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:
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:
With cap rates 100 basis points higher than Continue reading Portland apartment building investment market grows stronger.
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
Heidi N. Moore was talking with a investor who specializes in buying distressed commercial mortgage-backed securities (CMBS) and I was reminded of something Warren Buffett said back in 2007:
“When people start dropping shoes you really don’t know whether they’re a one-legged guy or a centipede.”
The investor was saying that the commercial real estate (CRE) market has been under the same pressure as the housing market but the CRE market hasn’t crashed. Why hasn’t that shoe dropped… and why won’t it?
The investor said that CRE was “rife with all the same corruption as the housing market: banks didn’t do their homework before signing loans, ratings agencies were overly generous in classifying weak loans as strong, but when it came [time] to mark down the value of the struggling commercial real-estate loans, many banks simply refused. They inflated the values of the loans to make their balance sheets look good.” [And therefore could keep all their bailout funds at work speculating in derivatives and jacking their bonuses instead of being set aside to cover losses.]
There are two other reasons that the CRE market and the CMBS tied to it didn’t crash: 0% interest rates, which means commercial borrowers weren’t punished with higher interest payments; and more importantly Continue reading The One Shoe That Didn’t Drop in The Financial Collapse- Commercial Mortgage-Backed Securities. #CRE
M&M covers 39 major apartment building investment markets in the US and have just published their Q3 reports. Here’s a list of the metros they cover:
They also provide snapshots of the Office, Industrial, Retail and Self-storage sectors in many of those markets, accessible from the tabs on the page. Note this information requires registration at the website to view.
ALB Commercial Capital has a nice guide for small balance (<$5 million) apartment building investment loans. In it they cover the three most important ratios investors have to clear in order to get a deal funded:
In addition the guide covers other items that need to be addressed such as Continue reading The 3 Most Important Things You Need To Get an Apartment Building Investment Loan
Good article in Asset Management Quarterly Value Add Has Its Day talking about how investors have split since the Financial Meltdown in 2007 into a risk adverse group favoring mostly Class A apartment building investments in core markets and a more risk tolerant group seeking high returns by purchasing distressed debt.
This has created an opportunity to generate good returns with investments in properties that need help of some kind. A few bullet points:
Just got an email from Jay Denton, Research VP at AXIOMetrics saying the national apartment building occupancy is 94.3%, a level not seen since 2006. Class A occupancy is at 95.5%, class B is 94.8% and class C is 92%. Also many submarkets around the country will see the first new supply of units this summer. Even so properties in Lease Up are doing well, averaging more than 20 move-ins a month. Further strength in the market is reflected by the fact that concessions are down to only 2-3 weeks in many markets.
Jay also shared an interesting idea for a leading indicator of Continue reading Even in Slow Jobs Climate Apartment Buildings Leasing Well- National Occupancy now over 94%
In their June 2012 Economic Update, Freddie Mac says: “Over the year ending March 2012, an additional 1.5 million households moved into rental housing. That’s a 4 percent increase in renter-occupied dwellings in a single year.”
The increase in apartment demand has helped to enhance property values, on average up about 25 percent during the past two years from their trough during the first quarter of 2010…
See the whole report here: Rental Markets: A Sign of Strength
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.
