Wednesday, October 31, 2012

NMHC Apartment Survey: Market Conditions Tighten, Growth Rate Moderates via Calculated Risk

From the National Multi Housing Council (NMHC): Apartment Market Expansion Continues as Growth Rate Moderates

Apartment markets improved across all areas for the seventh quarter in a row, but the pace of improvement moderated according to the National Multi Housing Council’s (NMHC) Quarterly Survey of Apartment Market Conditions. The survey’s indexes measuring Market Tightness (56), Sales Volume (51), Equity Financing (56) and Debt Financing (65) all measured at 50 or higher, indicating growth from the previous quarter.

“Even after nearly three years of recovery, apartment markets around the country remain strong as more report tightening conditions than not,” said NMHC Chief Economist Mark Obrinsky. “The dynamic that began in 2010 remains in place: the increase in prospective apartment residents continues to outpace the pickup in new apartments completed. While development activity has picked up considerably since the trough, finance for both acquisition and construction remains constrained, flowing mainly to the best properties in the top markets.”

Read more...Calculated Risk: NMHC Apartment Survey: Market Conditions Tighten, Growth Rate Moderates

M-F Industry Will Decelerate in 2013, Panelists Agree via Commercial Property Executive

he year 2012 will go down in the record books as a chart-popping year for the multi-family sector, but the exuberant levels of multi-family rent increases, transactional activity and equity investments are due for a slowdown over the next year, suggested speakers at the 2012 CREW Network Convention and Marketplace held in Chicago.

“This is one of our best years ever,” said Debbie Corson, principal, Apartment Realty Advisors.

Read more...CREW SPECIAL REPORT: M-F Industry Will Decelerate in 2013, Panelists Agree | Commercial Property Executive

Prepare for Important Tax Changes in 2013 via NREI Readers Write


Next year could bring some significant tax increases, and now is the time to start planning.

On a recent episode of my “America’s Commercial Real Estate Show,” I talked with a panel of experts about tax strategies and took an in-depth look at the potential tax changes that lie ahead in 2013. My guests shared their insights and tips to help real estate investors protect their interests and minimize their tax burden.

Experts say 2013 is a minefield of potential new taxes. All eyes are watching Washington for possible tax increases — from capital gains to carried interest.

“The great mystery is, ‘What will tax rates be in 2013?’” said Linda Goold, director of federal taxation at the National Association of Realtors.

Of course, one of the hottest topics is the capital gains tax.

Read more...Prepare for Important Tax Changes in 2013 | NREI Readers Write

Austin housing market accelerates via Real Estate Center at Texas A&M University

Metrostudy’s Quarterly Residential Survey in the Austin region indicated there were 6,545 new home starts in the last year, a 19 percent increase from a year ago. The increased starts total is the result of increasing demand, as well as very low inventory levels for new homes.

Metrostudy counted 1,105 finished and vacant new homes at the end of second quarter 2012, the lowest total since 1Q 2001.

The biggest challenge for builders in the Austin market is the tight supply of finished lots in the most desirable areas. While the Austin region as a whole has a 30-month supply of developed lots, in some areas there is less than a 15-month supply of lots.

Read more...Austin housing market accelerates via Real Estate Center at Texas A&M University

So why do they need renters insurance? via

Those of you that know me or have been to one of my workshops have heard me talk about emergency preparedness. On occasion we as property managers are faced with the many types of challenges related to the topic. I have instructed companies and associations on how to prepare for them and presented to hundreds of managers all over the country. This past week the Northeast was dealt an unforgiving hand with Hurricane Sandy, and I personally had to deal with a fire a my community. These events emphasize the importance of being prepared and expecting the unexpected.

True story!
So I just get off of work and it's 6:19 PM. My cell phone rings and on the caller ID it's the company that monitors our alarms...not a good sign! Now we have had issues on occasion with ground faults related to the alarms, but there had been no storms or anything to lead me to believe it could be that. The person says, we have a fire trouble signal in Building 3. I ask, is it a trouble alert or fire? Then I hear that four letter word we never want to hear, "fire." Ok Larry, take a breath and think...rule number one!

Read more...So why do they need renters insurance? :: Apartment Ideas via

Texas Gushing Over Oilfield Jobs via the Blog of the Real Estate Center

It’s no secret that the oil and gas sector has been one of the few bright spots in the U.S. economy during the past few years.

A recent PricewaterhouseCoopers (PWC) report estimates the oil and gas industry supports about two million direct and indirect Texas jobs that power 24 percent of the state’s economy. As a result, Texas residential and commercial real estate markets are largely outperforming those in the rest of the country.

Although employment gains reach well beyond the oil patch, some of the biggest effects have been in areas at the heart of drilling activity. Our research shows the significant impact oil and gas activity is having on some of the most active counties in the Permian Basin and Eagle Ford and Barnett shale regions, referred to in oilfield jargon as “plays.”

Read more...Texas Gushing Over Oilfield Jobs | the Blog of the Real Estate Center

Tuesday, October 30, 2012

Increasing Investment Activity Projected in 2013 via CCIM Institute

Commercial real estate’s recovery will continue in 2013, led by the multifamily, industrial, and office sectors, according to results from Jones Lang LaSalle’s 2013 Cross Sector Survey. Despite lingering fears about unemployment and the Eurozone crisis, survey respondents expect to increase their investment activity by as much as 20 percent year over year in 2013.

Read more...Increasing Investment Activity Projected in 2013 | CCIM Institute

25% of Renters Plan to Stay That Way via

The multifamily market continues to get the thumbs up from Americans. According to, a locally based apartment-finding search engine, 40% of American households rent their homes, and one-fourth of these renters have no intention of becoming homeowners.

“The fact that a quarter of renters plan to never own a home indicates to us that the definition of the American Dream is changing, said John Kobs, CEO and co-founder of Apartment List, in a prepared statement. “While the resale market slowly recovers, it seems that more Americans are embracing renting for the long term. We will be keeping a close eye on how the next administration can improve the situation for renters around the US.”

Read - 25% of Renters Plan to Stay That Way - Daily News Article

Texas Manufacturing Outlook Survey via Dallas Fed

Texas factory activity increased in October, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, dipped from 10 to 7.9, indicating slightly slower growth.

Most other measures of current manufacturing activity also suggested growth in October, although new orders declined. The capacity utilization index edged up from 9.3 to 11.4, with more than one-quarter of manufacturers noting an increase. The shipments index held steady at 4.7, suggesting shipments rose at about the same pace as in September. The new orders index fell from 5.3 to –4.5, reaching its lowest level this year and indicating a decrease in demand.

Perceptions of general business conditions improved slightly in October. The general business activity index rose to 1.8, registering its first positive reading since June. The company outlook index was positive for the sixth month in a row and remained unchanged at 2.4.

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

Leasing Conversation vs. Leasing Presentation- Is there a difference? via Multifamily Blogs

Let’s be honest, anyone who is even mildly successful in leasing apartments is pretty good at conversing. We are always engaging in conversations, not just at the office but at company business meetings, local apartment association functions, sales meetings, at home, and on the weekend with friends.

Why do so many Leasing Professionals leave all that “conversation” practice and skill behind when they “present” to the potential resident?

A presentation is often a monologue—a verbal presentation given by a single person featuring a collection of ideas. A conversation is different; it opens the door to interaction, engagement, and influence. It is a dialogue.

Read more...CUSTOMER EXPERIENCE: Leasing Conversation vs. Leasing Presentation- Is there a difference? - Multifamily Blogs

Monday, October 29, 2012

Multifamily Apartments: Five Big Trends via Multifamily Insight Blog

What “big trends” are driving the multifamily industry? Forget about what’s next, this post explores what’s here. Now. It’s easy to get lost is the minutia of multifamily. We have daily operations to address while planning for next month, next quarter, next year. Following are five trends occurring in our industry that will be taking up more space in your email box and brain in coming years. Notwithstanding the fact that they are occurring as we speak…

1. Technology. Rapid technological advances cannot to be ignored. It’s imperative to be a “first adopter” in an attempt to keep pace. When a twelve year old can help Mommy find an apartment on their smart phone we need to be there; on mobile, on-line, with current information and availability.

Tech is part of our daily lives on every level from the food we eat to the units we lease. Technology allows us to “connect” with our customers broadly and specifically. From Living Social to Facebook to PayPal there is no getting around greater forthcoming integration into the multifamily business. Carve out your niche here and own it. Note that this cannot be 100% outsourced. Someone in house must know where all the wires are located.

Read more...Multifamily Apartments: Five Big Trends | Multifamily Insight Blog

Austin Apartment Market Still in Strong Shape via Property Management Insider

Austin’s apartment market is still in strong shape. But year-over-year rent growth levels eased in 3rd quarter, corresponding with a pickup in new supply – which will be an even bigger factor in the year ahead.

Watch video...Austin Apartment Market Still in Strong Shape | Property Management Insider

Keep Personally Identifiable Information Out of the Leasing Office via Property Management Insider

The protection and privacy of a prospect’s or resident’s personally identifiable information should always be front of mind for apartment owners and managers. In July at RealWorld, the annual RealPage user conference, a collection of industry professionals shared tips and best practices for maintaining data security and protecting resident privacy.

One popular discussion point was that keeping personally identifiable information out of the apartment leasing office is the first step toward properly securing the privacy of this important data. Another was keeping close reigns on third-party vendors, like collectors, that share personally identifiable information.

All agreed that property owners relish the day when a prospective resident fills out that application for residency, but punching in that applicant’s social security, credit card or any other personally identifiable information can turn smiles to frowns if the data is violated. Sensitivity to personally identifiable information has heightened in recent years because of increased information technology and the potential for obtaining information through Internet breaches and network security.

Read more...Keep Personally Identifiable Information Out of the Leasing Office | Property Management Insider

Affordable Housing is Going Strong via

At last, good news for affordable housing! The market is strong and getting even stronger for properties with low rents, including apartments built with government funds for low-income families.

“We’re seeing vacancy rates at record lows,” says Bryan Keller, CPA, partner-in-charge of RubinBrown’s Real Estate Services Group, which has just released its 2012 Apartment Statistical Data report.

RubinBrown surveys a unique slice of the housing market—so don’t throw its data onto the pile with reports from other number crunchers like Reis Inc., and Axiometrics Inc. Of the 407 properties surveyed by RubinBrown, 372 were “government-assisted” housing, including 363 built with federal low-income housing tax credits. The other, unsubsidized apartment properties in the report are also relatively inexpensive, with average rents of $674 a month, which is even lower than the $721 a month average for the subsidized apartments.

Read more...Affordable Housing is Going Strong via

Office CMBS Leads the Way in New Defaults via

Newly defaulted office CMBS is the driver of a 30-basis-point increase in the cumulative default rate for conduit securitized loans, Fitch Ratings said Friday. The CDX for the $569 billion of fixed-rate CMBS issued between 1993 and today was 13.5% as of Sept. 30, according to the locally based ratings agency, with office loans comprising $1.4 billion of the $2.2 billion in newly delinquent CMBS during the third quarter and more than 50% of the year-to-date total.

The quarter-over-quarter increase was five bps higher than the uptick between Q1 and Q2 of this year. However, the YTD rise has fallen short of bearing out Fitch’s projections at the start of 2012, when the firm forecast a CDX of 14.5% by year’s end.

Read - Office CMBS Leads the Way in New Defaults - Daily News Article

Friday, October 26, 2012

SPECIAL REPORT: Gangbuster U.S. Economy Not Expected Until 2014 via Multi-Housing News Online

Strong economic growth will not return to the U.S. until 2014, forecasted Asieh Mansour, real estate economist and head of Americas Research for CBRE Inc.

Mansour was speaking at the 2012 CREW Network Convention & Marketplace that took place recently in Chicago.

Mansour said the United States is currently experiencing a weak economic recovery. She explained four conditions are causing, or will cause, a slow recovery domestically: upcoming fiscal austerity; deleveraging necessitated by the housing and credit bubbles; the poor U.S. job market; and the massive slowdown in the economy in China.

Read more...SPECIAL REPORT: Gangbuster U.S. Economy Not Expected Until 2014 | Multi-Housing News Online

PROFILE: BDO via Multi-Housing News Online

As consultant to real estate companies, Stuart Eisenberg may have a finger on the pulse of sentiments in the commercial property sector. And what he is sensing is that apartment investors may be starting to sit on the sidelines.

The global economic turmoil, the upcoming fiscal cliff, the fear of apartment overbuilding and the possibility of rising interest rates in future are all contributing to greater investor uncertainty, Eisenberg suggests. “To me, it does appear that investors are preferring to hold cash,” he says.

Eisenberg, who is partner and real estate industry practice leader at BDO USA LLP, says there are solid investment opportunities in multifamily housing today. All the same, he notes for example that investment sponsors are having greater difficulty creating real estate investment, including multifamily, funds today.

Read more...PROFILE: BDO | Multi-Housing News Online

Texas economic activity slowed again in August, Comerica says via Dallas Business Journal

Comerica Bank’s Texas Economic Activity Index dipped 0.3 points in August after increasing the month before.

August’s index level of 98.7 is 27 points, or 38 percent, above the index cyclical low of 71.7.

Since the beginning of the year, the index has averaged 97 points, seven points above the index average for all of 2011.

Read more...Texas economic activity slowed again in August, Comerica says - Dallas Business Journal

Study: New Mortgage Rules Could Shrink Lending by 20% via WSJ

Pending mortgage regulations could lock today’s tight lending standards in place and result in nearly 20% fewer mortgages being issued in the coming years, restraining home sales and construction, according to a new study.

The report from the American Action Forum, a center-right think tank, provides an estimate of the potential impact of three important mortgage regulations set to take effect next year:

* Higher bank capital standards under the Basel III agreement
* The “qualified mortgage” rule regulating ability-to-repay standards, which is part of the Dodd-Frank financial-overhaul law
* The “qualified residential mortgage” rule setting standards governing loans that are issued as securities, also part of Dodd-Frank.

Read more...Study: New Mortgage Rules Could Shrink Lending by 20% - Developments - WSJ

Thursday, October 25, 2012

USA Today Assails LEED System as a Sham via Multifamily Executive Magazine

USA Today took aim at the green building industry today with a special report that argues the U.S. Green Building Council–creator of the LEED system for rating buildings–"has helped thousands of developers win tax breaks and grants, charge higher rents, exceed local building restrictions and get expedited permitting by certifying them as 'green' under a system that often rewards minor, low-cost steps that have little or no proven environmental benefit."

Read more...USA Today Assails LEED System as a Sham - Green Building - Multifamily Executive Magazine

Top 10 Cities With Best Job Growth, Post-Recession via Multifamily Executive Magazine

CareerBuilder and EMSI's newest release of the top 10 locations with the most job growth includes some perennial favorites, like tech-heavy San Jose, Calif., Austin, and Raleigh, N.C. San Jose led all metros with a 7 percent increase since 2010. But there were some surprises as well: Phoenix and Detroit cracked the list, given just how bad things were two years ago (they started from a very low basis), while Oklahoma City and Salt Lake City have seen impressive growth as well.

Read more...Top 10 Cities With Best Job Growth, Post-Recession - Housing Data - Multifamily Executive Magazine

Real Estate Wealth Supports Texas Economy via the Blog of the Real Estate Center

Texas is wealthy, and real estate is a big reason.

Texas’ 2011 real estate wealth was valued at $1.6 trillion or $65,432 worth of real estate for every Texan, regardless of age. That’s up 86.7 percent from the $35,055 in 1997.

As a research economist with the Real Estate Center, I monitor the relative importance of the state’s real estate industry and the resulting wealth it creates. My latest article, “Texas Treasure,” is in the October issue of Tierra Grande magazine, REC’s flagship periodical.

Real estate is the state’s second largest industry. The 2011 Texas real estate industry accounted for 8.4 percent of the state’s gross domestic product (GDP). Only manufacturing at 14.7 percent of GDP is larger.

Read more...Real Estate Wealth Supports Texas Economy | the Blog of the Real Estate Center

At RealShare Apartments, Economy Is Focal Point for MF Observers via

Jobs and economic uncertainty were the buzzwords of the morning at the RealShare Apartments 2012 conference, taking place here today. More than 1,700 attendees gathered at the Westin Bonaventure Hotel to hear dozens of industry experts give their thoughts on the state of the multifamily market.

After a brief welcome from Michael Desiato, VP and group publisher of ALM’s Real Estate Media Group, Hessam Nadji took the stage to deliver a special presentation, “Can Apartments Withstand the Economic Headwinds?” the Marcus & Millichap SVP and managing director noted that the organic strength of economy—both corporate and consumer spending—is being held back by political uncertainty. But, he added, the foundation of economy in better shape. The US added 1.8 million jobs between September 2011 and Septeber 2012, though unfortunately the headlines were dominated by the debt and housing crises.

Demand is high and multifamily developers are ready to build, said Nadji, but equity for development is still very cautious and not readily available. “I don't think overbuilding is going to be a problem through 2014,” he said. Homebuying’s making a comeback as well, though he indicated it wouldn’t cause as much pressure on the rental market as it did in the last cycle. “There's enough demand for all types of housing.”

Read - At RealShare Apartments, Economy Is Focal Point for MF Observers - Daily News Article

Wednesday, October 24, 2012

Apartment Market Research Reveals Good News via

Third quarter 2012 results are encouraging for property managers and residential rental property owners nationwide. This trend has been ongoing now for over a year, and it’s not a surprise in lieu of the many challenges and expenses that potential home buyers face, including the ability to qualify for a mortgage. The industry leader in Apartment market research, Axiometrics Inc., recently released survey information and data that confirms the positive rental market trends in all regions of the country.

“The quarter was very steady at the national level,” they recently reported, “with each month’s performance similar to the pace of a year ago. Revenue growth, which combines the effective rent and occupancy growth into one number, measured 1.05% from the beginning to the end of the quarter. This compares to 1.08% over the same period last year.” An interesting anomaly was the effective rent rate decrease from August to September. During that brief period the effective rents actually decreased -0.03%, perhaps too microscopic to be in any way significant.

Read more...Apartment Market Research Reveals Good News |

Urban Land Institute Looks Toward 2020 and Beyond via EcoHome Magazine

During the Urban Land Institute (ULI) “Master-Planned Communities 2020: What Does the Future Look Like?” panel at the fall meeting in 2010, a panel of urbanists and developers drew conclusions on the future of the market, which needs to be addressed by those working in sustainable community planning and development. The points seem well reasoned and authoritative. We present them here as a provocative list that can stimulate our conversation here at Vision 2020. The summary comes from an article at ULI by John Martin.

• There will be more renters—both of single-family homes and other kinds of dwelling units—so developers need to figure out how to take advantage of the shift.

Read more...Urban Land Institute Looks Toward 2020 and Beyond - Green Communities, Land Planning - EcoHome Magazine

Texas a top U.S. energy producer and consumer via Dallas Business Journal

Texas is the No. 1 energy producer nationwide and ranks No. 6 for energy consumption per capita, a new analysis shows.

The state produces 15.3 percent of the nation’s energy, according to 2010 data the U.S. Energy Information Administration released this week. It also led the nation in U.S. marketed natural gas production, accounting for 28 percent in 2011, and in wind-powered generation capacity in 2010. It was the first state to reach 10,000 megawatts of wind capacity.

The EIA notes that Texas’ 26 petroleum refineries, which had a capacity of more than 4.7 million barrels of crude oil, accounted for 27 percent of total U.S. refining capacity in 2011.

Read more...Texas a top U.S. energy producer and consumer - Dallas Business Journal

Houston building permits Sept. 2012 via Real Estate Center of Texas A&M University

Permits for residential construction in the city of Houston grew faster than nonresidential construction in September 2012, according to the City of Houston’s Building Permit Department. Year-to-date total building permits are up 37.6 percent from $2.6 billion in the first three quarters of 2011 to $3.57 billion in the first three quarters 2012.

For the 12 months ending September 2012, building permits totaled $4.6 billion, a 40.2 percent increase over the $3.3 billion in permits issued during the 12 months ending September 2011.

Read more...Houston building permits Sept. 2012 via Real Estate Center of Texas A&M University

CMBS is Back via Commercial Property Executive

At its 2007 peak, the CMBS market reached $230 billion in sales. While we are a long way from that crest, the CMBS market has fought its way back: Wall Street banks report selling $1.25 billion during the week of Sept. 10 alone, and we are poised for $7 billion in new bonds in October. Issuance could hit $45 billion this year, partly because many loans written in 2007 are rolling over and are refinancing with new conduits. That total could rise to $58 billion in 2013 and $75 billion in 2014. Part of the issue is that there is a shortage of bonds in the market, since so much of the 2007 stock matured this year.

All of this is good news for the industry, because the simple truth is that we can’t function without CMBS. The bond market remains the principal way that developers and owners convert temporary financing (often three-year construction loans) into permanent financing. Typically, this is accomplished with conduit loans, which are converted into securities and sold to investors.

Read more...CMBS is Back | Commercial Property Executive

Tuesday, October 23, 2012

Great Recession creates 4.8 million renters via HousingWire

The United States added 4.8 million renters in the past six years while losing 1.7 million owner households as the dynamics of the real estate space changed in the wake of the 2008 financial meltdown, according to the Mortgage Bankers Association.

The market experienced additional changes in the first nine months of 2012, creating unexpected outcomes in the housing finance sector, prompting the MBA to alter its forecast for 2012.

In brief, the MBA revised its estimate for 2012 mortgage originations to $1.7 trillion, up from $1.4 trillion a year earlier. Still, the trade group predicts total originations will taper off to $1.3 trillion in 2013, eventually hitting $1.1 trillion in 2014. However, mortgage rates are expected to hover below 4% through the mid-part of next year.

Read more...HousingWire | Great Recession creates 4.8 million renters

Houston, Dallas Tops in Home Building via Real Estate Center at Texas A&M University

Houston and Dallas were the strongest home building markets in the nation for the year ending in August, according to a new report by John Burns Real Estate Consulting.

Houston had almost 27,000 single-family home building permits during that period. Dallas was second with 11,460 permits.

Also cracking the list of top 20 U.S. home building markets was Austin (sixth with 7,519 permits), Fort Worth (13th with 5,074 permits) and San Antonio (15th with 4,886 permits).

Meanwhile, the National Association of Home Builders reports that, nationally, housing production last month was at its highest level in over four years.

Read more...Houston, Dallas Tops in Home Building via Real Estate Center at Texas A&M University

DeMarco Shrinks Fannie-Freddie Without Help From Congress via Businessweek

The man with power over more than half of U.S. mortgages lives in a 1961 brick split-level house. There’s a basketball hoop in the driveway and a green Subaru Outback in the carport. The homes on Edward J. DeMarco’s block are so close that neighbors see into each other’s windows.

This surprised several dozen demonstrators, one in a vampire costume, who arrived at DeMarco’s residence in a middle- class Washington suburb last month to demand he quit his job as acting director of the Federal Housing Finance Agency.

“My home is better-looking than this,” said Catrese Tucker, a Massachusetts toll collector whose property is in foreclosure. “I don’t believe this is his home.”

As the overseer of mortgage giants Fannie Mae (FNMA ) and Freddie Mac, DeMarco has become the focus of ire from homeowners and lawmakers who want more aid for troubled borrowers, even as the two government-run companies subsist on taxpayer life support that now totals $190 billion.

Read more...DeMarco Shrinks Fannie-Freddie Without Help From Congress - Businessweek

Characteristics of Generation Y and Its Effect on Apartment Demand via Property Management Insider

At MPF Research, we are often asked: How can the U.S. apartment market record such strong demand given that employment growth has been lukewarm and that increasing numbers of Generation Y – the key demographic for the apartment industry – are living at home with Mom and Dad?

Recent apartment demand numbers have been far above what anyone likely would have predicted during the downturn in the economy. Since 2009, the U.S. apartment sector has absorbed nearly 800,000 units on net. The last time demand proved remotely comparable over a three-and-a-half year stretch was from 1997 to 2000. The difference, though, is that the U.S. employment market was in substantially better shape back then – expanding at an average annual rate of 2.4%. Since 2009, annual employment growth hasn’t topped 1.6%. That amounts to about 1 million fewer jobs being created per year, of late. And the share of Gen Y living at home with parents has grown from 19% to 24% over the last decade, according to a recent study.

So how can apartment demand be so strong given those headwinds? There are two major demographic trends at work.

Read more...Characteristics of Generation Y and Its Effect on Apartment Demand | Property Management Insider

NYU: LIHTC Requires More Subsidies via

Over the last 25 years, the federal Low Income Housing Tax Credit Program has created over 2.2 million units of affordable housing and remains the largest affordable housing program in the US. But new research is shedding light on the impact it has on multifamily owners/managers and tenants.

A study from the NYU Furman Center for Real Estate and Urban Policy and the Moelis Institute For Affordable Housing Policy finds that the Low Income Housing Tax Credit program serves a substantial number of households with incomes far lower than the program requires. According to the study, approximately 40% of LIHTC units house extremely low-income households with incomes below 30% of the area median income, even though program rules allow the developments to serve households with incomes up to 60% of the area median income.

Read - NYU: LIHTC Requires More Subsidies - Daily News Article

Monday, October 22, 2012

Axiometrics Reports Stable Occupancy and Effective Rent Growth for U.S. Apartment Market During September via NBC News

The U.S. apartment market finished the third quarter with an annual effective rent growth rate of 3.64% in September, while the occupancy rate climbed to 94.55%, according to Axiometrics Inc., the leading provider of apartment data and apartment market research. Revenue growth, which combines the effective rent and occupancy growth into one number, measured 1.05% from the beginning to the end of the third quarter, as compared to 1.08% over the same period in 2011.

New apartment supply coming online has yet to have a significant impact on pricing, though annual effective rent growth for the full third quarter was 3.7%, down from 4.0% in the second quarter. According to Axiometrics, during the third quarter more than 28,000 new units were introduced to the market, which was almost as many as were delivered in the first six months of the year combined (31,593).

Read more...Axiometrics Reports Stable Occupancy and Effective Rent Growth for U.S. Apartment Market During September - Business - Press Releases | NBC News

Three Texas real estate markets hit ULI list via Real Estate Center at Texas A&M University

The Urban Land Institute (ULI) and PwC US have released the 2013 Emerging Trends in Real Estate report. Three Texas markets — Austin, Houston, and Dallas-Fort Worth (DFW) — made ULI’s top ten markets to watch list.

Austin ranked No. 4. In 2013, Austin looks set to extend its trend of attracting individual and institutional investors alike. Expansion of commercial real estate in Austin looks likely with a population increase of 2.3 percent anticipated next year, pushed by the echo boomer demographic.

Read more...Three Texas real estate markets hit ULI list via Real Estate Center at Texas A&M University

RealtyTrac: 65% of housing markets worse off than in 2008 via HousingWire

Sixty-five percent of U.S. housing markets studied by RealtyTrac are worse off than they were four years ago, according to the Irvine, Calif.-based real estate research firm. The results of the survey arrive the same day as the final presidential debate and just weeks before the general election.

RealtyTrac measured five key housing metrics in 919 U.S. counties and discovered the majority are still suffering from falling average home prices, unemployment, and higher foreclosure inventories, foreclosure starts and distressed sales.

Read more...HousingWire | RealtyTrac: 65% of housing markets worse off than in 2008

CRE Recovery: Lumpy and Living With It via

The first year Saul Ewing held its Mid-Atlantic Real Estate Conference the mood, understandably, was grim. The year: 2009. The month: September. This year’s event, held last week, cleared that very low bar and then some, reports Howard Majev, the co-chair of the firm’s real estate practice and the planner of the conference. “People were much more optimistic and confident about the real estate market,” he tells “The general impression received is that although the commercial real estate markets aren't totally healthy, they've gained a lot of traction.”

Working the room in between sessions, Majev gathered that multifamily was leading the recovery (not that he didn’t know that already), that financing had become more available (ditto) and, in fact, that capital is chasing deals, especially those by larger institutional capital (ibid). The speakers provided similar insights, albeit with far more nuance.

Read - CRE Recovery: Lumpy and Living With It - Daily News Article

Friday, October 19, 2012

Slow But Steady in 2012 via

A third quarter report from Real Capital Analytics projects positive but slowing growth for the full year for 2012.

See Graph...Slow But Steady in 2012 via

Are Rising Rents Too Much of a Good Thing? via

It seems like such good news—apartment rents are rising faster than inflation. That means more profits for real estate investors.

But there’s also a risk. When rents rise faster than the paychecks of your residents, then that puts pressure on their budgets. Eventually they may look for other options. If you’ve carefully marketed your apartment community to a certain set of residents—say retirees or workers at the local hospital—it’s bad news for you if those people can longer afford to live there.

“Landlords need to be careful,” says Brad Doremus, senior analyst for data firm Reis, Inc., based in New York City. “They can’t raise rents forever or they come up against that budget constraint.” Property managers should worry about competition from new rental housing, cheaper rental housing and even for-sale housing. Eventually it will become clear to everyone that the for-sale housing market has bottomed and prices are rising, and residents paying sky-high rents will start looking seriously at homes or condominiums.

Read more...Are Rising Rents Too Much of a Good Thing? via

Texas unemployment dropped to 6.8 percent in September via Dallas Business Journal

The Texas seasonally adjusted unemployment rate dropped to 6.8 percent in September, down from 7.1 percent in August and from 7.9 percent in September 2011, the Texas Workforce Commission reported Friday.

Texas’ September unemployment rate was below the national rate of 7.8 percent. The Dallas-Fort Worth-Arlington metropolitan statistical area posted an unemployment rate of 6.3 percent in September, the commission said.

Read more...Texas unemployment dropped to 6.8 percent in September - Dallas Business Journal

ENERGY STAR in the Apartment Industry is Good Business via Property Management Insider

In today’s environmentally conscious world, making a statement about energy management or, better yet, having an ENERGY STAR® label can elevate an apartment community to a better light when potential residents are seeking a new place to live or at lease renewal time.

However, under current Environmental Protection Agency (EPA) guidelines, only certain multifamily properties – specifically high rises – are eligible to obtain an ENERGY STAR rating, that little blue sticker synonymous with lower electric and water consumption. But non-high-rise properties may take advantage of EPA’s energy management program just by enrolling, says Steve Heinz, founder and CEO of EnergyCap, which publishes energy management software.

Read more...ENERGY STAR in the Apartment Industry is Good Business | Property Management Insider

Thursday, October 18, 2012

CMBS Issuance Seen Rising More Than 40% in 2013 via NASDAQ

Some commercial mortgage-backed securities lenders and issuers on Thursday predicted the largest jump in issuance in six years for 2013 as low rates and bond risk premiums encourage more borrowing.

Representatives from Blackstone Group LP (BX), LNR Property and Morgan Stanley (MS) said CMBS volume could climb more than 40% from this year, to as much as $65 billion, as they outlined the market's progress at the Talmage 2012 Credit Conference in New York.

Issuance of privately-issued CMBS in 2012 is expected to top out near $46 billion, compared with $33 billion in 2011, according to Commercial Mortgage Alert.

Read more...CMBS Issuance Seen Rising More Than 40% in 2013 via NASDAQ

Social-Media Strategies - Marketing via Multifamily Executive Magazine

Far and away, Gen Y is the most technologically plugged-in generation of any demographic.

A recent survey from Houston-based J Turner Research found that Gen Y residents have the highest percentage of laptops and smart phones, at 89 percent and 88 percent, respectively. And the same report, Trends in Resident Technology & Communication Preferences, shows they’re using these devices to research neighborhood restaurants and events, perhaps even on your property’s Facebook page.

But when it comes to managing your company’s online reputation, there’s a lot more to manage than just social media if you want to attract Gen Y renters.

Read more...Social-Media Strategies - Marketing - Multifamily Executive Magazine survey: Apartment vacancies no longer caused primarily by bad economy via REJblog

The latest Property Manager Survey from offers some interesting tidbits about the strength of the national economy: First, apartment vacancies today are no longer being driven primarily by job losses. Secondly, landlords feel comfortable enough in the national economy to continue raising rents at their apartment communities.

According to the survey, the main reason for apartment vacancies today is no longer unemployment. Instead, consumers are buying homes and relocating to new cities in greater numbers, and this has become the main reason for vacancies in apartment communities across the country.

Read survey: Apartment vacancies no longer caused primarily by bad economy | REJblog

Houston Economic Update October 2012 via FRB of Dallas

Economic activity in the Houston metropolitan area, as measured by the Federal Reserve Bank of Dallas business-cycle index, grew at an annualized rate of 5.47 percent in August, and July growth was revised up significantly from 1.5 percent to 4 percent. Houston’s connection to the global economy does pose some risks as expected slowdowns materialize around the world, but trends in hydrocarbon industries and real estate continue to drive a diversity of economic activity in the region. Thus, the outlook for Houston remains guardedly positive.

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

Multifamily Permits Jump 20 Percent, Highest Level in 4 Years via Multifamily Executive Magazine

The housing construction numbers in September provided a glimmer of hope at an impending recovery for the single-family housing market. But don’t be deceived. Multifamily still reigns supreme according to the latest data from the U.S. Commerce Department.

While single-family construction enjoyed an 11 percent bump in production in September, multifamily hit a home run with a 25 percent increase in new starts. And permits issued in September echoed the same good fortune for multifamily.

Read more...Multifamily Permits Jump 20 Percent, Highest Level in 4 Years - Permitting - Multifamily Executive Magazine

Wednesday, October 17, 2012

Economists Offer 2013 Commercial Real Estate Outlook via CCIM Institute

“I don’t think we’ll see another recession,” said Mark G. Dotzour, chief economist and director of research at Texas A&M University at yesterday’s CCIM Live! economic panel luncheon. “We have too much pent up demand.”

Dotzour had the most optimistic outlook of the three economists on the panel. He cited such factors as the uptick in U.S. household net worth, exploding Internet sales, and the decline of household debt service payments as indications of an economic recovery.

Read more...Economists Offer 2013 Commercial Real Estate Outlook | CCIM Institute

Get the Hook: Five Things Buyers and Sellers Need to Know via Commercial Property Executive

When writer’s block sets in, I have a sure-fire remedy: Get the Hook. Not the giant hook used by vaudeville theater owners to drag bad performers off the stage. I’m referring to my colleague, Hook McCullough, managing director of the national investment properties group at Newmark Grubb Knight Frank. I asked Hook the following question: What are the five most important trends/issues/things that commercial property buyers and sellers need to keep in mind through the remainder of 2012 and the first half of 2013. Here is his response:

The fate of the capital gains tax is top of mind for buyers and sellers. Many sellers have accelerated their sales to close by year-end to be assured of maintaining the favorable 15 percent rate. Common wisdom is that if President Obama is re-elected, the rate is likely to increase. But the massive debt may require both parties to revisit this issue within the next few years no matter who is elected.

Read more...Get the Hook: Five Things Buyers and Sellers Need to Know | Commercial Property Executive

Emerging Trends Report: “Recovery Anchored in Uncertainty” in 2013 via

Commercial real estate’s slow recovery will continue in 2013, according to the Emerging Trends in Real Estate 2013 report released today by PwC and the Urban Land Institute at the ULI Fall Conference taking place in Denver.

The report, generated by surveys and interviews with 900 real estate investors, developers, service providers and lenders, shows expectations that trends that have materialized in recent years will continue in 2013. Namely, gateway cities like San Francisco, New York, Boston and Washington, D.C. continue to be the best bets for investment and development—although there are fledgling concerns that pricing has gotten too heated. As a result, secondary cities may receive more of a boost in the coming months. But growth everywhere will continue to be tepid with gradual improvements in occupancies, rents and values for all property types.

Read more...Emerging Trends Report: “Recovery Anchored in Uncertainty” in 2013 via

Housing recovery relies on continued government support via HousingWire

The federal government's grip on the nation's housing finance will remain both a hug and a stranglehold, at least for the near term.

Despite strengths in the housing recovery, a sudden withdrawal of the government out of the market would prove catastrophic. The truth is, however, that the United States couldn't get out of the housing market, even if it wanted to.

"Several factors are delaying the government from stepping away," said Standard & Poor's credit analyst Matthew Albrecht. "Despite recent signs that home prices are stabilizing in some areas, the housing market is still dealing with an overhang of inventory, high nonperforming loan rates, and few qualified new borrowers."

Read more...HousingWire | Housing recovery relies on continued government support

Texas leads the nation in total personal income via Dallas Business Journal

Economic expansion in Texas is just like the state. It's big.

According to On Numbers, a feature of American City Business Journals, total personal income in Texas reached $1.07 trillion in the second quarter of this year based on data from the U.S. Census Bureau Economic Analysis.

That's a 71 percent increase from the state's corresponding total from 10 years ago, On Numbers said.

Read more...Texas leads the nation in total personal income - Dallas Business Journal

The Top Ten Points to Watch for in Commercial Real Estate Contracts | Trenam Kemker via JDSupra

With today’s post we begin a new series on important points to watch in commercial real estate purchase and sale agreements. Admittedly, “top ten” countdowns are a little arbitrary, but when our clients send us contracts to review for their interest, whether as buyers or seller, the subjects on this list are always at the forefront. We’ll devote an article to each subject, in no particular rank of importance.

Here’s our “Top Ten”:

Who are the parties?
When do we close?
What’s the property and how good is its title?
What’s the purchase price and how is it paid?
What are the transaction expenses and who’s paying them?
What kind of disclosures or warranties am I making (or receiving) about the property and what happens If they’re false?
What happens if I can’t close the deal and break the contract?
How do I assess and limit the risks of owning the property?
How much work on the property needs to be performed before (or after) closing?
How do I obtain useful and reliable information about tenants or other parties on the Property?

Read more...The Top Ten Points to Watch for in Commercial Real Estate Contracts | Trenam Kemker - JDSupra

Forecast: Real Estate to ‘Grind It Out’ via WSJ

Virtually every leg of the real-estate sector will show some improvement in the coming year, but a still-slow economic recovery marked by tepid job and income growth will continue to weigh on the sector, according to the Urban Land Institute’s 2013 forecast released today at the group’s fall meeting here.

“What drives real estate is jobs. Our global economy has been recovering slowly,” said Stephen Blank, a senior fellow at the Urban Land Institute, a nonprofit concerned with land development issues. “We’re going to grind it out.”

The Urban Land Institute’s Emerging Trends forecast — a survey of some 900 of the group’s 30,000 members — is prepared with PwC and has been released annually for 34 years. The report, which covers a broad swath of the real estate market including the housing, office and industrial sectors, makes predictions about what will happen with real estate in the coming year. Among them:

Read more...Forecast: Real Estate to ‘Grind It Out’ - Developments - WSJ

Commentary: A Capitalist’s View of Affordable Housing via Affordable Housing Finance

True confession: I’m an unabashed free-market capitalist. I have a bachelor of science degree in economics. And most people who know me are well aware of my conservative tendencies. Yet I’m a huge supporter of affordable housing. I’ve heard the conventional wisdom that affordable housing tends to be advocated by those on the liberal side of the political spectrum. So what gives? How can such a conservative free-market guy have strong positive beliefs about affordable housing?

For purposes of this discussion, I want to focus on the Sec. 42 low-income housing tax credit (LIHTC) program. The Department of Housing and Urban Development is a different story and one to tackle in another article. For starters I’d like to offer some gentle criticism of Congress for its choice of nomenclature when establishing the program as a part of the Tax Reform Act of 1986. Why couldn’t it have been called the Sec. 42 affordable housing tax credit? Using the term “low-income” triggers negative connotations in many quarters. We’ve been stuck with this moniker from the beginning, and it can be a tough sell in smaller and rural communities. Still, the program has been able to garner bipartisan support.

Read more...Commentary: A Capitalist’s View of Affordable Housing - Affordable Housing Finance - News

Tuesday, October 16, 2012

Extension of Tax Deduction for Retrofitting Commercial Buildings Introduced in Senate via Multifamily Executive Magazine

Four U.S. senators are seeking to extend an existing tax deduction for energy-efficient retrofits of commercial and multifamily buildings. The Energy Efficient Commercial Buildings Deduction (Section 179D) is scheduled to expire at the end of 2013.

Senators Dianne Feinstein (D-Calif.), Olympia Snowe (R-Maine), Jeff Bingaman (D-N.M.), and Ben Cardin (D-Md.) introduced the Commercial Building Modernization Act (S. 3591) on Sept. 27, which proposed to extend the Section 179D tax deduction through 2016, while modifying the deduction to target the retrofits of existing commercial buildings.

Read more...Extension of Tax Deduction for Retrofitting Commercial Buildings Introduced in Senate - Legislation - Multifamily Executive Magazine

Three Up-and-Coming Apartment Investment Markets via Property Management Insider

At the recent Multifamily Executive magazine apartment sector conference, I – as usual – was quizzed on the under-the-radar-screen, fantastic apartment market performer that no one is targeting. The truth is that there’s no place that meets that particular description, if for no reason other than performance transparency makes it pretty much impossible for any market to do well without lots of people knowing about it.

But there are a few locales that definitely feature expanding profiles during this market cycle.

Read more...Three Up-and-Coming Apartment Investment Markets | Property Management Insider

NAREIT Explores 2012 Multifamily REITs via Multi-Housing News Online

According to a recent report from the National Association of Real Estate Investment Trusts (NAREIT), the U.S. REIT market as a whole underperformed in the third quarter of 2012, but outpaced the broader market in the first nine months of the year.

“The fundamentals behind the multifamily story are very much in place. We went from a market where in the housing market crisis, the rental market received all the new demand that was coming in,” Calvin Schnure, vice president of research and industry information, NAREIT, tells MHN. “What we’re seeing now is there’s still a huge pent-up demand, there are many people who remain living with roommates or doubled up in one way or another.”

Multifamily construction is tied to the economy, which Schnure says will lead to a strong demand.

Read more...NAREIT Explores 2012 Multifamily REITs | Multi-Housing News Online

Protecting Your Apartment Community's Online Reputation Requires More Than Just Playing Defense via

Matthew Kilmurry, director of marketing at Arlington, Va. based AvalonBay Communities watched the Sears delivery guy lug the appliance into his home and set it up. But his job wasn’t quite done yet. The worker had one more task—he asked Kilmurry to give him a five-star rating for service when he received a customer service follow-up call.

Kilmurry was more than happy to oblige. And, he thinks the apartment industry should follow Sears’ example. “Other industries have led the way on this,” he says. “We don’t have to be shy about telling people how important it is to us that we have strong ratings online.”

If apartment owners aren’t more proactive revealing that they have happy customers with positive reviews and responding quickly to bad reviews, they could be in trouble. Kilmurry says about 65 percent his residents look at online reviews. And with things like the incorporation of Google Places into Google searches putting company ratings and reviews directly in front of potential residents, reputation management means more than ever. “Prospects are taking a serious look at reviews and it’s impacting us,” Kilmurry says.

Read more...Protecting Your Apartment Community's Online Reputation Requires More Than Just Playing Defense - Multifamily News Headlines – Breaking News, Stories, Top Headlines ::

GAO Issues Report Highlighting GSEs’ Multifamily Programs Strong Performance via NMHC

On Oct. 9, 2012, the General Accountability Office (GAO) issued a report on the multifamily mortgage financing activities of Fannie Mae and Freddie Mac. The 98-page report provides data and information about the multifamily mortgage purchase activities of the two government-sponsored enterprises (GSEs), compares and contrasts their activities to private mortgage capital serving the apartment sector and highlights their strong credit performance and financing of workforce and affordable housing.

The report confirms NMHC/NAA’s main advocacy message: Fannie and Freddie provide a critical source of liquidity for the industry, serving a wide range of apartment markets, borrowers and properties.

The report also emphasizes their capacity to backstop the multifamily finance system, providing critical debt capital when private capital markets pullback on lending and also filling the gaps when the markets are fully active. The report notes that during normal market conditions, institutional lenders such as banks, life insurance companies and the private-label securities market dominate the apartment finance market, accounting for more than 70 percent of all mortgage debt originated each year. However, when the financial markets retreat, Fannie and Freddie have the capacity to accommodate borrower needs.

Read more...GAO Issues Report Highlighting GSEs’ Multifamily Programs Strong Performance via NMHC

Monday, October 15, 2012

San Antonio Multifamily Market Report via

San Antonio’s multifamily market has historically been exempt from the fluctuations typical of other Texas cities. While San Antonio has had its share of new deliveries over the years, the multifamily stock has not increased in step with its Texas contemporaries. The traditional engines of the city-- hospitality, health care and the military--provide a rock-solid foundation, but do not offer the types of high-paying wages that drive rent growth and new construction. New construction has also been inhibited by a lack of institutional capital flowing to San Antonio because it was perceived as a “low growth” market.

Things, however, are changing. Job growth in industries such as energy, manufacturing, and the financial sector are drawing families to the region like never before, just as long-time San Antonio organizations such as USAA, the Medical Center and the University of Texas—San Antonio (UTSA) continue to expand. As a result of new jobs and a nationwide regression of home ownership rates to more historic levels, San Antonio’s multifamily market is seeing a rapid increase in demand. Developers, both local and national, have begun planning new developments... As of August 2012, San Antonio multifamily properties boast an overall occupancy rate of 92.9 percent. As new units become available, the marketplace swiftly absorbs them: in the past 12 months, the market absorbed 3,048 of 3,338 delivered rental units. With such growth and economic diversification, San Antonio is positioning itself to compete with Texas’ other primary markets for the investment dollars of institutional capital.

Read more...San Antonio Multifamily Market Report via

Friday, October 12, 2012

Best Practices for Submitting a Complete Loan Package to Freddie Mac via Freddie Mac

2012 has been an exceptionally busy year for business, and the strong market and demand only underscore the need and focus on efficiency. Efficiency during the underwriting process is based on the quality of your packages.

Freddie Mac Multifamily volume has increased [PDF] nearly 110% in two years, from $9.1 billion in the first half of 2010 to $19.3 billion in through July of 2012.

Taking into consideration this increased volume, we ask for your focus on the following needs during the quote and underwriting process:

Read more...Best Practices for Submitting a Complete Loan Package to Freddie Mac

ALN Monthly Multifamily Newsletter October 2012 via

ALN Data just released their September 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 must read from a great provider of apartment data.

Read more...ALN Monthly Newsletter September 2012

U.S. CMBS delinquencies fall again;large loans pay off despite delays via Reuters

U.S. CMBS delinquencies declined for the fourth straight month, according to the latest index results from Fitch Ratings.

CMBS late-pays fell two basis points (bps) last month to 8.37% from 8.39% in August. Several notable loans were also paid in full this past month. While encouraging on the surface, a closer look reveals that they were paid off only after refinancing delays.

Read more...TEXT-Fitch:U.S. CMBS delinquencies fall again;large loans pay off despite delays | Reuters

Thursday, October 11, 2012

Multifamily Execs Unafraid of Healthier For-Sale Market via Multifamily Executive Magazine

With interest rates at historic lows, it’s easy to believe that homeownership will encroach upon the success of the multifamily industry, which has fared quite well during the recession.

But homeownership is still becoming less of an option for plenty Americans, and industry veterans are doubtful that folks will be lured into it to the point where it would hurt multifamily owners, according to panelists at the recent Multifamily Executive Conference.

“There will be an uptick of people buying homes, but it’ll far be outweighed by folks coming in with the renter-by-choice mindset,” says Justin Marshall, senior vice president of property operations at Fogelman Management Group. “They want location. They don’t feel like they need to buy a home to validate that they’ve made it or they’re all grown up. So I don’t see it as a significant threat.”

Read more...Multifamily Execs Unafraid of Healthier For-Sale Market - Housing Trends - Multifamily Executive Magazine

The Nation's Hottest Secondary Markets via Multifamily Executive Magazine

We all know about the allure of the “sexy six” markets—New York, Los Angeles, San Francisco, Boston, Washington, D.C., and Seattle. But there are plenty of less sexy metros that offer tremendous upside, according to panelists at the "Beyond the Sexy Six" panel at the recent Multifamily Executive Conference.

While the sexy six markets remain the biggest cash cows, the safest bets, for the multifamily industry, there are attractive metros just trailing behind these giants in the rental boom. And according to Greg Willett, vice president of research and analysis at MPF Research, they are not all that far behind the big six.

Read more...The Nation's Hottest Secondary Markets - Apartment Trends - Multifamily Executive Magazine

MARKET SNAPSHOT: Employment Boom Continues Across D/FW Metroplex, Leading to Tight Apartment Conditions and Renewed Construction via Multi-Housing News Online

The Dallas-Fort Worth metro area saw job gains of nearly three percent this year, which is far above the national average of 1.7 percent. According to Marcus & Millichap, the biggest gains came in the trade, transportation and utilities sector, which is likely to continue to make strides well into 2013. Additionally, residential development is fueling retail expansion and local warehouse/distribution operations, indicating that overall economic growth is likely to continue into the near future.

The recent job gains have led to a considerable plunge in vacancies over the past year, with metrowide vacancy falling 180 basis points to 5.5 percent. In keeping with trends in other markets, Class A products saw even lower vacancy—at 4.7 percent. Class B/C units, however, saw the most dramatic year-over-year change, with the respective rate falling 220 basis points to 6.4 percent.

Read more...MARKET SNAPSHOT: Employment Boom Continues Across D/FW Metroplex, Leading to Tight Apartment Conditions and Renewed Construction | Multi-Housing News Online

New Report: 1 in 8 Banks Fail Stress Test via Wall St. Cheat Sheet

October marks the four year anniversary of the Troubled Asset Relief Program that was voted and approved by Congress. In addition to TARP, several monetary easing programs from the Federal Reserve have been launched in order to prop up asset prices and keep the status quo of the financial system. However, a new report reinforces the belief among many that the system is still on thin ice and nothing has truly been resolved.

Trepp, a leading provider of information and analytics to the banking markets, recently released its first Capital Adequacy Stress Test Report of U.S. banks. The New York based firm used its model to analyze and evaluate stressful conditions of balance sheets and income statements of more than 6,000 domestic banks. Trepp’s model is inspired by the framework used by the Federal Reserve’s Stress Testing of the 19 largest banking institutions earlier this year. It combines data from each bank with dramatic adverse inputs to produce “what-if” scenarios for earnings, capital and asset performance for a nine quarter projection period. The outcomes were not comforting to say the least.

Read more...New Report: 1 in 8 Banks Fail Stress Test | Wall St. Cheat Sheet

Wednesday, October 10, 2012

Dallas Beige Book October 10, 2012 via Dallas Fed

The Eleventh District economy expanded at a moderate pace over the past six weeks. Energy activity remained strong, and construction and real estate activity picked up as housing demand strengthened. Demand for business services improved slightly, and transportation services activity continued to expand. Reports on manufacturing activity were mixed. Growth in retail and auto sales slowed over the reporting period, but Eleventh District sales continued to outperform the national average, according to respondents. Lenders noted steady loan demand. Agricultural conditions improved slightly. Price and wage pressures were modest over the reporting period, and employment levels continued to edge up. Many respondents across industries said continued uncertainty about upcoming elections was clouding outlooks.

Most reporting firms said prices were steady. Several contacts in the transportation services industry noted higher diesel prices led to higher costs. Shipping firms expect higher ground and air prices as a result. Airline industry contacts noted that business travelers were very price sensitive and soft demand was keeping a lid on fares. Food and cattle producers noted price increases due to continued commodity price pressures.

Read more...Dallas Beige Book October 10, 2012 - Dallas Fed

Ignoring These Signs of Illegal Activity Can Cost You by Mindy Sharp via

I’ll admit it. One of the most exciting parts of my life as a Property Manager on a Section 8 property was getting involved in the drug busts. It was an adrenaline rush like no other, no pun intended. Part of being a Manager on any property in any community is to provide decent, safe and sanitary apartment homes for our Residents. And, yes, I call the people who live in my communities “Residents” and not Tenants simply because everyone deserves to be treated respectfully. It is also a mindset. We must adopt the notion that people want to live long term, or at least as long as necessary, willingly in our apartment communities. This will reduce turnover costs and promote a more harmonious living environment for our Residents. We must believe that there is value in creating a warm, nurturing home atmosphere for our Residents. If we are successful, they will stay longer; they will take better care of their apartment homes, and thus the property.

You never want someone to feel bad about where they came from or what their current circumstances in life may be. You want to uplift your Residents’ spirits and promote a better lifestyle. If we can impart this mindset to our Residents, they in turn will believe in themselves more and become contributing members of our communities. At least this is my personal motto.

Read more...Ignoring These Signs of Illegal Activity Can Cost You by Mindy Sharp via

Multifamily vacancy rates tick down, rents up 0.8% in Q3 via SNL

One day after releasing third-quarter office vacancy rates data, Reis Inc. reported that U.S. apartment vacancy rates moved to 4.6% in the third quarter, down slightly from vacancy of 4.7% in the second quarter and 100 basis points below the figures reported for the third quarter of 2011.

Median occupancy for SNL-covered U.S. multifamily properties moved to 96.0% in the second quarter, up from 95.4% in the first quarter. Median occupancy for this group of assets has hovered between 95% and 96% since 2010. Based on the commercial apartment vacancy figures reported by Reis, one can expect a slight improvement in the median for the third quarter figures are disclosed in the upcoming earnings season.

Reis also reported that average third-quarter asking rent rose 0.8% from the second quarter to $1,090. According to Reuters, Reis stated this increase in average rent is marginally less than increases in prior quarters.

Read more...SNL: Data Dispatch: Multifamily vacancy rates tick down, rents up 0.8% in Q3 | SNL

Nebraska publication shows how to deter bed bugs via Texas A&M AgriLife

The University of Nebraska’s Integrated Pest Management program puts out excellent, practical materials on pest control. Their newest publication is an online magazine on the subject of managing bed bugs. I especially liked one of the videos included in the magazine showing how to protect your bed and use mattress encasements to discourage bed bugs. This video complements a blog post I wrote earlier the summer on first aid for bed bugs.

If you find yourself in the unfortunate position of having bed bugs, I always recommend calling a professional. But if you can’t afford professional treatment, or if you want to supplement the treatment provided by your apartment complex, this video is well worth watching and putting into practice.

Read more...Nebraska publication shows how to deter bed bugs Texas A&M AgriLife

California Energy Commission Adopts Revised Energy-Efficient Requirements for New Commercial Construction via NREI Readers Write

California continues to lead the way when it comes to sustainable building and energy efficiency standards. Recently, the California Energy Commission (CEC) approved new energy-efficient requirements applicable to newly constructed commercial buildings, as well as additions and alterations to existing buildings, are scheduled to take effect January 1, 2014. Referred to as the “2013 Building Energy Efficiency Standards” (2013 Standards), they promise to make newly constructed and/or altered buildings in California the most energy efficient in the nation.

Since the first such standards were adopted in 1977, CEC’s Building Efficiency Standards are estimated to have saved Californians more than $66 billion in electricity and natural gas costs through the use of energy efficient building and appliance standards, and have helped protect the environment by reducing more than 250 million metric tons of greenhouse gas emissions. The Standards are revised approximately every three years to implement new policy directives and technology. Over time, the Standards have implemented developments in energy-saving technology such as better windows, insulation, air conditioning and other features that reduce energy consumption in homes and businesses.

Read more...California Energy Commission Adopts Revised Energy-Efficient Requirements for New Commercial Construction | NREI Readers Write

Interest Rates: 'The Elephant in the Room' via

While political and economic uncertainty generally are taking a toll on investment sales activity, no factor is creating more sleeplessness than what will happen to interest rates. The future course of interest rates—how soon, how rapidly and how far they rise from the current historically low rates—is “the elephant in the room,” panelist Warren De Haan, chief originations officer and managing director at SPT Management LLC, told a RealShare New York audience Tuesday. For his part, Michael Cohen, president of the tri-state region for Colliers International, foresaw a “continued conspiracy” on the part of the Federal Reserve to keep interest rates low for the time being, regardless of who’s elected President next month.

All of the panelists during Tuesday’s “Transactions Outlook” panel at the Grand Hyatt in Midtown, moderated by Faith Hope Consolo, chairman of the retail group at Prudential Douglas Elliman, had plenty to say about government’s influence on the outlook for either sales or leasing. Patrick Robinson, president of the Northeast region at Transwestern, said we’re currently seeing “the calm before the storm” that may set in with election results. Cohen said that when it comes to the effects that the legislative/regulatory environment has on CRE, “the devil is in the details”—and there are few details available.

Read - Interest Rates: 'The Elephant in the Room' - Daily News Article

Fannie Mae Supports the Multifamily Market with Consistent Issuance in the Third Quarter of 2012 via

Fannie Mae announced that the company issued approximately $8.5 billion of multifamily MBS in the third quarter of 2012, backed by new multifamily loans delivered by our lenders. Year-to-date issuance is $22.3 billion. Fannie Mae also resecuritized $4.0 billion of DUS MBS through its Fannie Mae Guaranteed Multifamily Structures (Fannie Mae GeMS™) program in the third quarter.

"A protracted, low interest rate environment has kept the borrowing rate below 4 percent, and consequently, originations have been robust," said Kimberly Johnson, Fannie Mae Vice President of Multifamily Capital Markets.

Read more...Fannie Mae Supports the Multifamily Market with Consistent Issuance in the Third Quarter of 2012 - Multifamily News Headlines – Breaking News, Stories, Top Headlines ::

'via Blog this'

Tuesday, October 9, 2012

I.M.F. Lowers Its Forecast for Global Growth via

The International Monetary Fund is cutting its global economic forecasts yet again, calling the risks of a slowdown “alarmingly high,” primarily because of policy uncertainty in the United States and Europe.

It foresees global growth of 3.3 percent in 2012 and 3.6 percent in 2013, down from 3.5 percent this year and 3.9 percent next year when it made its last report in July. New estimates suggest a 15 percent chance of recession in the United States next year, 25 percent in Japan and above 80 percent in the euro area.

Read more...I.M.F. Lowers Its Forecast for Global Growth -

Tax Foundation ranks Texas 9th for taxes on businesses via Dallas Business Journal

Texas ranks ninth in the Tax Foundation’s annual State Business Tax Climate Index.

The index compares the states in five areas of taxation that impact business: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property.

Texas has no individual income tax. Sales tax is 6.25 percent, and Texas takes in $1,475 in property tax collections per capita.

Read more...Tax Foundation ranks Texas 9th for taxes on businesses - Dallas Business Journal

Fannie Mae finds increased homebuyer faith in housing recovery via HousingWire

Sixty-nine percent of the consumers answering Fannie Mae's latest housing survey said they would choose to buy a home over renting if they had to move in the coming months.

Fannie Mae, which polled 1,000 consumers for its September survey, said that figure is equal to the June level and the highest point reached in the survey's existence, suggesting an overall turnaround in consumer sentiment when it comes to housing.

"Consumers are showing increasing faith in the nascent housing recovery," said Doug Duncan, senior vice president and chief economist of Fannie Mae. "Home price change expectations have remained positive for 11 straight months, and the share expecting home price declines has stabilized at a survey low of 11%."

Read more...HousingWire | Fannie Mae finds increased homebuyer faith in housing recovery

Multifamily Devaluation (When Pigs Fly) via Multifamily Insight Blog

Pigs don’t fly and functional multifamily assets seldom trade at a significant discount to replacement costs. Soon after TARP (Troubled Asset Recovery Program) was implemented in 2008 the sharks circled eying bundles of multifamily assets presumed to hit the market at distressed prices… fire sale prices. The sale never happened. Why? ‘Because pigs don’t fly.

Why is it so hard to devalue multifamily assets? One reason is their popularity- the asset class has legs. Thus, even an upside down owner believes to their core that valuations will return “any minute” (note to self; market timing never works- see Gartman Interest Rate Observer)

Read more...Multifamily Devaluation (When Pigs Fly) | Multifamily Insight Blog

Monday, October 8, 2012

Rents are Surging in Houston Apartment Market via Property Management Insider

All across the country, apartment rent growth levels are easing. But not in Houston, where the booming local economy is finally translating to some very significant rent growth.

Read more...Rents are Surging in Houston Apartment Market | Property Management Insider

Apartment Performance Slowed in Q3 via

The apartment sector has lost some of the momentum that it showed earlier in the year, according to a recent third-quarter report from Reis Inc., while the office and retail sectors remained sluggish.

“We are starting to see the first indications of a bit of fatigue in the apartment market,” said Ryan Severino, senior economist with Reis. “We’re not seeing the vacancy compression that we once saw.”

The national vacancy rate inched down from 4.7 percent to 4.6 percent, the slowest rate of improvement since the recovery began in early 2010, according to the report.

Read more...Apartment Performance Slowed in Q3 via

Houston construction contracts August 2012 via Real Estate Center at Texas A&M University

Contracts in the Houston metropolitan area for future residential construction grew 23.5 percent for August 2012 compared to August 2011, while nonresidential contracts grew 44.4 percent and total construction increased 30.4 percent, according to McGraw Hill Construction.

Year to date, more than $7.02 billion in total contracts have been awarded, up 15.8 percent from $6.06 billion awarded year to date as of August 2011.

Residential contracts totaled $4.65 billion from January 2012 through August 2012, up 32.4 percent from $3.52 billion from January 2011 through August 2011.

Read more...Houston construction contracts August 2012 via Real Estate Center at Texas A&M University

Green Real Estate Earning Profits Not Just Kudos via NREI Readers Write


Sustainability trends have changed the real estate industry, but the cost of ‘green’ and LEED-certified real estate can be tough to swallow for developers and investors. Yet the landscape has changed while most of us were away at the recession: According to a slew of recent research, companies are showing that, rather than an earnings-drag, sustainably-designed properties can be a real boon that builds brand, differentiates from the competition – and makes profits.

Sustainability measures and monikers are proliferating in the real estate industry, beyond the pioneering Leadership in Energy and Environmental Development from the USGBC as well as the Energy Star system that’s expanded from its original focus on appliances to include entire buildings. Among the newer measures are the Green Building Challenge, Net-Zero Energy buildings, and the University of Maastricht–sponsored Global Real Estate Sustainability Benchmark, which is gaining international attention, including from NAREIT and other US organizations. Just this past April, the American Institute of Architects endorsed the International Green Construction Code, seeking a global standard. On the investment side, Responsible Property Investing (RPI) is a tenet of “creating value through improving the economic, social, and environmental profile of the investments,” and includes leading real estate funds among its followers.

Read more...Green Real Estate Earning Profits Not Just Kudos | NREI Readers Write

Friday, October 5, 2012

CMBS investors decry S&P changes via IFRAsia

Some investors are grousing that Standard & Poor’s recently re-tooled ratings criteria for US CMBS transactions revise the calculation of a key credit metric in such a way as to relax ratings standards in order to help the agency win back market share.

S&P is using lower capitalisation rates than before, abandoning its previous “stressed” view of cap rates and opting for an “expected-case” approach.

“S&P introduced something that sounds nice to investors but in reality, it introduces a level of volatility beyond property fundamentals, and beyond price,” said Nilesh Patel, a managing director at Prima Capital Advisors, an investment advisory firm specialising in high-quality CMBS

Read more...CMBS investors decry S&P changes | Top News | IFRAsia

The ‘Dreaded’ Procedure via Multi-Housing News Online

In August, three people were shot and killed in College Station, Tex. after a law enforcement officer attempted to serve notice to an apartment resident regarding a court date for eviction hearings, according to The constable was shot dead by the renter, and according to press reports, both the renter and a bystander were killed and others wounded in the ensuing gunfire between law enforcement officers and the renter.

The tragic incident is a reminder of the gravity of evictions. In light of the shooting incident, Anne Sadovsky, award-winning speaker, trainer and consultant, refers to apartment evictions as “this dreaded procedure.” That is why apartment companies work hard, whether by diligent screening or rent collection efforts, to minimize their chances of having to initiate evictions. But at what point do they have to initiate, and what specifically should be done?

One of the first things to remember about evictions is “to be 100 percent in tune with the laws and procedures and your legal obligations in your geographic area,” advises Sadovsky. “Know that you are filing in the right place and research the JP over your area. The key is developing a good relationship with the courts.”

Read more...The ‘Dreaded’ Procedure | Multi-Housing News Online

Are Real Estate Investors Too Dependent on ‘Cheap Interest Rates’? via

Today’s low interest rate environment is inducing many buyers to pay significantly more for properties than they should and poses the single biggest risk to the commercial real estate industry, warns Dean Adler, co-founder and CEO of Philadelphia-based Lubert Adler Partners LP, a real estate equity firm with $16 billion of assets under management.

“There are a lot of asset allocators out there that are paying way too much for real estate because of cheap interest rates, and they will get whipsawed,” predicts Adler. “It’s fine to raise money today, but they will get whipsawed in four and five years as interest rates rise. Real estate still has the same amount of [operating] risk and obstacles as it had two, three, four, five, six years ago. I could make an argument that there is greater risk.”

Read more...Are Real Estate Investors Too Dependent on ‘Cheap Interest Rates’? via

Class-C Apartments Strengthen via

The last shall be first, according to the latest August apartment markets report from Axiometrics Inc. The multifamily research firm finds that effective rents for new leases at class-C apartment properties grew faster on average than at class-A and class-B properties.

“We call it the filling in effect,” says Jay Denton, vice president of research of Axiometrics. “Now that occupancies are getting better, class-Cs are getting some pricing power.”

Overall, apartment rents continue to grow more slowly in the third quarter of 2012. Nationwide, apartment rents grew 3.7 percent on average over the last 12 months, down from 4.0 percent in the second quarter. “For five consecutive quarters the annual rate of growth—while still positive—has slowed,” according to Axiometrics. Average rent growth peaked at 5.1 percent in the second quarter of 2011. Axiometrics has now lowered its 2012 full-year forecast for effective rent growth to 3.6 percent, though it expects the rate to bounce back in 2013 because of improving job growth and renter household formation.

Read more...Class-C Apartments Strengthen

Extension of Tax Deduction for Retrofitting Commercial Buildings Introduced in Senate via Multifamily Executive Magazine

Four U.S. senators are seeking to extend an existing tax deduction for energy-efficient retrofits of commercial and multifamily buildings. The Energy Efficient Commercial Buildings Deduction (Section 179D) is scheduled to expire at the end of 2013.

Senators Dianne Feinstein (D-Calif.), Olympia Snowe (R-Maine), Jeff Bingaman (D-N.M.), and Ben Cardin (D-Md.) introduced the Commercial Building Modernization Act (S. 3591) on Sept. 27, which proposed to extend the Section 179D tax deduction through 2016, while modifying the deduction to target the retrofits of existing commercial buildings.

Section 179D was established by the Energy Policy Act of 2005 and allows a deduction of up to $1.80 per square foot for new buildings or renovations designed to use 50 percent less energy than ASHRAE Standard 90.1-2011. A partial deduction of up to $0.60 per square foot is also available for improvements within a building’s envelope, HVAC system, or lighting system.

Read more...Extension of Tax Deduction for Retrofitting Commercial Buildings Introduced in Senate - Legislation - Multifamily Executive Magazine

Thursday, October 4, 2012

Galante: FHA will not participate in REO-to-rental via HousingWire

Acting Federal Housing Administration commissioner Carol Galante told a crowd of mortgage professionals her institution will not initiate an REO-to-rental program similar to Fannie Mae.

The Federal Housing Finance Agency recently completed many sales of REO and is now announcing winning bidders. HousingWire had that information more than one month ago.

"Looking at an REO-to-rental strategy, and while a rental strategy is very important, we decided it wasn't the best solution for the FHA, servicers, borrowers and their communities," Galante told the crowd at the HousingWire REperform conference underway in Dallas, Texas.

Read more...HousingWire | Galante: FHA will not participate in REO-to-rental

Micro-Algae Tested for Green Building Facades via Multifamily Executive Magazine

A zero-energy house under construction in Germany is set to provide the first real-life test for a new façade system that uses live micro-algae to provide shade and generate renewable energy at the same time.

The world’s first bio-adaptive façade will be installed in the BIQ House for the International Building Exhibition in Hamburg, which runs through 2013. The concept is designed so that algae in the bio-reactor façades grow faster in bright sunlight to provide more internal shading. The bio-reactors not only produce biomass that can subsequently be harvested, but they also capture solar thermal heat; both energy sources can be used to power the building.

Read more...Micro-Algae Tested for Green Building Facades - Green Building - Multifamily Executive Magazine

Is Your Screening Company Leaving You Vulnerable? by Ryan Green via Multifamily Insiders

Do you remember the days when job applicants put on a nice suit, walked into a business, spoke with the manager on duty and asked if they had any positions open? After a few questions over a cup of coffee, it was decided whether the applicant and the open position were right for one another. “When can you start?” or “I’m sorry, this just isn’t a good fit.”

An apartment could be rented to the “nice looking couple” who saw the landlord putting a “For Rent” sign on the lawn. A hand shake and the first month rent moved you in.

Then came forms and rules, regulations and policies, agencies and committees. Screening. Now, hiring the right person can get an employer in as much legal trouble as turning down the wrong one. Does the employment application ask about marital status? Was there a box offering a copy of the report? Was there a Summary of Rights attached? In Spanish?

Read more...Is Your Screening Company Leaving You Vulnerable? by Ryan Green

Chesapeake Energy Corp. tests environmentally 'green' fracking liquids via Dallas Business Journal

Chesapeake Energy Corp. is testing hydraulic fracturing fluids composed entirely of environmentally friendly ingredients, according to a report by Bloomberg.

Oklahoma City-based Chesapeake (NYSE: CHK), the nation's second largest natural gas producer behind Irving-based Exxon Mobil Corp. (NYSE: XOM), plans to develop a 100 percent green mixture to be used in the operations that involving injected fluids underground to release trapped natural gas.

Chesapeake operates its Barnett Shale operation from a headquarters in Fort Worth. Fracking, as the process is called, is a common practice in shale formations such as the Barnett.

Read more...Chesapeake Energy Corp. tests environmentally 'green' fracking liquids - Dallas Business Journal

The Outlook for Investing in Secondary and Tertiary Markets via Multi-Housing News Online

Follow the job growth. That was the key takeaway during the recent Multi-Housing News and Commercial Property Executive webinar “Secondary and Tertiary Markets: Identifying, Finding and Investing in Commercial Real Estate Opportunities.” Panelists, which included Gary Ralston, managing partner, Coldwell Banker Commercial Saunders Ralston Dantzler Realty LLC; John S. Sebree, vice president, national director, National Housing Group, Marcus & Millichap Real Estate; Albert M. Berriz, CEO, McKinley; and Ernie Katai, senior vice president, Berkadia, looked into these commonly overlooked markets and provided insights for investors.

Focusing on commercial investments, Ralston said that investors are still focusing on safe investments, and on an aggregate basis in secondary markets, the prices are still down. The annual population growth of the United States is almost 1 percent, so, according to Ralson, the goal of investors is to focus on states that are growing above that, such as Florida, Texas and Nevada. Additionally, investors and developers should pay attention to areas of employment growth, which he says has shifted to port-driven areas.

Read more...The Outlook for Investing in Secondary and Tertiary Markets | Multi-Housing News Online

Top 10 Metros with Highest Occupancy Rates via Multifamily Executive Magazine

Across the board, occupancy rates were up during the third quarter of 2012, according to the latest data from Dallas-based Axiometrics.

In August alone, occupancy rates increased 89 basis points (bps) on a year-to-date basis and 26 bps on an annual basis. But this positive number still represents a decline from last August, when occupancy rates were up 102 bps on a year-to-date basis, and 58 bps on an annual basis. But demand is still high, so there’s no cause for alarm.

Here’s a list of some cities among the highest in average occupancy rates as of the third quarter of 2012:

Read more...Top 10 Metros with Highest Occupancy Rates - Occupancy And Vacancy Rate - Multifamily Executive Magazine

Wednesday, October 3, 2012

Texas Economic Indicators October 2012 via Dallas Federal Reserve

The Texas economy continues to expand, with employment growing at a 3.5 percent annual rate in August. Texas existing-home sales, single-family construction permits and housing starts all increased in August. Texas exports ticked down in July. Manufacturing activity increased at a faster pace in September, according to the Texas Manufacturing Outlook Survey.

Texas gained 31,100 jobs in August after adding 19,700 jobs in July. Current Texas employment stands at 10.85 million.

The Texas unemployment rate held steady at 7.1 percent in August. The Texas rate remains lower than the U.S. rate, which was 8.1 percent in August.

Read more...Texas Economic Indicators October 2012 via Dallas Federal Reserve