The Supply-Demand Imbalance Still Makes Multifamily an Attractive Investment via GlobeSt

Before the pandemic struck, the multifamily market suffered from a severe supply-demand imbalance that fueled an affordability crisis both nationally and in states like California. Nothing has changed. The supply-demand imbalance remains, and the pandemic has only exacerbated the problem. As a result, multifamily remains an attractive investment bet.

“Multifamily has long been a favored asset class, in large part because of an extreme supply/demand imbalance. The home ownership rate plummeted—from about 69% to 64%—since the Great Financial Crisis causing millions of American homeowners to rent,” Mitch Siegler, senior managing director and co-founder of Pathfinder Partners, tells GlobeSt.com.

Read more...The Supply-Demand Imbalance Still Makes Multifamily an Attractive Investment via GlobeSt

Texas Manufacturing Outlook Survey October 2020 via Dallas Fed

Texas factory activity expanded in October for the fifth month in a row following a record contraction due to the COVID-19 pandemic, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose three points to 25.5, indicating a slight acceleration in output growth.

Read more...Texas Manufacturing Outlook Survey October 2020 via Dallas Fed

Dallas-Fort Worth Economic Indicators October 2020 via Dallas Fed

The DFW economy continued to expand in September, although the pace of growth slowed from August. Job growth moderated, and the unemployment rate increased. Movement in the Dallas and Fort Worth business-cycle indexes was mixed. Activity in the housing market remained robust. Apartment demand picked up in the third quarter, while office leasing activity weakened further.

Read more...Dallas-Fort Worth Economic Indicators October 2020 via Dallas Fed

15 U.S. Cities Most Popular with Millennial Renters via NREI

In the following cities, millennials have been filling out more than a third of all apartment rental applications.

Millennials are the largest living generation in size and are increasingly taking up a greater share of the U.S. workforce. For this reason, commercial real estate professionals are keeping close tabs on where millennials prefer to live, especially as a large portion of them continues to rent rather than own their homes. Last year, 18.4 million of the estimated 45.9 million households that rent apartments identified as millennials, according to the Pew Research Center.

Read more...15 U.S. Cities Most Popular with Millennial Renters via NREI

Rents Plummet on Urban Apartments via NREI

Thousands of apartments stood empty in August 2020 that had been occupied only a few months before in urban cores across the country, including in previously white-hot markets like San Francisco and New York.

Desperate owners have been dropping rents and offering eye-popping concessions and optimizing on-site amenities in attempts to lure tenants. But it’s not nearly been enough to offset the trend of residents relocating to more spacious and less expensive markets as well others, including many young renters, who have lost jobs and moved back home to live with their parents.

Read more...Rents Plummet on Urban Apartments via NREI

Yardi: Rent Growth Falls by 0.3% YOY in September via Multifamily Executive Magazine

The national average multifamily rent rose by $1 in September, up to $1,463 overall, according to the latest Multifamily National Report by Yardi Matrix. Despite initial fears, rents have only risen or fallen by a few dollars each month since the beginning of the COVID-19 pandemic, amounting to an $8 rent decline overall since February.

Read more...Yardi: Rent Growth Falls by 0.3% YOY in September via Multifamily Executive Magazine

Texas Multifamily Still Attractive to Global Apartment Investors via Realty News Report

The coronavirus pandemic has taken a chunk out of another American real estate market. But Texas was still able to find some good in the depressing numbers

CBRE’s U.S. Multifamily Inbound Investment Trends report for the first half of 2020 says global spending in the U.S. multifamily sector decreased by 49.2% year-over-year from the first half of 2019. Outside-the-U.S. investors purchased $3.1 billion in multifamily property during the first six months of 2020.

Read more...Texas Multifamily Still Attractive to Global Apartment Investors via Realty News Report

Eleventh District Beige Book 10/21/20 via Dallas Fed

Economic growth resumed in the Eleventh District after a spike in COVID-19 infections over the summer disrupted the budding recovery. Growth in the services and manufacturing sectors picked up pace in September, and retail sales increased. However, revenues remained well below normal levels in most industries. The housing market continued to perform well. In the banking sector, real estate lending picked up further but was offset by declines in consumer and commercial and industrial loan volumes, and most contacts expect an increase in nonperforming loans over the next six months. Energy activity remained depressed but started to show some signs of improvement. Employment in the district edged higher, with increasing reports of hiring. Input costs rose modestly while selling prices were flat to up slightly. Outlooks were largely positive but highly uncertain, particularly with regard to the presidential election and the unknown trajectory of the COVID-19 pandemic.

Read more...Eleventh District Beige Book 10/21/20 via Dallas Fed

Class A Apartments in Top Markets Are Leading the Rise in Concessions via GlobeSt

Apartment concessions are increasing in the nation’s most expensive markets. The coronavirus pandemic has undoubtedly put pressure on the apartment market, and many metros are seeing an increase in concessions as a result. However, metros with higher rent levels and also more construction are seeing a substantially higher increase in concessions than lower priced metros, according to research from Fannie Mae.

Read more...Class A Apartments in Top Markets Are Leading the Rise in Concessions via GlobeSt

Texas Adds 40,700 Nonfarm Positions Over the Month via Texas Workforce Commission

The Texas unemployment rate rose to 8.3 percent in September, after dipping from the high of 13.5 percent in April 2020 when the peak of COVID-19 impacts occurred. The increase was due to the civilian labor force shrinking as the number of individuals actively looking for work contracted, while the unemployed rose.

Read more...Texas Adds 40,700 Nonfarm Positions Over the Month via Texas Workforce Commission

Time’s up: After a reprieve, a wave of evictions expected across U.S.​ via Reuters

On Sept. 1, U.S. health officials announced they would suspend evictions across the United States to help stem further spread of the novel coronavirus.

That was three days too late for Latrise Bean.

About 72 hours before the declaration by the U.S. Centers for Disease Control and Prevention (CDC), Bean, 35, was ordered evicted from her Milwaukee apartment. She’d lived there for three years despite the sagging ceilings, smell of urine in the hallways and homeless squatters in the basement - because it was all she could afford.

Read more...Time’s up: After a reprieve, a wave of evictions expected across U.S. via Reuters

Vast majority of D-FW renters are keeping up with payments via Dallas Morning News

The number of renters falling behind in payments due to the pandemic continues to grow slowly.

But Dallas-Fort Worth fares much better.

As of Oct 13, 86.8% of tenants in apartments owned by major landlords had paid their monthly rent, according to the National Multifamily Housing Council, which represents more than 11 million U.S. rental units.

Read more...Vast majority of D-FW renters are keeping up with payments via Dallas Morning News

Despite Overall Economic Struggles, Multifamily Foundation Looks Strong via Multifamily Executive Magazine

While the fundamentals are adjusting for the multifamily market, the foundation is still solid, and industry experts are optimistic looking ahead to the long term.

“As we go through this economic cycle and we look over the next year or two, I’m very optimistic about how multifamily is going to play out because I think the demand is going to remain extremely high,” John Sebree, senior vice president, national director at Marcus & Millichap, told attendees during the virtual Multifamily Executive Conference's Economic Outlook session at the end of September. “We can have a quarter or two that is soft with some uncertainty, but the underlying fundamentals are very strong.”

Read more...Despite Overall Economic Struggles, Multifamily Foundation Looks Strong via Multifamily Executive Magazine

D-FW ranks as one of the top U.S. property markets for 2021 via Dallas Morning News

For the second year in a row, Austin outshines Dallas-Fort Worth in a long-running real estate beauty contest.

But the real star of the annual “Emerging Trends in Real Estate” report is Raleigh-Durham, N.C., which was voted the top metro market to watch in the year ahead.

Read more...D-FW ranks as one of the top U.S. property markets for 2021 via Dallas Morning News

Demand Returns in Q3, but Rent Growth Lags via ALN Apartment Data

The holiday season approaches, and another quarter is in the books. The second quarter was a rough one for multifamily, as with the broader economy, but some positive signs emerged in the last few months. This month we take a closer look at Q3 performance and, as always, numbers will refer to conventional properties of at least 50 units.

Read more...Demand Returns in Q3, but Rent Growth Lags via ALN Apartment Data

Multifamily Stabilization Weighed Down By Rising Concessions via GlobeSt

The multifamily market is beginning to show signs of improvement and stabilization—but still has challenges ahead in certain areas, such as a rising level of concessions.

A new report from MRI Real Estate Software found that move-in numbers have improved, behind only 3% compared to last year as of September. On the other hand, concession volume is up 21% compared to last year, while concessions values are up 13%. Since April, concession values have increased 82%.

Read more...Apartment Leasing Rebounds to Normal Levels via GlobeSt

ALN Monthly Market Stats October 2020 via ALN Apartment Data

ALN Data just released their September 2020 market stats on occupancy and rents for over 80 markets. In Texas, it includes DFW, Austin, Houston, San Antonio, Lubbock, Amarillo, Abilene, Corpus Christi and more. It is a must read from a great provider of apartment data.

Read more...ALN Monthly Market Stats October 2020 via ALN Apartment Data

Austin Multifamily Report – Summer 2020 via Multi-Housing News

Austin’s multifamily market displayed weakening fundamentals in the second quarter, but was kept afloat with help from the growing presence of tech companies. Still, the pandemic’s impact and high number of completions have pressured rents, which contracted 0.2 percent to $1,372 on a trailing three-month basis through July. Meanwhile, the occupancy rate in stabilized properties was down 90 basis points in 12 months, to 94.0 percent as of July.

Read more...Austin Multifamily Report – Summer 2020 via Multi-Housing News

Some Multifamily Borrowers are Struggling to Find Small Balance Loans via NREI

Amid the broader challenges facing the commercial real estate market, many investors who own smaller apartment buildings are struggling to find financing in the current climate.

Many of the banks these sorts of investors rely on to finace deals have become more cautious in the pandemic—especially because smaller apartment buildings are more likely than larger properties to have residents hurt by the crisis that are falling behind in rent. Facing potential distress on existng loans, some banks are lowering origination volumes and hesitating to make new loans. Meanwhile, for the deals that are getting done, terms are becoming more stringent.

Read more...Some Multifamily Borrowers are Struggling to Find Small Balance Loans via NREI

DFW apartment rent payments down roughly 3% from year ago, but outpacing nation via Dallas Business Journal

Some 79.4 percent of national apartment households and more than 87 percent in Dallas-Fort Worth had paid their rent for October by the 6th of the month — a relatively healthy sign for the multifamily industry, which feared rent payments would plunge because of job loss and other ramifications associated with the pandemic.

Read more...DFW apartment rent payments down roughly 3% from year ago, but outpacing nation via Dallas Business Journal

Multifamily Permits Remain Muted as Single-Family Ramps Up via RealPage

Multifamily permit volumes declined by double digits in August, while single-family permitting is on the rise.

Building permits for multifamily construction fell to 381,000 units on a seasonally adjusted annual rate in August, down 17.4% from July and 28.5% below the rate from last August. Current rates are well below recent averages.

Read more...Multifamily Permits Remain Muted as Single-Family Ramps Up via RealPage

Multifamily: An Unassailable Asset Class Develops Some Cracks via GlobeSt

As a provider of joint venture and general partner equity, real estate investment firm RanchHarbor has been seeing an influx lately of multifamily investment opportunities presented by sponsors as value-add. However, upon a closer look at the underwriting, these deals do not actually fit the typical value-add investment profile, says Adam Deermount, co-founder and managing director of the company. Instead, these opportunities end up being cap rate compression plays under the guise of value-add and are priced to perfection in today’s market. “Most of the return on investment is generated by rent inflation buoyed in the early years of the investment by positive debt service arbitrage due to interest only terms,” Deermount says.

Read more...Multifamily: An Unassailable Asset Class Develops Some Cracks via GlobeSt

US will ‘become a renter nation,' says real estate investor via Yahoo News

Rising home prices are keeping prospective buyers out of homeownership — and some investors say it could be good for the rental market.

High demand, low supply and low mortgage rates have driven up home prices to historic highs this summer. And for every $1,000 price increase, some 150,000 potential buyers are priced out of a home purchase — keeping them in the rental market.

Read more...US will ‘become a renter nation,' says real estate investor via Yahoo News

Exclusive Research: Waiting for the Worst to Pass via NREI

Exclusive research results from NREI’s seventh annual multifamily survey show that industry participants have dialed back expectations on performance and access to capital. Yet they continue to view multifamily favorably relative to other property types.

“People generally view multifamily as being more resilient, and that is playing out in the data as well,” says Mike Sebastian, industry principal, investment management at commercial real estate software firm AppFolio Inc.

Read more...Exclusive Research: Waiting for the Worst to Pass via NREI

CRE Struggles to Adapt to a K-Shaped Recovery via GlobeSt

The lopsided nature of the K-shaped recovery continues to impact commercial real estate in varying ways.

At its heart is the dichotomy between higher-paid workers, who are weathering the recession and lower-paid laborers that are struggling.

“Individuals with less education were more than twice as likely to be out of work as college graduates,” according to Marcus & Millichap in a new research brief.

Read more...CRE Struggles to Adapt to a K-Shaped Recovery via GlobeSt

More DFW commercial properties are coming back to market, experts say via Dallas Business Journal

After shelter-in-place brought the commercial investment market to a near standstill in March, sellers and would-be buyers are both out in the market again looking to get deals done.

"There was really not a whole lot happened in April, May and June. Then, about 60 days ago, our RFP and (broker opinion of value) activity really picked up. We're starting to see deals come out from that," said Todd Savage, managing director of Capital Markets for JLL's Dallas office.

Read more...More DFW commercial properties are coming back to market, experts say via Dallas Business Journal

D-FW apartment leasing surges after slowdown early in the pandemic via Dallas Morning News

Dallas-Fort Worth’s apartment market turned its back on the pandemic with a surge in third-quarter leasing activity.

Net apartment leasing in North Texas totaled almost 9,000 units — the most of any U.S. metro area, according to the latest survey by RealPage.

Leasing more than doubled from the 3,832 net apartment total in the previous quarter, which reflected the worst of the COVID-19 shutdown.

Read more...D-FW apartment leasing surges after slowdown early in the pandemic via Dallas Morning News

Austin Economic Indicators October 2020 via Dallas Fed

The Austin economy continued to improve in August. The Austin Business-Cycle Index accelerated. While jobs and the unemployment rate improved in June, July and August, neither metric has returned to its March level. Regional consumer spending since mid-July held at pre-COVID-19 levels. Existing-home sales dipped but remained strong, and building permits rose.

Read more...Austin Economic Indicators October 2020 via Dallas Fed

Apartment Rents Have Dropped in Nearly Half of the Top 100 Markets via GlobeSt

Rents are declining in markets across the country. A new national apartment rent report from the Apartment List shows that rents have declined in 41 of the top 100 markets in the country since the onset of the pandemic in March. San Francisco, New York and Seattle have seen the steepest decline in rental rates, with 17.8%, 11.6% and 9.9% drops in average rent, respectively. This has cleared all of the rent growth from the last year in those markets.

Read more...Apartment Rents Have Dropped in Nearly Half of the Top 100 Markets via GlobeSt