Who is buying all those properties and what does it mean for the apartment building investment cycle?
Filed under: Apartment Building Investment Cycle, Commercial Real Estate, Multifamily Investments, The Economy and Current Affairs
Mark Hickey of CoStar put out a piece looking at who was responsible for the near record $65.8B of apartment building investment in 2012. CoStar’s numbers show that private owners/developers did just about half of all acquisitions last year and institutions were in for 12%, both near their recent trends. REITs on the other hand increased their share by a third, responsible for 12% of sales volume last year.
Interestingly the sellers were pretty much the same groups, except REITs who were the largest net buyers last year.
Last year REITs raised 15x the equity they did in 2008 (and 20x the total capital). Up against pockets that deep Read more
Housing recovering from the bottom up- good for apartment builidng investment? 2 charts via Calculated Risk Blog
Filed under: Multifamily Investments, The Economy and Current Affairs
Bill McBride over at Calculated Risk has a post out this morning with 2 charts of data from LPS on the housing recovery. The first shows that homes in ‘active’ status, either in foreclosure, delinquent or otherwise ‘non-current’ has fallen below 2008 levels for the first time.
Which is the primary axis and which is the secondary is kind of a mystery and we are left to assume that both are x1,000 so that would imply the left axis is secondary (Or is it?) The most interesting factoid on the chart is in the box on the upper left; The percent of DQ homeowners active (in the foreclosure pipeline instead of being ignored) has doubled. To me this looks like a market that’s starting to clear, which is good for housing and the economy in general.
The next chart looks at the percent of Read more
Local Apartment Building Investment Research Reports For 37 US Cities Now Posted by Marcus & Millichap
Filed under: Apartment Building Investment Cycle, Multifamily Design & Development, Multifamily Investments
Requires (free) registration: M&M Research
Here’s a peek at their Phoenix Charts:
Apartment Building Replacement Costs Rising: lumber back to housing boom highs, growing labor shortages.
Filed under: Apartment Building Investment Cycle, Multifamily Design & Development, Multifamily Investments
The NAHB has a piece out called Producer Prices in March – Building Materials Prices Approaching Housing Boom Highs talking about how far gypsum (main ingredient in drywall +18%), softwood lumber (2x4s, 2x6s, etc. +30%) and chipboard (oriented strand board and waferboard which have replaced plywood, joists and beams in many applications +68%) prices have risen in the last year, the chart tells the story:
Click on chart for full size image.
Bill McBride over at Calculated Risk has a piece showing the longer term price history for Random Length Lumber (2x4s only, both cash and futures) and a link to a pretty depressing Vancouver Sun article on pine beetle devastation in BC (Spoiler alert: the Read more
Owning apartment buildings “is a great business” :Aaron Task on The Daily Ticker show.
Filed under: Multifamily Investments, REOs to Rentals- Single Family
Aaron Task speaking on Yahoo Finance’s Daily Ticker show says that: “Owning apartment buildings and renting them out is a great business.” He’s not as sure about the single family REO to Rentals (RtR) model though. Click the image below to view the video, at about 1:44 in he’s talking about apartment building investment:
Apartment building investment is a great business- Yahoo Finance
If clicking the image doesn’t work try this Read more
ULI Biz Barometer: Apartment building invesment sales vaulted last month, bouyed otherwise sagging #CRE sector.
Filed under: Apartment Building Investment Cycle, Apartment Finance, Commercial Real Estate, Multifamily Design & Development, Multifamily Investments
The Urban Land Institute’s April Real Estate Business Barometer reports that apartment building investment sales were strong enough to pull the entire sector up from last month’s slump while CRE prices are at four year highs. Condominium sales are also at a 5-1/2 year high with strongly increasing prices.
“Overall, 65 percent of the key Read more
Charging apartment building residents for water, sewer AND garbage- the growing trend.
Filed under: Apartment Technology and Management, Multifamily Investments
In a study by Dupre+Scott they found a growing number of apartment building investors in the Puget Sound region are charging tenants for water, sewer and garbage which make up can make up a pretty large chunk of operating expenses:
Two-thirds of the properties we surveyed pass through water and sewer charges to residents, and 50% also pass through garbage costs. The average monthly water/sewer charge in the region ranges from $46 for studios to $70 for three-bedroom units. Adding garbage charges increases costs to $55 for studios and $90 for three bedroom units. Our March Apartment Expense Report found that utility charges paid by residents increased 50% between 2008 and 2012.
Do you or have you considered charging for water and sewer via sub-metering, individual metering or a RUBS system? how about garbage? Read more
CBRE Research: Since 2010 population shifting towards urban but apartment building construction is outpacing growth in
Filed under: Apartment Building Investment Cycle, The Economy and Current Affairs
… A number of major metros
CBRE Econometrics is out with a new report showing population growth trends in major US metros has shifted towards urban centers since 2010 but apartment building investors have been keeping pace (or exceeding it) with new construction. Author Gleb Nechayev, Senior Managing Economist lays it out nicely in a series of charts:
First Population Growth Average Change 2000- 2010
source: CBRE Econometrics
Raleigh is the only metro with significant urban vs. suburban population growth. Note that one-county metros such as Read more
FHFA’s DeMarco re-affirms cutting Fannie and Freddie apartment building loan volume.
Filed under: Apartment Finance, Multifamily Investments, The Economy and Current Affairs
As reported by CoStar: “Given that the multifamily market’s reliance on the enterprises has moved to a more normal range, to move forward with the contract goal, we are setting a target of a 10% reduction in multifamily business new acquisitions from 2012 levels,” Edward DeMarco, acting director of the Federal Housing Finance Agency (FHFA) said. “We expect that this reduction will be achieved through some combination of increased pricing, more limited product offerings and tighter overall underwriting standards.”
Source: www.multifamilyexecutive.com/
While 10 percent doesn’t sound like much, Fannie Mae and Freddie Mac combined to finance about $62.8 billion in multifamily deals last year, meaning about $6 billion in liquidity will Read more
CoreLogic Map: Almost 23 Million Zombie Homeowners Still Underwater.
Filed under: Multifamily Design & Development, Multifamily Investments
CoreLogic is out with their quarterly report and map of underwater homeowners. Their analysis is “showing approximately 200,000 more residential properties returned to a state of positive equity during the fourth quarter of 2012. This brings the total number of properties that moved from negative to positive equity in 2012 to 1.7 million and the number of mortgaged residential properties with equity to 38.1 million. The analysis also shows that 10.4 million, or 21.5 percent of all residential properties with a mortgage, were still in negative equity at the end of the fourth quarter of 2012. This figure is down from 10.6 million* properties, or 22 percent, at the end of the third quarter of 2012.
Negative equity, often referred to as “underwater” or “upside down,” means that borrowers owe more on their mortgages than their homes are worth. Negative equity can occur because of a decline in value, an increase in mortgage debt or a combination of both.
Of the 38.1 million residential properties with positive equity, 11.3 million have less than 20 percent equity. Borrowers with less than 20 percent equity Read more
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