HFO Pumps Up Portland Office

The apartment-investment firm HFO Investment Real Estate has added two staff positions and one broker. Already the largest apartment-only commercial real estate brokerage in Oregon and SW Washington, the company’s expansion is a reflection of the company’s goal to constantly improve the HFO experience coupled with the growth in apartment development.

Recently added are Spencer Marona, Managing Director and Lee Fehrenbacher, Analyst. Meanwhile, Jack Stephens has been promoted to Broker, bringing the number of licensed brokers in the office to nine—its high water mark.

Spencer Marona, Managing Director, joins HFO in a newly-created position.  Marona has spent his career working for titans of commercial real estate and commerce in the Pacific Northwest. He is a driven organizational leader with a successful track record of helping teams implement their strategic vision. He will manage the firm’s goal of constantly improving the client’s brand experience. Marona has worked with winning teams since college, where he was a player and assistant coach for the Washington Huskies. As an athlete, he played in the 2001 Rose Bowl and four NCAA Bowl Games. Marona graduated with a degree in Humanities from the University of Washington.

Lee Fehrenbacher, Analyst, is new to the brokerage side of real estate but not the industry. Prior to joining HFO, he was a reporter for the Daily Journal of Commerce, where he wrote hundreds of articles on Portland's real estate market. After nearly three years of full-time research, Fehrenbacher has a virtually encyclopedic knowledge of the apartment development pipeline, and an intuitive understanding of the economic drivers behind each project. A native of Portland, he grew up in Sacramento and earned a B.A. in English at Western Washington University in Bellingham.

Jack Stephens, Broker. HFO recruited Stephens from a national commercial real estate firm in 2013. Having grown up in NE Portland, he draws upon his first-hand knowledge of the metro area to educate clients on the region and the sub-markets within it. His thirst for knowledge and avid attention to detail make him highly valuable in analyzing the ever-changing financial landscape of multifamily investments. Stephens earned a Bachelor of Science in Economics from the University of Oregon.

Will AIR BNB Be a Problem for Landlords and Tenants in Portland?

It's been all over the news lately. AIRBNB. People renting their houses, and in some cases apartments and condos, to strangers for a few extra bucks to cover the rent or mortgage.

In Portland, following a work session on June 24, and two subsequent hearings on July 2 and July 23, City Council unanimously adopted the new rules that will allow a resident to rent up to two bedrooms in their house, attached house, duplex, manufactured home, or accessory dwelling unit to overnight guests with a low-cost permit. Such rentals will not be allowed in multi-dwelling structures, such as apartments and condos, but will be addressed by Council later this year. 

The new short-term rental rules for single family homes take effect on Friday, August 29. The City expects to begin issuing permits on  September 2nd.
 
Here is a summary of the rules and regulations for owners of single family dwellings that want to rent out rooms. The full documentation is here.

Meanwhile, in some parts of the country, multifamily rentals are generating controversy and concern, as GlobeSt.Com reports:

"New York courts have determined that a landlord cannot use a law enacted last year to prevent apartments from being turned into hotel rooms, thereby enabling the existing tenant to utilize  the services of Air BnB to make a profit on the apartment they rent. In New York there is also talk among members of the City Council about enacting legislation to help renters defray the high living cost by taking in paying “guests.” However, little is being considered of the unintended consequences to both landlords and other residents in a building from tenants using services such as Air BnB.

First, there is the overriding security risk posed to both the tenant-host and the other residents from a stranger showing up with a suitcase and moving into a building for a night, a week or even longer. However, this risk also extends to the landlord if this “guest” turns out to be a criminal who robs the host or any of the other residents or causes bodily harm to any of the residents. In that event, the building tenants can and in many cases will sue the landlord, claiming that the ownership failed to maintain a safe living environment ." Read the full article.

 

Are Banks Creating a Multifamily Lending Bubble? (Part 1 of 4)

Lots of young adults are renting apartments today, and more of them are coming. These young adults are better equipped to support rent hikes than most realize. Millennials are widely portrayed as underemployed and poorly paid, but the data doesn’t support that view – not for the generation as a whole, at least. The Pew Research Center recently did the most extensive study to date on Millennials. One surprise finding: Millennial households command greater incomes than did previous generations at the same age (adjusted for inflation). Digging deeper, Pew found a disparity: All the income growth is coming among those with college degrees. Incomes for young adults without college degrees have dropped off. That disparity has obvious implications for apartment investors and lenders. Read the full story.

MFE: Inside the Greystar-Riverstone Merger

Multifamily Executive Magazine's cover story this month offers a look inside the merger of apartment management companies Greystar and Riverstone.

Read the story.

Condo Market Comeback?

The National Apartment Association reports a 47 percent increase in condo development since 2010. One expert remarks "Today's renters are tomorrow's condo buyers."

Read more.

Where Will 23,000 New Apartments in Condos Downtown be Built?

The Oregonian provided a quick snapshot of where Portland city planners think the next wave of apartments and condos will be built between now and 2035. Overall, the city is projected to add 112,000 housing units during the next 20 years.  Read more. 

Portland Ranked #8 in Top 10 Occupancy Markets

Portland has ranked eighth in the top occupancy for multifamily in Q2, behind sixth place Seattle.

Read more.

Freddie Mac: Multifamily Remains Strong [Video]

Freddie Mac reports that current U.S. multifamily vacancies are at a 13 year low.

Demand for Apartments Stronger than Thought

Good news for multifamily housing—demand for space is likely to be even stronger than experts estimated, helping the sector keep ahead of new construction for the immediate future, according to the Mid-Year Outlook 2104 from Freddie Mac Multifamily Research.
Read the full story (requires free registration), or Watch the Video.

MultifamilyNW 8th Annual Charity Golf Tourney!

Attention golfers! This Thursday is the MultifamilyNW annual charity golf tournament. This year it's at the Emerald Valley Golf Club in Creswell, Oregon. Read more.

Higher Rates, Lower Returns, Coming Soon?

Are higher rates and lower returns on the horizon? The question is pondered in this month's issue of the national apartment association magazine Units.

Investors frequently ask how they can tell when the market has reached its peak. As we know, such assessments are more accurately made in retrospect or, as the saying goes, “Hindsight is 20/20.”

But absent any crystal ball, certain market conditions may act as indicators of things to come. Discusses six signs that the apartment market may be entering the apex of the current investment cycle.

Read the article.

Report: Millennials Trending Towards Suburbs?

Will the influx of young people to the urban centers of cities across America be ending? GlobeSt.Com reports that "suburbia’s demise as a draw for Millennials are extremely premature—if applicable at all."

"A recent GlobeSt.com online poll asking why Millennials are rediscovering the virtues of life outside big urban centers as they enter a different life stage, 47% of respondents said the suburbs still corner the market on better services such as schools and property, and 42% said the cost of city living has made it harder to establish a family and career."

One thing is certain, each successive generation tends to defy being pigeonholed, and this generation will be no less independent than the last!

Read the full story. 

Portland Metro Apartment Construction at Highest Level in 17 Years

Through June, Portland/Vancouver metro area apartment permits numbered 2,998. If the rate of construction holds, our area is on track to build the highest number of apartments since 1997.

Proposed "Door for the Poor" in Mixed-Class Housing Strikes Nerve in NYC

A 33-story apartment complex in New York's Upper West Side has plans for a separate door for residents of affordable housing units. While the development isn't breaking any rules, it is striking a nerve. Its two-door plan is prompting calls for changes in housing rules in the Big Apple. Read more.

U.S. Apartment Occupancy Rate At 95%

The national apartment market maintained its strong 2014 performance in June, as year-to-date effective rent growth continued to exceed that of any other post-Great Recession year, according to Axiometrics.

June’s concession rate of 0.78% was the lowest in at least five years, annualized effective rent growth of 3.6% was the highest since December 2012 and occupancy remained above 95% for the second straight month.

Read more.