Q2 Local Metro Apartment Building Investment Reports Now Posted.
Filed under: Apartment Building Investment Cycle, Apartment Finance, Multifamily Design & Development, The Economy and Current Affairs
M&M tracks 40 metro apartment investment markets and delivers quarterly reports on occupancy, rents, absorption, new construction and permits (See list below). You may have to register with them to access the reports.
Apartment Construction Trends for Phoenix Q2 2012
If you have questions about a specific market Read more
Portland Apartment Market to add 31,000 jobs this year, vacancy to fall below 3%.
Filed under: Multifamily Investments, The Economy and Current Affairs
As the next building cycle for the Portland area is still another year out, vacancy rates are expected to fall to historic lows across the metro. The overall vacancy rate will match the lowest on record at 2.7 percent, while the area’s lower-tier vacancy will fall to as low as 2 percent.
Marcus & Millichap notes that a lack of multifamily construction and the expansion of jobs in the region will be the prime factors behind the extraordinarily high rates of occupancy. Job growth is expected to rise 3.1 percent—from 20,500 positions created in 2011 to 31,000 positions created in 2012. Of particular significance will be the development of a new Intel facility, which is expected to create thousands of construction jobs and spur large demand for Class B and C apartments.
Cap rates for trophy buildings are likely to average in the high 4-percent range, with Class A and B assets in Read more
Denver Job Growth catching up with Apartment Building occupancy and rent gains.
Filed under: Commercial Real Estate, Multifamily Investments, The Economy and Current Affairs
Apartment building investment buoyed by job growth in Denver
Video via Property Management Insider: http://youtu.be/uFjpYSbVdRg
Apartment fundamentals are strong essentially across the board in Denver, which ranked among the nation’s best with year-over-year rent growth of 6.5%
M&M Apartment Building Investment call: Opportunities exist in secondary mkts & value add, tertiary still lagging
Filed under: Apartment Finance, Commercial Real Estate, Multifamily Investments
Marcus & Millichap Q1 call on the apartment building investment climate this morning:
- Year over year manufacturing jobs grew 238k. Manufacturing = 20% of GDP but gets no press, where as single family housing < 2% gets all the coverage.
- There is a historic % of 18-34 Y/Os still living ‘with the parents’ but they are also getting a larger proportion of the new jobs. (See chart) Good for apartment building investors as these people typically become renters when they do move out.
- A props in primary (coastal) markets seeing compressed cap rates; most on the call (including me) thought they were a little frothy.
- Nadji feels that if operations and NOI growth keep up, cap rates will remain Read more
Six lessons on the financial crisis that help explain why we’re still in one.
Filed under: Neuroscience and Behavioral Economics, The Economy and Current Affairs
Six lessons on crisis that help explain why we’re still in one:
- When you don’t reinvent institutions at a time of systemic failure, the problems they’re creating don’t just magically disappear.
- When you prop up (read: bail out) the institutions causing the crisis, instead of reinventing them, the crisis will deepen.
- When dysfunctional institutions prop one another up, prosperity’s a house of cards. Crisis becomes stagnation.
- When propping up failed institutions has drained your resources, you’ve turned a crisis into a catastrophe.
- The longer it takes you to see a crisis for what it truly is, the disproportionately worse it’s likely to get.
- When people who are prisoners of the
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
Filed under: Apartment Building Investment Cycle, Commercial Real Estate, Multifamily Investments, The Economy and Current Affairs
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 Read more
European debt-crisis issues are lessons for the US. We’re just a few years behind them and if we pay attention…
European debt-crisis issues are lessons for the US. They belong in the political debate. Both political parties are responsible for our growing debt issues. Bush ran up huge deficits. Obama continued them. Each party blames the other. See the whole post here: Back from Paris
Especially pay attention to item #4. that begins: Private holders of Greek debt had several years to get out…
For extra credit from ‘The Only Thing New In History’ department: Yet another sovereign debt crisis If that link no longer works use this one to see the PDF.
The bullet points:
- Having believed the myth that governments don’t default, many banks and investors will take huge losses in Europe’s sovereign debt crisis.
- The historical regularity of government defaults—more than 250 have occurred since 1800*—gives the lie to the notion that holding sovereign debt is “risk-free.”
- The sovereign debt crisis of post–World War I Europe provides highly relevant lessons for today.
*Referencing Rogoff & Reinhart’s work in “This Time Is Different”. See ‘Whodunit’ in the column to the right for this essential book.
Where is Your Multifamily Market In The Cycle? Nice interactive map. Via @UrbanLandInst
Filed under: Multifamily Investments, The Economy and Current Affairs
Is Apartment Building Investment in the up cycle in your market? Job growth is the most important leading indicator of the market cycle. Check out the cool interactive map through Q4 2011 from The Atlantic here: MetroMonitor Economic Performance Maps
A new (and simple to understand) economic model that actually works- Via Bridgewater Associates
Three related research pieces from the guy about whom former Fed Chairman Paul Volcker said had a degree of detail that is “mind-blowing” and admits to feeling sometimes that “he has a bigger staff, and produces more relevant statistics and analyses, than the Federal Reserve.”- The Economist
A Template for Understanding…
…How the Economic Machine Works and How it is Reflected Now
Ray Dalio | October 2008 (Updated March 2012): The economy is like a machine. At the most fundamental level it is a relatively simple machine, yet it is not well understood. I wrote this paper to describe how I believe it works. My description is not the same as conventional economists’ descriptions so you should decide for yourself whether or not what I’m saying makes sense. I will start with the simple things and build up, so please bear with me. I believe that you will be able to understand and assess my description if we patiently go through it.
An In-Depth Look at Deleveragings
Ray Dalio | February, 2012: The purpose of this paper is to show the compositions of past deleveragings and, through this process, to convey in-depth, how the deleveraging process works.
Why Countries Succeed and Fail Economically
Ray Dalio | June, 2011: This study looks at how different countries’ shares of the world economy have changed and why these changes have occurred, with a particular emphasis on the period since 1820. As explained in this study, the rises and declines in countries’ shares of the world economy occur as a result of very long-term cycles that are not apparent to observers who look at economic conditions from a close-up perspective.
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