Between young adults who are moving out of their parents’ houses and the parents themselves, now facing empty-nest syndrome, “demand is coming from all directions” for multifamily, Marcus & Millichap’s Hessam Nadji said on BloombergTV last week. The GlobeSt.com Thought Leader enumerated the ways in which this demand is becoming evident, including what he termed a long-term “structural change” toward renting versus owning as well as investment sales pricing that’s now about 33% above the 2007 peak.
“The apartment investment market has been white hot; what’s really important is that the fundamentals have also followed the pricing,” said Nadji, senior EVP at MMI. “If you look at the effective rents that apartments are generating, they’re up about 25% above the prior peak as well. Prices didn’t just go up without the accompanying rent growth.”
Read more...Nadji: MF Demand ‘From All Directions’ - Daily News Article - GlobeSt.com
Friday, October 30, 2015
Region Continues to Grow Despite Renewed Energy Headwinds via Dallas Fed
The Texas economy is growing at a modest pace after slowing from a slight acceleration near mid-year. Employment picked up in September to an annualized 1.4 percent pace after posting essentially no growth in August. The Texas Business Outlook Surveys (TBOS) point to continued weakness in the manufacturing sector and moderate strength in services.
The headwinds of declining energy markets and a strengthening dollar have continued to dampen growth prospects for the region. Metropolitan areas tied to oil and gas, such as Houston, or manufacturing, such as Fort Worth, saw weak job growth in August and September. Despite this, job growth in most other large metro areas remains robust, and growth for Texas overall should remain positive for the remainder of this year and into 2016.
Read more...Region Continues to Grow Despite Renewed Energy Headwinds - Dallas Fed
The headwinds of declining energy markets and a strengthening dollar have continued to dampen growth prospects for the region. Metropolitan areas tied to oil and gas, such as Houston, or manufacturing, such as Fort Worth, saw weak job growth in August and September. Despite this, job growth in most other large metro areas remains robust, and growth for Texas overall should remain positive for the remainder of this year and into 2016.
Read more...Region Continues to Grow Despite Renewed Energy Headwinds - Dallas Fed
Apartment Volume Continues Sliding in September via Multifamily Executive Magazine
After a recovery in August, sales of apartment properties fell 11% year over year in September, according to Real Capital Analytics’ (RCA's) most recent market report.
“This decline comes on the heels of a slowdown since May in the growth in sales volume for the apartment sector,” RCA said in the report.
RCA said the average monthly pace of sales growth in the first quarter of 2015 was 73% year over year. But in the second quarter, that number fell to 23% year over, and in the third quarter, it dropped to 5% year over year. Private investors have driven volume throughout the year.
Read more...Apartment Volume Continues Sliding in September | Multifamily Executive Magazine | Cap Rates, Capital Markets, Dispositions and Transactions, Sales, Transactions, Real Capital Analytics
“This decline comes on the heels of a slowdown since May in the growth in sales volume for the apartment sector,” RCA said in the report.
RCA said the average monthly pace of sales growth in the first quarter of 2015 was 73% year over year. But in the second quarter, that number fell to 23% year over, and in the third quarter, it dropped to 5% year over year. Private investors have driven volume throughout the year.
Read more...Apartment Volume Continues Sliding in September | Multifamily Executive Magazine | Cap Rates, Capital Markets, Dispositions and Transactions, Sales, Transactions, Real Capital Analytics
Apt. Rent Growth Flattens in Oct. via GlobeSt.com
It appears to be a seasonal occurrence. Along with Halloween and the end of Daylight Saving Time, this time of year brings a flattening of apartment rent growth. Yardi’s latest Matrix Monthly report shows that US multifamily rents held at an average $1,166 for October, unchanged from the month before.
October’s rent performance in this regard followed a pattern seen in the past two years, according to Yardi. Along with October representing the first month this year in which rents did not rise month over month, it also represented a slightly lower rate of year-over-year growth at 6.7%, 10 basis points shy of September’s rate, which marked a post-recession high watermark.
Read more...Apt. Rent Growht Flattens in Oct. - Daily News Article - GlobeSt.com
October’s rent performance in this regard followed a pattern seen in the past two years, according to Yardi. Along with October representing the first month this year in which rents did not rise month over month, it also represented a slightly lower rate of year-over-year growth at 6.7%, 10 basis points shy of September’s rate, which marked a post-recession high watermark.
Read more...Apt. Rent Growht Flattens in Oct. - Daily News Article - GlobeSt.com
Tuesday, October 27, 2015
Texas Manufacturing Activity Increases in October After Nine-Month Slump, Says Dallas Fed Surv via Dallas Fed
Texas factory activity increased in October after nine months of flat or declining output, according to the Federal Reserve Bank of Dallas’ Texas Manufacturing Outlook Survey.
The production index—a key measure of state manufacturing conditions—rose to 4.8, marking the first month of output growth this year.
Positive readings in the survey generally indicate expansion of factory activity, while readings below zero generally indicate contraction.
Read more...Texas Manufacturing Activity Increases in October After Nine-Month Slump, Says Dallas Fed Surv - Dallas Fed
The production index—a key measure of state manufacturing conditions—rose to 4.8, marking the first month of output growth this year.
Positive readings in the survey generally indicate expansion of factory activity, while readings below zero generally indicate contraction.
Read more...Texas Manufacturing Activity Increases in October After Nine-Month Slump, Says Dallas Fed Surv - Dallas Fed
Apartment Boom Nears Its End via GlobeSt.com
Senior housing economist David Schulman published an economic letter in the UCLA Zinman Center for Real Estate with some compelling observations about the home market. Most notably, Schulman predicts that the apartment boom will start to see strain by the end of 2016 as the homeownership market picks up and puts downward pressure on rents. He expects new construction levels to negatively impact apartment vacancies.
“Our guess is that the old average of 1.5 million units will be the new peak in the coming years. Longer-term demographics and affordability issues are beginning to work against the demand for housing,” Schulman tells GlobeSt.com. “With developers building for the top of the market for high-income renters, they may not yet to be cognizant of this trend, but they will soon find out that the high-end apartment market might not be as deep as they think.”
Read more...Apartment Boom Nears Its End - Daily News Article - GlobeSt.com
“Our guess is that the old average of 1.5 million units will be the new peak in the coming years. Longer-term demographics and affordability issues are beginning to work against the demand for housing,” Schulman tells GlobeSt.com. “With developers building for the top of the market for high-income renters, they may not yet to be cognizant of this trend, but they will soon find out that the high-end apartment market might not be as deep as they think.”
Read more...Apartment Boom Nears Its End - Daily News Article - GlobeSt.com
Friday, October 23, 2015
Affordable Housing: Lowest Income Households Most Exposed in Supply Shortage via Property Management Insider
The number of renter households grows and multifamily construction continues to be robust, but the lack of designated affordable housing remains a pressing issue for the multifamily industry. Strong absorption of market-rate apartments continues to place pressure on households that must rely on affordable housing. More specifically, latest data from the American Housing Survey indicate households with extremely low incomes (30% of area median income and less) are feeling the most stress, as this group has grown faster than the supply of designated affordable product entering the market and higher income households have more choices in terms of location and product class in local apartment markets.
Read more...Affordable Housing: Lowest Income Households Most Exposed in Supply Shortage | Property Management Insider
Read more...Affordable Housing: Lowest Income Households Most Exposed in Supply Shortage | Property Management Insider
Wednesday, October 21, 2015
DFW Economic Indicators October 2015 via Dallas Fed
The Dallas–Fort Worth economy expanded at a fast clip to close the third quarter. The metroplex created jobs at a 2.1 percent rate in the quarter, outpacing both the state at 1.6 percent and the nation at 1.4. Home prices rose further in July, and activity in the office market remained solid in the third quarter. Unemployment held steady in Dallas but ticked up in Fort Worth in September. Dallas Fed business-cycle indexes point to continued growth for the metroplex.
Read more...DFW Economic Indicators October 2015 via Dallas Fed
Read more...DFW Economic Indicators October 2015 via Dallas Fed
5 Tips to Saving Big Money Managing Apartment Utilities via Property Management Insider
More and more, all eyes are on energy and water usage. Investors, property owners and even residents pay close attention to utility bills. In some areas, local and state regulators require that energy performance be reported to the Environmental Protection Agency.
The impact of utilities may seem to affect either the property or resident, but it actually touches both. Certainly, the effect of utilities on an apartment’s operating costs varies depending on whether the community is master-metered or individual-metered. In the National Apartment Association’s 2015 Income & Expense Survey, only 3 percent of a property’s total expenses are from utilities if the property is individual-metered, compared to 8.1 percent – third-highest – for master-metered.
Read more...5 Tips to Saving Big Money Managing Apartment Utilities | Property Management Insider
The impact of utilities may seem to affect either the property or resident, but it actually touches both. Certainly, the effect of utilities on an apartment’s operating costs varies depending on whether the community is master-metered or individual-metered. In the National Apartment Association’s 2015 Income & Expense Survey, only 3 percent of a property’s total expenses are from utilities if the property is individual-metered, compared to 8.1 percent – third-highest – for master-metered.
Read more...5 Tips to Saving Big Money Managing Apartment Utilities | Property Management Insider
Rent.com 2015 Rental Market Report via PropertyManager.com
Rent.com just released it’s annual market report citing research done on hundreds of property managers, thousands of rental properties, and hundreds of thousands of rental units across the country. The current rental market is experiencing the lowest vacancy rates in nearly 20 years. This is good news for property managers, who have reported a decrease in their rental vacancies. There are more prospective tenants to choose from and less of a need to negotiate rental prices. Rental rates continue to rise, making it a great time to be a property manager.
Read more...Rent.com 2015 Rental Market Report | PropertyManager.com
Read more...Rent.com 2015 Rental Market Report | PropertyManager.com
Monday, October 19, 2015
Houston Economic Indicators October 2015 via Dallas Fed
The Houston Business-Cycle Index declined at an annual rate of 1.9 percent in August. July’s growth rate was revised down from 5.9 percent to 4.4 percent. Upstream energy (oilfield-related employment and manufacturing) weakness continues to be at least partially offset by strength in downstream energy (refining and petrochemicals). Leisure and hospitality and health care, two sectors driven in part by Houston’s robust population growth, also continue to log solid gains. On whole, the outlook for Houston is for job growth to remain flat.
Read more...Houston Economic Indicators October 2015 via Dallas Fed
Read more...Houston Economic Indicators October 2015 via Dallas Fed
Texas job growth spiked for the month, year in September via Dallas Business Journal
Employers in Texas added jobs for the seventh consecutive month in September. During the month of September, Texas added 26,600 nonfarm seasonally adjusted jobs. Over the past year, Texas employers have increased payrolls by 224,800 positions since September 2014.
“With the Texas economy continuing to generate a steady growth of jobs, our employers and jobseekers have a definite competitive advantage when seeking the many opportunities available in our Lone Star State,” said Texas Workforce Commission Chairman Andres Alcantar in a news release.
Read more...Texas job growth spiked for the month, year in September - Dallas Business Journal
“With the Texas economy continuing to generate a steady growth of jobs, our employers and jobseekers have a definite competitive advantage when seeking the many opportunities available in our Lone Star State,” said Texas Workforce Commission Chairman Andres Alcantar in a news release.
Read more...Texas job growth spiked for the month, year in September - Dallas Business Journal
Special Report: How Long Will Multifamily Defy Gravity? via Commercial Property Executive
Are multifamily developers and investors getting out over their skis?
At a time of sky-high optimism in the sector, only a minority would probably answer “yes.” Yet in sizing up today’s favorable economic and demographic trends, a trio of experts grappled with that question at a national conference in Las Vegas last week.
Ryan Severino, the senior economist & director of research for REIS Inc., offered particularly strong caveats about Class A supply and demand during the annual event organized by Multifamily Executive. “It’s going to be very challenging going forward because everybody and their mother is building apartments today,” Severino warned his audience of several hundred professionals on Oct. 6. “Be careful—it’s not going to be as easy over the next four or five years.”
Read more...Special Report: How Long Will Multifamily Defy Gravity? | Commercial Property Executive
At a time of sky-high optimism in the sector, only a minority would probably answer “yes.” Yet in sizing up today’s favorable economic and demographic trends, a trio of experts grappled with that question at a national conference in Las Vegas last week.
Ryan Severino, the senior economist & director of research for REIS Inc., offered particularly strong caveats about Class A supply and demand during the annual event organized by Multifamily Executive. “It’s going to be very challenging going forward because everybody and their mother is building apartments today,” Severino warned his audience of several hundred professionals on Oct. 6. “Be careful—it’s not going to be as easy over the next four or five years.”
Read more...Special Report: How Long Will Multifamily Defy Gravity? | Commercial Property Executive
Dallas Beige Book October 2015 via Dallas Fed
The Eleventh District economy grew at a moderate pace over the past six weeks. Manufacturing demand increased, and retail and auto sales grew. Demand for nonfinancial services held steady or improved, except for some transportation services. Real estate activity remained solid overall, and loan demand rose steadily. Demand for oil field services was still depressed, and lower oil prices dampened outlooks. Price pressures remained subdued and employment held steady or increased.
Read more...Dallas Beige Book - Dallas Fed
Read more...Dallas Beige Book - Dallas Fed
Wednesday, October 14, 2015
ALN Monthly Newsletter October 2015 via ALN Apartment Data
ALN Data just released their September 2015 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 October 2015 via ALN Apartment Data
Read more...ALN Monthly Newsletter October 2015 via ALN Apartment Data
Multifamily Prices Could Stall With Interest Rate Hike via NREIonline.com
Apartment property prices may finally stop rising—and even begin to fall—when interest rates start going up.
“The assumption is that capitalization rates would jump higher with interest rates,” says Luis Mejia, chief multifamily economist with research firm CoStar Group.
But the rise in cap rates is likely to come very, very slowly. Cap rates on apartment properties have been going from low to lower for years as apartment prices climbed steadily higher. However, federal officials might soon make a change to benchmark interest rates—the Federal Reserve had strongly hinted it might raise rates at its September meeting. Bad news from the world economy delayed the action, but officials are still likely to raise rates by the end of the year. Higher interest rates usually mean higher cap rates.
Read more...Multifamily Prices Could Stall With Interest Rate Hike
“The assumption is that capitalization rates would jump higher with interest rates,” says Luis Mejia, chief multifamily economist with research firm CoStar Group.
But the rise in cap rates is likely to come very, very slowly. Cap rates on apartment properties have been going from low to lower for years as apartment prices climbed steadily higher. However, federal officials might soon make a change to benchmark interest rates—the Federal Reserve had strongly hinted it might raise rates at its September meeting. Bad news from the world economy delayed the action, but officials are still likely to raise rates by the end of the year. Higher interest rates usually mean higher cap rates.
Read more...Multifamily Prices Could Stall With Interest Rate Hike
Monday, October 12, 2015
What’s Really Driving the Urbanization Trend? via GlobeSt.com
For commercial real estate developers, urbanization is the new black. Of course, it’s not urbanization for urbanization’s sake. Savvy developers are following—and fueling—this trend.
For decades, most Americans settled in the suburbs. Now, there’s a mass exodus—or at least a growing movement—toward urban cores. According to Census Bureau data, American cities are witnessing a renaissance, of sorts, as residents migrate to downtown areas.
Read more...What’s Really Driving the Urbanization Trend? - Daily News Article - GlobeSt.com
For decades, most Americans settled in the suburbs. Now, there’s a mass exodus—or at least a growing movement—toward urban cores. According to Census Bureau data, American cities are witnessing a renaissance, of sorts, as residents migrate to downtown areas.
Read more...What’s Really Driving the Urbanization Trend? - Daily News Article - GlobeSt.com
Despite Looming Clouds, Bright Forecast for U.S. Real Estate via Urban Land Magazine
The latest ULI Real Estate Consensus Forecast calls for relatively smooth sailing ahead as it relates to both continued economic growth and a favorable outlook for commercial real estate investment. Yet, the forecast is not as bullish as it was six months ago, and there are headwinds looming that are expected to temper growth heading into 2017.
The forecast, produced by the ULI Center for Capital Markets and Real Estate, predicts a healthy pace of economic expansion. Gross domestic product (GDP) growth for this year is expected to be on par with the 2.4 percent that was recorded in 2014, while strengthening to 2.8 percent in 2016 and 2.7 percent in 2017. It is notable that the forecast growth for 2016 and 2017 is at the highest levels in eight years, comparable with the 2.7 percent GDP growth that occurred in 2006.
Read more...Despite Looming Clouds, Bright Forecast for U.S. Real Estate - Urban Land Magazine
The forecast, produced by the ULI Center for Capital Markets and Real Estate, predicts a healthy pace of economic expansion. Gross domestic product (GDP) growth for this year is expected to be on par with the 2.4 percent that was recorded in 2014, while strengthening to 2.8 percent in 2016 and 2.7 percent in 2017. It is notable that the forecast growth for 2016 and 2017 is at the highest levels in eight years, comparable with the 2.7 percent GDP growth that occurred in 2006.
Read more...Despite Looming Clouds, Bright Forecast for U.S. Real Estate - Urban Land Magazine
Multifamily Market in U.S. to Remain Strong for Several More Years via WORLD PROPERTY JOURNAL
Based on Freddie Mac's Multifamily Outlook released this week, the U.S. multifamily rental market continues its 5-year streak of robust growth that began just after the Great Recession ended and is expected to remain strong for several more years.
Steve Guggenmos, senior director of Freddie Mac Multifamily investments and research said, "It is now clear that the increase in Multifamily demand is more than a temporary correction stemming from the Great Recession. Favorable demographic trends will support strong multifamily growth for several years. Individual market performance will vary based on the pace of new supply delivered to the market and local economic strength."
Read more...Multifamily Market in U.S. to Remain Strong for Several More Years - WORLD PROPERTY JOURNAL Global News Center
Steve Guggenmos, senior director of Freddie Mac Multifamily investments and research said, "It is now clear that the increase in Multifamily demand is more than a temporary correction stemming from the Great Recession. Favorable demographic trends will support strong multifamily growth for several years. Individual market performance will vary based on the pace of new supply delivered to the market and local economic strength."
Read more...Multifamily Market in U.S. to Remain Strong for Several More Years - WORLD PROPERTY JOURNAL Global News Center
The Nation’s Rent Growth Leaderboard is Heavy on the West via Property Management Insider
Western markets dominate the top spots in the nation’s rent growth leaderboard as of Q3. But that’s not to say performance hasn’t been strong elsewhere, too, with a big numbers coming all across the country.
Watch video...The Nation’s Rent Growth Leaderboard is Heavy on the West | Property Management Insider
Watch video...The Nation’s Rent Growth Leaderboard is Heavy on the West | Property Management Insider
Emerging Trends: Dallas/Fort Worth and Austin Are Top Cities for 2016 via Urban Land Magazine
The commercial real estate industry is increasingly focused on the needs of small firms employing fewer than 50 people where job growth is outpacing larger firms by nearly five to one, according to Emerging Trends in Real Estate® 2016, copublished by PwC US and the Urban Land Institute (ULI).
“The real estate industry’s traditional focus on big cities and large employers is shifting significantly as small businesses emerge as the growth engine for the U.S. economy,” said Mitch Roschelle, partner, U.S. real estate advisory practice leader, PwC. “This is creating disruption in the office sector as it finds ways to create new space models to accommodate these employers.”
Read more...Emerging Trends: Dallas/Fort Worth and Austin Are Top Cities for 2016 - Urban Land Magazine
“The real estate industry’s traditional focus on big cities and large employers is shifting significantly as small businesses emerge as the growth engine for the U.S. economy,” said Mitch Roschelle, partner, U.S. real estate advisory practice leader, PwC. “This is creating disruption in the office sector as it finds ways to create new space models to accommodate these employers.”
Read more...Emerging Trends: Dallas/Fort Worth and Austin Are Top Cities for 2016 - Urban Land Magazine
Renters, get out your checkbooks, hikes are coming via CNBC.com
Property managers in the U.S. are raising rents - possibly by as much as 8 percent next year - as demand rises and vacancies fall, a new survey from property rental website Rent.com found.
"An overwhelming 88 percent of property managers raised their rent in the last 12 months, and there does not appear to be any signs of stopping," the survey of more than 500 U.S. property managers who used Rent.com found.
Read more...Rent.com survey of property managers finds rents rising in 2015, 2016
"An overwhelming 88 percent of property managers raised their rent in the last 12 months, and there does not appear to be any signs of stopping," the survey of more than 500 U.S. property managers who used Rent.com found.
Read more...Rent.com survey of property managers finds rents rising in 2015, 2016
Monday, October 5, 2015
2015 Poised to Be Busiest Year Ever for Multifamily Sales via Multifamily Executive Magazine
As summer turns to fall, a lot of exhausted multifamily investment and finance professionals around the country are wondering whether the scalding apartment sector is hitting—or at least nearing—its cyclical peak.
And with good reason.
Effective rental rates in many markets have risen to unprecedented levels, gobbling up ever-higher proportions of resident incomes. Accordingly, properties are selling at average per-unit prices beyond previous historic highs amid arguably frenzied trading volume. And, thanks in part to ultra-cheap debt financing, the average capitalization rate recorded in major markets compressed to an all-time low earlier this year—with the yields in secondary and tertiary markets closing in on records as well.
Read more...2015 Poised to Be Busiest Year Ever for Multifamily Sales | Multifamily Executive Magazine | Capital Markets, Cap Rates, Finance, Construction Finance, Effective Rents, Transactions
And with good reason.
Effective rental rates in many markets have risen to unprecedented levels, gobbling up ever-higher proportions of resident incomes. Accordingly, properties are selling at average per-unit prices beyond previous historic highs amid arguably frenzied trading volume. And, thanks in part to ultra-cheap debt financing, the average capitalization rate recorded in major markets compressed to an all-time low earlier this year—with the yields in secondary and tertiary markets closing in on records as well.
Read more...2015 Poised to Be Busiest Year Ever for Multifamily Sales | Multifamily Executive Magazine | Capital Markets, Cap Rates, Finance, Construction Finance, Effective Rents, Transactions
Have Apartments Reached Tipping Point? via GlobeSt.com
Call it a ripple rather than a storm surge, yet Reis is seeing apartment vacancy tick upward ever so slightly. “It appears as if the market has finally reached its inflection point during the third quarter,” says Ryan Severino, the firm’s senior economist and director of research, who predicts a faster upward pace in the coming months.
Q3 saw nationwide vacancy inch upward by 10 basis points to 4.3%, thanks to construction slightly outpacing net absorption, according to Reis data released Friday. That represented “a slight acceleration of a trend” that began in Q2 2014, although the uptick was followed by a slight decline in vacancy earlier this year.
Read more...Have Apartments Reached Tipping Point? - Daily News Article - GlobeSt.com
Q3 saw nationwide vacancy inch upward by 10 basis points to 4.3%, thanks to construction slightly outpacing net absorption, according to Reis data released Friday. That represented “a slight acceleration of a trend” that began in Q2 2014, although the uptick was followed by a slight decline in vacancy earlier this year.
Read more...Have Apartments Reached Tipping Point? - Daily News Article - GlobeSt.com
Thursday, October 1, 2015
D-FW apartment rents soar at record rate in third quarter via Dallas Morning News
Dallas-Fort Worth apartment renters this year are getting slammed with record rent increases.
North Texas apartment costs were up almost 7 percent in the third quarter from a year earlier. That’s about three times the average long-term rent increase rate, according a new report by Carrollton-based MPF Research.
“We can’t find a quarter in the past where rent increases were this high year-over-year,” said Greg Willett, MPF Research chief economist.
Read more...D-FW apartment rents soar at record rate in third quarter | | Dallas Morning News
North Texas apartment costs were up almost 7 percent in the third quarter from a year earlier. That’s about three times the average long-term rent increase rate, according a new report by Carrollton-based MPF Research.
“We can’t find a quarter in the past where rent increases were this high year-over-year,” said Greg Willett, MPF Research chief economist.
Read more...D-FW apartment rents soar at record rate in third quarter | | Dallas Morning News
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