257 Units Planned for 11th and SE Belmont "Goat Blocks"

At 1:30pm on January 9th the design commission will review initial plans submitted by Killian Pacific and Ankrom Moisan Architects, Inc. for development at the "goat blocks*" at SE 11th and Belmont.

Plans call for 257 apartments, with one level each of underground and above ground parking and are 84,000 square feet of retail space. The buildings will be up to seven stories tall.

*Why is it called the goat blocks? Three years ago, Killian Pacific brought in 50 goats to keep the grass mowed between SE 10th and SE 11th and Belmont.

Word has it they're still there.

Read more. 

Meanwhile, an additional 62-units is already under construction in the Pearl District at the eight-story community dubbed The Janey.

United Van Lines: Oregon Top Choice for New Out-of-State Residents

United Van Lines released its annual study of top states for  in-migration. After four years of being runner-up, Oregon ranked #1 for inbound migration.

The state most people are leaving? New Jersey.
Read more.

Meanwhile a somewhat unorthodox "best cities" ranking was announced this week. The national real estate blog Movoto ranked Portland best city in the U.S., largely because, despite our high percentage of vegans/vegetarians, it ranks highly among "best cities for meat and movie lovers." Read more. 

Axiometrics & REIS: 2014 Rents to Grow Despite Construction Boom

Who will win the battle of the apartment research firms in forecasting the average increase in U.S. rents?


Axiometrics predicts average U.S. rents will increase 3.1%, about the same as this year.  Reis says it will be closer to 3.3%.

A USA Today report quotes Axiometrics' VP of Research Jay Denton, saying:

• Rents have soared 43% in San Francisco since 2009, including an 8% jump this year. San Francisco is forecast to have a 5.1% jump given strong demand and limited new supply.

• Seattle, which posted a 6.5% increase in 2013 will see increases of 4.4% next year.

• Austin, which rose 5.2% this year, will see an increase of 3.7%

Institutionals Developing Exit Strategies?
Meanwhile, Multifamily Executive reported that Victor Calanog, Reis' vice president of research & economics. Recently noted that some large investors are now considering exit strategies, such as the Carlyle Group, which signaled its intent to sell part of its $2.3 billion apartment portfolio in a recent conference call amid fears of growing supply.

Fair Housing: Avoiding Disparate Impact Discrimination

In a recent issue, Property Management Insider provides a really nice discussion of disparate impact discrimination.

What is disparate impact?

This might happen if employ an applicant screening system that inadvertently rejects a class that's protected by law. Under the Fair Housing Act Discriminatory Effects Standard, property owners could be subject to liability. The problem is that litigation involving these types of cases have largely been settled out of court, resulting in less-than-clear implications of what's allowed under the Fair Housing Act.

"But the theory is a bit more complicated and can put property owners in a potentially litigious situation while making 'seemingly neutral and common business policies, such as occupancy limitations, criminal background screening and Section 8 voucher policies, among others,' says the NMHC on its website. Such could trigger discrimination claims even though the property owner has no intent of singling out a particular group adversely."

 Read more on the Property Management Insider.

Storefronts No More: Some Apartments Drop Retail Space For More Units

Elliot Njus of The Oregonian recently reported that as property owners are easily leasing up apartments right as first floor retail languishes. Citing what they call forcing the oversupply of retail space, many owners are converting first floor space for additional apartments.

Read the full story.

Out With the Timber and in with the Tech: The New Oregon Economy

Both the Portland Business Journal and The Oregonian have had great coverage recently about reports provided by the Technology Association of Oregon and the Oregon Business Council on changes to Oregon's economy. Over the past 30 years we've shifted from Timber to Tech.

Portland is now among the top 10 cities in terms of information communications and technology jobs. These jobs pay a range of $90,000-$120,000 with an average wage of $105,000.

The Oregonian has a cool infographic on their page here (note: it takes a little while to load).


Read the Business Journal's story here.

The biggest worry for these high paying companies? Lack of skilled workers for all the jobs they have to offer.

Construction Begins on Another 124 Units at Orenco MAX Station in Hillsboro

Holland Partner Group broke ground December 12th on The Core apartments. The multi-story apartment, office and retail development will include a total of 124 units. The building will consist of two floors of parking and four floors of apartments.

The Core is part of Holland's $120-million mixed-use Podium Project. The development will have three six-story buildings of nearly 580 apartments with 20,000 square feet of retail.

HFO-TV: Apartment Fire Safety Tips with Ted Stark, USI Insurance

Did you know they make stove hood fire extinguishers that cost about 20 bucks? We didn't either. All this and more as HFO and Ted Stark discuss apartment fire safety tips.

Portland & Oregon Jobless Rates Hit 5 Year Lows

Portland metro area's unemployment levels are now below the U.S. average and at the lowest point since before the recession began. The Portland unemployment rate is down one full percentage point from a year ago. 

About 1/3 of the Portland Metro's new jobs being created are in Construction.*

The City of Portland grew almost 10 percent in the past five years.  That is twice as fast as Washington and Clark County, and almost five times faster than Clackamas County.*

 

 

This dramatic reversal of historic population growth trends is being driven by large numbers of college graduates moving to the city.  A slight majority of all newcomers to the City of Portland in 2012 had a four-year degree or more.*

Oregon Employment Department reported that Oregon's Unemployment rate fell to 7.7 percent in October, it's lowest level since October, 2008.

*Oregon Employment Department

National Trends: Will CBD's Continue to be the Center of Attention?

Nationally speaking, central business districts have been "where the action is" since the recession ended.  Worries are growing that oversupply may rain on the urban parade.

Read more.

Ready or Not? Micro-Units Arriving in Portland

Footprint Investments

Back in March, Portland's first micro apartments opened in the Pearl District at the eko haus Freedom Center. When they opened, the Freedom Center was featured in a TV news story by KGW. 

A few months later, CNN offered an inside look at a similar 295-square foot apartment building in San Francisco. Micro-apartments have been going up in downtown Seattle since 2008. Click for video.

The story continued on November 5th when Portland real estate reporter Elliot Njus of The Oregonian wrote about current Micro-Apartments in NW Portland on Thurman Street and a future planned development in the Hollywood District on his real estate blog here. 




Just three days later on November 8th, The Oregonian editorial board weighed in with an opinion piece critical of government for allowing developers "a thousand ways" around a set of minimum standards. Click here.

Most recently, on November 20th, KATU-TV reported that neighborhood residents in the Hollywood District of Portland began protesting fight construction of the planned micro-apartments there. Click here.

Is Portland ready for more micro-units? What do you think?

HFO Sells 104-Unit Apartment Property in Vancouver, Washington for $9.1 Million

HFO Investment Real Estate (HFO) is pleased to announce the sale of the Village on Seventh apartments in Vancouver for $9.1 million.

Using its extensive network of investors, HFO was able to source a buyer who recognized the upside potential of the asset and had the ability to assume the existing debt.

Village on Seventh consists of 13 buildings on nearly six acres in SE Vancouver. Built in 1991, this low-density garden-style asset features unusually large apartment units and offers a long list of renter amenities including fitness center, clubhouse and pool/spa.

The buyer -- FPA -- is a real estate investment firm utilizing institutional private equity for apartment investments. FPA and its affiliated management and general contracting companies has a portfolio of approximately 20,000 apartment units valued at $1.9 billion.

HFO represented the parties in the transaction.

Owners of LLCs May Qualify For New, Lower Oregon Tax Rates!

Harris Berne Christensen LLP has published an important update regarding new tax rates that take effect in 2015.  These new business income tax rates give a significant tax cut to business owners . . . if they have the correct business structure and if they meet the requirements. If necessary, you may want to consider restructuring to take advantage of these new lower tax rates.  Read more.

In addition, Oregon's unemployment tax rates will fall in 2014 for the first time in three years. The average tax rate will drop from 3 percent to 2.76 percent, a savings of $85 per employee on average.

Construction Leading Oregon's Job Recovery

Oregon’s seasonally adjusted unemployment rate dropped to 7.7 percent in October, its low point for the year, and the lowest in five years. Construction jobs surged 9.3% in the past year. 

In October, 135,298 Oregonians were unemployed. This was 22,322 fewer
individuals than in October 2012 when 157,620 Oregonians were unemployed.  The labor force participation rate declined to 61.2 percent, a record low. The participation rate has declined in Oregon and across the nation and is a measure watched by the Federal Reserve to gauge the extent to which the economy is operating at full employment.

Read more at Oregonlive.

1031 Exchange Basics [Video]

Toija Buetler, Attorney and Regional Manager of IPX 1031 Exchange, gives a primer on 1031 Basics.

 

Value of Trade & Harbor Jobs Explored in Recent Studies

In Oregon, jobs involving trade have grown 7x faster than other jobs.  The Portland Business Alliance in conjunction with the Value of Job Coalition have released data from three major studies on the job growth powered by Oregon's import/export trade.

Click here to visit the website with full details.

Leasing an Apartment is now the New American Dream

In its latest report, Property Management Insider argues that the middle class is being squeezed out of the ability to afford a median-priced home in cities throughout America.

City populations are booming at levels not seen since the 1920's and the percentage of home owners headed by young adults is falling significantly.

Check out this fascinating and detailed look at renting as the new American Dream. Read more.

Fake Apartment Reviews: Don't Write Them

Some apartment owners may notice fake reviews on apartment rating sites about their properties, or they may write fake reviews themselves in an attempt to improve their ratings.  In its Property Management Insider newsletter, MPF Market Dynamics has a word of advice: Don't.

Read "To Fake or Not To Fake: The Apartment Review Question"

Want Gen Y Renters? Here's how to get them. . .

Here are some secrets about what attracts today's younger people from a recent survey:

1. Those of us in Gen Y use Google or Craigslist to find apartments -- can we find you there?
2. If we can find  you on Google, it's better if your links are to specific properties -- not to another page where we have to fill something out! (Puhleeze! Can you say "hassle?")
3. Please include floor plans. We care about them.
4. When we check out reviews of your apartments, we want to know they're clean.
5. Our biggest turn-offs are comments about pest management challenges, loud or bothersome neighbors or complaints about customer service.

and there's more...


Click to download a PDF of the full article from Units magazine.

HFO-TV: Mary Beth Christopher on Improving Investment Performance

HFO Lead Underwriter Mary Beth Christopher explains a bit about ways apartment owners can control expenses and improve income.  We also discuss HFO's asset review program.

U.S. Census Reports Q3 Portland/Vancouver/Beaverton Multifamily Vacancy at 2.1 Percent - Nation's 3rd Lowest

The U.S. Census Bureau reported today the Portland/Vancouver/Beaverton vacancy rate remained flat at 2.1 percent in the third quarter, the nation's third lowest among the top 75 U.S. Metropolitan Statistical Areas (MSAs).

Seattle-Tacoma-Bellevue, WA ranked #9 with a Q3 2013 vacancy estimate of 4.4 percent, up from 4.0 percent from the prior quarter.

MSA's with the lowest vacancy rates were as follows:
 

• Oxnard-Thousand Oaks-Ventura, CA - 1.8
• San Jose-Sunnyvale-Santa Clara, CA\34 - 2.0
• Portland-Vancouver-Beaverton, OR-WA\25 - 2.1
• Springfield, MA - 2.1
• Nashville-Davidson-Murfreesboro, TN\21 -3.2
• San Francisco-Oakland-Fremont, CA\33 - 3.2
• Los Angeles-Long Beach-Santa Ana, CA \19 - 3.8
• Denver-Aurora, CO\12 - 4.1
• El Paso, TX -4.1
• Tulsa, OK -4.2

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

• Richmond, VA - 13.5
• Syracuse, NY - 13.7
• Las Vegas-Paradise, NV - 14.3
• Memphis, TN-AR-MS - 14.6
• Columbia, SC - 15.1
• Orlando, FL - 17.4

Average national vacancy rate for Q3 2013 was at 8.3 percent for rental housing and flat at 1.9 percent for homeowner housing. The rental vacancy rate was 0.3 percentage points lower than last quarter.

The nation's homeownership rate ticked up slightly to 65.3 percent, up 0.3 percentage points from Q2.

Download the Census Bureau table here.

Call in the Trombones! Park West Tower Groundbreaking at 10:30 am Friday in Director Park

TMT development is hosting the Lincoln High School marching band at 10:30 a.m. tomorrow for the official re-groundbreaking ceremony of the Park Avenue West Tower. 

The building will include 211 apartments on 15 floors topped by 13 floors of office space leased almost exclusively to the law firm Stoel Rives.  The building will have a six floor underground parking garage topped by two floors of retail.

The $175 million project will be completed in 2015.

REIS: National Apartment Vacancy Rate: 4.2%, Portland Metro: 2.9%

According to REIS, the national apartment vacancy rate declined in the 3rd quarter from 4.3 percent to 4.2 percent. For Q2 the Portland Metro apartment vacancy rate was pegged at 2.9 percent. Read the full story.

The Red Capital Group also released its 2013 report for Q2, ranking Portland 5th in the nation for occupancy.  Red Capital Group is forecasting Portland metropolitan vacancy at 3.5 percent for 2014, 3.4 percent for 2015 and 3.1 percent for 2016. Download the Red Capital Group summary sheet PDF.

Report from Real Share Apartments 2013: "Potential for A Nice Long Cycle"

A panel of apartment experts this past week at the Real Share Conference in Los Angeles were upbeat about the state of the apartment market.  One panelist's forecast was the possibility of a  long cycle with continued gains.

Read the full story at GlobeSt.com

Join HFO's Table at the BIG Breakfast, Thurs. Nov. 7th

Consider joining the HFO table at the BIG BREAKFAST on Thursday, November 7th 7:30-8:30 am at the Oregon Convention Center. If you can't make it - please consider making a donation.

Oregon ranks among the bottom of all states for high school graduation rates.  But Big Brothers/Big Sisters is amazingly effective at making a difference.  Last year 95% of all at-risk children matched with Big Brothers or Sisters graduated high school! Please give your support for something with proven results.
https://www.givebigtoday.org/

Making A Difference: Its National Lead Poisioning Prevention Week

Apartment Safety: It's the EPA's annual lead poisoning prevention week. For buildings built before the late 1970's, lead-based paint can be an issue. If you haven't read up on it lately, here a refresher and four steps management can take to prevent lead poisoning (and the litigation that can come with it).

CoStar: Financing Availability for Multifamily Development Expected to Slow

After four years will financing to develop new apartments become more difficult?

Read today's report at CoStar.

HFO Apartment Construction Report(TM)

The last numbers are in! HFO's current Apartment Construction Report(TM) provides the following data.

This report, updated as of October 23, 2013, shows a total of 15,727 units currently under construction and planned in the Portland/Vancouver metro area.  If all of these units were built, here is where they would be located:
 

Sum of Units	Stage of Construction
Location Code	Planned	Under Construction	Grand Total
Close-in Eastside	1273	1596	2869
Close-in Westside	2424	690	3114
N Portland	1446	1000	2446
Outer Eastside	528	668	1196
Outer Westside	2336	2164	4500
S. Waterfront		118	118
Washington	976	508	1484
Grand Total	8983	6744	15727

(c) HFO Investment Real Estate 2013. Reproduction without permission is strictly prohibited.

Oregon's In-Migration Coming From All Over the Country, But Mostly California

In a series of posts on the Oregon Office of Economic Analysis blog, Josh Lehner explains in great detail where the new residents of Oregon are coming from and just where they are going. 

There's a lot here to consider, but HFO's reading is:

Southern Californians are the largest set of migrants to Oregon (L.A./Riverside & San Diego).

Portland is getting in-migration from all big cities across the country with NY ranking #3

There is a slight net migration gain to Seattle from Portland.

82% of people leaving Portland for Washington are moving to Clark County... (tax reduction, anyone?)

People leaving Portland move largely to Seattle, Austin, Houston, Denver, Charlotte, New Orleans and Dallas. 



See more cool charts on the state's economic blog.

http://oregoneconomicanalysis.com/2013/08/29/migration/
http://oregoneconomicanalysis.com/2013/09/05/more-on-migration/
http://oregoneconomicanalysis.com/2013/09/05/one-more-on-migration/

Portland, Oregon Metro Fall 2013 Apartment Market Update [Video] with Greg Frick

HFO Partner Greg Frick shares his thoughts on the Portland metro apartment market. October 2013. [video]

From the Business Journal: Why Banks Love Apartments Right Now

The Portland Business Journal's Wendy Culverwell interviewed a local banker about banker's current feelings about the multifamily housing market.

Read more.

Sunday Oregonian: Shift to Renting Likely Permanent After Recession

The Sunday Oregonian's editorial this week was about the housing market, and how the recession has likely left it with one permanent change: more renters.  Read the editorial.

Portland area apartment tax bills to rise as much as 11%

Tax bills being mailed out now show increases for apartments as high as 11 percent. Read more on Oregonlive.com.

Breaking... Multifamily NW Apartment Report Pegs Portland Metro Vacancies at 3.11%

Multifamily NW released its report this morning stating apartment vacancies in Portland metro have fallen from 3.55 percent reported in April to 3.11 percent.

Average rent per square foot has increased 5.8 percent in the past six months.

Inner and central NE has the lowest vacancy in the area, at 2.1 percent.

Geographic Area	Rent Per Square Ft.	Market Vacancy Rate
NW Portland	$1.61	3.5%
Hillsboro	$1.05	4.5%
Aloha	$1.06	2.5%
Beaverton	$1.04	2.3%
Downtown Portland	$1.82	2.8%
SW Portland	$1.35	3.0%
Tigard/Tualatin/ Sherwood	$0.98	2.6%
Lake Oswego/ West Linn	$1.10	3.2%
Wilsonville/ Canby	$0.99	2.7%
Oregon City/ Gladstone	$0.98	2.6%
Milwaukie	$0.98	3.9%
Clackamas	$0.98	4.0%
Inner & Central SE Portland	$1.17	2.3%
Outer SE Portland	$0.98	3.6%
Troutdale/ Fairview/ Wood Village/ Gresham	$0.90	5.9%
Outer NE Portland	$0.86	4.3%
Inner & Central NE Portland	$1.28	2.1%
North Portland/ St. Johns	$1.08	2.2%
West Vancouver	$0.87	2.5%
East Vancouver	$0.94	2.6%
Salem	$0.86	4.0%
Eugene/ Springfield	$1.01	3.4%
Bend/ Redmond	$0.83	1.3%

Read more in Wendy Culverwell's article in today's Business Journal.

Also today, Elliot Njus reports in The Oregonian:
Demand For Apartments, & Rents Keep Rising Despite New Construction