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June 4, 2015

Multifamily Investors Look Past the Sexy Six

Rising property prices are sending some multifamily investors on the hunt for deals in non-traditional markets, reports the Wall Street Journal. While larger players such as real-estate investment trusts and domestic and foreign institutional investors continue to zero in on the primary markets, smaller investors are exploring secondary and tertiary markets.

“Competition due to the amount of capital that’s flowing into the industry right now is causing people to seek out different investments, which might take them into markets where they traditionally haven’t gone,” said David Borsos, vice president of capital markets for the National Multifamily Housing Council, in the article.

The article traces investors' increasing comfort with secondary and tertiary markets to a broadening economic recovery and points to data from Marcus & Millichap that shows three years ago, over 60 percent of apartment acquisition capital was going to primary markets; today, that share has fallen below 50 percent. (paywall)

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AFFORDABILITY

Minimum Wage in U.S. Cities Not Enough to Afford Rent, Report Says

Around the country, renter households would need to make $19.35 an hour working full time to afford a two-bedroom unit, which is $4.00 more than the estimated average wage of U.S. workers, according to a report released by the National Low Income Housing Coalition. (paywall)

STUDENT HOUSING

Investors Bid High for Student Housing

The rush to buy student housing continues. Following a bit of a hiatus last year, student housing REITs have returned to the market in force, driving property prices for student housing even higher. “A property will come up for sale, if it’s halfway attractive, you will have a whole line of bidders,” says Jim Arbury, vice president of student housing with NMHC. “It’s a seller’s market.”

BROADBAND

Apartment Sector Reacts to Time Warner Acquisition

Charter Communications recently struck a deal to buy rival Time Warner, a move that would affect one in six households. Given that strong, consistent broadband connectivity is a top-desired apartment community amenity, apartment firms are watching the deal closely. NMHC’s Vice President of Industry Technology Initiatives Rick Haughey offers additional insight.

LAND USE

30 Strategies to Attract Infill Development

Economically distressed communities have been less able to attract infill development and attain the accompanying economic, environmental, health and quality-of-life benefits. A new EPA report identifies 30 strategies to help communities better position themselves to attract infill development.

FINANCE

LIHTC Property Expense Growth Accelerates

Operating expenses at low-income housing tax credit (LIHTC) developments increased by 2.98%, or approximately $130 per unit, in 2013, according to new data released by Novogradac & Co. This was slightly faster than the annualized rate for the prior three years. The annual report also reveals some expense disparities based on property size.
In Case You Missed It
A hand-selected collection of noteworthy articles on a wide variety of issues of interest to apartment executives.
Multifamily Construction Costs Fall, Labor Costs Rise

Multifamily Developers in an Amenities Arms Race

Wireless Internet Provider NetBlazr Targets High-End Apartments

New Census Analysis Digs into the City-Suburb Growth Gap

Developers Worry California Ruling Could Dent Building (paywall)

The Link Between Walkable Neighborhoods and Race

Greystone Video Highlights Affordable Housing Preservation in Rural America

Blackstone, America’s Biggest Landlord, Invests in Oakland

Palo Alto Startup HomeSuite Aims to Overhaul Rental Market

Former Steel Town Rebuilt, with Apartments

As Suburbs Become More Urban, Smart Growth Is Key

What Would Happen If We Taxed Land Instead of Buildings?

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A must-read for top apartment industry professionals, Apartment Wire is a timely review of emerging trends in apartment finance, development, management and technology and more, featuring both exclusive content from NMHC's staff of experts and provocative articles from across the web.
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SEPTEMBER

2015 NMHC Fall Board of Directors and Advisory Committee Meeting

September 15 - 17, 2015
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Multifamily Market Dashboard

Rising Rents Have Limited Effect on Renter Satisfaction

High rents are proving worth it for many renters. At least that’s the takeaway from several new surveys that show that most renters are staying put in their apartments rather than rushing into homeownership in response to the higher costs. Convenience and proximity to jobs and recreational activities are trumping cost when it comes to their satisfaction with renting.

New Freddie Mac research shows rising rents aren’t necessarily driving home purchases as most residents remain satisfied with their rental experience. In fact, a third of renter respondents said they were highly satisfied while an additional 30 percent said they were moderately satisfied. Moreover, favorable perceptions about renting are increasing. (Can we get a woot woot?)

A separate survey by Apartment List supported similar findings as apartment dwellers in New York, San Francisco and Washington were more satisfied living in those high-rent cities than renters in far more affordable markets such as Albuquerque, Detroit and Milwaukee.

In a related blog post, Freddie Mac EVP of Multifamily David Brickman concluded, “These results largely confirmed my own views. I believe rising rents are primarily a sign of increased demand rather than a signal that home purchases will be increasing.”



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