Thursday, September 27, 2012

MBA: Multifamily and commercial originations jump 25% in 2Q via HousingWire

Loans tied to commercial real estate are performing quite well with originations in the commercial/multifamily segment up 25% in the second quarter from last year, the Mortgage Bankers Association said Thursday.

Originations also grew 39% from the first quarter.

The segment is doing well enough for Freddie Mac to offer its first structured pass-through certificates backed by LIBOR-based, floating rate multifamily loans with five- and seven-year terms.

Read more...HousingWire | MBA: Multifamily and commercial originations jump 25% in 2Q

Fed Trying to Make You Feel Wealthy via the Blog of the Real Estate Center

The Federal Reserve says it will print another $480 billion to buy more mortgages. The stated reason is to bring mortgage rates down even lower to stimulate the housing market. While that is true, there is a bigger picture here. Does anyone really think that dropping mortgage rates another quarter of a percent will have much impact on home sales?

The much bigger reason the Fed announced another round of money creation is to increase the prices of stocks and hopefully cause the prices of houses to increase as well. Economists use a fancy term for this called “the wealth effect.”

The story goes that if you feel wealthy you are more likely to spend money instead of save it. The Fed wants all of us to spend money because that is how we measure economic growth in America. If we all spend more money, businesses prosper and eventually hire more people.

Read more...Fed Trying to Make You Feel Wealthy | the Blog of the Real Estate Center

In the Balance via Apartment Finance Today Magazine

The people who occupy the White House and Congress next year will encounter a host of issues critical to the apartment industry, from GSE reform to CMBS regulation. Question is, will they act or merely punt once more?


What’s at stake for the apartment industry with the November election soon upon us and the 113th Congress getting to work in January? Given the paucity of even lip service that President Obama and Republican Mitt Romney have paid to the housing crisis along the campaign trail, it’s a pretty tough prognostication. But industry advocates targeting key decision makers in both parties are off ering some insight—ranging from sobering to encouraging.

A variety of issues will face the Congress—should it choose to act on them— among them government-sponsored enterprise (GSE) reform; tax reform, including the low-income housing tax credit (LIHTC); various federal subsidy programs; and several capital-markets regulations, such as those involving commercial mortgage-backed securities (CMBS).

Read more...In the Balance - Apartment Finance Today Online Article - Apartment Finance Today Magazine

MAJOR DILEMMA: Economically We're in Recovery; Mentally We're Stuck in Recession via CoStar Group

Despite improving job numbers, rising CRE and housing prices, declining vacancies and stabilizing rental rates, not to mention a new round of fed stimulus that will pump $40 billion a month into the mortgage markets, the prevailing sentiment in the commercial real estate industry still seems to be one of doom and gloom. And importantly that outlook is affecting which deals are getting done and which ones are not.

"We have noticed the trend as well and concur that a negative, or rather extremely conservative, mindset is prevalent with the investors in the market," said Steve Timmel, senior vice president of Colliers International in Cincinnati. "Many investors are analyzing assets based on the 'what-could-go-wrong' view versus spending time focusing on 'what-could-go-right' and this has had an impact on pricing and deal velocity."

Read more...MAJOR DILEMMA: Economically We're in Recovery; Mentally We're Stuck in Recession - CoStar Group

Wednesday, September 26, 2012

Housing Recovery Could Slow Multifamily Growth via

As signs emerge indicating that the U.S. housing market is recovering, there’s one question that Ric Campo, CEO of apartment REIT Camden Property Trust (NYSE: CPT), has been asked “a million times” lately: What does that mean for the flourishing multifamily sector?

Campo contends that there is room for both the single-family housing market and multifamily sector to succeed at the same time.

“I think an improved housing market is great for the multifamily sector. When you think about it, our economy is not hitting on all cylinders because housing has been down,” he said. “They have coexisted in the past, and both have done well.”

Read more...Housing Recovery Could Slow Multifamily Growth

Commercial Property Sales Outlook for U.S. Cut by ULI via Bloomberg

The Urban Land Institute cut its forecast for U.S. commercial real estate sales by 12 percent to $748 billion through 2014 because projections for economic growth are “down considerably” from six months ago.

Deals for properties such as office buildings, shopping centers and warehouses probably will be $223 billion this year, $250 billion next year and $275 billion in 2014, according to a ULI survey released today of 39 economists and analysts from real estate investment, advisory and research firms. In a March report, sales were forecast at $250 billion this year, $290 billion next and $312 billion in 2014.

The forecast “is generally less optimistic regarding the economy and the performance of commercial real estate,” the Washington-based institute, which researches land-use and development issues, said in its survey.

Read more...Commercial Property Sales Outlook for U.S. Cut by ULI - Bloomberg

Texas Employment Update via Dallas Fed

The Texas economy continued to expand. Texas added 31,100 jobs in August. Year to date, the state has gained 181,700 jobs.

Read more...Texas Employment Update - Dallas Fed

ULI: Cap Rates Rising, CMBS Volumes on the Upswing via

The Urban Land Institute’s second semi-annual survey of real estate economists for 2012 was less optimistic about the industry’s prospects than the previous study. That said, many of the metrics examined in a wider context (read–compared to 2009) show that the industry is relatively on solid ground.

All in all, the report projected a continued improvement for the US economy and housing market, Dean Schwanke executive director of ULI Center for Capital Markets, told listeners in a webinar today during which ULI unveiled the results. “However, predictions diverged from the previous survey in that people are less optimistic regarding the economy and more optimistic regarding single-family homes.”

Read - ULI: Cap Rates Rising, CMBS Volumes on the Upswing - Daily News Article

CMBS Rally Is Welcome News in Property Market via

Commercial-real-estate lenders and borrowers are scrambling to capitalize on one of the strongest rallies in the debt markets since the financial crisis.

Buyers of commercial-mortgage-backed securities are accepting yields on new issues as narrow as 0.85 percentage point above an interest-rate benchmark, the lowest since 2007. They have accelerated their demand in the past few weeks because of the Federal Reserve's latest round of quantitative easing, which has ignited a firestorm of demand for riskier assets.

This higher demand for commercial-mortgage securities is enabling lenders to make more debt available at better terms to property owners. To be sure, the financing-parched commercial-property industry still faces a huge mismatch between supply and demand.

Read more...CMBS Rally Is Welcome News in Property Market -

Tuesday, September 25, 2012

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

The Texas economy continues to grow at a rate higher than the national average. The state gained 261,000 nonagricultural jobs from August 2011 to August 2012, an annual growth rate of 2.5 percent compared with 1.4 percent for the United States. The state’s private sector added 270,900 jobs, an annual growth rate of 3.1 percent compared with 1.8 percent for the nation’s nongovernment sector.

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

MHN TV: Green Operations via Multi-Housing News Online

Cheryl Gray, CPM, senior vice president at Bentall Kennedy, describes simple and inexpensive tips for properties exploring a green strategy.

Read more...MHN TV: Green Operations | Multi-Housing News Online

Outlook for the CMBS Market via Morningstar

Despite significant headwinds in the form of upcoming loan maturities and market forces, the tepid recovery of the CMBS market will persist in the near term.

*Commercial property fundamentals are gaining traction, in aggregate, leading to the slow recovery of the CMBS market. When the credit spectrum is delineated by property type, the multifamily segment stands out: It has potential to reach full recovery much faster than its cohorts, given that uncertainty surrounding the single-family housing market provides ample demand for existing stock.

*Issuance is tracking slightly below last year's pace, though a strong finish in the fourth quarter will push 2012's issuance slightly past 2011's.

*As with all financial assets, downside risks to our CMBS outlook include the worsening of European debt crisis and policy uncertainty surrounding the upcoming elections. More tangible threats to our outlook include upcoming maturity balloon dates, and the more medium- to long-term, risk of new construction outpacing fundamental absorption rates.

The CMBS market's tepid recovery continued in the third quarter, and we expect this trend to extend itself in the near term. The overall delinquency rate for "all deals," which excludes Canadian CMBS and agency deals, edged downward in August, to 9.9%. The overall delinquency rate still remains well above its prerecession average of less than 1%, and is still within close proximity to its postrecession peak of 10.3%, reached in May.

Read more...Outlook for the CMBS Market via Morningstar

Breaking Down The Fiscal Cliff In 12 Charts via ZeroHedge

Investors remain convinced, it would seem, that the fiscal cliff will not happen because our great-and-good politicians in Washington know full-well that the economic repercussions will be too great. Even though Ben's foot is to the floor, he has stated that monetary policy will be unable to offset the negative economic impact of the tax hikes and spending cuts. The prospect of agreement among a deeply polarized politik and just as Goldman expects, we worry that the S&P 500 will fall sharply following the election once investors finally recognize the serious possibility that the 'fiscal-cliff-problem' will not be solved in a smooth manner. In order to clarify that thinking, Bloomberg Brief has provided 12 charts on the timelines, impact, uncertainty, and possibilities surrounding this most obvious of risk events.

The so-called ‘fiscal cliff,’ the confluence of $607 billion in expiring tax and expenditure policies set to take effect at the end of 2012, poses a significant risk to the U.S. economic outlook.

Read more...Breaking Down The Fiscal Cliff In 12 Charts | ZeroHedge

NMHC: Housing policy must adapt to growing renter population via HousingWire

"We have a tremendous opportunity to create thriving and sustainable communities," said council President Doug Bibby in a presentation to the National Apartment Summit in Tysons Corner, Va., earlier this week. "But only if we change our thinking about rental housing and renters."

There is a growing disconnect between America's housing needs and current housing policy, he told the group.

“The U.S. is on the cusp of fundamental change in our housing dynamics as changing demographics and changing housing preferences drive more people away from the typical suburban house and toward the type of housing that rental housing offers,” Bibby said.

Read more...HousingWire | NMHC: Housing policy must adapt to growing renter population

Texas economic activity picked up in July, Comerica says via Dallas Business Journal

Comerica Bank’s Texas Economic Activity Index increased 0.5 points in July after dipping in June.

July’s index level of 99 is 27 points, or 38 percent, above the index cyclical low of 71.7.

In June, the index experienced its first decrease in recent months, dipping by 0.4 points. In May, the index had a healthier increase than it had seen the previous two months.

Read more...Texas economic activity picked up in July, Comerica says - Dallas Business Journal

New Supply to Meet Demand in Houston Apartment Sector via ReisReports

Declining vacancy rates and strong rent growth in the Houston apartment market set the stage for the current spike in new construction. The market is riding on the backs of strong energy and health care sectors and should continue to tighten during the period ahead.

Vacancy Peaks and Valleys

Market-rate apartment occupancy has been on a roller coaster ride for several years. A decline from double digit vacancy rates was spurred by the migration caused by Hurricane Katrina. The recession that followed, however propelled the rate back to double digits soon after. A cutback in development led to the rallying of demand in 2010 and yet another rapid descent in vacancy returned.

Read more...New Supply to Meet Demand in Houston Apartment Sector | ReisReports

What Gen Y Wants in an Apartment, And How They Find It via Multifamily Executive Magazine

Whether Gen Y apartment prospects are relying on a single source to inform their selection of a rental community or tapping into a variety of channels, the Millennial approach to finding an apartment is comparatively (and perhaps not surprisingly) more tech-savvy than searches conducted by other demographics.

What Gen Y residents ultimately want from apartment community design and management, however, may not be drastically different from what the renters who preceded them desired. Apartment operators bent on Gen Y success will likely benefit from the site selection, core amenity offerings, and customer service considerations typically made for market-rate multifamily communities in the first place.

Read more...What Gen Y Wants in an Apartment, And How They Find It - Research - Multifamily Executive Magazine

Texas Manufacturing Outlook Survey via Dallas Fed

"Texas factory activity increased in September, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose from 6.4 to 10, suggesting stronger output growth.

Other measures of current manufacturing activity also indicated growth in September. The new orders index rose to 5.3 following a reading of zero last month, suggesting a pickup in demand. The capacity utilization index advanced from 1.7 to 9.3, largely due to fewer manufacturers noting a decrease. The shipments index rose to 4.5, bouncing back into positive territory after falling to -2.3 in August.

Indexes reflecting broader business conditions were mixed. The general business activity index remained slightly negative but edged up from -1.6 to -0.9. The company outlook index was positive for the fifth month in a row but fell slightly to 2.4 from a reading of 4.1 in August."

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

Monday, September 24, 2012

The Coming Storm: $2 Trillion in CRE Loan Maturity Presents the Next Fiscal Cliff via NREI Readers Write

While a majority of America is keenly aware of the housing bubble, and at least somewhat familiar with the unraveling of the European Markets, little energy is being focused on what may very well be the nation’s next looming fiscal crisis: the large volume of commercial real estate debt maturing over the next seven years.

According to Trepp, a provider of CMBS analytics and data to the securities and investment management industry, there will be more than $2 trillion of commercial real estate loans maturing by 2017. It’s estimated that half of them are “underwater.” This of course means that fully $1 trillion in commercial real estate loans will mature without a clear refinancing strategy. These loans will not be refinanceable at existing debt levels, due to a decrease in underlying asset value, and today’s lending standards are much tighter than those of the middle 2000s, which further compounds the problem.

The lenders holding these overvalued loans will seek to either (1) right-size the loan balance at maturity through a large equity injection by the borrower (if an extension is even entertained), (2) foreclose on the loan and sell the underlying collateral, or (3) sell the loans at the maximum price attainable (oftentimes at a discount to the par value). In each of these resolutions, there will be significant opportunity for borrowers and third-party buyers alike to purchase real estate or real estate debt at significant discounts to legacy value.

Read more...The Coming Storm: $2 Trillion in CRE Loan Maturity Presents the Next Fiscal Cliff | NREI Readers Write

Guest Column: Adding EB-5 Immigrant Investor Funds to Your Capital Stack via Commercial Property Executive

By Kate Kalmykov

Since 2008, a little-known government program, the EB-5, has grown exponentially in popularity. The EB-5 program has become particularly popular with those in the commercial real estate industry as an alternative, low-interest source of capital.

The Immigration Act of 1990 for the first time permitted a foreign national to qualify for permanent residency (green card status) in the United States, based upon investment under the employment-centered fifth preference category (EB-5). The foreign national who wishes to use the EB-5 category has two basic choices: Find an existing EB-5 investment company or invest directly in his or her own new enterprise.

With the “individual EB-5” option, the investor will not only be required to commit the EB-5 investment funds to the enterprise but also be expected to be actively involved in the day-to-day management of the business. Individual EB-5s are not limited to one investor; multiple investors can pool funds together to infuse into businesses that they know will create the requisite amount of direct employee positions for each investor (the individual EB-5 requires that the investor demonstrate, after a two-year period, that their investment has resulted in the company creating 10 full-time and permanent positions filled by U.S. workers, whether citizens or permanent residents). The investor must demonstrate that the job creation requirement has been met by submitting evidence that includes W-2s, Form I-9 employment eligibility verification forms and payroll records.

Read more...Guest Column: Adding EB-5 Immigrant Investor Funds to Your Capital Stack | Commercial Property Executive

Multifamily Vacancy: 10 Negatives via Multifamily Insight Blog

When significant multifamily vacancy becomes an issue it is because of one of three reasons; the people, the paper or the property. High vacancy means one of these three have gone for a walk. And we already know paper and property are unable to walk… The people can be either ownership or management. The paper refers to implemented systems or mortgage matters. And the property, well, the property is a reflection of the people in charge.

To maintain the physical and financial health of an asset extended vacancy requires a property specific game plan. Here is a starter list of things that go south with extended vacancy:

Read more...Multifamily Vacancy: 10 Negatives | Multifamily Insight Blog

Commercial/Multifamily Mortgage Debt Outstanding Declines Fueled by Drop in CMBS Loans via Multi-Housing News Online

The level of commercial/multifamily mortgage debt outstanding decreased by $10.4 billion, or 0.4 percent, in the second quarter of 2012, as the balance of loans in CMBS, CDO and other ABS issues continued to decline, according to the Mortgage Bankers Association (MBA).

The $2.37 trillion in outstanding commercial/multifamily mortgage debt was $10.4 billion lower than the first quarter 2012 figure. Multifamily mortgage debt outstanding rose to $826 billion, an increase of $5.4 billion or 0.7 percent from the first quarter of 2012.

Read more...Commercial/Multifamily Mortgage Debt Outstanding Declines Fueled by Drop in CMBS Loans | Multi-Housing News Online

Should a Seller Get a Property Condition Report? via

The Property Condition Report is an important due diligence tool that evaluates the building improvements and systems at a commercial property. It answers the questions:

What is wrong with the asset now? and
What capital improvements will be necessary in the future?

A lot of owners say, “let the buyer do their own due diligence,” which is what occurs the majority of the time. A buyer absolutely should do thorough due diligence!

Read - Should a Seller Get a Property Condition Report? - The Science of Real Estate Article

The Federal Reserve Makes Peace with Inflation via

The U.S. central bank is running out of taboos to break. This week, Boston Federal Reserve President Eric Rosengren admitted that the latest quantitative easing broadside would debase the dollar. His counterpart in Minneapolis, Narayana Kocherlakota, traditionally on the hawkish side, said that an above-target inflation rate of 2.25 percent would be tolerable.

Regional Fed bosses have more leeway to speak their mind than, say, Fed Chairman Ben Bernanke - especially when, like Rosengren and Kocherlakota, they’re not currently voting members of the policy-setting Federal Open Market Committee. Their pronouncements still carry weight. Rosengren has a reputation for choosing his words wisely, while the Minneapolis Fed boss is known for vigilance on inflationary threats.

Read more...The latest chapter in the US Federal Reserve's fight against stagnation: embracing inflation

Friday, September 21, 2012

Texas Apartment Market Update August 2012 via

August 2012 Texas Apartment Market Stats for DFW, Houston, Austin and San Antonio from O'Connor & Associates. They are a great resource for apartment data in Texas.

Read more...Texas Apartment Market Update August 2012 via

Fannie Mae Launches Multifamily Green Initiative via GreenBuilder

There is an emerging business opportunity for certified RESNET Home Energy Raters with multifamily buildings. The U.S. multifamily housing stock is aging. The Harvard Joint Center for Housing Studies estimates that the average age of the nation’s multifamily housing stock is 38 years. This means that there are many opportunities for making cost effective energy upgrades to multifamily buildings. Aging multifamily housing and increasing energy costs also provides an opportunity to preserve affordable housing.

Fannie Mae is a key player in the financing of multifamily buildings. Fannie Mae reports that the size of their multifamily portfolio is nearly $193 billion. The Federal Reserve reported that Fannie Mae accounts for 21.2% of the financing of multifamily housing. The corporation has a multifamily portfolio of more than 3.8 million housing units. This makes the corporation the nation’s largest single participant in the multifamily mortgage market.

Fannie Mae’s housing mission and size of its multifamily portfolio provides a natural alignment of interests with green building principles.

Read more...Fannie Mae Launches Multifamily Green Initiative - GreenBuilder

FDIC Announces Asset Purchaser/Investor Outreach Workshops via FDIC

The Federal Deposit Insurance Corporation (FDIC) is conducting a series of outreach workshops to provide information on how to invest in or purchase assets retained from failed financial institutions. The three workshops will be held in Chicago on September 27th, Los Angeles on October 2nd, and New York on October 16th.

The FDIC has failed bank assets available for acquisition by depository institutions, investors and asset purchasers. Some of these assets have been designated for inclusion in the structured sales program. To ensure diverse participation in the structured sales program, the FDIC welcomes and strongly encourages minority- and women-owned investors and asset managers to participate and/or partner in bidding on the equity interests sold to investors under the program.

Read more...FDIC Announces Asset Purchaser/Investor Outreach Workshops via FDIC

Officed Up via Commercial Property Executive

The CMBS delinquency rate has reached a new high at the end of each month through the first half of this year. At the end of June, the rate was 9.62 percent, up from 9.43 percent last month and 9.07 percent one year ago. The amount delinquent increased to $44.75 billion in June, although the monthly increase was less than 1 percent. The amount delinquent movements have been negligible each month this year, ranging from an increase of 2.3 percent to a decrease of 2.4 percent. Despite the fluctuations, however, the amount delinquent at mid-year was actually 0.2 percent lower than where it was at the beginning of 2012.

Read more...Officed Up | Commercial Property Executive

Multifamily Refi Rates are Great But For How Long? via

All-in rates for multifamily refinancing are the lowest in Walker & Dunlop broker Brendan Coleman’s memory. For a fully levered deal of 80%, a borrower could conceivably get a loan at 375 basis points. And indeed, Walker & Dunlop just secured $19.2 million in fixed-rate Fannie Mae financing for a portfolio of residential properties in Washington, DC, for William C. Smith + Co., at below 4%. “The debt on the company’s portfolio was maturing and they were able to refinance at a great time at significant savings,” Coleman says. Walker & Dunlop colleague Benjamin Krosin also worked on the transaction.

But capital market observers can’t help but wonder how long the low interest multifamily rates will last, despite the Federal Reserve Bank’s pledge to keep rates low. “There is definitely a perception that the low interest rates will be here for a long time but people are uncertain how long the execution will be here—how long Fannie and Freddie will be active and how long investor interest in these securities will hold,” Coleman says. In short, if one of these factors change, spreads could go up and the all-in rate could change considerably without the Treasury rate moving that much, he says.

Read - Multifamily Refi Rates are Great But For How Long? - Daily News Article

Thursday, September 20, 2012

Pros & Cons of commercial real estate asset classes via Parkhurst Real Estate Investments

Why multi-family apartments are our favourite asset class in any market cycle.

Lower purchase price, same rent.
Due to higher economies of scale, the ‘per door’ cost of an apartment unit is less than a single family home or condo, but can generate the same rental income.
For example, you can buy an apartment building for $90K–$100K per door that rents for $800 per month, or you can buy a condo worth $150K–200K that rents for a similar $800–$1,000 per month. This means you can have almost double the rent for the same amount of investment capital, assuming you have enough to buy the apartment building.

Less vacancy risk Apartment vacancies are far easier to manage. If you own a rental property and your only tenant can’t pay their rent, you have a risk exposure of 100%, and you’re now paying all operating expenses (mortgage, taxes, etc). When you own an apartment building and tenant doesn’t pay their rent, the rest of your tenants still cover operating expenses. The chance of every tenant in the building failing to pay rent is almost zero.

Read more...Pros & Cons of commercial real estate asset classes | Parkhurst Real Estate Investments

Freddie Mac Provides Report Card, Gets Creative on MBS via Multifamily Executive Magazine

David Brickman, senior vice president of the Freddie Mac’s multifamily business, recently provided a mid-year progress report detailing just how the company provides value for American taxpayers. The following are some of the highlights from the report, which came out in early September:

Multifamily earnings increased in the first half of 2012 to $942 million, almost as much as all of 2010.

Freddie financed rental housing for 193,000 families, most of which were affordable for families below local area median income.

Multifamily loan purchases for the first half of 2012 were at $12.4 billion, allowing borrowers to refinance at lower rates and fund new apartment construction.

Read more...Freddie Mac Provides Report Card, Gets Creative on MBS - Finance - Multifamily Executive Magazine

Wednesday, September 19, 2012

Give Me Your (Moneyed) Masses: Congress Extends Investor Visa Program and Important Source of CRE Funding via CoStar Group

It turns out there is at least one federal stimulus program that Congress can support almost unanimously -- the Immigrant Investor Program, which allows foreign nationals to obtain a so-called EB-5 visa in exchange for investing in U.S. real estate development and other job-creating ventures.

The House of Representatives voted 412-3 last week to reauthorize the EB-5 Regional Center Program, administered by the U.S. Citizenship and Immigration Services agency, for at least three years through Sept. 30, 2015.

As reported by CoStar in April, the program has become an increasingly popular matchmaking and financing tool for pairing foreign investors with U.S. developers and completing projects hampered by lack of construction capital and financing.

Read more...Give Me Your (Moneyed) Masses: Congress Extends Investor Visa Program and Important Source of CRE Funding - CoStar Group

Sucking it up and paying it off via

Our debt goes down while Uncle Sam’s rises

One reason for our sluggish recovery from the recession is what Americans are doing with their money: paying off old debt. Total American household debt is 17.5 percent lower than when the market crash occurred in 2008. From 2007 to 2010, the percentage of US households owing some kind of debt fell from 77 to 75 percent. Total households debt in this country now stands at $11.38 trillion. At its peak in 2008, it totaled $13.8 trillion.

To see what that means to the average household – and what types of debt we’re running – click on today’s infographic, then comment below. In an economy driven by consumer spending, is this trend good or bad?

Read more...We’re settling old bills: American household debt is down 17.5% since the 2008 market crash! | Face the Facts USA

Housing starts rise, multifamily projects weak via CNBC

Housing starts rose less than expected in August as groundbreaking on multifamily home projects fell, but the trend continued to point to a turnaround in the housing market.

The Commerce Department said on Wednesday housing starts increased 2.3 percent to a seasonally adjusted annual rate of 750,000 units. July's starts were revised to show a 733,000-unit pace instead of the previously reported 746,000.

Economists polled by Reuters had forecast residential construction rising to a 765,000-unit rate. Compared to August last year, residential construction was up 29.1 percent.

Read more...Housing starts rise, multifamily projects weak - CNBC

Impact of Central Bank Actions Subdued by Threat of Fiscal Cliff via

The U.S. recovery still marches along, following more of a rollercoaster trajectory rather than a straight line. The summer slowdown that started in May looked like the start of a double-dip recession to many analysts, only to post improving job and retail sales data in July, followed by disappointing job numbers in August. We have long taken the position that monthly vital signs will remain volatile as long as a high degree of global uncertainty persists. Despite massive improvements in key economic fundamentals since the end of the Great Recession, corporate and consumer attitudes have been tainted by macro concerns, particularly the European debt crisis and the fear that they may erupt into another shock.

Read - Impact of Central Bank Actions Subdued by Threat of Fiscal Cliff - StreetSmart Article

Tax Trap in Dallas via

Since the beginning of the economic decline in 2008, property values have fluctuated in many Texas counties, including Dallas County. Now that the Dallas commercial real estate market is on the mend, commercial property owners must continue to monitor their property values and consider remedies available to appeal errant assessments.

Generally, the Dallas County real estate market has fared well over the past five years, having proven itself largely immune to the effects of the recession. In fact, the Dallas Central Appraisal District (DCAD) in July announced that overall property values increased this year for the first time since 2008, climbing by 1.4 percent. Commercial real estate drove the increase with a 4.6 percent gain that trumped a slight decline in residential values to boost the total tax roll.

Read more...Tax Trap in Dallas via

Tuesday, September 18, 2012

CMBS issuance to jump in US via

Issuance of commercial mortgage-backed securities, touted as the asset of choice for investors driven out of the residential mortgage market by the Federal Reserve, is expected to ramp up next year, but still may not keep pace with demand, analysts say.

Standard & Poor’s, the rating agency, predicted on Tuesday that US lenders would issue $45bn of CMBS in 2013, up from an estimated $40bn this year.

The increase is not expected to be enough to replenish the supply of CMBS, which has been shrinking at a rate of more than $3bn per month, according to S&P. Issuance next year will only be 20 per cent of the total issued in the US in 2007, the peak of the securitisation boom.

Read more...CMBS issuance to jump in US -

Drones: A Controversial Eye in the Sky for Property Managers

By Ashley Halligan, an analyst at Software Advice

The FAA Air Transportation Modernization and Safety Improvement Act, passed earlier this year, will authorize funds exceeding $60 billion for the Federal Aviation Administration (FAA) through 2015. The bill, intended to accelerate modernization in U.S. aviation, includes a rather controversial component: drones.

By September 2015, the FAA is required to accept and support the flight of Unmanned Aerial Vehicles (UAVs) in U.S. airspace. The range of potential commercial uses for these UAVs is vast and, not surprisingly, of interest to a broad spectrum of markets–including real estate and property management.

In fact, until the bill passed last February (which restricts airspace accessibility until the FAA devises a plan for non-authority UAVs), some real estate agencies had already begun hiring companies specializing in aerial photography via drones. The LAPD cracked down on such operations in January, warning of possible FAA violations.

While awaiting the FAA’s release of new regulations on commercial drone use, companies are designing high-tech devices ready to perform a slew of airborne operations. Other organizations are considering how using these drones could improve their businesses. Meanwhile, the public and media are in frenzies about what such flying contraptions mean in their day-to-day lives.

What is the potential future of drones in the U.S. real estate market? And what concerns are residents expressing?

For more, read the original story at Drones: A Controversial Eye in the Sky for Property Managers

Apartment Absorption Rates on the Rise via Multifamily Executive Magazine

It should come as little surprise, but as fast as new units are hitting the multifamily market, they’re being rented out and bought up. The latest data from the Survey of Market Absorption of Apartments (SOMA), compiled by the Census Bureau and the Department of Housing and Urban Development (HUD), points to an uptick in rentals and sales of newly built apartments and condos during the second quarter.

For unfinished apartments, the three-month absorption rate for the second quarter increased to 61 percent, following a moderate decline during the first quarter of 2012 when the number registered at 56 percent. Completions were on the rise too, with 15,700 new rental units hitting the market.

Read more...Apartment Absorption Rates on the Rise - Multifamily Trends - Multifamily Executive Magazine

CoreLogic Launches Independent Landlord Service via

CoreLogic, a leading provider of information, analytics and business services, today opened online access to comprehensive tenant screening data for independent landlords with the launch of

The new service provides the same applicant rental histories, eviction data, and criminal reports to small landlords who rent properties independently as those large apartment complexes and property management companies use to mitigate renter-applicant risk. Where services like these previously seemed cost prohibitive, the rates as low as $10 per assessment—with no minimum and no sign-up fee— gives independent landlords managing a small number of properties a way to cost-effectively compete for high-quality tenants while reducing their exposure to risk.

Read more...CoreLogic Launches Independent Landlord Service - Multifamily News Headlines – Breaking News, Stories, Top Headlines ::

Monday, September 17, 2012

CMBS Delinquencies Down, Although Office Sector Woes Persist via MortgageOrb

Increased loan resolutions have helped lead to a third-straight month of declines for U.S. commercial mortgage-backed securities (CMBS) delinquencies, according to the latest index results from Fitch Ratings.

CMBS late-pays fell 9 basis points (bps) last month to 8.39% from July's reading of 8.48%; Fitch Ratings attributes the decline to the volume of loan resolutions outnumbering the volume of new delinquencies. In August, approximately $2 billion of loans were resolved and removed from the index compared to $1.7 billion of new delinquencies added to the index.

Read more...MortgageOrb: CMBS Delinquencies Down, Although Office Sector Woes Persist

How to Keep Your Best Leasing Office Employees via Multifamily Executive Magazine

As the economy recovers, apartment companies plan to avoid high rates of turnover for their best employees.

“If you start to worry about engagement after you are suffering from a retention problem, it’s too late,” says Rick Haughey, vice president of property operations for the National Multi-Housing Council.

To keep top talent in your leasing office, hire people whose career goals and temperament are aligned with your corporate culture and mission. Communicate with them throughout their employment to make sure the job is still a good fit. Give them opportunities to increase their skills and advance their career and, of course, competitive compensation.

Read more...How to Keep Your Best Leasing Office Employees - Leasing Agents - Multifamily Executive Magazine

Texas Housing Market Finally Building a Solid Recovery via FRB of Dallas

Texas housing is showing evidence of a sustained recovery in 2012. Home sales and construction have bounced back from recessionary levels, and apartment leasing remains robust thanks to solid employment and population gains. Other factors, including historically low interest rates and increased home affordability, are also playing a role, especially in a rebounding single-family market. Unlike the 2009–10 upturn, which resulted from a temporary tax incentive, the latest gains are due to improved fundamentals reflected in lower housing inventories and rising home prices.

Read more...Texas Housing Market Finally Building a Solid Recovery via FRB of Dallas

Making Social Media Work for Multifamily via Multifamily Executive Magazine

The resident at the St. George Manor apartment community in the Pacific Beach area of San Diego wasn’t happy. With her water suddenly cut off, she took to Facebook to vent. “She posted on our Facebook page, saying, ‘What’s going on? I’ve got no ­water!’?” says Melissa Deen, marketing director for San Diego–based Sunrise Management, which runs 9,000 units across Southern California and Arizona, including those at St. George.

Within minutes, the community’s manager posted a response to this effect: “We were just told by the water company that there’s been a temporary shutoff and that service should be restored within a few hours.”

Sunrise’s experience is a textbook example of how to do social media right. The original message could have elicited a defensive response from a community manager. Instead, with training and practice, Sunrise was able to reply with just the right response.

Read more...Making Social Media Work for Multifamily - Technology - Multifamily Executive Magazine

Pest Management in Multifamily Housing via Multifamily Insight Blog

Pest management is part of property management. There are a number of insects and small animals that can infest a multifamily home, and before you know it, the problem spreads and people are leaving in droves. If you are a responsible property manager, you must know how to deal with the situation, as well as how to prevent it in the first place.

There are numerous pests that can infest multifamily housing. Roaches, bedbugs, and rodents are just some of the primary offenders. Following are some important facts to keep in mind as you consider pest control:

Read more...Pest Management in Multifamily Housing | Multifamily Insight Blog

Friday, September 14, 2012

US structured-finance volume jumps - but so does risk via Reuters

The US structured-credit market exploded with issuance this week, as 24 transactions across ABS, RMBS, CMBS, and CLOs sent investors into a feeding frenzy.

More than $15 billion in deals were either priced or announced, and several more new issues are in the queue for Monday.

With the Federal Reserve's low interest-rate policy now extended out till at least 2015 -- and a good deal of buy-side cash chasing assets -- investors pounced on anything that provided even a modicum of extra yield.

Read more...US structured-finance volume jumps - but so does risk | Reuters

Amy Kosnikowski’s “Power Leasing Questions” That Help You Close Prospects via

Last July, Amy Kosnikowski of Quintessential Marketing & Training, shared her expertise with us and hundreds of listeners in the informative Webinar titled “Tips to Soar this Leasing Season.” Through her years of experience in the industry, Amy developed a list of “Power Questions” that helped her become a top sales producer and enabled her to close more prospects faster.

When you understand the priorities of your prospects, you are able to sell to those features. Below are Amy’s “Power Questions” that have proven to be successful to her and her team. We hope you find value in these great questions.

Read more...Amy Kosnikowski’s “Power Leasing Questions” That Help You Close Prospects via

Texas Economy Grows at Moderate Pace via Dallas Fed

The Texas economy is expanding at a moderate pace, with employment growing at a 2 percent annual rate in July. While the housing, real estate and energy sectors are witnessing strong activity, exports were flat through the second quarter and retail sales remain sluggish. Uncertainty from the European debt crisis, the looming fiscal cliff and upcoming elections continues to weigh on business sentiment and poses the main downside risk the remainder of the year.

Texas Continues to Outpace U.S. in Job Growth
Payroll job growth was 2 percent in July, slower than the revised 2.4 percent in June (Chart 1). So far in 2012, total nonfarm jobs in Texas have grown at a 2.4 percent annual rate, almost the same pace as in the corresponding period in 2011.

Read more...Texas Economy Grows at Moderate Pace - Dallas Fed

Thursday, September 13, 2012

Cap Rate Formula | What's Your Property Worth? via

by Ray Alcorn

How do you know what a commercial income property is worth?

How do you know that you can get your desired return on your investment?

Is there a way to calculate the maximum you can pay for an investment and still achieve your investment goals?

This article will answer these questions and more about valuing income property.

Many real estate investors determine the value of an income property by using the capitalization rate, aka cap rate. It is probably the one most misused concept in real estate investing.

While brokers, sellers, and lenders are fond of quoting deals based on the cap rate, the way it is typically used, they really shortcut the true use of a valuable tool. A broker prices a property by taking the Net Operating Income (NOI), dividing it by the sales price, and voila!--there's the cap rate.

Read more...Cap Rate Formula | What's Your Property Worth?

Builder Sentiment at Highest Level Since 2005 via Multifamily Executive Magazine

The latest data from the National Association of Home Builders (NAHB) released shows that multifamily builder and developer sentiment is riding higher than it has in years.

According to the results from the newest Multifamily Production Index (MPI), sentiment has risen to 54 in the second quarter, up from 51 on a scale of 0 to 100 during the first quarter of 2012. Essentially, the higher the score, the better developers and builders feel about market conditions. This recent increase marks the highest level of confidence since the second quarter of 2005.

Read more...Builder Sentiment at Highest Level Since 2005 - Housing Trends - Multifamily Executive Magazine

CoreLogic Releases September MarketPulse Report via

CoreLogic, a leading provider of information, analytics and business services, today released its September MarketPulse report. The monthly economic publication provides insight into the current and future health of the U.S. economic climate with emphasis on housing and mortgage metrics. CoreLogic Chief Economist Mark Fleming and Deputy Chief Economist Sam Khater, along with colleagues from the CoreLogic mortgage analytics and economics team, authored the articles. Additionally, this month's edition includes an opening letter to the industry by Anand Nallathambi, CoreLogic president and CEO, featuring his personal observations on the road to a sustainable housing recovery.

Key findings in the September MarketPulse Report include:

Read more...CoreLogic Releases September MarketPulse Report - Multifamily News Headlines – Breaking News, Stories, Top Headlines ::

ALN Monthly Newsletter September 2012 via ALN Apartment Data

ALN Data just released their August 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 September 2012

Big Investors Rummage For Profits in Foreclosed Homes via

On a muggy morning earlier this month, Paul Fuhrman pried the screen off a window to get into a two-story house in this Atlanta suburb.

It was just another day's work for the 43-year-old executive at private-equity firm Colony Capital LLC, based in Santa Monica, Calif. After buying the house for $120,000 in a foreclosure auction, Mr. Furhman and his colleagues wanted to check out Colony's new investment—and broke in because they hadn't gotten the keys yet.

Mr. Fuhrman's sweat and dirty hands show how the business of buying foreclosed homes, renovating and renting them out is morphing from a largely mom-and-pop business into the next big thing on Wall Street. Investors who once chased only big-ticket deals now are buying houses one at a time.

Read more...Big Investors Rummage For Profits in Foreclosed Homes -

Houston Economic Update September 2012 via FRB of Dallas

Annualized monthly economic growth slowed considerably to 1.5 percent in July, as measured by the Federal Reserve Bank of Dallas business-cycle index, following a significant upward revision of the prior two months to 2.9 and 6.4 percent. With healthy hydrocarbon industries and a broad-based improvement in real estate markets, Houston’s economic fundamentals remain in growth territory, but downside risks weigh heavily. Regulatory uncertainty, the U.S. fiscal situation and stresses in the global economy continue to cloud the horizon. Therefore, the Houston outlook is guardedly positive..

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

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.

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

Wednesday, September 12, 2012

Four Steps For Hiring & Keeping PM SuperStars - Multifamily Blogs via

“When you hire the best, the rest is easy!” We have heard this phrase many times, but how do we put this concept into action? We know that hiring the best people is vital to the success of our business, especially in property management. And certainly, the residents who live in the apartments you manage have high service expectations. So…how do you hire and keep property management superstars? Let’s start from the beginning.

The job description: Often overlooked, the job description sets the tone for success when hiring new people for your property management. Start by making certain your job descriptions are accurate, up-to-date and reflect your expectations. This is an important step, as it ensures consistency in your hiring practices and says your property management company is well run.

Read more...Four Steps For Hiring & Keeping PM SuperStars - Multifamily Blogs – Experts – Technology, Products ::

Will Property Prices Need a Crutch as the Population Ages? via CoStar Group

There has been much speculation that single-family housing prices could take a hit as increasing numbers of baby boomers downsize and leave larger homes behind as they move into retirement age. That assumption is too general to be entirely accurate, according a pair of major economic papers on the topic of aging and property prices.

What is clear is that this ongoing population shift holds important ramifications for the multifamily property sector, including senior and assisted living facilities. And it is also becoming an issue of increasing importance for commercial real estate investment researchers.

Read more...Will Property Prices Need a Crutch as the Population Ages? - CoStar Group

What the LIBOR Scandal Means for Real Estate via

In early July, British investment bank Barclays PLC announced a surprise settlement with agencies from the United States and Europe and admitted that, for years, it had been reporting false information to the British Bankers’ Association as part of the process of determining the London Inter Bank Overnight Rate (LIBOR)—a key metric used as the basis for trillions of dollars’ worth of other financial products, including some commercial real estate debt. The bank agreed to pay more than $450 million in fines: $200 million to the U.S. Commodity Futures Trading Commission, $160 million to the criminal division of the U.S. Department of Justice and $92.8 million to Britain’s Financial Services Authority.

As a result of the scandal, key executives—including Barclays Chairman Marcus Agius and Barclays CEO Robert Diamond—announced their resignations. The bank is now fighting to regain the trust of investors, borrowers, other banks and regulatory agencies in the wake of the revelations.

And, allegedly, it wasn’t alone.

Read more...What the LIBOR Scandal Means for Real Estate via

Apartment buildings outperform bonds in rising intrest rates via Ashworth Partners

Good charts on long term returns in this piece from Glenn R Mueller, PhD.:
I recently met with my financial advisor to “rebalance” my … retirement portfolio. Based on my “age and stage of life” his allocation model showed a 50% bond allocation. I laughed and asked him if the company allocation model assumed interest rates would rise over the next 10 years? His answer was “yes- of course.” I showed him the graph below which shows lower than average TOTAL returns in a rising interest rate environment and he checked his long-term data and found that bond holders between 1953 and 1980 had actually lost money. We all know that as interest rates rise, bond values decline and thus the total return can be small or negative. Not to mention that a 10-year treasury at 1.5% is below expected inflation and thus a NEGATIVE REAL RETURN. He agreed that a bond allocation did not make much sense, but since my investor profile was conservative what was the alternative?

Read more...Apartment buildings outperform bonds in rising intrest rates | Ashworth Partners

Houston Adds Most Metro U.S. Jobs Since Recession via Real Estate Center at Texas A&M University

Houston remains the national leader for job growth over the past five years, topping a list dominated by Texas metros.

Houston added 114,800 private sector jobs between July 2007 and July 2012, a Business Journals’ On Numbers analysis of U.S. Bureau of Labor Statistics data shows.

Read more...Houston Adds Most Metro U.S. Jobs Since Recession via Real Estate Center at Texas A&M University

Houston a Top Metro for Economic Health via Real Estate Center at Texas A&M University

Houston ranks No. 6 in a new analysis that measures the economic health of 102 major metropolitan areas.

Houston received overall score of 75.523 in the Business Journals’ On Numbers Economic Index, which is calculated by an 18-part formula. It also ranked No. 8 on the short-term index and No. 7 on the long-term index.

Houston’s private sector grew 5.19 percent in the past five years, with 4.11 percent growth over the past year. Similarly, the area’s house appreciation increased 5.82 percent in the past five years and 4.14 percent over the past year.

Read more...Houston a Top Metro for Economic Health via Real Estate Center at Texas A&M University

Tuesday, September 11, 2012

Data Shows LIHTC Program Aids Multifamily Construction via CCIM Institute

Subsidized affordable housing units, including Low-Income Housing Tax Credit units, constituted 32 percent of total multifamily construction completions in 2Q12, according to the Survey of Market Absorption of Apartments conducted by the U.S. Census Bureau and the Department of Housing and Urban Development. This statistic, up from an average of less than 20 percent year over year, illustrates the role of the LIHTC program in bolstering multifamily construction and providing affordable housing during the economic downturn.

Read more...Data Shows LIHTC Program Aids Multifamily Construction | CCIM Institute

CRE Fundamentals in Energy Markets Are Outperforming All Others via

Last month, we highlighted the positive effects of a local technology cluster on commercial real estate fundamentals. Data from metros with a large technology base indicated above-average rent growth and occupancy gains over the past several years.

However, technology is not alone in its preeminence among economic sectors. Energy firms are also performing well despite the economic gloom that pervades much of the country. An analysis of energy-centric metros confirms that, much like multifamily and office buildings in tech-oriented metros, property fundamentals are benefitting from the influence of local energy firms.

Seven metros were classified as having a strong energy cluster, all of which are found in Oklahoma and Texas. The group includes Austin, Dallas, Fort Worth, Houston, Oklahoma City, San Antonio and Tulsa. This analysis focuses solely on primary metropolitan areas. As a result, many smaller towns in Texas and North Dakota—think Odessa, Texas, or Bismarck, N.D.—that would fit this description are not included.

Read more...CRE Fundamentals in Energy Markets Are Outperforming All Others

Rents continue to rise in the Houston area via Houston Chronicle

Last fall, Chester Brown Jr.'s rent went up by $150 a month. He's about to get hit again.

Brown's landlord just told him his 950-square-foot, townhouse-style apartment is going for even more in today's frenzied rental market.

"They say the market price for that unit is $1,100," said Brown, who lives with his wife and two young children in a complex near T.C. Jester and the North Loop.

Brown's situation is not unique. Rising rents have put landlords in the catbird seat.

Rents in the Houston area are at an all-time high and tenants are facing steep increases as demand for apartments shows no signs of slowing.

Read more...Rents continue to rise in the Houston area - Houston Chronicle

Monday, September 10, 2012

Making Peace With Online Rating Sites via Multifamily Executive Magazine

Sometimes, apartment living can breed strange bedfellows. Who hasn’t been paired with an oil-and-water roommate? When that happens, the best each side can do is learn to get along. You may even find an unlikely friend in the process.

It’s a fitting analogy for what’s happening between apartment operators and the online apartment review sites where residents post their unabashed opinions about multifamily communities. Once reviled as industry pariahs where haters could unfairly bash a community with negative rants – true or not – online review sites have quickly become the go-to source for prospects looking for the right place to live. That’s why apartment operators, some willingly and some less so, have started to embrace them.

Read more...Making Peace With Online Rating Sites - Technology - Multifamily Executive Magazine

What’s Cooking? via Multi-Housing News Online

MHN teamed up with research and consulting services firm Kingsley Associates this month to find out what renters think about their kitchens. There are many factors that affect a person’s satisfaction when it comes to this essential facet of living. These include the quality and functionality of amenities, the age and style of finishes, and the size of the space itself, especially with respect to the overall rent the resident is paying. Needless to say, property owners and managers should be cognizant of the effectiveness of their kitchen layouts and keep tabs on what’s in style. Also, maintaining the infrastructure throughout the property that supports kitchen use is a constant necessity, one that cannot be neglected. At the end of the day, basic upkeep before new tenants move in and updating when trends shift will keep you in the game for resident satisfaction.

Read more...What’s Cooking? | Multi-Housing News Online

Marketing to Gen-Y Renters via

Generation Y, or Millennials, are those born in the mid-80s, and after. They have grown up in the digital age, love technology, and environmental awareness. There are about 70 million Generation Y renters that come with very specific wants and needs that you must know about if you want to start attracting them as tenants. Use these helpful tips to begin attracting Gen Y renters to your community today:

Get Connected
This generation thrives on being connected, so share content on social networks like Facebook and Twitter. As you create fans, ask them to help spread the word, share exclusive content with them, and offer prizes or contests. The more interaction and engagement the better.

Read more...Marketing to Gen-Y Renters - Multifamily Blogs – Experts – Technology, Products ::

Lenders Press Forward, but Outlook for CMBS Remains Reserved via The Commercial Observer

Commercial real estate lenders are growing more confident, or at least more inclined to resume risk-taking. Bucking headwinds from the weaker economy and job market, underwriting standards for loans on well-positioned assets eased in the second quarter and through the summer. Competition to fund high quality borrowers showed increasing spillovers from the febrile apartment sector, with a small but growing number of development projects and cash-out refinancings registering alongside new office, retail and hotel mortgages.

Read more...Lenders Press Forward, but Outlook for CMBS Remains Reserved | The Commercial Observer

CMBS Delinquency Rate Falls Sharply After Increases: Trepp via

The CMBS delinquency rate made a steep drop in August, marking the first fall since February 2012, according to Trepp.

After five months of increases, the CMBS delinquency rate fell 21 basis points to 10.13 percent in August from 10.34 in July. The plunge in August is the largest since November 2011.

Read more...CMBS Delinquency Rate Falls Sharply After Increases: Trepp

Friday, September 7, 2012

Getting Residents to Recycle via National Apartment Association Blog

Multifamily recycling is considered a challenge; however, it is possible for communities to establish and maintain successful recycling programs given the right tools and resources.

A successful recycling program can be defined as one that achieves a high diversion rate, state or local goals, collects multiple types of recyclables, and makes recycling accessible to more people. The path to success starts with the following tips:

Read more...Getting Residents to Recycle via National Apartment Association Blog

Rooftop Farms: Here to Stay or Passing Phase? via NREIonline

When Centrum Partners took over the Bradley Business Center on Chicago’s North Side in 2011, the company wanted to transform the 21-acre commercial campus into a cutting-edge location with tenants poised for the new economy.

That’s why it made perfect sense to partner with New York-based BrightFarms to turn one acre of the complex’s rooftop from vacant space into a hydroponic greenhouse—a deal that was unveiled this week.

The farm will grow 500,000 pounds of lettuces, tomatoes and herbs annually, to be sold directly to supermarkets, community markets and other venues.

Read more...Rooftop Farms: Here to Stay or Passing Phase? via NREIonline

How Multifamily Creates Value: A Progress Report via Freddie Mac

Since one-third of Americans rent rather than own their home, Freddie Mac has a vibrant business focused on the multifamily marketplace. Here, we work with a variety of business partners – lenders, borrowers, and securities investors – to finance affordable housing for renters nationwide. How are we doing in terms of creating value for these stakeholders as well as the U.S. taxpayers who capitalize Freddie Mac?

Read more...How Multifamily Creates Value: A Progress Report - Freddie Mac

Debt-to-Income Ratio Keeping Renters in Units via Multifamily Executive Magazine

Maybe college wasn’t such a good idea. Say what you will about today’s 20-somethings, but they represent the one demographic crucial to sustaining the current rental boom. And one of the main reasons they’ve flocked to apartment living? They are buried under piles of student debt and can’t afford a major purchase, like a home.

According to a report from, Gen Y renters may not be renting by choice, but rather by economic design. In many cases, even if they wanted to buy, they can’t. Take a look at some key findings from the report:

Read more...Debt-to-Income Ratio Keeping Renters in Units - Housing Trends - Multifamily Executive Magazine

Thursday, September 6, 2012

National Association of Home Builders: Multifamily Still Doing Just Fine - Developments via WSJ

The multifamily housing sector continues to improve, fed by people renting homes and the improving for-sale market, the National Association of Home Builders reported Thursday.

The trade group says that its Multifamily Production Index came in at 54 out of 100, climbing three points from the prior quarter and marking its eighth consecutive quarterly improvement. The reading is the highest since the second quarter of 2005, back before the housing market took its huge dive.

Read more...National Association of Home Builders: Multifamily Still Doing Just Fine - Developments - WSJ

Improving Resident Retention: Putting the Resident’s Convenience above Your Own via Property Management Insider

I recently saw a post on Facebook where a customer wrote a personal thank you to a popular grocery store. In his post, he explained that he arrived at the store and not realizing that the store had closed ten minutes prior, tried to enter the store. He found the entrance locked, however a manager opened the door and asked how she could help the man. The customer explained that he just needed to get one item and didn’t realize the store had closed. As he turned to walk back to his car, the manager invited him into the store and told him to take his time getting the item he needed. The man hurriedly grabbed the item and headed to the checkout.

At the checkout, he was greeted cheerfully by a cashier who proceeded to ask if the customer needed anything more than just the one item. The man told her that he didn’t want to hold them up and would come back the next day. The cashier smiled and responded, “You should get it now. That’s what we’re here for.” The customer told her that his one item was enough, paid for his purchase, thanked the cashier and left the store.

Read more...Improving Resident Retention: Putting the Resident’s Convenience above Your Own | Property Management Insider

Rental Trends: Rent Growth Levels Lag in Smaller Metros via Property Management Insider

The gap in rent growth levels has become unusually large between the nation’s primary and secondary markets – even though occupancy rates and job growth numbers are similar. What is fueling that trend?

Watch video...Rental Trends: Rent Growth Levels Lag in Smaller Metros | Property Management Insider

Pop Quiz: Q&A with Shekar Narasimhan on GSE Reform Multifamily Trends via Multifamily Executive Magazine

As we enter another heated election season, perhaps no single issue touches as many multifamily players as housing finance reform.

Multifamily Executive recently sat down with Shekar Narasimhan, managing partner of McLean, Va.–based Beekman Advisors, to discuss that topic, as well as several others. Narasimhan has a deep history with Fannie and Freddie—he was CEO of WMF Group, a large agency lender which was acquired by Prudential in 2000. Narasimhan was elected the first chair of the DUS Advisory Committee, founded the MBA's Multifamily Steering Committee and was the first chair of its Multifamily Board of Governors. He also sits on the executive committee of the National Housing Conference, and is a fellow at the Joint Center for Housing Studies at Harvard University.

Here, he predicts how things might shake out once the dust settles and a decision maker has been chosen to steer the fate of the housing industry for the next four years—and beyond.

Read more...Pop Quiz: Q&A with Shekar Narasimhan on GSE Reform - Multifamily Trends - Multifamily Executive Magazine

Transaction Volume at Mid-Year Trending Lower via ReisReports

Real estate investors have responded to an especially disappointing year economically (i.e., market uncertainty, sluggish GDP growth, and the lackluster job market) by curtailing their buying activity—or waiting on the sidelines entirely. Consequently, transaction volume during 2Q 2012 has retreated back to near the level observed in 3Q 2010. This reverses the trend seen over the last few years, where sales volumes increased throughout the calendar year. If this trend persists over the second half of 2012, transaction volume will come in below last year’s levels. A definite indicator of lukewarm investor sentiment.

Read more...Transaction Volume at Mid-Year Trending Lower | ReisReports

Wednesday, September 5, 2012

NAR: Commercial Real Estate Healing Slowly via Commercial Property Executive

Commercial real estate will continue moving in an upward trajectory for the next few months, but at a sluggish pace, mainly due to meek job creation and tight loan underwriting, according to the National Association of Realtors’ quarterly commercial real estate forecast.

“With the general slowdown in national economic conditions, and especially weak employment trends, commercial real estate is following the broader trends,” George Ratiu, NAR’s manager of quantitative and commercial research, told Commercial Property Executive. “Since demand for office and retail spaces is directly correlated to employment data, lack of new jobs translates into less absorption of space, accompanied by softer rent growth and lingering vacancies.”

Read more...NAR: Commercial Real Estate Healing Slowly | Commercial Property Executive

Nerves of Steel via Commercial Property Executive

Uncertainty continues to dominate the investment environment—uncertainty about the outcome of the November elections and the “fiscal cliff” facing our nation at the end of the year, uncertainty over whether the Federal Reserve will throw another round of quantitative easing into the economic mix, uncertainty about which European country will need a bailout next or whether the euro will survive, to name a few—it is going to be hard to balance the return investors require and the risk that is getting harder and harder to stomach.

Even prime commercial real estate, which as an asset class on an institutional basis is considered a relatively “safe” investment and has been clearly holding its own during the ups and downs of the recession and recovery, is becoming more risky as prices have been bid up in the major markets. In fact, Real Estate Research Corporation’s (RERC’s) return versus risk ratings, as reported in the recent issue of the RERC Real Estate Report, declined for commercial real estate as an asset class and for each of the individual property sectors during second quarter 2012. This reflects the recent run-up of prices for core properties and the major markets and the lack of rebound for properties located in the secondary investment markets.

Read more...Nerves of Steel | Commercial Property Executive

CRE Investors and Apts. Remain Bankers' Favorites, While Construction Lending Declines via CoStar Group

Bank commercial real estate lending continued to be a mixed bag for the industry in the second quarter. Overall, CRE lending continued its downward slide, dropping four-tenths of a percent from the first quarter and down 3.4% from a year earlier, according to data CoStar Group collected and analyzed from FDIC for the nation's 7,522 operating banks and savings and loans.

Encouragingly, though, lending for investment and multifamily properties continued to increase modestly. Multifamily lending increased more than 1.6%. The quarterly increase outpaced the year-over-year growth of slightly more than 4%.

Read more...CRE Investors and Apts. Remain Bankers' Favorites, While Construction Lending Declines - CoStar Group

Construction Spending Dropped Slightly in July via Multifamily Executive Magazine

Construction spending in the U.S. fell slightly, by less than a percentage point, in July, to an annual rate of $834.4 billion, ending its three-months of rising numbers streak, but still 9.3% ahead of July of last year, the U.S. Census Bureau reported Tuesday.

Despite the slight downward monthly blip, so small that it could easily be erased when the July numbers are revised, construction spending for the first seven months of 2012 was 9.3% higher than the same period in 2011.

Read more...Construction Spending Dropped Slightly in July - Housing Data, Economic Conditions - Multifamily Executive Magazine

FHA Multifamily Programs via Multi-Housing News Online

The benefits of financing insured by the Federal Housing Administration (FHA) are many. According to Tyler Griffin, vice president at Beech Street Capital, they include: low rates (as low as sub-3 percent on refinances) with no underwriting floors; long fixed-rate terms and amortizations; and flexible prepayment options. Mortgages are non-recourse, but they may require longer application times and Davis-Bacon wages. Here are the major, as well as some less well-known, FHA-insured multifamily financing programs.

Read more...FHA Multifamily Programs | Multi-Housing News Online

CMBS Delinquency Rate in US Down in August; First Drop Since February via WORLD PROPERTY CHANNEL

According to an August report from Trepp, US CMBS delinquencies were down from July, the first decline since February.

"Over the last few months, we predicted that the Trepp CMBS delinquency rate would hit a high point in the early to mid-summer and then decelerate in the second half of the year," says Manus Clancy, managing director at Trepp. "That prognostication came to fruition (in August) when the delinquency rate fell sharply," he said.

The delinquency rate for US commercial real estate loans in CMBS fell 21 basis points to 10.13% in August. This decrease occurred after five consecutive months in which the rate increased, including three months that set all-time records. This was the largest one-month drop since November 2011, according to Trepp.

Read more...CMBS Delinquency Rate in US Down in August; First Drop Since February - WORLD PROPERTY CHANNEL Global News Center

Tuesday, September 4, 2012

Back to School via Multi-Housing News Online

Starting at the turn of the 21st century, there was a shift of people specifically setting their sights on a career in the multifamily industry. “What we are seeing today is that young people are gravitating toward real estate management as a career of choice instead of a career of chance,” says Joseph Greenblatt, current secretary/treasurer of the Institute of Real Estate Management and president and CEO of Sunrise Management Inc. in San Diego, Calif. “As I travel around the country, I am increasingly meeting very bright, capable young people who are getting a foothold in this business. They are masters of today’s media and technology and full of energy and enthusiasm.”

Professional associations have established certificate programs in residential property management and offer a wide range of classes online and at a multitude of locations around the country. Meanwhile, many residential property management employers have set up their own
in-house training departments and provide professional development courses on company time.

Read more...Back to School | Multi-Housing News Online

Multifamily Finance Issues at Stake in the Upcoming Election - Legislation via Multifamily Executive Magazine

What’s at stake for the apartment industry with the November election soon upon us and the 113th Congress getting to work in January?

Given the paucity of even lip service that President Obama and Republican Mitt Romney have paid to the housing crisis along the campaign trail, it’s a pretty tough prognostication. But industry advocates targeting key decision makers in both parties are offering some insight—ranging from sobering to encouraging.

A variety of issues will face the Congress—should it choose to act on them—among them government-sponsored enterprise (GSE) reform; tax reform, including the low-income housing tax credit (LIHTC); various federal subsidy programs; and several capital-markets regulations, such as those involving commercial mortgage-backed securities (CMBS).

Read more...Multifamily Finance Issues at Stake in the Upcoming Election - Legislation - Multifamily Executive Magazine

Five Reasons Why Multifamily Occupancy is Sky High via Multifamily Insight Blog

Multifamily in the U.S. is experiencing its best occupancy since 2002. Why? Is it our stellar industry personality? Better dressed leasing agents? Shiny glass doors? Nope. Occupancy is high for the same reason gasoline goes up right before Labor Day… supply and demand. There are a few other reasons, of course. Let’s explore them.

Mortgage squeeze. How many people do you know that have applied for mortgage financing? How many obtained the loan they wanted? As if refinancing were not difficult enough, new rules imposed by Fannie/Freddie have increased standards banks must meet to sell their originated loans to these GSE (Government Sponsored Entities).

Read more...Five Reasons Why Multifamily Occupancy is Sky High | Multifamily Insight Blog

How to Prepare for a Hurricane via Property Management Insider

Hurricane Isaac’s stormy path along the Gulf Coast this week serves as a sober reminder that this is hurricane season and that preparedness should be at the top of the list for multifamily property owners and managers everywhere.

And hurricanes don’t just affect seaside cities; they can push hundreds of miles inland and inflict damaging winds and flooding.

Read more...Property Management Tips: How to Prepare for a Hurricane | Property Management Insider