ULI: Seattle most attractive market for Apartment Building Investment but there are 36,000 units just completed, under way or in the pipeline.

Two quick links- you decide. From the Seattle Times: Urban Land Institute finds Seattle among most attractive real-estate markets and from Dupre + Scott ( The leading Seattle area apartment market research firm): Apartment development pipeline (video)

When I see this:

Seattle apartment building investment market: 36,000 new units

Portland apartment building investment market grows stronger.

Joe Chaplik at Joseph Bernard Investment Real Estate sent me a summary of apartment building investment transactions for Q3 in the Portland area and surrounding counties:

  • Transactions in Q3: 39, including 27 in Multnomah County (Portland is the County seat)
  • Transactions YTD: 114, averaging 38 per quarter.
  • Total transaction volume Q3: $164,115,807
  • Total units in Q3 transactions: 1,385
  • Average price per unit Q3 in Multnomah Co: $100,794; up 49% from year ago.
  • Q3 average cap rate: 6.32, up from 6.24 last quarter.
  • 80% of the transactions in Q3 were properties with less than 50 units.
  • See the whole report here.
Portland apartment builidng investment market grows
Admiral Apartments, 37 units, 910 SW Park Ave, Portland, OR

With cap rates 100 basis points higher than Continue reading Portland apartment building investment market grows stronger.

College towns are top destination for Gen Y job hunters…. and renters.

Where are Gen Y students most likely to find jobs? If you guessed New York or San Francisco, you’d be wrong. This year, small towns led the way as larger cities were more susceptible to economic downturns and only ranked outside of the college towns division on the index. As the report suggests, many small towns are essentially recession-proof since they house a consistent population of spenders.

Apartment building investments are good in small college towns
Cornell University in top rated Ithaca NY. Photo credit: campustravel.com

See the whole MFE piece with the list and a link to cool map here.

Those small college towns, or tertiary markets as they’re called, often fly below the radar of institutional investors and therefore dodge the cap rate compression that bigger markets suffer when institutions start buying up properties. Send me a message to find out how we analyze these markets for apartment building investment and some of the towns we like today. Continue reading College towns are top destination for Gen Y job hunters…. and renters.

How to make REOs-to-Rentals work: spin them into a REIT. Look out single family investors, here come the institutions.

Colony Capital has big plans for the REO-to-Rentals (RtR) sector. Not only do they want to buy 30,000 plus houses to rent them out, they also want to turn RtR into an institutional grade asset class. That has big implications for single family real estate investors who will now have deep pocketed competition that enjoys economies of scale.

Apartment Building Investment and Foreclosures
How Foreclosures Ate America. Click for interactive map from WNYC

Granted I was initially skeptical about single family homes becoming an institutional asset class but people said that about apartments twenty years ago too. In an interview printed in Institutional Real Estate Letter, Kevin Traenkle of Colony Capital maps out their strategy in pretty good detail, including what I think is Tom Barrack’s real genius piece, their exit plan of Continue reading How to make REOs-to-Rentals work: spin them into a REIT. Look out single family investors, here come the institutions.

Apartment Building Occupancy, Effective Rents and Revenues Charted. How are yours?

Axiometrics was out with their National Monthly Apartment Trends report which includes a couple of cool charts, one is a map of their top 88 markets coded by rent growth (below). The one that caught my eye though was showing Occupancy, Effective Rents and Revenues:

Apartment Building Investment Occupancy, Effective Rents and Revenue

From the chart it looks like the national average of Continue reading Apartment Building Occupancy, Effective Rents and Revenues Charted. How are yours?

What comes after primary, secondary, tertiary apartment building investment markets?

What comes after primary, secondary, tertiary apartment building investment markets? I got to thinking about this after I read that MPF Research classifies a tertiary market as one with up to 100,000 units…. so I looked it up on the intertubes:
The sequence continues with quaternary, quinary, senary, septenary, octonary, nonary, denary. Words also exist for `twelfth order’ (duodenary) and `twentieth order’ (vigenary) according to www.answerbag.com

A Family Inflation Gauge for Everyday Americans; rent, food, energy, medical costs, education and childcare.

Yes the Fed is fighting DEflation but it sure doesn’t feel like deflation when we go to the store or pull up to the gas pump. While I am glad that Ben is battling the correct demon, it would be very helpful to know what ‘living inflation’ is doing to or for our apartment residents. Especially since on their National Apartment web conference earlier this week Reis said that in many of their largest 79 markets class B & C owners ability to raise rents has or soon will run into the 35% of income barrier. Watching what the costs of rent, food and beverages, energy and medical expenses are doing to our residents’ pocketbooks could guide us in raising rents.  Today Pragmatic Capitalism had a very interesting piece on just that.

Inflation Gauge for Apartment Building Investors and residents
Source: Pragmatic Capitalism http://pragcap.com/wp-content/uploads/2012/10/CPI1-e1349809833759.png

Right now ‘Family Inflation’ is in the 2% range but you can see that last year it was as high as 7% and that it’s quite volatile. Most of that feels like it could be from rising fuel costs but let’s take a look to see if we can find out what’s really going on. Continue reading A Family Inflation Gauge for Everyday Americans; rent, food, energy, medical costs, education and childcare.