Sunday, March 29, 2015

Portland Business Journal: Guest Column - Why Portland Is Popping On the Radar of Global Insitutional Investors

"Should that matter to us? The answer is yes, because institutional investors are folks who do their homework. They make investment decisions driven by facts, not emotion. They obsessively analyze numerous indicators: employment rates, demographics, incomes, cost of living and taxes. And lately they seem to think the numbers in Portland make us a sound location to place their bets," according to Vanessa Sturgeon, president and CEO of TMT Development, and author of a recently published column in the Portland Business Journal.

Read the entire column.

Friday, March 27, 2015

What Does Poor Urban Design Cost in America? $1 Trillion.

In a new report by LSE Cities and the Victoria Transport Policy Institute posted on, sprawl costs America about $1 trillion per year. Increases up to 80 percent per capita land consumption and 60 percent of car use can occur. Combined, the report estimates incurred costs of $626 billion per year for people living in sprawling areas and $400 billion for those outside of them.

Millennials continue to move into urban centers for the desire to live in walkable areas with numerous public transportation options; however, many developers are hesitant to move forward with building compact housing.

Read more.

Thursday, March 26, 2015

The Story Behind The 284 Units Going Up at the Burnside Bridgehead

by HFO broker Lee Fehrenbacher

Andersen Construction has begun erecting the first floors of B67: a 21-story glassy tower in Portland’s exact geographical center. When finished, the 284-unit building will be one of the most visible landmarks in the city.

Read more. 

U.S. Apartment Lease Renewals Reach All-Time High

U.S. apartment renters are increasingly choosing to stay put rather than move up to new apartments, move down to cheaper units or move out to buy homes. Apartment resident retention rates hit a decade-high in February 2015, continuing a five-year upward trend.

Wednesday, March 25, 2015

Homeownership At It's Lowest Level In 20 Years: How Long Will Millennials Rent?

Sales are 4.7 percent higher than a year ago and above year-over-year totals for the fifth month in a row, NAR also said. That sounds good, but a sales rate of 5 million units a year is roughly where the market was in the mid-1990s. In other words, considering the population growth of the last 20 years, people aren’t buying houses at the same pace as they did then, and thus aren’t owning them at the same rate.

Tuesday, March 24, 2015

Report: $7 Billion In Apartment Activity in Portland For 2013

In 2013 – the latest numbers available – apartment construction, operations and resident spending contributed $7.1 billion locally and supported more than 70,500 jobs in the metro region.

Read more in Jon Bell's latest column in The Portland Business Journal.

Data from the report is available on the website:

HFO Sponsors Friends of Trees Planting in N. Portland (Photos)

HFO is pleased to have supported Friends of Trees in Saturday's neighborhood tree planting in the N. Portland neighborhoods of Arbor Lodge, Overlook, Kenton and Portsmouth!

The event was supported by 177 volunteers, and over 200 trees were planted.

HFO's Lee Fehrenbacher (L) digs in.

National Real Estate Investor: 8 Common Mistakes Real Estate Investors Make

In a recently published NREI slide show, multiple industry experts compiled a list of eight common mistakes real estate investors make.

With as fast as the market is moving and as active as buyers are, it is critical to seek expert advice prior to any acquisition. More importantly, is having a qualified broker who specializes in acquisitions and dispositions of the particular property type represent your best interests. Similar to seeing a medical or legal professional who specializes in a particular field, the same is just as important with investment real estate.

8 Common Mistakes Real Estate Investors Make according to National Real Estate Investor:

  1. Performing incomplete diligence.
  2. Assuming a recently constructed building has no problems.
  3. Going over their comfort zone without proper advisement.
  4. Not calculating rent sustainability.
  5. Focusing on the short-term noise vs. long-term signals.
  6. Not building in proper deal contingencies.
  7. Chasing "bad" deals, at all costs.
  8. Stretching for yield at the wrong point in the cycle.

Read details about each of these common mistakes at Contact an HFO broker to discuss any property acquisition or disposition goals and how we can help you avoid common real estate investment mistakes like the above.

Friday, March 20, 2015

Foreign Capital Is Starting to Invest Beyond Core Properties and Markets: Is Portland Ready?

Reports at the end of 2014 showed that it was a banner year for foreign investors placing capital into the US commercial real estate sector. According to a Puget Sound Business Journal article, Chinese capital was responsible for $2 billion worth of purchases for investment real estate in the Puget Sound market.

Due to a strong US economy, foreign capital continue to pours into the economy in seek of multifamily assets and other investment properties.  You can read more about this in a recently published Costar article.

If or when the Portland market begins to experience the rippling effects of investors chasing yield from the Puget Sound market due to investors selling their assets at top value, how is your apartment positioned to take advantage of this? If you decide to sell, what can you do with the proceeds?

Contact an HFO broker to help you answer these questions.

Thursday, March 19, 2015

LA Times: Fed moves toward raising interest rates - but when is unclear

The Federal Reserve took its first step since 2006 in raising interest rates, but with economic growth slowing and inflation remaining low, they're in no hurry.

Read more in the LA Times

The X Factor Driving Today's Investment in Multifamily Real Estate

If interest rates were at a higher level such that a buyer of a multifamily property would go from a 5% cap to a 6% cap to achieve the same yield, the property would need to have a 20% higher net operating income to maintain the same value.

This is why many owners will consider selling at lower rates, as it gives them a lot more value while the buyer achieves their goal and is able to lock in a rate for 10 years.


Tuesday, March 17, 2015

HFO - Proud Sponsor of Oregon Food Bank's Canstruction - April 27-May 3 at Pioneer Place

Celebrating two decades as one of the world’s most imaginative food charities, the Canstruction® exhibition and competition invites Oregon’s top architecture, engineering, and construction firms to transform more than 35,000 cans of food into whimsical, wildly inventive sculptures at Pioneer Place in downtown Portland.

Click here to see last year's entries and to donate.

Saturday, March 14, 2015

Are you having trouble finding a parking spot? Fear not. It will get worse.

According to Patty Dupre and Mike Scott with Dupre+Scott, an unbiased apartment research company covering the Puget Sound, parking is only going to get worse with new deliveries of apartment buildings, particularly in the core. More on this is covered in Dupre+Scott's video above and their recently published article.

Portland is also having their own battles with parking. Read more about "Portland Parking Wars" in a recently published article in The Oregonian

For a different and controversial view on parking, see HFO's blog post from September 17, 2014.

Friday, March 13, 2015

National Multifamily Housing Council: Apartments Add $1.3 Trillion to Economy reported that the apartment industry and 36 million residents contributed to approximately $1.3 trillion to the US economy in 2013, while supporting 12.3 million jobs.

Research was conducted by the National Multifamily Housing Council and National Apartment Association.  Read more about this's recently published article.

Thursday, March 12, 2015

HFO-TV: Are 1031 Exchanges Going Away?

David Moore discusses possible national changes in Section 1031 like-kind exchanges.

Summary: Both parties of Congress are proposing to end the 1031 exchange program and the Administration is proposing to limit exemption to the first $1 million. But how likely is this to happen and what should you do about it?

Millennial Homebuyers: What Are Their Fear Factors that Are Making Apartment Owners Smile?

Click the image below to see an infographic of inside the mind of a millennial homebuyer. The infographic is courtesy of Ali Wolf, Senior Research Analyst at John Burns Real Estate Consulting. Click again on the infographic if needed to enlarge.

Click to enter the mind of a millennial homebuyer

Wednesday, March 11, 2015

HFO-TV: Are You Ready For Apartment Hot Water Heaters Getting Bigger?

It's estimated that by mid May, 2015 the typical sizes of home water heaters will be unavailable. New manufacturing regulations taking effect April 16th require water heaters to be more energy efficient. This requirement adds four inches of insulation to the height and four inches to the width of a typical water heater.

These new sizes may not fit into existing closets or utility rooms and existing stock is expected to run out quickly.

Smaller under counter varieties will be available in the same size, but water capacity will be reduced by 12 gallons in order to meet the new insulation requirements.

Tuesday, March 10, 2015

More Satisfied Clients! HFO Represented Buyer and Seller in Sale of 72 Units, Close-In NE Portland

HFO Investment Real Estate (HFO) is pleased to announce the sale of the 72-unit Colonial Gardens Apartments. Built in 1945, the vintage property traded for $9.25 million or approximately $128,473 per unit.

Monday, March 9, 2015

Renters Begin Exploring Options To Change Oregon's Rent Control Prohibition

The Oregonian reported recently that local activists are exploring ways to potentially eliminate the state's prohibition against rent control.

Oregonian's March 5th story: "Activists say it's time to undo Oregon's prohibition of rent control."

The news struck such a nerve with readers they wrote a follow-up story the next day:
Oregonian's March 6th story "Is Portland ripe for rent controls?"

Friday, March 6, 2015

Portland Ranks 14th Highest Median Rent in the Country and Where's the Love?

by Spencer Marona 

According to Zumper's National Rent Report for February of 2015, Portland ranked 14th out of the 50 major metropolitan markets for highest median rent in the month of February.

Zumper also ranked Portland at number six in a recently published article on the top six places for singles to find love.

Headquartered in San Francisco, CA, Zumper is a relatively new startup research and technology company, twinning a consumer and B2B approach. Zumper developed the first ever search-through-close rental platform where a user can search, tour, and submit an instant and guaranteed rental application for a home or apartment via their mobile phone.

Zumper may be relatively new to the multifamily industry; however, with venture capital firms like KPCB and Andreessen Horowitz among others, chances are Zumper could become a household name soon. Both firms have venture backed giants in the tech industry including: Google, Amazon, Pinterest, Twitter, Airbnb, Spotify, Flipboard, and more.

Thursday, March 5, 2015

Portland Center for Real Estate Issues Quarterly Real Estate Report for Multifamily

The Portland State University Center for Real Estate has issued its quarterly report for the Portland metro area market.

According to its most recent multi-family housing report,  the apartment market remains very tight. Apartment owners were able to achieve 5.0% effective rent growth nationally and 7.5% in the Portland market, making Portland the 7th strongest market in the country. And while vacancy rates have risen slightly to 4.1%, they have stayed below the benchmark rate of 5.0% for the fifth straight year.

Read the full multifamily report here.  

Goldman Sachs: Data Story on Millennials

Click Here to View the Goldman Sachs Infographic
Millennials - One of the largest generations in history, savvy with savings, slow to marry, more 4 year college degrees than any other generation, and they arguably have higher IQs than previous generations; on an apples to apples basis, according to a recent BBC article. The impact Millennials will have on shaping the future is profound.

Goldman Sachs recently published an infographic covering statistics and metrics on Millennials. It takes the reader on a wide-eye and informative journey. Click the link above to learn more.

Wednesday, March 4, 2015

Portland MSA Counties Approve Permits for 6,681 Apartment Units in 2014

An analysis of statistics provided by the U.S. Census bureau by HFO shows that multifamily construction permits for the Portland metro area totaled 6,681 in 187 buildings for 2014, the highest level since 1997 when 7,205 permits were issued.

Tuesday, March 3, 2015

With U.S. Rental Demand Rising and Supply Limited, Apartment Industry Sets 2015 Congressional Priorities

The National Multifamily Housing Council and the National Apartment Association issued a joint news release today, listing priorities for Congressional action in 2015.

"For the fourth time in the past five years, 2014 saw an increase of more than 1 million new renters. Additionally, over the past decade, 8 million rental households were created, which is the highest number on record," said NAA President and CEO Douglas S. Culkin, CAE.  "The surge in apartment demand has outstripped supply. As a result, we need to be building an estimated 300,000 to 400,000 new apartments a year to meet expected demand."

  • Housing Finance Reform: Ensure housing finance reform proposals include a federal guarantee and recognize the unique characteristics of the multifamily industry.
  • Tax Reform: Support tax reform that promotes economic growth and investment in rental housing without unfairly burdening apartment owners and renters relative to other asset classes.
  • Immigration Reform: Seek immigration reform that improves temporary worker visa programs and prevents apartment firms from being required to enforce immigration laws.
  • Energy Policy: Ensure that national energy policy limits reliance on inflexible codes and mandates, and supports new research and incentive-based strategies, as well as trusted energy and building technology programs.
  • Data Security: Advance sensible privacy and data security policies.
  • Telecommunications: Protect apartment owner and resident interests as policymakers consider in-building and outdoor coverage and capacity issues.

Millennials Overtake Baby Boomers This Year

Any day now, the Millennial generation (those ages 18-34) will surpass the Baby Boom Generation as the nation's largest living generation. Meanwhile, the smaller Gen X population (ages 35-50) will outnumber remaining living Boomers in 2028.

Read more at Pew Research. 

In a recent study on Millennial consumers, Elite Daily and Millennial Branding reported results of its study indicating that 59% of Millennials would rather rent a home than buy one, and only 25% of them are "very likely" or "completely likely" to purchase a home in the next five years.  Read more. 

In a recent segment on HFO-TV, we interviewed John Horvick, VP of research for the public opinion research firm DHM. He provided us with an inside look on the living and transportation preferences of Portland's millennial generation and how those choices are shaping our area's future.

Monday, March 2, 2015

Will the Loss of Hanjin Deal a Huge Blow to Portland Economy?

Oregon Business magazine reports that although it feels like the loss of Hanjin would be an economic body blow to Portland, apparently that's not the case.

Read more.

Sunday, March 1, 2015

Retiring and Selling, or Moving Out of Home for the First Time? Developer John Carroll Is Counting on It.

Announced last week in The Oregonian/OregonLive, Developer John Carroll has plans to develop a 14-story apartment tower in the Pearl District.  The site is on the corner of Northwest 11th Avenue and Hoyt Street, which is currently occupied by Jim Steven's Auto Body.

This will add to the existing construction boom in the Pearl District and the $30 - $40 million project is anticipated to be delivered in July of 2016. Carroll states that he is confident there is a market for his project, in what he calls the "close-in Pearl" specifically for Baby Boomers and Millennials. View renderings of site and learn more about this planned development in The Oregonian/OregonLive article.