Rehab ROI: Which Upgrades Cause the Biggest Rent Bumps? via Multifamily Executive Magazine

In April, Home Properties got started on a $3 million, three-year renovation of Stone Hill Apartments in Brookhaven, Pa. a complex of 11 three-story buildings with 205 units that Home Properties had purchased in November 2013.

This company is upgrading these garden apartments’ kitchens with maple cabinets and brushed-steel finishes. The units’ bathrooms will now have tub surrounds, two-tone paint and six-inch wood baseboards. Lighting, plumbing and electrical services are being improved. And, in response to resident feedback, Home Properties is installing energy efficient windows and sliding glass doors.

The initial results of this acquisition and renovation have been positive in terms of bumping up monthly rents for a two-bedroom apartment to $1,040, from $918 in December, thereby exceeding the 10 percent return on investment target Home Properties typically shoots for on interior rehabs, according to its senior vice president of property management Bernie Quinn.

Read more...Rehab ROI: Which Upgrades Cause the Biggest Rent Bumps? - Multifamily Executive Magazine

DFW ranks No. 2 for job growth in U.S. via Real Estate Center at Texas A&M

DFW ranked No. 2 in adding the most jobs in April compared to a year earlier, according to data released by the U.S. Bureau of Labor Statistics. DFW added 115,900 jobs in the last year, or a 3.8 percent increase.

The Los Angeles metro area was No. 1, adding 118,200 jobs in the year ended April 30, or a gain of 2.1 percent.

April’s announcement by Toyota that it will move its North American headquarters to Plano and generate 4,000 jobs through 2017 “adds to our expectations for ongoing strong job growth,” said Robert A. Dye, chief economist for Dallas-based Comerica Bank.

Read more...DFW ranks No. 2 for job growth in U.S.

Austin multifamily 1Q 2014: Hendricks-Berkadia via Real Estate Center at Texas A&M

Developers delivered 2,850 units in first quarter 2014, 53.1 percent more than 4Q 2013. The Central submarket had the most completions for the metropolitan area with 590 units.

Rental demand has remained healthy as 2,000 units have been absorbed in 1Q 2014. Leasing activity has accelerated from the 1,330 units absorbed in 4Q 2013.

Developers submitted multifamily permits for 17,200 annualized units in March, up 24.6 percent from December 2013. The recent surge elevated permitting activity 33.5 percent from March 2013. The 1Q 2014 submission rate was a three-decade high.

Read more...Austin multifamily 1Q 2014: Hendricks-Berkadia via Real Estate Center at Texas A&M

Led By Multifamily, Improvement Seen in All Commercial Real Estate Sectors via realtor.org

The outlook for all of the major commercial real estate sectors is slightly improving despite disappointing economic growth during the first quarter of 2014, according to the National Association of Realtors® quarterly commercial real estate forecast.

Lawrence Yun, NAR chief economist, said the sluggish growth experienced in the first quarter is not indicative of the actual health of the economy. “Gross Domestic Product should expand closer to 3 percent for the remainder of the year. The improved lending for commercial loans and continuing job gains we’ve seen this spring bode well for modest progress in commercial real estate leases and purchases of properties.”

However, Yun cautions that with rising long-term interest rates on the horizon, consistent economic growth is imperative to solid commercial real estate investment in the years ahead.

Read more...Led By Multifamily, Improvement Seen in All Commercial Real Estate Sectors | realtor.org

San Antonio Economic Update May 2014 via Dallas Fed

The San Antonio economy accelerated in April. The unemployment rate fell to 4.8 percent, 0.4 percentage points below the state and 1.5 percentage points below the nation. Private employment growth was strong, particularly in business and professional services, while government jobs declined. New building permits remained steady in March and construction employment grew moderately in April, but housing starts weakened and continue to lag behind the state as a whole.

The San Antonio Business-Cycle Index continued to accelerate, primarily due to a continuing decline in the unemployment rate. The six-month growth rate increased from 4.5 percent in March to 4.8 percent in April, the highest rate in nearly a year. Overall, the San Antonio economy continues to track above trend when compared with the 10-year annual growth rate of 3.4 percent.

Read more...San Antonio Economic Update May 2014 via Dallas Fed

Commercial Building Energy-Use Disclosure Requirements via Commercial Property Executive

Once again, the government is attempting to help the general public by getting into our business. I’m not saying it’s a bad thing, but it’s more regulation and bureaucracy that building owners and tenants will need to deal with. Effective Jan. 1, 2014, building owners will be required to provide energy benchmark reports for the prior year when a commercial property is leased, sold or refinanced.

The law will be phased in over the next 18 months depending on the size of the property. Buildings that exceed 10,000 square feet of total floor area need to begin their energy usage benchmarking Jan. 1, 2014. Buildings measuring between 5,000 to 10,000 square feet must begin their energy use disclosure by July 1, 2014.

Read more...Commercial Building Energy-Use Disclosure Requirements | Commercial Property Executive

DFW Economic Indicators May 2014 via Dallas Fed

The Dallas–Fort Worth economy expanded at a rapid clip in April. DFW employment grew 8.7 percent, faster than Texas and the U.S., which grew 5.7 percent and 2.5 percent during the month. Unemployment rates in both Dallas and Fort Worth declined further in April. Robust leasing activity continued to keep office and apartment vacancies low despite strong construction. The Dallas Fed business-cycle indexes posted increases, suggesting continued expansion for the Dallas–Fort Worth metroplex.

Dallas–Fort Worth employment expanded at a faster pace in April. Jobs grew at an annual rate of 8.7 percent in April, up sharply from the 2.7 percent increase recorded in March. For the year, Dallas–Fort Worth has added 46,700 jobs—a 4.6 percent annualized pace.

Read more...DFW Economic Indicators May 2014 via Dallas Fed

MF Rent Growth Hits New High via GlobeSt.com

Effective rent growth in US multifamily year to date is the best since the nation’s economy began recovering from the Great Recession, locally based Axiometrics said Tuesday. Effective rent growth rose to 3.4% in April, up from 3.1% the previous month and 3.2% year over year. The research firm credited increased occupancy and burgeoning job growth with giving apartment landlords the impetus to raise rents.

Apartment occupancy increased last month to 94.8%, a 60-basis-point rise since 2014 began. At the same time, job growth was 1.6% in March, while the national unemployment rate dropped to 6.3% in April. Accordingly, more people sought housing in what is already a landlord’s market, Axiometrics says.

Read more...MF Rent Growth Hits New High - Daily News Article - GlobeSt.com

Apartments: Supply and Demand via Calculated Risk

Time flies! It was four years ago that we started discussing the turnaround for apartments. Then, in January 2011, I attended the NMHC Apartment Strategies Conference in Palm Springs, and the atmosphere was very positive.

The drivers were 1) very low new supply, and 2) strong demand (favorable demographics, and people moving from owning to renting).

Demographics are still favorable, but my sense is the move "from owning to renting" has slowed. And more supply is now coming online.

Read more...Calculated Risk: Apartments: Supply and Demand

Treasury yield squeeze suggests interest rates to stay low via HousingWire

The rally in U.S. Treasurys that pushed 10-year yields down to a level not seen since late 2013 shows the belief that the Federal Reserve will keep rates low in a slowly growing global economy, Bill Gross, chief investment officer at Pimco told MarketWatch.

“2.50% currently reflects a 0.5% new neutral rate and seems fair for now,” Gross said.

MarketWatch goes on to say, “The new-neutral outlook published by Gross and Pimco adviser Richard Clarida suggests that the global economy is transforming from a period of recovery after the financial crisis…toward stability that is characterized by modest economic growth over the next three-to-five years.”

Read more...Treasury yield squeeze suggests interest rates to stay low | 2014-05-16 | HousingWire