Monday, December 31, 2012

Small housing inventory may push rental demand for years via REwired

The next 10 years may bring five to six million new renter households. Or at least that’s what a recent infographic by the Bipartisan Policy Center is saying. So in the midst of a recovering housing market, why the shift toward a rise in rentals?

Although housing starts are up, construction will take some time to complete and the low inventory of houses may push many potential homeowners to consider renting.

“There is clearly an unmet demand for homeownership among young households,” Barry Zigas, director of Housing Policy for Consumer Federation of America, told HousingWire. “Those households are running up against a number of constraints.”

Factors such as tighter credit, larger down payments and decreased income with the rising generation will all play into the increase in renters in the years ahead.

Read more...Small housing inventory may push rental demand for years | REwired

Houston Economic Update December 2012 via FRB of Dallas

Annualized monthly economic growth, as measured by the Federal Reserve Bank of Dallas business-cycle index, accelerated to 9.5 percent in October—the highest rate since January of this year. Energy-related activities, real estate and international trade continue to propel growth. However, regulatory uncertainty, the U.S. fiscal situation and stresses in the global economy continue to cloud the horizon.

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

Texas’ manufacturing industry posts growth in December via Dallas Business Journal

Texas’ factory activity rose slightly in December, according to the Federal Reserve Bank of Dallas’ Texas Manufacturing Outlook Survey, indicating that the manufacturing sector is growing but slowly.

This reading is important because Texas produces more than 9 percent of total manufactured goods in the United States, behind California.

The Dallas Fed’s production index — a key measure of state manufacturing conditions — rose from an index reading of 1.7 in November to 2.7 in December.

Read more...Texas’ manufacturing industry posts growth in December - Dallas Business Journal

Texas Employment Update December 2012 via Dallas Fed

The Texas economy continued to expand. Texas added 23,000 jobs in November. Year to date, Texas has gained 306,500 jobs.

Read more...Texas Employment Update - Dallas Fed

Top 10 Issues Affecting the Real Estate Industry via

The Counselors of Real Estate®, an invitation-only professional association of top leaders in more than 50 specialties within the real estate industry (and which is an affiliate of the National Association of REALTORS®) developed the following list of critical issues that will affect the real estate industry over the next 10 – 30 years. Members of CRE®s External Affairs Committee regularly issue alerts about important topics. Many of the issues have strong interrelationships and are common across industries.

Through a series of objective white papers to be developed over the next few years, the organization seeks to engage leaders within the industry and the world economy in meaningful dialogue to address these urgent issues.

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

Read more...Top 10 Issues Affecting the Real Estate Industry |

Friday, December 28, 2012

Texas Apartment Market Update November 2012 via

November 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 November 2012 via

Apartment Sales Finish Strong in 2012 via Multifamily Executive Magazine

The newest report from New York City-based Real Capital Analytics (RCA) shows that November continued the sales growth trend that most expected, pointing to a stirring finish to the year.

Multifamily sales topped out at $5.5 billion in November, marking a 19 percent increase year-over-year. But it’s worth considering that $1.7 billion of that total was portfolio sales, with American Campus Communities’ $863 million student housing portfolio purchase leading the way.

Read more...Apartment Sales Finish Strong in 2012 - Apartment Trends - Multifamily Executive Magazine

As CRE Stock Grows, Energy Efficiency Concerns Do As Well via

How the global footprint of real estate assets will impact the environment is a concern that appears to be growing along with the worldwide building stock. In a newly released report by Boulder, CO-based Pike Research, the worldwide stock of brick-and-mortar is set to increase 25% by 2021, with much of this growth driven by Asian countries.

In fact, according to Pike, in the next nine years, global building inventory—both residential and commercial—will balloon from 1.6 trillion square feet to 2 trillion. “Commercial and residential buildings are responsible for 49% of the world’s energy consumption and 47% of global greenhouse gas emissions,” says senior research analyst Eric Bloom.

“Much of this energy is consumed in an inefficient manner and can be reduced through cost-effective measures," he continues. "Such measures will be particularly critical in rapidly growing economies like China, where residential buildings will grow by 60% in the next decade, reaching more than 600 billion square feet by 2021.”

Read more...As CRE Stock Grows, Energy Efficiency Concerns Do As Well - Daily News Article -

Thursday, December 27, 2012

Deep Energy Retrofit at Affordable Housing Property Cuts Energy Consumption 72% via Property Management Insider

Property owners considering improving energy efficiency at older apartment buildings may want to consider reaching for a jacket to get the job done. Updating 40- and 50-year-old structures to reduce utility spends is literally going under cover with a deep energy retrofit, a process that envelopes exteriors with an insulated wrap without removing a brick. The result is a new look and better energy efficiency.

WinnDevelopment, a Boston, Mass. developer, recently completed an experimental deep energy retrofit that included putting an insulated exterior wrap over a portion of the 500-unit Castle Square Apartments, a 1960s-style affordable housing property on the city’s South End. The $50 million project, partially funded by government low-income tax credits, low-interest loans, and competitive grants, is expected to reduce the property’s energy consumption by 72 percent.

Read more...Deep Energy Retrofit at Affordable Housing Property Cuts Energy Consumption 72% | Property Management Insider

Report: Affordable Sees ‘Critical’ Shortage via

Regardless of whether multifamily inventory per se is reaching the saturation point in certain markets, the affordable segment faces an acute shortage, says CohnReznick LLP in a new report. The study, which focuses on the operating performance of apartment properties financed with Low Income Housing Tax Credits, cites an imbalance between supply and demand generally; in almost every one of the past 15 years, LIHTC demand has outpaced supply.

“For those who think that our country has ‘too much housing,’ the fact is that most markets have a shortage of rental housing,” says Fred Copeman, CohnReznick principal and leader of its Tax Credit Investment Services practice, in a release. “When it comes to affordable rental housing, this report confirms that we have a critical shortage not only in our major cities, but across the entire country. There is, in short, no room at the inn.”

Read more...Report: Affordable Sees ‘Critical’ Shortage - Daily News Article -

Rising Rents Pinch Tenants via

Record-low mortgage rates mean that homeowners have a smaller financial burden for their residences than at any time since the early 1980s.

But here's the bad news: Rising rents are squeezing many families and leaving them with less to spend.

Several factors have pushed rents up. Rental and apartment housing is in short supply but demand has grown after several years of foreclosures and population growth.

Read more...Rising Rents Pinch Tenants -

Monday, December 24, 2012

Texas unemployment falls for 3rd straight month via Dallas Business Journal

The unemployment rate in Texas fell to 6.2 percent in November, the third straight month the rate has declined, The Texas Workforce Commission said on Friday.

That compares to 6.6 percent in October and 6.8 percent unemployment in September, the agency said.

The rate for the Dallas-Plano-Irving area was 5.8 percent in November, down from 6.2 percent in October. The rate for the Fort Worth-Arlington area was 5.6 percent in November, compared to 6.1 percent in October, the TWC said.

Read more...Texas unemployment falls for 3rd straight month - Dallas Business Journal

Optimism for Apartments Sector for 2013 via

If we make it over the fiscal cliff, good times may be ahead for apartment builders—though that’s a big “if.”

“Assuming current trends hold, over the rest of this decade, we will need at least 300,000 new apartments annually, and possibly as many as 400,000, to meet demand,” says Mark Obrinsky, vice president of research and chief economist for the National Multi Housing Council.

That would be great news, if it happened. Right now multifamily developers are happy to be building at a rate slightly faster than 250,000 a year. Most apartment analysts think market will be able to absorb that new construction—but not too much more.

Read more...Optimism for Apartments Sector for 2013

Has CMBS Mended Its Ways? via

“The CMBS industry may need to confront bigger obstacles in order to rebound fully. Although most interviewees contend that a properly functioning mortgage securities engine is necessary for liquidity in the real estate capital markets, they also express serious concerns about the failures to address evident problems in CMBS underwriting, regulation, ratings and servicing since the market collapse.”

Maybe it’s just a matter of perception but the industry executives who provided that feedback to the authors of Emerging Trends could take heart that Basel III and Dodd-Frank are both taking a swing at shoring up those problems. But that oversight is something those in the sector are less than happy about, firm in their stated belief that the sector is sufficiently self-policing. But is self-policing enough, as CMBS—projected to be a $60-billion market again by 2014—“sputters to life” (In the words of Emerging Trends), can we be headed for a repeat of the above?

Read more...Has CMBS Mended Its Ways? - Daily News Article -

Multifamily Growth Still Healthy in DFW via

A recent multifamily report released by Hendricks & Partners indicated that statistics continue on their upward trend for 2012, though there was some slowdown. Though the year-to-date positive net absorption of 9,370 units is below the 15,500 net move-ins recorded during 2011, on the supply side, full-year completions are anticipated to be 6,180 units, exceeding the 5,290 units that came online in 2011.

Other statistics from the report note that:

Read more...Multifamily Growth Still Healthy in DFW - Daily News Article -

Thursday, December 20, 2012

Turnaround Continues for CMBS Market in 2013, But Fiscal Cliff Bears Watching via WORLD PROPERTY CHANNEL

The commercial real estate market, and the U.S. CMBS market in particular, are likely to see steady improvement in the New Year, says Huxley Somerville, head of US CMBS at Fitch Ratings in New York. "A slow increase in volume is preferable; we would not like to see a 50% increase over 2012," he says. "A 15% to 20% increase would be much better. Otherwise, competition would lead to the erosion of underwriting standards."

"We expect 2012 CMBS issuance to finish at roughly $45 billion, with a slight increase to $50 billion as a possibility in 2013," says Zanda Lynn, managing director at Fitch Ratings.

Read more...Turnaround Continues for CMBS Market in 2013, But Fiscal Cliff Bears Watching - WORLD PROPERTY CHANNEL Global News Center

HUD wants apartments to become assisted-living facilities via Dallas Business Journal

An aging population has sparked demand for assisted-living facilities and the U.S. Department of Housing and Urban Development hasn’t overlooked the trend.

The government agency awarded $26 million in grants to owners of apartment complexes across the country as an incentive to alter the housing into assisted-living or senior homes.

Read more...HUD wants apartments to become assisted-living facilities - Dallas Business Journal

Housing Data Released By The Commerce Department Underscores Risks to Multifamily According to Fitch via

Housing data released by the Commerce Department confirmed Fitch's expectation that the housing market continues to gain traction, increasing the likelihood of moderating multifamily demand growth. Housing permits, a proxy for future construction, were up 27% and 4% higher on a year-over-year and quarter-over-quarter basis, respectively, for November 2012.

In a report issued last week ("U.S. Equity REITs: The Key Issues for Multifamily"), Fitch estimated that 80% of the growth in demand for multifamily properties from 2009-2011 was attributable to the decline in the home ownership rate. Looking forward, Fitch expects decreasing rental affordability and the increasing relative/absolute attractiveness of home ownership will cause multifamily demand and operating fundamentals to more closely track economic growth. Today's data supports Fitch's expectation that a recovery in housing is underway.

Read more...Housing Data Released By The Commerce Department Underscores Risks to Multifamily According to Fitch - Multifamily News Headlines – Breaking News, Stories, Top Headlines ::

Wednesday, December 19, 2012

HUD Expanding Distressed Loan Sale Program via CoStar Group

The U.S. Department of Housing and Urban Development (HUD) is accelerating loan sales under its expanded Distressed Asset Stabilization Program (DASP).

The program enjoys strong nonprofit community support and has attracted major investors such as the Blackstone Group and residential loan servicing firms, such as Bayview Finance and Selene Finance.

HUD’s next scheduled sale, which will take place late in the first quarter of 2013, will include 10,000-15,000 loans, and will have targeted Neighborhood Stabilization Outcome (NSO) pools in metropolitan areas in Georgia, California, Florida and Ohio.

Read more...HUD Expanding Distressed Loan Sale Program - CoStar Group

Building Permits Increase as U.S. Housing Rebounds via Bloomberg

The number of building applications issued in November rose to a four-year high, a sign the U.S. housing-market recovery will extend into 2013.

Permits, a proxy for future construction, climbed 3.6 percent to an 899,000 annual rate, the most since July 2008 and exceeding the 875,000 median forecast of 58 economists surveyed by Bloomberg, Commerce Department figures showed today in Washington. While housing starts fell 3 percent to an 861,000 pace, the average rate from September through November was the strongest since the three months ended August 2008.

Record-low mortgage rates and an improving job market are giving Americans the confidence and wherewithal to buy a house, boosting builders such as Toll Brothers Inc. (TOL), which are now able to raise prices. Gains in housing will help shore up economic growth this quarter as businesses curb spending on concern lawmakers will fail to avert the tax increases and spending cuts slated to take effect in 2013.

Read more...Building Permits Increase as U.S. Housing Rebounds: Economy - Bloomberg

Winds of Change for M-F REITs via Commercial Property Executive

Multi-family REITs are the investment haven of today. Tenant demand for multi-family units has been insatiable since the bursting of the single-family residential bubble, despite persistent macroeconomic headwinds. But according to a new report released last week by Fitch Ratings, what goes up does eventually have to come down—not only in physics but, apparently, in commercial real estate, as well.

“When you speak to anyone in commercial real estate right now, they are just unbelievably excited about multi-family (investments), from the financing side to the property fundamentals side, and they’re really euphoric,” said Britton Costa, associate director at Fitch Ratings. “There are some very significant growth expectations being dug into the current acquisition environment, and we think that if things are less positive than today, people’s minds can change very quickly, and people are very affected when something is (at its) best and then suddenly becomes worse.”

Read more...Winds of Change for M-F REITs | Commercial Property Executive

Is Multifamily's Meteoric Growth Built to Last? via

Everything seems to be going right for the apartment industry. Demand is growing. New supply remains constrained. Rents are rising a little faster than overall inflation. Occupancy rates have rebounded to normal levels in most markets. Real estate investors still find apartments an attractive asset class and financing is mostly available. For the next few years, most analysts foresee rising rents, higher net operating income, modest price gains, available capital and an active transactions market. Is it all too good to be true?

Despite the current optimism, some potential challenges lurk on the horizon. Rent growth is one. While today’s rent increases are great for apartment firms that are recovering from recessionary rent declines, they are creating affordability concerns as rent growth outpaces resident income growth. Competition in the single-family market is another issue. Distress in the single-family, for-sale segment of the market has turned the rent-versus-buy value proposition on its head in some markets and created opportunities for investment and growth in the single-family rental market.

Read more...Is Multifamily's Meteoric Growth Built to Last?

Multifamily Resident Portals Moving to the Next Level via NREI Readers Write

Multifamily owners, operators and tenants have embraced resident portals as a convenient conduit for paying rent and submitting work orders. Now industry forward-thinkers are looking at additional ways to make these websites more relevant so they will draw visitors on a daily basis.

Clearly, multifamily portals designed to accomplish business between landlords and tenants make sense from an operational standpoint. Money comes in online and is routed electronically, and these payments automatically update the ledger and statements via the accounting system. Or, if someone submits a work order, it will route to the appropriate person. Residents can check on the progress, and once their job is completed they receive an automated notification. Nobody has to touch anything from the operational side, which can cut down processing expenses significantly.

Yet these “Version 1.0” portals provide little motivation for residents to log on frequently. So what else can they be engaged to do? Simply put, Internet portals provide a launch point for people when they go online. General portals like AOL, MSN and Yahoo! include information from multiple sources, such as news, stocks, weather and other items of interest. Niche portals – like those being used in multifamily – are specialized to emphasize a particular interest or subject area. To that end, multifamily owners are starting to customize their portals with information pertinent to their individual communities. This may include:

Read more...Multifamily Resident Portals Moving to the Next Level | NREI Readers Write

Tuesday, December 18, 2012

Dealmaking Strategies for 2013 via Multifamily Executive Magazine

In a lot of ways, it’s a seller’s market.

Multifamily communities have been selling like hotcakes, and by all accounts, the market is set to outdo itself again in 2013.

The volume of apartment transactions has expanded annually for the past three years, after hitting a trough of $14.9 billion in 2009. By the end of the third quarter, $47 billion in multifamily assets had changed hands in 2012, on pace to easily eclipse last year’s $53.9 billion.

While these figures speak to the overall health of the market, this expansion may not be good news for buyers. New and old money continues to circle over the sector, from smaller, local players and national institutions alike, as bargain-hunting investors increasingly chase yield off the beaten path. The competition gets a little steeper with each passing day.

Read more...Dealmaking Strategies for 2013 - Mergers And Acquisitions - Multifamily Executive Magazine

Liquidity Still Attracting Institutions to REIT via

Hans Nordby, managing director with Property and Portfolio Research, spoke with at NAREIT’s headquarters about his current thoughts on the REIT market and what his expectations are heading into 2013. Property and Portfolio Research (PPR) provides unparalleled expertise and objective thinking in analyzing and forecasting commercial real estate markets. PPR offers independent research, a unique set of analytic tools, and actionable insights to investors on hundreds of global markets in North America and Europe. PPR is wholly owned by CoStar Group.

Nordby said the recovery in the housing market that begun in 2012 was one of the year’s most significant developments. And while he said it is unlikely to approach 2003 to 2005 levels, it is going to be a source of some economic growth and will no longer be an “anchor” to broader economic recovery.

Also for commercial real estate, 2012 may likely be remembered as the peak year for apartment rent growth, Nordby said.

Read more...Liquidity Still Attracting Institutions to REITs

Stoffers: The Future of Fannie, Freddie, and Housing Finance via Multifamily Executive Magazine

Fannie Mae and Freddie Mac—the government-sponsored enterprises (GSEs)—played a crucial countercyclical role during the recession. They provided liquidity when private capital sources largely scaled back.

But what now? The current state of the GSEs—which hold or guarantee about 35 percent of multifamily mortgages in this country—in government conservatorship is unique, unprecedented and requires a long-term policy solution.

The multifamily housing market serves more than 15 million—that's one in seven—American households, spanning workforce housing, seniors housing, student housing, and market-rate and affordable rental properties.

Read more...Stoffers: The Future of Fannie, Freddie, and Housing Finance - Finance - Multifamily Executive Magazine

Texas Economy Slower in Recent Months via Dallas Fed

Texas job growth has been persistently above trend this year, with jobs growing at an annual pace of 3.2 percent through October. In recent months, however, the pace of employment growth has slowed. Exports have generally declined since February, causing a weakening in Texas manufacturing. Continued low prices for natural gas have also led to some slowing in the energy sector. Offsetting this somewhat, construction activity has accelerated. Looking forward, the Texas Leading Index increased for the fourth consecutive month in October, although the pace of increase has moderated. The outlook components of the Dallas Fed’s three Texas Business Outlook Surveys all weakened in November, suggesting somewhat weaker growth ahead.

Read more...Texas Economy Slower in Recent Months - Dallas Fed

Wall Street Sees Promise in Multifamily Loans via WSJ

Fannie Mae FNMA -1.83% and Freddie Mac FMCC +0.33% are finally getting some private-sector competition in the business of financing loans in the debt market, at least in multifamily housing.

Wall Street lenders are getting more aggressive bidding on multifamily loans to securitize in recent months, helped as the demand for their commercial mortgage-backed securities has cut their costs to the lowest in more than four years, getting closer to those of government-advantaged programs of Freddie Mac, Fannie Mae and the Federal Housing Administration.

Congress has urged private capital to take over as the primary source of funding for real estate, after the housing bust left taxpayers shouldering billions in losses from the single-family portfolios of Fannie Mae and Freddie Mac. With CMBS recovering faster than private residential mortgage bond issuance, that shift may be seen first in multifamily housing, analysts said.

Read more...Wall Street Sees Promise in Multifamily Loans - Developments - WSJ

Monday, December 17, 2012

First Shipping Container-Construction Multifamily Building Breaks Ground in U.S. via

More than 21,000 shipping containers arrive in the United States on a daily basis. Many of them originate in China, where it is cheaper to build new containers than to ship them back after their maiden voyages. Currently, over 700,000 containers are stockpiled on prime waterfront real estate throughout the U.S. with no use, purpose or method of disposal. But one forward-thinking real estate developer—Three Squared Inc.—is pushing ahead with cargo container residential and commercial construction initiatives, not only finding “homes,” so to speak, for retired cargo containers, but thriving as a company even while the traditional bricks-and-mortar construction industry flounders in the midst of the troubled economy.

Three Squared Inc., a sustainable real estate developer, is currently slated to build over $109 million in projects in the U.S. and abroad over the next two years. The firm, which offers systemized and sustainable construction using shipping containers to create affordable luxury buildings, says that this construction alternative is growing in demand due to its superior cost efficiencies, heightened profitability, minimal building time and an expanding acceptance in the marketplace. Its patented Cargolinc System provides architects, builders, developers and private owners with a comprehensive three-step process that surpasses green and sustainable construction and quality standards at a much reduced cost and in a fraction of the time it normally takes to build sustainably.

Read more...First Shipping Container-Construction Multifamily Building Breaks Ground in U.S. via

Preventive Maintenance: An Ounce of Prevention Means a Better Bottom Line for Owners via Multi-Housing News Online

There is no denying that multifamily is and has been the hottest ticket in the commercial real estate industry in recent months. With that in mind, both new and experienced owners alike are seeking the most efficient ways to maintain and increase the value of their properties.

As a leader in the field, and a manager of multifamily properties for over 40 years, Western National Property Management is actively assisting owners in increasing property values. One specific way to do this is to focus on preventative maintenance programs on an ongoing basis.

The foundation is simple: Notice small problems and fix them before major ones develop. It may sound like a common practice, but the truth is that many private owners do not have a current effective system in place. Without one the owner can experience high levels of unanticipated or projected maintenance costs.

Read more...Preventive Maintenance: An Ounce of Prevention Means a Better Bottom Line for Owners | Multi-Housing News Online

Rental Sector to Gain the Most from Rebound in Household Formation via

As household formation mends and grows, the housing recovery will benefit overall, but the rental industry is expected to come out as the biggest winner, according to a report from Capital Economics.

“[W]ith the overwhelming majority of newly forming households over the next few years set to rent rather than own their home, the rental sector will be the disproportionate beneficiary,” wrote economist Paul Diggle in the report.

Not only has household formation picked up again after dropping off in 2008 and 2010, but Capital Economics added, “there are good reasons to expect household formation to keep getting stronger.”

Read more...Rental Sector to Gain the Most from Rebound in Household Formation via

Houston economy and multifamily construction rising via Your Houston News

The Brookings Global MetroMonitor announced its 2011-12 ranking of the largest 300 metropolitan economies worldwide, and the Houston area ranks the highest among U.S. cities. From 2007-11, Houston ranked 194. Houston’s 2012 ranking is 40th.

The Brookings Institute said, “Houston has partially recovered from a major recession, outperforming the United States on employment change.”

Macau, China, came in at No. 1 this year. In the United States, Houston was followed by San Jose, Calif., at 46; Salt Lake City at 56; and Louisville, Ky., at 57. In Texas, Austin ranked 61st, Dallas 91st and San Antonio at 144th. San Juan, Puerto Rico, a U.S. territory, came in at a high status of seventh in the world.

Read more...Houston economy and multifamily construction rising - Your Houston News: Opinion

Friday, December 14, 2012

The Top 3 Reasons Why Your Residents Will Renew…Or Not via Property Management Insider

Over the years, there has been a lot of speculation and discussion on the best way to close the back door when it comes to maintaining occupancy at a community. Resident events, perks, incentives and the like were the most common themes. But in recent years, thought leaders have been talking data more than door hangers.

In other words, polls more than parties.

The resulting shift in focus has been astounding as more residents are asking for, and receiving, better and more personalized service! To keep that ball rolling, here is the latest “Big Data” when it comes to getting those leases renewed:

In 2012, SatisFacts published the ebook “Getting Inside the Head of the Online Renter,” which revealed that the top three factors that influence a renewal decision are:

Read more...The Top 3 Reasons Why Your Residents Will Renew…Or Not | Property Management Insider

Commercial Lending Survey via

The Commercial Real Estate Lending Survey is conducted annually and provides an overview of lending conditions that impact commercial transactions nationally, based on responses from commercial real estate members. The 2012 survey shows that while commercial markets turned a corner in 2011, commercial lending standards have tightened in the past year for small businesses and have remained an obstacle to a major portion of contracted transactions for smaller properties.

Read more...Commercial Lending Survey |

5 Reasons A Property Management Office Should Go Paperless via

You have probably debated going paperless. Fear of change or perhaps fear of security has stopped you. Whatever it is, put your reasons aside. Web-based property management software empowers you to not only transform your workspace into a paperless office, but also to help your business save money and be more efficient. This leaves you more time to focus on activities that grow the business. It’s simple and easy to get started, so don’t be left in the office shuffling through papers. Here are five reasons your business should go paperless to keep up with today’s demands.

Read more...5 Reasons A Property Management Office Should Go Paperless via

Payoff rate of CMBS greater than 50% for second month in a row via HousingWire

Of the $920 million in commercial mortgage-backed securities loans scheduled to mature in November, $677 million, or 74%, paid off in full, according to Morningstar's monthly CMBS maturity report.

This is the second consecutive month in which the pay off rate was greater than 50%, Morningstar added.

Prior to October, the monthly pay-off rate for maturing loans previously peaked at 61% in April

Read more...Payoff rate of CMBS greater than 50% for second month in a row | HousingWire

Thursday, December 13, 2012

Texas' spot on Forbes' 'Best States for Business' list via Dallas Business Journal

Texas still ranks among the top 10 on Forbes’ latest list of “The Best States for Business.”
The Lone Star State takes the No. 7 spot, down one place from its 2011 rank.

Forbes’ analysis measured 35 data points in six categories: costs, labor supply, regulatory environment, current economic climate, growth prospects and quality of life.

Read more...Texas' spot on Forbes' 'Best States for Business' list - Dallas Business Journal

The #1 Most Vital Property Tool is Made of Paper? via All Things Property Management

By Linda Day Harrison, theBrokerList, Chicago, IL

If you are in the industry of caring for properties, leasing properties, or even selling properties, there is one tool you should never be caught without — the Emergency Calling List! It’s the one tool that does many things for anyone charged with caring for a property.

When you think about the word “emergency” it connotes visions of fires, floods, crime, etc. However, when you think of the words “crisis” or “disaster,” it sounds much more evil and sinister. The difference to me is that you can have an emergency, but if you are not prepared, it can quickly become a crisis or a disaster. There is a huge difference.

Being prepared, like Boy Scouts are always known to be good at, is an incredible skill. It takes thought, the ability to anticipate, and planning. On top of that, it does requiring testing from time to time and many “what if?” scenario considerations.

Read more...All Things Property Management » Blog Archive » The #1 Most Vital Property Tool is Made of Paper?

Competition Heats Up in REO-to-Rent Space via Multifamily Executive Magazine

For years, the shadow market of single-family rentals has been a nagging nemesis of the apartment industry. It’s notoriously difficult to quantify, both in terms of sheer numbers and its impact on the multifamily market’s fundamentals, hence the name. It is to the apartment industry what unlicensed cabs are to the taxi industry.

But maybe there’s nothing to fear. According to Jeff Hayward, head of Washington, D.C.-based Fannie Mae’s multifamily division, there’s plenty enough demand to go around, and it’s an apples-to-oranges comparison anyhow.

“We see REO-to-rental initiatives as a complement to the multifamily market,” says Hayward. “A standalone house attracts a different type of renter; they tend to be older, may have a family, and therefore need more space. They may have even been through a foreclosure or short sale, so they may be accustomed to living in a single-family home.”

Read more...Competition Heats Up in REO-to-Rent Space - Single Family - Multifamily Executive Magazine

ALN Monthly Newsletter December 2012 via ALN Apartment Data

ALN Data just released their November 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 December 2012 via ALN Apartment Data

Angelou projects Austin's boom to continue in 2013, 2014 via Austin Business Journal

Austin has had a spectacular year, and the future is looking just as bright, predicted local economist Angelos Angelou at his annual economic outlook event.

The Austin area welcomed 65,500 new residents, created 26,300 new jobs, founded 1,120 new businesses and saw $722 million in venture capital investment in 2012, according to numbers compiled by AngelouEconomics. Unemployment sank to 5.3 percent, well below the 7.8 percent national average.

The city’s future looks just as bright. About 28,000 new jobs are forecast for 2013, and 2014 is projected to yield more than 30,000 new jobs. Angelou said those numbers are on the conservative side.

Read more...Angelou projects Austin's boom to continue in 2013, 2014 - Austin Business Journal

Fitch: No exisiting financial entity can replace Fannie, Freddie multifamily via HousingWire

Since the fourth quarter of 2007, Fannie Mae and Freddie Mac increased their exposure in the multifamily market by $76 billion, compared with an $80 billion decrease by all other lenders, a net of more than $150 billion, according to Fitch Ratings report on U.S. Equity REITs: The Key Issues for Multifamily.

The aim of such research is to prepare for a world post-GSE reform. And if such a world were to happen tomorrow, the mortgage finance market would be woefully under-prepared.

Both government-sponsored enterprises are now the largest multifamily lender by 17 percentage basis points, compared with a three percentage basis point lead as of 4Q07.

Read more...Fitch: No exisiting financial entity can replace Fannie, Freddie multifamily | HousingWire

Wednesday, December 12, 2012

Bank CRE Lending Slows to a Crawl via CoStar Group

Like seemingly everyone else in the third quarter, banks retreated from their already tepid return to commercial real estate lending.

Overall, lending for investment and multifamily properties was flat with multifamily lending up just 1% and investment property lending up just about a one-quarter of a percent. Multifamily lending remains pretty much on pace with its year-over-year increase of 5%, but investment property lending is way off its 9% a year growth over the last four quarters.

Total construction and development loans were down 3.3% in the third quarter from Q2 and down 17.3% year to year. Balances of real estate construction and development loans fell by more than $7 billion in the quarter while the balances on investment CRE and multifamily properties increased only by about $4 billion.

Read more...Bank CRE Lending Slows to a Crawl - CoStar Group

The Texas Economy December 12, 2012 via Texas Comptroller

Texas total nonfarm employment increased by 36,600 jobs during October 2012. Between October 2011 and October 2012, Texas total nonfarm employment increased by 2.6 percent.

Over the past year, Texas added jobs in 10 of the 11 major industries, including government, leisure and hospitality, trade, transportation, and utilities, construction, education and health services, professional and business services, financial activities, manufacturing, mining and logging, other services and information.

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

Investors Assess Apartments After the Love Is Gone via WSJ

A strong recovery in single-family homes may spell bad news for apartment companies that reaped big profits over the last few years by renting to displaced homeowners, Fitch Ratings says in a new report.

The ratings agency says that an improving housing market could weigh on rent growth for multifamily real-estate investment trusts. Fitch estimates that 80% of the growth in apartment demand between 2009 and 2011 was derived from declining homeownership.

“As such, improvements in the single-family market will negatively impact apartments,” says Fitch Analyst Britton Costa in the report. “Over time, multifamily REIT demand and operating fundamentals will slow down as rents become less affordable and interest in homeownership rises.”

Read more...Investors Assess Apartments After the Love Is Gone - Developments - WSJ

FOMC Statement: Expand QE3, Sets Thresholds of 6.5% Unemployment Rate, 2 1/2 Inflation via Calculated Risk

The thresholds are huge!

FOMC Statement:
Information received since the Federal Open Market Committee met in October suggests that economic activity and employment have continued to expand at a moderate pace in recent months, apart from weather-related disruptions. Although the unemployment rate has declined somewhat since the summer, it remains elevated. Household spending has continued to advance, and the housing sector has shown further signs of improvement, but growth in business fixed investment has slowed. Inflation has been running somewhat below the Committee’s longer-run objective, apart from temporary variations that largely reflect fluctuations in energy prices. Longer-term inflation expectations have remained stable.

Read more...Calculated Risk: FOMC Statement: Expand QE3, Sets Thresholds of 6.5% Unemployment Rate, 2 1/2 Inflation

Reminder: Millennials want to buy homes! via HousingWire

Consumers are beginning to feel more positive about homeownership than they were even six months ago, a recent survey by Trulia ($18.25 0.25%) revealed. In fact, one in four surveyed consumers marked an increased confidence and 31% of renters plan to purchase a home within the next two years.

Millennials, consumers ages 18 to 34, are often the most skeptical, as they’ve grown up during the years of boom and bust. However, of the Millennials polled, 93% plan to buy a home at some point. Interestingly enough, 43% of young adults are already homeowners.

“Millennials have been shaken, not scarred by the housing bust,” said Jed Kolko, Trulia’s Chief Economist. “Nearly all of them want to own a home someday if they’re not homeowners already. But many of them think today’s low prices and low mortgage rates will last. They may be in for sticker shock if the cost of homeownership has returned to normal levels by the time they’re ready to buy.”

Read more...Reminder: Millennials want to buy homes! | REwired

CoreLogic: Rental income profit, demand remain strong for investors via HousingWire

Rental income on residential properties shot up 12% over last year during the month of September as rents continued to rise on new demand, CoreLogic ($27.25 0%) said in its latest December MarketPulse report.

The property analytics firm expressed a great deal of confidence on where the real estate economy for the past several months, but also noted a general sense of trepidation heading into the new year.

"Ongoing uncertainty in the overall business climate brings into question whether the economy can fire on all cylinders," wrote Anand Nallathambi, CEO and president of CoreLogic.

Read more...CoreLogic: Rental income profit, demand remain strong for investors | HousingWire

Apartment Insurance Costs Increase for the Second Consecutive Year via NMHC

The cost to insure apartments increased by 9.5 percent between 2011 and 2012, marking the second consecutive year of rising insurance expenditures according to the National Multi Housing Council’s (NMHC) Apartment Cost of Risk Survey (ACORS). The survey covers data from more than one million apartment units, the largest number of units covered by the survey to date, operated by 55 apartment firms, tracking three principal components of insurance premiums: property, general liability and workers’ compensation. The 9.5 percent increase in 2012 came entirely from property risk costs, with general liability and workers’ compensation costs staying virtually unchanged from 2011.

“Respondents noted that their greatest challenges in 2012 came from obtaining adequate and affordable coverage in traditional catastrophe risk zones. In fact, catastrophe exposed properties were the major drivers of the increase in premium costs and higher deductibles,” said Rick Haughey, NMHC’s Vice President of Property Operations and Technology. “With U.S. catastrophe losses in 2012 expected to be moderately higher than average due to Hurricane Sandy, the outlook for insurance costs in 2013 remains uncertain. This uncertainty mitigates what would be downward pressure on 2013 catastrophe rates due to strong underwriting capacity for primary insurers and reinsurers.”

Additional key findings:

Read more...Apartment Insurance Costs Increase for the Second Consecutive Year According to National Multi Housing Council Report - NMHC - National Multi Housing Council - NMHC

Job Growth Increases in Retail and Multifamily Sectors via CCIM Institute

Declining unemployment, an increase in building permits, and an uptick in home prices all contributed to commercial real estate job growth, according to the Cornell/Select Leaders Job Barometer report. According to the report, commercial real estate job postings are up 32 percent over 2011.

Jobs postings in the retail sector grew 22 percent in 2012, followed by multifamily, which has seen a 15 percent year-to-date increase. Banking, office, and single-family, the other sectors tracked in the report, also showed year-over-year increases.

Read more...Job Growth Increases in Retail and Multifamily Sectors | CCIM Institute

GSE Reform Could Have Dire Unintended Consequences for Renters via

Rental housing is a growing crisis according to the Center for American Progress, but policymakers have made it "an afterthought in the debate over the future of mortgage giants Fannie Mae and Freddie Mac." David M. Abromowitz, a Senior Fellow at the Center, said that the U.S. housing market appears on the road to recovery but any mention of a broad "housing recovery" ignores the far less rosy future of roughly a third of the U.S. population, the 100 million people who rent.

Renters face a long-term and growing affordability crisis. The demand for rental housing has skyrocketed and production has failed to keep up. As a result rents have climbed 4 percent this year while middle class wages have stalled and now one of every four renters spends more than half their monthly income on housing. Rents are projected to increase by at least another 4.6 percent next year and 4 percent in both 2014 and 2015.

Read more...GSE Reform Could Have Dire Unintended Consequences for Renters

Tuesday, December 11, 2012

Should Apartment Landlords Worry About an Improving Housing Market? via

In last month’s column, we argued that the strong multifamily market will continue on despite the flood of new supply coming online in the following years. This month, we tackle another source of concern for landlords and apartment investors. Could further improvements in the housing market dent the current upswing in the apartment market?

Home prices and sales have recently passed what many believe to be their cyclical trough, coinciding with a slowdown in demand for apartments that was visible in third quarter data. The timing of both these occurrences suggests that an upturn in the single-family housing market may be contributing to slowing improvements in multifamily fundamentals.

Housing market data releases have been uniformly positive in recent months. Home prices, as represented by the S&P/Case Shiller Composite 20 Index, having been increasing on a month-to-month basis for six straight months. More importantly, year-over-year price growth turned positive during the summer and his been increasing in each month since then.

Read more...Should Apartment Landlords Worry About an Improving Housing Market? via

Commercial and Multifamily Mortgage Debt Outstanding Increases for Fourth Straight Quarter via Multi-Housing News Online

Washington, D.C.—The level of commercial/multifamily mortgage debt outstanding increased by $6.6 billion, or 0.3 percent, in the third quarter of 2012, as three of the four major investor groups increased their holdings, according to the Mortgage Bankers Association (MBA).

The $2.38 trillion in outstanding commercial/multifamily mortgage debt was $6.6 billion higher than the second quarter 2012 figure. Multifamily mortgage debt outstanding rose to $825 billion, an increase of $12.1 billion or 1.5 percent from the second quarter of 2012.

Read more...Commercial and Multifamily Mortgage Debt Outstanding Increases for Fourth Straight Quarter | Multi-Housing News Online

Occupancy soars in Killeen-Temple via Real Estate Center at Texas A&M University

Occupancy for Temple-Killeen area apartments have reached 96.6 percent, up from 88.8 percent in 2011. About 500 of the area’s 14,392 units are vacant, according to Darrell Jack, president of Apartment Market Data.

Competition could only become stiffer if forecasts for 7.2 percent population growth are right. Pitney Bowes Software ranked the Temple-Killeen area third in the nation for projected percentage growth with the addition of almost 10,500 households by 2017.

Read more...Occupancy soars in Killeen-Temple via Real Estate Center at Texas A&M University

Home price appreciation driven by investors: DBRS via HousingWire

Home prices are expected to continue to rise in 2013, especially with investors on the hunt for good buys, but the New Year is expected to bring at least a few drops in home values along the way, according to real estate analysts.

Analysts with DBRS released a report this week, saying home acquisitions by investors are likely to keep pushing home prices higher. But the company's latest report also says mass real estate consumption by investors could eventually lead to large capital gains, bringing ever increasing competition and then dampening yields at some point.

The end result of this would be a tapering off in investors' appetites for homes, leading to a dip in home prices in certain regions, DBRS said.

Read more...Home price appreciation driven by investors: DBRS | HousingWire

Multifamily Production Index Shows Apartment and Condominium Market Remained Steady in 3Q via

The Multifamily Production Index (MPI), released by the National Association of Home Builders (NAHB), remained steady with an index level of 52. It is the third straight quarter with a reading over 50. The MPI, which measures builder and developer sentiment about current conditions in the apartment and condominium market on a scale of 0 to 100, was essentially unchanged in the third quarter, only dropping two points from 54 in the second quarter.

The MPI provides a composite measure of three key elements of the multifamily housing market: construction of low-rent units, market-rate rental units and “for-sale" units, or condominiums. The index and all of its components are scaled so that any number over 50 indicates that more respondents report conditions are improving than report conditions are getting worse. In the third quarter of 2012, the MPI component tracking builder and developer perceptions of market-rate rental properties recorded a level of 69 and has been over 60 for five consecutive quarters—the longest sustained period of strength since the inception of the index in 2003. For-sale units had its highest reading since the fourth quarter of 2005, coming in at 44, while low-rent units dropped 15 points to 46.

Read more...Multifamily Production Index Shows Apartment and Condominium Market Remained Steady in 3Q - Multifamily News Headlines – Breaking News, Stories, Top Headlines ::

Monday, December 10, 2012

21 Questions: On Real Estate Demographics via Multifamily Insight Blog

As a property owner (or manager) how can you say you know your assets without knowledge of the human demographic surrounding the assets in your care? Demography is the study of statistics about human populations. Many people turn the page when they see the word demographics. It seems like the study of “something” that could be useful.

A review of demographic patterns is all about trends. These trends make and break fortunes. Here are a few examples:

  • When an area is gaining in population with people earning high incomes property values rise.
  • When young people move away from an area in droves, as occurs in small communities with limited job prospects, the in-place population ages rapidly and eventually income falls since there are fewer wage earners.

Read more...21 Questions: On Real Estate Demographics | Multifamily Insight Blog

Conference Speakers Warn of ‘Mounting Fears’ for Affordable Housing via Multi-Housing News Online

There may be increasing concern about the prospects for affordable housing. Speakers at the New York Housing Conference (NYHC) and National Housing Conference’s (NHC) 39th Annual Awards program warned that the outcome of Capitol Hill fiscal negotiations may not be favorable to the industry’s production, preservation and investment programs.

There are “mounting fears that negotiations to avert the Fiscal Cliff could leave affordable housing programs vulnerable,” said Judy Calegero, CEO of NYHC. Calegero said that one estimate places the chance for the survival of the Low Income Housing Tax Credit at a little better than 50 percent. The housing industry faces strong headwinds, and conditions demand that it charts a new course, she said.

“What frightens us is what happens” to the tax-exempt and LIHTC programs, said Richard Gerwitz, managing director of Citi Community Capital, at a panel. He said he has heard some alarming rumors. “Certainly it will be a different world no matter what happens.”

Read more...SPECIAL REPORT: NYHC/NHC Conference Speakers Warn of ‘Mounting Fears’ for Affordable Housing | Multi-Housing News Online

The Case for Lower Multifamily Cap Rates via NREI Readers Write

Attend any number of multifamily conferences around the Tri-State region and cap rates are sure to be a topic of discussion. But while many suggest that cap rates for multifamily rental properties will flatten in the future or even rise, I would argue that they can (and likely will) go lower. There are number of factors driving this compression, including a healthy amount of cash that is ready to return to the market; record low interest rates; and a desire among both Generation Y consumers and the Baby Boomer generation (some 76 million strong) to forgo homeownership in favor of renting. But what’s arguably most important to the cap rate debate will be the fate of the home mortgage interest deduction.

First, let’s follow the cash flow. There is a strong stable of Real Estate Investment Trusts that have large amounts of cash they are looking to deploy, and multifamily is currently the most stable asset class available. In September, the Multifamily Production Index (MPI), released by the National Association of Home Builders (NAHB), improved for the eighth consecutive quarter with an index level of 54. It is the highest reading since the second quarter of 2005. The MPI, which measures builder and developer sentiment about current conditions in the apartment and condominium market on a scale of 0 to 100, rose from 51 in the first quarter to 54 in the second quarter.

Read more...The Case for Lower Multifamily Cap Rates | NREI Readers Write

Commercial Real Estate Investment Environment Shows Small Signs of Improvement via CCIM Institute

Investment conditions have improved modestly across all property sectors, while property values remain flat and transaction volumes have decreased. These results were released today by CCIM Institute (, one of the largest commercial real estate networks in the world, following a national third-quarter survey of CCIM members conducted by Real Estate Research Corp. (RERC).

Slow economic growth, high unemployment and anticipated federal tax increases are factors that continue to negatively impact the commercial investment environment, based on the report. The climate remains challenging for commercial real estate investors, who struggle to find viable opportunities in a slow-growth environment. A small silver lining – commercial real estate remains a reasonable and sturdy investment choice for investors seeking realistic returns and minimal volatility, according to CCIM members.

Read more...Commercial Real Estate Investment Environment Shows Small Signs of Improvement | CCIM Institute

Whatever Happened to CRE Distress? via

At one point the level of distress commercial real estate was close to $200 billion, according to Delta Associates, which tracked these figures and released them quarterly to the waiting-with-baited-breath commercial real estate industry. What that number is today, though, Greg Leisch, president of Delta Associates, couldn’t tell you.

"We stopped tracking it," he tells "There's no longer a demand for the information or demand for distress services—and that is a market indicator in itself I would guess."

Not to worry, though. There are plenty of other statistics that capture the progress of commercial real estate loan delinquencies. The Mortgage Bankers Association, for instance, has released its Commercial/Multifamily Delinquency Report. Among its choicer findings, according to Jaime Woodwell, MBA's vice president of Commercial Real Estate Research: the delinquency rate on bank-held loans is at its lowest level since the beginning of 2009. CMBS is doing relatively well, too, he says, with the delinquency rate for these loans, while still elevated, continuing to stabilize.

Read - Whatever Happened to CRE Distress? - Daily News Article

Friday, December 7, 2012

Demand for Commercial-Mortgage Bonds Defies Expectations via WSJ

The busiest December for commercial mortgage-backed securities issuance in five years is being met with strong interest from investors.

Benchmark classes from most CMBS are pricing at healthy levels after softening last month when investors anticipated a rash of new supply would overwhelm typically thin year-end buying. In all, at least $4.6 billion will price or has already sold, the most in any year-end push since 2007, according to Deutsche Bank DBK.XE -1.06%.

CMBS “is flying off the shelf,” said Edward Shugrue, chief executive at Talmage, an investor and bond servicer.

Read more...Demand for Commercial-Mortgage Bonds Defies Expectations - Developments - WSJ

Long-Term Renting | The Balance Sheet via Yardi Corporate Blog

The nation’s homeownership rate is the lowest in 50 years, estimated at 62.1 percent, as reported by the Examiner. With 3.8 million homeowners 90 days or more delinquent on their mortgage payments and a wavering single-family housing market, long-term renting appears a much more viable solution to deal with the economic uncertainties that affected the residential real estate during the recession.

The overall U.S. apartment sector gained considerable momentum in the first two quarters of 2012, spurred by an increased demand of urban living and a shortage of new residential development. The improved multifamily market conditions allowed landlords to raise rents and continue on a path of steady recovery, though at a slower pace than earlier this year.

The third quarter wrapped with an annual effective rent growth rate of 3.64 percent in September, while the occupancy rate climbed to 94.55 percent, according to Axiometrics Inc, a national provider of apartment data and apartment market research. The peak for annual growth in 2012 was 4.14 percent in April, during prime leasing season.

Read more...Long-Term Renting | The Balance Sheet - Yardi Corporate Blog

Fannie and Freddie Are Not Piggy Banks via Bloomberg

What does a U.S. immigration program have to do with the housing market? Nothing. Yet lawmakers are once again attempting to tap mortgage-finance giants Fannie Mae and Freddie Mac to fund unrelated legislation, this time to cover the cost of increasing the number of green cards for foreign graduates with advanced degrees. Fannie and Freddie, it seems, have become Washington’s favorite piggy bank.

Some may see this as a good thing. The U.S., after all, spent $190 billion bailing out the companies, so why not siphon some of the money back to pay for other priorities? The reality is that doing so raises mortgage costs for borrowers regardless of their credit risk, threatens to stall the housing market’s comeback and lowers the odds that Washington will ever fix the two companies.

Read more...Fannie and Freddie Are Not Piggy Banks - Bloomberg

Developers of New Housing Aim for Renters, Not Buyers via

Houston is better known for urban sprawl than dense apartment living. But as part of a national rush to capitalize on rising rents, developers there are building thousands of apartments like those south of downtown at Camden City Centre, where 268 units will open early next year in a complex that also has two swimming pools, billiards tables, a coffee bar and a fitness center.

As residential building recovers from a near standstill after the housing crisis, much of the momentum is coming not from subdivisions with green lawns and two-car garages but from rental apartments. Multifamily construction nationwide is two-thirds of the way back to its prerecession peak, while single-family home construction is still only about a third of the way back to its peak, said David Crowe, the chief economist of the National Association of Home Builders.

The multifamily construction recovery, fueled by young people who are striking out on their own, is strongest in the South and West, particularly in markets where job growth is picking up. Last month, the Commerce Department released data on new construction that showed new apartment complexes were going up at the fastest rate since July 2008.

Read more...Developers of New Housing Aim for Renters, Not Buyers -

More Leverage for Conduit Loans, Says Moody's via

As the recovery continues for commercial real estate, conduit lenders are opening the taps—tempting borrowers with risky levels of leverage, according to Moody’s Investors Service.

“As the lending market continues to ramp up, competition among issuers will lead to a further decline in credit underwriting standards,” according to Moody’s “US CMBS 2013 Outlook: Credit Quality of New Loans to Slip But Not to Peak Levels.”

You might not feel like you’re getting high-leverage loan offers from conduit lenders, but Moody’s loan-to-value measure considers capitalization rates through market cycles, taking into account the recent run-up in commercial property values compared to income from those properties.

Read more...More Leverage for Conduit Loans, Says Moody's

Moody’s: Detroit, Dallas biggest CMBS losers via HousingWire

Of the 10 metropolitan statistical areas with the highest dollar losses for all of the liquidated commercial-mortgage backed securitized loans, Detroit placed first, with 59.2% followed by Dallas-Fort Worth, with 40.9%, according to Moody’s Investors Service.

In the third quarter, Detroit’s MSA had an additional $71.2 million in losses, increasing loss severity from to 59.2% from 58.3% in the previous quarter.

Dallas’ MSA had the second highest total dollar loss, with an additional $32.8 million in losses in the third quarter. Loss severity decreased to 40.9% from 41.9% in the prior quarter.

Read more...Moody’s: Detroit, Dallas biggest CMBS losers | HousingWire

Housing, Multifamily On Steady Growth Track via

The housing industry received good news in the form of two separate reports from the National Association of Home Builders. In one, the Multifamily Production Index held steady with a score of 52, making it the third straight quarter with a reading over 50. In the other, NAHB reported that the number of housing markets considered to be "improving" has jumped by 76 to reach 201 in December.

The MPI measures builder and developer sentiment about current conditions in the apartment and condominium market on a scale of 0 to 100. In the third quarter of 2012, the MPI component tracking builder and developer perceptions of market-rate rental properties reached a record score of 69. In addition it has been over 60 for five consecutive quarters, which is the longest sustained period of strength since the inception of the index in 2003. For-sale units had its highest reading since the fourth quarter of 2005, of 44, while low-rent units dropped 15 points to 46.

Read - Housing, Multifamily On Steady Growth Track - Daily News Article

Thursday, December 6, 2012

Capital Economics predicts housing improvement through 2014 via HousingWire

Home sales and housing starts are anticipated to gain steam in 2013 and 2014, likely reflecting gains seen this year, Capital Economics reported in its fourth quarter housing market report.

The report shows that traditional mortgage-dependent buyers, many of which are institutions versus individuals, will begin to play a more crucial role in the housing recovery.

In 2013, Capital Economics believes the shortage of inventory will lessen as properties in the shadow inventory begin to join the market as short sales instead of foreclosures.

Read more...Capital Economics predicts housing improvement through 2014 | HousingWire

Multifamily Permits Boom in Secondary Markets via Multifamily Executive Magazine

The latest data from Dallas-based Axiometrics shows that multifamily permits were on the rise in October in almost all major metros in the United States.

But there were some surprises in terms of where the largest increases were taking place. One would think and expect metros like New York, San Francisco, and Washington, D.C. to top this list.

But some smaller cities had a more productive third quarter for permits than did many larger cities. In terms of the number of permits issued in October 2012 compared to October 2011, the leading cities were mostly secondary markets.

Read more...Multifamily Permits Boom in Secondary Markets - Permitting - Multifamily Executive Magazine

Houston Is Booming, Pushed by, Surprise, Its Energy Industry via

Even first-time visitors here can tell that the city is growing rapidly. Construction cranes overhang office and apartment sites all along the Katy Freeway, a stretch of Interstate 10 that connects a string of booming submarkets west of the 610 Loop. This expanse includes the Westchase neighborhood and the Energy Corridor, home to an expanding cluster of energy companies.

The energy sector drives job growth and all manner of business activity here, with the greatest demand for office space concentrated in the west side where oil and gas companies are clustered, in the medical center just south of the central business district and in the Woodlands, a master-planned community 27 miles north of downtown.

“Houston is clearly a growth leader,” said Walter Page, director of office research at Property and Portfolio Research in Boston. “It was the first major economy in the U.S. to register more jobs than it lost in the recession.” Employment here is up 3.7 percent since August 2008, when it peaked before declining during the recession. That compares with New York’s gain of just 0.7 percent from its peak in April 2008 before declining, Mr. Page said.

Read more...Houston Is Booming, Pushed by, Surprise, Its Energy Industry -

Wednesday, December 5, 2012

Rent Perks for Landlords: Transit-Oriented Apt. Developers Reap Occupancy, Income Premiums via CoStar Group

Stubbornly high gas prices and gridlocked freeways have compelled younger workers and retiring Baby Boomers to rethink the suburbs as a place to live and work. As the apartment pipeline again fills to pre-recession levels, recent construction data shows that cities and forward-thinking multifamily developers are getting the message.

A CoStar analysis of apartment construction data since 2000 shows a significant shift over the last couple of years toward new multifamily projects located within walking distance of rail and bus lines. It also found that landlords such apartments collect higher rents and have higher occupancies than non-transit-oriented properties. These communities are often part of larger, pedestrian friendly transit-oriented developments (TODs) featuring a mix of office, shopping and entertainment districts encouraged by municipal planners as a key strategy to lure businesses, residents and visitors to revitalize urban and outer-ring neighborhoods.

Read more...Rent Perks for Landlords: Transit-Oriented Apt. Developers Reap Occupancy, Income Premiums - CoStar Group

Insanity: The New Norm via Commercial Property Executive

We must be an insane lot. We’ve seen this play before, performed by the same actors, and for some reason, we think (perhaps “hope,” is more accurate) that this time, things will turn out differently.

But it shouldn’t take Einstein to tell us that it is unlikely we will see a different outcome during this fiscal crisis. Not only are we up against another debt ceiling, but we are also facing the “fiscal cliff” of automatic tax increases and cuts to domestic/defense spending, which this same administration and Congress concocted when they were unable to come to agreement about raising the debt ceiling last year. As a result of that debacle, Standard & Poor’s lowered the nation’s credit rating to AA+ (the first downgrade in our nation’s history), the stock market tanked, and investors were left holding the bag. This time, both Fitch and Moody’s have already stated that they will lower their credit outlooks for the U.S. if lawmakers do not take meaningful steps to reduce the nation’s debt burden. Meanwhile, the stock market leaps at any hint of success, and falters when the political commentary is less hopeful.

Read more...Insanity: The New Norm | Commercial Property Executive

Appeal Keeps Building for a Still Unproven Investment In Housing Rental Market via CoStar Group

One of the most significant real estate investment trends of 2012 has been the tremendous amount of institutional capital directed into single-family housing rental investments. And while it’s still too early to tell whether it’s all a passing fad or 'the next big thing,' some have begun questioning whether the burgeoning industry will see long-lasting returns in rental income and property value appreciation.

If a fad, then the investment activity over the past few weeks could be the zenith of the trend. If part of a long-term housing recovery play, then the recent developments may well represent an inflection point as several new domestic and international institutional players have placed big bets on the market, including Blackstone and Colony Financial, which have stepped up their earlier efforts to expand their single-family holdings.

Blackstone formally launched its Invitation Homes last month as its national single-family rental platform.

Read more...Appeal Keeps Building for a Still Unproven Investment In Housing Rental Market - CoStar Group

Payment Processing, Present and Future via Multi-Housing News Online

When it comes to payment processing, mobility is just one of many drivers shaping how owners/managers are doing business. Many are offering more ways to pay, striving to eliminate paper wherever possible, opening rent-payment kiosks at retail locations, seeking to incorporate greater security into payment systems and striving for ways to make the process more cost effective.

There’s no doubt the industry has embraced mobile as an increasingly popular way to provide payment. Residents are alerted to payments due by text messages or mobile-friendly apps, and rents are drawn from their checking accounts through Automated Clearing House (ACH) transfers and other means.

Mobile is so big it’s no longer a trend. It has transcended that term, says John Pendergast, senior vice president of client services with Santa Barbara, Calif.-based Yardi Systems. “The mobile population is not growing or increasing. Today, everyone is walking around with their smartphone or tablet,” he says. “If you’re preparing now to serve a mobile population, you’ve missed the boat.”

Read more...Payment Processing, Present and Future | Multi-Housing News Online

CMBS Delinquency Rate Inches Higher After Three Months of Improvement via MarketWatch

Trepp, LLC, the leading provider of information, analytics and technology to the CMBS, commercial real estate and banking markets, released its November 2012 U.S. CMBS Delinquency Report today (available at ).

The delinquency rate for U.S. commercial real estate loans in CMBS inched slightly higher in November, rising two basis points to 9.71%. This tick upward came after three consecutive months of decline. From July through October, the rate fell 65 basis points from an all-time high of 10.34% in July to 9.69% in October.

One of the main contributors to the rate moving up in November was an increase in newly delinquent loans. November saw around $3.7 billion of such loans, which compares to $2.6 billion in October. As a result, the pressure these delinquent loans put on the rate outweighed the sizeable amount of loan resolutions in November.

Read more...CMBS Delinquency Rate Inches Higher After Three Months of Improvement - MarketWatch

Ethics in Property Management: A Cutting-Edge Topic? via Multifamily Blogs

Absolutely! Why, you ask? It's not a bunch of boring legal stuff that is neither cool nor sexy. Heck, it's not even about marketing, technology, social media, or anything current or trending, as they say. Or is it?

I think it's very cutting edge to act ethically, and above all, with the highest respect for your employer, clients, and customers. It's not an easy track to maintain with all of the examples we see and hear about every day. Other people did it, so why not me? So-and-so was able to do this and they got away with it. Why should I walk the straight line? If they don't know it, it won't hurt them. Hey, I can e-mail documents, take files, and share information about my properties or clients freely! What's the big deal?

Today more than ever, the world is becoming more and more transparent. Documents, information, and actions move so fast. You can't hide, run away, or conceal your actions. There is e-mail, tweets, LinkedIn, and many other virtual business networks where your trail of activity exists. Use extreme caution. Ignorance is not bliss when it comes to this vital aspect in our roles as property managers, leasing agents, or company executives.

Read more...Ethics in Property Management: A Cutting-Edge Topic? - Multifamily Blogs

El Paso’s New Supply Surge Pulls Down Rent Growth Levels via Property Management Insider

by Jay Parsons on December 5, 2012

Back in 2010, no apartment market in the country was hotter than El Paso. That led to a surge in new development, which triggered a significant slowdown in rent growth levels and a decline in occupancy rates.

Watch Video...El Paso’s New Supply Surge Pulls Down Rent Growth Levels | Property Management Insider

Texas Economic Indicators December 2012 via Dallas Federal Reserve

The Texas economy continues to expand, with employment growing at a 2.5 percent annual rate in October. Texas existing-home sales, single-family construction permits and housing starts all increased in October. Texas exports ticked up slightly in the third quarter. Manufacturing activity was little changed in November, according to the Texas Manufacturing Outlook Survey.

Texas gained 22,900 jobs in October after adding 23,600 jobs in September. Current Texas employment stands at 10.95 million.

The Texas unemployment rate edged down to 6.6 percent in October from 6.8 percent in September. The Texas rate remains lower than the U.S. rate, which was 7.9 percent in October.

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

MBA calls for government-backed multifamily insurance program via HousingWire

The Mortgage Bankers Association’s GSE Multifamily Task Force presented a white paper today, which discussed the future roles of Fannie Mae and Freddie Mac in multifamily housing finance. The paper called for a government role that attracts larger private capital and outlined a government-backed insurance program that ensures access to liquidity in all market conditions.

The program would be funded through risk-based premiums, which were paid by those who securitized the loans.

The paper titled "Ensuring Liquidity and Stability: The Future of Multifamily Housing Finance and the Government-Sponsored Enterprises" underscores the importance of multifamily rental housing and the roles of the government-sponsored enterprises.

Read more...MBA calls for government-backed multifamily insurance program | HousingWire

Tuesday, December 4, 2012

Booming Business Opportunity via Multi-Housing News Online

The 65-plus population in the United States, which measured about 40.3 million in 2010, is expected to reach 54.8 million by the end of this decade. That’s a 36 percent growth, propelled by the fact that 40 million baby boomers will turn 65 in this time.

According to “Housing in America: The Baby Boomers Turn 65,” a new report released this fall by The Urban Land Institute, the combination of aging baby boomers and those a bit older has created a variety of market segments and it is posing new opportunities and challenges for the housing industry. The report highlights the Leading Edge Boomers (born between 1943-1954), the Silent Generation (aged 67 to 85) and the Greatest Generation (aged 85 and older).

“The 65-plus age group is the fastest growing age group in the United States and will be for the rest of this decade, as the rate of growth for that group is accelerating,” says John McIlwain, ULI’s senior resident fellow for housing and author of the report. “Over the last two decades, unprecedented change has occurred, and today three separate generations are over 65, each with its own outlook on life and distinct housing needs that are unlike those of past markets for people in their age group.”

Read more...Booming Business Opportunity | Multi-Housing News Online

Capital Economics: Fed likely to replace Operation Twist with more QE3 via HousingWire

The Federal Reserve is likely to expand the third installment of its open-ended quantitative easing program, under which the Fed is currently purchasing $40 billion of agency mortgage-backed securities per month. This extended QE stimulus is expected to replace the expiring Operation Twist, according to Capital Economics.

Analysts with Capital Economics predict the Fed will use the next Federal Open Market Committee, concluding on Dec. 12, to announce plans to continue buying $40 billion of long-term Treasury securities each month. The Fed also could adopt "numerical threshold for its guidance" in regards to the duration of short sales to remain at near zero, Capital Economics said.

Read more...Capital Economics: Fed likely to replace Operation Twist with more QE3 | HousingWire

Home Price Growth vs. Rent Growth in Top 25 Metros via Multifamily Executive Magazine

Earlier today, Trulia released the latest data for its November 2012 Trulia Rent Monitor. Rents were up nationally 5.6 percent year-over-year in November, compared to asking prices on for-sale homes increasing 5.4 percent over the same period.

But out of the Top 25 metros included in Trulia data, only 11 saw rents increase at a higher rate than asking home prices. Does this mean a housing recovery is really beginning to pick up steam? Take a look at the list below to see how the top 25 cities fared in home price growth versus rent growth during the month of November.

Read more...Home Price Growth vs. Rent Growth in Top 25 Metros - Rents - Multifamily Executive Magazine

Top 5 Property Management Mistakes & How to Fix Them via

Property management is a complex job with lots of details and a diverse clientele. In order to keep your business running in the most productive and efficient way possible, it is important to keep these 5 common mistakes in mind and to do your best to avoid or remedy them. If you take these issues into account, you will increase the likelihood of saving money and time in the long run.

1. Hiring New Contractors Every Time
When a maintenance issue emerges, it is understandable that you want to get it fixed as economically as possible. Contractors can charge anything they want, so if you shop around with each round of repairs or maintenance tasks, sure you can save a penny or two. However, you are going to pay in delayed time as well as increased risk, as your assurance of the project being completed efficiently and with a long-term solution is vastly reduced. In addition, you’ll potentially have to spend extra time in dealing with tenant complaints while you bid out the work. Instead, look to build a network of highly trusted, responsive contractors whom you can call on time and time again. You’ll be more efficient, faster and achieve higher quality work – keeping your tenants happier in the process.

Read more...Top 5 Property Management Mistakes & How to Fix Them via

Capital Markets Outlook: Low Rates, More Lenders in 2013 via Multifamily Executive Magazine

While rent hikes in 2013 probably won’t match the robust rates seen the past couple years, rock-bottom debt pricing should continue unabated in 2013.

Given the Fed’s commitment to prevailing monetary policies, the low-rate environment won’t retreat any time soon–the federal budget’s looming fiscal cliff notwithstanding. Meanwhile the budding re-emergence of Wall Street conduits should help keep other conventional apartment lenders quoting tight spreads, multifamily finance pros agree.

“Any concern we may have about higher (interest) rates or wider (apartment) spreads would be beyond 2013,” relates Matthew Rocco, national production manager with Grandbridge Real Estate Capital. “So we may see one of the best years ever in terms of debt costs and availability.”

Read more...Capital Markets Outlook: Low Rates, More Lenders in 2013 - Capital Markets - Multifamily Executive Magazine

Monday, December 3, 2012

Foreclosure process in Texas remains busy, analysis finds via San Antonio Business Journal

Over the 12 months ended Oct. 31, 2012, a total of 59,256 foreclosures were completed in the Lone Star State, according to the latest analysis by Irvine, Calif.-based CoreLogic.

Completed foreclosures are an indication of the total number of homes in a given area that have actually been lost to the foreclosure process.

Texas was one of five states that recorded the highest number of completed foreclosures between October 2011 and 2012, the analysis finds. The other four were California, which completed 105,000 foreclosures between October 2011 and 2012; Florida, 95,000; Michigan, 68,000; and Georgia, 54,000.

Read more...Foreclosure process in Texas remains busy, analysis finds - San Antonio Business Journal

U.S. Multi-Housing Vacancy Rate Expected To Rise Slightly In 2013 But Remain Near Historic Average via CBRE

The U.S. multi-housing market vacancy rate is expected to rise modestly to 5.3% in 2013, according to a new analysis from CBRE Group, Inc. The increase, from a rate of 4.5% in Q3 2012, will be driven by new construction completions and a slight tapering off of demand from historically robust levels in recent years. CBRE forecasts that the multi-housing vacancy will fall back to 5.2% in 2014.

The multi-housing vacancy rate is projected to be 5% for 2012, down from 5.4% in 2011 and from 7.3% at its 2009 peak.

“It is a great time to own multi-housing properties: apartment demand is benefiting from the slowly recovering economy as well as rapidly expanding pool of renter households,” said Gleb Nechayev, Senior Managing Economist, CBRE Econometric Advisors.

Read more...U.S. Multi-Housing Vacancy Rate Expected To Rise Slightly In 2013 But Remain Near Historic Average

Fitch: Drop in Specially Serviced US CMBS Positive, Risks Remain via MarketWatch

The steep reduction in the balance of U.S. CMBS loans in special servicing is encouraging, Fitch believes, but this trend may intensify some of the conflicts of interest that special servicers have wrestled with. It also may be difficult to maintain over the long run, as the balance remains high and a large number of maturities are due in 2015-2017. According to data collected by Fitch, CMBS loans in special servicing dropped by almost $6.0 billion to $74.8 billion at the end of 3Q12. This balance peaked in 2010 at $91.7 million.

We believe that a similar magnitude reduction in the number of assets per special servicer asset manager and the balance of loans transferred into special servicing has allowed these companies to reduce their headcounts and operate at more reasonable levels. Over the past year, the average number of assets per asset manager has declined from 20 to 12. As recently as 2010, one special servicer had nearly 50 assets per manager. We expect the reduction in loan volume and increase refinancing opportunities to continue in the short term.

Read more...Fitch: Drop in Specially Serviced US CMBS Positive, Risks Remain - MarketWatch

San Antonio apartments 3Q 2012: Hendricks & Partners via Real Estate Center at Texas A&M University

Healthy apartment demand underpinned positive net absorption of 1,640 units in third quarter 2012, according to Hendricks & Partners.

There are more than 5,725 units under construction, as there are significant deliveries slated over the next several years.

Although there is sizeable supply growth, vacancy rates are currently at tight levels. The 3Q 2012 vacancy rate of 2.4 percent is less than half the 5.3 percent recorded in September of last year.

Read more...San Antonio apartments 3Q 2012: Hendricks & Partners via Real Estate Center at Texas A&M University

Houston economy ranked top in U.S., 40th worldwide via Your Houston News

The Brookings Global MetroMonitor has released it's 2011-2012 ranking of the largest 300 metropolitan economies worldwide, and Houston ranks the highest amongst United States cities. Houston moved up to 40 from its 2007-2011 of 194.

"Houston has partially recovered from a major recession," the Brookings Institute said. "It is outperforming the United States on employment change, but is lagging on GDP per capita change."

Houston has had a 1.7 percent GDP per capita increase and a 3.3 percent increase in employment. The city's total GPD is $399.7 billion.

Read more...Houston economy ranked top in U.S., 40th worldwide - Your Houston News: News