Thursday, February 28, 2013

Special Report: Research Reveals New Insights about Today’s Student Renters via Multi-Housing News Online

On February 25-27, the National Apartment Association (NAA) hosted its annual Student Housing Conference and Exposition at the Aria—a 2009-built, LEED Gold-certified casino-hotel resort in Las Vegas. Attendees from across the country and multifamily industry attended presentations by experts in the booming student housing sector, who offered invaluable information on the latest trends among Millennials and the future of development and operations in this niche of the market.

The conference was kicked off with an energetic opening keynote by Michael Wood, senior vice president of Tru Insight—a research firm specializing in teens and young adults. In highlighting the unique nature of today’s student renters, Wood pointed out some key contrasts between teens and 20-somethings in 2013 versus the same demographic just five years ago.

Read more...Special Report: Research Reveals New Insights about Today’s Student Renters | Multi-Housing News Online

Fewer Gen Yers Choosing Homeownership via Multifamily Executive Magazine

Americans younger than 35 are less likely to own cars or homes than their counterparts of a decade ago.

Builders may need to start buffing up their sales pitches for first-time buyers. A new report by the Pew Research Center suggests that young Americans—those between 18 and 35 years old—are not as interested in making big-ticket purchases such as a house or car that require borrowing money as their counterparts in the past.

Compared to their peers of just a decade ago, today’s young Americans are less likely to:

* own a home (34% in 2011 versus 38% in 2001),

Read more...Fewer Gen Yers Choosing Homeownership - Demographics, Economic Conditions - Multifamily Executive Magazine

Eight Great Steps to Apartment Video Marketing Success with Multifamily Superstar Kate Good via

As one of the multifamily industry’s most sought after leasing, training, and performance marketing consultants, Kate Good, a partner and director of multifamily development and operations with Hunington Residential and a professional speaker and partner with Apartment All Stars gets to see a lot of video.

This April, Good will host the AIM 2013 Video Awards, an inaugural event recognizing the industry’s best community marketing, training, and vendor videos. Good visited this week for an exclusive look at why video has become such a trusted tool for marketing, conversion, and training in the apartment industry, and shares her thoughts on how apartment professionals can better succeed with refined video design and distribution strategies.

Read more...Eight Great Steps to Apartment Video Marketing Success with Multifamily Superstar Kate Good - Multifamily News Headlines – Breaking News, Stories, Top Headlines ::

Capital Concerns Are Top Of Mind for Multifamily Pros via

Capital—the availability of it, the amount of it and where it’s being placed in the market—was a recurring topic of conversation at the RealShare Apartments East conference on Tuesday. In fact, the first and last panels of the event, which drew some 400 people to the Hyatt Regency Downtown here, focused on debt and equity financing.

The day kicked off with Prudential Mortgage Capital Co. managing director Michael McRoberts chatting with Freddie Mac’s John Cannon and Fannie Mae's Manuel Menendez. In the “GSE Report: 2012 in Review and the Outlook for 2014,” the execs both related that business and activity is up tremendously for the GSEs’ multifamily arms.

Read more...At RealShare Apartments East 2013, Capital Concerns Are Top Of Mind for Multifamily Pros - Daily News Article -

As Investors Chase Yield, Rich Apt. Pricing Pushes Capital Further Afield via CoStar Group

The continuing strong recovery of apartment rents and occupancies has not gone unnoticed by real estate property investors, who pushed sales volume to 2007 boom era levels last year -- and even higher sales totals possible in 2013, as a result of the now-closed $16 billion Archstone transaction.

According to preliminary CoStar data, total multifamily sales volume for all markets totaled $29.2 billion in the fourth quarter, the highest quarterly sales volume since second-quarter 2007. More than $84.5 billion in multifamily sales were recorded for all of 2012, a 30% increase over the previous year and the highest yearly volume since 2007's $99.7 billion.

"Sales volume continues to grow quarter after quarter, and pricing continues to get richer. Investors still love apartments," CoStar real estate economist Francis Yuen said during the recent presentation of the year-end multifamily review and outlook.

Read more...As Investors Chase Yield, Rich Apt. Pricing Pushes Capital Further Afield - CoStar Group

Wednesday, February 27, 2013

The Briefing: Economy Shrank in Q4, but Forecast is Not Discouraging via NREI Readers Write

The initial 4Q12 numbers showed the U.S. GDP slid into negative territory, -0.1%. Many informed watchers believe this was due to temporary influences and that the number will be revised up to +0.3% once the improved trade numbers are factored in. The economy continues to power through the international headwinds and dysfunctional political environment here at home. Despite the fiscal cliff, postponement of sequestration, debt ceiling and a meaningful budget, our economy continues to produce jobs and chug along. Conditions will continue to be choppy, but ultimately slow and moderate growth will prevail.

The economy shrank in 4Q12 – but the details are not as discouraging as the headline:

Read more...The Briefing: Economy Shrank in Q4, but Forecast is Not Discouraging | NREI Readers Write

Complicated tax lien bill attracts attention via Dallas Business Journal

A large crowd packed the Senate Committee on Business and Commerce’s hearing Tuesday for a bill related to the transfer of ad valorem tax liens.

State Sen. John Carona’s Senate Bill 247 removes non-judicial foreclosure and prohibits the transfer of a lien from a licensed to a non-licensed entity. About $6 billion in liens come up for sale each year in 28 states, Washington, D.C., Puerto Rico and the U.S. Virgin Islands, Forbes reports. Enough of that money is changing hands in Texas — loan balances on delinquent accounts totaled nearly $65 million in 2011, according to a report by the Finance Commission of Texas — to make those affected and involved care about this particular bill.

Read more...Complicated tax lien bill attracts attention - Dallas Business Journal

Hedge Funds Plotting CMBS Gatekeeper Coup via Bloomberg

Hedge funds are preparing to muscle in on the riskiest part of the $550 billion commercial mortgage bond market, where a handful of firms control the fate of deals.

Ellington Management Group LLC, Saba Capital Management LP and a fund of MatlinPatterson are among investors considering purchases of so-called B-pieces of newly issued commercial property bonds, according to people familiar with the three firms’ plans who asked not to be identified because the information is private. Buyers of the securities are the first to lose money when buyers default; in exchange they earn higher returns and control over which mortgages are included in new deals created by Wall Street.

Read more...Hedge Funds Plotting CMBS Gatekeeper Coup: Mortgages - Bloomberg

Zombie love, true sales and why “Too Big To Fail” is really dead via Housingwire

Simply stated, the largest commercial banks became “too big to fail” in large part because they used non-bank vehicles to increase leverage without disclosure or capital backing. Their intent was to reduce the apparent capital needs of banks. Banks’ abuse of non-bank vehicles to issue subprime securities and hide capital deficits was facilitated by legal counsel, auditors, rating agencies and regulators, who all pretended that four centuries of legal precedent regarding financial fraud had somehow never occurred. Until 2011, FDIC rules did not preclude that abuse and even sheltered banks from need to disclose it to auditors and investors.

The failure of Lehman Brothers, Bear Stearns and most notably Citigroup all were attributable to deliberate acts of securities fraud whereby assets were “sold” to investors via non-bank financial vehicles. These transactions were styled as “sales” in an effort to meet applicable accounting rules, but were in fact frauds that must, by GAAP and law applicable to non-banks since 1997, be reported as secured borrowings.

Read more...Zombie love, true sales and why “Too Big To Fail” is really dead | REwired

Multifamily Construction – Its Growth, Drivers Hot U.S. Markets Via

Many construction economists have projected the multifamily residential market to be one of the most active construction sectors for 2013. This is welcome news for multifamily builders as well as for general contracting firms that are involved in this sector, and the impetus for many other companies to jump in while the going is good. As illustrated in the chart below, the National Association of Homebuilders (NAHB) is forecasting 299,000 multifamily housing starts for 2013 which is a 22% improvement over 2012. Complementing this data is the fact that, for three consecutive quarters, the Multifamily Production Index (MPI) has been above 50, which indicates optimism across the industry.

Read more...Multifamily Construction – Its Growth, Drivers Hot U.S. Markets Via

Tuesday, February 26, 2013

CMBS 2.0? Be Prepared via

Continuing the momentum that started in the fourth quarter of 2011, CMBS volume grew by a third to reach almost $50 billion in loan securitizations in 2012. This trend continues in 2013, and CMBS lenders have started the year by continuing their quest for financing opportunities.

While multifamily financing is still dominated by the GSEs, CMBS has resumed its place as the top capital source for long-term, fixed rate, non-recourse financing for commercial real estate. This new influx of CMBS lending might be viewed as “CMBS 2.0.”

Read more...CMBS 2.0? Be Prepared - Commentary Article -

The U.S. Simply Doesn't Have Enough Available Rental Housing, Whether You're Rich or Poor via The Atlantic Cities

The Census Bureau says there are about 41 million renter households in the United States, a group making up about 35 percent of the country. And the renter ranks are expected to swell this decade as the housing demand of Baby Boomers and their children starts to converge. Twentysomethings who’ve been living at home during the recession will finally move out to form their own households. Many Baby Boomers, meanwhile, are expected to downsize into smaller rentals units where they won’t have to mow their own lawns.

Housing wonks have projected that we may need to build at least 3 million new rental apartment units in the next 10 years to satisfy all these people. And if you’re a renter just about anywhere in the country, you may already be feeling the crunch: As Cities reported last summer, it’s lately become cheaper to buy a home than to rent one in the vast majority of America’s 100 largest metros.

Read more...The U.S. Simply Doesn't Have Enough Available Rental Housing, Whether You're Rich or Poor - Housing - The Atlantic Cities

Schnurman: Wind power is a blowing force in Texas via The Dallas Morning News

The wind is blowing Texas' way.

While shale gas gets the most credit for the state's cheap, abundant energy, wind power has become a force, too. One evening this month, wind generated nearly 28 percent of electricity in the state grid, enough to power more than 4 million homes.

That’s a record high, the result of strong winds and steady growth in wind farms and transmission lines. In the last five years, wind generation has more than tripled in Texas, while natural gas grew 5 percent, and coal and nuclear declined.

Read more...Schnurman: Wind power is a blowing force in Texas | - News for Dallas, Texas - The Dallas Morning News

White Paper: Multifamily Manufactured and Modular Construction via Multi-Housing News Online

Prefabrication in construction has been available for decades. It has traditionally been provided in three major forms:

* Panelization—The use of interlocking or interconnecting wall, floor and roof assemblies fabricated on tables (on or off site) and assembled on building pads. Its greatest efficiencies come from repetitive component members used in fabricating highly repetitive plan solutions.

* Core modules—Wet or infrastructural modules that concentrate utility assemblies into compact transportable packages to be field joined with conventional or panelized construction components.

* Manufactured or modular structures—Modular structural boxes factory fabricated and field joined either horizontally or vertically to form larger interior environments and often involving selective field fabrication.

Reasons for considering manufactured multifamily housing approaches

Read more...White Paper: Multifamily Manufactured and Modular Construction | Multi-Housing News Online

Texas cities dominate GDP growth list via Real Estate Center at Texas A&M

Many Texas cities have shown significant growth in gross domestic product (GDP). Houston area’s real GDP in 2011 grew 3.7 percent — the most of the ten largest metropolitan areas in the United States, according to the U.S. Bureau of Economic Analysis.

DFW followed with 3.1 percent growth, and the San Francisco area was No. 3 with 2.6 percent growth.

Among metropolitan areas with real GDP of more than $100 billion, the San Jose, Calif., area experienced the most growth with 7.7 percent.

Read more...Texas cities dominate GDP growth list via Real Estate Center at Texas A&M

Monday, February 25, 2013

Tips for Dealing with Missed Rent Payments via Multifamily Blogs

Every landlord or property manager has probably dealt with a tenant not paying their rent on time or missing payments altogether. Dealing with missed rent payments can warrant different actions depending on the terms of the lease. As a landlord, it is important to keep in mind that this is a business, after all. Late or missed payments will only hurt the business you are managing. In order to deal with this often-sticky situation with tenants, landlords can equip themselves with several tips to avoid the headache.

Don’t Get Too Personal

Landlords, especially those who live on site, can at times develop friendships with tenants. Even if this is the case, landlords need to remain firm when it comes to rent. If a tenant falls on hard times, landlords shouldn’t become too personal about the situation, letting months of late payments slide. Landlords should take a business approach when dealing with tenants and collecting their rent.

Read more...Tips for Dealing with Missed Rent Payments - Multifamily Blogs

Despite building boom, Central Texas apartment supply still lagging behind demand via

Here’s some news that won’t come as a surprise to Central Texas apartment dwellers: Rents in the area keep going up, continuing a three-year climb.

And here’s something many apartment-hunters already know: It’s hard to find a place, much less one that fits their budgets.

What gives? It’s Supply and Demand 101: Despite an ongoing boom in apartment building, the number of new units under construction aren’t going up fast enough to meet the continued growing demand.

Read more...Despite building boom, Central Texas apartment supply still lagging behind demand via

Texas Manufacturing Activity Increases but at a Slower Pace via Dallas Fed

Texas factory activity expanded in February, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, fell from 12.9 to 6.2, suggesting growth continued but at a slower pace.

Other measures of current manufacturing activity also indicated slower growth in February. The new orders index was positive for the second month in a row, although it fell from 12.2 to 2.8. The capacity utilization index declined from 14.0 to 5.4, suggesting utilization rates increased less than last month. The shipments index plunged almost 20 points but stayed in positive territory, indicating slightly higher shipments in February.

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

Commercial Real Estate Sectors Steadily Improve via

Major commercial real estate sectors continue to improve, albeit slowly, with gradual economic improvement and job creation driving absorption of space, according to the National Association of Realtors® quarterly commercial real estate forecast.

Lawrence Yun, NAR chief economist, said rental housing demand has been exceptionally strong. "Rent increases have been higher in multifamily housing where supply is not matching strong demand, thereby allowing landlords to raise rents at faster rates," he said. "Overall commercial real estate leasing activity continued to grow in most markets during the closing months of 2012, which is modestly lowering vacancy rates in all of the commercial sectors early this year."

Read more...Commercial Real Estate Sectors Steadily Improve |

Friday, February 22, 2013

Special Report: How Data Collection Could Influence Investment in Sustainability via

For real estate investors, it is becoming more and more difficult to ignore the fact that not only is it better for the environment to have a sustainable community, but that renters are actively seeking out these types of buildings—and the data proves it. At the recent Third Annual Conference on Sustainable Real Estate in New York, during a panel called “Can Better Information Make Responsible Investment the Next Big Thing,” moderator Ursula Hartenberger, global head of responsibility, Royal Institution of Chartered Surveyors, and panelists John J. Gilbert, III, executive vice president and CEO, Rudin Management Co. Inc.; David Lorenz, professor, Karlsruhe Institute of Technology; Peter J. Miscovich, managing director of corporate solutions, Jones Lang LaSalle; David L. Pogue, global director of sustainability, CBRE Inc.; and Peter Steil, CEO, NCEEIF, discussed how having access to data could change how investors view sustainable properties.

Read more...Special Report: How Data Collection Could Influence Investment in Sustainability via

Top 5 Technologies That Will Impact The Multifamily Industry In 2013 via Property Management Insider

Well, 2012 has come and gone, and I think it’s safe to say this has been an amazing year for technology in the multifamily industry. We continue to adopt new and exciting ways to drive customer engagement and interest while continuing to look for ways to optimize net operating income. We are only beginning to scratch the surface of what’s possible. I have no doubt that 2013 will be an even greater opportunity to expand how we use technology in this industry. Without further ado, here are the top five technologies that I feel will have a major impact on the way we do business in the new year.

1. Mobile Devices

Read more...Top 5 Technologies That Will Impact The Multifamily Industry In 2013 | Property Management Insider

DFW apartments forecast 2013: Hendricks-Berkadia via Real Estate Center at Texas A&M

The pace of job gains in the Dallas-Fort Worth MSA is projected to quicken to 2.2 percent in 2013, and rise to 2.3 percent in 2014. Overall, the health care and education sector accounts for more than 377,000 local jobs, a figure that is up nearly 43 percent over the past ten years.

Apartment completions will surge to a four-year high of 10,820 units in 2013 but will trend down to 3,340 units in 2014, returning closer to levels seen in 2011 and 2012.

Read more...DFW apartments forecast 2013: Hendricks-Berkadia via Real Estate Center at Texas A&M

Apartment Market Trends, Asset Class Performance, January, 2013 via Axiometrics

Asset Class Performance

At the national level, Class C properties continued to post the best annual effective rent and occupancy growth rates in January 2013. Annual effective rent growth for Class A properties steadily declined from 5.1% in January 2012 to 3.2% in January 2013. While Class A and C properties have been on opposite growth paths compared to each other, Class B properties have been very stable, at a growth rate close to 3.7% since November 2011.

Read more...Apartment Market Trends, Asset Class Performance, January, 2013 via Axiometrics

San Antonio apartment forecast 2013: Hendricks-Partners via Real Estate Center at Texas A&M

Local apartment demand echoed trends seen in the single-family arena, with net apartment move-ins rising to 6,300 units in 2012, the highest annual total on record.

Apartment completions rose to a three-year high of 3,010 units, more than twice the year-ago total of 1,160 units.

Forecast for 2013: Apartment demand will remain strong, with new jobs and the need for temporary housing for energy company employees supporting leasing activity.

Read more...San Antonio apartment forecast 2013: Hendricks-Partners via Real Estate Center at Texas A&M

Thursday, February 21, 2013

Multifamily Borrowers Have It Good via

Good times are here to stay around for a while in the multifamily sector, says Donald P. King III, Walker & Dunlop's chief production officer. The demand in the space has created a good climate for borrowers, and secondary markets are starting to gain more traction. The only unknown right now that could impact this momentum, he contends in a recent conversation with, is the status of Fannie Mae and Freddie Mac. Do you see the multifamily market overheating any time soon?

Donald King: I do not think it’s starting to overheat. The fundamentals behind the multifamily market as a whole continue to be very, very strong. Demand is increasing. There hasn’t been too much new product added. Financing is available in large part thanks to Fannie and Freddie and HUD. There continues to be very high demand by investors and a lot of capital still chasing that product.

Read more...Multifamily Borrowers Have It Good - Daily News Article -

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

Total returns for commercial real estate and apartment investment fell in the third quarter, according to statistics from the National Council of Real Estate Investment Fiduciaries.

Financing volume has increased this year, as reflected in the Mortgage Bankers Association’s (MBA) originations volume index. Compared to the same period a year ago, the third quarter financing index is 30 percent higher.

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

Apartment Market Trends, Asking Rents and Concessions, January, 2013 via Axiometrics

Nationally, the level of asking rent was practically unchanged between December and January. That resulted in the annual growth rate for asking rents slowing from 2.36% in December to 2.25% in January. A year ago annual asking rent growth was 2.14%. While Axiometrics tracks asking rent growth, effective rent growth is our main focus because it matches closest with actual revenue growth.

Concession values lowered the asking rent 1.99% at the national level in December, which is the equivalent of 7.3 days of free rent on a 12-month lease. For comparison, the concession value lowered asking rents 3.33% last year and 5.12% two years ago.

Read more...Apartment Market Trends, Asking Rents and Concessions, January, 2013 via Axiometrics

Apartment Rent Growth Expected To Decelerate In Top Markets Ahead of New Supply Wave via CoStar Group

With continued strong demand for apartments being met by a legitimate multifamily building boom in many U.S. cities, increasing apartment rents are expected to reach something of an inflection point in 2013.

Rent growth in some metros such as Boston, Washington, D.C. and New York is cooling down as those markets are doused by a wave of new supply from developers. Other areas of the U.S., such as the San Francisco Bay Area and Silicon Valley, remain red hot, while in still other markets like Southern California, St. Louis and Salt Lake City, apartment vacancies have tightened to the point where rents are starting to increase again.

By any measure, the apartment sector has enjoyed the strongest rebound of any of the four major CRE property types, and can now be considered fully recovered, observed CoStar Senior Real Estate Economist Erica Champion who, along with Director of Research-Multifamily Luis Mejia and Real Estate Economist Francis Yuen, recently presented CoStar's latest analysis of the multifamily market as part of a 2012 Review and Outlook presentation to clients.

Read more...Apartment Rent Growth Expected To Decelerate In Top Markets Ahead of New Supply Wave - CoStar Group

Wednesday, February 20, 2013

We Are Not a Cookie-Cutter Industry: Don’t Quote Your Services That Way! Part II via Multifamily Blogs

I came to the conclusion very early in discussions with potential new property management clients that an initial drive-by, preliminary meeting with the owner, if possible, and compiling facts about the property on my own internal “Real Property Inventory Profile” was the best approach for me to take in determining the information necessary. Keep in mind, this approach is only necessary with local owners who were typically comprised of a partnership of local individuals or related persons who pool funds to invest in real estate.

If the potential prospect is an institutional-grade client, the approach is completely different as that type of prospect knows exactly what is involved and generally the real estate has been managed professionally. In that case, a discussion with the existing property manager would be ideal, or you can provide your request for key information included in the “Real Property Inventory Profile” initially. The key fact is whether or not the property has been managed by professionals or self-managed, or is being built or acquired.

Read more...We Are Not a Cookie-Cutter Industry: Don’t Quote Your Services That Way! Part II - Multifamily Blogs

The Course of Capital: Accepting the New Normal via Commercial Property Executive

While the recession and ongoing recovery have presented opportunities for the industry, it is safe to say that many commercial real estate professionals would like to put this time period behind them and move on. But as much as one can wish for the good old days—and can perhaps justify their imminent return with recent performance of the macro economy—there is still much uncertainty and many challenges ahead according to the annual commercial real estate outlook report issued by the Real Estate Research Corp., Deloitte and the National Association of Realtors. This year’s report is appropriately titled Expectations & Market Realities in Real Estate 2013—Turn the Page.

One of the report’s major findings is that while many investors spent much of 2012 focused on traditional safe haven investments, new requirements for higher yields and a new wave of easing by banks has drawn some investors into riskier strategies. The good news is that the capital markets are willing to support such endeavors, and lending continues to expand.

Read more...The Course of Capital: Accepting the New Normal via Commercial Property Executive

Secondary Markets: Multifamily's New Frontier via

Secondary multifamily markets are ripe for investment for smaller players, while the larger institutions continue to focus on Class A assets in gateway markets. That was one of the main messages from our conversation with Morgan Ferris, senior vice president income property lending, at BofI Federal Bank. His firm is one of our Thought Leader partners on Multifamily Leader, as part of our coverage of MBA's CREF/Multifamily Housing Convention & Expo earlier this month. Were there any surprises about the market at MBA’s CREF multifamily conference, or were your prior impressions reinforced?

Morgan Ferris: There weren’t any surprises to what we see in the marketplace or where things are going. It kind of solidified our overall thoughts. There appears to be some very buoyant mood for the next year. A lot is very positivie. Do you see that momentum going into secondary markets as well?

Read more...Secondary Markets: Multifamily's New Frontier - Daily News Article -

Housing Starts decrease to 890 thousand SAAR in January, Single Family Starts Increase via Calculated Risk

From the Census Bureau: Permits, Starts and Completions

Housing Starts:
Privately-owned housing starts in January were at a seasonally adjusted annual rate of 890,000. This is 8.5 percent below the revised December estimate of 973,000, but is 23.6 percent above the January 2012 rate of 720,000.

Single-family housing starts in January were at a rate of 613,000; this is 0.8 percent above the revised December figure of 608,000. The January rate for units in buildings with five units or more was 260,000.

Building Permits:
Privately-owned housing units authorized by building permits in January were at a seasonally adjusted annual rate of 925,000. This is 1.8 percent above the revised December rate of 909,000 and is 35.2 percent above the January 2012 estimate of 684,000.

Single-family authorizations in January were at a rate of 584,000; this is 1.9 percent above the revised December figure of 573,000. Authorizations of units in buildings with five units or more were at a rate of 311,000 in January.

Read more...Calculated Risk: Housing Starts decrease to 890 thousand SAAR in January, Single Family Starts Increase

Default Risk Among Renters Decreased Year Over Year According to CoreLogic Q4 2012 Renter Risk Index via

CoreLogic, a leading residential property information, analytics and services provider, today released its fourth quarter 2012 CoreLogic SafeRent® Renter Applicant Risk (RAR) Index Report, formerly known as the Multifamily Applicant Risk (MAR) Index Report. Published quarterly, the RAR Index Report provides market-based benchmarks for evaluating credit quality and risk of default for renters applying for apartment homes in multifamily housing units. The index also includes data from single-family rentals. Using a mean of 100, an index value above 100 indicates decreased risk, and a value below 100 indicates increased risk.

According to the data, the risk of default among renters nationwide decreased year over year in the fourth quarter of 2012 with an index value of 103 compared to the fourth quarter of 2011 with an index value of 101. On a quarter-over-quarter basis, the risk of default increased in the fourth quarter 2012 compared to the third quarter of 2012 when the index value was 106. The increased risk from the third quarter to the fourth quarter of 2012 reflects a riskier applicant pool that is typical in seasonally slower periods of applicant traffic.

Read more...Default Risk Among Renters Decreased Year Over Year According to CoreLogic Q4 2012 Renter Risk Index - Multifamily News Headlines – Breaking News, Stories, Top Headlines ::

The IRS’s Little-Known Green Tax Break for Building Owners via

Building owners and tenants who construct new buildings or improve existing buildings often miss out on valuable tax deductions at the time the building or improvement was originally placed into service. Until recently these deductions were lost forever unless filed on a current-year return or through amending prior-year returns. Recent IRS guidance enables building owners and tenants to take the deductions this year for projects as far back as 2006—without amending tax returns.

These are known as Section 179D deductions, and they allow owners and tenants who have made energy-efficient improvements to claim valuable deductions by making an accounting method change. By way of example, a 100,000-square-foot office building could yield up to $180,000 in accelerated deductions for the building owner or the tenant that owns the improvements.

How does it work?

Read more...The IRS’s Little-Known Green Tax Break for Building Owners - Building Opportunity Article -

Apartment Market Trends, January, 2013 via Axiometrics

Nationally, annual effective rent growth slowed from 3.72% in December to 3.62% in January. The annual growth rate was 4.0% a year ago, but it has been very steady at close to 3.7% since June 2012. Nineteen of the top 88 MSAs had an annual growth rate greater than 5.0%, including Houston (7.0%), San Francisco (6.8%), Nashville (6.3%), and Denver (6.2%). Twelve of the MSAs had an annual growth rate less than 1.0%. More details on top and bottom performing MSAs can be found at the end of this newsletter.

Read more...Apartment Market Trends, January, 2013

Tuesday, February 19, 2013

Texas markets boom for homebuilders via HousingWire

Texas metros made up 25% of the list of top single-family permit markets in 2012, put together by John Burns Real Estate Consulting and the U.S. Census Bureau.

These markets, which provide a perfect opportunity for homebuilders looking to capitalize on the market recovery, have a number of conditions that place them on the list.

All five of the Texas metros on the list saw double-digit percentage gains year-over-year of existing home sales.

The resale inventory in Houston, Dallas and Austin is below four months of supply, a drop that is inevitably due to the rise in demand. These Texas metros, like most, are experiencing pent-up buyer demand from buyers who waited to buy until after the economic downturn.

Read more...Texas markets boom for homebuilders | HousingWire

Bullish 2013 Outlook via Real Estate Center at Texas A&M University

Dr. Mark Dotzour feels more bullish about the national economy this year than he has in the last five years. And with good reason.

“Real estate construction is growing again finally. There are more people at work. We’ve got five years of pent-up demand [for housing and commercial properties]. And, very importantly, Americans have credit capacity again,” said the Real Estate Center’s chief economist.

In a new video available on the Center’s website, Dotzour says the most significant change he sees going forward in 2013 is that residential housing markets in most of the country are stabilizing.

Watch video...Bullish 2013 Outlook -- Real Estate Center at Texas A&M University

Houston Economic Update February 2013 via FRB of Dallas

The Houston Business-Cycle index rose nearly 4 percent in December, implying faster economic growth in the region. Energy-related activities, construction and international trade continue to propel growth. Regulatory uncertainty, the U.S. fiscal situation and stresses in the global economy cloud the horizon, but fundamentals in many area industries were firmer than in much of 2012.

Houston payroll employment grew 1.5 percent in December and 3.6 percent through 2012. Only 1997, 1998, 2005 and 2006 had greater annual growth rates the past 20 years. Construction, manufacturing, and professional and business services led employment growth in December.

Read more...Houston Economic Update February 2013 via FRB of Dallas

Freddie Mac: Multifamily affordability is now a key focus via HousingWire

Renters in multifamily apartments of five or more units currently account for 15 million U.S. households and that figure is expected to rise even more as demographics and housing preferences shift, a Fannie Mae executive said.

Various factors are driving the increase in rental housing affordability, including demographic trends, household formations, higher credit standards for residential mortgages and changing attitudes about homeownership in light of the housing crisis, according to Senior Vice President David Brickman of Multifamily at Freddie Mac. Brickman made those assertions in a blog this past week.

However, adequate, affordable rental housing is hard to find in certain parts of the country due to gross rent, which is rent plus tenant-paid utilities.

Read more...Freddie Mac: Multifamily affordability is now a key focus | HousingWire

Houston, Energy Sector’s Peak Nowhere in Sight via

Recent strides taken in the United States toward independence from using foreign energy sources are also benefiting the nation’s office market, boosting occupancy at a time of caution for most of the professional business sectors.

More than half of the top performing office markets in the country today are primarily technology- or energy-driven, with Houston leading the latter. Unemployment is at less than 6 percent in Houston. Also, though the city’s 195 million sq. ft. of office space makes up just 4 percent of the U.S. total, the city accounted for almost 13 percent of the country’s total office absorption in the past year, according to a Jones Lang LaSalle fourth quarter report.

Jobs are a big part of the answer for the Houston office market’s growth. Of the top 12 largest metropolitan areas, Houston had the only rate of job growth to surpass 3 percent from October 2011 to September 2012. In contrast to Silicon Valley, the other current office powerhouse, there’s no lack of employees for the energy sector, says Rudy Hubbard, a managing director with JLL’s Houston market. “Anyone with a petroleum degree coming out of college today doesn’t have any problem getting a job in Houston,” he says.

Read more...Houston, Energy Sector’s Peak Nowhere in Sight via

Effective Rent Growth Chugs Along via

January's national multifamily property statistics released by local AXIOMetrics Inc. showed a slowdown in annual effective rent growth and a decrease in concession values. Occupancy also took a slight hit, with the national occupancy rate declining 7 basis points from 94.11% in December to 94.04% in January.

The report noted that the slowdown was due to seasonality, but even taking that into account, occupancy rates were an improvement from comparable months of 2011 and 2012.

Read more...Effective Rent Growth Chugs Along - Daily News Article -

Friday, February 15, 2013

Price Stability, the Real Estate Hedge and the Federal Debt via The Commercial Observer

The Federal Reserve dropped a lead foot on monetary policy in late 2008 and intends to keep it there until you or someone you know finds a job.

If you’re reading The Commercial Observer, odds are you’re gainfully employed. The Fed’s attention is elsewhere, fixed on the more than 12 million Americans still lollygagging in the labor statistics. Price stability is the other half of the Fed’s mandate, but for now, employment is the larger challenge.

In battling unemployment, the central bank’s toolbox is limited to fairly blunt instruments. Its ultimate power rests in its ability to set the overnight rate. The Fed also exerts its influence over the market for Treasuries and other securities, though its sway is limited in this arena. In balancing interest rate policy with price stability, the Fed has been able to exercise a relatively free hand in the absence of higher rates of inflation.

Read more...Price Stability, the Real Estate Hedge and the Federal Debt | The Commercial Observer

Trepp: Percentage of CMBS Loans Paying Off at Maturity Jumps via

The percentage of loans contained in commercial mortgage-backed securities (CMBS) that are paying off on their balloon date has exceeded 60 percent for the fourth time in the last five months, according to the Trepp January Payoff Report.

In January, 66.9 percent of loans reaching their balloon date paid off — an increase of more than 12 percentage points from the December reading. The total was also the second highest total over the last four years. Only September's 68.2 percent reading was higher.

The January rate of 66.9 percent is well above the 12-month moving average of 49.2 percent. (This number sums the averages of each month and divides by 12. There was no balance weighting across the months.)

Read more...Trepp: Percentage of CMBS Loans Paying Off at Maturity Jumps via

Resident Retention: Great Leadership Increases Loyalty and Revenue via Property Management Insider

Do you employ Apartment Manager Customer Experience Leaders at your apartment communities?

“Do we employ a what-now?”

Let me put it another way.

When it comes to the customer experience are you ready to put your money where your mouth is or will you simply pay lip service to the idea? Do you really understand the value of a better customer experience for your employees and residents?

In December, 2012, Oracle published a research report, “Why Customer Satisfaction is No Longer Good Enough.” Here are three important points the survey revealed:

Read more...Resident Retention: Great Leadership Increases Loyalty and Revenue | Property Management Insider

Never Mind the Governor: CA to TX Migration Is Already Strong via

Since the early days of February, business headlines in Texas and California have been focused on efforts by Texas Governor Rick Perry to woo California businesses to the Lone Star State. Much has been made in the Texas media about the millions spent by the governor's office on public relations and advertising in the Golden State in attempts to lure businesses there to the Lone Star State.

But experts tell that the governor's promotion activities haven't really been necessary. The eastward migration of businesses to Texas from California has been in play for quite some time now. "This has been a phenomenon we've experienced during the past 10 years," notes Mike Lewis, co-founder and principal with Dallas-based Velocis Partners. "But it's been getting stronger recently." Transwestern senior vice president Larry Mendez, who is based in San Antonio, pinpoints the increase of California business in Texas from before the recent financial crash, though acknowledges that there seems to be more interest than ever these days. Adds Tom Pearson, executive vice president with Colliers International's Dallas office: "The governor really didn't need to do this; there are plenty of people promoting Texas and coming here right now."

Read more...Never Mind the Governor: CA to TX Migration Is Already Strong - Daily News Article -

3 Ways to Make Your Rental Properties More Energy Efficient via Appfolio

The imperative to “go green” is becoming more central to today’s property management world. Going beyond a simple moral imperative connected to environmental sustainability, going green is also about the way we do business in general.

Of course saving the planet from ecological collapse is vital. On top of this, it’s good to know that green initiatives also improve efficiency, lower costs, reduce waste and save energy. There are many ways you can “go green,” but one of the most direct and effective ways is with energy efficiency. Energy not only produces waste and pollution, but is also very costly. Improving your building’s energy efficiency not only helps the environment, it saves you money in the long-run and makes you more appealing to younger and affluent tenants looking to find an apartment and make a positive impact at the same time.

To that end, here are three ways to make your buildings more energy efficient:

Read more...3 Ways to Make Your Rental Properties More Energy Efficient

Carbon Footprint and Property Management via

While going about the business of managing properties, it’s easy to forget about the impact our typical business day can have on the environment.

While there are several long term investments you can make to reduce your carbon footprint such as installing low flow toilets in each apartment, or xeriscaping the lawn to reduce water consumption, there are several easy, inexpensive things you can do to conserve energy and leave the environment just a little bit cleaner and your carbon footprint a little bit lighter. Here are just a few:

Read more...Carbon Footprint and Property Management |

Thursday, February 14, 2013

ULI Real Estate Business Barometer -- February 2013 via Urban Land Institute

Buyer appetite for commercial property hit post-recession highs as transaction volumes vaulted, prices strengthened, and CMBS issuance shot up. Permits and starts of all types of housing continue to hit high notes; condominium sales are staging a strong comeback now, as well. A negative fourth-quarter GDP provides the first insight into the impact of major government cutbacks.

The top ten trends in this month’s Barometer:

Employment growth slipped but remained above the long-term monthly average, with notable gains in retail and construction. Retail sales were strong and spending on private construction increased, almost entirely due to residential construction.

Read more...ULI Real Estate Business Barometer -- February 2013 via Urban Land Institute

They are Social, Tech-Savvy, Design Conscious and Headed to Your Community - Meet the Dawdlers via

They’re educated, upwardly mobile, socially conscious, and networked. They’ve delayed the whole getting married, having children, buying a house and moving to the suburbs deal. They’ll do all of that someday, but what’s the hurry. There’s a lot of life to live before all of that. Meet the “dawdlers”...They’re waiting, and in the process, changing the way we think about multifamily development.

Until recently, the market segment eschewing family for fun, or career was negligible. But, we can’t ignore them anymore. In fact, this group of Millennials is shaping some of the most vibrant and exciting developments across the country and their numbers are

Read more...They are Social, Tech-Savvy, Design Conscious and Headed to Your Community - Meet the Dawdlers - Multifamily News Headlines – Breaking News, Stories, Top Headlines ::

CRE Sales Surge 22% In 2012 As Pricing Recovery Spreads To More Markets via CoStar Group

Sales of U.S. commercial real estate reached nearly $64 billion in 2012, jumping 22% from the previous year to the highest annual total since 2004, according to the latest findings from the CoStar Commercial Repeat Sale Indices (CCRSI).

The analysis of sales data through December caps a year in which the recovery in CRE pricing rippled beyond the apartment market into office, industrial and even retail property, to a greater or lesser extent. Meanwhile, the level of distressed property sales fell to just 11.5% of transactions noted in December 2012, the lowest level since the end of 2008, which also helped put a solid foundation under prices.

Even commercial land prices showed signs of recovery in the last quarter of 2012, mostly due to strong developer demand for apartment sites. The CCRSI Land Index gained 3.6% in the last quarter of 2012, although it still remains 39.9% below the frothy December 2007 peak.

Read more...CRE Sales Surge 22% In 2012 As Pricing Recovery Spreads To More Markets - CoStar Group

Wednesday, February 13, 2013

Texas leads nation in exports via Real Estate Center at Texas A&M

Texas has been named the No. 1 exporting state in the United States for the 11th year in a row, according to the U.S. Department of Commerce.

Texas exports for 2012 totaled $265 billion, a 5.4 percent increase from the $251 billion in exports tallied in 2011. Meanwhile, U.S. exports grew 4.3 percent to $1.54 trillion in 2012.

The state’s top export markets were Mexico ($94.8 billion), Canada ($23.7 billion), China ($10.3 billion), Brazil ($10 billion) and the Netherlands ($9.5 billion).

Read more...Texas leads nation in exports via Real Estate Center at Texas A&M

Apartment activity added $4.5B to Houston economy via Houston Business Journal

Apartment construction and operations contributed $4.5 billion to the Houston area's economy and supported 38,000 local jobs in 2011, according to a report by the National Multi Houston Council and the National Apartment Association.

Some highlights from the study include:

$429 million was spent on new apartment construction in Houston in 2011

Read more...Apartment activity added $4.5B to Houston economy - Houston Business Journal

Multifamily Housing Growth Poised to Continue in 2013 via

After years of downturn, home building is now solidly contributing to economic growth. An important factor behind that growth has been the expansion of multifamily construction such as apartment buildings and condominiums.

As a result of the housing crisis, homeownership is down, particularly among younger households. In addition, the overall number of households—homeowners and renters combined—is down compared to where it should be given the population growth.

This trend has translated into a lot of potential in household formation—as many as two million future households according to some estimates, with most of them expected to become renters as economic and labor market conditions improve.

The result for the building industry has been an increase in the demand for rental units, which in turn has reduced rental vacancy rates and driven demand for multifamily construction.

Read more...Multifamily Housing Growth Poised to Continue in 2013 - The Home Front (

Five Characteristics Define the Nation's Top Multifamily Markets via NREI

What makes an apartment market a “top” market?

Is it single-digit vacancy rates and double-digit rental rate growth? Can investors simply look at the most recent data from industry researcher Axiometrics Inc. and make their decisions based on numbers alone? If they do, they might end up investing in markets that are performing well today but lack any future growth prospects.

Or should investors take their cue from Wall Street and stick to the coastal markets—the so-called Sexy Six that regularly attract institutional investors? In doing so, investors might end up competing with every other investor and paying cap rates below 4 percent for assets that have little or no upside.

Read more...Five Characteristics Define the Nation's Top Multifamily Markets via NREI

Corpus apartment forecast 2013: Hendricks-Berkadia via Real Estate Center at Texas A&M

Hendricks-Berkadia has released its 2013 forecast for the Corpus Christi market.

Net absorption will slow 35.7 percent as 315 units will be leased in 2013, followed by 285 net move-ins in 2014. Historically, leasing activity has underpinned average absorption of 345 units annually.

Developers will complete 200 units in 2013, increasing inventory by 0.7 percent. Activity will continue as construction will begin on at least 290 units by year-end. Supply will grow by an additional 0.8 percent next year as developers bring online 230 rentals.

The forecast includes 300 multifamily permits during the next four quarters. In 2014, activity will increase to 325 multifamily units.

Read more...Corpus apartment forecast 2013: Hendricks-Berkadia via Real Estate Center at Texas A&M

ALN Monthly Newsletter February 2013 via ALN Apartment Data

ALN Data just released their January 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 February 2013 via ALN Apartment Data

Multifamily a Trillion Dollar Business via Multifamily Executive Magazine

To those who live and breathe the multifamily business, it’s all about the bottom line. The economic impact of an apartment community is measured in net operating income, revenue and expense, debits and credits.

But if you step back and consider the economic impact a new apartment community has on its neighborhood—and further, the industry’s impact on the national economy—you’d be astounded.

The first and most obvious factor is construction spending, and several studies quantify just how many jobs are supported via development. But that’s just the tip of the iceberg: The financial contribution of ongoing operations, not to mention resident spending, paints a much more complete picture of multifamily’s might.

Read more...Multifamily a Trillion Dollar Business - Multifamily, Research, Apartment Trends - Multifamily Executive Magazine

Tuesday, February 12, 2013

Distressed Cycle Passes Half-Way Mark via

Bargain hunters hoping to pick up deals among distressed assets may need to move quickly. More than half the distressed assets on banks’ books have been dealt with and the amount of loans falling into distressed situations has reached a cyclical low.

“At this point, it’s fair to say that we are moving into the later innings of the distressed cycle,” says Dan Fasulo, managing director at New York-based Real Capital Analytics.

Of the $394 billion of mortgages that became troubled since the 2007 market peak, 58 percent has now been resolved and $165 billion remains to be worked out, according to RCA. In addition, new instances of distress fell substantially in fourth quarter to $4 billion, which is the lowest level this cycle.

Read more...Distressed Cycle Passes Half-Way Mark via

Fiscal Cliff Law Benefits Affordable Housing via Commercial Property Executive

When Congress passed the fiscal cliff legislation on New Year’s Day, Will Cooper Jr. and others in the affordable housing industry breathed a sigh of relief.

The bill, which had earlier passed the Senate but needed the House of Representatives’ approval to send it on to President Obama, extended two important federal tax credits considered crucial to creating funding sources for affordable housing in the United States: the Low Income Housing Tax Credit (LIHTC) and the New Markets Tax Credit (NMTC) programs.

“The entire industry was holding its breath,” said Cooper, president & CEO of WNC & Associates Inc., a national investor in real estate and community renewal initiatives.

Read more...Fiscal Cliff Law Benefits Affordable Housing | Commercial Property Executive

Funds Cite CMBS Top Bet After Subprime Gains via Bloomberg

Hedge funds seeking the hottest trade of 2013 are turning to skyscrapers, shopping malls and hotels after last year’s rebound in residential real-estate drove the industry’s best gains.

Boaz Weinstein, founder of Saba Capital Management LP, and Tom Kempner of Davidson Kempner Capital Management LLC cited commercial property bonds as their best investment idea last week at the EnTrust Investment Summit in New York, according to a person who attended and asked not to be named because it was a private event. Jamie Dinan, founder of York Capital Management LP, also speaking at the conference in the Waldorf Astoria Hotel, said his top pick is commercial property and stocks.

The managers, who can buy everything from corporate loans to stocks and derivatives, are joining mortgage-bond investors including Seer Capital Management LP and LibreMax Capital LLC touting commercial real-estate after property values recovered 45 percent since bottoming in December 2009. Firms are mainly investing in the $550 billion commercial mortgage backed securities market after the hedge-fund industry reaped its biggest gains last year on bets tied to subprime-home loans.

Read more...Funds Cite CMBS Top Bet After Subprime Gains: Mortgages - Bloomberg

Rent Hike Transparency: How to Sell the Increase via Multifamily Executive Magazine

Apartment pros poised to keep increasing rents in 2013 stress that presentation, as well as product and service, are critical to raising rents in the right way.

That means educating existing residents about the costs to move, and even the alternatives they have to your property, while keeping common areas and other amenities sparklingly enticing.

Nicholas Dunlap, vice president of Fullerton, Calif.–based Dunlap Property Group, is aiming for a 5 percent increase in rents for 2013 across his 1,000-unit portfolio. To Dunlap, the main point to get across when selling a rent increase is simply to outline where it’s coming from.

Read more...Rent Hike Transparency: How to Sell the Increase - Rents - Multifamily Executive Magazine

Data Benchmarking—The Key to Reducing Gas Pains and Flushing Out Inefficient Water Use via Multi-Housing News Online

Buildings in the Northeast are among the oldest in the country and weather conditions can be notoriously harsh. Other key factors, like the escalating costs of all utilities, contribute to the fact that less efficient buildings in the Northeast can cost four times more than efficient newly constructed buildings of similar size.

Maloney Properties Inc. strives to remain on the cutting edge of multifamily housing management. With utility expenses representing one of the highest operating costs, we remain committed to making our properties energy and water efficient in order to lower the financial and environmental impact—lowering costs and reducing our carbon footprint. Lower utility costs can provide more cash flow for capital improvements, site amenities, daily operations and owner profitability.

The first critical step to determine building performance is to collect the usage and cost data for each building, each utility and each meter. The next step is to break the data down into common factors and then have the ability to compare the data with other buildings/developments with similar traits. It is equally beneficial to compare usage among buildings within the same development to help identify problem areas.

Read more...Data Benchmarking—The Key to Reducing Gas Pains and Flushing Out Inefficient Water Use | Multi-Housing News Online

Leasing Season Preview: Rent Growth Decelerates via Multifamily Executive Magazine

Brad Cribbins has had a great couple of years.

As chief operating officer at the management division of Phoenix-based Alliance Residential, Cribbins has helped push rent increases at a nice clip across the firm’s 50,000 units and 24 markets since 2010.

“On average, we’re up in the high double digits since 2010,” ­Cribbins says. And he doesn’t plan to take his foot off the gas in 2013, either.

With markets such as San Francisco projecting rent growth of 8 percent to 10 percent this year, and Denver, Dallas, and Seattle slated for bumps of 4 percent to 5 percent—even though that growth rate has slowed from last year—his outlook continues to be optimistic.

“Supply is building, and we continue to watch deliveries, but net absorption in key markets with select demographics will remain strong,” Cribbins says. “We expect a good year.”

Read more...Leasing Season Preview: Rent Growth Decelerates - Rents - Multifamily Executive Magazine

Monday, February 11, 2013

Advanced Submeters Reveal Savings Opportunities for Multifamily Housing via Multi-Housing News Online

John P. Holdren, Assistant to the President and Director of the Office of Science and Technology Policy, states in Submetering of Building Energy and Water Usage: Analysis and Recommendations of the Subcommittee on Buildings Technology Research and Development that “the refined measurement of energy and water use represents a key enabler for the performance of new and existing buildings. For building operators, a detailed record of system performance provides a critical means of not only detecting system malfunctions easily but also focusing future design and retrofit activities on the most cost-effective energy and water system improvements. For building occupants, detailed information on consumption promotes resource conservation through behavioral changes.”

That said, the level of sophisticated energy profiling needed by high-volume consumers is unobtainable using the standard meter found at the main utility service entrance. In response to the need for greater granularity in terms of the energy intelligence needed to optimize today’s facility operations, advanced submeters provide a cost-effective way to help facility operators identify literally thousands of dollars in reduced energy use and cost-savings opportunities.

Read more...Advanced Submeters Reveal Savings Opportunities for Multifamily Housing | Multi-Housing News Online

Most Young Consumers Want to Buy a Home, Survey Finds via AOL Real Estate

The economic downturn that ended a few years ago may have soured many consumers on making significant financial decisions. But as the effects of the recession fade, many may be more interested in homeownership. That seems particularly true of younger consumers who may not have been in a position to buy years ago.

Today, the vast majority of consumers between the ages of 25 and 44, comprising both Millennials and those in Generation X, say that homeownership is at least somewhat important to them, according to a new survey from Prudential Real Estate. In all, 96 percent of all consumers feel this way. But 77 percent of those aged 25 to 34, and 78 percent of people between 35 and 44, say it's "very important." Further, 74 percent say that the current levels of affordability lent by historically low interest rates mean that now is a great time for them to buy a home.

Read more...Most Young Consumers Want to Buy a Home, Survey Finds | AOL Real Estate

Love of Multifamily Lending Lingers, But for How Long? via American Banker Article

Multifamily lending has been the darling of banks and investors for the past few years due partly to easy financing from Fannie Mae and Freddie Mac and the housing bust that has forced more families to rent rather than own.

But bankers and investors are raising renewed concerns that fierce competition for deals, a run-up in apartment prices, and an expected jump in interest rates in the years ahead could spell bad news for banks that hold multifamily loans on their balance sheets. Others are questioning the role of the government in providing cheap financing to large investors while financing for small affordable rental housing has declined.

At a multifamily conference in San Diego this week, debate raged over whether a jump in new construction and increased demand for apartments are laying the groundwork for a multifamily housing bubble. Some of the comments sounded astonishingly like those made by bankers before the housing bust.

Read more...Love of Multifamily Lending Lingers, But for How Long? - American Banker Article

Economic forecast: More jobs, faster growth via USA Today

The first half of 2013 is expected to be sluggish as government spending cuts dampen growth and a payroll tax increase crimps consumer spending.

The nation's economy and job-creating engine will start to purr later this year as business activity picks up — more than offsetting federal government cutbacks, predict economists surveyed by USA TODAY.

After starting the year slowly, the economy will shift into a higher gear this summer and then grow for the next nine months at the fastest pace in three years, according to the median estimates of 46 economists.

"I think we're really on the verge of this becoming a self-sustaining recovery," says Richard Moody, chief economist at Regions Bank.

Read more...Economic forecast: More jobs, faster growth via USA Today

Friday, February 8, 2013

Rent vs. Own: Move Outs for Homeownership Slowly Rise via Multifamily Executive Magazine

The for-sale housing market may be gaining some momentum, with a steady increase in pricing and sales volume coupled with decreasing inventory. But according to some of the industry's top CEOs, it shouldn’t pose much of a threat to the multifamily industry.

The homeownership rate among those aged 25 to 34 is down 700 basis points nationally from its peak, a decline twice as steep as the overall population. These Gen Y members are expected to increase in population by 500,000 this year, but are leaning more toward renting thanks to their lifestyle and flexibility needs, as well as financial and downpayment constraints.

This group represents the largest source of pent-up demand, as an estimated 1 million to 2 million young adult households are waiting to be formed, with 23 million still living with their parents.

Read more...Rent vs. Own: Move Outs for Homeownership Slowly Rise - Housing Data - Multifamily Executive Magazine

San Antonio Apartment Market Continues to Outperform its Historic Norms via Property Management Insider

San Antonio’s apartment market led the nation in quarterly inventory growth in 2012’s fourth quarter, yet still turned in a solid performance in 2012. The Alamo City easily topped its long-term averages in terms of both rent growth and occupancy.

New supply emerged as the key story line in the San Antonio apartment market at the end of 2012. The Alamo City was the nation’s leader in quarterly inventory growth by adding 1,911 units, an expansion of its apartment base by 1.2%.

While San Antonio did add 1,911 units in Q4, that number will not be sustained. New supply is expected to come in just under the 3,000 mark over the course of 2013, putting new supply on par with 2012. And that’s what gives the San Antonio apartment market some upside for next year versus the other Texas apartment markets where new supply is expected to ramp up and play a bigger role in 2013.

Watch video...San Antonio Apartment Market Continues to Outperform its Historic Norms | Property Management Insider

Report: Commercial Investors Eager to 'Turn the Page' via Realtor Magazine

Frustrated by continued uncertainty, a sluggish recovery, and a challenging investment environment, investors generally appear eager to put the past behind them and adjust to the new normal. Those findings were outlined in Expectations & Market Realities in Real Estate 2013 – Turn the Page, a new annual report published jointly by Real Estate Research Corp. (RERC), Deloitte, and the National Association of REALTORS® (NAR).

According to the report, investors appear to realize that this environment will likely be with us for the foreseeable future, and that adjustments may need to be made to maximize commercial real estate investment performance and yield in the continuing slow-growth economy.

Read more...Report: Commercial Investors Eager to 'Turn the Page' via Realtor Magazine

Fitch: CMBS Delinquencies Fall Again; Georgia Remains 'Problem Spot' via

The national delinquency rate for commercial mortgage-backed securities (CMBS) began the year with another decline, marking the eighth consecutive month of decreases, according to Fitch Ratings. The rating agency, however, noted regional struggles in Georgia.

“Offsetting the positive movement in overall delinquencies is Georgia, which continues to be a problem spot,” Fitch said.

In January, the CMBS delinquency rate fell 8 basis points, ending the month at 7.91 percent. The CMBS delinquency rate is now at the lowest level since October 2010, when the rate stood at 7.78 percent.

Read more...Fitch: CMBS Delinquencies Fall Again; Georgia Remains 'Problem Spot' via

Economist Pulls No Punches at ULI Forum via

Commercial real estate players from across South Florida gathered at Gulfstream Park in Hallandale Beach, FL on Thursday afternoon for the Urban Land Institute’s 2013 South Florida Economic & Development Outlook Program. The venue’s Sport of Kings Theater was packed out with leaders hoping to hear perspectives on the future of South Florida land use and real estate from some leading voices in the industry.

Gene Berman, program chair of the event and executive vice president and managing director at Marcus & Millichap, offered what he called a summary of the market in its simplest form: “We took the ride up. We took the ride down. Now we are slowly growing again.”

Read more...Economist Pulls No Punches at ULI Forum - Daily News Article -

Thursday, February 7, 2013

Multifamily sweet spot could turn sour via Real Estate Weekly

There are good reasons multi-family housing is still the hottest real estate sectors in the country, according to Jonathan Woloshin, co-head of sector research for UBS Financial Services.

But he also is making a rare call for caution on the part of investors who think it’s impossible to go wrong with multifamily.

“What’s really going to trip us up? I think it’s going to be over-paying, and we’re not going to know until it’s too late,” he told the members of New York Commercial Real Estate Women (NYCREW) at a meeting last week.

In a review of markets across the country, Woloshin pointed to diminishing cap rates and warned that, slowly but surely, the housing market is on its way back.

Read more...Real Estate Weekly » Blog Archive » Multifamily sweet spot could turn sour

CMBS Seeing Resurgence in U.S. via World Property Channel

After several troubled years, the US commercial mortgage-backed securities (CMBS) market has begun to take off. So far this year, issuance is approaching $13 billion, according to a February 6th Bloomberg report, and in January, the $8.8 billion worth of new CMBS issued broke records, according to RBS. All this is happening at a time when property owners are having better luck resolving troubled loans.

"I think there was a rally in the second half of 2012, in terms of CMBS prices and spreads," says Joe McBride, research analyst at Trepp, LLC. "In June, spreads dropped to 2007 levels and by the end of 2012, it had become more profitable for a lot of borrowers to borrow in the CMBS market. For a few months, lots of lenders were sitting on the sidelines making sure the rally was for real. But once we didn't go over the fiscal cliff fully, lots of lenders and securitizers, jumped in and took advantage of CMBS spreads," he says.

Read more...CMBS Seeing Resurgence in U.S. - WORLD PROPERTY CHANNEL Global News Center

Goodbye Flyers: Social Media Referral Programs On the Rise via Multifamily Executive Magazine

Sometimes, your best marketing agents are living within the walls of your own property.

Such is the case for King of Prussia, Penn.-based Morgan Properties. Back in 2008, its properties were littered with traditional door hangers and flyers requesting tenants to refer friends to available units, luring them with incentives like Starbucks gift cards or, even better, a $200 to $400 rent credit. Though the incentives were enticing, residents either trashed or simply overlooked the flyers, a common tale told at most multifamily properties. It only ended up being a waste for the marketing department.

That’s until Peggy Hale, vice president of sales, marketing, and training at Morgan Properties, was introduced to the idea of using social media-based referral programs.

Read more...Goodbye Flyers: Social Media Referral Programs On the Rise - Technology - Multifamily Executive Magazine

Rent Gains Soften as More Multiunit Buildings Enter Market: Trulia via

Rents continued to rise in January, but at a slower pace as more newly-constructed multifamily units hit the market, according to a report from Trulia.

National rents rose 4.1 percent in January, down from the 4.7 percent increase seen earlier in the year in July, data from Trulia revealed.

“Rent gains are slowing down because of more supply, not less demand,” said Jed Kolko, Trulia’s chief economist. “Many of the multi-unit buildings that have been under construction over the past two years are now coming onto the market.”

Read more...Rent Gains Soften as More Multiunit Buildings Enter Market: Trulia via

Wednesday, February 6, 2013

As Multifamily Debt Demand Grows, More Lenders Stepping Up via CoStar Group

For the first time in more than a decade, apartments have replaced office buildings as the top investment sector for commercial real estate in the United States, and with that demand has come a commensurate need for debt capital and a growing source of lenders to fill the need.

New development of multifamily space across the U.S. has been unabashedly robust over the past year, leaving many anxious about the impact the new supply will have on market conditions. However, according to Jones Lang LaSalle, reports of overbuilding in the apartment sector are greatly exaggerated, as the number necessary to sustain demand fell short by 100,000 units last year, pointing to a healthy outlook for 2013 and well into 2014.

“The multifamily market is still playing catch-up, as supply remains depleted. Development will continue to grow at a solid pace in 2013 with approximately 260,000 units expected to come online, while demand requirements outpace the supply pipeline. This year, expected deliveries of new product will be 12% below historical average delivery levels,” said Jubeen Vaghefi, international director and leader of Jones Lang LaSalle’s Multifamily Capital Markets.

Read more...As Multifamily Debt Demand Grows, More Lenders Stepping Up - CoStar Group

Multifamily Still Strong, With a Bit of Caution via

The multifamily sector is still doing well because of strong demographics and an investors desire to be in the space, but there are some issues giving investors a bit of concern says Doug Bibby, president of the National Multihousing Council. He spoke here with us at their recent national conference.

They are thinking about:

* Where there could be some overbuilding.
* Concerns about housing finance reform.
* How the single-family market could impact the multifamily sector.

Watch video...Multifamily Still Strong, With a Bit of Caution - Videos Article -

Pace of Job Growth Faster Than Previously Estimated via

Benchmark Revision Boosts Job Growth For 2011 And 2012; Pace of Job Growth Faster Than Previously Estimated.

On Friday, February 1, 2013, the U.S. Department of Labor’s Bureau of Labor Statistics (BLS) posted its preliminary January employment numbers for the U.S. At the national level, the employment report showed an increase in job gain and the unemployment rate from December 2012. Monthly nonfarm payrolls increased by 157,000 jobs in with private payrolls rising by 166,000 jobs. Employment growth by sector was led by Retail Trade (+33,000), Construction (+28,000), and Health Care (+23,000). Employment declined in Transportation and Warehousing by 14,000 jobs. The number of unemployed persons increased slightly to 12.3 million and the labor force participation rate remained unchanged at 63.6%, near its recent historically low level. The number of long-term unemployed (+27 weeks) was 4.7 million, accounting for 38.1% of the unemployed. Also, out of 2.4 million persons who were marginally attached to the labor force in January, 804,000 were discouraged workers and 1.6 million persons had not searched for work in four weeks preceding the survey because they believe that there are no jobs are available for them or they must attend school, or family responsibilities.

Read more...Pace of Job Growth Faster Than Previously Estimated via

ULI Real Estate Business Barometer -- February 2013 via Urban Land Institute

Buyer appetite for commercial property hit post-recession highs as transaction volumes vaulted, prices strengthened, and CMBS issuance shot up. Permits and starts of all types of housing continue to hit high notes; condominium sales are staging a strong comeback now, as well. A negative fourth-quarter GDP provides the first insight into the impact of major government cutbacks.

The top ten trends in this month’s Barometer:

Read more...ULI Real Estate Business Barometer -- February 2013 via Urban Land Institute

Texas Economic Indicators February 2013 via Dallas Federal Reserve

The Texas economy continues to expand, with employment growing at a modest 1.3 percent annual rate in December. Texas housing starts and existing-home sales increased in December, while single family construction permits declined. Texas exports ticked up slightly in November. Manufacturing activity rose sharply in January, according to the Texas Manufacturing Outlook Survey.

Texas gained 12,000 jobs in December after adding 23,500 jobs in November. Texas employment grew by 2.9 percent in 2012, adding 305,000 jobs. Current Texas employment stands at 10.98 million.

The Texas unemployment rate edged down to 6.1 percent in December from 6.2 percent in November. The Texas rate remains lower than the U.S. rate, which was 7.9 percent in January.

Read more...Texas Economic Indicators February 2013 via Dallas Federal Reserve

Tuesday, February 5, 2013

HUD Announces Radon Testing and Radon Mitigation Policy. Mandatory Radon Testing Begins June via PRNewswire

In a monumental announcement yesterday, HUD (Department of Housing & Urban Development) deployed their new guidelines for mandatory radon testing and radon mitigation in multifamily dwellings. They have made the requirement effective June 4th, 2013.

Radon gas is widely known as a leading cause of environmental lung cancer throughout the United States. For over 20 years the Environmental Protection Agency has been encouraging more regulation to mandate testing for radon gas and mitigating the problem when levels are 4 pCi/l or higher.

Yesterday, key members of HUD, EPA, Surgeon General, and CDC held a press conference to announce new radon testing and radon mitigation requirements for multifamily structures. Government officials as well as the awareness group Cancer Survivors Against Radon (CSAR) believe that this plan of action will save thousands of lives every year.

Read more...HUD Announces Radon Testing and Radon Mitigation Policy. Mandatory Radon Testing Begins June... -- MINNEAPOLIS, Feb. 5, 2013 /PRNewswire/ --

Axiometrics Apartment Outlook 2013 via Axiometrics


Watch Video...Axiometrics Outlook 2013

Assessing the Risk via Multi-Housing News Online

In a market and in a world of increasing risks, it is prudent for multifamily operators to have a firm grasp of their property’s exposure and correctly allocate precious resources. While insurance is an important tool “in the quiver,” there are a number of ways property managers can fortify their assets—both to the benefit of their bottom line and the resident body.

Heidi Much, vice president of risk management services at Village Green, believes that the industry is evolving in its perspective on risk management, and that certain elements that might have been under appreciated in the past are now being put on an even footing with more traditional approaches relating to insurance.

“We’re taking a more holistic approach to risk now than ever before,” says Much. “We’re not just looking at the physical building and the people, but we’re looking at the business risk as well. Cyber liability is a business risk. We’re looking at contractual risk. We’re looking at financial risks from the standpoint of: can I re-finance this property?”

Read more...Assessing the Risk | Multi-Housing News Online

Houston and Dallas lead construction job growth via Real Estate Center at Texas A&M

Houston and Dallas led the nation in the most new construction jobs in December 2012, according the Associated General Contractors of America.

The Houston metropolitan area added the most jobs nationally — 17,600 jobs or a 10 percent increase from December 2011. The Dallas area was second, adding 8,300 jobs or an 8 percent increase.

Across Texas, the construction industry added 35,600 jobs last month for a gain of 6 percent.

Read more... Dallas lead construction job growth via Real Estate Center at Texas A&M

Monday, February 4, 2013

Commercial, Multifamily Lending to Increase 11% in 2013 via American Banker Article

Lending on offices and apartment buildings is expected to rise this year, further evidence that the commercial real estate continues to strengthen.

Last year ended on a high note: originations of commercial and multifamily mortgages rose 49% in the fourth quarter of 2012 from the same period a year earlier. This year, lenders are expected to originate $254 billion commercial and multifamily mortgages, an increase of 11% from last year, according to a forecast published Monday by the Mortgage Bankers Association, a trade group that represents the real estate finance industry.

Jamie Woodwell, the Mortgage Bankers Association's vice president of commercial real estate research, said in a news release that 2012 "was a strong year for the commercial and multifamily mortgage markets, and 2013 is shaping up to continue the growth. Despite a 21% decline in the volume of commercial and multifamily mortgages maturing this year, we expect origination volumes and the amount of mortgage debt outstanding will both increase."

Read more...Commercial, Multifamily Lending to Increase 11% in 2013 - American Banker Article

MBA: Multifamily originations grew 49% in 4Q via HousingWire

Multifamily mortgage originations grew 49% over last year during the fourth quarter as commercial originations overall soared above 2011 levels, the Mortgage Bankers Association said in a new report Monday.

The jump in originations occurred as low interest rates prompted more borrowers to finance multifamily properties and as strength in the commercial and multifamily mortgage segment fueled investor appetite, said Jamie Woodwell, vice president of commercial real estate research at the MBA.

In just the fourth quarter of 2012, commercial and multifamily mortgage originations were up 49% from the third quarter, with hotel property originations soaring 99% quarter-to-quarter, while multifamily properties experienced a 48% increase in originations between the two quarters.

Read more...MBA: Multifamily originations grew 49% in 4Q | HousingWire

Buying, Building Both in Multifamily’s Future via

It’s out. The 2013 National Apartment Index prepared by Marcus &Millichap Real Estate Investment Services, and the news, for the most part, is positive as the economy continues to sail for calmer waters.

The report sets the apartment forecast against the confident belief that certainty—as opposed to the uncertainty that marked 2012—will continue to grow, although this confidence is based on the hope that such issues as the fiscal cliff will continue to find resolution or that employment will continue to increase.

As their introductory remarks to the report indicate, president and CEO John J. Kerin and managing director of research and advisory services Hessam Nadji, says they are "looking forward to the year ahead marked by more certainty and renewed confidence." But that doesn't mean there is no risk here.

Read more...Buying, Building Both in Multifamily’s Future - Daily News Article -

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CMBS Delinquency Rate Falls to Lowest Rate in Almost a Year Showing Improved Real Estate Market via

Trepp, LLC, the leading provider of information, analytics and technology to the CMBS, commercial real estate and banking markets, released its January 2013 U.S. CMBS Delinquency Report.

The delinquency rate for U.S. commercial real estate loans in CMBS fell 14 basis points in January to 9.57%. This is the lowest level in 11 months, since February 2012 when the rate was at 9.38%, and the improvement marks the resumption of the downward trend in the rate that began in August 2012.

Loan resolutions experienced a slight bump in January, with over $1.2 billion in loans resolved with losses. The removal of these loans from the delinquent category helped drive the delinquency rate down 22 basis points. Loans that cured put an additional 40 basis points of downward pressure on the rate.

Read more...CMBS Delinquency Rate Falls to Lowest Rate in Almost a Year Showing Improved Real Estate Market - Multifamily News Headlines – Breaking News, Stories, Top Headlines ::

Multifamily in Houston: Enough or too Much? via

Recent articles on have reported on a very robust multifamily sector in Houston. Even as the development pipeline continues chugging along, creating more and more units, the question becomes, will it be too much?

In a MarketView white paper entitled "Is Houston's Multi-Housing Market Overheated?" CBRE research analysts Analee Micheletti and Lauren Paris paint a picture of frenzied multifamily property development throughout Oil City – building permit activity was up a whopping 120.7% as of Q3 2012, with the Inner Loop and Far West submarkets seeing the most units under construction. Approximately 4,000 units were delivered in 2012, with almost 10,000 under construction.

Read more...Multifamily in Houston: Enough or too Much? - Daily News Article -