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Class C Apartment Building Investments takes the lead in rent growth nationally says Axiometrics.

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.

Is Revenue Management Already Losing Its Edge for Apartment Building Investments? An interesting take-

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.

Q3 Apartment Building Investment Reports Now Available From Marcus & Millichap

M&M covers 39 major apartment building investment markets in the US and have just published their Q3 reports. Here’s a list of the metros they cover:

They also provide snapshots of the Office, Industrial, Retail and Self-storage sectors in many of those markets, accessible from the tabs on the page. Note this information requires registration at the website to view.

UPDATE: Top 10 US Submarkets for new apartment building units in the pipeline.

In May we posted an article Top 10 US Cities for new apartment building permits where Seattle came in sixth in new apartment building units permitted. Now a new list is out from Axiometrics with a breakdown by submarket and Seattle’s Downtown/Capitol Hill/Queen Anne submarket lands at number two with almost 4,000 units due to come on line in the near future.

And that’s on top of nearly 6,000 units (3,500 in the last two years) that have already been delivered downtown since 2005. Plus there are several other hot neighborhoods such as Belltown and South Lake Union that Continue reading UPDATE: Top 10 US Submarkets for new apartment building units in the pipeline.

Even in Slow Jobs Climate Apartment Buildings Leasing Well- National Occupancy now over 94%

Just got an email from Jay Denton, Research VP at AXIOMetrics saying the national apartment building occupancy is 94.3%, a level not seen since 2006. Class A occupancy is at 95.5%, class B is 94.8% and class C is 92%. Also many submarkets around the country will see the first new supply of units this summer. Even so properties in Lease Up are doing well, averaging more than 20 move-ins a month. Further strength in the market is reflected by the fact that concessions are down to only 2-3 weeks in many markets.

Apartment Building Invesment Revenue Rents Occupancy

Jay also shared an interesting idea for a leading indicator of Continue reading Even in Slow Jobs Climate Apartment Buildings Leasing Well- National Occupancy now over 94%

Apartment rents rising at inflation rate- Freddie Mac video report

In their June 2012 Economic Update, Freddie Mac says: “Over the year ending March 2012, an additional 1.5 million households moved into rental housing. That’s a 4 percent increase in renter-occupied dwellings in a single year.”

The increase in apartment demand has helped to enhance property values, on average up about 25 percent during the past two years from their trough during the first quarter of 2010…

See the whole report here: Rental Markets: A Sign of Strength

Updated CRE and Apartment Market Cycle Charts Now Posted by Glenn Mueller at Dividend Capital

Dr. Mueller is one of the leading researchers on the commercial and apartment building investment cycle but I have big questions about Seattle being placed at the bottom of the cycle in his latest Cycle Monitor report. According to MPF Research there currently are 6,000 new units under construction in Seattle (see here) and Essex Property Trust estimates that there will be 10,000 units coming on line in the next three years (see here). In fact the NMHC lists Seattle as one of three US markets in danger of overbuilding (see here).

Reis Reports is showing that while rents are up about 1% QoQ in Q1 2012, vacancy is starting Continue reading Updated CRE and Apartment Market Cycle Charts Now Posted by Glenn Mueller at Dividend Capital

Phoenix, Seattle and Washington, DC apartment markets at risk of overbuilding says NMHC panel

Report on the state of apartment building investment markets from the good folks at Joseph Bernard Investment Real Estate in Portland:

Continued positive multifamily demand fundamentals and ready access to capital at attractive rates is fueling a surge in new apartment development, according to industry executives.

Several hundred senior-level apartment executives gathered in Scottsdale, AZ, last week for National Multi Housing Council’s (NMHC) Apartment Strategies/Finance Conference and Spring Board of Directors Meeting. The following is the NMHC’s summary of what was discussed.

Continued low levels of new supply have led to a big bounce-back in rents as demand outpaces new construction. According to one panel of apartment executives, the new supply shortfall may be larger than once thought — as many as 700,000 to 1 million units — because many of the apartments built in recent years have been in the affordable, rather than market-rate, section of the market. Moreover, much of the current apartment stock dates back to the 1970s and is becoming obsolete, creating additional demand for new supply.

Select areas have seen such large upticks in the number of planned and under construction units that could turn into hot spots for potential overbuilding. In particular, certain submarkets of Phoenix, Seattle and Washington, D.C., appear somewhat at risk.

But, overall, new completions are still a very low percentage of total inventory.

Money Flowing for Multifamily

There is a wall of private capital that wants into the multifamily space. More than 250 private equity funds currently are Continue reading Phoenix, Seattle and Washington, DC apartment markets at risk of overbuilding says NMHC panel

Commercial Real Estate added $260 Billion to GDP last year- Hessam Nadji video via Marcus & Millichap

See the video here: http://bit.ly/JpqMck Sorry, couldn’t figure out how to load their video directly into this post. Any suggestions? Thanks.

5 Tips on how to choose the best internet listing service (ILS) for your apartment building advertising.

With so many online ad sources to choose from, how can you be sure which is best for your apartment building investment? Below Jason Velazquez, VP of Strategic Initiatives at Colliers of offers 5 tips for choosing a great ILS:

Does their traffic measure up? Most Internet Listing Services (ILS) will happily provide you with their web statistics. Take the time to thoroughly review any report offered to you before you sign on the dotted line.

Check whether they’re popular in your city. Simply because an ILS is nationwide, doesn’t necessarily mean they have high web traffic in your city. A simple way to gauge an ILS’s regional market penetration is to google the keywords – apartments in city name, and then scroll through the search results until you see their site. Don’t just search using the city you are located in; type other city names that your prospects move from.

If the ILS isn’t on the front page of Google, you may want to find an alternative ad source. Studies have consistently shown the majority of renters look for their apartment using search engines.

Before you run a Google search: Continue reading 5 Tips on how to choose the best internet listing service (ILS) for your apartment building advertising.