Multifamily Investments | Ashworth Partners

Fannie, Freddie and Ginnie do $13.5B in apartment investment lending biz during Q1, +81% YoY.

Bonds backed by Fannie Mae and Freddie Mac tied to apartment investments soared to a record as the government-supported mortgage companies made low-cost loans on rental properties amid a continued slide in home values. Fannie Mae, Freddie Mac and Ginnie Mae sold $13.5 billion of securities tied to apartment buildings in the first quarter of 2012, an 81 percent increase from the year-earlier period and up from $5.2 billion issued in all of 2008, according to data compiled by Bloomberg. It’s the highest quarterly issuance since records began in 1993.

Apartment Building Investment Loans from Freddie, Fannie and Ginnie

The interest rate for a 10-year, fixed multifamily loan Continue reading Fannie, Freddie and Ginnie do $13.5B in apartment investment lending biz during Q1, +81% YoY.

Rising rates won’t necessarily lead to higher cap rates on CRE, apartment building investments. CBRE debt & equity podcast.

Great podcast on the financing market for CRE and apartment building investment with a look at potential impacts from events around the world.

“In this Global In-Sights podcast, Spencer Levy, Executive Managing Director for CBRE Capital Markets, shares his view on the commercial real estate debt and equity finance markets. What are current key sources of capital, what is the current pricing of CRE debt, and what are expectations going forward? Are there key sectors that are attracting most of the capital flows? What are expectations for interest rates and how are investors underwriting the possibility of an interest rate spike in the next 2 to 3 years? What are some of the key positive trends that we suggest our clients look out for when selecting markets in which to invest?”

Podcast Link

A few bullet points: Continue reading Rising rates won’t necessarily lead to higher cap rates on CRE, apartment building investments. CBRE debt & equity podcast.

Portland OR Q1 Apartment Building Investments Now Posted.

Here are some interesting transaction statistics for 1st Quarter apartment building investment transactions:

Average price per unit was up 11% from Q1 2011
6.86% was the average cap rate, vs. 7.07% in 2011
77% of properties sold had between 5-50 units

Click on the image to see the list of Q1 apartment building investment sales in Portland:

For more on PDX apartment building investment see City Rents Rise As Buyers Wait Out Housing Bust from Joseph Bernard Investment Real Estate.

Why now is the right time for CRE and Apartment Building Investment. Video via Tom Barrack at Colony Capital

Tom is one of my mentors and I follow what he’s doing closely to learn from a pro in apartment building investing. Here’s a video 3fer with Tom on why now is the time, if you have any contrarian testosterone as he puts it (in other words you are a true value investor). See also my notes below with the exec sum in bold.

1st Video:

Tom Barrack on CNBC last week

Stock markets rise and fall, but investors with a long-term view will make money, real estate investor Tom Barrack of Colony Capital is a “slow money guy”. Barrack has $27 billion invested in real estate and $45 billion in assets around the world.

Overall in the US

Where I think we are is actually a great Continue reading Why now is the right time for CRE and Apartment Building Investment. Video via Tom Barrack at Colony Capital

Now you can watch the Apartment Building Investing Cycle Unfold In Real Time- Much easier than deciphering technical stock charts!

Successful apartment building investing is about knowing where and when to buy and when to sell. The apartment building investment cycle sends very clear signals to those paying attention and one of the biggest and clearest is when existing properties begin to sell for more than the cost of building new apartments. As I mentioned here this line was crossed about a year ago in the Seattle market and now we can see how the peak is formed, when every developer and their brother starts building new apartments.

From Bloomberg:

The biggest surge of Seattle-area apartment construction in a quarter century is threatening to undercut the growth in rents. Seattle went from “dead last” in rent increases three years ago to 13th out of 88 markets last year. “We went from almost a desert to a big pipeline” in two years, said David Young, the Seattle-based managing director who oversees western U.S. apartments for commercial broker Jones Lang LaSalle Inc.

Apartment building investment in Seattle

Encouraged by hiring at local employers such as Amazon.com, Boeing and Nordstrom, developers are building almost 10,000 apartments in Washington state’s King and Snohomish counties, Three- quarters of the total are in Seattle, with 4,619 of those units in or near downtown.

Dupre + Scott Apartment Advisors Inc. said the building boom may last through 2016.

“If in fact we come to market when there’s excess supply, we’ll just have to be aggressive on rents,” said Continue reading Now you can watch the Apartment Building Investing Cycle Unfold In Real Time- Much easier than deciphering technical stock charts!

Apartment Building Investment In Seattle, here’s the good news- video

Seattle Apartment Building Investment update video Translation: We would never overbuild or get started too late in the apartment building investment cycle 😉

Is the Dallas/Fort Worth Apartment Building Investment Cycle Peaking or just taking a breather?

In their RECON report The Real Estate Center @ Texas A&M quotes The Dallas Morning News on apartment building investment in the DFW market:

“Apartment leasing in Dallas-Fort Worth dipped for the first time in over two years.

Net leases fell by 270 during first quarter 2012, with most of the declines occurring in the northern suburbs.

Apartment Building Invesment Cycle peaking in Dallas?

Greg Willett of apartment analyst MPF Research believes the slight dip is nothing to worry about.

“I don’t think one quarter of slight resident loss should be viewed as a big deal, especially when demand in first quarter usually is pretty mild anyway,” he said. “The job numbers still look good, and a comeback for the for-sale housing sector actually could drive them higher.”

The North Texas area has added about Continue reading Is the Dallas/Fort Worth Apartment Building Investment Cycle Peaking or just taking a breather?

The Top 10 Fastest Growing US Cities. Own an apartment building investment in each.

Apartment investing is about where and when to buy properties; here’s 10 good ideas for the where part. Nice slide presentation via CNN/Money-

“Despite the housing bust and the recession, these 10 U.S. cities still managed to record population gains of 30% or more in the decade ending in 2010, according to the Census Bureau. The national average was less than 10% during that time.”

Apartment Investing in the 10 fastest growing US cities

See the presentation here: 10 fastest growing U.S. cities

If you can’t Continue reading The Top 10 Fastest Growing US Cities. Own an apartment building investment in each.

Attention apartment investors: An entire generation has lost its interest in homeownership.

When it comes to apartment building investing one has to consider homeownership as competition for ‘our’ residents. But now in a post that’s part of his series on where the housing market stands today, Barry Ritholtz over at The Big Picture blog has this to say:

“There are many good reasons to believe that the 5.5 million foreclosures we have so far brings us only to the 5th inning of this real estate cycle. We are, in my best guess, barely halfway through the full course of foreclosures. By the time this entire unwind is complete, the United States may end up with a total of 8-10 million foreclosures. Apartment Building Investing and Foreclosures

Therein lay the Psychology factor. Once we begin to see an increase in foreclosures, the data is going to be far less accommodating. Monthly prices start falling, fear levels rise, and a viscous cycle could begin. Consider the recent college grads, who typically form each wave of first time buyers. From their perspectives, this whole housing thing must seem absurd. Their observations about home ownership is not the American Dream, but rather, a nightmare. Yale professor Robert Shiller worries that we have lost an entire generation of potential home buyers.” [Emphasis mine] BTW, Shiller is co-author of the Case-Shiller index, a measure of the state of the housing market. Continue reading Attention apartment investors: An entire generation has lost its interest in homeownership.

National Apartment Building Vacancy Plummets, Defies Fourth-Quarter Seasonal Slowdown says report.

Marcus & Millichap’s latest report on Apartment Building Investment called “The Outlook” is just out today. In it they cover the usual national multifamily trends; rents up, vacancy down, economy slowly recovering, jobs growing but could be better. Then they take it a little deeper with these points (bel0w) then flesh it all out with charts demonstrating that things are really picking up for apartment building investors.

Here’s the exec sum:

Expanding Production Capacity Signals Stronger Job Creation.
Sustained employment growth underscores traction in the economy.
Apartment demand surges, completions sink to new lows, and a sweeping recovery matures into an expansion cycle.
Vacancy rates tighten across markets and asset classes, moving the sector into expansion.
Foreclosed homes and government-sponsored REO-to-Rental program offer rental alternatives to apartments.
Cap rate arbitrage and stabilizing operations create a compelling investment thesis for opportunistic and value-add strategies.
Stronger job growth and household formation will provide a steady source of new entrants to the multifamily rental market. Continue reading National Apartment Building Vacancy Plummets, Defies Fourth-Quarter Seasonal Slowdown says report.