Wednesday, December 29, 2010

HFO Announces End-Of-Year Corporate Philanthropic Contributions

At the close of each brokered apartment sale, HFO makes a contribution in honor of our clients to their charity of choice. In addition to thousands of dollars distributed each year to our client’s preferred charities, at the end of each year all HFO Team members pick a charity for an end-of-year contribution.
HFO is pleased to announce that for 2010, in addition to more than 500 hours in volunteer time by team members, HFO donated over $9,000 in cash to the following charities:
  • Audobon Society of Portland
  • Bicycle Transportation Alliance
  • Big Brothers Big Sisters Columbia Northwest
  • Blanchet House
  • Children’s Cancer Association
  • Compassion International
  • Doernbecher Foundation
  • Dougy Center, The
  • Ecumenical Ministries of Oregon
  • Juvenile Diabetes-Oregon Chapter
  • Knight Cancer Institute (OHSU)
  • Metropolitan Family Service
  • Oregon Food Bank
  • Oregon Humane Society
  • Portland Area Theatre Alliance
  • Portland Jewish Academy
  • Raphael House
  • Red Cross of Oregon
  • Salvation Army
  • Southwest Parent Child Collective
  • Sparrows Clubs USA
  • St. Francis Dining Hall
  • Stand For Children
We know you have a choice of brokers and appreciate your business.  Thank you for continuing to help us support the communities in which we do business.

Wednesday, December 22, 2010

Will 2011 Get Better? Multifamily By The Numbers

Jeffrey Lee's cover story for Units Magazine, the National Apartment Association's monthly publication, predicts the US economy will improve in 2011 with GDP growth at around 3%.  It also says to expect "demographic delight" and virtually no new completions. The consensus view seems to be that rents should bounce back strongly in 2011. Witten Advisors predicts rents will increase 4.5% in 2011 as operators become aggressive in raising rents with little fear of losing customers to other housing options. MPF Research predicts occupancy will rise above the 95% mark nationally, up 1 to 1.5%. Click here to read the full article.

Thursday, December 16, 2010

HFO Closes $8.5 Million in all Cash Sales of Oregon Apartment Buildings

HFO Investment Real Estate has just completed sales of Oregon apartments in separate transactions totaling over $8.5 million. All four deals were completed in cash with no financing. Click here to read more.

Tuesday, December 14, 2010

Greg Frick with the HFO Q4 2010 Summary and 2011 Apartment Market Forecast in This Online Video



Greg Frick sums up the year and offers a brief look at the year ahead for the Portland/Vancouver metro area apartment market.

Latest Quarterly Report from the PSU Center for Real Estate

Not surprisingly, the latest report on multifamily from the PSU Center for Real Estate -- issued this week --summarizes low vacancy rates, low construction, and rents that are flat or slightly increasing. The entire report offers an interesting analysis of business taxes among the six Western states (Oregon's are lowest). Highest taxes are in Washington, Nevada and Arizona.
Download the PDF of the Multifamily Report or View the Entire Report.

Thursday, December 9, 2010

Apartment Insurance Cost Fell 6% In 2010, National Multi Housing Council Finds

Apartment firms benefited from lower insurance costs in 2010, according to the National Multi Housing Council.

The mean (nonweighted) average Total Cost of Risk (TCR) decreased by about 6% from 2009 to 2010. (Total Cost of Risk reflects the cost of the three principal components of the insurance premium: property, general liability and workers’ compensation.) The weighted average cost of risk, which is less distorted by very large or very small respondents, dropped by a full 14%.

“Our findings show that it’s a buyers’ market,” commented Jeanne McGlynn Delgado, NMHC’s Vice President of Business and Risk Management Policy. “The momentum of insurance rate decreases accelerated in 2010, following decreases in 2008 and 2009.”  Read More > > >

Sold! Vintage Bricker Apartments in NW Portland Sell for $1,645,000

The 12-unit Bowers Apartments on NW Johnson Street in Portland sold for $1,645,000. The sales price represents $137,083/unit and $148.20 per square foot.

Constructed in 1950 at 2401 NW Johnson St., the apartment complex contains (4) 1-bed 1-bath units (7) 2-bed 1-bath Townhouses and (1) 3-bed 2-bath unit. Average rent per square foot is currently $1.18. Amenities include on-site large garages with storage, hardwood floors and period charm throughout. The capitalization rate was 5.40%,

“This was an all cash sale to a new owner involved in a 1031 exchange,” HFO Partner Greg Frick said. “The buyer was pleased to acquire a vintage apartment complex in the hottest rental district in the city.”
HFO represented the parties.

Thursday, December 2, 2010

Sold! 12 Apartment Units in NW Portland $1,645,000

HFO Investment Real Estate is pleased to announce the sale of the Bowers Apartments, a 12-unit garden style apartment community located Portland, Oregon. The property was built in 1950.  HFO represented the parties in the transaction.

HFO Investor Roundtable Luncheon January 5, 2011 co-sponsored by Chase Bank.

HFO is pleased to announce our bank sponsor for our 2011 events and newsletters - Chase Bank.  Learn more about our upcoming investor roundtable luncheon -- for investors only -- this January 5th, 2011.  Featured speakers are former U.S. Bancorp economist John W. Mitchell and Jeff Passadore of Cambridge Real Estate, property and asset manager of more than 110 rental communities in nine western states. Click here to learn more.

Tuesday, November 30, 2010

National Association of Realtors: Commercial Vacancies Set to Improve Nationwide in 2011

The National Association of Realtors reported today that commercial vacancies have stabilized and will see slight improvement in 2011.  The NAR predicted that multifamily properties would also improve nationally with vacancy rates dropping from the current 6.4% to 5.8% by the end of 2011. The NAR reports areas with the lowest multifamily vacancy rates presently are San Jose, Calif.; Miami; Boston; and Portland, Ore., with vacancies in a range around 4 percent. Read more.

Monday, November 29, 2010

IRS Provides Some Relief to Exchanges Destroyed by Bankrupt Accommodators

by Ron Shellan,
Miller Nash LLP

The IRS has provided some relief for taxpayers who had completed the first leg of an exchange, only to have the accommodator file for bankruptcy or be involved in a receivership. In Rev Proc 2010-14, the IRS ruled that in such situations the exchange will be treated as an installment sale.

In order to complete a tax-free exchange under Section 1031, the taxpayer must sell his or her property using the services of a qualified intermediary (also known as an accommodator). If qualified replacement property is properly identified within the 45-day identification period and it is actually acquired within 180 days, or the earlier due date of the taxpayer's tax return, the exchange qualifies for tax-free treatment under Section 1031.

But what if the accommodator files for bankruptcy in the interim? In that situation, many taxpayers have found themselves in the unhappy situation of losing some or all of their funds. But even if the funds were completely lost, they could not get access to the funds within the 180-day replacement period in order to complete their exchange.

The new revenue procedure allows the gain to be recognized similar to an installment sale. It requires the following: (1) that the accommodator be a qualified intermediary, (2) that the replacement property be properly identified unless the accommodator was in default before the end of the 45-day identification period, (3) that the like-kind exchange not be completed solely because of the bankruptcy of the accommodator, and (4) that the taxpayer not be in constructive receipt of the fund held by the accommodator before the bankruptcy filing.

The new procedure determines gain similarly to an installment sale under Section 453. The gain is recognized if, as, and when the accommodator ultimately distributes cash to the taxpayer:

Joe sold his $5 million building through an accommodator. His basis was $1 million. Joe was unable to acquire replacement property because Joe's accommodator had filed for bankruptcy. Joe's gain for a normal sale is $4 million. Joe is advised that he will receive $3 million in full satisfaction of his claim three years after the bankruptcy was filed and in that year receives $1 million in cash. Joe's gain for purposes of the calculation is $2 million ($3 million cash recovery less $1 million basis). His gain ratio is 67% ($2 million gain / $3 million sale price). Joe will have taxable income in the year he receives the first $1 million of cash of $670,000 ($1 million × 67% gain ratio).

If the taxpayer does not even receive enough cash from the bankruptcy to equal his basis, he will be able to claim a loss. Additional guidance is provided for many additional situations, such as for taxpayers who sold encumbered property.

The best approach for taxpayers is to use caution in negotiating the exchange with the accommodator. Make sure that the accommodator is adequately capitalized. Consider securing the accommodator's obligation with a qualified escrow or qualified trust arrangement. Oregon and Washington have each passed laws that provide new regulatory scrutiny of accommodators, but the new laws by no means guarantee that taxpayers cannot lose money in dealing with a financially unstable or dishonest accommodator.

Note that the new revenue procedure does not extend the 45-day identification period or the 180-day replacement period.

Ron Shellan is a partner at the law firm Miller Nash LLP.  Miller Nash is a well established firm with strong traditions and fresh ideas. Serving the Pacific Northwest more than a century, Miller Nash lawyers are creative thinkers committed to serving clients and community in smart and innovative ways. You may reach Ron by phone at 503-224-5858 or e-mail ron.shellan@millernash.com.

Tuesday, November 23, 2010

Nationally, Rents Predicted to Rise 2.4% in 2011 and 2.8% in 2012

Multifamily Executive reports that although Generation Y renters are now starting to pick up jobs in the recovering job market, many of them are not earning the wages necessary to pay much more in rents than currently being charged.  They won't have much leverage in their careers for a while. That said, the Portland/Vancouver metro market may be different.  We have almost no supply coming online and one of the lowest vacancy rates in the nation despite high unemployment.  When employment picks up there should be upward pressure in rents higher than at the national average. Throughout the Pacific Northwest, price sensitivity will likely vary by geographic area, tenant mix, and apartment amenities. Read the story on national trends at Multifamily Executive.

Monday, November 22, 2010

Washington State Legislature Has Postponed The Carbon Monoxide Alarm Installment Requirement

The Washington State Building Code Council took action postponing the requirement that all existing multi-family housing units in Washington State be equipped with at least one carbon monoxide alarm by July 1, 2011. The Council will now start a new rulemaking process that will allow time for further consideration of stakeholder interests.

New rules will likely be established by November 2011 and take effect July 1, 2012. It is expected that the new regulation will require installation of alarms in units by July 1, 2012. Like current Oregon laws, MMHA said that it expects its allies in Washington to seek an exemption for those buildings that do not have a source of carbon monoxide. Without the action today, carbon monoxide alarms would have been required in all existing buildings by July 1, 2011. New units are still required to have the alarms installed on January 1, 2011.

The Metro Multifamily Housing Association delivered this news to members on Friday.  "Obviously, MMHA and our Washington allies are pleased with successfully delaying the deadline for carbon monoxide alarm installation. However, there is much work remaining to be done on this issue." 

MMHA stressed the importance of pointing out that carbon monoxide remains a serious health threat. "Winter windstorms and associated power losses pose the greatest risk in the Northwest for illness or death caused by carbon monoxide poisoning." MMHA urged all its members to have written materials on hand and ready to distribute to residents when a threat of loss of power is imminent. A printed warning is available in 25 languages at: http://kingcounty.gov/healthservices/health/preparedness/disaster/carbon-monoxide.aspx

Q3 Occupancy Gains In Multifamily Break National Record

Separate forecasts by New York based REIS and Jones Lang Lasalle of Washington D.C. indicate that national vacancy levels fell by 70 basis points from 7.8% to 7.1%. Both companies predict that the U.S. will fully recover from job losses by 2015. Read More at Multifamily Executive.

Thursday, November 18, 2010

Prepare for Impact: Immgration Trends, Aging Baby Boomers & the Gen Y Decade

Baby boomers are returning to rentals in droves, as demographic trneds that will shape the next decade arrived in full force this year. Absorption rates are so strong they turned conventional wisdom on its ear.  Read More at:
Apartment Finance Today – Market Movers

Oregon Economic Roundup - Population, Employment, Housing Starts

  • Population: Researchers at PSU's Population Research Center are projecting Oregon's population will increase by roughly 21,000 residents between 2009 and 2010, marking the fourth straight year of slowing population growth.  The current rate is the most sluggish since the recession in the 1980s.
  • Employment: Most industries in Oregon added jobs in October. Total nonfarm employment increased by 7,600 jobs, including 4,100 new private sector jobs. Government hiring accounted for 3,500 jobs while education and health services added 2,300 jobs in October. Trade, transportation and utilities added 1,000. Leisure and hospitality industries declined by 1,100 and manufacturing slipped by 500.
  • Housing starts and building permits for the US fell year over year. Figures for the Western states (including Oregon) indicated that housing starts fell about 1 percent from September and were flat compared to October 2009.

Tuesday, November 2, 2010

Quality Apartment Sales Bump Volume 63% in Third Quarter

Sales volume rose 63 percent to a total of $8.5 billion from Q2 to Q3 2010 according to Real Capital Analytics (RCA). That’s the biggest jump in the past five years and a 130 percent jump from Q3 2009.

The caveat: while sales volume rose 63 percent, the number of transactions rose just 5 percent, meaning deal size played a huge role in the transaction numbers. So far this year $18.5 billion of apartments have sold, almost double the first nine months of 2009. But the number of properties sold represents just a 31 percent increase.

The difference in sales dollar value vs. properties sold is explained this way: quality apartments are selling fast.  Read More at Multifamily Executive Online.

Across-the-Board Improvement in the Apartment Industry, According to NMHC Quarterly Survey of Apartment Market Conditions









NMHC Reports:

Debt and equity are more available than last quarter and markets are tighter. The Sales Volume Index registered an all-time high.

“While demand for apartment residences and apartment properties is still below the peak levels seen in the last decade, the further shift from owning to renting may well add to apartment demand in the near-term, while population growth and a rebound in household formation should strengthen demand over the longer term,” said NMHC Chief Economist Mark Obrinsky. “But at some point, economic growth will have to shift into a higher gear for the apartment industry to see conditions continue to register improvements of this level.”

Key findings:
  • The Sales Volume Index increased from 78 to a record high of 84. This was the fifth consecutive quarter this index has indicated widespread improvement. For the year this index averaged 73, the highest on record.
  • The Debt Financing Index increased slightly, from 81 to 82, the second-highest debt financing figure in the history of the series. This means borrowing conditions have improved. A full 64 percent of respondents said conditions for multifamily borrowing were better this quarter. For the first time ever in the history of the survey not a single respondent said conditions were worse.  For the year this index averaged 68, the second highest on record. 
  • The Equity Financing Index decreased slightly from a record 73 to 70. Because the score is well above 50, this indicates that equity financing is more available. Forty-three percent indicated that equity financing was more available; this is the fifth quarter in a row where more respondents said equity finance conditions were improving. For the year this index averaged 70, also a record.
  • The Market Tightness Index, which measures changes in occupancy rates and/or rents, decreased from 83 to 77, but remained well above the “break-even” mark of 50. Sixty percent of respondents said markets were tighter, meaning lower vacancies and/or higher rents. For the year this index averaged 70, the highest since 2006.
Full survey results are posted at www.nmhc.org/goto/quarterlysurvey.

Multihousing Investor: Portland Showing Signs of Investor Interest Despite High Unemployment

New-York Based Multi-Housing News featured Portland and HFO Investment Real Estate in it's Market Snapshot feature this month.  Reporter Erika Schnitzer interviewed HFO's Greg Frick for the article, which focused on our recent investor survey results.  Read the article here.

Monday, November 1, 2010

Generation Y Driving Portland Multifamily Development

HFO Partner Tim O'Brien is quoted in last Friday's Daily Journal of Commerce article about Generation Y leading the next -- largely urban -- apartment boom.

It all started last week when Clyde Holland, CEO of Vancouver, Wash.-based Holland Partners Group, said that market conditions in Portland are beginning to favor multifamily investments. And Holland isn't the only developer that feels that way -- local developer Jack Menashe agrees, saying he believes North Portland is especially ripe for multifamily commercial projects, including his 72-unit apartment and retail development planned for North Williams Avenue.
“I’m getting calls from developers asking about prices per square foot, and other logistical questions. I’ve had three of these conversations in the last week. I haven’t had that many of those conversations in the last three years.” -- HFO Partner Tim O'Brien
Read the full Daily Journal of Commerce Story.
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Monday, October 25, 2010

The Latest Apartment Vacancy & Rent Rates for Oregon & SW Washington Are Released

The Metro Multifamily Housing Association (MMHA) has released its fall 2010 report that includes rent survey data for Portland/Vancouver metro area along with Salem, Eugene/Springfield and Bend/Redmond.  It also includes the latest vacancy rate data and detailed neighborhood by neighborhood rent breakdowns for the Portland metro area.

Click here to download the report.

HFO encourages apartment owners and investors in Oregon and SW Washington to become active members of the MMHA! Learn more about the many features and benefits of becoming an MMHA member at http://www.metromultifamily.com/about/

Apartment Fundamentals Impress Analysts: Owners Are Back Making Deals

Looking back on three consecutive quarters of improving fundamentals, researchers say the multifamily market hit the bottom of the cycle in the fourth quarter of 2009 and is leading the commercial property sectors in recovery. Apartment prices bottomed out in the third quarter of 2009 and have been climbing since the fourth quarter, according to the Moody’s/REAL Commercial Property Price Indices. Read More at the National Real Estate Investor.

Wednesday, October 20, 2010

Forbes Ranks Oregon Among Top States for Business

Forbes Magazine has ranked Oregon among the top states for business and careers.  This year Oregon ranked sixth, up from #10 last year.  The study is based on six categories: costs, labor supply, regulatory environment, current economic climate, growth prospects and quality of life.  Oregon ranked No. 4 for labor supply, No. 12 for growth prospects, No. 18 for business costs, No. 14 for economic climate, No. 21 for quality of life and No. 34 for regulatory environment. Click here to see the full list.

HFO Announces $10.625 million Sale of 132-Unit Apartment Complex in Clackamas, OR and Results of Apartment Investor Survey - CNBC

HFO Announces $10.625 million Sale of 132-Unit Apartment Complex in Clackamas, OR and Results of Apartment Investor Survey - CNBC

Intel to Invest Billions in Oregon, Creating Thousands of Jobs

Speculation over a massive investment in Oregon by Intel ended yesterday with the company's announcement that it would spend $6-$8 billion in the state.  More from The Oregonian.

Former HUD Secretary Cisneros: Five Factors Will Shape the Industry's Future

At the annual Multifamily Executive Conference held in Las Vegas last week, the closing keynote speaker was former U.S. Department of Housing and Urban Development Secretary Henry Cisneros.  He offered up his insights -- drawing heavily on his current experience as chairman of CityView, a Los Angeles-based developer of affordable housing currently raising money to acquire and redevelop multifamily housing in the Southwest, the Bay Area, D.C., and the Boston-New York corridor.

Among other things Cisneros said:
  1. Stick with apartments. They are a great investment. More than 70 percent of pension fund managers rank it as the highest return sector in real estate.
  2. Follow the institutions. For example, right now, many of the private funds he's talking to are looking to target student housing or university-adjacent housing.
  3. Demographics, particularly the Latino population, which will account for 50 percent of the population growth between now and 2030, will dictate different types of homes. Families, particularly those that are younger and larger, will outnumber the more nuclear, older families the industry is used to seeing.
  4. Energy efficiency is vital to acquisitive and development strategies today and must be approached as an necesssary investment.
  5. There is no better time to act than now. "For the past two years, we've heard that whoever would be standing at the end of the downturn would be well-positioned to move forward. That time has come. Builders: It's time to build. Buyers: It's time to buy. Investors: It's time to invest."
Cisneros ended his remarks by adding: "There's work out there to be done, and it's time for those who are able to move to take action. There will be great rewards for those first-movers."

Read more on the conference, where optimism abounded this year, online at Multifamily Executive.

Monday, October 18, 2010

Multifamily CEOs Paint Bright Industry Future

Last week was an upbeat one in Las Vegas as apartment owners were bullish on apartment futures.  “I don’t recall a time in the last 40 years that I’ve been more optimistic about our prospects over the next several years,” said industry veteran Steve Bell, CEO of Bell Partners, which has a $5 billion portfolio that includes market-rate and seniors apartments. Read more at Multifamily Executive Magazine.

Thursday, October 7, 2010

The Glenn Featured in Today's Daily Journal of Commerce

An apartment complex in Portland’s Hawthorne neighborhood recently went up for sale. The Glenn, at 3268 S.E. Hawthorne Blvd., is a 95-year-old vintage building with modern amenities. Located in a hip Southeast Portland area, it’s a rare type of building to be on the market. “It’s on the 50-yard line of Hawthorne,” said broker Gregory Frick with Hagerman Frick O’Brien. Read more about The Glenn in today's Daily Journal of Commerce > > >

Wednesday, October 6, 2010

REIS Reports: Apartment Vacancy Rate Drops Sharply in Third Quarter

The U.S. apartment market recovery was in full swing in the third quarter as vacancies dropped sharply and rents increased because tenants signed leases in belief they would shortly find jobs.

REIS reported today that the national vacancy The national vacancy rate fell to 7.2 percent from 7.9 percent as renters soaked up 84,382 more units than were vacated. Read the full story at Bloomberg News.

ForRent.com Reports Spike in Traffic

ForRent.com and its affiliate sites (including CorporateHousing.com and SeniorOutlook.com) report a 65 percent increase in traffic during August 2010 compared with the same month in 2009, according to the company, which specializes in providing information to apartment seekers. This finding matches other recent reports that indicate demand for apartments is increasing nationwide. Read More at Multi-Housing News > > >

Wednesday, September 29, 2010

Wherefore Art Thou, Distress? -- Apartments March Ahead

The nation’s apartment sector appears to be recovering faster than other segments, in a sort of “first in, first out” play on the recession.

In the second quarter, the multifamily mortgage default rate declined by 47 basis points, from 4.63% to 4.16%, falling below the commercial default rate for the first time in two years. Read more at the National Real Estate Investor online in their story: Wherefore Art Thou, Distress?

Friday, September 24, 2010

Wall Street Journal: Apartment Market Heats Up

The Wall Street Journal reported this week:
"Apartment buildings are considered a sound investment: Landlords have been able to keep rents up and units filled, even during the downturn. And, since there’s been little new development in the last few years, some industry watchers expect to create a supply shortage in some markets down the road." 
Portland developer Dwight Unti was way ahead of this story, as we reported in May following Dwight's speech at the Portland Metro Multifamily Housing Association. Read the Wall Street Journal Analysis.

Thursday, September 23, 2010

Apartment Transactions Surge

Multifamily Executive reports that improving fundamentals, cheap money, cash-stacked buyers and motivated sellers suddenly converge, striking deals. Click to read more.

Tuesday, September 21, 2010

Continued Rental Recovery Hinges on Employment Growth

Multifamily Executive magazine reports that occupancy, vacancy, rental, and concession numbers from the first half of the year all show we are experiencing a rental recovery.  But there's a catch.  Job growth is nowhere to be found. Economists, executives, and analysts are all scratching their heads trying to figure out what is driving this year's surge in rentals without much luck explaining it. There is one thing they agree on:  unemployment could deflate the recovery just as quickly as it came. Read more in Multifamily Executive online.

Tuesday, September 14, 2010

Sold! Timbers at Towne Center

HFO is pleased to announce the sale of Timbers at Towne Center.  This property consists of 26 partially complete units with land for an additional 26 units.  The property is convenient to shopping and has easy freeway access.  The seller was Albina Community Bank.  HFO represented the parties in the transaction. Timbers at Towne Center sold for $625,000.

Seattle Apartment Market Update - Rents up Even With 10-Year Record Number of Units Brought to Market




Report from MPF Apartment Market Research.

Monday, September 13, 2010

The Latest Trends on Income and Expenses in Rental Apartment Communities

The National Apartment Association has published its annual Survey of Operating Income & Expenses in Rental Apartment Communities.  An executive summary by Christopher Lee is available from the NAA website free of charge.  A full detailed report is available to NAA members for $599 and to non-members for $1,000.  The survey breaks the 50-states into six regions.  Oregon and Washington are in region VI.  Download the executive summary here.

Thursday, September 9, 2010

National Apartment Association Posts Mid-Year Apartment Report Updates

The 2010 Mid-Year Apartment Report from the National Apartment Association includes these predictions:
  • Many more assets will hit the market Q3 and Q4 with an attempt to close by year-end.
  • Occupancy will remain tight across the country
  • Effective rents will remain strong
Other reports state "investors seeking small balance loans ($2 million or less) had more challenges in the first half of the year but there is reason to expect that situation to improve in Q3 and Q4. Mortgage REITS, Fannie Mae, Freddie Mac, HUD/FHA, and CMBS aggregators are generally geared toward larger transactions but some are adjusting minimum loan levels down to increase deal flow and earn spread premiums."  However, analyst Mike Bryant of Berkadia Commercial Mortgage in Dallas opines, "as multifamily housing debt opportunities increase, the under $2-million debt deal will eventually attract new lenders because the space has limited competition and great spreads."  Read more of these and other reports.

Tuesday, September 7, 2010

Suburbs and Sprawl No Longer All The Rage

In this month's edition of Multi-Housing News, author R. Scott Ziegler of Ziegler Cooper Architects in Houston examines what is happening in American cities today with regard to sprawl.

What's interesting about this article is that it highlights the costs of suburban sprawl on the environment, as well as the respective tax values.












It's clear from the chart above that irrigation, electricity and sometimes farm acreage are utilized in far greater amounts in suburbs as opposed to apartment buildings.  Ziegler argues that higher density development, close to conveniences and entertainment, will be in high demand in the future.  He also cites a study by the Brookings Institute that the U.S. population is expected to increase 33 percent -- to more than 376 million -- by 2030 -- 94 million people more than in the year 2000. 

Read more.

Thursday, September 2, 2010

Apartment Market Research - Q2 2010 Results - Video Discussion

The U.S. apartment market is -- quite surprisingly -- on track to make 2010 a banner year. The apartment sector gained roughly a quarter million renters, on net, in the first six months of 2010, according to preliminary data from MPF Research's 2nd quarter survey. MPF's Greg Willett and Jay Parsons discuss the impressive performance in this episode of the Multifamily Fast Lane.
 

Monday, August 30, 2010

Apartment and Office Sectors Spark Investor Demand

The 75-year-old Real Estate Research Corporation based in Chicago and with offices around the country, reports that the apartment sector, long-recognized as the commercial property type that generally possesses better risk-versus-return characteristics than those for other property types.  Its investment level rating has just increased to its highest level since second quarter 2001.
"...apartment investments are proving to be safer bets during slowed economic times and are meeting the strategic initiatives of most investors."

Read the full Real Estate Research Corporation press release.

Concessions Burning Off As National Leasing Rates Increase

A market report from New York-based REIS indicates a net absorption of 44,199 units during the second quarter -- the highest in 10 years. And rental rates are increasing along with occupancy, with asking rents increasing 400 basis points and effective rents jumping 700 basis points. Read More in Multifamily Executive.

Tuesday, August 24, 2010

MPF Research Predicts All New Downtown Portland Apartments Will Be "Essentially Full" This Fall

MPF Research predicts that with the Portland metro area's current 96% occupancy rate, the only significant availability is the recent completions still moving through initial lease-up downtown.  "Those projects are making progress by leaps and bounds. The overall occupancy for developments built since 2000 in the urban core has soared from a low of about 73 percent in fall 2009 to a rate of 91.6 percent as of mid-2010. In another quarter or so, the newest completions seem likely to be essentially full."

Further, MPF reports that effective pricing climbed 3.5 percent during the initial half of 2010, with growth split about evenly between 1st and 2nd quarters. Rents are way up in the metro's suburban apartment centers, while pricing in the urban core is edging forward."  Read the full story.

Are Portland's Unreinforced Masonry Apartment Buildings a Threatened Species?

"Given the large number of and historic/ architectural importance of URM apartments to Portland, URM building owners, architectural preservationists, structural engineers, mortgage lenders and insurers, and city and state officials need to work collaboratively to reduce impediments to and increase incentives for seismically upgrading URM apartments." 

Read the full article discussing the costs and providing examples of retrofitting printed in this quarter's PSU Center for Real Estate Quarterly Report.  Your comments and feedback on the article are invited by the author: wmcmonies@robertskaplan.com.

Monday, August 23, 2010

DEAL OF THE DAY: HFO Brokers Sale of $17 Million Apartment Building

PORTLAND, Oregon--(MULTI-HOUSING NEWS)--HFO Investment Real Estate, a commercial real estate investment firm with apartment brokers based in Portland, OR, has brokered the sale of the Twin Creeks Apartments, a 220-unit apartment complex built in phases starting in 1996 and completed in 1999. Twin Creeks is a garden-style multifamily complex situated on nearly 12 acres in the Sunnyside corridor in Clackamas, southeast of Portland.

Read the Full Press Release.

Wednesday, August 18, 2010

PSU Center for Real Estate Releases Quarterly Report on Multifamily

PSU has released its quarterly real estate report.  Greg LeBlanc reports in the section on Multifamily housing that owners and managers are seeing improved conditions to the point that some have scaled back the use of concessions and introduced modest rent increases. Download the PDF of his report here.

The full 85-page issue of the Real Estate Quarterly focuses largely on the causes and consequences of what has been called the “Great Recession" on the Portland real estate market.  Download the full report.

Monday, August 16, 2010

Obama Administration Announces Multifamily Housing Finance As Topic for Aug. 17 Housing Finance Conference

Tomorrow, Tuesday August 17, 2010, at the U.S. Treasury Department beginning at 6 a.m. Pacific Time there will be a conference on the Future of Housing Finance.  The Obama Administration announced topics and key participants on Thursday. 

Topics include an 8:45 AM PDT breakout session hosted by Senior White House, HUD, and Treasury Officials on the topic of : Supporting Capital for Multifamily Finance.  The event will stream live at http://www.treasury.gov/.

Thursday, August 12, 2010

Apartment Rentals Hit High Mark as Americans Shun Homes

The National Multi Housing Council (NMHC) reported results of its latest Quarterly Survey of Apartment Market Conditions Friday, stating the industry is on the rise, improving in all four indices surveyed and setting an index average record for the second quarter in a row. 

Read More > > >

Apartment Transaction Volume Jumps, Fueled by New Buyers

Second-quarter sales of apartment properties rose to $5 billion, bringing the total volume of 2010 sales to $9.6 billion, a 69.6 percent increase from the first half of 2009. Read more in Multifamily Executive.

Tuesday, August 10, 2010

U.S. Census Bureau Pegs Portland Metro Rental Vacancies at 4.5% - Nation's 4th Lowest

The U.S. Census Bureau has reported 2nd quarter 2010 vacancy rate estimates for the top 75 U.S. Metropolitan Statistical Areas (MSAs).

The Portland/ Vancouver/ Beaverton area ranks 4th in the nation for vacancies at 4.5%. Portland's Q1 2010 vacancy rate was estimated at 3.8% - the new estimate shows a drop of 0.7% over the past 3 months. Seattle-Tacoma-Bellevue, WA had a Q1 2010 vacancy estimate of 8.0 and a Q2 vacancy estimate of 6.9%, the nation's 10th lowest.

The Census Bureau reports the nation's lowest vacancy rates as follows:
  • Ex Paso, TX - 2.1%
  • Salt Lake City, UT - 3.8%
  • San Jose-Sunnyvale-Santa Clara, CA; Springfield, MA - 4.0% (2-way tie)
  • Portland-Vancouver-Beaverton, OR-WA - 4.5%
  • Milwaukee-Waukesha-West Allis, WI - 5.1%
  • San Francisco-Oakland-Fremont, CA - 5.6%
  • Alburquerque, NM - 5.7%
  • Bakersfield, CA; Boston-Cambridge-Quincy, MA-NH - 5.9% (2-way tie)
  • Los Angeles-Long Beach-Santa Ana, CA - 6.5%

The MSA's with the five highest vacancy rates were as follows:
  • Orlando, FL - 20.6%
  • Houston-Baytown-Sugar Land, TX - 17.4%
  • Orlando, FL - 18.2%
  • Jacksonville, FL - 18.6%
  • Memphis, TN-AR-MS - 21.2%
  • Akron, OH - 21.9%
Read the full report online.

Monday, August 9, 2010

Legal Pot Cultivation on Apartment Properties: A Growing Concern

A November ballot measure, Proposition 19, would allow Californians to possess up to an ounce of marijuana, smoke it in private, or at publicly designated locations, and grow it at home. Proposition 19 also allows government to tax pot. Landlords in California are gearing up for the bill's potential passage.  Remember the old saying "As California goes, so goes the nation."? Are owners in Oregon and Washington ready if it should happen here? Today we check in on the buzz at the Sacramento Bee.


Thursday, August 5, 2010

Business Week Reports: Apartment Retals Surge in US

A 215,000 surge in the number of rental units the first half of 2010 is being explained as the result of home foreclosures coupled with an increasingly positive job market for young adults. Read the full report in Business Week.

Saturday, July 31, 2010

New Apartments Being Constructed in NW Portland

News of a new downtown  apartment complex being built broke yesterday when the Daily Journal of Commerce reported yesterday that a new 90-unit apartment building is beginning construction in NW Portland.

Tuesday, July 27, 2010

Price Reduced! Senior Apartment Complex - With Great Cash Flow! $2.4 million

The Albany Court Apartments are a 71-unit senior apartment complex with recent substantial renovations. Converted in 2008 from assisted living to senior apartment - kitchens were added to all units and all new electrical service was installed along with new cabinets, appliances,
carpet, flooring, and double-pane windows. Common area amenities
include a library, fireplace, reception desk, private dining area,
activity and exercise rooms, beauty salon/barbershop, chapel, garden
courtyards, administrative offices, and a commercial kitchen leased for
additional income. Estatimated net cash flow of over 11%. Fully fire
sprinkler protected. Price reduced $200,000 to $2.4 million. For additional information click here to download the marketing flyer.

Summer 2010 Barry Apartment Report: "Slow Transition From Great Recession to Recovery.”


In his Summer 2010 Apartment Report, Mark D. Barry’s latest report predicts:
  • Income will remain flat
  • Some increases in utility expenses
  • Vacancies will hold around 5% 
  • Values will remain stable 
  • The next two years will experience a better sales environment
  • Permits for only 600 to 800 new apartments will be issued in 2010

Vacancies & 2012 Shortage
Barry expects that the rest of 2010 will be “…a year to concentrate on keeping your tenants happy, and holding on to what you have.” He predicts that apartment vacancies should fall between 4.75%-5.25% and says the close-in urban market will remain in balance with higher vacancies concentrated in more expensive units and more outlying suburban areas. And, over the next couple of years, Barry says apartment vacancies will “rebound quickly” as the economy turns around and expects an apartment shortage by 2012.

Values
Apartment values are anticipated to remain stable for the balance of 2010 due to low interest rates and stable income despite some increasing expenses. Typical cap rates of 6.50% to 7.75% for suburban properties and 6.00% to 7.25% for urban properties.

Sales
“The next two years will be a far better environment for apartment sales. This will be due to many owners getting better educated on values, some capitulation on the part of sellers, motivated sellers who need the funds, seller motivated by possible increases in capital gains, and buyers who sense that we are close to a bottom.”

Monday, July 26, 2010

Wednesday, July 7, 2010