 basis points since February and makes July the fifth straight month in which the rate has increased.

There are $59.5 billion in CMBS loans now delinquent, which excludes loans that are past their balloon date but are current in their interest payments. There are currently $75.4 billion in loans that are with the special servicer, representing almost 4,000 loans.

Read more...July Trepp CMBS Delinquency Rate Hits New All-Time High Once Again | Trepp

It's a Great Time to be a Borrower via Multifamily Insight Blog

The 10-Year US Treasury is currently at a 60-year historic low, hovering around 1.40%. Life Insurance Companies are currently lending; Fannie Mae, Freddie Mac and HUD are still aggressively lending on multi-family; and the CMBS is market is back (Commercial Mortgage Backed Securities, also known as Conduit loans). Life Insurance Company rates can be had somewhere around 4% – 4.50% fixed for 10-years. Freddie and Fannie have 10-year rates around 3.75%, with HUD rates below 3% fixed for 35-years (plus 0.45% for Mortgage Insurance Premium, also known as MIP). CMBS rates can be had for around 5% fixed for 10-years. These assumptions are based on fuller leverage.

Read more...It's a Great Time to be a Borrower | Multifamily Insight Blog

Apartment Market Hot Streak Continues via Multi-Housing News Online

For the sixth quarter in a row, the apartment industry improved across all indexes in the National Multi Housing Council’s (NMHC) Quarterly Survey of Apartment Market Conditions. The survey’s indexes measuring Market Tightness (76), Sales Volume (54), Equity Financing (58) and Debt Financing (77) all measured at 50 or higher, indicating growth from the previous quarter.

Key findings include:

Read more...Apartment Market Hot Streak Continues | Multi-Housing News Online

Economy Watch: Growth Trudges Along at 1.5%; Apartment Vacancies via Commercial Property Executive

The U.S. economy expanded by a tepid 1.5 percent during the second quarter of 2012, according to Friday’s preliminary report by the Department of Commerce. That was a slowdown in growth from the first quarter, when the final estimate turned out to be 2 percent, after being revised upward twice.

Too many second-quarter headwinds were against the economy for it to see increased growth. Consumers are stepping back from spending, businesses aren’t hiring as much as they did, and government at all levels is shrinking. Not only that, net imports — a direct subtraction from GDP — grew during the quarter.

Read more...Economy Watch: Growth Trudges Along at 1.5%; Apartment Vacancies | Commercial Property Executive

DFW Apartment Market Good for Landlords, Investors–For Now via Multi-Housing News Online

Even though the Dallas-Fort Worth area never quite suffered the housing slump that many other U.S. markets did, the area’s relatively robust economy is creating new households that are tightening the apartment market. In fact, according to the recently released 2Q report by investment specialist Marcus & Millichap, employment gains in the Metroplex will be nearly 3 percent in 2012, nearly double the national average, and job seekers will be moving into the area, especially from less-than-robust markets in the Midwest and on the West Coast.

“As a result, leverage in lease negotiations will remain firmly on the side of apartment operators through the end of the year, spurring strong revenue gains,” the report predicts. In short, DFW apartment landlords are going to be in clover for the time being.

Read more...DFW Apartment Market Good for Landlords, Investors–For Now | Multi-Housing News Online

Friday, July 27, 2012

Commercial Real Estate Forecast: 2012-2013 via Forbes

The other shoe has not dropped. During the housing crisis, many people asserted that commercial real estate was the other shoe waiting to drop. Commercial real estate loan defaults did rise along with residential defaults, but the commercial sector never went down enough to throw the financial system into crisis.

Now the non-residential real estate sector is showing some signs of life. Downtowns across the country are seeing occupancy increases, though the majority of suburban markets are still languid. In the boom years, many suburban office properties were occupied by real estate and title companies, which have since downsized significantly.

Read more...Commercial Real Estate Forecast: 2012-2013 - Forbes

Fitch: Cumulative CMBS Defaults Keep Pace at 13.2% via MarketWatch

Fitch Ratings' U.S. CMBS cumulative default rate for fixed-rate CMBS increased 25 basis points to 13.2% as of the second quarter of 2012 (2Q'12).

The steady increase in the default rate has so far in 2012 has been slightly better than Fitch's expectations. Earlier this year, Fitch predicted that cumulative defaults would reach 14.5% by year end 2012.

Read more...Fitch: Cumulative CMBS Defaults Keep Pace at 13.2% - MarketWatch

Strong Market Challenges via Multi-Housing News Online

The investor chase after multifamily product is creating pressures for affordable housing developers. Nonprofits are finding that financing cannot be obtained quickly enough, especially in the hot primary markets. According to Thomas Deyo, deputy director for real estate, community stabilization, and green strategies at NeighborWorks America, these developers are “struggling to compete with a lot of capital resources driving towards the rental markets.” Coupled with the drop in subsidies for affordable housing, he says, it is becoming very difficult for affordable housing developers to be competitive in accessing properties.

Read more...Strong Market Challenges | Multi-Housing News Online

LEED Buildings in the US: 2B SF and Counting via GlobeSt.com

The total footprint of commercial real estate certified under USGBC’s LEED green building program has now exceeded two billion square feet, the council reveals. In addition, there is seven billion square feet in the pipeline around the globe. This translates into $554 billion annually into the economy, says Rick Fedrizzi, president, CEO and founding chair of USGBC, in a prepared statement. It has also "helped support 7.9 million jobs across the US."

Another way to visualize this data: LEED certifies two million square feet of commercial building space each day in more than 130 countries. Also, there are nearly 50,000 commercial projects currently participating in LEED, comprising nine billion square feet of construction. Since the beginning of July, more than 300 projects have earned the certification in more than 20 countries worldwide.

Read more...GlobeSt.com - LEED Buildings in the US: 2B SF and Counting - Daily News Article

Report: MF Demand, Investment & Development Remain Strong via GlobeSt.com

For the third year in a row, the U.S. economy continues sluggish growth as it remains impacted by macro factors. Despite the poor economic showing, the multifamily property sector nationally continues strong, bolstered by a net absorption of more than 30,000 units in Q2 and a national multifamily vacancy rate of 4.7%.

On the economic side, If the 1.9% GDP growth reported during Q1 2012 weren't enough, other factors weighing in include European issues, the general election and the expiration early next year of payroll and Bush-era tax cuts. According to the Marcus & Millichap Real Estate Investment Services' Q3 Economic and Apartment Outlook report prepared by vice president of research services John T. Chang, all of this will lead to continued problems for the economy, including a weaker consumer spending base and contraction in new factory orders. All of this, combined with an 8.2% unemployment rate encouraged the Federal Reserve to downgrade its near-term outlook for the economy.

Read more...GlobeSt.com - Report: MF Demand, Investment & Development Remain Strong - Daily News Article

Thursday, July 26, 2012

University of Texas Study Uncovers Significant Projected Gap between Actual Water Costs and Subsidies Provided to Low-Income Housing Residents via Multi-Housing News Online

NWP Services Corporation (NWP), in collaboration with the McCombs School of Business at The University of Texas at Austin, recently released the results of an MBA-student study exploring a wide range of water management, cost and conservation issues, including key takeaways for municipalities and governments who hope to keep ahead of the rising cost of water subsidies for low-income housing and voucher recipients.

The study was conducted by Texas MBA graduate student Rob Schimmel and sponsored by the Energy Management & Innovation Center at McCombs. NWP, a leading provider of utility management, resident and property operation services, was the industry partner and sponsor for the research.

The goal of the study was to substantiate the true economic cost of water and how these costs compare to funds appropriated to low-income housing residents. It is hoped that the research results will further public discussion on water’s relationship to energy and available methods to promote responsible water usage and allocation.

Read more...University of Texas Study Uncovers Significant Projected Gap between Actual Water Costs and Subsidies Provided to Low-Income Housing Residents | Multi-Housing News Online

CMBS Leverage Reaches Five-Year High via CCIM Institute

For the first time since 2007, the size of mortgages bundled into bonds will exceed 100 percent of building values, according to a recent Bloomberg article. The larger loans are helping landlords pay off debt and satisfying investor demand for higher yields, but they are also raising concerns that banks are using the same tactics that led to record defaults.

Read more...CMBS Leverage Reaches Five-Year High | CCIM Institute

Vacancy Falls to Lowest Level in Six Years in Houston via Multi-Housing News Online

As employment surged by levels not seen in four years, the overall vacancy rate for the Houston metro area dipped to 11.3 percent—the lowest level since 2006. Meanwhile, rent growth accelerated 3.8 percent to an average of $766 per month.

Hendricks & Partners reports that the metro area added 82,300 jobs in the last 12 months, bringing the unemployment rate down 110 basis points to 7.0 percent. The mining and logging sector posted the largest gains, while leisure, hospitality, education and health services were close behind. Not surprisingly, apartment owners have witnessed a dramatic uptick in leasing activity over the past three months, resulting in the strongest first-quarter gains in 10 years.

Read more...MARKET SNAPSHOT: Vacancy Falls to Lowest Level in Six Years in Houston | Multi-Housing News Online

IREM: Costs, Rents up for Apartments, Down for Offices via GlobeSt.com

The locally based Institute of Real Estate Management has released two commercial real estate-realted studies it compiles every year on the national apartment and office markets. Surveys from thousands of properties show some of the obvious, such as apartment rents have gone up while office rents have dropped, but also detail other leasing factors, such as expense break downs for each property type.

The apartment report, Income/Expense Analysis: Conventional Apartments, analyzes NOI and cost figures for 3,156 multifamily properties across the US and Canada in 2011. Results show that low-rise buildings, with only 12 to 24 units, had the highest rent increase of 8.3% to $11.98 per square foot, while low-rise buildings with 25 or more units had the only decrease of 1.5% to $10.07 per square foot. Garden and elevator complexes remained about the same. The report also shows the move back into higher rents and NOI after two slow years in 2009-10.

Read more...GlobeSt.com - IREM: Costs, Rents up for Apartments, Down for Offices - Daily News Article

Job Growth Anemic, though Multifamily Properties In Demand via GlobeSt.com

According to preliminary June employment numbers released July 20 by the Bureau of Labor Statistics, June was not a terrific month for job growth, especially with the unemployment rate holding steady at 8.2%. Monthly nonfarm jobs increased by only 80,000 jobs, leading to an average employment growth of 75,000 per month during Q2 2012 – a far cry from Q1 2012's monthly average job growth of 226,000.

Local AXIOMetrics Inc. senior real estate economist K.C., Sanjay blames sluggish job growth on one thing: Macro conditions. "The things we're seeing point to consumer and business sentiments," he comments. "The European Union played a bit of a role; the gridlock in Congress played a role." Despite the fact that corporations are enjoying some pretty good profits, "they don't want to put a bunch of cash into investments or employment because of taxes and a lack of a clear vision about where regulation will go," Sanjay tells GlobeSt.com.

Read more...GlobeSt.com - Job Growth Anemic, though Multifamily Properties In Demand - Daily News Article

Caution Returns in Commercial Real Estate, KPMG Survey Finds via WSJ

What a difference a year makes.

A year ago, commercial real-estate executives were feeling better about the market. A recovery looked like it was on the horizon.

And then things changed.

Now caution is back among those same executives, according to a new survey by KPMG LLP slated to be released Wednesday. Rather than growth, those executives are talking about cost-cutting and holding onto profits in the next two years.

Read more...Caution Returns in Commercial Real Estate, KPMG Survey Finds - Developments - WSJ

Multifamily Strength Enticing Banks Back into CRE Lending via CoStar Group

The thaw in bank lending for commercial real estate appears to have quickened a bit in the second quarter based on comments from bank executives in their earnings conference call.

It is not a unanimous movement back into CRE lending as several of the larger banks are still working through mounds of distressed assets and many are still in cost-cutting mode. However, a number of others have decided the markets are ripening and the time is either right to return to CRE lending, or is fast approaching to do so.

Interest in multifamily properties is leading the comeback, but many bank executives said that is just the jumping in point and not the sole purpose for getting back into lending.

Read more...Multifamily Strength Enticing Banks Back into CRE Lending - CoStar Group

Wednesday, July 25, 2012

Financing Options Exist For Sustainable Retrofits via GlobeSt.com

Many of today’s commercial buildings are being constructed with energy efficiency and economically sound principles in mind. LEED certifications have become practically commonplace, and architects and developers are creating properties that are cleaner and greener than ever.

But what about existing buildings, particularly those constructed more than a couple of decades ago? Retrofitting these properties to become more sustainable can be extremely costly, and in the current economy many owners don’t have the means to do complete overhauls. Fortunately, options do exist for making buildings greener without going bankrupt. Some involve taking advantage of existing financing programs, while others deal with reexamining operating procedures.

Read more...GlobeSt.com - Financing Options Exist For Sustainable Retrofits - Daily News Article

Tuesday, July 24, 2012

Benefits of Energy Saving Window Shades via PropertyManager.com

While it’s important for renters to practice energy conservation in their apartment homes, there are numerous things that property managers can do in order to conserve energy on a larger scale. Remember, window coverings, while decorative, also provide an important function, serving as a barrier to outside heat in the summer, while keeping heat inside during the winter. It’s currently estimated that about 40 percent of outside heat comes through windows, while 10 percent of heat is lost through windows during the winter, so while it’s important to keep those shades or curtains closed, it may be time to upgrade your property with more efficient window coverings.

One of the biggest energy savers are ‘smart shades’ that help conserve energy. And while just about any window covering is better than nothing, with current energy prices increasing, managers may want to start thinking about replacing those traditional blinds and window shades with more energy efficient ones.

Read more...Benefits of Energy Saving Window Shades | PropertyManager.com

Monday, July 23, 2012

Best Practices for Getting an Apartment Leased via Multi-Housing News Online

You have a great building and several vacancies that you want filled. How do you get people to sign that lease? In a recent webinar called “Tips to Soar this Leasing Season,” Amy Kosnikowski Dilisio, principal, Quintessential Marketing and Training, provided tips for leasing agents to best convert prospects into renters.

According to Kosnikowski, an effective leasing agent is the number one key factor when it comes to attracting new residents.

“People are coming back to a community because of you,” she said. “Your objective as a sales person is to have people like you.”

Read more...Best Practices for Getting an Apartment Leased | Multi-Housing News Online

DFW among 11 markets with more than 100K small businesses via Dallas Business Journal

Dallas-Fort Worth is one of 11 U.S. markets containing more than 100,000 small businesses each — and an additional 14 metropolitan areas have between 50,000 and 100,000 apiece.

The total for these 25 markets, according to a new study by On Numbers, is 3.13 million small businesses.

Read more...DFW among 11 markets with more than 100K small businesses - Dallas Business Journal

Texas Employment Update July 23, 2012 via Dallas Fed

The Texas economy continued to expand. Texas added 14,900 jobs in June. Year to date, the state has gained 121,400 jobs.

Read more...Texas Employment Update - Dallas Fed

Houston Multifamily Market is On Fire via the Blog of the Real Estate Center

I attended CBRE’s Second Quarter 2012 Press Luncheon last Thursday. These events are always informative, but this one offered some exceptional insights into the Houston multifamily market. Ryan Epstein is CBRE’s multifamily guru, and his comments about this red-hot market are worth repeating:

* Houston is seeing a stable, healthy volume of apartment sales transactions.
* Multifamily debt financing for new construction in Houston is readily available at rates under 4 percent for a ten-year term.
* Annual rent increases of 7 to 8 percent are not unusual for Class-A units, with some submarkets seeing more than 10 percent increases.
* Citywide multifamily occupancy increased 100 basis points to 89.4 percent and should reach 90 percent by year-end, a rare event in Houston’s multifamily sector.

Read more...Houston Multifamily Market is On Fire | the Blog of the Real Estate Center

The Age of Multifamily via Realtor Magazine

The ’10s are the apartment decade. Indeed, multifamily has become the darling of commercial property investors, whose seemingly endless appetite for product has pushed cap rates for Class A properties below 5 percent in many top markets. “Multifamily is the only sector to enter the expansion phase of the cycle so far. Average cap rates for multifamily have also returned to pre–financial crisis levels,” says Gleb Nechayev, senior managing economist for CBRE Econometric Advisors in Boston.

Hungry investors are now turning to secondary markets and value-added plays that offer the potential of increasing value through renovation and repositioning. “I’ve been surprised at how quickly markets that a couple of years ago were in panic have returned to normalcy,” says Joe Greenblatt, CPM, president of Sunrise Management in San Diego. In Phoenix, where Sunrise manages 3,000 apartment units, occupancies are above 90 percent in Class A properties, he says.

Read more...The Age of Multifamily

Friday, July 20, 2012

Snap-Back CMBS Rally Reverses June Slump via Commercial Mortgage Lenders

Commercial MBS prices, which slumped sharply last month, have quickly rebounded over the past couple of weeks, providing a much-needed shot in the arm to the sector.

But market pros, noting that conditions remain volatile, cautioned it’s far from clear whether the gains will hold.

On June 28, the benchmark triple-A class of a $1.2 billion conduit deal led by UBS and Barclays priced at 160 bp over swaps. That was 20 bp wider than in a deal three weeks earlier and represented the widest level of the year.

Read more...Commercial Mortgage Alert - Commercial Mortgage Brokers - Commercial Mortgage Lenders

Thursday, July 19, 2012

Bernanke Finally Takes Off the Gloves via the Blog of the Real Estate Center

Fed Chairman Bernanke finally took the gloves off yesterday and punched Congress right in the face. Finally!

First, he outlined how the U.S. economy is weakening. Here is his assessment:

* The U.S. economy appeared to decelerate in the first half of 2012.
* Job creation recently has been much weaker than the first quarter.
* Household confidence about employment and income is low.
* Manufacturing production has slowed in recent months.
* Surveys of business spending indicate weakness ahead.
* Fed projections of GDP growth were revised down to 1.9 to 2.4 percent this year.
* Fed projections of GDP growth in 2013 have been revised down to a range of 2.2 to 2.8 percent.
* Reduction of unemployment rate will be frustratingly low.
* No members of the Fed think unemployment will be back to normal levels by 2014.

Read more...Bernanke Finally Takes Off the Gloves | the Blog of the Real Estate Center

Lawyer: ‘Handshake deal’ not enough for some Dallas multifamily projects via Dallas Business Journal

The boon of multifamily development has led to increased competition in the Texas area, including Dallas, which has boosted legal requirements beyond the 'handshake deal,' a legal source says.
"We are seeing more home builders and commercial contractors moving into multifamily development," said Danielle Senn, a construction law attorney at Ford Nassen & Baldwin PC in Dallas. "The commercial contractors have brought a new level of sophistication to multifamily development."
Some of the home builders, however, are wild cards and they can get into legal trouble, she said.

Read more...Lawyer: ‘Handshake deal’ not enough for some Dallas multifamily projects - Dallas Business Journal

Dallas Beige Book July 19, 2012 via Dallas Fed

The Eleventh District economy grew at a moderate pace over the past six weeks. Overall manufacturing activity continued to expand. Demand for business services remained solid, and transportation services activity increased. Respondents said retail sales grew at a somewhat slower pace than the last report, and automobile sales held steady. The housing sector continued to improve, and commercial real estate leasing activity held steady. Financial firms noted mixed loan demand. Overall energy activity remained strong, although gas-directed drilling continued to decline. Agricultural conditions deteriorated slightly. Employment levels were steady to slightly higher, and prices were mostly unchanged. Wage pressures remained minimal. Outlooks across industries were generally positive, but some respondents expressed concern about European debt issues, U.S. political uncertainty, and healthcare costs.

Read more...Dallas Beige Book - Dallas Fed

Commercial real estate industry still awaits CMBS return via Finance & Commerce

Commercial real estate investors are well aware of the excesses that went on in the heyday of the commercial mortgage-backed securities (CMBS) market several years ago.

But oh, are they eager to see that market back on its feet.

The majority of CRE investments during the busiest years of the last decade were financed by the CMBS issues, which totaled almost $231 billion in new securities at the market’s peak in 2007.

This year, when many of those 2007 five-year term loans are coming due, the CMBS market has issued just $18 billion in new securities. By the end of 2012, the market will probably issue no more than $35 billion, almost $200 billion short of the 2007 mortgage volume that’s going to be rolling over in the next few years, according to Joe McBride, an analyst with Trepp LLC, which monitors the commercial real estate finance markets.

Read more...Commercial real estate industry still awaits CMBS return | Finance & Commerce

Wednesday, July 18, 2012

Apartment Demand Surges Again in Dallas/Fort Worth via Property Management Insider

by Jay Parsons on July 18, 2012

Dallas/Fort Worth posted strong demand in 2nd quarter 2012. As a result, the bottom half of the market is filling up, while the top half – already full – is seeing big rent growth.

Watch video...Apartment Demand Surges Again in Dallas/Fort Worth | Property Management Insider

Summer Heat and Smart Thermostats via PropertyManager.com

Right now, a large swath of the country is engulfed in a heat wave. You can bet that no one is overly concerned about conserving energy: they just want to stay cool. This same heat wave is causing millions of people to run their air conditioners 24-7, resulting in a large increase in energy consumption, and increasing the risk of brown-outs across the country. Even worse, the majority of those running their cooling systems full-blast are at work during the day, with their absence requiring them to run the system while they’re not at home, or face the prospect of returning home to uncomfortable indoor temperatures.

We’ve all tried conserving energy by turning our thermostats up (or down) depending on the season, only to return to a sweltering or freezing home, where we then use more energy trying to make the temperature comfortable. If only there was a way for a thermostat to self-adjust, cooling more when the temperature goes up, less when it’s cloudy or cooler outside. If only there was a cooling (and heating) system that could be programmed to reflect the habits of the apartment dweller, that could be set cooler or warmer, as needed, without the need to run the air conditioner or heater all day long. Enter ‘Smart’ thermostats.

Read more...Summer Heat and Smart Thermostats | PropertyManager.com

Is Rent-to-Buy Here for the Long Haul? via GlobeSt.com

Recent headlines in the mainstream press have alluded to a shift in the housing market. In several instances during the past few weeks, the dismal tone that has become the standard for housing market discussions has yielded to conversations on an emerging trend: large-scale acquisitions of distressed single-family homes being repurposed (in the near term at least) for rental, that is, rent-to-buy.

Historically, rent-to-buy has been a fragmented business restricted largely to individuals buying and renting out second homes as vacation homes. Now, the numbers that are trickling in point to a new trend among sophisticated real estate investors. For example, a June article in USA Today mentioned one fund’s plans to invest more than $1.5 billion in buying and renting single-family homes, and that the fund had already acquired more than 1,000 homes in Arizona, California and Nevada. In May, The Wall Street Journal published an article about a large homebuilder and another large investment fund forming a private REIT to pursue this strategy in those markets as well.

Read more...GlobeSt.com - Is Rent-to-Buy Here for the Long Haul? - Commentary Article

Tuesday, July 17, 2012

Houston Home Sales and Pricing Reach New Heights in June via Houston Association of Realtors

Temperatures weren't the only thing sizzling in June. Consumers snapped up homes at the greatest volume in nearly five years, pushing average and median prices to record highs with increased volume in purchases of higher-end properties.

According to the latest monthly data prepared by the Houston Association of REALTORS® (HAR), single-family home sales rose 14.4 percent compared to June 2011. This makes June the 13th consecutive month of positive sales. The month also saw local housing inventory hold to its lowest level in more than five years.

Read more...Houston Home Sales and Pricing Reach New Heights in June via Houston Association of Realtors

Source: Investors still bullish on DFW apartment market via Dallas Business Journal

A perfect storm of circumstances — a flailing economy, a recovering housing market and a growing job market — has set up Dallas-Fort Worth for a strong apartment market in the near future, a source says.

“It’s still a tight housing market and the younger generation hesitates to take the plunge on buying a house unless they have families,” said Norman Eastwood, senior vice president for investments at Marcus & Millichap’s Dallas office. “With a growing job market, the apartment market has nowhere to go but up.”

Read more...Source: Investors still bullish on DFW apartment market - Dallas Business Journal

The top 10 threats facing real estate - Amy Hoak's Home Economics via MarketWatch

Big-picture perspectives of the real-estate market are rare, as professionals tend to focus on their corner of the real-estate world—be it residential or commercial, funding or construction.

But that’s exactly what the Counselors of Real Estate, an international professional group, assembled recently, identifying the top 10 issues facing all real estate in the next three decades. The group of high-profile thinkers came up with a list that focuses on themes from demographic trends to global uncertainty and their effects on real-estate markets.

Essentially, the response to these trends will separate the winners from the losers in the real-estate market, said Scott Muldavin, a member of the group and president of The Muldavin Company, a consulting firm serving the real-estate industry.

“If you pay attention to them you will be able to beat the market,” he said.

Below are the top 10 issues affecting the real-estate market in the next 10 to 30 years.

Read more...The top 10 threats facing real estate - Amy Hoak's Home Economics - MarketWatch

CMBS Leverage Most Since ’07 as Standards Loosen: Credit Markets via Bloomberg

Landlords are piling the most debt onto commercial properties in five years as Wall Street banks bundle the loans into bonds to meet rising demand from investors seeking high yields amid record-low interest rates.

The size of mortgages bundled into bonds will surpass 100 percent of building values for the first time since 2007, before the market shut down amid the worst financial crisis in seven decades, according to Moody’s Investors Service. That measure of leverage on loans tied to everything from skyscrapers to strip malls is poised to climb 4.3 percentage points this quarter, the New York-based ratings company said in a July 11 report.

Read more...CMBS Leverage Most Since ’07 as Standards Loosen: Credit Markets - Bloomberg

Monday, July 16, 2012

Multifamily’s Voice Must Be Heard via Multifamily Executive Magazine

Housing dominates the news these days. We read about the homeownership slump and how the rate recently fell to 65.4 percent, a 15-year low.

Are these figures good news or bad? What should the government do, or not, about foreclosures? What are the appropriate credit standards and downpayment requirements for families to qualify for a mortgage? Should Congress modify the mortgage interest deduction? What about the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac; the Federal Housing Administration (FHA); the Federal Home Loan Banks?

Housing, considered the wunderkind of the past decade’s economic spurt, is blamed for this decade’s economic downturn. Candidates and policy wonks are proffering solutions, but they’re talking about the single-family market. The multifamily market garners scant attention.

Read more...Multifamily’s Voice Must Be Heard - Finance - Multifamily Executive Magazine

Fannie Mae multifamily MBS issuance rises 25% in 2Q via HousingWire

Fannie Mae multifamily mortgage-backed securities issuance grew 25% from year-ago levels in the second quarter, according to data released by the government-sponsored enterprise Friday.

The firm's MBS issuance rose to $6.7 billion from $5.34 billion in 2Q of 2011. That increase is attributed to low interest rates and growing interest in the multifamily segment overall.

"I think one of the primary drivers is something well outside of our control," said Kimberly Johnson, vice president of Fannie's multifamily capital markets. "Interest rates are continuing to fall, and while that is just part of our monetary policy right now, it is working."

Read more...Fannie Mae multifamily MBS issuance rises 25% in 2Q | HousingWire

Wilcox: The Days of Cheap Money Are Here via GlobeSt.com

Gretchen Wilcox is founder and CEO of G.S. Wilcox & Co. of Morristown, the country's first female-founded commercial real estate mortgage banking firm that is a sole proprietorship. She will be a panelist at RealShare New Jersey 2012 at the Hyatt Regency in New Brunswick on Sept. 19.

GlobeSt.com: How’s business? Can you give us a preview of the outlook you might share with the conferees at RealShare?

Wilcox: The commercial mortgage business is intensely busy, very active right now. At G.S. Wilcox, we mostly handle refinance loans, the majority through long term, fixed-rate loans with life-insurance companies. The investors want to get the business. It’s very competitive out there.

GlobeSt.com: What’s the reason the refinance market is so frantic? Is it mainly that low rates are inciting more borrowers to refinance?

Read more...GlobeSt.com - Wilcox: The Days of Cheap Money Are Here - Daily News Article

Friday, July 13, 2012

Latest Fannie Mae DUS REMIC Includes Shorter-Term Tranche via GlobeSt.com

Fannie Mae priced its fifth Multifamily DUS REMIC this week. The offering, which totaled $789 million, went to market under its Guaranteed Multifamily Structures program.

Fannie Mae has been tweaking this program in recent months, using new managers, for example. This issuance had a new twist as well—the inclusion of shorter-term collateral in a separate tranche, Kimberly Johnson, vice president of Multifamily Capital Markets, explains to GlobeSt.com. “Having tranches with different maturities was very favorably received,” she says, “and it brought in new buyers.” The deal was subscribed at two-and-a-half times and three-times, depending on the tranche, she says.

Read more...GlobeSt.com - Latest Fannie Mae DUS REMIC Includes Shorter-Term Tranche - Daily News Article

TEXT-Fitch:U.S. CMBS delinquency rate flat in June via Reuters

U.S. CMBS delinquencies leveled off last month after three straight months of deteriorating performance, according to the latest index results from Fitch Ratings.

CMBS late-pays fell three basis points (bps) in June to 8.62% from 8.65% in May. The drop in delinquencies comes after sizeable increases in each of the prior three months.

Read more...TEXT-Fitch:U.S. CMBS delinquency rate flat in June; Atlanta woes continue | Reuters

Market Momentum via CCIM Institute

Modest economic growth keeps commercial real estate on the road to recovery.
by Mark Vitner
The commercial real estate recovery continues to build momentum. A torrent of equity capital has been raised to purchase commercial properties and loans. Lenders continue to come back to the market, loans are being refinanced, purchased, and restructured, and the underlying fundamentals continue to improve.

While current market conditions are encouraging, concerns still abound about the mountain of loans coming due over the next few years, particularly those done at the top of the last cycle. The commercial mortgage–backed securities market also largely remains on the sidelines, although credit is gradually improving in that market as loans are restructured and sold.

Read more...Market Momentum | CCIM Institute

CMBS Concerns via CCIM Institute

Are securitized loans worth the trouble?

Since becoming popular in the 1980s, commercial mortgage-backed securitization promised commercial real estate borrowers access to more loan capital, often at the most competitive interest rates. The trade-off was more complexity in loan structure and documentation and very little flexibility to make changes to the loan and the property securing it.

Elaborate Real Estate Mortgage Investment Conduit rules and rating agency requirements impose extensive and minutely detailed requirements regarding the loans and the structure and management of the loan pool. The REMIC rules limit the ability to alter the loan or collateral, and the rating agency requirements force borrowers to set up special purpose entities with exhaustive restrictions on the conduct of the borrower’s business.

Read more...CMBS Concerns | CCIM Institute

Veterans Struggle to Afford Housing via Affordable Housing Finance

Finding affordable housing is one of the biggest challenges for veterans adjusting to civilian life.

More than 30 percent of young vets, aged 18 to 24 years, are unemployed, and even employed veterans are struggling to meet their basic needs, according to the latest “Paycheck to Paycheck” report from the Center for Housing Policy.

The new study focuses on housing affordability for five of the jobs targeted by training programs sponsored by the Department of Labor in partnership with the military and other organizations: carpenters, dental assistants, electricians, firefighters, and truck drivers.

Read more...Veterans Struggle to Afford Housing - Affordable Housing Finance - News

Thursday, July 12, 2012

ALN Monthly Newsletter July 2012 via ALN Apartment Data

ALN Data just released their June 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 July 2012

Social Media is Out, Ratings and Reviews Are In via MultifamilyBiz.com

J Turner Research, a leading market research firm exclusively serving the multifamily industry, today announced the findings of Trends in Resident Technology & Communication Preferences: What Do Residents Want?, the largest and most comprehensive multifamily-specific survey to date examining the technology preferences of apartment prospects and residents and the impact these factors have on rental housing decisions.

Results of the ground-breaking survey provide insight into the ongoing importance of technology-optimized ILSs, drive-by, and referral research by apartment prospects; determine demographic use and absorption of smartphones, tablets, and other devices for researching and communicating with apartment operators and property managers; and investigate emerging resident and prospect patterns in the use of social media and online ratings and reviews sites, often with demonstrable results running counter to widely held industry tenets and the resulting business operations strategies.

Read more...Social Media is Out, Ratings and Reviews Are In - Multifamily News Headlines – Breaking News, Stories, Top Headlines :: MultifamilyBiz.com

Austin area apartment 3Q 2012: Marcus & Millichap via Real Estate Center at Texas A&M University

Austin apartment owners will continue to enjoy some of the tightest conditions since 2001. Rent growth in the area is expected to accelerate, while apartment inventory will remain stagnant in 2012 but stands to grow substantially in 2013.

Less than 300 units were delivered over the past 12 months, down from 1,730 units in the previous period. Completions will be concentrated in submarkets south of Hwy 71, with the Southeast and Far South submarkets each expecting to receive 500 units. There are 800 units already underway and slated for completion in 2013.

Austin’s apartment inventory will grow 1.8 percent in 2012 as developers deliver 3,000 units.

Read more...Austin area apartment 3Q 2012: Marcus & Millichap via Real Estate Center at Texas A&M University

National Flood Insurance Extended for Five Years via CCIM Institute

The extension of the National Flood Insurance Program (NFIP) is a multifaceted victory for homeowners, businesses, banks, and real estate professionals. This brings certainly to the areas throughout the nation where coverage is necessary to obtain a mortgage.

The Surface Transportation Bill (H.R. 4348) included the specifications necessary to reauthorize NFIP through 2017. President Obama signed the bill into law on July 6, 2012. Reforms to NFIP include:

Read more...National Flood Insurance Extended for Five Years | CCIM Institute

Less Than Half of Renters Have Renters Insurance via MultifamilyBiz.com

As U.S. rental occupancy rates continue to rise, according to the U.S. Census Bureau, a new Allstate survey found that the number one concern for renters is fire damage. The survey also revealed that 54 percent of renters say it would take three or more years to replace everything they lost if they didn't have insurance, yet only 45 percent of U.S. renters have a renters insurance policy to protect their personal possessions and collectibles.

"It's important for renters to know that their landlord's insurance most likely will not cover the tenant's personal belongings. A landlord may have coverage that can help cover the cost of structural damage to the dwelling if the unexpected happens, but renters may be faced with significant replacement costs for their furniture, clothes, electronics and other belongings," said Keith Rutman, vice president of Allstate's Consumer Household unit. "The average renter owns about $30,000 worth of possessions, and a renters insurance policy can help cover losses due to common perils like theft, fire and smoke, vandalism and water damage."

Read more...Less Than Half of Renters Have Renters Insurance - Multifamily News Headlines – Breaking News, Stories, Top Headlines :: MultifamilyBiz.com

Wednesday, July 11, 2012

Legal Issues Associated with Building “Green” | Reed Smith via JDSupra

State and local governments have enacted a variety of incentives to encourage energy efficient “green” design and construction practices. Projects owned or leased by government authorities are often subject to mandatory green requirements. Private development is often encouraged to go “green” through contractual or tax-related incentives. Promoters of green building features often tout the cost savings associated with energy-saving features or the increased marketability of a property if it is able to achieve a certain green building certification standard.

But, as Kermit the Frog once remarked, it isn’t easy being green. Well-intentioned efforts to promote green building projects can often go astray in a number of different ways, with adverse legal consequences for the project participants. This Client Alert summarizes in a high-level fashion, some of the more common legal issues affecting green building participants that have emerged in recent case law in this developing field. These issues are divided into a few broadly-defined categories, based upon the position of the project participant involved.

Read more...Legal Issues Associated with Building “Green” | Reed Smith - JDSupra

Texas Stampede - Affordable Housing Finance Online Article via Affordable Housing Finance Magazine

Developers from across the country are in a Lone Star state of mind this year.

Drawn by a large pool of low-income housing tax credits (LIHTCs) and strong demographics, they have their sights set firmly on building in Texas.

Miami-based Pinnacle Housing Group opened an Austin office last year. Columbus, Ohio-based National Church Residences (NCR) opened a San Antonio office two years ago. And, several other developers are also making a big push in the state.

The overall strong interest can be seen in the large number of LIHTC applications this year. The Texas Department of Housing and Community Affairs (TDHCA), the agency that oversees the financing program, received a whopping 388 pre-applications for credits this year, a 55 percent spike from the year before. However, the number continuing to the full application stage has dropped to 162.

Read more...Texas Stampede - Affordable Housing Finance Online Article - Affordable Housing Finance Magazine

DFW area apartment 3Q 2012: Marcus & Millichap via Real Estate Center at Texas A&M University

DFW’s robust economy is generating new households, creating the tightest apartment conditions in over a decade and facilitating healthy rent growth.

Foreclosure activity is up more than 10 percent from second quarter 2011.

Developers delivered 3,800 units to the DFW apartment market over the past 12 months, including 2,300 units in the first half of 2012. At midyear, approximately 12,500 apartments were underway in the Metroplex and another 30,000 units were planned or proposed.

Read more...DFW area apartment 3Q 2012: Marcus & Millichap via Real Estate Center at Texas A&M University

Inexperienced Multifamily Investors Could Damage Sector via GlobeSt.com

With the multifamily market being touted as both white-hot and a safe bet, a new trend is emerging in this industry sector: Small groups of investors who are inexperienced in owning and operating multifamily properties are outbidding savvier investors for these assets and driving up prices in the market. While this is good news for sellers—and who could blame them for shaking hands with the highest bidder?—CRE experts say it may not ultimately bode well for these investors and the market five years down the road, when rents haven’t risen appreciably enough to cover operating costs and mortgage payments, and these owners are forced to sell at a loss.

GlobeSt.com has discovered that, while this trend is evident all over the country, it is mostly manifesting itself in the under-$20-million category, where institutional investors tend not to play and independent private investors can get a toehold. “We’re not necessarily experiencing that directly because it’s not the size space we are aggressively playing in,” Jay Koster, president of the capital markets group at Jones Lang LaSalle, tells GlobeSt.com. “But it’s not surprising; multifamily continues to be viewed as a great current yield real estate investment opportunity matched with strong overall housing and demographic trends, coupled with the fact that it might get the best inflation protection going forward. Some of these drivers are finding themselves factors in the private-capital world.”

Read more...GlobeSt.com - Inexperienced Multifamily Investors Could Damage Sector - Daily News Article

Texas tops CNBC’s list of best states for business via MSNBC.com

Texas has done it again.

The Lone Star State makes a triumphant return as America’s top state for business — its third time at the top of our rankings.

“Listen, there is a reason that Caterpillar moved their hydraulics manufacturing and their engine manufacturing to the state of Texas,” said Gov. Rick Perry in November during the CNBC Republican presidential debate.

We can attest to that.

In our sixth annual study, Texas racked up an impressive 1,604 points out of a possible 2,500, with top-10 finishe s in six of our 10 categories of competitiveness. Texas has never finished below second place since we began the study in 2007.

Read more...Texas tops CNBC’s list of best states for business via MSNBC.com

Tuesday, July 10, 2012

Commercial Properties are Returning to Health, but Property Managers Remain on Active Duty via NREIonline.com

A property manager’s job is never done. Especially not in today’s world, where the need to retain old tenants and attract new ones, combined with those tenants’ heightened expectations for round-the-clock service, have left property managers with more responsibilities than ever.

Just a few years ago, property management was about basic building services: contract negotiations, rent collection, cleaning and maintenance, says Dan Pufunt, president of property management with Jones Lang LaSalle in Chicago. Today, property managers also have to act as asset managers, with a focus on helping grow Net Operating Incomes, especially when it comes to distressed assets being taken back by lenders and special servicers.

Read more...Commercial Properties are Returning to Health, but Property Managers Remain on Active Duty via NREIonline.com

Observers Say Concerns Over Multifamily Overbuilding are Overblown via NREIonline.com

After several years of little new apartment construction, development activity has ramped up. But industry experts aren’t worried about overbuilding. The number of units under construction is still below historic norms. Plus, most properties coming online today are leasing quickly—with some rental rates well above expectations.

“We’re coming off two exceptionally low years of new deliveries, and we’re still well below the long-term average,” says Michael Ging, Alliance Residential Company’s (ARC) Florida managing director of development. “I don’t see where we’re going to have an oversupply condition.” ARC’s newest property, Broadstone Citrus Village in Tampa, Fla., is 75 percent leased and achieving rents 10 percent above pro forma.

Annual multifamily permits increased by 48.5 percent during April compared to a year ago, representing six consecutive months of annual permitting above 200,000, according to the U.S. Census Bureau. Research firm Axiometrics says new apartment construction will only add 0.7 percent to overall inventory in 2012 and 0.9 percent in 2013.

Read more...Observers Say Concerns Over Multifamily Overbuilding are Overblown via NREIonline.com

Capital Markets Have a Long Way to Go via NREIonline.com

Lenders like commercial real estate. They really do. But they have concerns about the global economy, and that makes them unwilling to finance anything other than quality assets in major markets owned by strong sponsors.

“There’s been no meaningful job growth and uncertainties with U.S. debt and Europe just won’t let people believe the situation will be better six months or a year from now,” says Steve Holle, a regional director with Northwestern Mutual, which originated $4.5 billion in commercial real estate loans in 2011.

Even though mortgage originations have increased annually since the credit crisis, and even the once dormant conduit market is coming back to life, Holle says the capital markets are still far from normal. “The focus is strictly on high-quality, core real estate in primary markets,” he says.

Read more...Capital Markets Have a Long Way to Go via NREIonline.com

Pay-Off Percentages Near 12-Month Low via GlobeSt.com

Despite historically low interest rates, the ability for borrowers to refinance commercial real estate loans remains challenging. According to a new report from Trepp LLC, the percentage of loans paying off on their balloon date remained anchored near its 12-month bottom point after plummeting downward to new lows just two months ago.

In June, only 32.3% of loans reaching their balloon date paid off, making it the second lowest total in 21 months. But in May, the rate plummeted to 29.4%, the lowest level since October 2010—which Manus Clancy, senior managing director at Trepp, says is being driven by the troublesome class of ’07 CMBS loans.

Read more...GlobeSt.com - Pay-Off Percentages Near 12-Month Low - Daily News Article

Monday, July 9, 2012

Gen Y Household Formation: Calm Before the Storm via Multifamily Executive Magazine

Heard a neighbor complain recently that their 25-year-old has moved back home and is crashing on their couch? That story isn’t an uncommon one. Nearly two million 18-34 year-olds were living with their parents between 2006 and 2010, according to the “State of the Nation’s Housing” report released in June by Harvard University.

The percentage of 18-34 year-olds living with their parents between 2006 and 2010 increased 2.7 percent, bringing the total number to 1.95 million. That’s the largest decline of household formation numbers for any age group during that time. But Eric Belsky, managing director of the Joint Center for Housing Studies, remains optimistic that this demographic will start forming households in the near term—and start buying homes in the long term.

Read more...Gen Y Household Formation: Calm Before the Storm - Housing Trends - Multifamily Executive Magazine

New home construction rises 19 percent in Dallas-Fort Worth - Dallas Business Journal

The Dallas-Fort Worth housing market recorded a 19 percent increase in new-home construction during the second quarter.

Officials say that if recent strong demand continues, it could translate to more workers in the housing industry.

"The housing recovery is well under way in Dallas-Fort Worth," said Ted Wilson, a partner at Residential Strategies, in a statement. "While much of the improvement to date has been centered on the northern suburbs and at the higher price points, our builder clients are reporting widespread improved confidence among potential home buyers."

Read more...New home construction rises 19 percent in Dallas-Fort Worth - Dallas Business Journal

Austin, DFW, Houston, San Antonio ALN June 2012 via Real Estate Center at Texas A&M University

ALN Apartment Data has released the June review of occupancy, effective rent and more for Austin, Dallas-Fort Worth (DFW), Houston and San Antonio.

For reference, Atlanta, Ga., and Phoenix, Ariz. are shown. The general overview includes properties in initial lease-up.

Read more...Austin, DFW, Houston, San Antonio ALN June 2012 via Real Estate Center at Texas A&M University

The Good, The Bad and the Not-So-Ugly of Commercial RE via The Source For NAR Commercial Real Estate

There’s no doubt we see many signs of recovery in the national commercial real estate market. But as with any gigantic, inter-related collection of localities, sectors and instruments, it’s tough to know with any certainty what to expect long-term. As always, there’s plenty of room for disagreement about what lies beyond the horizon. Here are three conflicting looks at the CRE market long-term:

The Good: At this month’s NREI’s Strategic Real Estate Investment Conference in New York, panelist Arthur Mirante, principal and tri-state president of Avison Young painted a sunny picture of commercial investment, noting its steady attractiveness when compared to stocks. While he points out that knowing the market means mastering complexities, he believes that long-term, commercial real estate is the better value.

Read more...The Good, The Bad and the Not-So-Ugly of Commercial RE | The Source For NAR Commercial Real Estate

Friday, July 6, 2012

Top Ten Apartment Market Rent Growth Leaders for Second Quarter via Property Management Insider

Earlier this week, MPF Research released their preliminary numbers for the U.S. apartment market in the second quarter of 2012. While they are reporting some slowing in rent growth for the quarter, overall the numbers are good.

MPF reports that effective rents for new leases in U.S. apartments climbed 1.2 percent during the second quarter and 4 percent between mid-2011 and mid-2012. Additionally, the annual rent growth pace has slowed modestly during the past few months, after the rate of increase reached 4.8 percent at the end of last year.

Read more...Top Ten Apartment Market Rent Growth Leaders for Second Quarter | Property Management Insider

Highly Distressed Multifamily Beauty in the Eye of the Beholder via GlobeSt.com

I’ve been writing about distressed assets for years--and I've witnessed some interesting strategies and even more interesting deals. But late, I’ve seen a string of so-called “highly distressed” assets in multifamily, industrial and office. It was the multifamily deals that really got my attention.

A portfolio of three multifamily assets recently traded in Atlanta for a total of $6.75 million. The value-add multifamily portfolio offers 521 units. That’s about $13,000 a door. That’s quite a basement bargain, until you consider just how “highly-distressed” these multifamily assets are.

Read more...GlobeSt.com - Highly Distressed Multifamily Beauty in the Eye of the Beholder - In the Know Article

Why Now Is a Good Time for Multi-Family Acquisitions via Commercial Property Executive

KBS Legacy Partners Apartment REIT, a joint venture sponsored by KBS Capital Advisors LLC and Legacy Partners Residential Realty LLC, has recently made its fourth multi-family acquisition of the year. MHN speaks with W. Dean Henry, president of Legacy Partners Residential, about why now is the best time for multi-family acquisitions.

MHN: Your company has made a lot of recent acquisitions. Why is now the right time for that?

Henry: There are several important reasons why now is a great time to acquire existing multi-family assets. Let’s start with demand and supply:

Read more...Why Now Is a Good Time for Multi-Family Acquisitions | Commercial Property Executive

Bad Mortgage Loans Burn Investors and Tenants via NYTimes.com

Just five years ago, the commercial real estate market was thriving. The delinquency rate on mortgage loans was at a record low, and the volume of new mortgages being sold to investors was at a record high.

Now the first of the mortgages that were securitized in 2007 have started to come due, and it is becoming clear just how bad many of the loans were. The time when investors were most eager to buy turns out to have been the worst time to do so.

Commercial mortgages — unlike residential ones — are seldom issued for periods of longer than 10 years, and often for as little as five. Many require no principal repayments during that period but call for the entire amount to be repaid in a balloon payment at the end of the loan. So it can be at maturity when the bad news arrives.

Read more...Bad Mortgage Loans Burn Investors and Tenants - High and Low Finance - NYTimes.com

North Texas job growth leads to robust apartment market via Dallas Business Journal

There was a strong demand for apartments in North Texas during the second quarter, despite rebounding home sales.

In the quarter, renters absorbed 8,031 apartment units, or more than five times the completed 1,563 apartment units. Apartment occupancy was 94.1 percent in the second quarter, up a full percentage point over the last quarter, according to data collected from Carrollton-based apartment analyst MPF Research.

"Substantial job growth in North Texas is keeping apartment demand robust at the same time that single-family home sales are rebounding from their recently low levels, said Greg Willett, vice president of MPF Research, in a written statement. "These are the kind of housing demand numbers we were hoping for and expecting to see."

Read more...North Texas job growth leads to robust apartment market - Dallas Business Journal

Thursday, July 5, 2012

US apartment rents rise at highest rate since '07 -Reis via Reuters

Renting an apartment in the U.S. became even more expensive during the second quarter, as vacancies set a new 10-year low and rents rose at a pace not seen since before the financial crisis, according to real estate research firm Reis Inc.

The average U.S. vacancy rate of 4.7 percent was the lowest since the fourth quarter of 2001, down 0.2 percentage points from the prior quarter, according to preliminary data Reis released on Thursday.

Read more...US apartment rents rise at highest rate since '07 -Reis | Reuters

Census: New residents continuing to move to San Antonio via San Antonio Business Journal

San Antonio posted the third-largest numeric increase in population in the United States between April 1, 2010 to July 1, 2011, according to the U.S. Census Bureau.

San Antonio gained 32,152 people between the two years, bringing up the total population to 1.36 million.

New York had the highest numeric increase at 69,777 people. Houston had the second-highest increase at 45,716 people.

Read more...Census: New residents continuing to move to San Antonio - San Antonio Business Journal

Texas Economic Indicators July 2012 via FRB Dallas

The Texas economy continues to expand, with employment growing at a 0.8 percent annual rate in May. Texas existing-home sales and single-family construction permits rose, while housing starts fell. Exports declined in April, and crude oil prices moved further down in June. Growth in Texas manufacturing activity surged in June, according to the Texas Manufacturing Outlook Survey.

Read more...Texas Economic Indicators February 2012 via FRB Dallas

Multifamily housing bubble may be in the future via HousingWire

While single-family housing starts remain down, rental demand is driving new multifamily construction. But how long the demand will last is uncertain — an uneasy consideration for investors whose current investments may take years to hit the market.

"People who are thinking about renting are going to think about buying again, so the increase in demand for rental housing will start to plateau and supply will still be high," said Stan Humphries, chief economist at Zillow ($39.37 0.261%), who said he thinks the demand for multifamily housing will be met within "the next couple of years."

At the National Association of Real Estate Editors conference in Denver last month, Humphries said the multifamily sector would "be the next bubble." But, he doesn't want you to associate that word with the "Armageddon this country just endured."

Read more...Multifamily housing bubble may be in the future | HousingWire

Watch The Capital Flows - The Ross Rant Article via GlobeSt.com

To get a sense of where things are headed, follow the capital flows. If you observe the dot com crash and the housing induced crash of 2007-08, then you begin to realize that almost all crashes throughout history have been preceded by major inflows of capital chasing higher yield or dream returns. Going back to the tulip mania, or the South Sea Bubble, it is always the same. Investors, homeowners, commodity speculators, or whoever, are chasing a fantasy that inevitably blows up in a banking or capital markets collapse.

Read more...GlobeSt.com - Watch The Capital Flows - The Ross Rant Article

Tuesday, July 3, 2012

U.S. Apartment Sector Posts Good Results in Q2 2012 via Property Management Insider

by Jay Parsons on July 3, 2012

The U.S. economy hit a speed bump in 2nd quarter, but the apartment market continues to improve nicely – just not at the same robust pace seen previously.

Watch video...U.S. Apartment Sector Posts Good Results in Q2 2012 | Property Management Insider

Green Mortgages are Making Headway via Multifamily Executive Magazine

The problem of where to find the financing for energy efficient developments and retrofits has not been as severe on the affordable housing side, as energy savings essentially go hand-in-hand with the mission of affordable housing. But on the market rate side, the data to show evidence that spending money on energy efficient retrofits pays off for investors in the long run is simply not sufficient. And there has historically been a lack of resources.

“There’s this impression that there’s a lot of programs available for energy efficient financing, but they’re really not geared toward the multifamily market rate sector,” said Paula Cino, director of energy and environmental policy at the National Multi Housing Council (NMHC).

Read more...Green Mortgages are Making Headway - Mortgages And Banking - Multifamily Executive Magazine

4 Ways to Monetize Your Green Investments via Multifamily Executive Magazine

A dark cloud still looms over the heads of apartment owners when it comes to spending money on energy efficient retrofits and construction. The problem has largely been justifying, in hard data, when and how they will see a return on investment.

While figures on the actual savings may be difficult to come by, there are specific strategizes being implemented in the industry that are showing positive results. Here’s a look at four ways multifamily owners can cash in on green building investments:

Green Leasing

One of the ways a company can recoup money on energy-efficient investments is called “green leasing.” It’s a relatively new idea, but it’s basically a way that an owner and tenant can work together on the efficient use of energy. Essentially, a green lease outlines future rental increases, and justifies those increases by detailing the energy savings that a tenant can expect to see on their utilities.

Read more...4 Ways to Monetize Your Green Investments - Energy Efficiency - Multifamily Executive Magazine

Commercial Real Estate Transactions Increase in Secondary Markets via CCIM Institute

Multifamily continues to lead investment ratings, according to CCIM Institute and RERC data.

Commercial real estate investors are expanding their search for quality office, industrial, and apartment properties into secondary markets such as Nashville, Tenn., Austin, Texas, and Charlotte, N.C., according to CCIM Institute and Real Estate Research Corp.’s 2Q12 RERC/CCIM Investment Trends Quarterly (PDF). Another positive trend is the extension of institutional investors beyond coastal hubs into large inland markets, such as Chicago and Denver, where some significant transactions are taking place, according to the survey.

Multifamily Leads Investment Conditions Ratings

Read more...Commercial Real Estate Transactions Increase in Secondary Markets | CCIM Institute

Do Green Student Housing Assets Pay Back? via GlobeSt.com

No longer a fad or associated with granola-eating activists, environmental consciousness has become a part of everyday life. The commercial real estate industry jumped on the wagon several years ago, and now almost every property developed today has some sort of sustainable features. From including solar panels and reduced water use, to being LEED and Energy Star certified, to name just two, green development has become the norm for properties in most developed countries these days.

But sustainable building comes with a price tag, and it’s understandable that a lease in such properties would be a bit pricier than one without green features. Developers would generally tell you that tenants are willing to pay more to live or work in an environmentally friendly property. But does that apply to the student housing sector, where price is certainly a major factor in students’—and their parents’—leasing decisions?

Read more...GlobeSt.com - Do Green Student Housing Assets Pay Back? - Daily News Article

Monday, July 2, 2012

The Student Housing Opportunity via NREIonline.com

The rapid growth of university enrollments in the United States has been bolstered by highly favorable demographics, particularly the echo boomer age cohort (those born between 1982 and 1995), and an increasing number of international students. With heightened economic demand for advanced skills and knowledge, more high school graduates are attending full-time colleges. According to the U.S. Department of Education, 68.1 percent of high school graduates went on to attend college as of 2010.


The echo boomer generation, whose oldest members became college-aged in 2000-2001, boasts a cohort of 77 million strong. College student populations are expected to continue to grow over the next decade (by an average of 1 percent annually through 2020). According to the National Center for Education Statistics, between 2011 and 2020, U.S. college enrollment is projected to increase by about 2.3 million students. Additionally, colleges have been experiencing a steady increase in international student attendance. The United States has one of the best higher education systems in the world, which draws students worldwide.

Read more...The Student Housing Opportunity via NREIonline.com

Trepp CMBS Delinquency Rate Hits New All-Time High in June via Ereleases.com

Trepp, LLC, the leading provider of information, analytics and technology to the CMBS, commercial real estate and banking markets, released its June 2012 U.S. CMBS Delinquency Report today (available at http://www.trepp.com/knowledge/research).

The delinquency rate for U.S. commercial real estate loans in CMBS moved up 12 basis points in June to 10.16%. This new all-time high comes just one month after cracking through the 10% barrier.

Late last year, Trepp had predicted that the market could easily see a spike of 70 basis points in the short term. As the CMBS market has now seen the rate increase 64 basis points since late 2011, that forecast turned out to be pretty close. Since February, the delinquency rate is up 79 basis points.

Read more...Trepp CMBS Delinquency Rate Hits New All-Time High in June: Rate Increases for Fourth Straight Month

Rental real estate market has legs, experts say via Urban Land Institute

The rental sector’s run at the top of the housing ladder has more staying power than most observers think, according to industry experts speaking at the National Association of Real Estate Editors’ annual conference in Denver.

Mark Obrinsky, vice president of research and chief economist of the National Multi-Housing Conference, pointed out that despite the recent surge in apartment production, starts are still far below the “normal” yearly run rate achieved in the ten-year span between 1996 and 2005.

“We’re still 100,000 starts a year away from meeting demand – or maybe more,” Obrinsky said. “Demand will continue to outstrip supply for the next couple of years at least.”

Read more...Rental real estate market has legs, experts say

Late-Pays Fall for Banks, Rise for CMBS via GlobeSt.com

Non-securitized commercial mortgage debt continues to look pretty healthy compared to CMBS. The Mortgage Bankers Association, based here, reported in June that delinquency rates rose for CMBS during the first quarter, while for banks and life companies, they declined further from levels that are already low compared to securitized loans. And for legacy CMBS, more pain is on the horizon as Morningstar said last week that nearly half the securitized debt scheduled to mature over the next 12 months is already on its watchlist.

With a Q1 60-plus-day delinquency rate of just 0.14%, “The life companies’ numbers is extremely low and stayed low throughout the credit crunch and recession,” Jamie Woodwell, MBA’s VP of commercial/multifamily research, tells GlobeSt.com. During the same period, banks’ commercial and multifamily mortgage delinquencies increased, “but they have been coming in for a number of quarters as the economy has stabilized, demand for commercial real estate has stabilized and prices have begun to improve.”

Read more...GlobeSt.com - Late-Pays Fall for Banks, Rise for CMBS - Daily News Article