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September 7, 2016
CMBS Moves Toward Recovery
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A veritable tidal wave of maturing CMBS loans is hitting the multifamily market, leaving market watchers concerned about the possibility of rising defaults should refinancing appetite prove weak.

While market conditions generally have been favorable for refinancing, the CMBS market continues to wrestle with a shrinking share of the multifamily financing market. Threatening to further constrain CMBS activity are new risk-retention rules set to take effect in late December that call for CMBS loan originators to retain at least 5 percent of the credit risk.

However, the market breathed a little sigh of relief when the first CMBS deal structured with risk retention was issued in August and met with high demand and tight pricing. The $870.6 million transaction was sponsored by Wells Fargo, Bank of America and Morgan Stanley. The landmark transaction provides a benchmark for other issuers to lay the groundwork to get CMBS back on track after what has been a relatively moribund issuance volume so far this year.

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RESOURCES

New Multifamily Compensation Benchmarking Data Now Available

The 2016 NMHC Compensation Survey provides essential market-level data benchmarks for developing a strategic compensation and employment plan. Included are salary and total compensation data for more than 100 industry positions from top executives to leasing consultants, as well as stats on turnover, work/life policies and more.

FINANCE

New Sector Classification Marks Major Milestone in REIT Market Growth

Last week marked a big moment for stock exchange-listed equity REITs, including those in multifamily. On Aug. 31, S&P Dow Jones Indices and MSCI Inc. officially pulled REITs from a financial sector classification, forming a separate real estate sector. The much-anticipated move reflects growth in the asset class and is likely to draw more attention to the sector from institutional investors.

EMERGING LEADERS

Three Fall Networking Events Scheduled for Rising Young Professionals

Make plans to connect with other under-40 multifamily professionals this fall. NMHC’s Emerging Leaders group is hosting a networking breakfast on Sept. 19 in New Orleans in conjunction with the NMHC Student Housing Conference and Speaker Series events on Oct. 13 in Boston and Nov. 9 in Atlanta

RESEARCH

For Quick Rental Housing Data, Hit Craigslist

Everyone’s favorite internet bulletin board offers insights into regional and local rental housing trends, according to a new paper. “Correlations between the Craigslist and HUD median rents are positive, strong and statistically significant,” says the study’s author. 

AFFORDABLE HOUSING

Rising Construction Costs Threaten New Affordable Housing Development

A preview of a soon-to-be-released report by National Council of State Housing Agencies underscores the need for more funding for the Low-Income Housing Tax Credit (LIHTC) program as higher development costs shrink the amount of new affordable housing that developers can build.

DESIGN

Swedish Bike Apartments Are Designed for Life Without Cars

A new apartment building in Sweden doesn't have any parking spaces. Instead, the developers invested the money that would have gone to a parking garage into creating an ideal place to live for people who don't want to own a car.

POLICY

Tax Reform Talk Increasingly Includes Changes to MID

Reducing or even eliminating the mortgage interest deduction (MID)—a popular homeowner benefit—could be worth considering as part of a comprehensive reform of the American tax code, said Mortgage Bankers Association CEO David Stevens in a recent interview. 

In Case You Missed It
A hand-selected collection of noteworthy articles on a wide variety of issues of interest to apartment executives.
Multifamily Market Dashboard

Real Estate Investors Consider Carbon Footprint

In a move to both invest more responsibly for the long term and get ahead of regulation, investors are increasingly paying more attention to real estate companies’ sustainability practices and performances—especially when it comes to energy efficiency.

The trend is backed by science: Studies, like this one from the University of Cambridge, show that more energy-efficient properties have better financial performance. But benchmarking environmental impact is difficult given the various kinds of commercial real estate whose end uses affect carbon footprints.

In an exclusive for Bloomberg, GeoPhy, a property data-analytics firm, takes a stab at the challenge by comparing how much carbon a property produce per dollar of rent revenue it generates. By this measure, AvalonBay Communities leads the multifamily industry, ranking No. 5 on the top carbon performers list out of the largest 50 REITs by market cap. 


Upcoming Meetings
2016 Fall Board of Directors and Advisory Committee Meeting

September 13-15, 2016 Washington DC

2016 NMHC Student Housing Conference & Exposition

September 28-30, 2016 New Orleans Marriot in New Orleans, LA
About Apartment Wire
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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