Wednesday, September 27, 2017

Bombshell: Chloe Eudaly to Propose Tenant "First Right of Refusal" to Purchase Apartment Buildings Listed for Sale

The Portland Mercury reports today that Portland City Commissioner Chloe Eudaly plans to unveil a proposal that would allow tenants 60 days to determine whether they want to purchase an apartment building that's up for sale, and the City of Portland would have 30 days after that, meaning property sales would be stalled for up to 90 days while an owner waits for the groups to decide. Read more.

HFO Brokers Sale of Happy Valley Apartment Community for $58 Million

HFO Investment Real Estate announced the sale of Latitude Apartments located near Clackamas Town Center mall in Happy Valley for $58 million.

The Latitude Apartments is a gated apartment community consisting of 210 apartments with an average unit size of 1,133 square feet. Built in two phases between 2008 and 2014, the sale represents the second largest apartment transaction for Clackamas County this calendar year.
 
Latitude Apartments consists of 33 three-story apartment buildings and one clubhouse on 6.89 acres across from Clackamas Town Center one of the largest regional malls. The transit-oriented development is convenient to I-205 and easy walking distance to MAX light rail and several bus lines.

“Happy Valley is an affluent, educated area with high employment in healthcare, professional services and retail,” said HFO partner Cody Hagerman. “Latitude Apartments is a great example of well-constructed condo-quality housing that is in exceptionally high demand.”

Latitude Apartments offers its residents numerous community amenities including a dog run and grooming station, electronic parcel lockers, bike repair station, fitness facility, pool, basketball court, and direct-entry garages.

The seller was Bay Area investment firm The Reliant Group and the buyer was global real estate investment company Kennedy Wilson. The sale represents a price per unit of $276,190 per unit or $243.76 per square foot.

City Council to Vote on Extending Housing State of Emergency by 18 Months

Portland's Housing State of Emergency, declared in October 2015 and extended for an additional year in 2016, could be extended by another 18 months. Mayor Wheeler is submitting an ordinance to city council for consideration prior to the October 6th expiration date. The ordinance includes the following provisions:
  • The Housing State of Emergency will be extended by 18 months, until April 4, 2019, unless the City Council chooses to extend or terminate it
  • Affordable housing projects will be subject to Type IIX rather than Type III design review
  • The Portland Housing Bureau and Joint Office of Homeless Services will decide what criteria must be met to end the Housing State of Emergency within 180 days
The mayor's push for this extension is a result of a continued housing shortage in Portland. Rents have continued to rise at a rate of 7% per year, and while the vacancy rate has been increasing it is still under 5% in most of the city. Many of the largest rent increases have been in East Portland, and rents for 1-, 2-, and 3- bedroom units have increased in every neighborhood in the city. Read more.

Tuesday, September 26, 2017

Multifamily Marketwatch Podcast - September 26, 2017

This week: The Tribune turns a spotlight to the City of Portland's dysfunction; hurricane disasters could result in a construction slowdown due to scarcity of workers and increasing materials costs; and six months in -- the inclusionary zoning requirement's impact on apartment construction applications in the City of Portland.



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Monday, September 25, 2017

Multifamily Marketwatch Special

In an interview with HFO partner Greg Frick, Multifamily NW spokesman John McIsaac relates the bureaucratic difficulties facing developers in the City of Portland. Estimates are that 50,000 new apartments will be needed by 2030 to accommodate the nearly 100 people moving to the city every day.



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Wednesday, September 20, 2017

Portland Tribune: 17 Groups from Six Different Bureaus Required to Review Construction Permits

The Portland City Council has begun a review of bureaucratic processes in an attempt to streamline various processes. The hitch? Folks from bureaus overseen by different councilors are often involved in the same projects, making it even more difficult. One example cited by the paper is the simple fact that there's no single phone number for people wanting city services to call, resulting in countless phone calls by the public to the wrong bureaus and even to 9-1-1 for non-emergency help. Read more.

Six-Month Review of Inclusionary Zoning in Portland Shows Slowdown in Land Use Review Applications

The Bureau of Planning and Sustainability released its six month review of Portland's Inclusionary Housing policy, which went into effect February 1st of this year. Prior to the law taking effect, developers rushed to get projects with 20 or more units into the permitting pipeline. That rush to submit plans to the city resulted in a pipeline of 19,000 units, or a four-year supply of new construction. This backlog has led the BPS to determine that the new requirement hasn't caused a slowdown in development activity. The Bureau also does not believe there is a trend of developers keeping projects under 20 units. 5,000 of those 19,000 units have been permitted since February, but since then only 11 projects over 20 units have been submitted. Five of these these developments are affordable housing projects. According to the Portland Tribune, no new land use review applications have been submitted for projects over 20 units during that time. Read more.

Tuesday, September 19, 2017

Multifamily Marketwatch Podcast, September 17, 2017

This week: the Metro council considers new taxes to help pay for affordable housing outside the city limits of Portland; The U.S. Census reports Oregon's median household income rose 6.2% in 2016, after decades of trailing the rest of the United States.



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Amazon to Build New Fulfillment Center in North Portland

Amazon announced that it will build a new fulfillment center in North Portland that will create 1,000 new jobs. The fulfillment center will be located in the Rivergate Industrial District, north of the St. Johns neighborhood near Kelley Point Park. The large site will facilitate the packing and shipping of larger items, and Amazon also hopes it will help the company reduce shipping times within the metro area. The 918,400 square foot site is being developed by Trammell Crow Co. and Clarion Partners, and is part of a designated enterprise zone. Amazon is also planning to open facilities in Salem and Troutdale, which are likely to employ 2,500 full-time workers in total. Warehouse jobs such as the ones that will be coming to North Portland typically pay $13-$23 per hour, and Amazon's warehouse workers are eligible for the same benefits package as other company employees. Amazon also announced last week that it is scouting locations for its new HQ2. While Portland is involved in the competition, its proximity to Seattle makes it an unlikely choice. Read more.

Monday, September 18, 2017

Portland Monthly Report: Four New Downtown Portland Apartment Buildings to Add Nearly 1,040 Units

Portland Monthly reports on four new apartment projects either under construction or awaiting final approval that "could change downtown forever." From Old Town/Chinatown to the Pearl to the heart of the Arts District, these buildings will add another 1,039 living spaces downtown (including about 80 units of affordable housing). With amenities including outdoor pools, decked rooftops with chefs kitchens. and fire pits - but no playgrounds... yet. Read more. 

Friday, September 15, 2017

Metro Council Considers Taxes to Fund Affordable Housing

The Metro Council, which oversees ares of Multnomah, Clackamas, and Washington counties that fall within the UGB, is considering tax measures aimed at funding affordable housing initiatives. The Council is considering a construction excise tax, a property tax measure, or authority to use money generated from property tax increases. The city of Portland already has a 1% construction excise tax, and in November 2016 city voters passed an affordable housing bond measure. Other cities in Metro's jurisdiction have not taken comparable steps to address the shortage of affordable housing units. More than half of severely cost-burdened households in the metro area live outside of Portland, but far fewer affordable units have been built outside city limits. Although development costs are higher in Portland, the city provides better access to transportation and job opportunities than can be found in the suburbs and outlying areas. Metro staff had a meeting to discuss proposals with the Metro Policy Advisory Committee September 13th, and the Council is set to begin discussions with the 24 city councils and 3 county commissions that make up the metro area. Read more.

Thursday, September 14, 2017

Oregon's Median Household Income Grew by 6.2% in 2016

Oregon's median income is now on par with the national median after several decades of lagging behind. The U.S. Census Bureau reports that Oregon's median income is currently $57,532 compared with the national median of $57,617. The last time Oregon's median income was within reach of the national median was in the late 1970s, but the state has since lagged behind due to the decline of the timber industry as well as housing crashes in the 1980s and 2000s. Since the late 2000s, income in the state has been growing at a steady clip, with Portland seeing big gains beginning in 2013. Salem and Bend have begun to outpace Portland in job growth over the last couple of years, and poverty rates in rural parts of the state have been declining. In 2016 the state's median income grew by 6.2%, outpacing every state except Idaho and Massachusetts. Read more.

Tuesday, September 12, 2017

Multifamily Marketwatch Podcast - September 12, 2017

This week: The Portland Unreinforced Masonry Policy Committee holds a final public meeting October 4th and then heads to City Council; Vacancy rates for studios and one-bedroom units are increasing; national economics professors argue that restrictive land use policies are adding drag to the national economy.



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Monday, September 11, 2017

Portland Tribune: Studio Apartments Sit Empty As Renters Seek Larger Units

Three quarters of market rate apartments built in the last five years have been studio or one-bedroom apartments. The Portland Business Tribune reports that many of the new units sit empty as renters look for housing with two or three-bedrooms. Read more.

Thursday, September 7, 2017

City Council to Review URM Policy Proposal October 19th

The URM Policy Committee is set to meet for a final time October 4th, before presenting their policy proposal to the City Council October 19th. The policy will determine what retrofits building owners are required to complete, as well as the timetable for completion. Building owners have expressed concern about the lack of available financing for retrofits, as well as the scope of retrofit projects. Seismic retrofits frequently require tenants to relocate, and landlords who own URM buildings are subject to the relocation ordinance passed earlier this year. The ordinance requires landlords to pay tenants $2,900-$4,500 upon issuing a no-cause eviction. Such evictions would be hard to avoid if the city requires landlords to add steel reinforcement throughout their buildings. Nonprofits, schools, and churches also own several URM buildings in Portland, and Central City Concern is urging the city to provide an exception for affordable housing. The URM Policy Committee is overseen by the Bureau of Emergency Management as well as Mayor Ted Wheeler's office. Read more.

Wednesday, September 6, 2017

Multifamily Marketwatch Podcast - Sept. 6, 2017

This week: lender to the rescue for Portland's pending seismic upgrade requirement? Cap rates continue to decline despite an increase in interest rates. 



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Friday, September 1, 2017

PropertyFit Program Expands to Finance Seismic Upgrades in Multnomah County

The Daily Journal of Commerce reports that the PropertyFit program, which offers 100% financing to building owners and developers for energy-efficiency and seismic upgrades, will be expanding to serve properties throughout Multnomah County. Prosper Portland, Multnomah County, and the Energy Trust of Oregon are sponsoring the program in hopes that it will encourage "mom and pop" owners of unreinforced masonry buildings to perform necessary seismic upgrades. The capital providers for the program include Prosper Portland, CleanFund Commercial PACE Capital Inc., and PACE Equity. Funding can also be used to replace outdated boilers and lighting systems with more energy efficient alternatives. It appears from the website that interest rates range between 5-10%. Read more.