Overall Housing Starts Decrease As Multi-Family Starts Plummet By Almost 50%
November 19th, 2010
Here’s more proof that even though the economy is starting to show signs of growth, it still has a long way to go: residential construction continues to reflect a downward movement and building permits increase only by a minimal. The drop can be greatly attributed to multi-family starts and the movement in the West.
The Commerce Department released a report on Wednesday showing figures for housing starts and building permits grants for the month of October. The month reflected an 11.7% fall to an annual rate of 519,000 – more than what is expected. The fall is in comparison to the revised September estimate of 588,000. The annual rate is expected by economists to slip from the 610,000 originally reported in the previous month to 600,000. ING’s chief international economist Rob Carnell, however, says the overall figures may seem to reflect a bad result but reality shows that the decline is more centered on the erratic nature of the multi-family sector.
In October, multi-family housing starts fell by 47.5% to an annual rate of 74,000. This is a huge number as compared to single-family starts’ decline of 1.1% to an annual rate of 436,000.
Artis REIT Purchases Six Twin Cities Properties
November 5th, 2010
The commercial real estate market may be faring better than its residential counterpart but not all commercial real estate companies have the means to purchase – and those which do have great potential to dominate the industrial landscape. Much like the Canadian real estate investment trust that has recently acquired a huge chunk of Twin Cities industrial properties portfolio. The said real estate investment trust is now being seen as the next dominant industrial landlord.
Artis Real Estate Investment Trust, based in Winnipeg, has just bought four suburban Twin Cities warehouses with the price tag $23.8 million. The four warehouses are located in Brooklyn Park, Eden Prairie, New Hope, and Rogers. The deal, which was closed last Friday, was documented in a Hennepin County Government Center filing.
Friday seemed to be a shopping spree for Artis REIT as it also closed a purchase of two buildings in Savage and Fridley. Senior VP-asset management for trust Doug McGregor said that he does not know the exact price paid by Artis for the two properties.
The six properties recently bought by Artis REIT is part of AMB Property Corp.’s collection of 25 industrial buildings. San Francisco-based and considered to be a large real estate investment trust, AMB Property Corp. has put the collection in the market early this year. Marketing it was CB Richard Ellis, which declared the collection as the largest single industrial portfolio in Twin Cities.
There have been huge amount of interest in the portfolio and the pieces of it. Minnetonka-based Welsh Cos. senior vice president Tim Prinsen therefore considers the sale a “big deal”. CB Richard Ellis will continue to manage and lease the buildings bought by Artis REIT.
But Artis REIT is not done with the buying spree – it is yet to acquire all of the 25 buildings in AMB’s package. This will total their purchase to 2.3 million square feet, making Artis REIT a large industrial landlord in Twin Cities.
“We’re clearly pleased with the acquisition of the six, and we’re looking forward to closing on the balance of this transaction at the end of the first quarter of 2011,” says McGregor.
A local broker reveals that the entire sale price had a tag of $115 million – approximately $50 per square foot.
Raised Rents And Better Forecasts For Two Apartment REITS
October 29th, 2010
As if the apartment market needs further proof that it is about to emerge as the best performing industry in this down economy: two of America’s largest apartment REITs have yielded better-than-expected funds from operations. Furthermore, both companies raised the bar by increasing its outlook for the year 2010. This just intensifies the recent reports of an improving – if not improved – apartment market.
Both AvalonBay Communities Inc. and Equity Residential (whose chairman is real estate mogul Sam Zell) saw an increase in their year-over-year rental revenue. Given a boost in morale, both have also pushed their rents at expense of occupancy.
The increase in apartment demands has been brought about by more and more people choosing to move out of their parents’ house or to live on their own without a roommate, says Adelante Capital Management vice president Luis Sanchez. The influx of foreclosures has also contributed to the decrease in vacancy rates – evicted homeowners choose to just rent and prospective home buyers are scared out of purchasing thus going with rental.
Boston Sees Surge In Apartment Building Starts
October 27th, 2010
It has already been established that with the housing market loss, the apartment market gains. And lots of states and cities are joining the apartment building bandwagon, the latest of which is Boston.
In Boston, developers are having a hard time gaining financing for new office towers and high-rise condominiums and this has prompted a dramatic increase in proposals for apartment complexes. There are currently more than a dozen pending projects amounting to $1 billion. Though still in need of financing, these projects will provide additional rental units that the whole city is clamoring for.
There has been a shortage in apartments, which in turn led to an increase in rents. The need for more apartment units, which has been long time coming given the housing market crash, further proves that the apartment building industry is in a far better shape than the rest of the economy.
Several of the proposed projects are actually former luxury condominium projects that have been stalled when the market crashed two years ago. Since more and more companies are choosing to go with existing buildings that offer low rents, office building has become practically non-existent. Same goes for condominiums.
HFF Announces $70.1M Sale Of The Courts At Fair Oaks
October 16th, 2010
There have been news left and right of how previous homeowners are slowly turning into renters. The recent sale of a multi-family housing community provides another proof behind the truth of that news.
The Courts at Fair Oaks, formerly known as The Point at Fairfax, is a 364-unit luxury multi-housing community in Fairfax, Virginia. Its sale has been closed recently by the Washington, D.C. office of Holiday Fenoglio Fowler (HFF) in behalf of seller Panco Strategic Real Estate Fund I, an affiliate of Pantzer Properties, Inc. HFF’s investment sales team was led by managing directors Dave Nachison and Alan Davis and senior real estate analyst Brenden Flood in making the sale.
Home Properties of New York, Inc. was the one who purchased The Oaks for $70.1 million. The price is under the assumption of an existing $46 million fixed-rate mortgage.
Located at 12101 Pine Forest Circle, The Courts is close to the Fairfax County Government Center, Fairfax Corner, and Fair Oaks Mall and also approximately 18 miles west of downtown Washington, D.C. The 364 units vary from studio and one- and two-bedroom units, with each averaging 859 square feet each. This 95.1% leased property offers different amenities such as tennis courts, swimming pool, exercise trail, fitness center, community center, and onsite car wash facilities.
Developer Lifesaver: Apartment Boom Gives Developers More Business
October 12th, 2010
“Another man’s loss may be another man’s gain” – that is exactly what happened between the residential housing market and the apartment industry. Whereas property values are still declining and houses for sale remain in the market for a long time, the apartment industry is gaining more advocates as a shift from house buying to renting happens nationwide. If there’s another industry that’s being saved by this shift, it’s the development industry.
The national shift has been such a big lifesaver for the developers that some real estate businesses who have not considered developing in a long time suddenly find themselves doing just that – developing apartment sites. Take for example the property between New York Avenue and L Street near Mount Vernon Square in Northwest D.C., which has been undeveloped since brothers Guy and L.P. Steuart acquired it in the 1920s. Guy Steuart II is now converting the site into an apartment complex and has just recently partnered with Arlington housing developer Paradigm Development and applied for excavation permits to start work this month of October.
New Partnership To Yield A 275-Property Affordable Housing Portfolio
October 4th, 2010
A new partnership hits the real estate market. Forming a new company, the partnership aims to provide affordable housing to as many people as possible.
Low Income Housing Tax Credit industry leader Michael Costa, Highridge Partners and Citi form Highridge Costa Housing Partners to manage a portfolio amounting to $3.4 billion, consisting of 275 affordable, multifamily properties. Each one will play a part and contribute something to the newly-formed partnership in meeting its mission of seeking new opportunities as well as managing the current portfolio built in the last 15 years.
Citi will be contributing a previously foreclosed portfolio, which was also made in partnership with Costa. On the other hand, Highridge Partners can not only provide global capital markets relationships and strategic financial management perspective but new equity capital as well. Costa, with his business acumen and unparalleled experience in the tax credit syndication, will contribute highly through strategic planning.
Citi Community Capital’s managing director Steven N. Fayne says, “We explored several options for these properties and determined that a partnership with Highridge Costa maintains much needed affordable housing throughout the United States while protecting Citi’s investment.”