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
Essex Prop. Trust on Seattle Apartment Building Investment: rents up 6.5%, NOI +11% but 10k new units coming
Filed under: Apartment Building Investment Cycle, Multifamily Investments
My Exec Sum: Seattle apartment building investment results from Essex Property Trust Q1 call:
- Seattle demonstrated exceptional same-store NOI and revenue growth of 11.2% driven by very limited supplies of housing and job growth that exceeds national averages
- On operating expenses we expect a 2.3% increase for the second quarter ’12 over the second quarter in ’11
- Seattle rents were up 6.5% compared to the first quarter of 2011. So depending on the submarket, we are now 4% below to even with our prior rent peaks.
- renewal offers for June and July averaged +6% to 8% in Seattle
- As of April 30, its occupancy was 96.1% with a net availability of 5.1%.
- We view this turnover activity (50-55% YoY) as healthy because it provides us with more opportunity to grow rents. Additionally, we only saw a nominal increase in move-outs due to home purchases and affordability.
- Cap rates continue 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
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.
Now you can watch the Apartment Building Investing Cycle Unfold In Real Time- Much easier than deciphering technical stock charts!
Filed under: Apartment Building Investment Cycle, Multifamily Design & Development, Multifamily Investments
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.
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 Read more
Apartment Building Investment In Seattle, here’s the good news- video
Filed under: Apartment Building Investment Cycle, Multifamily Design & Development, Multifamily Investments
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?
Filed under: Apartment Building Investment Cycle, Multifamily Investments
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.
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 Read more
Multifamily is best Commercial RE sector but…. Video from Starpoint CEO Paul Daneshrad
Filed under: Commercial Real Estate, Multifamily Investments
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