Thursday, August 29, 2013

Active Portland Apartment Market Getting National Ink

The Big Six markets (New York; Washington, D.C.; Boston; Los Angeles; San Francisco; and Seattle) indicate that the economy is recovering.  The most telling sign of a revival are when the secondary markets heat up.  Turns out "under-the-radar" Portland is raising some eyebrows.

Ryan Severino, an economist for New York–based market research firm Reis, chose Portland, Ore., as his hottest secondary market. Based on Reis projections, Portland is expected to have the highest effective-revenue growth of any non-gateway market, Severino says.
“Moreover, not only are [Portland's] fundamentals projected to perform well, but the presence of the technology sector bodes well for the metro area," Severino says.
"Technology is clearly one of the drivers of the U.S. economy, and in October Intel announced that it was planning a $3 billion capital investment for a massive expansion of its facilities in the metro area.”
Additionally, local industries are expected to drive demand in the housing market as the largest companies grow. Global conglomerate Nike, which is based in Portland, is expected to expand, with a $125 million capital investment.
“Not to mention Portland’s position as the microbrew capital of the U.S., and it is good times ahead for Portland this year.”
Read about the other four metros here.  

Wednesday, August 28, 2013

Second Quarter Multifamily Performance Highlights for Portland Apartment Market

If you missed it, MPF Research released its Q2 Apartment Market Highlights for Portland recently. 

"Despite the fact that rent growth levels have eased since 4th quarter 2012 (5.7%), annual rent growth in Portland has stayed relatively strong and has not fallen off nearly as quickly as other metros. Unlike other markets in the West, rent growth has stayed pretty consistent by product age group."
"Strong rent growth levels were achieved thanks to tight occupancy rates, with the 2nd quarter rate landing at a solid 97.0%, a high not seen since 3rd quarter 2007." 

You can read more highlights here.

The Effect of the Interest Rate Surge on Multifamily

"We all knew the ultra-low mortgage rates seen over the last couple years wouldn’t last forever. Still, the recent rise of a full percentage point over a two-month period left even the steeliest of apartment professionals reaching for their Pepto-Bismol."

Read the full story at Multifamily Executive.

Tuesday, August 27, 2013

CoStar Multifamily Review and Outlook: Some Markets Up - Some Markets Down in the Months Ahead

At a recent Midyear report, CoStar's research director, Luis Mejia, said "We're past the point at which simply picking a market will lead to a successful strategy." While vacancy rates are low, a mini-construction boom in some markets is expected to have an impact on vacancies and growth of rents.

CoStar is predicting that "over the next 12 months, 40 markets will see elevated vacancies, with 20 of those seeing rises of 50 bps or more. Active supply markets like Austin, San Jose, CA, and Charlotte will see vacancies rise by 200 bps or more."
Make no mistake -- apartment demand is still very strong and U.S. demographics are clearly in the sector’s favor. With more than 65 million Echo Boomers ages 20-34 now entering the prime renter cohort -- more than at any time since the 1970s -- savvy multifamily investors will continue to find opportunities in spite of new supply pressures.
Many Echo Boomers are still living in their parents’ basement or with multiple roommates, but eventually they’ll get decent jobs and leave the nest. Markets benefiting from the growing technology and energy sectors such as Seattle, Austin, Denver and Houston are all seeing continued increases in both demand and absorption. 

Read the full article.

Friday, August 16, 2013

135 Units Going Up at NE 26th and E Burnside and 292 Units Proposed For Close-In SW

Yet more apartment construction in the news!

In Sullivan's Gulch, 135 units will be built with the help of a $15.4 million construction loan.  The apartments, located at NE 26th and E Burnside, are slated to open during the summer of 2014. Read More.

Meanwhile, an additional 292 units are being proposed for close-in SW Portland:  

  • An 11-story 158 unit project known as the Lincoln Place Apartments may rise near Lincoln High School at 1500 SW Taylor Street;
  • An additional 134 units are proposed at SW Jefferson at SW 21st.

Read More.

Thursday, August 15, 2013

New Seasons Plans Early 2015 Opening at NW 21st and Raleigh

A future high-density development on the current Con-Way site in NW Portland will begin in earnest next year.  First up will be a retail development known as Slabtown Marketplace, anchored by New Seasons. A 115-unit apartment complex will be located across the street from New Seasons.

Developer C.E. John has these projects and more apartments going up in NW Portland including 92-units at NW 23rd and Lovejoy and 40 Units at NW 20th and Raleigh.
Read More. 

Wednesday, August 14, 2013

Portland Metro Apartment Market: High Occupancy and 6.7% Effective Rent Growth Last 12 Months

U.S. Apartment Revenue Growth Leaders and Losers

The above table lists some of the top and bottom performing MSAs across the country. Some Florida markets rank in the top tier for revenue growth this month, and California and the Pacific Northwest continue to perform well.

Washington, DC continues to rank among the bottom for both annual effective rent growth and revenue growth and showed negative rent growth for the second consecutive month.

Monday, August 12, 2013

Arson Caused Five-Alarm NE Portland Apartment Fire

According to new KOIN-TV reports, officials have determined arson was the cause of last Thursday's early morning fire of the Monroe Apartments.  The apartments were a total loss and property damage is estimated at $5 million, not including damage to nearby properties.  The Bureau of Alcohol, Tobacco and Firearms is investigating. BATF is seeking tips and is offering a $2,500 reward for information. Anyone with information on the cause of the fire is asked to call ATF Hotline: 1-888-ATF-FIRE.  Read more.

Monday, August 5, 2013

Portland Closing in On Gaining Back All Jobs Lost During Recession

The State of Oregon reports that Portland is on the verge of gaining back all the jobs lost during recession.  Washington County has already regained all the jobs lost to the recession and Multnomah County will likely do the same in a few months.  Clackamas and Yamhill counties are recovering more slowly and Columbia County employment remains flat.

Meanwhile the June unemployment rate of 7.3% is down one full point from a year ago. The regional unemployment rate is now lower than the U.S. rate, after several years of being higher.

Almost every major industry has seen employment growth except high tech manufacturing and government, which remain flat.