Wednesday, December 23, 2009

Price Reduced to $525,000 on 7-Plex in NE Portland #pdx #realestate #investment

Price has just been reduced on this 1975 7-plex in NE Portland. The building has five 2-bedroom 1-bath units of approximately 800 square feet and two 3-bedroom 2-bath units of approximately 950 square feet. The Metro Multifamily Housing Association's most recent survey indicated NE Portland had the third highest rent per square foot in the Portland metro area, with an average vacancy rate.

Please Do Not Disturb Tenants or On-Site Manager. For additional information about this property click here.

Tuesday, December 22, 2009

Metro Looking for Comments on New Urban Growth Map

The Metro Regional Government is looking for public comment on it's new map for urban and rural reserves.  This past week Metro staff uploaded this new map for public comment. Explanatory information about the map can be found at this section of the Metro website where you can sign up to get involved and read about public comment participation. In early 2010, you will have an opportunity to attend public open houses to view maps, learn about the rationale behind the boundary lines and read the intergovernmental agreements that will formally establish the reserves system.

Final maps and inter-governmental agreements are expected to be approved in February, 2010.

Apartment Security Amenities and Portland's New Crime Alert E-Mail System

According to an ongoing Apartments.com survey, 96 percent of respondents to a national survey said neighborhood crime rates influence where they choose to live. Not surprisingly, most renter survey respondents stated violent crimes including assault, battery, theft, and burglary concern them most. To protect themselves, renters are acting responsibly including keeping strangers out of the apartment community and are even willing to pay more in rent to live where they feel secure.

This year's survey revealed that renters are not feeling as safe as they have in previous years. There was a 12% drop in the number of renters who say they feel extremely to moderately safe living in their current neighborhood, to 66% from 78% in 2006. 

The city of Portland has recently unveiled its CrimeMapper2 notification system. This system allows users to obtain a monthly e-mail with a summary of crimes reported around a specific address or location within the City of Portland. CrimeMapper2 e-mail notifications is an easy and convenient way to track crimes that have occurred around a home or business. Notifications are sent monthly, soon after the CrimeMapper database has been updated. Subscribers can update their e-mail address, choose a different location, select different crimes, or stop receiving notifications at any time.

In addition to increasingly taking safety matters into their own hands, renters are looking for and willing to pay more rent for specific safety features. The top five safety features renters said they would pay more to have, when asked to choose all that apply, are:

  • In-unit security alarm system: 49%
  • 24/7 building security patrol guards and a doorman: 45%
  • Security cameras on the apartment community property: 42%
  • Mandatory background screening for all residents: 30%
  • Cylinder deadbolt locks on windows and doors: 29%
Many professionally managed apartment communities and private landlords are doing their part to keep renters’ minds at easy by providing peepholes on apartment doors, securing windows and doors with locks and running background checks on potential residents.

Wishing you and your renters a safe and happy holiday season.

M&T Bank Joins HFO as Third Event Sponsor and Content Provider For 2010

HFO is pleased to announce that M&T Bank has joined as a sponsor for HFO's Investor Roundtables and as a content provider for our newsletter and blog updates. Watch this space for financial updates of interest to apartment investors.

Key contacts at M&T Bank are Tom Wiley with M&T Real Estate Trust (503.603.2116) and Joe DeCarlo, (503.603.2115) with M & T Realty Capital Corp. Learn more at http://www.mtb.com/.

Thursday, December 17, 2009

Wells Fargo Economics Group: "Leading Indicators Show Recovery Underway"

In its report out today, Wells Fargo said that while there hasn't been much job growth in the recovery so far, this eighth consecutive monthly gain in the Leading Index was driven by signs of improvement in the job market, and indications that employers will gradually start hiring by Q2 2010.

Meanwhile, the Coincident Index*, which has been roughly flat since summer, increased 0.2 percent this month and has moved back into positive territory for the first time since the outset of the recession.

(*Coincident indicators are those which change at approximately the same time as the whole economy, providing information about the current state of the economy. Personal income, GDP, industrial production and retail sales are coincident indicators.)

USI Northwest Insurance Joins HFO as 2010 Event and Content Partner

HFO is pleased to announce that USI Northwest Insurance has joined as a sponsor for HFO's Investor Roundtables and as a content provider for newsletters and blog updates. Watch this space for insurance updates of interest to apartment investors.

Feel free to contact USI Vice Presidents Matt Hennessey (503.417.9474) or Ted Stark (503.224.8390) with your insurance-related questions.  More information at http://www.usi.biz/.

Monday, December 7, 2009

Portland Ranked in Top Three - Greatest Improvement in Effective Rent Q3 2009

The real estate research firm REIS reported that the national vacancy rate reached 7.8% in the 3rd quarter 2009.  We noted earlier that the Portland metro vacancy rate of 5.1% is the third lowest in the nation.

REIS reports that vacancy rates decreased in 26 of the top 79 markets that it tracks and increased in 42 markets.  Nationally, effective rents fell 0.3 from Q2 to Q3 but Portland tied for #3 with Atlanta, Georgia for improvements in effective rent.

Greatest Improvement in Effective Rent
    1. Long Island, NY & Colorado Springs, CO (tie) +1.6%
    2. Pittsburgh, PA - +1.4%
    3. Atlanta, GA & Portland, Ore (tie) +0.9%
Greatest Declines in Effective Rent Q3
    1. Tacoma, WA - down 1.9%
    2. San Jose, CA - down 1.6%
    3. Orange County, CA - down 1.4%
    4. Richmond, VA - down 1.3%
    5. Ventura County - down 1.2%

Wednesday, December 2, 2009

Despite increased job losses, the University of Oregon Index of Economic Indicators shows Oregon's recession is over

The Portland Business Journal reports today that the recent behavior of the UO Index remains consistent with the end of the recession in Oregon, said Tim Duy, director of the Oregon Economic Forum and a UO adjunct assistant professor.

Read more > > >

Barclays: Wealthy Investors Call Market Bottom, Show Faith In Real Estate

In its latest "Wealth Insight Report" released this week, Barclays declared that global investors remain loyal to property as an asset class.

Barclays Wealth, the leading global wealth manager published this new global report which - for the first time since the start of the recession - reveals wealthy investors' attitudes towards residential and commercial property investment.

The report reveals renewed confidence in residential and commercial property:

  • Twice as many investors (35%) set to increase property allocation than decrease (17%) over next two years
  • Investor perception of property as an undervalued asset class and belief in better returns than other asset classes
  • Significant difference between property investment approach taken by men and women
Read more > > >

Tuesday, December 1, 2009

Multifamily Brightest Commercial Real Estate Investment for 2010, Report Says

The nonprofit Urban Land Institute and PricewaterhouseCoopers LLP have released the report "Emerging Trends in Real Estate 2010." This 76 page report on commercial real estate includes these highlights:
  • Multifamily "is the only place with a hint of hope, because of demographic demand. Scarce construction sets the stage for a strong rebound in any economic turnaround. There could be a shortage of apartments by 2012.(p. 12)
  • Portland ranks among the top US markets to watch for multifamily investment.(p. 28)
  • Multifamily ranks as the top prospect for real estate investment in 2010 (p. 41)
  • Pent up demand grows for apartments. Twenty-somethings who moved back in out of necessity want out of parents homes as soon as employment prospects improve. This huge generation Y cohort of young adults should be avid renters as they delay marriage and kids to build careers. (p. 43)
  • On the supply side, the apartment development pipeline will run dry. (p.43)
  • Multifamily investments historically provide the best risk-adjusted returns among property types - and current market experience reinforces investor views of the sector's relative resiliency.  (p. 45)
Download the full report free.

U.S. Census Bureau Ranks Portland / Vancouver / Beaverton Market 3rd Lowest in Rental Vacancy Rates

The U.S. Census Bureau has reported 3rd quarter vacancy rate estimates for the top 75 U.S. Metropolitan Statistical Areas (MSAs). The Portland/ Vancouver/ Beaverton area ranked as having the nation's third lowest vacancy rate. 

Lowest vacancy rates were reported as follows:

  • Springfield, MA 1.8%
  • Grand Rapids-Wyoming, MI 4.5%
  • Portland-Vancouver-Beaverton, OR-WA 5.1%
  • Nashville-Davidson-Murfreesboro, TN 5.7%
  • New York-Northern New Jersey-Long Island, NY 6.1%
  • Oxnard-Thousand Oaks-Ventura, CA 6.1%
  • Providence-New Bedford-Fall River RI-MA 6.4%
  • Boston-Cambridge-Quincy, MA-NH 6.7%
  • New Haven-Milford, CT 7.1%
  • Virginia Beach-Norfolk-Newport News, VA 7.1%
  • Los Angeles-Long Beach-Santa Ana, CA 7.2%
 The MSA's with the five highest vacancy rates were as follows:
  • Orlando, FL 28.1%
  • Memphis, TN-AR-MS 26.0%
  • New Orleans-Metairie-Kenner, LA 21.3%
  • Greensboro-High Point, NC 19.9%
  • Richmond, VA 19.7%
Read the full report online.

Monday, November 30, 2009

Some Multifamily Developers Resume Construction

The city of Portland has approved a six-story apartment project that will bring 138 affordable apartments to the Pearl District.
The $53.3 million Pearl Family Apartment project will be constructed at 1550 N.W. 14th Ave. The project is in the River District urban renewal area and will receive a 60-year low-interest loan of $19 million. Walsh Construction will build the project with developer Ed McNamara.

Meanwhile, REITS are preparing digs for mid 2010 in several areas of the country. Read More > > >

Friday, November 27, 2009

Experts Warn Apartment Owners to Protect Tenants' Identities

The National Multifamily Housing Council conference included a panel discussing the importance of safeguarding sensitive tenant information against identity theft.  It was estimated that the average breach of data costs a multifamily operator $830,000 to mitigate. 

Read More > > >

Tuesday, November 24, 2009

This Thanksgiving: Why I'm Thankful I Still Think Like an Investor

by Dwight Unti, CPM
(used with permission; edited for brevity)

After nearly 30 years of apartment development, investment and management I'm wondering why I still fall into the old trap of letting current economic circumstances affect my judgment about the long term, intrinsic value of apartment investments. Am I slipping in discipline and focus or are my defenses just not sufficient to thwart the volume and speed of negative information currently spewing forth about capital markets, real estate values, cash flow, vacancies and other apparent measurements of doom?

Unfortunately, I'm having a hard time fighting the feeling that I should just dump all my apartment investments. I mean apparently they've dropped in value along with everything else and according to some prognosticators they may just fall a lot further.
Oh, I know they still produce excellent cash flow and tax shelter, but who cares about minor stuff like that anymore? Haven't you heard, all real estate has plummeted and no longer offers much in the way of real value?
You see what's happening to me don't you? I'm letting current economic circumstances cause me to stop thinking like an investor and start thinking more like a banker or appraiser. It's a condition where you start to judge everything up ahead by what you see immediately behind. A little like walking down the sidewalk with your head partially turned backwards - as if someone is sneaking up on you. No wonder bankers and appraisers are a bit frightened these days - I would be too.

Okay, I'm being somewhat facetious, but my observation does seem to have some merit based on real world experience. Let's start with lenders. The buildings they once coveted as quality security for loans are now viewed as some sort of liability rather than asset. Traditional lender guidelines about vacancy rates, expenses per unit, debt coverage ratios and loan-to-values, all completely acceptable just a short time ago, are now entirely unacceptable. Where are they looking to reach this conclusion? They're looking back down the sidewalk. What they see immediately behind are increases in vacancy, rent concessions and soft economic conditions. Using this data and the look behind approach, they readily conclude apartment values are trending down for the foreseeable future. Oops, delete the word "foreseeable" - that's not allowed when living by the "look immediately behind" theory. Values are down and that's all you need to know.

Plenty of appraisers are also apparently on board with the "look immediately behind" theory. I suppose I can partially excuse appraisers for this practice because when you look at what they're charged to do and how they are told to do it -- it's pretty hard for them to look anywhere else. One thing is for certain, appraisers are under pressure from lenders to confirm they aren't overvaluing assets. The result is many have taken to carefully documenting downward trends. It's not hard to do when looking immediately behind. Just take the very few and mostly distressed sales over the past year and measure how far they've fallen from the over-inflated and mostly unrealistic values two years ago.

Boy, you get a good looking downward trend line when you go through that exercise. Now just apply the downward trend to all known apartment investments. Sometimes the process even produces humorous results. For example, by applying this approach, the same appraisers who two years ago concluded their clients were sitting on a gold mine of apartment investments now conclude their clients are sitting on empty mine shafts which are about to collapse!

Honestly, the speed at which apartment values have been revalued over the past several years is a fascination. It's been more like watching the stock market than a traditional real estate market. You know what I mean - up 20% this year, down 30% the next year. And much of this occurs without logical explanation and despite the fact the underlying investment chugs along producing a consistent net operating income. It seems the only difference lately between my stock broker and some appraisers is my stock broker always tries to make me feel better about a loss. True, my stock broker often resorts to a convoluted and nonsensical explanation for the loss, but I appreciate the effort and it can be quite entertaining. Appraisers, on the other hand, have become much drier and don't even attempt to explain away the pain. I've concluded it's more fun talking with my stock broker.

When I fight back against the slippage into banker/appraiser thought patterns and start thinking like an investor again, it brings up the strangest observations.
For example, did you know that demographic data indicates a surge of people will be entering their 20's in the next few years? As I recall, aren't those the same people who often rent? And what about the growing population of elderly who are choosing, with ever greater frequency, to exit ownership and seek low maintenance rental housing? Or how about the fact that few people are buying homes and it may take a generation for home buying confidence to return? And let's not forget the growing immigrant population and the positive impact it has on rental demand. Lastly, has anyone noticed that nothing new is being built and the supply of apartments will soon fall far short of demand? Doesn't this sound like the basis for an upward trend in apartment values, not down?
  • Why is it so few apartment sales are occurring?
  • Is it really caused by the lack of financing, distress in the capital markets and/or softness in the economy?
  • Is there an absence of buyers or is it more about an absence of sellers?
  • Could it be that apartment owners are simply refusing to part with their assets because they actually think they're worth something?
  • Are apartments really in a long downward value spiral as current and "look behind" theory would suggest?
  • Is there another answer that I just can't see because of the influence of too much coffee?
What are Joe Weston or Paul Labby doing? They're very smart, experienced and more often right than wrong abou the direction of the apartment market. So what are these fellows up to these days? From what I can tell they seem to be calmly holding to their apartment assets and looking to acquire more. I'll be darned they're thinking like investors, looking ahead and liking what they see. Hmm, maybe these apartment investments have some value after all.

Note to my dear friends in the finance and appraisal business. You guys are the best and I mean that, but things are getting a little out of hand. Rest assured, apartments remain an excellent investment and are only going to get stronger over the years ahead. It's now time to get moving again, not with free money or inflated appraisals, but with sound and reasoned underwriting and quality appraisals based on realistic market trends.

Dwight Unti, CPM is President of Tokola Properties, a real estate development, construction and property management company focused on multifamily and mixed-use development in Oregon and Washington. Mr. Unti is a Past President of the Columbia River chapter of the Institute of Real Estate Management and past board member of the Metro Multifamily Housing council.

Friday, November 20, 2009

Own a Vancouver apartment building? Here's a tip for keeping expenses down in 2010

In the November issue of the Clark County Rental Association newsletter, president Lyn Ayers points out that the City of Vancouver uses the months of December and January to determine the water/sewer charges for apartments. Owners should check all units in the next 30 days to ensure drips and leaks are shut off to avoid paying all year for those problems!

If you own an apartment building in the Clark County area and would like to learn more about the Clark County Rental Association and the benefits of joining, visit www.clarkcountyrentalassociation.org.

Thursday, November 19, 2009

Washington State Apartment Owners Free to Harvest Rooftop Rainwater


The Washington State Department of Ecology clarified its rules on water harvesting in October when it said that building owners no longer have to acquire a permit to harvest store or reuse rainwater from rooftops. 

Learn more about rooftop rainwater harvesting.

Increased Apartment Loan Losses at Fannie Mae and Freddie Mac

The Wall Street Journal reports that the delinquency rate for Fannie Mae's apartment loan portfolio is on the rise.  Delinquencies increased from 0.16% in Sept. 2008 to 0.62% in September 2009.

Fannie and Freddie increased their apartment lending from 34% of the market in 2006 to 84% in 2008. About one fourth of all loans on Fannie's books were made at the top of the market in 2007. Even though losses from Fannie and Freddie's $300 billion apartment loans pale in comparison to their losses on loans for single-family residences, some critics of the agencies say the firms were too aggressive with their apartment lending.  The firms generally deny this charge, citing the fact that 97% of Freddie-backed properties are still worth more than the value of underlying loans.

Various proposals to revamp Freddie and Fannie haven't paid much attention to multifamily lending.  Industry leaders aren't worried, saying it's highly unlikely the government would take any position that would negatively impact affordable housing.

Read the full story > > >

Wednesday, November 11, 2009

National Multi Housing Council survey shows 3rd quarter improvements

According to the National Multi Housing Council, 3rd quarter sales were up and the market offered easier access to debt and equity capital.

Read the full story > > >

Portland #37 of 200 on "Top Performing Cities" list

The Portland area ranks No. 37 out of 200 large U.S. metro areas in the Milken Institute's annual report on the nation's "best performing" cities.

Portland-Beaverton-Vancouver area ranked No. 28 last year.

Download the full Milken Report here > > >

Monday, November 9, 2009

Glimmers of hope in the apartment market as 3rd quarter volume picks up

Apartment Finance Today reports apartment transactions in September totaled more than $1.5 billion, nearly double the $830 million closed in August. Overall, sales were up 12 percent in the third quarter compared to the second quarter, with more than $3.5 billion in assets changing hands.

Full story > > >

Friday, November 6, 2009

Downtown Portland vacancy rate drops by half to 2.3%

The Metro Multifamily Housing Association reports that overall vacancy rates in the Portland metro area trended downward from 5.2 to 5.9% over the past six months. But not every area of the metropolitan area is negatively affected, however.

 
Areas with vacancy rates trending lower the last six months include
  • NW Portland
  • Downtown Portland
  • Beaverton
  • Tigard/Tualatin/Sherwood
  • Wilsonville/Canby
  • Outer NE Portland
  • Inner & Central NE Portland
Areas with vacancy rates trending upward in the last six months:
  • Hillsboro
  • Aloha
  • SW Portland
  • Lake Oswego/West Linn
  • Oregon City/Gladstone
  • Milwaukie
  • Clackamas
  • Inner & Central SE Portland
  • Outer SE Portland
  • Troutdale/Gresham/Wood Village/Fairview
  • North Portland/St. Johns
  • Vancouver

Thursday, November 5, 2009

Apartment buildings near colleges and universities near capacity

Portland State University has about 1,400 more students in 2009 than the 26,500+ recorded in 2008. Projections call for enrollment at PSU is to increase nearly 30% to 36,000 students in just a few years.



Meanwhile, Portland Community College enrollment this fall grew by 15%, putting the number of students enrolled there over the 40,000 mark.

Facts:
  • Neither of these schools provide much on-campus housing. 
  • Students tend to look for housing within a mile of campus.
In Eugene, the University of Oregon's increased enrollment has spurred on development of new complexes, and even with these new apartments the vacancy rate in Eugene dropped 21% to 4.2% from six months earlier.

In Corvallis, Oregon State University's enrollment is up over 1,500 students and with over 80% of students living off campus vacancies in that city have dropped to under 1.5% within a mile of campus.

To top it off, virtually no new apartment projects are scheduled to be constructed in the south valley for the next couple of years.

National apartment vacancy rates: research companies provide conflicting reports

Multifamily Executive reports that there are conflicting reports from the research companies REIS (based in NYC) and RealFacts (based in California) as to whether apartment vacancies are going up or down and what future trends will be.  Read the full story.

Wednesday, November 4, 2009

Decision time fast approaching for Portland metro area urban and rural reserves

The Portland metro area is getting closer to setting the limits of where it will grow over the next 40-50 years.  This past year, Metro has been working with the tri-county governments to identify urban and rural reserves. 

Later this fall these government entities are to have intergovernmental agreements in place next month that will allow the counties to move forward to amend their comprehensive plans and other land use documents to implement those reserves. 

The final milestone in which Metro designates the urban reserves and counties designate their rural reserves is expected in May, 2010.

Read the full article by Miller Nash lawyer Kelly Hossaini.

City of Portland Ecoroofs Incentive Program Deadline is December 1st

The City of Portland Environmental Services is accepting applications from property owners and developers for incentives to construct ecoroofs until December 1, 2009. 

Ecoroofs are lightweight, vegetated roof systems that replace conventional roofs with a layer of foliage over a growing medium on top of a waterproof membrane. They are part of Portland's stormwater management program. There are currently 173 ecoroofs in Portland, totaling nearly 10 acres.

Funds will be available until 2013; all types of projects are eligible. An Environmental services commtitee reviews applications twice each year and awards incentives.

To find out more, or to apply for the incentive, visit: www.portlandonline.com/ecoroof or call 503-823-7914.

Tuesday, October 27, 2009

Fire Prevention in Rentals A Hot Topic of Discussion

Concern over the frequency of fires in rental units and the impact on tenants' lives led to the Vancouver-Clark County Fire Department holding a workshop on fire prevention in rentals. 

Most common causes of tenant fires are related to tenant carelessness such as (a) stove burners left on (b) smoking (c) candles. 

At the very least, rental owners can require that tenants carry renters' insurance. They can also ban smoking in units.

Monday, October 26, 2009

LED Lighting a Good Alternative to Incandescents for Apartment Complexes

LED Lights are coming out of the dark!  According to the latest issue of Multifamily Executive magazine, light-emitting diodes or LEDs are just as energy-efficient as compact flourescent light (CFL) without  hazardous materials like mercury.  A 7-watt LED bulb can replace a 75-watt incandescent bulb and lasts 20 times longer than an candandescent and up to 6x longer than a CFL bulb.

LEDs are appropriate for common spaces and hallways, structures and interior use.  Read More > > >

Thursday, October 22, 2009

Act Now! Oregonians Have Until Nov. 19th To Take Advantage of Taxpayer Amnesty

Taxpayers with a tax deficiency and flying under the radar of the Oregon Department of Revenue were given a break when Governor Kulongoski signed Senate Bill 880 on July 15, 2009. The new law created a voluntary tax amnesty program for Oregon individuals and corporations with tax deficiencies resulting from unfiled or underpaid tax returns. The program's goal is to provide incentives to delinquent taxpayers to move forward, resolve their outstanding tax obligations, and provide for future compliance with state tax laws. Eligible taxes include corporate income and excise tax, personal income tax, inheritance tax, and Lane and Tri-Met Transit District self-employment taxes for all tax years prior to 2008.

The deadline for filing is November 19, 2009.
Read More > > >

More About Miller Nash Tax Group

Leading Economic Index Posts Another Gain

In a report issued today, the Wells Fargo Economics Group reports that the Leading Economic Index increased for the sixth straight month in September in the latest affirmation that the economy has shifted gears from recession to slow recovery.
The LEI has posted gains for six straight months and suggests the recent recovery will likely continue.
Along with low short-term interest rates, a key driver of the gain in the LEI is a recovery in consumer expectations. So far, expectations are recovering faster than consumers’ assessment of the present situation. Recovery in consumer spending will require improvement in the present situation as well.

Thursday, October 15, 2009

Since 2006, Thousands More Portland Area Apartments Become Smokefree



A recent Portland/Vancouver renter survey conducted by the Smokefree Housing Project projects that the number of rental units covered by a no-smoking policy increased by 13,000 rental units from 2006 to 2009. A total of 22% of tenants surveyed reported that smoking inside their units was prohibited. Among other things the study found:
  • 76% of renters say they rarely or never experience secondhand smoke in their homes, up from 70% in 2006
  • 75% of all metro-area renters prefer a smokefree environment 
  • 50% reported they would choose a rental community with a no-smoking rule even if they had to pay more or compromise on things like location
  • The 2009 study reconfirmed findings from 2006 - renters with incomes of less than $35,000 were just as likely as those with higher incomes to reject the idea of living next door to tenants who do smoke
Effective January 1, 2010 a new law in Oregon will require landlords to disclose their smoking policy to tenants in rental agreements.

Information on smokefree housing is available from http://www.smokefreehousingnw.com/, a partnership between the American Lung Association in Oregon and the health departments of Multnomah, Washington, Clackamas and Clark Counties.

Monday, October 12, 2009

Oregon Jobless Rate Eases from 12% to 11.5% in September

The Oregon employment Department reports September showed a gain of 1,500 jobs in September for professional and business services to lead a significant increase in hiring. See details.

MSN Article Points To Portland's Coolness Factor in Drawing Renter-Aged Youth


Last week MSN published a story highlighting the experts' rankings of Portland as a Youth Magnet city and commented on the residential market.

"For the mobile youth of today, home is often where they make it. But with unemployment at a five-year-high nationwide, recent college graduates and other young workers need to carefully weigh the fun factor with the job market before deciding where to make their new home."

Recently, Portland's buy-to-rent ratio put it #1 in US cities where it makes more sense to rent than to buy, which is great news for apartment owners.

To see the full MSN article, click here.

Thursday, October 8, 2009

HFO Brokers Announce Multifamily Apartment Sales Totaling $2.5 Million in NE Portland and Beaverton

PORTLAND, Ore.-- HFO Investment Real Estate, a Northwest real estate investment firm with headquarters in Portland, Ore., has arranged the sale of the 38-unit Highlander Apartments in SE Portland for $1.62 million. The buyer used a HUD loan to finance the purchase and a planned major upgrade at the property. The buyer was RCD Acquisitions of Irvine, CA and the seller was Carlson Trust of Portland. HFO Investment Real Estate brokers represented the parties.

The 6th Avenue West Apartments located in Beaverton have sold for $900,000 or $56,250 per unit. Constructed in 1967, the low-density complex consists of 16 large 2-bedroom units. The buyer was C.A. LLC of Portland, Oregon and the seller was E. Lang of Portland, Oregon. HFO Investment Real Estate brokers represented the parties.

Wednesday, October 7, 2009

HFO Again Named Top Corporate Philanthropist by Portland Business Journal

Portland, OR – HFO Investment Real Estate, a Northwest real estate investment firm with headquarters in Portland, OR, is pleased to announce it has been named by the Portland Business Journal as a top Corporate Philanthropist for the second year in a row.

"We’re pleased to be recognized for corporate giving but we couldn’t do it without our clients” said partner Greg Frick. HFO’s corporate giving program provides for a charitable contribution to be made for the closing of each transaction.

Monday, October 5, 2009

Experts Offer Tips for Eliminating Crime at Your Rental Property

What are some of the best ways to address on-site apartment safety? This month's Multifamily Executive magazine provides a step-by-step guide on how to rid your property of crime at a price you can afford.

Read More > > >

Thursday, October 1, 2009

How multifamily may be affected by the proposed high performance green building policy

The EnergyTrust of Oregon invites you to give your multifamily properties a competitive edge in the marketplace by attending an innovative seminar series connecting real estate and industry professionals with green industry leaders.

On Tuesday, November 17th: How Multifamily Could Be Affected by the Proposed High Performance Green Building Policy.  This event is presented by Vinh Mason, Policy Analyst, City of Portland Bureau of Planning and Sustainability.

Learn about Portland’s proposed High Performance Green Building Policy; specifically, how multifamily properties—which are classified as commercial buildings—fit into the legislation. The policy is designed to improve environmental performance while strengthening the local economy and keeping buildings affordable in the long-term.

Date: Tuesday, November 17, 2009
Time: 8-10 am

Location:
Umpqua Bank Innovation Lab
3606 SW Bond Avenue
Portland OR 97239

To register, contact Meredith Rizzari, multifamily account representative at 503.523.4822 or e-mail Meredith.Rizzari@csgrp.com.

Wall Street Journal: Portland 4th Top Youth Magnet City

Renters ahead! Need more reasons to feel good about apartment investing? More young people aged 18-29 (mostly renters) continue to move to the Portland area, as evidenced by a story in today's Wall Street Journal. Youth magnet cities gain a cultural allure and labor market edge.
"A 'symbol of west coast hipness,' Portland has continued to draw migrants throughout the recession." Wall Street Journal.
Portland is cited for its "staying power" among youth, a haven for artists, musicians and outdoor enthusiasts.

The paper consulted six experts consulted about what 10 cities will emerge as the hottest, hippest destinations for highly mobile, educated workers in their 20s when the economy gets moving again - here are their picks based on a range of things from economic diversity to lifestyle.
  1. Washington DC
  2. Seattle
  3. New York
  4. Portland
  5. Austin
  6. San Jose
  7. Denver
  8. Raleigh-Durham
  9. Dallas
  10. Chicago + Boston
"Where young adults settle is no small thing. People 18 to 29 are the most mobile age group, and their past migration patterns have defined the future of regions, from the long rural exodus of the 1900s to the Silicon Valley boom of the 1990s. Youth-magnet cities gain an enviable cultural allure and a labor-market edge."

Read the full story online > > >

Thursday, September 24, 2009

New IRS Rules May Help Stave Off CMBS Defaults and Foreclosures


The IRS has just issued new guidelines allowing certain commercial mortgage borrowers to modify and restructure their securitized loans without triggering massive tax penalties. These new tax changes could give many borrowers more flexibility in working with lenders. The catch: those already drowning in debt may be out of luck.

Read more at CoStar online > > >

Tuesday, September 22, 2009

Putting apartment curb appeal into focus.

What makes a property appealing to just about anyone? what makes it difficult for a renter to leave?  Aesthetics. Curb Appeal. Pretty Dirt. Call it what you will, what your building looks like can have a big impact on the ability to attract and retain renters.  Jeffrey Steele, contributing editor of Multi-Housing News, provides a quick method of determining whether your property has it, or not. Check it out.

What will you do with a Swine flu outbreak in your apartment complex?

The CDC keeps a weekly update of the status of the swine flu outbreak. Read the latest tips and find links to state emergency preparedness plans here.

Friday, September 18, 2009

Predictions for slow economic growth now through 2011

Economist Jack Kern is generally quite optimistic about the U.S. economic outlook, saying there are a lot of signs for growth.  He cites America's ability to innovate as a key method of job creation.  He says "remember, while unmployment is high, the economy is still functioning at a high level and sustaining growth in many areas." He does not see inflation as a problem in the next 18-24 months and, he points to apartments as a stable asset class. Read more > > >

Thursday, September 17, 2009

New Law Effective January 1 Relating to Deceased Apartment Tenants

As a landlord with tenants who live alone -- what do you do if they die?

A new Oregon law taking effect January 1 2010 provides the same rights as a tenant to the certain individuals. These individuals, if claiming rights, must be able to provide reasonable evidence of their status: (a) personal representatives (b) heirs or devisees, or (c) any person designated in writing by the tenant to be contacted by the landlord if the tenant dies.

The bill provides for certain specific language to be contained in any abandoned property notice, and that a copy of the notice be sent to: the Oregon Department of State Lands, any personal representative, heir, devisee, or designated person the landlord knows of.

Landlords must NOT release any property until the Oregon Department of State Lands approves the disposition.

If a landlord complies with this process, they are not liable to others who have claims to the property.

Tuesday, September 15, 2009

Price just reduced on this Tigard 4-plex - now $350,000

This Tigard 4-plex offers a buyer a unique opportunity to acquire 4 units consisting of a single family home and a triplex all on one tax lot. The house has 2 bedrooms and measures aprox. 850 sq. ft.; the triplex has 3 one-bedroom apartments measuring approx. 650 square feet. The property has been well maintained and the windows were recently replaced. The home features a large garage and an additional covered parking space. Each unit has its own parking and there is one covered parking space. On-site laundry and storage shed.  For information download the marketing flyer.

Monday, September 14, 2009

National Retail Federation economist believes recession is ending

The chief economist for the National Retail Federation said in a report released Tuesday that figures suggest “the recession is ending,” and she forecast a growing economy in the second half of 2009 despite ongoing weakness in consumer spending. Read more > > >

Thursday, September 10, 2009

New MAX Rail Line Opens Saturday, Bringing "Green" to Clackamas

The MAX train green line opens to Clackamas this Saturday. Read more about the history of the line's development in a special feature article published today in the Portland Tribune. Learn all about the celebratory activities at TriMet's homepage.

Like all MAX line openings, the train is expected to spur additional development along the rail line, including the development and increased desirability of multifamily properties.

The Portland Tribune recently ran a story regarding local city leaders arguing over who should be first to get the next MAX line. The piece is available here at: Cities Fight to Avoid Being Left at the Station. Currently, the next lines are set to run from Portland to Milwaukie (opening 2015) and top priorities for new lines include from Portland to Sherwood along Hwy 99 and from Portland to Gresham via SE Powell.

Wednesday, September 9, 2009

A Look Ahead at New Jobs Coming to Vancouver, Washington

Recent events in Vancouver are priming the pump of the city’s economic engine. On August 13th 2009, the Port of Vancouver dedicated a new marine terminal, Terminal 5. The terminal is part of the West Vancouver Freight Access Project, a $137 million rail project expected to be completed next summer. The Washington State Department of Transportation expects the project to yield up to 4,000 new jobs, nearly doubling local and state tax revenues and attracting millions in private investment. The Port is receiving $2.5 million in federal stimulus money for the project.

In June 2009, SEH America -- a Japanese manufacturer of solar equipment and computer chip components -- purchased the 174-acre Vancouver campus of HP for $55 million. HP is leasing back part of the property for the time being. SEH America is expected to use the former HP facilities for manufacturing its products. A company spokesman referred to the purchase as part of its long term investment in Vancouver. Since 2006 the company has spent $350 million upgrading its East Vancouver plant. The company announced in February it would double its Vancouver workforce, which would mean ultimately adding as many as 1,000 jobs.

Also in June, developers submitted plans to transform a 26-acre industrial site along Vancouver’s waterfront into a bustling riverfront extension of Vancouver’s downtown district. Work is scheduled to begin in 2011. (From news reports.)

Tuesday, September 8, 2009

Update on Oregon Legislative Changes On Tenant Fees

Legislative update by J. Norton Cabell, from the Rental Housing Association of Greater Portland. Download their complete newsletter here. HFO Investment Real Estate encourages membership in the RHAGP. Visit their membership section here.

Effective January 1, 2010, SB 771 passed by the legislature and signed by the governor, provide the following with regard to tenant fees:

Prohibited fees.
All one-time fees such as cleaning fees, pet fees, carpet cleaning fees, move-in fees and fees for service or companion animals are prohibited.

Allowed fees.
Certain noncompliance fees are allowed.
Non-compliance fees that are allowed and are not to exceed $50 are:
  1. Late payment of utilities to the landlord
  2. Failure to clean up pet waste
  3. Failure to clean up garbage from outside the dwelling unit
  4. Parking violations
  5. Improper use of vehicles, such as speeding, on the premises
Other allowed fees that may be more than $50 are:
  1. Late charges for a bounced check, plus any amount the landlord was charged by the bank
  2. Any pet violations in a manufactured home
  3. Breaking a lease (limited to 1.5x rent) - in the alternative, the landlord may charge for damages
  4. Charges for services requested by the tenant and not required by law such as
  • Key replacements
  • Lock-out fees
Written Disclosures Required for Deposits and Fees
Landlords must give written disclosure of rent, deposits and fees when preparing a rental agreement or when taking a deposit for future rental.

Security deposits
  • Landlords may not charge a security or pet deposit for companion or service animal
  • Landlords can charge for their own labor when making repairs or cleaning
  • Rent for the time a rental unit is unavailable for renting because of cleaning or repairs necessitated by the tenant can be charged to a security deposit
  • If agreed to in the rental agreement, if the carpet was cleaned before the tenant moved in, the landlord can charge from teh deposit carpet cleaning expenses, even if the tenant had the carpet cleaned, and regardless of the condition of the carpet
  • If a tenant terminates a fixed-term tenancy before expiration, a landlord may charge actual damages, including rent and cost of re-renting.


Wednesday, September 2, 2009

Oregon Job Market Seeing Signs of Hope

Oregonian reporter Lisa Grace Lednicer reports that there are glimmers of hope in the state job market.

Read More > > >

Factory Orders Rising at Highest Annualized Rate Since 2006

One of the key measures of whether a recession is ending has always been the status of factory orders. Wells Fargo reports today that factory orders have risen for the fourth straight month, rising 1.3% in July. Notable gains were seen in the transportation sector. Excluding the volatile transportation sector (which did not see a jump in July as a result of the cash for clunkers program), orders shed 0.7 percent but remain positive on a three-month annualized basis. The three month annualized rate is the highest since 2006 and suggests orders have turned the corner, Wells Fargo Economics Group reports.

Tuesday, August 25, 2009

Earning Renter Loyalty Through Twitter

Two suggestions For Adding Value and Retaining Renters in Today’s Market

By Aaron Kirk Douglas

What are you doing to set your apartment complex apart from all the rest? Even midsize apartments might want to consider these two simple low-cost value-add strategies. Depending on your market, these strategies can help you justify maintaining or even increasing rental rates and keeping vacancies low.

Suggestion #1: Provide A List of Recommended Service Providers Offering Discounts

Rental managers often provide a list of who to call for cable TV, phone service, the power company, etc.

But why not take it a step further? Similar arrangements could be made to provide renters with a list of other local recommended service providers who offer reasonable rates on services. This saves renters the hassle of having to call around, check references, etc. It also adds value and makes it worth paying a little extra to obtain good and possibly discounted rates from reliable service providers. This type of referral system has benefits for the service providers, building managers, and tenants alike – proven reliability and good rates, recognizable vendors, and accountability.

As a renter, here are some things I might like to see on a list of vendors. Even if I never used these things, it’s appealing to have them available for vacations or in case of emergency.
  • An apartment cleaning service
  • A laundry service that does regular laundry, picking up and dropping off in my unit using bags they provide me for a small deposit
  • A building dry cleaning service. Pick up and drop off of dry cleaning on site on a specified schedule, saving me from having to make a special dry cleaning stop
  • If I have a patio or lots of houseplants, a service that will take care of my deck plants or houseplants, either on a regular basis or when I’m on vacation
  • A grocery shopping service that will take orders and deliver to my unit and put perishable products in the refrigerator/freezer
  • Names of at least two management-approved pet sitters/dog walkers
Suggestion #2: Earning Loyalty Through Twitter

A lot has been written about “pushing out apartment communities” to the masses in terms of advertising through social media, but not a lot about how to use social media to retain renters you already have or obtain through social media networks.

As an experienced renter in an apartment tower where the electricity has been disrupted due to a blown transformer, electrical storm, or other reasons, who doesn’t want to know as soon as possible what’s going on?

With social media, there is a great, free and simple system that apartment managers can use to keep tenants up to date on the latest goings-on in emergency situations. It’s super easy to set up a Twitter account for an apartment building, and any tenants with a computer can set up their own Twitter account. Tenants can find and “follow” their own apartment building, and can set it up so that items posted there by management is sent automatically to their mobile phones as a text message any time of day or night.

It’s easy for building managers to update a Twitter status just by sending a text e-mail through a cell phone, no matter where they are.

Many tenants would love to get updates this way. Here’s how a building manager could let a tenant know what’s happening, in 140 characters or less -- the number of characters allowed on Twitter.

Because not everyone has unlimited text messages, Twitter updates should be about important things that have a direct and somewhat urgent impact on a renter. Some examples of “status updates”:
  • Snow clogging driveway. No snowplow for back lot until 10am
  • All dryers offline until 7pm for repairs
  • Office closing at 5pm today due to emergency. Call 555-1212 for after hours assistance
  • Fire alarm testing today 12-5
  • Elevator #1 out all day today for repairs. Car #2 and freight elevator still in service
  • Hot water out until tomorrow for boiler repairs
  • Building social night tonight - barbeque 7pm
These kinds of notices make renters feel connected to their home base. Who doesn’t want to know what’s going on at home? Communication makes people feel part of a community and reduces stress by avoiding surprises. Tenants can thus change their schedules throughout the day and change plans as necessary. For example, if I’m planning to leave work early because I have to get laundry done for vacation tomorrow, and I get home only to find out all the washing machines are offline for 24 hours – if I am a busy professional, that hast the potential to really stress me out -- BUT if I’ve received notice about that and can change my plans accordingly ahead of time, life is much easier.

Twitter updates can also be set to automatically update/display on a wide network of social networking sites including an apartment building’s web site, a building/complex Facebook page, a corporate LinkedIn page, and many others. Providing renters with a easy way to stay up-to-date on what’s happening could well engender the kind of loyalty that leads to easy retention of existing renters and a willingness to pay higher than average rent for such great customer service.

Aaron Kirk Douglas is Vice President of Research and Marketing at HFO Investment Real Estate, an apartment investment and consulting firm in downtown Portland. HFO provides brokerage and investment advice services to owners of multifamily properties. Learn more at http://www.hfore.com/. (c) 2009 HFO Investment Real Estate.

Home Prices on an Upswing in the Second Quarter of 2009

The Case-Shiller index released today shows that in many of the 20 metro areas tracked, home prices have stopped their free fall.

The S&P/Case-Shiller 20-city home price index and 10-city home price index both rose 1.4% in June, more than twice the rate of increase seen in May.

David Blitzer, Chairman of the Index Committee at Standard and Poors said "This is the first time we have seen a positive quarter-over-quarter print in three years."

Monday, August 24, 2009

Predict the End of the Recession and Win $1,000

Portland consultant Renee Fellman is offering $1,000 in cash to the person who correctly predicts the end of the recession according to a couple of criteria.  As of this posting only 111 people have entered. The sooner you enter, the better your chances of winning.  Click here to enter the contest.