HFO Announces Past 30-day Sales Totaling $35.44 million



Westview Heights

Over the last 30 days, HFO Investment Real Estate brokered the sale of Westview Heights Apartments in Beaverton for $29.5 million, the Riverside Villa Apartments in Milwaukie for $2,495,000 and the Cinnamon Lakes Apartments in Salem for $3,445,000. 

Westview Heights is an “A” quality institutional grade community built in 2002 and consisting of 198 units.  This garden-style apartment complex located along the Sunset Corridor is a condo quality complex with an average unit size of over 1,400 square feet with attached garages and full-size washers/ dryers. Westview Heights sold for $29,500,000 or $149,000/door with a cap rate of 6%. The seller was Westview Keys Pacific LLC of Portland; the buyer was California real estate firm Kennedy Wilson. The Buyer assumed an above-market interest rate loan with low leverage.  The Buyer plans to remodel unit interiors on turnover and capitalize on the rent growth in this market. “This is a unique opportunity for the buyer to acquire a solid condo quality project in a location which will capitalize on the continued increased demand for rental units,” said HFO partner Cody Hagerman.

The Cinnamon Lakes Apartments in Salem were built in 2005 and consists of 42 units on a low-density 4.25 acre parcel – most with lake views. Units include washers/dryers, bamboo hardwood floors, private decks and patios, a park-like walkway along the lake and assigned carport parking. The sale price of $3,445,000 represents $82,024 per unit and a cap rate of 6.27%. The seller was QA Enterprises Inc. of Salem and the buyer was LB LLC of Portland. This sale was another example of investors looking for quality assets to place their investment dollars.
 
Riverside Villa Apartments in Milwaukie is 37-unit apartment community built in 1975 on almost two acres. These 15-townhouses and 22 flats have easy access to I-205.  The Milwaukie area was pegged with an average 2.9% vacancy rate in last month’s Metro Multifamily Housing Association survey. The Riverside Apartments has a pool, picnic and BBQ areas and sold for $2,495,000 or $67,432 per unit at a cap rate of 7.31%. The Buyer is planning on putting in new windows and doors at the property. P. Rorex and J. Sandoval of Los Angeles sold the property to a Portland area buyer for all cash. 

Developers Halt Plans for 15-story Pearl District Apartment Tower

The Oregonian has reported that Simpson Housing LLP of Denver has called off plans to develop a 15-story apartment tower in the Pearl District at the corner of NW 14th and Irving. Read More.

Axiometrics: Recent Slowdown in Apartment Effective Rents and Occupancy

Axiometrics Inc., a provider of data and analysis on the apartment market, notes in its latest research that effective rents (rent net of concessions) and occupancy declined slightly in October, typical for the market as it heads into the fourth quarter. Nationally, effective rents declined 0.28% between September and October, similar to the 0.21% decline in October of 2010 but far ahead of the -0.73% and -0.63% growth rates in October of 2009 and 2008.

The national occupancy rate also declined slightly, from 94.07% in September to 93.83% in October. This trend is also seasonal and similar to the decline in October of 2010. Overall, occupancy is up 0.71% year-to-date.

"The market typically sees negative growth for effective rent and occupancy in the fourth quarter, and this year the rates are likely to be negative again, though much milder than for the average fourth quarter," said Jay Denton, vice president of research for Axiometrics. "Year-to-date growth has slowed somewhat from our last forecast. We continue to expect a strong apartment market for 2012, but perhaps not as robust as previously forecasted."   Read the full story.

Costar Reports on "The Coming Rental Housing Wave"

The multifamily market is benefitting from changing demographics and consumer attitudes toward renting resulting from the growing number of financially stressed households. The increase in young and newly formed households that have decided to postpone or even reject homeownership in favor of the lower debt and flexibility afforded by renting during these last unsettled economic years. Read the full story.

Apartment Sales Volume Remains Strong

Despite economic uncertainty, the apartment transaction market remained strong in the third quarter, according to New York–based commercial real estate research firm Real Capital Analytics (RCA). Read the full story.

Census Reports: Portland Metro Q3 Vacancy Rate Falls Yet Again to 3.1%

The U.S. Census Bureau reported this week that Portland's vacancy rate fell from 3.5 percent to 3.1 percent in the third quarter of 2011, maintaining its position as the nation's fourth lowest vacancy rate among the top 75 U.S. Metropolitan Statistical Areas (MSAs).

Seattle-Tacoma-Bellevue, WA had a Q3 2011 vacancy estimate of 6.8 percent, down from 7.5 percent the prior quarter and the nation's 17th lowest.




The nation's 10 lowest vacancy rates were:

• Springfield, MA 2.6
• Worcester, MA 2.8
• Oxnard-Thousand Oaks-Ventura, CA 3.0
• Portland-Vancouver-Beaverton, OR-WA 3.1
• El Paso, TX 3.3
• Bakersfield, CA 3.7
• Alburquerque, NM 4.3
• Albany-Schenectady-Troy, NY 4.5
• San Jose-Sunnyvale-Santa Clara, CA 4.6
• Los Angeles-Long Beach-Santa Ana, CA 5.0

The MSA's with the five highest vacancy rates were as follows:

• Greensboro-High Point, NC 16.3
• Orlando, FL 16.6
• Poughkeepsie-Newburgh-Middletown, 17.0
• Tucson, AZ 17.0
• Houston-Baytown-Sugar Land, TX 17.1

Click here to read the full report online.

Developers Reportedly Actively Moving to Construct Apartments

Two-thirds (67%) of developers surveyed last quarter by the National Multifamily Housing Council said construction activity is underway, and 20% are breaking ground on new projects at a rapid clip. The other 47% reported an increase in pre-construction activities—acquiring land, lining up financing, getting building permits—but not much actual construction yet.

Read more: Too Many Renters, Too Few Apartments