Tag: multi family investments

M&M Apartment Building Investment call: Opportunities exist in secondary mkts & value add, tertiary still lagging

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.

pent up apartment building demand

Portland Apartment Building Market: occupancy drops but rents still rising according to report

Apartments are a little easier to come by in the Portland area, but that’s not slowing down rent increases across much of the market.
According to the Metro Multifamily Housing Association which released its latest survey Wednesday:

  • Vacancy across the metro area grew to 3.72% from 3.34% late last year.
  • Rents climbed 3% in the same period, reaching $1 a square foot per month across the metro area.
  • Average two-bedroom unit now rents for $771, up $28 a month compared with six months earlier.

Portland Apartment Building Investment Cycle Occupancy and Rents
The Portland area has one of the lowest Continue reading Portland Apartment Building Market: occupancy drops but rents still rising according to report

Handy Apartment Building Investment Market Reports- interactive one-pagers from Reis Reports.

Reis puts out these really handy one page reports with all the major QoQ changes broken out by sub-market. Here’s the latest on Portland, OR:

Apartment Builiding Investment Metro Reports by Reis Reports

Click on the image above to go to a list of  markets then select Continue reading Handy Apartment Building Investment Market Reports- interactive one-pagers from Reis Reports.

The Yin/Yang of Apartment Building finance: Urban Equity v. Suburban Debt.

[Urban] TOD (Transit Oriented Development) has performed better and has a sexier image with many institutional investors. But while equity investors continue to favor urban TOD, developers are having a more difficult time finding construction debt at leverage levels that would make those deals pencil out.

Urban Apartment Building Investments

Meanwhile out in the ‘burbs: “On suburban sites, you see yields in the 7 to 8 percent range. On the core infill, you’re really building to a 5, 5.25 percent, maybe, and that’s getting dangerously close to acquisition cap rates.”

Suburban Apartment Building Investment

“We’re in an interesting situation now, where anytime you have a Continue reading The Yin/Yang of Apartment Building finance: Urban Equity v. Suburban Debt.

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:

Portland Apartment Building Investment Sales Q1

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

 

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!

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.

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.