Monday, December 15, 2008

HFO Launching New Interactive Website Tuesday, December 16

The new HFO web site will launch tomorrow. The site has the same features you've been accustomed to in a more user friendly layout, along with new interactive maps and links to information.




Some of the highlights:

  • Login to the new HFO Transaction Center for deals in progress
  • Online event sign-up for investors
  • Links to a wide variety of demographic information customized to an available property's location
  • Information on businesses located near an available property
  • Links to a neighborhood rent comparison tool
  • View or subscribe to select local/national multifamily housing news items
The site will reside at the same location: http://www.hfore.com/ 

Monday, December 8, 2008

Now's The Time to Appeal to Single Women As Your Next Renters

Multifamily Executive magazine reports that it's possible to reach a powerful and influential group of renters you might be overlooking: single women.  Many apartment owners are now focusing on this important demographic group.  As a whole, women want safety but also want luxury amenities and services they are willing to pay for.

Read More > > > 

Monday, December 1, 2008

Sold! Patrician Square - 74-Units in Milwaukie, Oregon

HFO Investment Real Estate is pleased to announce the sale of the 74-unit Patrician Square Apartments in Milwaukie, Oregon for $4.35 million or approximately $58,784 per unit. The apartments, located at 3500 SE Oak Grove Blvd. in Milwaukie feature a private pool, basketball court and clubhouse. 

Monday, November 24, 2008

City of Portland Approves Sweeping Revisions of Landlord Tenant Regulations

City of Portland staff report that the Portland City Council Council voted last week to accept the Quality Rental Housing Workgroup (QRHW) recommendations. All four Commissioners were present during the voting, and made a commitment to fund the group's recommendations.

The City of Portland Bureau of Housing and Community Development will report back to the City Council with its implementation plan by January 31, 2009.  This plan will include specific details regarding the phasing and budget of segments of the numerous recommendations.  Among other things, this plan will make a final recommendation on implementation of an annual per unit fee.

Meanwhile, many landlords may not be aware that it has always been mandatory for every business in Portland to get a business license. (The workgroup made no change to this requirement.)  And the City of Portland has decided to increase enforcement of that requirement.  A landlord with 9 or fewer units in the past qualified for an exemption from paying the $100 minimum tax and from filing a tax return. All landlords that conduct business by renting even one unit has always been required to get a business license.

The $50,000 minimum revenue exemption (which again exempts the $100 minimum tax, but not the requirement to get a business license) still applies, meaning that any landlord with revenue of less than $50,000 per year, will still qualify for a revenue exemption. Landlords with fewer than 5-6 units -- if it is their only business activity -- are going to still be exempt --  ($50,000=$720 ave. rent per month).

Washington Mutual Looking to Finance NW Apartment Deals

Contrary to information previously posted here, WaMu is still making apartment loans. When notified of its error, HFO asked Washington Mutual for correct information that we could pass along to our readers. HFO regrets the error: please feel free to contact the loan officers listed below with your loan questions!

We have exciting news! WaMu became part of JPMorgan Chase N.A., on September 25, 2008. As a commercial real estate investor, you can’t take chances financing your next deal. In the current economic environment, it’s more important than ever to work with a commercial lender who can get your deal done. WaMu is excited to be part of Chase. This is an exceptional opportunity for you to benefit from the resources of one of the strongest full service commercial banks in the world.

Call WaMu today and let us close your next commercial property loan.
Tom Barbour
Tom.Barbour@wamu.net
503-598-3657

Steve Mozinski
Steve.Mozinski@wamu.net
503-598-3661
5335 SW Meadows Road, Suite 100
Lake Oswego, OR 97035
Toll Free: 866.886.3774
www.wamu.com/commercial

Sunday, November 23, 2008

HFO brokers announce multifamily apartment sales totaling over $3.87 million in NE, SE Portland

HFO arranged the sale of the 16-unit Rose Garden Apartments (pictured at left) in NE Portland for $1.25 million or approximately $78,125 per unit. The multifamily property consists of 12 apartments plus 4 retail spaces along Sandy Boulevard. The buyer was Metro Windser LLC and the seller was Malcolm F. Johnson of Portland. HFO Investment Real Estate brokers represented the parties.

The 20-unit Foxstar Apartments located in SE Portland have sold for $1.4 million or $70,000 per unit. The buyer was Foxstar Investments LLC and the seller was Portland Foxstar, L.P. of Alameda, California. HFO Investment Real Estate brokers represented the seller of this multifamily property.

2820 LLC of Portland purchased Weathering Heights, a 16-unit apartment complex at 2820 SE Gladstone Street in Portland for $1.225 million or $76,563 per unit. The seller was J. Barnes of Reno, Nevada. HFO Investment Real Estate brokered the transaction.

Thursday, November 20, 2008

2009 Apartment Owner Survey Predicts Coming Trends for Improvements, Advertising

J. Turner Research has released its Apartment Market Industry Outlook Survey for 2009. Among the findings:

  • 54% of owners plan to increase print advertising, 64% plan to increase online advertising.
  • In the coming year, 50% of owners plan to increase spending on in-unit kitchen upgrade, 43% plan to increase spending on bathrooms, 42% plan to improve flooring and 40% plan to improve fixtures.
  • 40% of landlords surveyed also said they plan to improve common areas and 47% plan to add WiFi.
  • Regarding the country's economic conditions, 47% said they felt the economy was having a negative impact, and 37% said it was having a positive impact.
  • 40% of owners said they had experienced some increase in site traffic as a result of a recent home foreclosure.  45% of owners said they were requiring residents with foreclosures to pay additional deposits or increasing their rates. 
Other areas covered in the survey included questions regarding the importance of a multifamily property being "green" and what tactics are most often employed and planned by owners to make properties more green.

Apartment Owners Take Note: Here Are The Ten Most Important Resident Amenities

The National Apartment Association has released a list of the most important resident amenities.  These amenities came from a national survey conducted by J. Turner Research.  The survey was sent to roughly 6,000 apartment executives and onsite managers and had a total of 341 respondents.  Those surveyed were asked to list their top resident amenity.  Here's the list:
  1. In-Unit Laundry (81%)
  2. Wi-Fi Internet Access (71%)
  3. Custom Interiors (61%)
  4. Weight/Cardio Room (55%)
  5. Pool (50%)
  6. Controlled Access (50%)
  7. Covered Parking (47%)
  8. clubhouse with Multi-Media (25%)
  9. Television/Internet/Phone (25%)
  10. In-Unit Security System (22%)
J. Turner Research conducts market research for the apartment industry.

Apartment Investments Remain Sound As Apartments are Only Housing Sector Not Oversupplied

The Multi-Housing News recently published a story recently that provides further reassurance to apartment investors.

The apartment market remains healthy although rental demand is slowing, said Ron Witten, president of Witten Advisors LLC, speaking recently at the National Association of Home Builders’ (NAHB) Fall Construction Forecast Conference.

Witten said that apartment occupancy level has decreased by only half a point in the past 12 months, and is now at 95 percent on a national basis. Rent growth continues, but it has declined from 4 to 5 percent at its peak in 2006-07 to 2.3 percent in the second quarter this year.

Read the Full Story Online > > >

Witten Advisors LLC is a market advisory firm specializing in the major apartment markets across the United States. The firm's mission is to support apartment developers, investors, owners and lenders in making market-smart investment decisions in the ongoing course of their businesses. http://www.wittenadvisors.com 




Tuesday, November 18, 2008

Apartment Investments: Short Run Challenges Leading To Intermediate Term Financial Rewards

In the latest edition of Multi-Housing News, the chief economist for the National Multi Housing Council argues that there is no more important economic indicator for the apartment industry than the job market—not even with the current turmoil in the credit markets. 

Economist Mark Obrinsky concludes that while apartment owners should pay close attention to employment levels in their locality, he is optimistic two trends that should mitigate the effect of a downturn in employment:
  • the reduced outflow of renters buying houses, at least until house prices start appreciating a few years from now; and
  • demographics: aging baby boomers, and an increasing number of students, and minorities that prefer to rent.
While the short run may have some challenges [especially where unemployment levels are highest], the intermediate term looks bright.

Read the full article >>>

Thursday, November 13, 2008

HFO Charitable Giving Update Through October 30 2008

The HFO charitable contributions/client appreciation program through October 2008 resulted in contributions to the following organizations, among others:

  • Alzheimer’s Association

  • American Cancer Society

  • Blind Children’s Center

  • Chabad Lubavich of Clark County

  • Children’s Cancer Association

  • Cleveland High School Foundation

  • Community Partners for Affordable Housing

  • Doernbecher Children's Hospital Foundation

  • Habitat for Humanity

  • Jesuit High Diversity Club

  • Jesuit High Scholarship Fund

  • Lance Armstrong Foundation

  • Marion-Polk Food Share

  • Mission Emanuel

  • Oregon Humane Society

  • Oregon Jewish Museum

  • Oregon Symphony

  • Portland Rescue Mission

  • Relay for Life – West Clark County

  • Susan G. Komen for the Cure

  • Union Gospel Mission

  • University of Portland

  • Vovinam Martial Arts of Salem

  • Wallace Medical Concern

  • West Hills Christian School Foundation
  • Intervest Mortgage Reports Deals Continue Receiving Funding Despite Changing Market

    by Mark Paskill, Intervest Mortgage

    Lenders across the board have shifted toward lower risk tolerance resulting in lower leverage and cash equity critical to loan fundings. Lender focus today is on transaction risk with both tenant and borrower strength being looked over in more detail. The good new is that while spreads have increased, indexes have remained generally consistent and funding rates are still low by historical standards.

    A wide range of loan appetites is occurring across our lenders. For many of the commercial banks we are seeing declining appetites driven by balance sheet concerns due to residential loan portfolios and overall pressure and guidance from the FDIC to pull back on real estate lending. Pre commercial mortgage backed security “relationship” lending is back in style as bank credit departments seek justifications to expand their portfolios. Construction lending has also tightened up significantly with little to no speculative lending occurring. For our life company lenders, we have been seeing a wide range of loan appetites depending on each companies remaining loan allocations for the year. Over the past month or so we have seen a number of life lenders pull back as their stock and bond sides have taken a beating in the stock and bond markets. With that said, Life companies are clearly the price leaders once again and in addition to their traditional 10 year fixed rates some are now offering 3 and 5 year fixed rate structures with flexible prepayment windows. Life companies are actively seeking to place loans on multifamily properties. The Commercial Mortgage Back Security (CMBS) market clearly has not recovered and is now not expected to reappear within the next few years. A number of loan pools with 2007 vintage loans sold earlier this year and numerous pools are still waiting in the wings with the hopes the secondary market will come back in the near future. We are also seeing a number of liquidation pools coming to market from failed companies such as Indymac Bank, etc. The only good CMBS news is loan delinquencies have so far remained low for commercial real estate.

    For apartments financing the landscape has changed significantly. Over the past 5 years multifamily borrowers benefited from the wide range of lenders in the market which worked to dive down transaction costs (including free appraisals, etc) and higher loan to values appetites as lenders competed to place their funds. Over the past 12 months we have seen a large number of wholesale lenders close doors and exit the market including IndyMac Bank, Countywide Commercial, IMPAC and LaSalle. We don’t expect these types of lenders to return to the market for many years. We are currently seeing a number of national multifamily lenders such as Citibank and the former Washington Mutual (now Chase) going through significant internal changes. Following the exit of capital from the market we are seeing tightening underwriting, generally lower loan to value appetites and more traditional transaction cost structures.

    INTERVEST continues to offer access to lenders who have capital to lend on solid, fundamental deals. Good pricing and terms continue to be available particularly with low leverage and/or well leased properties.

    Mark Paskill can be reached at (503) 214-5082. 

    In Contract - Prime NW Portland Apartment Investment Property and Development Opportunity $3.8 Million

    The Elysian Garden Apartments are located at 2631 NW Upshur in Portland, Oregon.  Built in 1926, these apartments have a total of 38 units consisting of (15) studio units, (18) double studio, (3) 1-bed 1-bath units, and (2) 2-bed 1-bath units.

    Elysian Garden is an exceptionally hard to find apartment complex in the close-in NW Portland neighborhood and is currently operating very successfully as an apartment building. Buyer can obtain conventional financing or develop right away.

    This desirable property consists of nearly a full acre with two additional sites totaling approx. 20,000 sq. ft in this block also for sale for combined development potential. This property makes sense either as is or as a development property and is priced attractively for either option. The property has a pre-approved zoning variance to 60 feet high.

    Please do not disturb tenants or on-site manager. Viewing by appointment only. For information please contact Tim O'Brien at 503-241-5541.

    Wednesday, November 12, 2008

    Beautiful 16-Unit Cottage-Style Apartment Community Available For Sale $1.8 Million

    The Westmoreland 16 Apartments are located at 5232-5248 SE Milwaukie Avenue and 5231-5247 SE 17th Avenue, in Portland, Oregon.  Built in 1947, this complex of cottage-style apartments is made up of (2) seperate tax lots with (8) units in each tax lot, making it a total of (12) 1-bed 1-bath apartments and (4) 2-bed 1-bath units.

    The complex has (11) garages as well as individual basements, with some of the basements having washer/dryer hookups.  Westmoreland 16 has been owned since 1962 by the same family providing stability with the building.  This is a rare opportunity to own a close-in, well maintained property in an A+ location.

    Please do not disturb tenants or on-site manager. Viewing by appointment only. For more information contact: Rob Marton at 503-241-5541.

    Vancouver, Washington 8-Unit Apartment Building For Sale $625,000

    This 8-plex is located at 9619-9621 E. Mill Plain Blvd.in Vancouver, Washington.  Built in 1972, the property has (7) 2-bedroom 1-bath units of 800 square feet and (1) 1-bedroom 1-bath unit of 735 sq. feet.

    All units have dishwashers and the complex has an on-site laundry facility and offers easy access to East Mill Plain Blvd. and I-205.

    This property features the following upgrades:
    • New siding and paint on upper gables
    • All new vinyl windows and sliders
    • New roof in 2006; soffit vents added (2 per unit front and back)
    • All new hardware and fixtures in units
    • All new appliances: refrigerators, stoves and dishwashers
    • New vinyl floors in kitchen and baths
    • All new carpet throughout units
    • All storm doors painted
    • New water heaters
    Please do not disturb tenants. Viewing by appointment only. For more information please contact Greg Frick at 503-241-5541.

    NE Portland Oregon 38-Unit Multi-Family Investment Property $2.09 Million

    The Highlander Apartments are located at 1217 NE 122nd Avenue in Portland, Oregon.  Built in 1960, this complex has (16) 1-bedroom 1-bath units and (22) 2-bedroom 1-bath units, all with spacious floor plans.

    The Highlander offers a great opportunity to own a midsize apartment building in an established neighborhood in Portland’s Gateway community.  The complex has easy access to I-205 and I-84 and ample open parking.  Currently fully occupied, the building has a history of very low vacancy rates.

    Please do not disturb tenants or on-site manager.  Viewing by appointment only.  For more information please contact Greg Frick at 503-241-5541.

    All 2-Bedroom Multi-Family Investment Property in SE Portland - 36 Units $2.885 Million

    The Lassam Terrace Apartments are located at 2160 SE 96th Avenue in Portland, Oregon.  Built in 2001, this newer complex consists of (12) 2-bedroom 1 bath units and (24) 2 bedroom 1.5 bath townhouses.

    This turnkey investment property is a great opportunity to own a midsize apartment building in an established neighborhood near Kelly Butte Park.  Lassam Terrace has easy access to I-205 and I-84 and ample numbered parking spaces for tenants.  

    Please do not disturb tenants or on-site manager. Viewing by appointment only. For information please contact Greg Frick at 503-241-5541.

    15-Unit Multi-Family Investment Property in NE Portland, Oregon $865,000

    The ChaRay Apartments are located at 5050 NE Killingsworth Street in Portland, Oregon.  Built in 1968, this complex has (6) 2-bedroom 1 bath units and (9) 1-bedroom 1-bath units.  The building has recently upgraded windows and additional insulation.

    Neighborhood amenities within a half mile include Portland Community College, New Seasons grocery and Albertsons. Other retail outlets within a mile radius include Rite Aid, Walgreens, Safeway, and the McMenamin’s Kennedy School. There are eight parks and eight fitness outlets within a two mile radius.

    Please do not disturb tenants.  Viewing by appointment only.  For information contact Greg Frick at 503-241-5541.

    Monday, November 10, 2008

    HFO Multifamily Brokers Announce Oregon Apartment Sales Totaling $3.87 Million in NE, SE Portland

    HFO Investment Real Estate is pleased to announce the sale of the Rose Garden, Foxstar and Weathering Heights Apartment Buildings.

    The 16-unit Rose Garden Apartments in NE Portland sold for $1.25 million or approximately $78,125 per unit. This multifamily property consists of 12 apartments plus 4 retail spaces along Sandy Boulevard. HFO Investment Real Estate represented the parties in the transaction.

    The 20-unit Foxstar Apartments located in SE Portland sold for $1.4 million or $70,000 per unit. HFO Investment Real Estate brokers represented the seller.

    The 16-unit Weathering Heights complex in SE Portland sold for $1.225 million or $76,563 per unit. HFO Investment Real Estate brokered the transaction for the parties.

    Thursday, October 30, 2008

    Portland's South Waterfront Mirabella Retirement Community Featured in National Article

    Portland's Mirabella retirement community apartment living, opening in 2010 on the South Waterfront is a project receiving national recognition for its green strategies and design excellence.

    Read More. 

    Terms are tougher, but Multifamily Financing conditions expected to remain stable

    Multi-housing news reported in October that financing conditions are not expected to change dramatically as a result of the government takeover of Freddie Mac and Fannie Mae -- at least for now.

    Marcia Upton, President of Banker's Mutual reported today that reasonable interest rates ranging from 5.97% to 7% are still available depending on the loan program and things such as loan to value ratio. 

    Wednesday, October 29, 2008

    Multifamily Executive Conference Wraps in Las Vegas, A Study of the Future of Apartment Investing

    The Multifamily Executive Conference has wrapped in Vegas.  Information about all the sessions is available online.

    Among the sessions:

    Green Features Will Soon Be a Given at Multifamily Properties

    Broken Condo Projects Spell Opportunity for Equity-Backed Investors

    Small Upgrades Can Drive Up Rents

    Also at this year's conference a major national apartment brokerage firm reported its business is off 45 percent for the year and it expects even steeper declines in 2009. The company said traditional 5-10% gaps in seller/buyer expectations had widened to 25%.  Starts of multifamily buildings of five units or more have dropped 25%, which is expected to help increase the value of existing apartment investments as demand continues to grow.

    Thursday, October 23, 2008

    Apartment Appraiser Provides Update on Portland/Vancouver Multifamily Market Based On Recent Sales

    At the sold-out HFO Investor Roundtable on Tuesday, October 21st, Multifamily appraiser Jeremy snow gave an update of the Portland/Vancouver multifamily market.


    He reported that although there is significant interest in multifamily investment, 2008 sales through September have fallen far below 2007 levels. CAP rates for 1970’s era properties are in the 6.5% to 7.0% range with newer properties selling in the 5.50% to 6.5% CAP rate range, with institutional grade Class A properties ranging from 4.5% to 5.5%.

    Current apartment projects are under construction in Clackamas, the Sunset Corridor, and in Tigard. In downtown/close-in Portland, there are 10 apartments under construction or in lease-up, nearly all of them luxury apartments that will face extreme competition for tenants in the next 1-3 years during lease-up.

    Download Jeremy’s full report by clicking here.

    Oregon DMV Law Changes Providing Food For Thought for Oregon Landlords

    by Andy Hahs, Attorney at Law.

    Recent changes in DMV law has made it difficult for some people to obtain driver's licenses because they must provide a Social Security number and other documents to obtain a new license or for renewal of an existing license. This new requirement can be difficult for some people who don't have easy access to documentation, or who have none at all.

    Although you can require driver's licenses for the purpose of leasing an apartment, you are not required to do so. Oregon law does not require that landlords determine whether an individual is in the country legally for the purposes of obtaining housing. But most landlords want to conduct some kind of reference/background check. As long as you treat everyone equally, you have the option of broadening the application process by requiring any one or more of these items:
    1) Passport
    2) Driver's License
    3) Social Security Card
    4) Work Visa
    5) ID from a sponsoring nonprofit

    If you don't have a written policy that you and/or your leasing staff are following or would like to have yours reviewed, I can certainly help you with that and answer any questions you might have.

    Andy Hahs is a partner of Bittner & Hahs, P.C. in Lake Oswego and has been practicing law for over 25 years. Andy is one of the leading authorities on Oregon's landlord-tenant law and represents a large share of the major residential property management companies in the Portland/Vancouver metro area. You can reach Andy directly at 503-445-4302.

    Monday, October 20, 2008

    Portland / Vancouver Apartment Rents and Occupancy Rates Bucking National Trends

    Q3 Vacancy rates and rental data reported recently indicates the Portland/Vancouver rental market is following national trends in terms of occupancy, but still bucking the trend with rent increases.  Much of the Pacific Northwest is seeing increased rents while many parts of the country are flat or decreasing.  RealFacts reported 2008 Q3 Seattle/Tacoma rents up 5.7% from a year ago and Portland/Vancouver up 3.3%.

    Meanwhile, Portland MAI Appraiser Mark D. Barry last week delivered a speech to the Metro Multifamily Housing Association (MMHA) predicting vacancies will increase slightly through year end 2009, with modest rent increases in the first six months of 2009 and flat the rest of '09.


    VACANCY RATES
    RealFacts reported 3Q 2008 vacancy rates as follows:
    Portland/Vancouver vacancy rates increased from 4% to 5% over last 12 months (+1%) Nationally, RealFacts reported vacancy rates increasing from 6.4% to 7.1% (+0.7%). Axiometrics reported that occupancy rates dropped by -0.7% to 6.5%.

    Portland's Metro Multifamily Housing Association reported Portland/Vancouver MSA vacancies increased 0.7% over the last 12 months from 2.9% to 3.6%.

    All sources are attributing the drop in occupancy rates to rising unemployment which is forcing some renters to give up apartments and move in with friends or family members. RealFacts Inc. predicts additional job losses will result in additional apartment vacancies during Q4 2008.

    RENT INCREASES
    Portland/Vancouver MSA
    Mark Barry reports:
    • Turnover rents up 4-8% to date with 3-6% increases in collections (RealFacts reports Portland/Vancouver MSA rents up 3.3% from one year ago)
    • Landlords are increasing fees and more are starting RUBS
    Meanwhile, Axiometrics reports the US apartment Market had the smallest increase in any quarter since 2001; its data indicated effective rent increases of only 0.8% from a year earlier.  Read More.

    Wednesday, October 8, 2008

    Portland Poised to Approve Sweeping Revisions to Landlord Tenant Laws

    City of Portland staffers report that the city's Quality Rental Housing Workgroup (QRHWG) voted unanimously on September 22nd to support the final package of recommendations.

    The Bureau of Housing and Community Development and the Bureau of Development Services are now working with the respective Commissioners-in-Charge to make sure that the recommendations of the workgroup are something that are politically feasible given the current economic conditions. The recommendations and the associated budget requests are expected to go to the Portland City Council "in the next month or so."

    National Economic Research Firm Ranks Portland Economy 30th out of 363 Metro Areas

    The independent economic research firm POLICOM, a specialist in analyzing local and state economies, has released its economic 2008 rankings of 363 Metropolitan Statistical Areas. The highest ranked areas have had rapid, consistent growth in both size and quality for an extended period of time. The lowest ranked areas have been in volatile decline for an extended period of time.

    There are now 363 Metropolitan Statistical Areas (MSAs) in the United States Among the 3,142 counties in the United States, 1,092 are included in the 363 areas. Approximately 82% of the nation’s population reside in MSAs.

    Oregon and Washington MSAs ranked in the top 100:
    11th - Seattle-Tacoma-Bellevue, WA
    30th - Portland-Vancouver-Beaverton, OR-WA
    46th - Bend, OR
    86th - Medford, OR
    98th - Mount Vernon-Anacortes, WA
    The Nation's Top 10 Healthiest Economies, as ranked by Policom:
    1. Charlotte-Gastonia-Concord, NC-SC
    2. Washington-Arlington-Alexandria, DC-VA-MD-WV
    3. San diego-Carlsbad-San Marcos, CA
    4. Nashville-Davidson-Murfreesboro-Franklin, TN
    5. Sacramento-Arden-Arcade-Roseville, CA
    6. Phoehix-Mesa-Scottsdale, AZ
    7. Dallas-Fort Worth-Arlington, TX
    8. Houston-Sugar Land-Baytown, TX
    9. Salt Lake City, UT
    10. Las Vegas-Paradise, NV

    Thursday, October 2, 2008

    Mortgage Bankers Association: Multifamily Investments Remain Strong

    Thanks to blogger Rick Fitzgerald of Chatanooga, Tenn. for this tidbit:

    The Mortgage Bankers Association reports outstanding commercial / multifamily mortgage debt -- now at $3.4 trillion -- continued to grow and to see relatively strong, steady performance during the 2nd quarter of 2008. Total origination volume in Q2 2008 was down 63 percent from the second quarter of 2007.

    Despite the significant drop in mortgage originations, investors increased their holdings of commercial / multifamily mortgages during the quarter – as the relatively low level of originations exceeded an even lower level of portfolio run-offs. Between the first and second quarters, investors added $51 billion of commercial / multifamily mortgages (net) to their portfolios, a 1.5 percent increase. Nearly every major investor group increased their holdings – led by commercial banks, Fannie Mae and Freddie Mac and Finance Companies, all of whom have sources of funding at least slightly immune from the ongoing capital markets turmoil.

    The financial group with more than 80% of outstanding multifamily loans -- CMBS, Fannie Mae, Freddie Mac, Life Insurance and Commercial Banks -- report lower than expected delinquencies.

    Insurance companies have more than 35,000 loans and $252 billion in outstanding balances -- and report  only 23 loans are more than 60 days late. The FDIC backed portfolio of $1.2 trillion contained $15 billion in total delinquent balances over 90 days late or just 1.18 percent delinquent. Not bad in the current market.

    The Mortgage Bankers Association’s Commercial/Multifamily Quarterly Data Book can be downloaded here.

    Wednesday, October 1, 2008

    Hagerman Frick O'Brien Named Top Corporate Philanthropist by Portland Business Journal

    The Portland Business Journal has named HFO Investment Real Estate among Portland's top 10 philanthropic corporations among companies with revenues of under $10 million. The award was presented on Thursday, September 25th to partner Greg Frick at an annual celebratory banquet held on the floor of the Rose Garden Arena. HFO ranked eighth in its category overall, and fourth in terms of per-employee cash contributions. Total cash contributions for HFO and its 10 full time employees was $22,250. HFO is pleased to support numerous charities throughout the year, including The Dougy Center for Grieving Children, Film Action Oregon/The Hollywood Theatre Project, the Alzheimer's Foundation, Dove Lewis Animal ShelterMedical Teams International, and others.  Formal announcements regarding the corporate philanthropy awards will be made in the October 3rd edition of the Business Journal.

    Tuesday, September 30, 2008

    Bailout Package Will Have Little Impact on Financing Apartment Investments

    The bailout package now rumbling around the halls of Congress will have little impact on multifamily financing, the Multi-Family Housing News reported yesterday.

    David M. Abromowitz is a senior fellow at the Center for American Progress, focusing on housing policy and related federal and state programs and issues says that the multifamily market thrives better when the homeownership market is not flooded with cheap and easy loans. Since those loans are never coming back, there is good news for multifamily.

    Today, Jim Arbury, senior vice president of government affairs at the National Multi Housing Council (NMHC), told the Multi-Housing News “If and when the bailout package passes, it will no doubt have a positive impact on multifamily."

    Monday, September 29, 2008

    400 University of Oregon Freshmen Living in Off-Campus Apartments

    As we mentioned in our earlier post, apartment buildings located next to colleges and universities will continue to do well across the country.  Here's an example from today's Oregonian about what's happening in Eugene.

    Thursday, September 25, 2008

    Mid-Year 2008 Portland Area Apartment Market Update

    by Mark D. Barry, MAI
    The big news impacting the real estate market in YTD 2008 has been the problems in the single-family market, a much tougher real estate lending environment, the current crisis going on in the financial markets, and an obvious slowdown in the economy. So what has happened in the Portland area apartment market? The purpose of this article is to provide an update on the Portland area apartment market as of mid 2008.

    Portland Economy: In recent months, our economy has stagnated. We have added just 3,000 non-farm payroll employment jobs over the last year, and have seen our unemployment rate increase from 5.0% in August 2007 to 6.1% in August 2008.

    Residential Market: The Portland area single-family market was one of the last in the nation to head south. The median single-family sales price is now down 7.3% over the last year, with a ten-month inventory of homes. The condo construction and condo conversion market has come to a virtual halt, with inventories estimated at 2.5 to 3.5 years based on the slower recent sales activity.

    Single Family and Apartment Construction: 2008 will be the slowest year for single-family construction in our market in three decades! Permits have been issued for just under 2,500 homes through July. Thus, we should see around 4,000 new single-family homes for the year, or well under half of the average number of homes added per year over the last decade.

    Apartment construction remains slow by historical standards, but has been more active in YTD 2008 than in recent years due to favorable fundamentals. Permits have been issued for 2,249 apartment units in the four county metro area through July 2008. Thus, we should see around 4,000 new apartment units for the year. Around 83% of the YTD 2008 permits are in Multnomah County, with Trammel Crow Residential and some subsidized projects accounting for well over half of the construction. The balance of the activity is concentrated in Washington County, with virtually no new apartment construction activity in Clackamas County or Clark County.

    Apartment Sales Activity: The first half of 2008 saw 65 apartment sales. This is in comparison with 139 apartment sales for the first half of 2007. Thus, the credit crunch is clearly having an impact on apartment sales activity due to tighter underwriting standards, and more limited availability of financing.

    However, the first half of 2008 saw $360.7 million in apartment sales volume vs. $389.7 million for the first half of 2008. The first half of 2008 saw eight sales of $24 million or more vs. five such transactions in the first half of 2007. While the first half of 2008 saw 52 sales of apartments with a price under $5.0 million, this is in comparison with 127 such sales for the first half of 2007. Thus, the big slowdown in apartments sales activity in YTD 2008 has been in apartments with 50 units and under.

    Apartment Values: The median sales price per unit of an apartment in the first half of 2008 was $78,362 vs. $70,000 in the first half of 2007, or almost a 12% increase. However, this is misleading due to a high number of sales of larger, newer high-end apartments in YTD 2008. If one eliminates the sales of newer, larger apartment communities, and instead looks at all of the sales of apartments of 100 units and less and built prior to 2001, the increase is closer to 3% over the last year. In addition, cap rates have declined by 5 to 15 basis points, with a median cap rate of 6.06% for the YTD 2008 sales.

    Apartment Fundamentals
    Vacancies: The Fall 2008 MMHA survey shows a slight up tick in apartment vacancies to around 3.6% vs. 3.3% in the Spring of 2008, and 2.9% in the Fall of 2007. I attribute this increase in apartment vacancies to a slower economy, some doubling up or moving home, many new row houses or condominiums being converted to rentals, and some apartment construction.

    The apartment market in Portland and most other areas of the country has been immune to problems occurring in the single family and condo market. In my opinion, the main reason that the apartment market here has been so healthy is that fewer people can afford to buy houses, and are forced to rent. The US Census Bureau recently reported that around 66% of Oregon households are homeowners, which is a decline from the peak of 69% in 2004.

    Rents and Income: The latest MMHA data as well as information from RealFacts shows an increase in rents of just over 5% in the last year on a per unit per month basis. Studios and two bedroom townhouse units are showing the largest increases, while one bedroom units are showing the smallest increase. The actual income for YTD 2008 is clearly up all over the metro area. Typical increases I see range from 3% to 6%.

    Expenses: Most operating expenses, with the exception of insurance and advertising, are creeping up. Utility costs have shown double digit increases on the majority of appraisals I have completed in YTD 2008. I expect 2009 to be a tough year for owners of apartments with central utilities.

    In conclusion, a flat economy, increasing unemployment, very slow single-family construction, high inventory levels of residential properties for sale, and a decline in the median single-family prices characterize our market for YTD 2008. In addition, there has been a noticeable slowdown in apartment sale transactions, which is partially offset by greater sales activity of larger, high profile complexes. However, apartment values are showing some increases, and cap rates are down slightly from a year ago. The apartment fundamentals remain solid, with below normal vacancies, and noticeable increases in rents and income. Increasing expenses continue to be a challenge, particularly utilities.

    Mark D. Barry, MAI, is a real estate appraiser specializing in apartment appraisal work in the Portland-Vancouver metropolitan area. He has completed almost 5,000 apartment appraisals since starting as a fee appraiser in 1983. He has a BA from University of California at Berkeley, and an MBA in Real Estate from American University in Washington, D.C.

    Monday, September 22, 2008

    Multifamily Investment: 29 turnkey units ~ Beaverton, Oregon ~ $2.15 million

    The Hampton Court apartments, built in 1967, consist of 29 turnkey units. This clean property has many upgrades, is convenient to retail and shopping, and near major employers.

    Learn More > > >

    Big Players Holding Back for Lower Prices

    Given the current credit crunch, the advantage for acquiring multifamily properties rests with equity-blessed players like REITs and institution-backed investment advisors. Income producing apartment properties are sitting with general equilibrium so few sellers have adjusted their asking prices, while the best-heeled buyers consider some sellers' pricing expectations unrealistic in today's shaky economic situation and conservative financing environment. Data crunchers report investment could fall as much as 60% from year end 2007 to year end 2008 on investment property trades, largely due to particularly slow portfolio and other large transaction sales. The bulk of today's deals are modest-size transactions in major markets.

    Summarized from: "Long Jump: Well-Heeled Equity Players Can Leap Over The Bid-Ask Gap -- But Will They?" By: Brad Berton, Commercial Property News

    Portland: Most Sustainable U.S. City 2 Years Running

    Portland, has been named once again as the nation's most self-sustaining city according to 2008 SustainLane U.S. City Rankings.

    Complete results are available online.

    Thursday, September 18, 2008

    Tuesday, September 16, 2008

    Student Rental Housing Needed as College and University Enrollment Booms

    The group known as "echo boomers" are heading off to college and entering the workforce. With many campuses offering outdated housing stock, apartments near colleges and universities are expected to do well in the years ahead. in a recent speech at the PSU Center For Real Estate, Christopher Lee, President & CEO of CEL & Associates, Inc. cited statistics that 74% of 15-24 year olds rent, and 51% of 25-34 year olds rent. At recorded birth rates the number of emerging renters will increase 17.3 million between 2010 and 2050. Additionally, because universities supply only 35% of student housing needs, a substantial increase in housing near colleges and universities will be necessary to house the growing number of students nationwide.

    Read the Multi-Family Housing Article

    See Mr. Lee's PowerPoint Presentation

    Monday, September 15, 2008

    Despite Recent Financial Upheavals, Outlook Remains Good for Multi-family

    Fannie Mae and Freddie Mac report their multi-family delinquency rates remain very low - about the same as one year ago -- less than one quarter of one percent (0.25%).  The approximate loan-to-value ratio of Fannie Mae's multifamily portfolio is 67%

    Both Fannie Mae and Freddie Mac are anticipated to stay active in making loans to multi-family projects, because their portfolios in these areas are doing well.  For the first half of 2008 the agencies report a 62% increase in new mult-family loans over the same period a year ago. 

    Business Journal Reports: Landlords Protesting Rental Rule Revisions

    The Portland Business Journal reported September 12, 2008 that residential landlords are hoping the city will relax its proposed rules that would "tap their wallets and air their dirty laundry." 

    The entire story is available online to subscribers of the Portland Business Journal.

    Friday, September 12, 2008

    HFO Announces Sale of Gresham Apartment Complex for $2.7 Million - MarketWatch

    PORTLAND, Ore., Sept 15, 2008 /PRNewswire -- Hagerman Frick O'Brien (HFO), a Northwest real estate investment firm with headquarters in Portland, Ore., has arranged the sale of the 54-unit Carrington Square Apartments in Gresham, Oregon for $2.7 million or approximately $50,000 per unit. The apartments, located at 637 SE 182nd in Gresham is located on approximately two acres of land and includes a private pool. The complex is 1/3 mile from a MAX stop and apartment amenities include private balconies/patios. The buyer was Carrington Investments LLC of Portland state and the seller was P. Carlson of Gresham. HFO Investment Real Estate represented the seller.

    About HFO. HFO specializes in the sale of apartment properties throughout Oregon and Washington. Using cutting edge resources, HFO helps clients find dynamic investments and offers an insider's knowledge of the local market. It is HFO's mission to create wealth for its clients by providing extraordinary service, forging mutually beneficial, long-term relationships. Learn more at http://www.hfore.com/.

    Tuesday, September 9, 2008

    We're On Fire For New Listings!

    Never a dull day here at Hagerman Frick O'Brien Investment Real Estate. At just after 5:00pm yesterday, after burning up the phone lines all day working on transactions, closing deals and obtaining new listings, a fire broke out next door at the Empire Rubber and Supply Company. Nick Kline of our office called in the fire when he saw it sometime shortly after 5. Source of the blaze has not been determined.

    Our thoughts today are with the owners and employees of our neighbors at the Empire Rubber and Supply as they work through this difficult experience.

    PSU Real Estate Report: Portland Multifamily Continues to Perform

    In its 3rd Quarter 2008 Report, the PSU Center for Real Estate calls the multi-family market "one of the strongest performing real estate classes in Portland." The report says that after years of minimal rent growth, rents have increased by an average of 6% in the last 30 months, and vacancy rates have dropped since 2003 to a low of 3.3%. Median CAP rates have dropped from a high of 8.30% in 2002 to a media of 6.05% in 2007. This is reflective of the average price per unit. Sale prices for properties constructed after 1990 jumped 40% from 2006-2007 to an average of about $111,000 per unit. Pre-1990 building sales appreciated about 18% from 2006-2007 with an average sale of nearly $80,000 per unit.

    The report indicates "multi-family brokers expect continued low vacancies and rent increases for 2008." Troubles may be on the horizon though for high-end rentals. NW Portland rents per square foot have dropped from $1.14 in Oct 2007 to $1.09 in Spring, 2008. These areas have seen a number of new condo projects enter the market in the last five years and some unsold condos are expected to enter the market as rentals. In addition, downtown and close-in Portland will see a total of 2,100 luxury rentals coming on the market prior to the end of 2009.

    See the full report

    Monday, September 8, 2008

    Experts Hopeful Fannie/Freddie Takeover Won't Impact Apartment Lending

    Doug Bibby, President of the National Multi Housing Council (NMHC), issued the following statement concerning the Treasury Department's plan to put Fannie Mae and Freddie Mac into conservatorship.

    "Fannie Mae and Freddie Mac have played a critically important role in the apartment industry, and we do not expect that to change with the recent actions taken by the Treasury Department. It is important to note that neither company faces an immediate crisis. Rather, these actions were taken largely to restore investor confidence and keep the markets working.

    "The impact of the Treasury Department plan on the apartment sector remains to be seen as the details are worked out, but we are optimistic that there will be little to no disruption in the companies' multifamily operations.

    "The government action is directly related to the companies' single-family investments and their efforts to weather the ongoing decline in that sector. The multifamily sector, on the other hand, remains strong and is actually producing profits for the firms that are helping rebuild their capital reserves. As a result, we expect them to remain active in the multifamily market.

    NMHC is a national association representing the interests of the larger and most prominent apartment firms in the U.S. NMHC's members are the principal officers of firms engaged in all aspects of the apartment industry, including ownership, development, management and financing.

    Thursday, September 4, 2008

    Portland, Oregon: Great Place for Multifamily / Apartment Investment Property

    What amazing changes can happen in almost 40 years!

    Just a generation ago Portland was derided for its bland food, gangs and strip clubs. Now it seems to be on everyone's top places to live, work, and play including CNN Money, Moviemaker Magazine, Men's Journal, AARP, Men's Fitness, and in early 2008 Popular Science even called Portland the "Greenest city in the USA." Articles in the NY Times extol the virtues of Portland's hot restaurant and bicycling scenes.

    Most recent Portland population estimates peg Portland's population at 566,072 with the entire Portland/Vancouver metro area estimated at 2.16 million. Portland is the biggest city in Oregon; third in the Pacific Northwest after Vancouver, BC and Seattle, Washington.

    Portland's evolution has been a long time coming, but the past few years have seen the rise of incredibly popular compact, planned development in the Pearl District and South Waterfront while existing neighborhoods have had curb-appeal makeovers. About 60 blocks of downtown are currently undergoing street and storefront upgrades as the result of a new light rail line from the Amtrak/Union Train station to Portland State University. One of the more interesting new developments is the current installation of a KGW-TV satellite newsroom at Pioneer Courthouse Square. The newsroom will follow the concept of NBC's "Today Show" newsroom on Times Square. It is set to open this fall just steps away from "The Nines" -- a new 9-story 331-room hotel sitting atop the historic downtown Macy's.

    Old run-down areas of town once home to pawn shops and seedy bars are suddenly lively with light restaurants, wine and cocktail bars, brewpubs and a plethora of unique retailers. Changes have been most noticeable in North Mississippi, SE Division, NE Alberta St. -- with many others currently in the making.

    What caused all this? Likely a lot of things but the city's compact growth and the push to infill is largely the result of the state's urban growth management planning that began in the early 1980's.

    Despite the growth and energy that exudes from Portland as a result of its huge population of young people. Portland is one of the top destinations for America's 20-somethings. In 2006, Portland had the 4th highest net migration rate in the US. In that year alone, Portland gained nearly 12,000 adults aged 25-39 and another 12,000 55 and over.

    Despite these population increases in highly desirable demographics, rents remain lower in Portland than in Seattle or San Francisco. According to the US Housing & Urban Development (FY2008), a studio Apartment in averages $600 in Portland, $700 in Seattle and $1100 in San Francisco. A two-bedroom unit rents for $800 in Portland, $1000 in Seattle and $1,650 in San Francisco. While other West Coast Cities have become increasingly expensive, Portland has yet to catch up. As migration to the area continues to increase, rents will only increase. And that can only mean good news for today's apartment investors!

    Wednesday, September 3, 2008

    Oregon State Economist Predicts June 2009 as Recession's End

    Oregon's economist Tom Potiowsky predicted last week that Oregon's economy would remain stagnant until mid 2009 when it will begin a slow recovery.  State economists also predicted that Oregon's employment growth will be 1% in 2008 and another 1% in 2009.

    Thursday, August 28, 2008

    Taxes Now Withheld In Escrow on All Oregon Real Estate Sales

    While individuals living outside of Oregon have often skirted the law requiring payment of Oregon taxes on the sale of property, that loophole has recently been closed, as Miller Nash lawyer Jenee Gifford reports. 
    Read More > > >

    Apartment Market Remains Stable

    Multifamily data specialists RealFacts reported this week that the rental apartment market is a model of stability in an uncertain housing market. According to their latest statistics, rents are growing modestly, occupancy is unchanged and the rental apartment segment appears immune to the problems occurring in other housing sectors.

    Read the full story > > >

    Sweeping Changes Proposed For Portland's Landlord Tenant Ordinances

    Among other things, proposed sweeping changes to Portland's landlord ordinances would include a provision requiring all owners who rent even a single property to a tenant to obtain a business license. Previously owners who rented up to 9 units were exempt from the provision.

    Other proposed changes, put together over the past three months by a city task force dubbed the Quality Rental Housing Workgroup (QRHW) include (among others) the following requirements:


    • "Temporary" (no end date specified) $8-$10 per unit fee per year to help fund program start-up

    • Sets various levels of inspections. Initial inspections can be triggered by anonymous tenant complaints, social services, police or fire referrals, unit-specific exterior violations observed by a Neighborhood Inspections Team, or three years of unpaid property taxes

    • Requires landlords to send copies of all termination notices to a Neighborhood Inspection Team

    • Substantially increases fines for violations and they accumulate monthly until a problem is resolved. Fines range from $300-$500 per month by unit and if not resolved result in double and triple those amounts per month

    • Makes history of property violations permanently available to renters/general public (lenders, insurers, etc.) via Internet

    • Adds information on number of inspections, violations, status of remediation and enforcement (including appeals), inspection schedules, fees assessed and collected by property tax ID and by unit at each rental property, with information on ownership at the time of violations

    • Funds a full-time attorney to provide advice and representation to tenants living at or below 80% median family income

    These recommendations (and others) represent significant changes that will affect all rental unit owners! The draft recommendations were made available to the public on August 12, 2008 and the public hearing on the changes takes place on Wednesday, September 3rd at 6 p.m. (public testimony 7 p.m.) at the Multnomah County Building, Commission Room, located at 501 SE Hawthorne Blvd., in Portland.

    The workgroup draft document is currently 64 pages and is available online at the city of Portland’s web site at http://www.portlandonline.com/bhcd/index.cfm?c=48233.

    What is a CAP rate?

    by Tim O'Brien, HFO Investment Real Estate, as published in Units Magazine, a publication of the National Apartment Association.

    What is a CAP rate?

    A cap rate is simply the net operating income (NOI) of the property (before any debt service) divided by the price and it equates to a percentage rate of return if the investor were to purchase a property with no debt (all cash).

    Example: NOI = $100,000, Price $1,200,000 CAP rate = $100,000/$1,200,000. Result: Cap Rate = 8.3%.

    Supply and demand and the cost of debt are two factors that affect cap rates in a market place. The cap rate is one of the primary determinates of pricing for investment property and there is a direct correlation between market cap rates and current available interest rates for debt on investment property. When interest rates are lower than cap rates, we end up in what we call a positive leverage market; the more one borrows the higher the return on investment.

    When interest rates are greater than cap rates, the market is in a negative leverage scenario -- the more one borrows against a property the lower the rate of return is on the investment.

    It is also important to understand that the primary advantage of real estate over other investment types are leverage and tax advantages. Most real estate investors want leverage as much as possible because most advantages in owning real estate come with leverage. Like any other investment type, real estate is driven by supply and demand. Investors in real estate normally have a certain threshold of investment return they are willing to accept, depending on the asset and the current market.

    As interest rates decline and the cost to borrow decreases investors are willing to accept a lower rate of return on their cash because other investment vehicles offer lower returns.

    As interest rates decline, two market forces working to drive an increase in real estate prices: (1) Cap rates are decreasing with interest rates; and (2) Investors are willing to accept a lower rate of return on their money.

    Conversely, in a rising interest-rate environment, the opposite is true. When more options exist for investors to achieve a greater rate of return and the cost of debt increases, cap rates increase and reduce the price an investor is willing to pay for an asset.

    In conjunction with these effects, the market also plays an important role in cap and interest rates. The higher market demand is in a particular market, the lower cap rates tend to be.

    Lower cap rates have a positive affect on prices. Alternatively in a weaker market with lower demand, cap rates rise and values decrease.

    Wednesday, August 27, 2008

    Portland, Oregon / Vancouver, Washington Apartment Investment Market Compares Favorably to Cities Nationwide

    Q2 2008 statistics are in. Here's how the Portland/Vancouver MSA stacks up against 31 of the top metro areas: (data provided by RealFacts)

    BIGGEST GAINERS:
    Year Over Year Average Rent Change

    1. +10.4% Salt Lake City, UT
    2. +8.8% Tulsa, OK
    3. +8.3% Oklahoma City, OK
    4. +7.7% San Francisco, Oakland, Fremont, CA
    5. +7.4% Seattle-Tacoma-Bellevue, WA
    6. +7.3% San Jose-Sunnyvale-Santa Clara, CA
    7. +5.1% Portland-Beaverton OR, Vancouver WA

    Of the 31 top metro areas measured by RealFacts, only three showed a drop in rents - all of them in Florida.

    CURRENT AVERAGE OCCUPANCY
    Nation's highest by Percentage

    1. 96.3% San Jose, CA
    2. 95.8% San Francisco/Oakland, CA
    3. 95.5% San Diego/Carlsbad/San Marcos, CA
    4. 95.4% Tulsa, OK
    5. 95.2% Vallejo-Fairfield, CA
    6. 95.2% Fresno
    7. 95.1% Seattle/Tacoma, WA
    8. 95.1% Salt Lake City, UT
    9. 94.7% Portland / Beaverton OR, Vancouver, WA

    Tuesday, August 26, 2008

    Sales Flow Through Multifamily Sector as Others Dry Up

    Although sales in all property types have slowed, multifamily sales haven't fared as poorly as other commercial and residential categories, according to Commercial Property News.

    In its August edition, CPN reports that because of solid fundamentals, a relatively small size, and government-sponsored entities' purchase of residential loans, multifamily is being protected from the problems in the credit market.

    Real Capital Analytics Inc. reported that year over year apartment sales fell from 2007-2008 as follows:

    Loan Range Jan-May 2007 vs. 2008
    $5-$10 million down 43.73%
    $10-$30 million down 37.58%
    $30-$50 million down 38.92%
    $50 million+ down 63.78%

    Fannie Mae and Freddie Mac have increased their spending in the paartment market, keeping sales liquid in spite of industry problems.

    Experts in the Multifamily Market say they "have the least negative outlook" for multi-family compared with other property types.

    Oregon's Multifamily Housing Market Offers Opportunities

    The Portland Business Journal reports that "Being a multifamily housing investor is good work if you can get it."

    In a special section story, Sean Meyers writes "Multifamily properties are profitable in western Oregon and sellers are holding on tight."

    "The key to breaking into the current market is to have financing lined up and ready to go when a good buying opportunity presents itself. That means providing actual rental income history from a targeted property rather than an average of the comparable market."

    Although not yet available online, the full story is available in the "How to Book" pullout section published August 15th.

    Monday, August 25, 2008

    Good News for Financing Oregon and Washington Multifamily Investments

    The Multi-Housing News and Commercial Property News report that while stockholder values may be falling at Fannie Mae and Freddic Mac, these stabilizing entities rank among the biggest lenders to multifamily acquisitions and development and are expected to remain regardless of their problems with subprime mortgages.

    Read the full story > > >

    Oregon Investment Property for Sale: Price Reduced

    The listing price on the Park Place & Lomita West Apartments is reduced to $5,425,000. This is a very clean, turnkey property with 6.65% CAP rate and the price per unit is $61,648. For details visit the detailed listing page which has a link to the full marketing flyer.

    Wall Street Journal Reports Apartment Sales Pick Up in Second Quarter

    The Wall Street Journal reported this week that as apartment prices have declined, sales activity has been on the increase. The Journal cites Real Capital Analytics' recent statistics indicating that June sales were "well above" recent months' figures, with $5.5 billion already having closed or in contract in the third quarter compared with $8.7 billion in sales in the second quarter.

    Apartment-building sales already were far outpacing deals involving other commercial property, such as office buildings and strip malls with the availability of credit from government-sponsored Fannie Mae and Freddie Mac helping to buoy new deals.

    Last month, Fannie Mae announced month that it would increase its commitment to buy loans on multifamily housing of up to $5 million to provide additional liquidity for rental housing. From January-June, Fannie said it invested $20 billion in multifamily housing.

    Even with sales doing better than in other sectors, job losses in many cities have recently reduced the ability to raise rents and other renters are sharing apartments or moving in with family members. [Ed. note: the article reflects the nationwide trend, not necessarily that of Portland, where vacancy rates -- so far -- have declined, remaining relatively low at around 4%.]

    Read the full article > > >

    Portland's Ione Plaza Resurrected as The Vue Apartments

    Portland's first high-rise apartment building was Ione Plaza. The 15-story building originally opened in 1951. Located at 1717 SW Park Avenue, the complex has been completely remodeled and recently reopened as The Vue. This 307-unit building has the following unit mix:

    Studios 388-sq. ft. renting from $730-$800
    1 bedroom 1-bath units of 568 sq. ft. renting from $920-$1,135
    2-bedroom 1-bath units with 725 sq. ft. renting from $1,240-$1,800
    3-bedroom 2-bath penthouses, 1,664 Sq. ft. $4,000

    The Oregonian reports that the Vue's renovation comes "at a tumultous moment in the downtown housing market" amid the recent conversion of an estimated 1,200 apartments to condos. Read the full article > > >

    Thursday, August 21, 2008

    Washington Landlord Tenant Laws for 2008 Available for Download

    The State of Washington makes its Landlord/Tenant law booklet available for downloading here at the web site of the Washington State Attorney General.

    Multifamily Owners Should Review the 2008 Landlord and Tenant Laws of Oregon

    The State of Oregon now has available the latest edition of the Landlord and Tenant Laws of Oregon. Cost is $26.

    The Effect of Immigrants and Immigration on Apartment Rentals in Oregon and Across the Nation

    This week's Sandy Post carried an article revealing that since February, the number of Latino immigrants taking driving tests at Oregon DMV's have plummeted; the likely result of a new law requiring more proof of identification to get a driver's license.

    It's estimated that Oregon has between 120,000 and 170,000 undocumented workers. Recently, the Apartment Manager Newsletter carried an article arguing that this new law, which will have its largest impact between 2011 and 2014, may result in the loss of rent for 30,000 Oregon apartment units.

    On the national level, some cities and states have gone as far as enacting legislation fining landlords for housing undocumented immigrants. Multifamily Executive magazine discussed some of these issues in a recent article called The Immigrant Experience. The article covers the national debate about the effect of the Hispanic immigrant demographic on rental housing. Among other things, the article states: (a) illegal immigrants will become a larger percentage of renters as 102.6 million immigrants are expected to arrive between now and 2050; (b) new state document requirements will adversely affect operations; and (c) immigrants can sometimes become a target for crime because they deal largely in cash.

    Some believe Oregon's legislation may encourage undocumented workers to go home or to other states. For example, when Arizona and Oklahoma enacted tougher laws regarding immigrants, many of them simply moved to Texas.

    Portland Apartment Owners Face Revised Rental Housing Standards

    The City of Portland's Quality Rental Housing Workgroup's draft recommendations were the subject of an article in Portland's Daily Journal of Commerce on Wednesday, August 20th. Read The Article.

    Thursday, August 14, 2008

    Portland Quality Rental Housing Workgroup Releases Draft Recommendations for Multifamily housing Code Revisions Re: Apartment Health and Safety Issues

    The Portland Quality Rental Housing Workgroup (QRHW) has released its draft recommendations for ensuring that rental housing is maintained by both tenants and landlords for the purpose of ensuring safe and healthy rental housing.

    The draft recommendations were approved July 22, 2008, were posted online August 12th and a public hearing on the draft recommendations will be held September 3rd. The entire 50-page summary document is available for review online.

    These draft recommendations contain some important positive and negative things for owners of property within the Portland City Limits. Because there is only a brief amount of time prior to the public hearing, rental owners should download and read for themselves the entire list of recommendations. PUBLIC COMMENT IS AVAILABLE ONLINE OR AT THE PUBLIC HEARING ON SEPTEMBER 3rd.

    After receiving public comment, the workgroup will vote September 22, 2008 on the package of recommendations that will be forwarded to City Council for approval in early October 2008.

    Public Comment
    There are several ways for organizations or individuals to provide comment on the Workgroup recommendations.

    The public hearing on these draft recommendations will take place:
    Wednesday, September 3, 2008
    6:00 pm (7:00 public testimony)
    Multnomah County Building, Commission Room
    501 SE Hawthorne Blvd.
    Portland, Oregon

    Public testimony is open to all and is limited to three minutes per person. Individuals wishing to testify will need to sign up upon arrival. Forms for written comment will also be provided. The hearing will be audio taped and a transcription will be made available.

    Additionally, comments can be provided using the online form found at
    http://www.portlandonline.com/bhcd/index.cfm?c=48233&a=207137

    For additional information or if you are having problems viewing or downloading the workgroup recommendations, please contact Andrea Matthiessen at (503) 823-2379 or amatthiessen@ci.portland.or.us.

    Tuesday, August 12, 2008

    HFO Investment Real Estate announces charitable Giving Program Recipients through June 30, 2008

    The HFO charitable contributions/client appreciation program for the first and second quarters of 2008 resulted in contributions to the following organizations:

  • Alzheimer’s Association
  • Blind Children’s Center
  • Chabad Lubavich of Clark County
  • Children’s Cancer Association
  • Cleveland High School Foundation
  • Community Partners for Affordable Housing
  • Habitat for Humanity
  • Jesuit High Diversity Club
  • Jesuit High Scholarship Fund
  • Lance Armstrong Foundation
  • Marion-Polk Food Share
  • Mission Emanuel
  • Portland Rescue Mission
  • Relay for Life – West Clark County
  • Susan G. Komen for the Cure
  • Union Gospel Mission
  • University of Portland
  • Vovinam Martial Arts of Salem
  • Wallace Medical Concern
  • West Hills Christian School Foundation

  • Hagerman Frick O'Brien (HFO) Investment Real Estate is pleased to support the charitable causes of our clients. For information about our apartment / multifamily investment opportunities in the Portland metro area, as well as throughout Oregon and Vancouver, Washington, visit our web site at http://www.hfore.com.

    Thursday, July 31, 2008

    Renter Survey Shows 70% of Renters Start Search For Apartments Online

    A new survey commissioned by mynewplace.com revealed that more than 70 percent of renters who are looking for a new apartment start their search online. Managers are reporting that more than half of their lease and lead activity is coming from online sources. If you're not advertising your property online, you're missing the boat.

    Maximizing the effectiveness of online listings requires including photographs of the building, units, and floor plans, as well as detailed rent information. Listings that are missing any of this information - especially photographs - will generate significantly fewer leads and fewer leases, according to the report.

    Read the full story.

    Wednesday, July 23, 2008

    The Most Requested Multifamily Amenities

    The Multi-Housing News reported in its article "What Do Renters Really Want?" that the web search portal Apartment Guide tracked the most popular amenities searched over a three-month period. The amenities consumers searched most often for on its web site were (in this order):

    1. Washer and dryer in unit
    2. Air conditioning
    3. Pets welcome
    4. Dishwasher
    5. Washer/dryer hookups
    6. Cable ready
    7. Utilities included
    8. Balcony
    9. Swimming pool
    10. Ceiling fans
    11. On-site fitness center

    ApartmentGuide.com reports that it serves roughly 1.58 million visitors each month.

    Read the entire article online at Multi-housingnews.com.

    Multi-Family Sector Providing Options as U.S. Economy Shudders

    In a recent Commercial Property News, writer Adam Perrotta reported that: "Buoyed by a growing rental pool, limited new construction and the purging of many high-leverage players from the investment scene" multifamily properties continue to draw interest from investors. According to Perrotta, the credit crunch may have driven many smaller, more credit-reliant investors out of the sandbox, leaving larger, well-capitalized buyers to benefit from the diminished competition.

    Wednesday, July 16, 2008

    Lending in Today's Multifamily Market: How to Position Your Apartment Property for Maximum Value

    At the HFO Investor Roundtable in June, Marcia Upton, CEO of Banker's Mutual, presented an update on the current lending market, with information on how to position your multifamily property for maximum value.



    If you are an investor in Oregon and Washington multifamily properties and would like to receive an invitation to the next HFO Investor Roundtable, please send an e-mail with your name, mailing address and telephone number to service@hfore.com. One of our brokers will contact you to confirm your addition to our mailing list.

    City of Portland Apartment Inspection Program a/k/a Quality Rental Housing Workgroup (QRHW)

    At HFO's recent Roundtable, Andrea Matthiessen -- program coordinator for the City of Portland's Bureau of Housing and Community Development and staff to the Quality Rental Housing Work Group -- gave an update on the workgroup’s activities.

    The rental housing workgroup is made up of various stakeholders in the community and has been meeting regularly to explore ways to improve and integrate the city’s various systems of inspection and enforcement. Its goal is to come up with a proposed solution for adoption by the Portland City Council this summer.

    Timelines:
    Mid-July: Workgroup vote on DRAFT recommendations
    September 3: HCDC Public Forum
    September 18: Workgroup vote on FINAL recommendations
    October: Present final report to Portland City Council
    Learn More > > >