We’ve Hit the Halfway Point for Vintage CMBS via CoStar Group

Having just passed the five-year anniversary of the 2008 financial crisis peak, it’s a good time to review the impact of pre-crisis over-exuberance and excessive leverage on CMBS.

Total legacy U.S. CMBS 1.0 loan balances declined to $450 billion at the end of the third quarter from $825 billion at the end of 2008, as shown in Exhibit 1.1

Servicers liquidated approximately $65 billion in loans that lost a total of $28 billion over the past five years. Another $20 billion of defaulted loans either finally paid off or were liquidated with no losses. Total cumulative losses in the U.S. CMBS space have reached $32 billion, including losses sustained before the crisis.(2)

Read more...We’ve Hit the Halfway Point for Vintage CMBS - CoStar Group

DFW Economic Indicators December 2013 via Dallas Fed

The Dallas–Fort Worth economy continued to expand in November and has grown at a moderately strong pace year to date. Through November, Dallas–Fort Worth employment grew 2.6 percent, slightly above the state’s rate of 2.5 percent and well above the U.S. pace of 1.7 percent. Residential activity remains at high levels, and home inventories remain low. Strong leasing activity has kept apartment vacancies at historically low levels despite strong construction. The Dallas and Fort Worth unemployment rates remain below those of the U.S. and Texas, and the Dallas Fed Business-Cycle Indexes suggest continued expansion for the Dallas–Fort Worth metroplex.

Dallas–Fort Worth employment continued to increase in November but at a slower pace. November jobs grew at an annual rate of 1.0 percent following more robust growth in October. For the year, Dallas–Fort Worth has added 73,700 jobs. Currently, Dallas–Fort Worth Worth employment stands at 3.14 million, according to the Bureau of Labor Statistics’ payroll survey.

Read more...DFW Economic Indicators December 2013 via Dallas Fed

Economists: Texas Economy to Grow Stronger in 2014 via GlobeSt.com

Economists with BBVA Compass and Wells Fargo agree that the U.S, along with the Texas and Dallas-Forth Worth economies, will experience stronger growth in the coming year.

Both firms expect employment to improve and consumer confidence to grow in 2014. BBVA Compass predicts GDP growth in 25 states to exceed the U.S. average of 2.3% in 2014, driven by real estate, manufacturing and energy markets, according to the Dallas Morning News.

Read more...Economists: Texas Economy to Grow Stronger in 2014 - Daily News Article - GlobeSt.com

San Antonio Apartment Market Update November 2013 via oconnordata.com

Market Summary

Most key metrics of the San Antonio area multifamily sector recorded positive changes in November 2013.

The occupancy figures recorded mostly negative values for all the classes. For class A properties, occupancy decreased by 0.28% over the month to close at 93.47%; and decreased by 0.22% over the year. For Class B properties, occupancy went up by 0.01% over the month and decreased by 0.04% over the year to close at 92.29%.

Read more...San Antonio Apartment Market Update November 2013

Austin Apartment Market Update November 2013 via oconnordata

Market Summary

All metrics for the Austin area multifamily sector recorded both positive and negative changes in November 2013.

Occupancy figures recorded both positive and negative figures for the classes for the month. Class A properties reported a decrease of 0.51% over last month, and 0.10% over last year. The largest increase over the month was recorded for Class B reporting an increase of 0.11%. The largest increase over the year was also noted for Class B with an increase of 0.40%.

Read more...Austin Apartment Market Update November 2013

Dallas/Ft. Worth Apartment Market Update November 2013 via oconnordata

Market Summary

The key metrics for the Dallas/Fort Worth area multifamily sector recorded significant changes both over the month and over the year.

Over the month all the classes recorded mostly an upward trend in terms of occupancy. Class A properties recorded a decrease of 0.23% over previous month. Also on a year-over-year basis Class A properties recorded a decrease of 0.36%. Class C recorded the largest increase of 0.09% over the month. The largest annual increase of 1.66% was also noted for Class C properties.

Read more...Dallas/Ft. Worth Apartment Market Update November 2013

Houston Apartment Market Update November 2013 via oconnordata.com

Market Summary

Key metrics for the Houston area multifamily sector recorded both positive and negative changes in November 2013.

Occupancy figures for the classes recorded both positive and negative changes over the month. Class A recorded a decrease of 0.19% to close at 94.28%. The largest monthly increase was noted for Class C properties (0.25%). For Class A properties the average went down by 0.53% over the year. The largest annual increase was also noted for Class C properties with an average increase of 2.87% to close at 89.50%.

Read more...Houston Apartment Market Update November 2013

Texas unemployment rate hits five-year low via Dallas Business Journal

The Texas unemployment rate dropped to 6.1 percent in November, the lowest it’s been in nearly five years, according to statistics released Friday by the Texas Workforce Commission. At the same time, the state ranked second in the nation for job creation, adding 28,700 non-farm positions, the U.S. Bureau of Labor Statistics also reported.

In the Dallas area, the unemployment rate was even lower: 5.7 percent, dropping from 5.9 percent in October and 5.8 percent in November 2012. In the Fort Worth area, joblessness was at 5.5 percent.

Read more...Texas unemployment rate hits five-year low - Dallas Business Journal

Where the Renters Live Now - Emily Badger via The Atlantic Cities

Alongside a wealth of new data released Tuesday from the American Community Survey, the Census Bureau unveiled a nice new mapping tool that makes it possible to visualize individual neighborhoods by everything from the age of the local population to the median income to the share of residents with a high school diploma. The most recent picture is based on new five-year ACS data from 2007-2012.

But the tool also pulls in results form the 1990 and 2000 censuses, making it possible to compare states, counties and census tracts over time across each of these categories.

Read more...Where the Renters Live Now - Emily Badger - The Atlantic Cities

Demand prompting a new wave of multifamily development in San Antonio via San Antonio Business Journal

By the end of 2013, a total of 4,000 new apartment units will have been added to the San Antonio-area apartment market.

Then it’s on to 2014 where the market could gain another 6,000 new apartment units in and around the Alamo City.

The roster of players includes some relative newcomers, like Turner Busby Development LLC, and well recognized names, like locally based Embrey Partners.

Read more...Demand prompting a new wave of multifamily development in San Antonio - San Antonio Business Journal

Austin unemployment rate steady pace in 2013 via Real Estate Center at Texas A&M

Austin's unemployment plateaued at around 5 percent throughout most of 2013 — nearly a full two points below the national average. The region's employers added 20,795 jobs between January 2013 and October 2013, according to the U.S. Bureau of Labor Statistics.

The new jobs outpaced labor force gains over the same period of 15,289, driving the not seasonally adjusted unemployment rate down from 5.8 percent in January to 5.1 percent in October.

Read more...Austin unemployment rate steady pace in 2013 via Real Estate Center at Texas A&M

Regional Economy Continues Moderate Expansion via Dallas Fed

The Texas economy has continued to grow at a moderate pace in recent weeks. Employment has picked up significantly following weak growth in August. Energy job growth has subsided from high third-quarter rates, and construction jobs have rebounded after weakening in August. Manufacturing increased strongly in October, in part due to strength in Texas exports.

Overall job growth in 2014 is likely to be nearly the same as in 2013. Manufacturing activity is likely to pick up, while growth in energy and residential housing construction jobs may decelerate and federal government jobs will likely decline.

Read more...Regional Economy Continues Moderate Expansion - Dallas Fed

Increases, Though Slight, In Construction Employment via Axiometrics

During the Great Recession and the following financial meltdown, the construction industry took a hit. With demand for all classes of real estate faltering, this sector experienced many layoffs.

The good news is that the sector is starting to come back. The challenge is that the results are mixed.
A new analysis from the Association of General Contractors noted that, between October 2012 and October 2013, construction employment expanded in 215 metro areas, declined in 74 and was stagnant in 50. Furthermore, despite a recovering single-family market and increasing multifamily development in many metro areas around the country, construction employment remains below peak levels in 315 metro areas.

Read more...Increases, Though Slight, In Construction Employment

CBRE Sees Little Risk of Apartment Glut via GlobeSt.com

Although it may seem as though apartment development is entering a glut period, a CBRE report says that permits and starts are just now reaching their long-term averages. The comparative run-up in construction lately follows three years of dormancy, and CBRE is forecasting apartment rents to grow by approximately 2.5% per year for the next three years even as the level of development increases.

“The multi-housing sector is only now beginning to fill a supply shortage that has existed following a three-year-long drought in development resulting from the recession,” says Jim Costello, CBRE’s head of Americas Investment Research.

Read more...CBRE Sees Little Risk of Apartment Glut - Daily News Article - GlobeSt.com

3 Resident Retention Resolutions to Rock 2014 via Property Management Insider

The New Year is days away, and while we have survived the budget process, strategic planning and the company holiday party, for our over-achieving property managers out there, the question that is percolating in the back of their brains is: how do we make 2014 even better?

This past year offered opportunities to push rents, spend a little more on community improvements and training, and really allow teams to do what they do best. But what now? The only thing we can count on to be consistent in our industry is change.

Read more...3 Resident Retention Resolutions to Rock 2014 | Property Management Insider

Rent Growth Expected in U.S. Multi-Housing via World Property Channel

U.S. multi-housing rents are expected to grow approximately 2.5 percent each year for the next three years, even as the level of new construction increases, according to a report from CBRE.

The report shows that the pace of new multi-family construction in the U.S. will level off at approximately 216,000 units per year over the next five years, a figure slightly higher than historical averages.

Read more...Rent Growth Expected in U.S. Multi-Housing - WORLD PROPERTY CHANNEL Global News Center

Reflecting Back on 2013 via Commercial Property Executive

As we take a closer look at the dynamics of the economy, it seems that the economic climate has done little more than putter along in 2013.

There has been slight improvement, with third quarter 2013 GDP growing at a seasonally –adjusted annual rate of 3.6 percent, the highest rate in more than a year, and unemployment dropping to 7.0 percent in November, its lowest level since mid-2008. In addition, consumers finally pulled out their pocketbooks and retail spending increased 0.7 percent in November to five-month highs. However, business spending was weak in third quarter, with spending concentrated mostly on the build-up of inventories and almost zero spending on equipment. As for government contributions, spending is down but still running at a deficit, and many investors wonder where the economy would be without the added support provided by the Federal Reserve’s $85 billion in monthly purchases of bonds and securities.

Read more...Reflecting Back on 2013 | Commercial Property Executive

FOMC Projections and Press Conference via Calculated Risk

The key sentences in the announcement were: "In light of the cumulative progress toward maximum employment and the improvement in the outlook for labor market conditions, the Committee decided to modestly reduce the pace of its asset purchases. Beginning in January, the Committee will add to its holdings of agency mortgage-backed securities at a pace of $35 billion per month rather than $40 billion per month, and will add to its holdings of longer-term Treasury securities at a pace of $40 billion per month rather than $45 billion per month."

Read more...Calculated Risk: FOMC Projections and Press Conference

Push For Yield Will Lead to Secondary Cities in 2014 via GlobeSt.com

The push for yields will mean deeper inroads into markets outside the usual suspects in 2014, DTZ says in its Capital Markets Update issued Wednesday. “Many investors will take a harder look at the Texas, Oregon and Washington markets as the year progresses,” according to DTZ’s report, which cites Dallas, Houston—both of which are leading the recovery—as well as Seattle, Sacramento and Portland, OR.

Cross border investors in particular will have their eyes on these markets “in an effort to spread risk and improve returns as they continue their investments in the Americas,” DTZ says. Another driver, the report says, is a need to diversify portfolios and asset classes.

Read more...Push For Yield Will Lead to Secondary Cities in 2014 - Daily News Article - GlobeSt.com

U.S. Housing Starts Reach Highest Level in Five Years via World Property Channel

The number of U.S. housing starts in November increased 22.7 percent from the prior month, reaching its highest level in five years.

Housing starts reached an annually adjusted rate of 1,091,000 -- up from the revised estimate of 889,000 starts in October -- jumping 29.6 percent higher than last November's rate of 842,000, according to the U.S. Census Bureau and the Department of Housing and Urban Development data released today.

Single-family housing starts reach a rate of 727,000 in November, increasing 20.8 percent from last month's figure of 602,000.

Read more...U.S. Housing Starts Reach Highest Level in Five Years - WORLD PROPERTY CHANNEL Global News Center

Five Places Apartment Seekers Find the Zero Moment of Truth via Multifamily Blogs

Believe it or not, a lot of the marketing happening within the multifamily industry isn’t completely connected with what’s happening in the leasing office. “We are in an industry where customers self-identify as prospects and spend a considerable amount of time finding us through search,” explains D2 Demand Solutions president Donald Davidoff. “The flipside is that those prospects are coming to us at a point where they know as much or more about our product and our competitor’s product—including pricing and reviews—as we do,”

As a result, the Zero Moment of Truth (ZMOT) concept popularized by Google and trending across the multifamily marketing landscape is having a much more indelible impact, Davidoff says. ZMOT holds that consumer purchasing patterns and use of technology has empowered a new era of online leasing, targeted marketing and demand creation, and the ability to begin creating brand ambassadors at first (or zero) point of contact.

Read more...Five Places Apartment Seekers Find the Zero Moment of Truth - Multifamily Blogs

CMBS Late-Pays Likely to Finish Year Below 6% via GlobeSt.com

Delinquencies on CMBS could dip below 6% by year’s end, the lowest level since 2009, Fitch Ratings said Monday. The ratings agency cited a 22-basis point drop in November to 6.10% on the strength of four large loan dispositions. With the $2.57-billion CWCapital Asset Management asset sale still in process, Fitch is expecting more such dispositions in the weeks to come.

Even as late-pays continue to decline, Fitch notes that the prior month was not without several notable additions to the ranks. The largest was the $92-million Cerritos Corporate Center (securitized as MLMT 2006-C1), for which a deed in lieu foreclosure now appears imminent. At the same time, Fitch says the $78-million Sierra Vista Mall (COMM 2006-C8) fell 60-days delinquent last month, while the $63-million Buckingham Portfolio (GCCFC 2007-GG9) defaulted at maturity and is now reported as a nonperforming matured balloon loan.

Read more...CMBS Late-Pays Likely to Finish Year Below 6% - Daily News Article - GlobeSt.com

APARTMENT MARKET STATISTICS: December 2013 via Multi-Housing News Online

Banks are increasing their construction loans for the first time since 2007, according to Chandan Economics. Banks registered a quarterly increase of 897,529 in the second quarter 2013.

Year-over-year growth in residential construction prices decelerated from 2.1 percent in July 2013 to 1.7 percent in August 2013. After a period of significant increases, prices of building materials now display slower rates of year-over-year growth or outright declines, according to the National Association of Home Builders.

Read more...APARTMENT MARKET STATISTICS: December 2013 | Multi-Housing News Online

Senior Renter Population Expected to Spike 40% via Reverse Mortgage Daily

American housing trends have been shifting away from ownership toward rental, says a new report, and as the population ages, the number of senior renters is expected to increase by 40% in the next decade.

In 2012, renters comprised 35% of U.S. households, reaching 43 million by early 2013, according to the Joint Center for Housing Studies of Harvard University in a 2013 report on America’s Rental Housing: Evolving Markets and Needs. While older age groups are more likely to own a home, by 2011, there were nearly 5.5 million renters aged 65 and older.

Read more...Senior Renter Population Expected to Spike 40% | Reverse Mortgage Daily

Houston Economic Update December 2013 via Dallas Fed

The Houston Business-Cycle Index has been volatile the past few months, but recent data suggest acceleration in economic activity from earlier in the year. The index grew at a strong annualized pace of 9 percent in September before slowing in October to 4.5 percent. With an active construction market and a healthy energy industry, Houston-area fundamentals remain robust heading into the end of the year.

Houston payroll employment grew at an annualized pace of 3 percent in October and 2.2 percent over the three months ending in October. Other services (which includes businesses as varied as auto repair shops and pet hotels), and construction and mining were the fastest-growing industries in October. Financial activities dropped sharply. Manufacturing employment, which had virtually ground to a halt over the summer, grew at an annualized pace of 7.6 percent in September and 6.6 percent in October, the fastest rates of the year.

Read more...Houston Economic Update December 2013 via Dallas Fed

U.S. Commercial, Multifamily Debt Rises Most Since 2008 via World Property Channel

The level of outstanding commercial and multifamily mortgage debt increased by $25.2 billion during the third quarter, the largest increase since 2008, according to the Mortgage Bankers Association.

The total outstanding commercial and multifamily debt stood at $2.47 trillion in the third quarter. Multifamily mortgage debt alone increased to $887 billion, an increase of $10.8 billion from the second quarter, the MBA reports. - See more at: http://www.worldpropertychannel.com/north-america-commercial-news/commercialmultifamily-mortgage-debt-third-quarter-2013-mortgage-bankers-association-7770.php#sthash.U2rrrIRx.dpuf

Read more...U.S. Commercial, Multifamily Debt Rises Most Since 2008 - WORLD PROPERTY CHANNEL Global News Center

New Report Hints at Slowing Apartment Development Activity in 2014 via AppFolio

Dallas-based industry research firm, Axiometrics, has released its latest housing market predictions, and the news bodes well for property managers in certain multi-housing markets tracking the rise in inventory.

The study suggests that starting next year, “the development of new apartments will slow until investors and developers see new supply absorbed and market conditions recalibrated.”

Jim Costello, managing director of America research for CBRE echoed those findings during the company’s Multi-Housing Summit Florida in Miami last month. “We see a little more construction in 2014, but that’s the peak,” he said.

Read more...New Report Hints at Slowing Apartment Development Activity in 2014

ALN Monthly Newsletter December 2013 via ALN Apartment Data

ALN Data just released their November 2013 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 2013 via ALN Apartment Data

New Year Demands New Investment Strategies via Multifamily Executive Magazine

Amid pitched competition that has driven down cap rates, identifying assets that will provide targeted returns will increasingly force multifamily investors to adopt new investment strategies during 2014.

Purchasing properties with below-market rents, subsequently strengthening occupancy and raising rents, and then selling the property for a handsome profit was a winning strategy coming out of the recession, but no more.

Read more...New Year Demands New Investment Strategies - Multifamily Executive Magazine

5 Reasons Why You Should Raise the Rent via AppFolio

While raising rent probably isn’t on any landlord’s list of fun ways to spend their day — given that tenants won’t exactly respond to the news with happy excitement — it’s a necessary part of property management.

Here are the top 5 reasons to consider raising rent.

1. Keeping Up With the Market

One of the best reasons to raise the rent is keeping up with the local real estate market. A 2013 report on the rental housing market from the U.S. Census Bureau indicates that the rental market continues to tighten across the country, with prices increasing as demand rises.

Read more...5 Reasons Why You Should Raise the Rent

Top 10 Rent Growth Markets of 2014 via Multifamily Executive Magazine

Industry experts project that some of the largest metro areas will see some of the largest rent growth next year.

Seattle will continue to grow in 2014 and is expected to see the largest percent change in rents, according to Carrollton, Texas-based MPF Research.

San Francisco will push rents by about 4.7 percent, according to the projection. The Bay Area showed job growth as the unemployment rate dropped from 6.9 percent in July to 6.1 percent in September, according to the Bureau of Labor Statistics. California markets showed strong rents over the last two years, according to the 2012 list and preliminary 2013 numbers.

Read more...Top 10 Rent Growth Markets of 2014 - Multifamily Executive Magazine

Rates, Tapering & Lending Sources: What’s a Borrower To Do? via National Real Estate Investor

As the commercial real estate market continues to improve, lenders of all kinds are getting back in the game. With a possible rise in interest rates on the horizon and the unknown effects and timing of tapering, commercial real estate professionals and lenders are watching the lending environment with eagle eyes.

With financing rates, terms and underwriting having such a huge impact on commercial real estate, I invited some industry icons to Studio One to get a view of the latest trends and an idea of what lies ahead. If you’ve heard the Commercial Real Estate Show you know we like to have fun; we called this week’s show, Show Me the Money.

Choices
Sourcing the right lenders for particular assets is important, and fortunately we have more choices today than we have had in years.

Read more...Rates, Tapering & Lending Sources: What’s a Borrower To Do? | CMBS content from National Real Estate Investor

Austin Multifamily Market Report via REBusinessOnline.com

Saying that Austin's multifamily market has been a strong performer for the past several years would be stating the obvious and hardly newsworthy, considering that all of the well-reported economic rankings list Austin at or near the top. Nevertheless, the numbers from the past five years are remarkable.

While 2013 will go into the record books as one of the best years for multifamily landlords, the real story for 2014 — and beyond — is how the market responds to the two forces that have clearly started to change: supply and financing.

Supply Surge

There is no hiding the fact that a building boom is occurring in central Austin, as the cranes for multi-family construction easily outnumber the activity in hospitality and office properties combined.

Read more...Austin Multifamily Market Report via REBusinessOnline.com

Speculators Eye Affordable Housing via NuWire

Investors are seeking higher yielding investments, looking far beyond conventional, class-A apartment properties in prime markets. A growing number are bidding for government subsidized affordable housing properties.

“We’ve seen this cycle before. Conventional real estate investors come and play in our sandbox,” says R. Lee Harris, president and CEO of Cohen-Esrey Real Estate Services, a leading owner, manager and developer of affordable housing. “This is not a business you learn overnight.”

Harris and others shared their insights at AHF Live: The 2013 Affordable Housing Developers Summit, held in Chicago, Nov. 20-22. Affordable housing has become a relatively stable, strong business over the years, but poses challenges to speculators who aim to quickly raise the rents at affordable housing properties, according to housing advocates.

Read more...Speculators Eye Affordable Housing

Renters Face Affordable Housing Crisis, Harvard Housing Study Reports via Multi-Housing News Online

Renters are spending more of their monthly incomes on housing than ever before. A major need exists for new rental buildings with affordable apartments. And though newly built rental units surged in 2012, rental completions remain below average annual levels over the previous decade.

These are among findings of the 2013 America’s Rental Housing study, released today, by Harvard University’s Joint Center for Housing Studies (JCHS). The release event at Washington, D.C.’s Newseum was headlined by Secretary of Housing and Urban Development’s Shaun Donovan.

One finding of the study is that the rental burden has never been higher. Half of renters spend more than 30 percent of their monthly income on housing.

Read more...Renters Face Affordable Housing Crisis, Harvard Housing Study Reports | Multi-Housing News Online

Developers of New Housing Aim for Renters, Not Buyers via NYTimes.com

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.

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

Feds Wage War on Bed Bugs via Property Management Insider

The war on bed bugs continues to wage on, and some heavy artillery appears to be on the way.

In September, the Environmental Protection Agency (EPA) released a draft of a Federal Strategy on Bed Bugs, which has been about three years in the making. The Strategy is intended to provide guidance for how various levels of government can join forces with pest control efforts to effectively fight the war on bed bugs.

That’s good news for the apartment industry, which has been lobbying Washington D.C. for help. The National Multi Housing Council says Congress should implement a “Manhattan Project” on bed bugs. Such brute force is needed, NMHC says, “to expedite the development of a safe and effective “next generation” pesticide to control bed bug infestations,” and that the Department of Housing and Urban Development (HUD) should help educate residents on the collateral damage potential of bed bugs.

Read more...Feds Wage War on Bed Bugs | Property Management Insider

CRE Prices Still Increasing via the Blog of the Real Estate Center

“There is too much money chasing deals.”

That was a popular phrase back in the golden years of 2006 and 2007 when it was hard to find a real estate deal to invest in that had sufficient yield. Cap rates were low, prices were high and buying intensity was fierce.

If you thought there was too much money chasing real estate deals in 2007, there is even more money chasing the same deals in 2013. Since 2007, the United States, Japan, Europe and China have printed trillions of new “dollars.” New construction has been stymied by tight credit in America. So there are trillions of new dollars chasing the same U.S. real estate.

Read more...CRE Prices Still Increasing | the Blog of the Real Estate Center

By Any Measure, CRE Default Rates Are Dropping via GlobeSt.com

Two separate reports add to the growing picture of health that is commercial real estate finance. Both reports--one from the Mortgage Bankers Association, the other from Chandan Economics—show delinquency rates dropping across most categories of loan types. "Improvements in underlying property performance and property values, and the continued availability of commercial and multifamily mortgage financing, led to declines in delinquency rates for every major investor group," said Jaime Woodwell, MBA's Vice President of Commercial Real Estate Research.

MBA reported that delinquency rates for commercial and multifamily mortgage loans continued their decline in the third quarter of 2013, with the 60+ day delinquency rate for commercial and multifamily mortgages held in life company portfolios decreasing 0.02 percentage points to 0.06%.

Read more...By Any Measure, CRE Default Rates Are Dropping - Daily News Article - GlobeSt.com

8 Threats to Apartment Owners via Multifamily Executive Magazine

As the rest of the economy has foundered, apartment owners have surged coming out of the recession. But the good times might not last forever. Here are eight things that could wreck their joyride.

Read more...8 Threats to Apartment Owners - Multifamily Executive Magazine

Dallas Beige Book 12-4-13 via Dallas Fed

The Eleventh District economy expanded at a moderate pace over the past six weeks. Manufacturing activity increased overall, with demand weakening in only a few industries. Retail sales picked up over the period, but automobiles sales were slightly down. Nonfinancial services firms reported steady to somewhat improved demand. The housing sector softened due to seasonal factors and rising home prices, and apartment, office and industrial leasing activity remained strong. Loan demand softened at financial institutions. Energy activity remained strong, and drought conditions in the agricultural sector continued to ease. Prices were unchanged or increased mildly at most responding firms, and employment held steady or rose modestly. There were scattered reports of pay increases and wage pressures. Industry outlooks were generally more positive during the reporting period.

Read more...Dallas Beige Book - Dallas Fed

2014 Outlook for Capital Markets via Commercial Property Executive

Investment activity is expected to increase in 2014 as occupancies have stabilized to levels that might warrant landlords to exit from their post-recession acquisitions, and access to capital remains prevalent. Moreover, with a significant number of commercial real estate loans coming due in the next three years, industry analysts are predicting dramatic growth in the issuance of commercial mortgage-backed securities (CMBS). It is expected that more than $1 trillion of commercial real estate loans nationally will mature over the next few years and these assets are going to need new debt. However, it shouldn’t be overlooked that not all of those loans will present appealing refinancing opportunities for lenders.

Read more...2014 Outlook for Capital Markets | Commercial Property Executive

Q3 2013 Bank Lending and Default Report via Chandan Economics

Bank lending on multifamily and commercial properties continues to recover as market and balance sheet conditions improve. New lending is diluting the impact of non-performing legacy loans, pushing default rates lower for the tenth consecutive quarter. Leading those improvements, the apartment default rate is now below 1.0 percent for the first time since 2007.

Read more...Q3 2013 Bank Lending and Default Report | Chandan Economics

Comerica's Texas economic activity index jumps via Dallas Business Journal

Comerica Bank's Texas economic activity index rose by 1.9 percent in September to 104.8, a level just shy of the peak earlier this year.

The index shows a steady recovery at 33 points above the cyclical, 2009 low of 71.6, but has been trending downward slightly between January and August 2013. September's growth reversed that trend and brought the index back near high reached in 2008.

Read more...Comerica's Texas economic activity index jumps - Dallas Business Journal

Multifamily loan delinquencies decline in 3Q via HousingWire

The delinquency rates for commercial and multifamily mortgages continued to fall in the third quarter, new data from the Mortgage Bankers Association (MBA) claims.

The trade group released its commercial/multifamily delinquency report Tuesday, noting that loans 60 or more days past due held by life company portfolios fell 0.02 percentage points to 0.06%.

Meanwhile, the serious delinquency rate for multifamily loans held or insured by Freddie Mac fell 0.04 percentage points to a rate of 0.05%.

Read more...Multifamily loan delinquencies decline in 3Q | 2013-12-03 | HousingWire

Houston Multifamily Market Report via REBusinessOnline.com

While the national economy remains sluggish, the energy-fueled Houston economy continues to power a resurgent local apartment market. The Houston multifamily market is the strongest it has been in years, with robust performance across classes and in virtually every submarket.

Construction has rebounded from the depressed levels of the past few years, but demand continues to exceed supply, forcing rents ever higher. The statistics say that vacancy is at its lowest level in nearly eight years, and rents are at their highest rate on record. I am seeing that borne out, as virtually every deal that crosses my desk shows that income is on an upward trend.

Read more...Houston Multifamily Market Report via REBusinessOnline.com

Real Estate Trends | Where Is Everybody Going? US Populations Shifts through 2030 via Multifamily Blogs

Recently we reviewed our predictions for 2014, where we learned that the real estate market is expecting construction of more that 400,000 units per year over the next few years. The question is, where are all these units going to be built?

Read more...Real Estate Trends | Where Is Everybody Going? US Populations Shifts through 2030 - Multifamily Blogs

Dallas–Fort Worth Economic Update November 2013 via Dallas Fed

The Dallas–Fort Worth economy has expanded at a moderately strong pace this year and is outperforming the state as a whole. Year to date, Dallas–Fort Worth employment has grown 2.9 percent, which is above the state’s rate of 2.4 percent. Job growth continues to be mostly broad-based across sectors. Housing activity remains at high levels, and home prices continue to rise as inventories fall. Demand for industrial space has led to the lowest availability rates since 2007. The Dallas and Fort Worth unemployment rates remain below those of the U.S and Texas, and the Dallas Fed Business-Cycle Indexes suggest continued expansion for the Dallas–Fort Worth metroplex.

Read more...Dallas–Fort Worth Economic Update November 2013 via Dallas Fed

The Beginning of the End for the Apartment Pricing Boom via CoStar Group

The apartment boom is eventually coming to an end; it’s only a question of when. An increase in deliveries and a cooling off or stabilizing of purchases by REITs are a couple of the reasons why this property type will see a correction in pricing.

New construction is starting to roll in and Exhibit 1 below reveals what the tip of the iceberg looks like. The grey bars show that sales of apartment buildings aged two years or less spiked dramatically in 2012, and that 2013 apartment sales will almost undoubtedly end up passing that.

Read more...The Beginning of the End for the Apartment Pricing Boom - CoStar Group

US Regional Economic Map, Nov. 2013 via Business Insider

Deutsche Asset & Wealth Management put together this map that pretty much sums up everything going on in every major region of the U.S. economy.

Read more...US Regional Economic Map, Nov. 2013 - Business Insider

Monthly Review of Texas Economy, November 2013 via Real Estate Center at Texas A&M

The Texas economy gained 267,900 nonagricultural jobs from October 2012 to October 2013, an annual growth rate of 2.4 percent compared with 1.7 percent for the United States (Table 1 and Figure 1). The state’s nongovernment sector added 265,300 jobs, an annual growth rate of 2.9 percent compared with 2.1 percent for the nation’s private sector (Table 1).

Texas’ seasonally adjusted unemployment rate fell to 6.2 percent in October 2013 from 6.4 percent in October 2012. The nation’s rate decreased from 7.9 to 7.3 percent (Table 1).

Table 2 shows Texas industries ranked by employment growth rate from October 2012 to October 2013. Table 3 shows the relative importance of the state’s industries based on number of employees.

Read more...Monthly Review of Texas Economy, November 2013 -- Real Estate Center at Texas A&M

Have Apartment Fundamentals Peaked? via National Real Estate Investor

With vacancy declines slowing to a crawl and rent increases constrained by meager wage growth, market observers are wondering whether apartment fundamentals have peaked. This formulation is imprecise, incorrect and fails to capture the changing dynamics of the sector.

Vacancy declined by 10 basis points during the third quarter to 4.2 percent. Although vacancy compression has clearly slowed over the last couple of years, the decline of 10 basis points does represent a slight acceleration versus last quarter when vacancy was unchanged.

Read more...Have Apartment Fundamentals Peaked? | Multifamily content from National Real Estate Investor

Strong Multifamily Sector Pushes Building Permits Above 1 Million in October via NAHB

Issuance of new building permits rose 6.2 percent to a seasonally adjusted annual rate of 1.034 million units in October due primarily to a double-digit increase on the multifamily side, the U.S. Census Bureau reported today.

This follows a 5.2 percent increase in permit issuance in September to 974,000 units.

Census figures for nationwide housing starts for September and October have been delayed until Dec. 18 as a result of last month’s partial government shutdown.

Read more...NAHB: Strong Multifamily Sector Pushes Building Permits Above 1 Million in October

Commercial Investments Advance 26% in Third Quarter 2013 via NAR Research

While the summer season was in full swing, economic performance during the third quarter of the year accelerated, based on initial estimates from the Bureau of Economic Analysis. The main measure of economic activity—gross domestic product—rose at an annual rate of 2.9 percent. The boost came from upward inventory adjustments. Consumer spending was positive, buoyed by spending on travel and leisure, recreation and home purchases and furnishing. Business spending was cautious, as the specter of a government shutdown loomed large. Net exports were positive to the tune of $44.8 billion for the quarter. And with stronger balance sheets, state and local governments upped their spending, overcoming the federal government’s negative contribution to GDP.

Read more...Commercial Investments Advance 26% in Third Quarter 2013

Data Shows Americans Moving Less; What This Means for Multifamily via Multi-Housing News Online

Americans are on the move, though not as much as in recent years. According to the U.S. Census Bureau, 35.9 million U.S. residents (or 11.7 percent) moved between 2012 and 2013. This shows a decline from the 12 percent of Americans who moved in 2012.

The information, which was taken from Geographical Mobility: 2012 to 2013, also shows that in 2011 a record low of 11.6 Americans moved, which makes 2013’s numbers statistically similar to 2011.

The analysis showed that the most common reasons for moving were housing-related, at 48 percent. This was followed by family-related reasons at 30.2 percent and employment-related reasons at 19.4 percent.

Read more...Data Shows Americans Moving Less; What This Means for Multifamily | Multi-Housing News Online

Texas Manufacturing Outlook Survey 11/25/13 via Dallas Fed

Growth in Texas factory activity picked up for a third consecutive month in November, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose from 13.3 to 16.9, reaching its highest reading in five months.

Other measures of current manufacturing activity indicated further expansion in November. The new orders index came in at 5.4, similar to its October level, and marked a seventh consecutive month of increased demand. The capacity utilization index rose to 16.2, its highest level since March 2011, and the shipments index edged up to 14.8.

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

MF Deliveries to Ramp Up in 2014 via GlobeSt.com

Axiometrics Inc.'s October 2013 apartment report notes that multifamily property deliveries scheduled for 2014 and 2015 are ramping up due, in part to projects launched in 2013. The prediction for 2014 is that deliveries will be nearly two times the level they were in 2013, and nearly three times the level of what was delivered in 2012.

Also, the locally based apartment research firm points out that number of units to be delivered in 2014 has solidified. As such, the firm predicts that 230,000 units will come online next year versus the 133,000 originally forecasted.

Read more...MF Deliveries to Ramp Up in 2014 - Daily News Article - GlobeSt.com

Modest Growth Seen in Commercial Real Estate Markets via National Association of Realtors

Commercial real estate leasing patterns are showing steady but modest growth, according to the National Association of Realtors® quarterly commercial real estate forecast.

Lawrence Yun, NAR chief economist, projects only modest changes in the coming year. "Jobs are the key driver for commercial real estate, and the accumulation of 7 million net new jobs from the low point a few years ago is steadily showing up as demand for leasing and purchases of properties," he said. "But the difficulty of accessing loans remains a hindrance to a faster recovery."

The gross domestic product rose from 2.5 percent in the second quarter to 2.9 percent in the third quarter. NAR's recent Commercial Real Estate Quarterly Market Survey shows leasing activity rose 2 percent in the third quarter from the second quarter, and higher sales levels than a year ago.

Read more...Modest Growth Seen in Commercial Real Estate Markets

NREI/Marcus & Millichap Sentiment Index: Investor Confidence Flying High via National Real Estate Investor

Commercial real estate investors continue to be bullish in spite of political and economic headwinds that threatened to diminish the outlook for the sector. Exclusive results from the NREI/Marcus & Millichap Investor Sentiment Survey show that confidence continues to hover at a near record high.

The NREI/Marcus & Millichap Investor Sentiment Index declined slightly in the fourth quarter to 176, down four points from the record high of 180 reached in the second quarter [Figure 1]. The nominal drop is a testament to the faith investors have in the sector given the tumult that has taken place in recent months. Interest rates spiked more than 100 basis points in the spring and then the 16-day government shutdown nearly led to a government default.

Read more...NREI/Marcus & Millichap Sentiment Index: Investor Confidence Flying High | National Real Estate Investor

Dallas Multifamily Market Snapshot via TheCapRate.com

October 2013 Apartment Market Summary via Axiometrics

Turnover is typically low this time of year, which means the changes in effective rents only apply to a small quantity of units compared to prime leasing season during the second and third quarters. However, there are still important reasons for tracking monthly changes. First, any abnormal weakening in rent and occupancy growth could signal underlying economic conditions not yet picked up by the major employment data sources. In addition, if too deep of a hole is dug during the fourth quarter, there may be more pressure to push rents early the next year to make up for the decline.

So far, we are not seeing any macro-level indicators signaling a larger-than-normal seasonal decline this fourth quarter. Rent and occupancy growth this October was similar to what we reported for 2010, 2011, and 2012. Likewise, lease-up properties are absorbing well and offering very little in concessions even though new supply continues to increase.

As 2013 comes to a close, the delivery schedules for 2014 have started firming. Axiometrics has long expected that deliveries in 2014 would outpace the total for 2013.

Read more...October 2013 Apartment Market Summary via Axiometrics

Houston ranks high on list for millennials but low for seniors via Houston Business Journal

Millennials have spoken with their moving patterns and selected Houston as a top destination between 2009 to 2012, according to migration data from the U.S. Census Bureau and Brookings Institution.

The data defines millennials as Americans ages 25 to 34 and Houston ranked No. 4 on the list.Other attractive cities for millennials according to the list include Washington D.C. metro, Denver metro and Portland metro.

Austin came in just below Houston at No. 5 and Dallas/Fort Worth ranked on the list as No. 9.

Read more...Houston ranks high on list for millennials but low for seniors - Houston Business Journal

Reis 3Q Briefing Gives Reason for Optimism via Commercial Property Executive

“All indicators are pointing toward another year of recovery” was the optimistic bottom line of Wednesday’s Q3 2013 Capital Markets Briefing from Reis Inc. Hosted by Reis senior economist Ryan Severino, the conference call promised to tackle angles such as economic growth and the capital markets, interest rates and cap rates, and the GSE pullback.

Though he cautioned that the data are still preliminary, Severino said that GDP growth at an annualized 2.8 percent in the third quarter is better than what had been expected by many and added that job creation figures look good: “We are now ahead of last year’s pace of job creation.”

He does, however, expect a slowdown in growth in the fourth quarter, in part because of lingering effects from the government shutdown.

Read more...Reis 3Q Briefing Gives Reason for Optimism | Commercial Property Executive

New Construction Threatens Multifamily’s Good Run via Multifamily Executive Magazine

Is the party over? The apartment market has been on an exceptional run for the past four years. A for-sale housing market in tatters, a weak recovery in the labor market that created mostly middling jobs for young workers, and benign supply growth all conspired to create a significant recovery in the apartment sector. However, the landscape is already changing. The for-sale housing market is finally showing some signs of life after a prolonged downturn, but the main risk to multifamily’s good fortune stems from an increase in apartment construction activity rather than single-family competition.

Construction activity has been slowly increasing over the past few years, but that went largely unnoticed due to the strong demand for apartment units. New completions in the top 82 markets in the country averaged just 10,623 units per quarter in 2011 and 19,585 units per quarter in 2012. Over the first three quarters of 2013, however, new completions averaged 27,411 units per quarter.

Read more...New Construction Threatens Multifamily’s Good Run - Multifamily Executive Magazine

HAR: Houston home sales increase for 29th straight month via Houston Business Journal

Home sales in the Houston area have experienced year-over-year increases for 29 months in a row, leading to a housing shortage and higher prices.

Single-family home sales totaled 6,020, the lowest one-month volume since March, but up 13.5 percent from October 2012, reports the Houston Association of Realtors.

Both the median price and the average price for single-family homes hit their highest levels for an October in Houston. The median price increased 8.9 percent year over year to $177,500, and the average price hit $239,773, up 7.9 percent from October 2012.

Read more...HAR: Houston home sales increase for 29th straight month - Houston Business Journal

Wall Street Keeps Swagger in CMBS as Sales Surge via Businessweek

With almost six weeks to go in 2013, sales of commercial-mortgage bonds are already surpassing Wall Street’s forecasts for the year, defying concern that rising interest rates would stymie new deals.

Issuance of the securities is poised to exceed $80 billion, eclipsing the $60 billion that Barclays Plc predicted in January, according to analysts at the bank. Lenders have arranged $65.5 billion of offerings this year and another $14.5 billion is in the works, including a $3.5 billion deal tied to Hilton Worldwide Inc. that will be the largest such offering since before the credit crisis, Bank of America Corp. data show.

New York City landlords to South Carolina hotel operators are rushing to refinance mortgages before the Federal Reserve starts cutting stimulus that pushed interest-rate benchmarks to record lows.

Read more...Wall Street Keeps Swagger in CMBS as Sales Surge: Credit Markets - Businessweek

Texas construction booming on economic strength via Real Estate Center at Texas A&M

While many parts of the country have not fully emerged from the housing crisis and recession, Texas continues on a tear with new building and thriving residential and commercial real estate markets.

Single-family home building rebounded dramatically in 2012 after a trough in 2011 and is on pace to gain this year while home sales also rebounded in 2012 from a 2010 trough, with more gains on pace this year, said Mark Dotzour, chief economist of the Real Estate Center at Texas A&M University.

The 2011 single-family housing market in Texas saw just 67,254 building permits issued, Dotzour notes. The next year permits were up to 81,926, and this year is apt to notch 90,000.

Read more...Texas construction booming on economic strength via Real Estate Center at Texas A&M

Apartment Market Statistics: November 2013 via Multi-Housing News Online

Apartment transactions fell in the second quarter 2013 to $16.97 billion from the first quarter, according to PPR, a Costar company. Meanwhile, apartment completions increased by 64 percent in the second quarter in the top 30 metros, reports Marcus & Millichap.

Effective rents increased by 3.5 percent in the second quarter 2013 compared to the same period a year ago, according to Marcus & Millichap. And vacancies have fallen by 10 percent during the second quarter.

Read more...APARTMENT MARKET STATISTICS: November 2013 | Multi-Housing News Online

Fed Ponders How to Temper Tapering Without Rate Increase via Bloomberg

One of Janet Yellen’s first challenges as Federal Reserve chairman will be figuring out how to cushion against a lurch in interest rates when she pares the pace of the central bank’s bond buying.

After sending 10-year Treasury yields more than a percentage point higher by fueling taper expectations in May and June, policy makers now are grappling with their options when they do reduce debt purchases that have swelled their balance sheet to a record $3.91 trillion.

The Fed’s failure so far to convince investors that tapering on its own doesn’t constitute a tightening of policy creates the risk of more market volatility as the central bank communicates about tools it’s never used.

Read more...Fed Ponders How to Temper Tapering Without Rate Increase - Bloomberg

Houston Economic Update November 2013 via Dallas Fed

Due to the government shutdown, data critical to generating the Houston Business-Cycle Index were unavailable at the time of writing. However, anecdotal evidence and other data, such as the Houston Purchasing Managers Index, point to steady or slightly decelerating economic growth. As shown in the chart, overall activity in Houston has remained positive in 2013 despite recent contractions but has been slower than last year.

Read more...Houston Economic Update November 2013 via Dallas Fed

San Antonio Multifamily Market Report via REBusinessOnline.com

Growth Fueled by Eagle Ford Shale Tightens Multifamily Market

Strong job and household growth across the San Antonio metro will boost demand for apartments this year, tightening vacancy and pushing rents higher. Apartment developers are preparing to build more units in the upcoming quarters thanks to the formation of new households throughout the metro. However, the development of new rental housing will not jeopardize the operations of existing properties and will keep the investors very active in the coming months.

Job creation in the metro is supported by the Eagle Ford Shale, the primary driver of a booming oil industry in South Texas. Exploration and extraction are creating thousands of jobs and bringing billions of dollars to Bexar County.

Read more...San Antonio Multifamily Market Report via REBusinessOnline.com

CoStar: Commercial Real Estate prices mostly unchanged in September, Up 8.4% Year-over-year via Calculated Risk

Here is a price index for commercial real estate that I follow.

From CoStar: CRE Prices Gain Traction Across All Property Types During Third Quarter 2013 Despite Uncertainty Over Economic Policy

CRE PRICES POST MODEST QUARTERLY GAINS DESPITE SEPTEMBER LULL: After posting modest gains throughout the third quarter of 2013, price growth for commercial property was mixed in September, reflecting the uncertainty that existed over economic policy and an uptick in interest rates.

Read more...Calculated Risk: CoStar: Commercial Real Estate prices mostly unchanged in September, Up 8.4% Year-over-year

How Apartment Leasing Became Part of the New American Dream via Property Management Insider

Recent trends that suggest Americans are redefining the American Dream to not so much include home ownership certainly bode well for the apartment leasing industry. And while analysts and pundits may suggest the erosion of a U.S. cultural institution is the result of one of the worst economic downfalls in the country, other reasons may be at play.

Ownership of a home, car, boat or what-have-you is binding, and today’s society has become more Free Willy and conducive to an apartment lifestyle, one that can be centered in high density urban areas where dining, transportation and entertainment are non-committal.

The change in ideology is impacting American in its mid-section, which is telling.

Read more...How Apartment Leasing Became Part of the New American Dream | Property Management Insider

Houston CRE Growth to Continue in 2014 via GlobeSt.com

During 2013, Houston's metro economy continued improving, adding 80,700 jobs through August 2013 and increasing payroll employment by 3% during the same period. Experts at Transwestern's annual TrendLines conference on Nov. 12 said jobs will continue to be added between now and 2015, which will bode well across all commercial real estate sectors during that same time period.

Following former Secretary of Education William Bennett's keynote presentation, Greg Leisch, CEO of Transwestern research arm Delta Associates pointed out that the area's energy, construction and transportation sectors are bolstering growth, while the leisure/hospitality sector is also expanding. As a result, 91,700 jobs will be added to the Houston economy over the next two-year period, which is comparable to the growth experienced during the last expansion cycle (2005-2007).

Read more...Houston CRE Growth to Continue in 2014 - Daily News Article - GlobeSt.com

'Generation Wait': Share of young adults who move hits 50-year low via NBC News.com

U.S. mobility for young adults has fallen to the lowest level in more than 50 years as cash-strapped 20-somethings shun home-buying and refrain from major moves in a weak job market.

The new 2013 figures from the Census Bureau, which reversed earlier signs of recovery, underscore the impact of the sluggish economy on young people, many of them college graduates, whom demographers sometimes refer to as "Generation Wait."

Burdened with college debt or toiling in low-wage jobs, they are delaying careers, marriage and having children. Waiting anxiously for their lucky break, they are staying put and doubling up with roommates or living with Mom and dad, unable to make long-term plans or commit to buying a home — let alone pay a mortgage.

Read more...'Generation Wait': Share of young adults who move hits 50-year low - NBC News.com

National home prices simmer, Texas comparison via Real Estate Center at Texas A&M

Austin, Houston, San Antonio and Dallas are all among the major cities that the Trulia researchers say are becoming overheated with housing prices that are ahead of market fundamentals.

Only 16 of the 100 U.S. cities that Trulia tracks for its “bubble watch” report are considered overvalued. Nationally, home prices are 4 percent undervalued in fourth quarter 2013, which means nationally, we’re nowhere near another housing bubble, according to the report.

Read more...National home prices simmer, Texas comparison via Real Estate Center at Texas A&M

Reis: Rent Growth on Tap for 2014, but Peaked in 2012 via Multifamily Executive Magazine

Rent growth has been steadily increasing over the last few years, but it looks like the industry peaked in 2012, according to an analysis by New York-based market researcher Reis.

While fundamentals like vacancy rates and supply absorption are healthy, the slow pace of job formation has hamstrung owners' ability to raise rents. Asking and effective rents both rose by 1 percent in the third quarter, but that growth is still below the quarterly average from last year. In previous cycles, rent growth would be well above 4 percent given the vacancy rates the industry is now seeing, the report says.

Read more...Reis: Rent Growth on Tap for 2014, but Peaked in 2012 - Multifamily Executive Magazine

ULI: Emerging Trends in Real Estate via Real Estate Center at Texas A&M

The pace of the economic and real estate recovery remains uneven across U.S. metropolitan-area markets, according to the annual Emerging Trends in Real Estate 2014 report by the Urban Land Institute.

The top five markets remain virtually unchanged with only some moderate reshuffling. San Francisco maintains the No. 1 position in the overall rankings.

Read more...ULI: Emerging Trends in Real Estate via Real Estate Center at Texas A&M

When Millennials Leave the Nest via Multi-Housing News Online

Millennials who flocked to their parents’ nests during the recession are a huge source of untapped revenue for the apartment industry. The trick, however, is getting them to leave a place that is so cozy, convenient, and inexpensive.

Millennials, or Generation Y, already make up a notable portion of renters. Yet there is another wave of them, approximately 2.4 million strong, that is dancing on the peripherals of the rental market. Developers are pushing forward with construction plans, optimistically expecting that these young adults will soon form their own households. There are quite a few challenges that may further postpone, if not deter, the young adults’ entrance to the rental market.

Read more...When Millennials Leave the Nest | Multi-Housing News Online

Just How Sexy Will the "Sexy Six" Be in 2014? via Multifamily Executive Magazine

Everyone knows the “sexy six” markets are the big multifamily hot spots of investment and development.

The large metro markets— New York, Los Angeles, San Francisco, Boston, Washington, D.C., and Seattle — are sound bets in 2014, but some are stronger than others, experts say.

Greg Willett, Texas-based MPF Research's vice president of research and analysis, says Seattle is the strongest top market for 2014. Although the Seattle market has a lot of new product in the pipeline, he feels job growth will be able to support the uptick in development.

Read more...Just How Sexy Will the "Sexy Six" Be in 2014? - Multifamily Executive Magazine

The Top 10 Apartment Resident Complaints via PropertyManager.com

When experiencing an uptick in vacancies, most property managers ask themselves what could be causing their resident to leave. Without asking former tenants directly (or waiting for a bad review) how can you discover the reason for their discontent?

Thankfully, J Turner Research, a marketing research firm serving the multifamily industry has done just that. They surveyed 10,000 U.S. apartment residents regarding their satisfaction, and have published their results by ranking the top 10 apartment resident complaints:

Read more...The Top 10 Apartment Resident Complaints | PropertyManager.com

San Antonio Apartment Market Update October 2013 via Oconnordata.com

Market Summary

Most key metrics of the San Antonio area multifamily sector recorded positive changes in October 2013.

The occupancy figures recorded negative values for all the classes. For class A properties, occupancy decreased by 0.36% over the month to close at 93.75%; and decreased by 0.25% over the year. For Class D properties, occupancy went up by 0.02% over the month and increased by 0.84% over the year to close at 90.30%.

Read more...San Antonio Apartment Market Update October 2013 via Oconnordata.com

Austin Apartment Market Update October 2013 via Oconnordata.com

Market Summary

All metrics for the Austin multifamily sector area recorded both positive and negative changes in October 2013.

Occupancy figures recorded mostly a downward trend for the classes for the month. Class A properties reported a decrease of 0.61% over last month, and an increase of 0.29% over last year. Over the month, Class D properties recorded an increase of 0.06%. The largest increase over the year was recorded for Class B reporting an increase of 0.45%.

Read more...Austin Apartment Market Update October 2013 via Oconnordata.com

Dallas/Ft. Worth Apartment Market Update October 2013 via Oconnordata.com

Market Summary

The key metrics for the Dallas/Fort Worth area multifamily sector recorded significant changes both over the month and over the year.

Over the month all the classes recorded mostly a downward trend in terms of occupancy. Class A properties recorded a decrease of 0.33% over previous month. Also on a year-over-year basis Class A properties recorded a decrease of 0.17%. Class C recorded the largest increase of 0.08% over the month. The largest annual increase of 1.67% was also noted for Class C properties.

Read more...Dallas/Ft. Worth Apartment Market Update October 2013 via Oconnordata.com

Houston Apartment Market Update October 2013 via Oconnordata.com

Market Summary

Key metrics for the Houston area multifamily sector recorded both positive and negative changes in October 2013.

Occupancy figures mostly recorded both positive and negative changes for the classes over the month. Class A recorded a decrease of 0.38% to close at 94.48%. The largest monthly increase was noted for Class D properties (0.21%). For Class A properties the average went down by 0.34% over the year. The largest annual increase was noted for Class C properties with an average increase of 2.87% to close at 89.20%.

Read more...Houston Apartment Market Update October 2013 via Oconnordata.com

ALN Monthly Newsletter November 2013 via ALN Apartment Data

ALN Data just released their October 2013 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 November 2013 via ALN Apartment Data

Magnetic Attraction via CCIM Institute

Rising interest rates may prompt apartment buyers to modify expectations and strategies, but these factors haven’t diminished their desire for multifamily properties — at least not yet. The voracious demand that has fueled transaction activity and capitalization rate compression across the multifamily sector in recent years appears steadfast in many markets. “We are seeing sales volume that is equal to or slightly greater than the same time last year,” says John W. Stone, CCIM, principal, managing director of Multifamily Services/Foreign Investments at Colliers Arnold in Clearwater, Fla. “There is no shortage of bidders. There is no shortage of cash. There is no shortage of want.”

National apartment sales activity surged during the first half of the year with $49.4 billion in properties trading hands — a 55 percent increase compared to the same period a year ago, according to Real Capital Analytics. However, sales volume spiked during the first quarter due to a large Archstone portfolio sale. Extract that sale from the mix, and apartment sales rose a more modest 9 percent, according to RCA.

Read more...Magnetic Attraction | CCIM Institute

Apartment Rents Rise a Bit in Cash-Strapped McAllen/Brownsville via Property Management Insider

While almost all the economic news in Texas seems to be good these days, it’s no secret that the Rio Grande Valley doesn’t share equally in the success posted in major metros like Houston, Dallas, and Austin or in small energy-influenced markets like Midland/Odessa and Corpus Christi. In fact, recently-released Census Bureau information ranks Brownsville as the country’s poorest metro and adjacent McAllen as the third-poorest spot across the nation.

Is it possible to realize any apartment rent growth in that sort of environment?

Effective rent growth in McAllen/Brownsville’s 30,000-or-so apartments, in fact, has come in at 3% to 4% annually during much of the recent past, with the figure for the year-ending 3rd quarter registering at 3.2%. That’s right in line with the average percentage increase for the nation as a whole as of 3Q.

Read more...Apartment Rents Rise a Bit in Cash-Strapped McAllen/Brownsville | Property Management Insider

San Antonio multifamily market sees gains via Real Estate Center at Texas A&M

Apartment construction in the San Antonio area continues to gain steam, but occupancy rates remain steady. So far this year, nearly 4,200 apartments were added to the local market, according to data from Austin Investor Interests.

Currently, about 8,800 units under construction haven't been added to the inventory and another 6,900 units are expected to start in the next year.

During third quarter 2013, 1,460 units were added — a 41 percent jump compared to the same period last year.

Read more...San Antonio multifamily market sees gains via Real Estate Center at Texas A&M

Dallas Green Building Law Takes Effect via GreenBuildingAdvisor.com

Builders in Dallas, Texas, are now required to meet one of several green-building standards for all residential and commercial projects.

Under terms of a resolution adopted in 2008, the requirement was completely implemented on Oct. 1, 2013. Builders on residential projects will have to meet the minimum requirements of LEED for Homes, GreenBuilt Texas, or the National Green Building Standard. Water use must be reduced by 20%.

Alternatively, according to a summary posted online by the city, builders will have to meet a number or prescriptive requirements for energy and water efficiency, storm water management, indoor air quality, and heat island mitigation.

Read more...Dallas Green Building Law Takes Effect | GreenBuildingAdvisor.com

The Millennial Connection via Commercial Property Executive

Mil∙len∙ni∙al [mil-len-ee-uhl]: a person born in the 1980s or 1990s.

How much do you know about Millennials? Are you confused about how best to engage them? Are you challenged as to how to motivate them, unsure how they com- pare to the Gen X and Baby Boomer generations?

Here are a few insights into Millennials that you may want to consider:

Read more...The Millennial Connection | Commercial Property Executive

Commercial Market Recovery Remains Uneven via realtor.org

After several years of slow-moving growth the commercial real estate market is in a recovery mode as transaction volume increased 27 percent over a year ago and prices display solid gains, said National Association of Realtors® Chief Economist Lawrence Yun during a commercial real estate forum at the 2013 REALTORS® Conference & Expo in San Francisco today.

While the overall commercial sector appears to be improving, Yun said this isn’t the case in all parts of the market. “Realtors® involved in commercial real estate have reported they’re still seeing little improvement,” said Yun. “Commercial members typically handle smaller transactions, properties under $1 million; this part of the market is moving incrementally. At the opposite end, expensive properties priced above $2 million are doing much better. What we’re seeing is two very distinct markets within the commercial sector.”

Read more...Commercial Market Recovery Remains Uneven | realtor.org

Q3 2013 GDP Details: Residential Investment increases, Commercial Investment very Low via Calculated Risk

The BEA released the underlying details for the Q3 advance GDP report Friday.

The first graph is for Residential investment (RI) components as a percent of GDP. According to the Bureau of Economic Analysis, RI includes new single family structures, multifamily structures, home improvement, Brokers’ commissions and other ownership transfer costs, and a few minor categories (dormitories, manufactured homes).

A few key points:

Read more...Calculated Risk: Q3 2013 GDP Details: Residential Investment increases, Commercial Investment very Low

3 Questions to Determine If We Are In a Multifamily Bubble via biggerpockets.com

First, a story torn from the history books:

“In 1593 tulips were brought from Turkey and introduced to the Dutch. The novelty of the new flower made it widely sought after and therefore fairly pricey. After a time, the tulips contracted a non-fatal virus known as mosaic, which didn’t kill the tulip population but altered them causing “flames” of color to appear upon the petals. The color patterns came in a wide variety, increasing the rarity of an already unique flower. Thus, tulips, which were already selling at a premium, began to rise in price according to how their virus alterations were valued, or desired. Everyone began to deal in bulbs, essentially speculating on the tulip market, which was believed to have no limits.” See Investopedia

Are seeing a bubble forming in the multifamily market? Are apartments prices behaving like tulip bubble? My assertion is we are not likely to see a bubble in the multifamily market in 2014.

Read more...3 Questions to Determine If We Are In a Multifamily Bubble via biggerpockets.com

Millennials are ‘Renters Generation,’ Study Reports via Multi-Housing News Online

When the Great Recession struck in 2008, the Millennial Generation was among the hardest hit. Caught in a plummeting economy characterized by enormous job cuts and limited new hiring, these underpaid and unemployed new-to-the-workforce folks didn’t have the economic wherewithal to move out on their own as previous generations did.

Many of those forced to take shelter under their parents’ roofs back then are now ready to stake their claim to their own places, according to a new study from Rent.com. But the Millennials, also known as Generation Y, are seeking households that are different from those of past generations, explains Al Goldstein, a multifamily investor and chief executive officer of Chicago-based private real estate investment trust Pangea Properties.

Read more...Millennials are ‘Renters Generation,’ Study Reports | Multi-Housing News Online

Resident Retention Trends | How to hold on to your best tenants via Multifamily Blogs

The best renters, those with high credit scores and low maintenance needs, are highly sought after in the new rental market. Renters report that they don’t mind paying a premium for a home where they feel safe and comfortable, but keeping those tenants will take more than amenities. Adding bells and whistles is just as much a dead end game as lowering the rent and no property owner will survive long without a strategy to attract and hold onto the best tenants.

Great tenants are getting harder to find and the competition is heating up to find them, even if they are not in the market for a new apartment currently. Big data and aggressive marketing techniques are the hallmarks of the emerging rental market. At the recent Apartment Rental Management conference in Miami, Kelly Maguire, an executive director at SAS, clearly laid out the future of the rental market, where owners “need to be more strategically oriented, consumer focused and be more technologically advanced.”

Read more...Resident Retention Trends | How to hold on to your best tenants - Multifamily Blogs

The Craigslist Changes Fallout: Have posting tools become irrelevant? via Multifamily Blogs

We’ve been playing games with a free service.

At the end of September, we joked internally about the changes coming to Craigslist. We didn’t actually know what they were going to be, only that they were coming. October is the Craigslist month of doom. Last year it was the Great Ghosting Ruckus that caused leads to vanish into a black hole of ads. Our leads dropped by half. This year, Craig and his team worked hard on finding new ways to take their service back from us freeloaders.

Read more...The Craigslist Changes Fallout: Have posting tools become irrelevant? - Multifamily Blogs

October Employment Report: 204,000 Jobs, 7.3% Unemployment Rate via Calculated Risk

From the BLS:
Total nonfarm payroll employment rose by 204,000 in October, and the unemployment rate was little changed at 7.3 percent, the U.S. Bureau of Labor Statistics reported today. ...
...
Among the unemployed, however, the number who reported being on temporary layoff increased by 448,000. This figure includes furloughed federal employees who were classified as unemployed on temporary layoff under the definitions used in the household survey.

Read more...Calculated Risk: October Employment Report: 204,000 Jobs, 7.3% Unemployment Rate

GSEs Almost Back in Taxpayers' Good Graces via GlobeSt.com

Stellar quarterly earnings reports by Fannie Mae and Freddie Mac underline that the GSEs are nearing a key benchmark: full repayment of the close to $188 billion the federal government was forced to inject in them during the housing crisis. Freddie Mac reported a third-quarter profit of $30.5 billion and plans to return $30.4 billion to the Treasury. Fannie Mae posted a $8.7 billion profit for the quarter and is sending $8.6 billion of that to Treasury.

The GSEs are understandably proud of their performance. Said Fannie Mae's president and CEO, Tim Mayopoulos during the earnings call: "As you can see from the numbers, we've had another terrific quarter. I'm very pleased with our performance. And our results are really evidence of the quality of our business and proof that the measures we've taken over the past few years have righted the ship."

Read more...GSEs Almost Back in Taxpayers' Good Graces - Daily News Article - GlobeSt.com

Is the Bubble Back? via The Balance Sheet - Yardi Corporate Blog

Concerns are mounting that we may be headed back into problem territory, where easy liquidity fuels overbuilding, high property valuations and low cap rates that are not supported by property income or fundamentals. Of course, the low interest-rate environment is allowing Real Estate many aggressive deals to pencil out. But if interest rates should rise, the current state of affairs could prove to be a bubble in the making.

Then again, not everyone agrees there is cause for alarm just yet.

Read more...Is the Bubble Back? | The Balance Sheet - Yardi Corporate Blog

ULI: Recovery Will Gain Momentum in 2014 via GlobeSt.com

The Urban Land Institute and PwC have just released the 35th edition of Emerging Trends in Real Estate, a joint publication based on interviews and surveys they did with over 1,000 professionals. And the general feeling is that what had been a modest recovery will gain momentum in 2014.

“People were starting to talk about development again, and we hadn't heard that in years,” said Steven Blank of ULI. For several years, much activity has been driven by a compression in cap rates, but in 2014, interviewees expect property enhancements to be one of the big drivers. “The industry is getting itself on a solid footing financially,” Blank explained, but “we're going to have to get our fingernails dirty if we want to make money.”

Read more...ULI: Recovery Will Gain Momentum in 2014 - Daily News Article - GlobeSt.com

Looking Ahead: A Seller's Market in 2014 via Multifamily Executive Magazine

Jon Bell believes his company has found the right balance for success and he’s not willing to rock the boat in 2014.

Although Bell Partners recently shook up the company leadership and announced a few organizational changes—promoting Robert Slater to Chief Administrative Officer, and Gwenyth Cote to COO —the operating focus is still the same.

“It’s the discipline of sticking with what we do well,” he says.

Read more...Looking Ahead: A Seller's Market in 2014 - Multifamily Executive Magazine

CMBS Seen Soaring Next Year in Real Estate Lending Growth via Bloomberg

Commercial-property lenders are expected to loosen restrictions imposed after the 2008 credit crisis, with a jump in financing projected for next year, a survey by PricewaterhouseCoopers LLP and the Urban Land Institute shows.

The commercial mortgage-backed securities market ranks at the top of the survey for expected change in availability, according to a report to be released today. Several respondents estimated originations may exceed $100 billion in 2014, which would be more than any period except 2005 through 2007, when the market for real estate bonds surged before rising delinquencies caused demand to crash.

Read more...CMBS Seen Soaring Next Year in Real Estate Lending Growth - Bloomberg

Net Neutrality: Not Just A Nerd Thing - A (Marketing) Freedom Thing via Multifamily Blogs

I’m not normally an alarmist or a “conspiricist” who whips out her tin foil hat without hesitation, so bear that in mind when I tell you this:

The impending net neutrality judgment from the DC Circuit has got me very frightened, and no, this isn't just some nerd thing. This could affect how we do business in the multifamily housing industry in a less than positive fashion.

Read more...Net Neutrality: Not Just A Nerd Thing - A (Marketing) Freedom Thing - Multifamily Blogs

TD Bank: M-F Sector Dominating Housing Recovery via Commercial Property Executive

TD Bank released its Regional Multifamily Housing Outlook, examining the outlook for multi-family housing investment in 10 major metropolitan areas along the eastern seaboard from Boston to Miami.

The report shows that the housing recovery has been dominated by the multi-family sector, both in construction activity and price growth. Over the last four years, multi-family housing starts have risen 350 percent, as the recession pushed many homeowners to renters.

“After five years of drought, multi-family starts are beginning to meet demand,” Gregg Gerken, TD Bank’s senior vice president & head of U.S. commercial real estate lending, told Commercial Property Executive. “The markets that have the highest upside are those markets that had the largest decline, due to more room for recovery.”

Read more...TD Bank: M-F Sector Dominating Housing Recovery | Commercial Property Executive

Energy Management: 5 KPIs that Increase ROI and NOI via Property Management Insider

Energy management saves properties huge sums of money that sometimes is wasted in the day-to-day operation and occupation of buildings and living spaces. In multifamily, the bills for water, electricity, gas, fuel oil, refuse, sewer and storm drain costs that properties must manage – whether for a developer, owner, third party manager, or resident – draw much attention.

With them comes the burning question: What are the key performance indicators (KPIs) that properties need to be aware of in order to measure these costs and reduce them for very high-dollar returns?

Read more...Energy Management: 5 KPIs that Increase ROI and NOI | Property Management Insider

Is Growth in Multifamily Sector Sustainable? via Bull Realty, Inc. | #CRE Blog

The multifamily market, the so-called darling of commercial real estate, isn’t losing that title any time soon. The third quarter demonstrated once again how stable the sector is, as occupancy held steady and rents continued to rise, albeit at a more normal pace.

Those were a few of the points made during the most recent episode of the “Commercial Real Estate Show.” My guests and I discussed the factors affecting the sector, property-level performance expectations and investment strategies for this point in the cycle.

Read more...Is Growth in Multifamily Sector Sustainable? | Bull Realty, Inc. | #CRE Blog

Regional Economy Growing Steadily Despite Headwinds via Dallas Fed

he Texas economy has expanded at a moderate pace over the past six weeks. Employment growth was significantly slower in August than July. The real estate and energy sectors remain at high levels and continue to be the primary drivers of economic growth. However, the recently concluded government shutdown and continued fiscal uncertainty may be a drag on growth in the fourth quarter.

Employment Growth Around Long-Term Average

Job growth decelerated sharply in August, to a 0.3 percent annual rate, down from 3.6 percent in July. While monthly employment numbers have been volatile, anecdotal reports indicate a modest pickup in hiring in September. Employment grew in the first half of the year at a 2.4 percent annualized rate before declining slightly in the first two months of the third quarter to 2.1 percent (Chart 1). First-half growth was above Texas’ long-term average but slower than in 2012.

Read more...Regional Economy Growing Steadily Despite Headwinds - Dallas Fed

Homeownership Rate Climbs From Lowest Level Since 1995 via Bloomberg

The U.S. homeownership rate climbed from the lowest level in 18 years, signaling that the real estate rebound is drawing in more buyers.

The share of Americans who own their homes was 65.3 percent in the third quarter, up from 65 percent in the previous three months, the Census Bureau reported today. The prior level was the lowest since the third quarter of 1995.

Rising real estate values are removing negative equity, helping homeowners avoid foreclosure, while also luring would-be purchasers into the market before prices and mortgage rates go higher. The pool of eligible buyers is expanding as U.S. employment improves and families who lost properties during the recession repair their credit and seek another chance at owning.

Read more...Homeownership Rate Climbs From Lowest Level Since 1995 - Bloomberg

Dallas: job growth = apartment construction boom via Real Estate Center at Texas A&M

Dallas-Fort Worth leads the country in apartment building with about 23,500 units under construction. During the last year, the DFW labor market has added about 111,000 jobs — more than any other area of the country.

“Dallas was one of the first markets to see construction come back” after the recession,” Jay Parsons with MPF Research said. “Those new units are leasing up very, very fast."

Only about 6 percent of DFW apartments are currently vacant.

Read more...Dallas: job growth = apartment construction boom via Real Estate Center at Texas A&M

Job Growth is Slowing in San Antonio via Property Management Insider

San Antonio’s dependence on federal spending led to a drop-off in job growth levels — and in apartment performance — in 3rd quarter. Despite the slowdown, the local economy and apartment sector remain healthy.

The big picture for the San Antonio apartment market is that it is still very healthy and the outlook is solid. However, by Texas standards San Antonio is falling short.

Read more...Job Growth is Slowing in San Antonio | Property Management Insider

Signs of Steady Output Growth Continue While Labor Markets Disappoint via Dallas Fed

Economic indicators released in September and October present a modest outlook for growth for third quarter 2013 and imply likewise for the second half of the year. Output growth for the second quarter remained unchanged in its third estimate. The employment situation also showed some mildly positive signs in September—buoyed by modest job gains and a decrease in unemployment—but disappointed expectations of a stronger jobs path out of the recovery. Inflation measures remain anchored, and gauges of future inflation exhibit stability as well.

Real gross domestic product (GDP) grew 2.5 percent annualized in second quarter 2013 (Chart 1). This shows acceleration from the previous quarter’s rate of 1.1 percent and no change from the second estimate in August. Most components of real GDP showed either an increase or no significant decline in contribution to growth from first quarter 2013, offsetting the two that decreased, namely, real personal consumption and private inventories; and none showed much change in revision.

Read more...Signs of Steady Output Growth Continue While Labor Markets Disappoint - Dallas Fed

Muddled Employment Situation Continues via Axiometrics

The government shutdown during the first two weeks of October delayed the release of the September national employment figures from the Bureau of Labor Statistics (BLS) until last week, and will postpone the release of employment by metropolitan area until the release of October’s figures in November. This report focuses on the national figures and, more specifically, on both national total nonfarm employment and national private nonfarm employment that excludes the Government employment sector. We will return to our normal format next month.

Any way you look at it, September’s total nonfarm seasonally adjusted (SA) payroll employment figure was disappointing. Total nonfarm job gain in September was 148,000, much less than the consensus forecast of 180,000 jobs. August was revised upward from 169,000 to 193,000 but July was revised down from 104,000 to 89,000. The average monthly gain for the year is 181,800, but it has been slowing as the quarterly average has declined from 233,000 in the first quarter, to 172,000 in the second, and 151,000 in the third.

Read more...Muddled Employment Situation Continues

Developers Increasingly Find It Can Pay To Convert Office Buildings Into Apartments and Condos via CoStar Group

Analysis presented at CoStar’s recent Third-Quarter 2013 Office Outlook and Forecast found that developers added 39 million square feet of new office space over the last four quarters. However, the net impact was muted as another 22 million square feet of office space was removed from the market, either demolished or converted into other uses, with more than half of that former office space being converted to residential uses such as apartments and condominiums.

"Clearly, we see a shift in how real estate is being used and what developers are building," said Walter Page, director of office research for CoStar. "So far, over half of the office recovery has been driven by removals of space. We’re still at a very low level of [net] completions, due mostly to demolitions."

Read more...Developers Increasingly Find It Can Pay To Convert Office Buildings Into Apartments and Condos - CoStar Group

CMBS Late-Pays Dip Below 8% via GlobeSt.com

A little more than a year after peaking at 10.34%, the delinquency rate for CMBS has dropped below 8%, Trepp said Thursday. An impending $2.5-billion sale of distressed assets by CWCapital could bring the late-pay rate down further in the next couple of months.

"In addition to the distressed assets that were recently identified for sale, a large number of note sales are also expected from the servicer," says Manus Clancy, senior managing director of Trepp. "As CW stated that it is looking to sell these before year-end, this could result in the removal of a number of loans from the delinquent category over the next 60 days."

Read more...CMBS Late-Pays Dip Below 8% - Daily News Article - GlobeSt.com