Portland's Rent Growth Is Dominating Over Other Markets

Yardi Matrix Monthly reported the national average for multifamily rents in January rose $5 to an all-time high of $1,170. Portland repeated as the number one market out of 111 for year-over-year rent growth at more than 14%. Trailing Portland was San Francisco with a little more than 10% year-over-year rent growth.

Oregon Business: No magic wand

As the legislature begins considering how to handle our affordable housing crisis, experts discuss the fact that it's a problem that will take years to solve.

The Portland Housing Bureau states the city would have to "double or triple" the number of new affordable units it is now building just to maintain its historic affordable housing level of 8% of all units.
Read more.

Portland Hailed as "The New Silicon Valley"

An article in the Huffington Post this week hails Portland as "The New Silicon Valley" and urges people to move.

"...the city is quickly booming into a viable tech hub that could soon give the best of 'em a run for their money, according to a new report from the Milken Institute. . . we're thinking of moving there already." Depressed? Excited? Read more.

Sold! 74 Units in Tualatin, Oregon

HFO is pleased to announce the sale of Herons Landing Apartments in Tualatin for $8,500,000. Constructed in 1972 and renovated in 2002, the waterfront property offers several amenities including an on-site leasing office, pet-play area, playground, fitness room, washer/dryers, and a resident courtyard.

The HFO team represented both the buyer and seller on this transaction. Both parties were in the process of identifying new investment properties to exchange into.

Former Fed Chair: No Recession Imminent

At last week's National Multifamily Housing Council Recent bad financial news, including the 10 percent sell-off in U.S. stock prices and plummeting oil prices, are not a sign that a recession is imminent, according to former Federal Reserve Chairman Ben Bernanke. Read more.

In Seattle, A Colorado Apartment Company Buys 233-Unit Complex Near Amazon For Remodeling

The Puget Sound Business Journal is reporting that Griffis Residential purchased Berkshires on Elliott in the Belltown neighborhood for $90.8 million or $513 per square foot. Read more.

'Silicon Refugees' Will Keep Pouring into Seattle and Portland in 2016

by Spencer Marona, Managing Director

Seattle's online real estate company Zillow (Nasdaq: Z, ZG) forecasts another robust year for Seattle home values and rents. According to Aaron Terrazas, Zillow's senior economist, employment opportunities and investment activity from international buyers will continue to be driving factors in Seattle's economic boom. Terrazas stated that many people from other parts of the country continue to see Seattle as a bargain.

In the past couple of years, we have seen a similar outlook on the greater Portland-Beaverton-Vancouver market from out of state investors and new residents. The infusion of tech companies and 'Silicon Refugees' over the past two years have put 'Silicon Forest' on the tech hub map.

Zillow recently ranked Seattle #2 and Portland #10 among the hottest housing markets in the country for 2016. Clearly, it is a opportunistic time if you own multifamily property in the Pacific Northwest; however, a 'bull market' does not always mean it makes sense to sell. It may make more sense to hold and refinance, or hold and improve operations vs. selling and cashing/out or selling and exchanging.

Contact an HFO team member with any questions. Or call to learn more about how we can assist with your investment goals at (503) 241-5541. You can also visit our website at www.hfore.com.

References:

'Silicon Refugees' will continue to flood Seattle in 2016, Zillow economist says - Puget Sound Business Journal

Zillow: Here are 2016's hottest markets - HousingWire.com

Interactive Map Available for Portland's 2035 Comprehensive Plan

The City of Portland has created a portal for interested citizens to view a complete set of interactive plan maps outlining the city's plan to manage growth for the next 20 years. Available maps include the following:

• Land Use
• Systems (infrastructure investments)
• Transportation System
• Employment Zoning (job growth)
• Mixed-Use Zones
• Residential and Open Spaces
• Campus Institutional Zoning
• Bicycle Network

MPF Research: Portland Leads Nation in 2015 Rent Growth

MPF research reported today that its research had Portland leading the nation in rent growth for 2015 with an increase of 12.7%.

200 Apartments Coming Soon to SE Sixth and Belmont

The Portland Business Journal reports that a former dance studio used by the Oregon Ballet Theatre is being demolished to make way for apartments being built by Mill Creek Residential Trust. The apartments will be known as the Modera Belmont.

Multifamily Investment Sales in 2015 Eclipsed 2014 - CoStar

Multifamily investors fueled $150.6 billion into apartment properties in 2015, shattering the total set the previous year by about 16%, according to preliminary apartment sales data for the year compiled by CoStar through January 11, 2016.

In 2015, institutional investors made up the majority of the buyers alongside foreign buyers who were primarily active in the gateway cities. Some experts are expecting to see an increase of foreign capital continue to chase multifamily assets in 2016. Others see foreign investment into multifamily assets as a 'wild card' in 2016 according to JLL.

Costar also reported $47.3 billion in apartment sales for the fourth quarter of 2015, which far exceeds the previous quarterly record of just under $38.4 billion set in 2014.

Fourth-Quarter Surge Lifts Multifamily Investment Sales to New Record In 2015

Report: Oregon Tops List of National Inbound Move States For 3rd Year, Movers Cite Affordability & Social Reasons

For the third year in a row, Oregon is the top state for inbound moves, according to United Van Lines. The company’s research indicates Oregon is attracting millennials and retirees “…and it’s easy to see why. Industries like creative design and technology are booming, and places like Portland and Eugene have plenty for residents to enjoy.”

“This year’s data reflects longer-term trends of people moving to the Pacific West, where cities such as Portland and Seattle are seeing the combination of a boom in the technology and creative marketing industry, as well as a growing ‘want’ for outdoor activity and green space,” said Michael Stoll, economist, professor and chair of the Department of Public Policy at the University of California, Los Angeles. “In the past, you could clearly see the job-related reasoning. This year, people are moving for social reasons rather than economic reasons.”

The company reports that just as 2014, those moving to the Beaver state were drawn to “high walkability scores, affordable housing and beautiful green space.” That those retiring in Oregon found the cost of living relatively low compared to their prior home states.

Portland's metro area added nearly 36,000 jobs from November 2014 to November 2015, a 3.3% year-over-year increase, and the 8th fastest growing major metro region.

Portland continues to attract Millennials with dreams of entrepreneurship and profit in a growing technology arena.

Top Five Move-In States for 2015 according to the company were:

1. Oregon
2. South Carolina
3. Vermont
4. Idaho
5. North Carolina

Source: United Van Lines 39th Annual National Movers Study and HFO Research

Report: Denver, SF, Portland and Sacramento to Lead Rent Growth Again in 2016

In its Winter 2016 Multifamily Outlook Released today, YardiMatrix forecasts another strong year for rent growth, although unlikely to match 2015’s 6.5% gain.

The report finds that conditions in Denver, San Francisco, Portland and Sacramento will remain favorable, "but there are signs that affordability is becoming an issue at the high end of the rent spectrum and the rate of increases will moderate."

Three cities that topped the rankings in 2015 also boast the strongest rent growth forecasts for 2016: Denver (11.2%), San Francisco (11%) and Portland (9%). All of these metros are home to intellectual hubs led by technology firms and offer the jobs, lifestyle amenities and climate that attract Millennials.

Download the full report.

Keeping Up on Technology Can Benefit Multifamily Owners

by Matt Reynolds, Research Analyst 

There is an explosion of new technology available today, disrupting all industries. Multifamily real estate is no exception. After many years of resisting change, many multifamily professionals appear to be welcoming and adopting new technology. With this comes an increasing need to use technology to successfully compete in the multifamily world.

We have recently seen the emergence of a plethora of new technologies relating to all aspects of multifamily real estate. It remains unclear which ones will become ubiquitous, which will remain moderately well adopted or quickly forgotten. Adopting effective concepts early — and ignoring unsuccessful ones — can often be the key to giving you an edge over your competition.

The nature of marketing, in particular, has undergone a revolution. Social media has seemingly made potential clients or renters more reachable. The advantages to Internet mass-marketing seem obvious at first, while the downsides are harder to recognize. For starters, the competition for a potential renter’s or clients’ attention is greater. People are also increasingly able to deal with information on their own terms. Thirty years ago physical mail and telephones encompassed almost all remote communication. These days we have the added complexity of email, text messages, web conferences, social media and increasingly mobile applications. Choosing which information sources to view — and which to ignore — is much easier for people living in an age of diminished standardization. In short, there is more information and advertising out there, but people can view it on their own terms. So what, then, are good ways to reach customers?

The answer: make them come to you. Customers seek out the services they need on the Internet. If you happen to have the easiest interface, the most convenient service or the most engaging website features, you can be successful. Netflix and Amazon are perfect examples of website-based companies that dominate their competition following these principals. For property managers, attractive websites for apartment properties — with online services and features — can be a real boost. Matterport, for example, has developed a relatively inexpensive ($4,500) 3D camera that can create virtual, dimensionally-accurate tours of apartment units. With this technology, potential renters are able to seriously consider your property from the comfort of their bedroom — and at their own convenience. It also saves property managers a ton of time because it eliminates disinterested parties scheduling in-person tours.

Property management companies and developers are generally under the most pressure to adopt new technologies and amenities, because they are most exposed to renter demands. However, it is still useful for owners and investors to understand the demand for new technological conveniences so they can choose effective management companies — or know why they are having trouble renting their units for as much as other area properties that might have more conveniences and technology-based amenities. So ask yourself: are you aware of the latest space-age amenities benefiting renters in your area?

Currently, owners and property management companies in the Portland Metro Area have been somewhat insulated from the negative effects of slow technological adoption, due to the local housing crisis. When the vacancy rate is below 3%, potential renters are not likely to kick up a fuss over not being able to pay rent online from their phone. This might not be the case in a few years, when housing supply catches up with renter demand. Don’t wait to start learning more now.

Matt Reynolds is a research analyst and database manager for HFO. He can be reached at (503) 241-5541 or by e-mail at matt@hfore.com 

Sold! 65 Unit Salem Portfolio

HFO is pleased to announce the sale of a five-property, 65-unit portfolio in Salem. The owner of this property was looking to exchange for properties out of state. HFO marketed the properties extensively, garnering multiple offers.

The property sold to an out-of-state buyer, also represented by HFO.