Multi Housing News February 2012 : Page 8
news & notes After a Good Year in 2011, Apartment Industry Expects Another One in 2012 By Dees Stribling, Contributing Editor New York—Like any other kind of real estate, the apartment market is a game of numbers, and throughout 2011, the numbers were on the side of owners, developers and inves-tors. After a turnaround year in 2010, apart-ments were suddenly in demand in 2011— both by renters and investors. There’s little doubt that the year will be remembered as one in which the apartment industry fully bounced back, not only from the tough re-cession years, but also the hard times (for the industry) of the mid-2000s, when ev-eryone who could (and many who couldn’t) bought a house. “Powerful demographic trends, along with changing attitudes about homeownership and tighter mortgage underwriting, continue to drive a shift toward renting,” notes Mark Obrinsky, chief economist at the National Multi Housing Council (NMHC), adding that the industry has responded, after some lag because of tight credit for everyone, with an increase in development. According to the NMHC’s latest Quarterly Survey of Apartment Market Conditions (re-leased in October), 67 percent of respondents noted considerable activity, either in the plan-Rosen Partners, Russian Conglomerate Enter Joint Venture New York—Rosen Partners LLC, a New York-based private real estate developer, has announced it is entering a joint venture with Alfa Group, one of Russia’s largest privately owned financial-industrial investment conglomerates. The venture was formed with the intention of investing in commercial and residential real estate assets with values in excess of $100 million in major metropolitan markets along the Eastern Seaboard. The venture will seek multifamily, hospitality and office properties. Founded 23 years ago, Alfa Group boasts a num-ber of holdings and customarily concentrates on value-oriented, longer-term opportunities. Rosen Partners’ 30-year history has seen it build more than 3 million square feet of apartments, as 8 February 2012 | Multi-Housing News ning stage or actual new construction. In par-ticular, 20 percent said developers are break-ing ground on new projects at a rapid clip. Yet even with this increased activity, more than half (54 percent) think new development re-mains considerably below demand. The demographics Obrinsky spoke of mainly concern the Echo Boomers. The leading wave of this group has already started forming households, but seem to be doing so differently from their elders, in that fewer are buying residential property. That’s partly because unemployment is high among adults in their 20s, but it is also due to a widely noticed attitudinal shift. Whether that change proves temporary or perma-nent is impossible to say, but it’s clear that the combination of people who can’t buy a home and the people who don’t want one is driving U.S. homeownership down, to the benefi t of the apartment industry. As of the third quarter of 2011, nationwide apartment vacancy was 5.6 percent, down 30 basis points from the previous quarter and 150 basis points from the same quarter in 2010, according to Marcus & Millichap’s most recent report. Asking and effective rents posted annualized gains of 2.1 per-cent and 2.4 percent respectively. well as senior living and hotel properties. The com-pany owns a portfolio of thousands of multifamily apartments, and is known for its expertise in all phases of development. Rent Rite Directory Incorporates Amber Alert into System Dallas—Rent Rite recently integrated Amber Alerts into its Neighborhood Email Alert System, allowing property owners, managers and real estate agencies to receive notifi cation—in real time—of a child that has gone missing in their neighborhood directly from area police departments. Apartment investors George Pino and Joe Kill-inger launched Rent Rite. The directory’s Neigh-borhood Email Alert System allows peace officers to distribute email alerts to subscribers, apprising them of crimes and suspicious activity in their immedi-ate areas upon report of the incidents to the police. Now, Rent Rite has taken its offerings to a new level by adding Amber Alert to the system, which is pres-ently available in both Texas and California. AvalonBay Launches Two New Apartment Brands Arlington, Va.—AvalonBay Communities Inc. re-cently introduced two new apartment community brands, “AVA” and “eaves.” The new brands will be offered in addition to the company’s existing apartment community brand, “Avalon.” The new “AVA” brand is designed to attract the increasing number of people who want to live in or near urban neighborhoods. Located in close prox-imity to restaurants, nightlife, shopping and pub-lic transportation, they will feature smaller apart-ments, modern design and technology. The “AVA” brand will grow through new de-velopment and redevelopment, while the “eaves” brand addresses a segment of renters that seek good quality apartment living with practical and func-tional amenities and services. These communities will tend to be located in suburban areas and of-fer more moderately priced apartments. This brand will grow through redevelopment and acquisition. New Partnership Seeks Value-Add Apartments in Metro Seattle Seattle—Trinity Real Estate and Norman Partners have formed a partnership to buy multifamily and other commercial real estate in the Puget Sound region. The new entity, Northstar Realty Fund, will focus mainly on multifamily properties that “would benefi t from creative repositioning, redevelopment work and strategic re-marketing,” according to the partnership’s statement. Northstar will seek value-added investments in mid-sized ($6 million to $15 million) properties. The fund is designed to provide individual investors with a signifi cant measure of control over their in-vested capital, allowing each investor to participate only in investments they choose. Northstar says it will target assets that are be-low the radar of many institutional funds, and thus often priced more attractively. The partnership— which includes principals Richard Leider and Pete Stone of Trinity Real Estate, and Jim Norman and Rob Larsen of Norman Partners—will then make capital improvements and pursue other value-add-ed strategies for their investments.
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