Tuesday, July 28, 2015

U.S. Apartment Sales Set To Outperform 2006

In the first half of 2015, $63.2 billion worth of apartments changed hands, a 37.6% increase compared with last year, according to Real Capital Analytics (RCA). The second quarter produced $29.7 billion worth of this activity, a 13% increase over 2014’s second quarter. Read the full story.

Census Report: Q2 Portland's Apartment Vacancy Rate Ranked Nation's 10th Lowest

The U.S. Census Bureau reported today that the rental vacancy rate for the Portland-Vancouver- Hillsboro metro area was 3.5 percent for the second quarter of 2015, up slightly from 2.7 percent for the first quarter.

For the past two years, Portland metro has ranked consistently among the nation's lowest vacancy rates and currently ranks at 10th lowest.

Seattle-Tacoma-Bellevue ranked 13th with Q2 vacancies tightening to 4.0 percent, down 1.0 percent from the prior quarter.

The nation's 10 lowest vacancy rates were as follows:
  • Worcester, MA - 1.4%
  • Cape Coral-Ft Myers, FL - 2.2%
  • San Diego/Carlsbad, CA - 2.3%
  • Providence-Warwick, RI-MA - 2.4%
  • Grand Rapids-Wyoming, MI - 2.5%
  • Boston-Cambridge-Newton, MA-NH - 2.6%
  • Los Angeles-Long Beach-Santa Ana, CA - 3.0%
  • Raleigh, NC - 3.1%
  • Allentown-Bethlehem-Easton, PA-NJ -3.4%
  • Portland-Vancouver-Hillsboro, OR/WA - 3.5%
The average national rental vacancy rate for Q2 2015 was 6.8 percent for multifamily dwellings of five or more units, and was 0.7 percent lower than a year earlier. The U.S. rental vacancy rate has been falling since 2009. It is at its lowest level since 1993 and far below the 11 percent average vacancy rate of 2009.
U.S. Median Asking Rents: Click to enlarge

U.S. Rental Vacancy Rates by Region: Click to enlarge

U.S. Homeownership Rate Still Falling
U.S. Homeownership rates have fallen from at recent high of 65.1 percent at the end of 2013 to an estimated 63.5 percent in Q2 2015, the lowest level in 22 years.

Homeownership rates in the Western U.S. remained flat at 58.5 percent, the lowest level in 24 years.

Q2 2015 Homeownership Rates by Region: Click to enlarge

Q2 2015 Homeownership Rates 1995-2015: Click to enlarge

[Note: The US Census vacancy estimate is 0.39% higher than the vacancy rate of 3.09% reported by MultifamilyNW in its Spring, 2015 Apartment Report.]

Thursday, July 23, 2015

Metro COO Recommends Against Expanding Portland Metro Urban Growth Boundary

In an interview today for HFO-TV, Ted Reid, Metro Urban Growth Boundary Project Manager announced that Metro's Chief Operating Officer has recommended against expansion of the Urban Growth Boundary for 2015.

Click to Read More

Multifamily's Perfect Storm: Invest in Secondary and Tertiary Markets - MHN Online

"To be successful, you need to go beyond the metro area..."

In an informative video interview posted on Multi-Housing News Online aka MHN Online, three multifamily experts discuss what they believe to be the brewing of a perfect storm for the apartment market.

  • White-collar graduate segements
  • Walkability and access to transit
  • Creating places that will attract capital 
  • Where rents will increase over time
  • Top secondary markets to invest in
  • Secondary markets at risk for too much supply
  • Property that is relevant to specific employers or a specific school
  • Intellectual capital
  • Anywhere that is two hours from a downtown market
Mulitfamily's Perfect Storm: Invest in Secondary and Tertiary Markets, MHN Online

Wednesday, July 22, 2015

More Claims Expected on Disparate Impact After Supreme Court Ruling

The US Supreme Court ruled 5-4 that it's possible for liability to exist even without intent. The case was Texas Department of Housing and Community Development v. The Inclusive Communities Project, Inc. In this decision, the majority stated that “recognition of disparate-impact claims is consistent with the FHA’s central purpose,” and that “unlawful practices include zoning laws and other housing restrictions that function unfairly to exclude minorities from certain neighborhoods without any sufficient justification.”

Thursday, July 16, 2015

City of Seattle: Record Breaking Apartment Activity

The Downtown Seattle Associaton recently published their mid-year development guide stating there has not been this much development in Seattle in more than a decade. There are 106 projects currently under construction, about to break ground or completed since January of 2014, including 10,425 apartment units.

In addition, a city record was broken last week with the $240 milion dollar sale of a new, luxury, high-end apartment building, Premiere on Pine. Holland Partner Group, which developed the 40-story project just west of the Paramount Theatre sold the property to Heitman, a global investment management real estate firm based in Chicago for the record price of approximately $622,000 per-unit.

Monday, July 13, 2015

Portland Q2 2015 Rent Growth Leader With Effective Rents Growing 11.3%

MPF Research reports today that metros in the Western region of the U.S. continue to dominate the apartment market leaderboard, including a few new additions that had been lagging.
  1. Oakland, CA  - 11.8% growth
  2. Portland, OR - 11.3% growth
  3. Denver/Boulder, CO - 10.2% growth
  4. San Jose, CA - 10.0% growth
  5. San Francisco - 9.9% growth
  6. Seattle, WA - 8.4% growth
  7. Sacramento, CA - 7.6% growth
  8. San Diego, CA - 7.5% growth

Thursday, July 9, 2015

MPF Research: Apartments Show Best Rent Growth in 15 Years

New resident rents rose 5.2 percent over the 12 months that ended in the second quarter. That’s the biggest rent hike since 1999-2000, according to the latest data from MPF Research, based in Carrollton, Texas.

Going into the year, most estimates called for rent growth levels to ease. Halfway through the year, the exact opposite has happened.

While rents in the Northeastern and Midwestern part of the U.S. have risen at a rate of 3.3%, effective rents in the South have grown 4.1% and in the West, rents are up a whopping 7.8% from the second quarter of 2014.

Rents grew the fastest in apartment markets in the West, topped by Oakland, Calif.; Portland, Ore.; and Denver-Boulder, Colo. But rents are also growing quickly in Western markets that have taken years to heal from the housing crash.

Watch the full report in this video from MPF Research. 

Wednesday, July 8, 2015

HFO-TV: HFO's Mid-Year Apartment Report Now Online

Catch up on the latest information in the Portland, Oregon metro apartment market in our recent apartment market update for multifamily investors.

What Is the Vision for Portland's Central Eastside?

Old industrial buildings being converted into creative office space, new trendy restaurants and breweries opening up like they are going out of style, parking spaces vanishing in the blink of an eye and hundreds of apartment units under development are the reality in Portland's Central Eastside Industrial District. What does the future hold for Portland's mecca for art and design?

Part of that answer may become clearer with Portland's City Council vote on a blueprint for what the West Quadrant may look like in 2035. This includes the Pearl District, Goose Hollow and South Waterfront neighborhoods.

Read more about this and five "things" to know about Portland's vision for the Central Eastside on Oregon.Live.

Friday, July 3, 2015

Happy Independence Day from HFO

"As I look back at past Fourth of July holidays, I think about the memories created with family and friends. The picnics, fireworks displays and flags flying high always remind me of how grateful I am for the freedom we're celebrating and for the people who have helped our great nation become what it is today. Have a wonderful holiday," - Greg Frick, Partner with HFO.

I wanted to pass a message that Greg had shared with the HFO team and thank all (past and present) who have proudly served our country. Our Independence Day celebration is due to your dedication and service to protect our country. Thank you.

On behalf of HFO, we hope everyone has a safe and fun 4th of July weekend.

Spencer Marona, Managing Director with HFO.

Seattle Trophy Property Sells for $32 Million More Than Purchased Three Years Ago

Image Source

One Thousand Eighth Avenue is a 356-unit, 66-year-old apartment complex on Seattle's First Hill. The exterior of the property pales in comparison to the contemporary, interior finishes. Sequoia Equities, a Walnut Creek, California investment company probably felt the same way. The Puget Sound Business Journal reported Sequoia Equities purchased the assett for $92.9 million, a 52 percent increase from what the seller purchased it for three years ago.

What was the driving factor for dramatic increase in price? Rising rents...

Puget Sound Business Journal Article:
Rising rents drive value of Seattle 'trophy' apartment complex up 52 percent.