Apartment Wire - 02/04/2016 (Plain Text Version)

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Investors Favor Urban Development Deals

The traditional barriers to high-density, downtown development deals—time, cost and complexity—have done little to dissuade investors from pursuing them in this cycle, as capital preference continues to fuel more urban multifamily development.  

During the past 10 years, the number of apartment units inside central business districts (CBDs) jumped 19.5 percent, according to MPF Research. This increase marks a rate of more than double that of unit growth in the suburbs.

A great many apartment properties may have been developed recently in urban-core submarkets, but some industry watchers contend that the suburbs are far from dead. So-called “town center” developments, often large, urban-style developments outside city centers, are driving growth in a number of suburban submarkets, according to this Forbes article.

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MARKETS

Are Apartment REITs Headed Toward a Cliff in 2016?

Like dozens of apartments in Pacifica, Calif., that are teetering on the edge of a bluff eroded by El Niño storms, the apartment industry’s fate seems similarly uncertain, as market trends provide an unclear picture of whether apartments will continue to thrive, hold steady or fall into the “ocean” this year.
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MEETINGS

Economic Outlook Top of Mind at 2016 NMHC Annual Meeting

Amid softening in key global markets and declining oil prices, the question on executives’ minds at Annual Meeting was whether the U.S. economy is headed toward a new recession—and if so, what kind of ramifications will that have on apartment demand, capital flows and development pipeline. Leading executives weighed in, along with former Fed Chairman Ben Bernanke.  [return to top]

RENT VS. BUY

Why Buying a Home Is Overrated

It’s a question that’s frequently debated, with traditional thinking being that renting is akin to throwing money out the window. But as one economist points out, there are some good reasons to believe that buying a home instead of renting isn’t as great of an investment as Americans once thought.
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TRENDS

Apartments Figure into Super Bowl Excitement

As San Francisco prepares for the NFL battle royal between the Denver Broncos and Carolina Panthers on Sunday, the festivities are spotlighting the city’s housing scarcity and notoriously high rental costs. Also, don’t miss Jeff Goldblum among classic mainstays like beverage companies and car manufacturers in the ad line-up, as Apartments.com invests in a 60-second spot. [return to top]

STUDENT HOUSING

Investors Flock to Safe, Steady Student Housing Plays

The student housing industry in the U.S. has had image problems, seen as the duller, less appealing relation to the hot multifamily apartment sector. But that’s changing as pension funds, private equity money and foreign capital pour into the space. [return to top]

OPINION

The New Airbnb-Landlord Connection

Talks between home-sharing goliath Airbnb and three leading apartment firms raise several public policy issues. First, how much should we care to preserve the existing structure of the hotel industry—and its jobs? Second, what are the possible housing affordability and availability ramifications? Plus, a NYC apartment firm racks up fines for residents’ Airbnb sublets. [return to top]

Multifamily Market Dashboard

New Supply Does Little to Slow Rent Growth in Some Markets

Conventional wisdom would suggest that, in markets experiencing significant increases in supply, rent growth would begin to moderate. However, research shows that a number of markets have bucked that trend.

In some high supply markets, Class A rent growth has been well above the national average of 2.5 percent, said Jay Parsons, director of analytics for MPF Research, during a session at the 2016 NMHC Apartment Strategies Conference

In fact, half of the top 10 markets for inventory growth over the past decade—Austin, Dallas, Denver, Houston and San Antonio—also made the top ten list for markets with the biggest percentage rent increases during the same period.

“A lot of these markets have had big structural changes,” explained Parsons. “And many submarkets didn’t have good, institutional, Class A apartments ten years ago.”


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