Apartment Financing Hits An Air Pocket in Latest NMHC Survey

Apartment Building Investment Lending Conditions July 2015

The National Multifamily Housing Council’s NMHC Quarterly Survey is out now and three of the four categories held fairly steady but the availability of  debt financing dropped twenty five points from sixty to thirty five. A reading below fifty indicates worsening conditions and the report on the survey said that with Continue reading Apartment Financing Hits An Air Pocket in Latest NMHC Survey

3 Things I Learned Charting Apartment Building & Commercial Real Estate Market Cycles

Seattle’s Strange Trip Through the Apartment Building Investment Cycle Part II

In part I we saw that some of the most widely followed market cycle research can’t be relied on without question. If knowing where we are in the market cycle is the most important thing (and not everyone agrees, see the comments from one of my private equity guys about that under part I here) then the best solution is probably to chart the cycles for the markets we’re investing in ourselves. If you’re in multiple CRE sectors in a lot of markets hopefully you have someone on your team or can hire a consultant (like Ashworth) to chart those cycles.

SEA occupancy v cycle position WTH
Click on images for full size.

Building our own CRE market cycle chart

To track a cycle for one market and sector we only need to answer five questions according to Professor Mueller’s methodology: Market occupancy, the 30 year Long Term Average (LTA) occupancy, rent growth, inflation and new unit construction. Later we’ll look at whether we can Continue reading 3 Things I Learned Charting Apartment Building & Commercial Real Estate Market Cycles

Widely Followed Apartment Market Cycle Research Misses Widely

The Strange Tale of the Seattle Apartment Building Investment Cycle and Maybe Yours Too.

Back in 2012 it appeared that Seattle’s movement through the real estate cycle was stalling out. Not the actual market by any stretch of the imagination but instead where it was placed on the apartment market cycle charts in the Cycle Monitor report from Dividend Capital Research. These quarterly reports on the real estate market cycles for the five main Commercial Real Estate (CRE) sectors in more than fifty markets around the US were widely followed but something was wrong.

Seattle apartment occupancy vs. Cycle Monitor Market Position 2005 - 2014
Click on images for full size.

Why this up to date proprietary data is vitally important to your investment success:

You can fix a property but not a market cycle. Knowing where a market is in its cycle is critical for investors seeking to buy low and sell high. If signals are a year or more behind, prime opportunities will be missed to Continue reading Widely Followed Apartment Market Cycle Research Misses Widely

The ‘Twin Peaks’ of Seattle Apartment Building Investment Plus MPF Research says rent growth holding strong there.

Friday twofer on Seattle. First is Dupre+Scott’s  entertaining and enlightening video on apartment building construction and property sales:

Mike has two nice charts showing apartment development numbers back to 1988 and sales volume back to 1981. Note that on the sales volume chart 2013 numbers are Continue reading The ‘Twin Peaks’ of Seattle Apartment Building Investment Plus MPF Research says rent growth holding strong there.

Local Apartment Building Investment Research Reports For 37 US Cities Now Posted by Marcus & Millichap

Requires (free) registration: M&M Research

Here’s a peek at their Phoenix Charts:

Phoenix Apartment Building Rent Trends Q2 2013

Phoenix Apartment Building Vacancy Q2 2013

Phoenix Apartment Building Construction Q2 2013 Continue reading Local Apartment Building Investment Research Reports For 37 US Cities Now Posted by Marcus & Millichap

Latest Commercial RE and Apartment Building Investment Cycle Charts Posted by Glenn Mueller PhD.

…. “Only six markets advanced their position on the [Dividend Capital Apartment Market] cycle chart.” Once again with the notable exception of Seattle who has left in the basement of the cycle despite overwhelming evidence that it has moved well up in the cycle by his own definition. See my post from last quarter detailing the definitions and why Seattle’s apartment building investment cycle location according to Dr. Mueller is incorrect here. For other cities have a look and let me know if your markets are accurately placed:

Apartment Building Investmet Cycle Chart Q4 2012

Is it a Seattle thing? Is he the Brent Musburger of commercial real estate? Continue reading Latest Commercial RE and Apartment Building Investment Cycle Charts Posted by Glenn Mueller PhD.

Apartment Building Permits Rise to Long-term Average while Vacancy Index Remains Low

In their latest apartment building permitting report Axiometrics says: “permitting increased 44.3% or 84,308 units from the January 2012 figure of 274,640 units.” This is very near the long term average of 280,000 units, see the chart:

Apartment Building Investment New Construction Permits

Note that single family permits are still Continue reading Apartment Building Permits Rise to Long-term Average while Vacancy Index Remains Low

Single-Family Rentals Only Marginally Impact Apartment Building Investments PNC EVP says. Video via Globe St.

Scott Bassin, EVP and head of multifamily for PNC Real Estate says single family rentals will only marginally impact apartment building investment because there is a certain group of people who want or need single family homes, and everyone else. See his comments in the Globe St. video from the NMHC Apartment Strategies Conference in Palm Springs.

Single Family Rentals only have small impact on Apartment Building Investment
Scott Bassin, EVP at PNC with Globe St. in Palm Springs

 

Risks to Apartment Overbuilding Averted, For Now says ReisReports

In a piece just out today ReisReports says that new apartment starts have been postponed to 2014 by many developers.

The “bubble” now shows up in 2014, but if economic growth ramps up, then additional supply will most likely be absorbed relatively painlessly.

But not all Metros escape. The report mentions Washington DC and suburban Maryland as two of those who will still see large increases in supply next year.

US Apartment Market moves big supply increase to 2014

Interestingly they name Seattle as a market that should be able to absorb the new supply coming because Continue reading Risks to Apartment Overbuilding Averted, For Now says ReisReports

The Seasonal Effects on Apartment Building Effective Rents, Occupancy and Revenue Growth. Plus much more…

Axiometrics’ monthly apartment building investment report has a great chart showing the seasonal effects on effective rent, occupancy rate and revenue growth. How do you model seasonality in your budgets? What do you think is the best way to do this?

Seasonal Effects on Apartment Building Investment Results
Source: Axiometrics Inc.

Their report this month also has a very Continue reading The Seasonal Effects on Apartment Building Effective Rents, Occupancy and Revenue Growth. Plus much more…