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.
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.
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.
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:
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? 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
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.
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.
From their latest National Monthly Trends report: Class C properties took the lead for annual effective rent growth in August. Class A properties had been the leader in that category as the apartment market improved over the past few years, but the Class A annual growth rate slowed from 4.73% in May to 3.70% in August. Why has the growth rate slowed so much in just the past few months? Is it tied to job growth, which weakened in May? Is the first wave of new supply starting to impact performance as we show new apartment deliveries nationally jumping from about 13,000 in the first quarter to over 17,000 in the second quarter and 25,000 in the third quarter? Or is it simply because a $75 increase this year is not as big of a relative change as it was a year ago since the denominator in the rent growth equation keeps getting larger? The answer is likely due partially to all three situations, but the weighting of each factor can vary by market. However, new supply could play an even larger role next year than it will this year.
See the whole report with more charts and data here Continue reading Class C Apartment Building Investments takes the lead in rent growth nationally says Axiometrics.
Saw a very interesting piece by Daniel Cunningham, President of Leonard Property Management on how revenue management for apartment building investments might already have seen its best days of growing revenues. Dan compares it to what’s happening to other industries such as airline travel and hotels where consumers can quickly see all the pricing for all the competitors in the market or product they’re searching. With Craigslist and some patience renters can do that now Dan says. See the short to the point article here.
Good presentation on the current national apartment building investment sector from Marcus & Millichap. New supply remains constricted except for a few cities, they didn’t mention any names *cough Seattle cough* but if you’re in one of them and tracking the pipeline it’s easy to read between the lines.
Another interesting trend is that Continue reading Good News and News: Apartment Q3 update web conference replay now posted from Marcus & Millichap
Good charts on long term returns in this piece from Glenn R Mueller, PhD.:
I recently met with my financial advisor to “rebalance” my … retirement portfolio. Based on my “age and stage of life” his allocation model showed a 50% bond allocation. I laughed and asked him if the company allocation model assumed interest rates would rise over the next 10 years? His answer was “yes- of course.” I showed him the graph below which shows lower than average TOTAL returns in a rising interest rate environment and he checked his long-term data and found that bond holders between 1953 and 1980 had actually lost money. We all know that as interest rates rise, bond values decline and thus the total return can be small or negative. Not to mention that a 10-year treasury at 1.5% is below expected inflation and thus a NEGATIVE REAL RETURN. He agreed that a bond allocation did not make much sense, but since my investor profile was conservative what was the alternative?
Dr. Mueller is Continue reading What do I do with my retirement money, one investor’s answer (with charts). Think apartment building investment-
