A piece in the Seattle Real Estate BisNow is talking about the new mixed use development that will be starting up around the planned light rail station in the Bel-Red area. The area has now got a fancy new name too: The Spring District. Kevin Wallace, Pres. of Wallace properties compares it to South Lake Union (only with better, ok, less worse traffic if you ask me).
Also mentioned that downtown Bellevue’s office space is just a couple big tenants short of being full, full of tech tenants including game developers that is.
MHN Online has an interview with Dean Henry, president of Legacy Partners Residential, one of the big apartment building investment trusts (REITs). What I like is that he speaks in bullet points, just the way I think! Here’s my exec sum (in bullet points) of his bullet points:
“There are several important reasons why now is a great time to acquire existing multifamily assets. Let’s start with demand and supply:
TurboMetrics put out a nice infographic on employment growth trends by state:
Nice Axiometrics chart posted by MFE Mag showing the top apartment building investment markets for rent growth and employment growth. I understand the tech employment growth in SF San Jose and Seattle but the 2.8% job growth in Salt Lake City caught me by surprise. What do you think is driving job growth there?
Employment growth is one of the key drivers of a good apartment market but it can be overrun by Continue reading Nice chart of top Apartment Building Investment markets for rent and employment growth.
Is Phoenix apartment building investment overheating already?
My exec sum from the Apartment Finance Today* article Apartments Rising in Phoenix Again
Local and regional banks are working hard to fund ‘small’ apartment building investments in their local markets. Small loans in the $1-3 million dollar range are the ‘sweet spot’ for these lenders and investors looking for loans in the $3-5 million range are finding even more choices. For loans under $1 million the market is still pretty fragmented with lenders there averaging only five loans of that size.
“Banks are trying to create more aggressive lending programs in the small-balance multifamily financing space.”
In the West, banks like Sterling, KeyBank and Bank of The West are Continue reading Local banks, S&Ls and Credit Unions lining up for small apartment building investment loans.
Dr. Mueller is one of the leading researchers on the commercial and apartment building investment cycle but I have big questions about Seattle being placed at the bottom of the cycle in his latest Cycle Monitor report. According to MPF Research there currently are 6,000 new units under construction in Seattle (see here) and Essex Property Trust estimates that there will be 10,000 units coming on line in the next three years (see here). In fact the NMHC lists Seattle as one of three US markets in danger of overbuilding (see here).
Reis Reports is showing that while rents are up about 1% QoQ in Q1 2012, vacancy is starting Continue reading Updated CRE and Apartment Market Cycle Charts Now Posted by Glenn Mueller at Dividend Capital
Apartment building investments are a top choice according to Gary Shilling, one of the world’s foremost economic forecasters, a long-time Forbes columnist, publisher of Insight Newsletter with his editor Fred Rossi, and author of “The Age of Deleveraging,” (http://amzn.to/L9hm7W on Amazon) the perfect playbook for America’s new Age of Austerity.
Quoted in the Market Watch post:
Rental apartments. A huge inventory still overhangs the housing market as prices continue falling. The American dream of homeownership may be history. Renting is the affordable option. And with REIT prices running high, “direct ownership of rental apartments may still be attractive.”
See the whole post for more ideas for investing in these turbulent times.
Report on the state of apartment building investment markets from the good folks at Joseph Bernard Investment Real Estate in Portland:
Continued positive multifamily demand fundamentals and ready access to capital at attractive rates is fueling a surge in new apartment development, according to industry executives.
Several hundred senior-level apartment executives gathered in Scottsdale, AZ, last week for National Multi Housing Council’s (NMHC) Apartment Strategies/Finance Conference and Spring Board of Directors Meeting. The following is the NMHC’s summary of what was discussed.
Continued low levels of new supply have led to a big bounce-back in rents as demand outpaces new construction. According to one panel of apartment executives, the new supply shortfall may be larger than once thought — as many as 700,000 to 1 million units — because many of the apartments built in recent years have been in the affordable, rather than market-rate, section of the market. Moreover, much of the current apartment stock dates back to the 1970s and is becoming obsolete, creating additional demand for new supply.
Select areas have seen such large upticks in the number of planned and under construction units that could turn into hot spots for potential overbuilding. In particular, certain submarkets of Phoenix, Seattle and Washington, D.C., appear somewhat at risk.
But, overall, new completions are still a very low percentage of total inventory.
Money Flowing for Multifamily
There is a wall of private capital that wants into the multifamily space. More than 250 private equity funds currently are Continue reading Phoenix, Seattle and Washington, DC apartment markets at risk of overbuilding says NMHC panel