Monday, November 24, 2008

City of Portland Approves Sweeping Revisions of Landlord Tenant Regulations

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

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

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

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

Washington Mutual Looking to Finance NW Apartment Deals

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

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

Call WaMu today and let us close your next commercial property loan.
Tom Barbour

Steve Mozinski
5335 SW Meadows Road, Suite 100
Lake Oswego, OR 97035
Toll Free: 866.886.3774

Sunday, November 23, 2008

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

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

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

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

Thursday, November 20, 2008

2009 Apartment Owner Survey Predicts Coming Trends for Improvements, Advertising

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

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

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

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

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

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

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

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

Read the Full Story Online > > >

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

Tuesday, November 18, 2008

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

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

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

Read the full article >>>

Thursday, November 13, 2008

HFO Charitable Giving Update Through October 30 2008

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

  • Alzheimer’s Association

  • American Cancer Society

  • Blind Children’s Center

  • Chabad Lubavich of Clark County

  • Children’s Cancer Association

  • Cleveland High School Foundation

  • Community Partners for Affordable Housing

  • Doernbecher Children's Hospital Foundation

  • Habitat for Humanity

  • Jesuit High Diversity Club

  • Jesuit High Scholarship Fund

  • Lance Armstrong Foundation

  • Marion-Polk Food Share

  • Mission Emanuel

  • Oregon Humane Society

  • Oregon Jewish Museum

  • Oregon Symphony

  • Portland Rescue Mission

  • Relay for Life – West Clark County

  • Susan G. Komen for the Cure

  • Union Gospel Mission

  • University of Portland

  • Vovinam Martial Arts of Salem

  • Wallace Medical Concern

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

    by Mark Paskill, Intervest Mortgage

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

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

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

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

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

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

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

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

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

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

    Wednesday, November 12, 2008

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    Monday, November 10, 2008

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

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

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

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

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