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.

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.

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.