homesmillbrae.com » Apartment Market

Apartments: Wooing Dogs and Their Owners

Tue, 12 Feb 2013 05:02:03 +0000

Doggie business is becoming big business, especially in large urban markets where the apartment market is raging hot. In Manhattan, The Spot Experience describes itself as New York’s premier and fastest-growing dog services provider. Founded by a former NFL player and hedge fund manager, Mitch Marrow, the company offers pet amenities to 30 residential buildings in Manhattan and just announced it is partnering with Gateway, a residential complex in lower Manhattan. According to the press release:

“The dog amenity program provides Gateway residents with a complimentary Spot membership along with exclusive discounted services and priority access to the highest level of daycare, cage-free overnights, dog walking, transportation, grooming and training services at Spot locations in New York City. Spot also provides a designated shuttle service, which includes highly trained dog handlers for pick-up and drop-off of pets.”

“Our dog concierge program continues to grow at lightning speed,” says Morrow in the release.

Charges vary building to building, depending on the level of services, and those services are getting ever more creative. From dog washing stations to pet “spas,” from “Yappy Hours” to free swim for dogs in the pool, a “paw-dicure” is becoming paw-r for the course.

Just today Fisher Brothers, a New York-based commercial and residential development and property management company, announced the groundbreaking for a new, Class A apartment complex on Capitol Hill in Washington, DC. On the list of amenities, in between the business center and the rooftop pool deck, it boasts that residents, all residents, may enjoy the “Interior Pet Spa with exterior dog walk.”

(Read More: America’s Most Expensive Rentals)

Article source: http://www.cnbc.com/id/100449623

Home Builders Turn to Rental Apartments

Fri, 25 Jan 2013 20:30:41 +0000

“This increase in new construction is congruous with the strength in market fundamentals – strong performance is serving as a catalyst for new development,” said Ryan Severino of Reis Inc. “If anything the amount of new completions that have been delivered up to this point is low relative to the strength of the apartment market. “

There were just over 200,000 multi-family housing starts in 2012, according to the U.S. Commerce Department, far lower than the annual average of 340,000 over the past decade.

“We are still woefully short of what’s going to be coming in terms of demand,” says Buck Horne, a housing analyst at Raymond James. “Lennar is going where the demand is going to be. They’re going where they know they can make money.”

Lennar has positioned itself with offices in Atlanta, Charlotte, Chicago, Dallas, Denver, Miami, Orange County, San Francisco and Seattle, all markets where apartment demand is high, despite a recovery in the housing market.

“You’ve got to be very selective about your locations,” warns Miller. “We stay pretty thoughtful about where there are imbalances and too much building going on. This is not a market where you can start building any place.”

Miller is not concerned with competition from investors in the single family rental market, again focusing on location as his leg up. A lot of the foreclosed properties being absorbed by hedge funds and the like are not concentrated in the top markets targeted by Lennar. They are either inner city or third-level suburban, according to Miller.

Expanding household formations, coupled with credit and down payment-challenged new home buyers will benefit the rental sector for the foreseeable future. Many renters will eventually move to home buying, especially as their families expand. For Lennar, getting those potential buyers into a Lennar rental can only benefit the builder in the future.

“In many instances, the very first introduction to housing is through rentals and through branding and knowing consumers. Being there gives us a leg up and advantage in terms of new home sales later,” says Miller.

Article source: http://www.cnbc.com/id/100407898

Renovating Existing Property, Key to Outsized Returns

Wed, 21 Nov 2012 09:15:13 +0000

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?Sellers may move money across
the bay in search of higher
yields or park capital in
less management-intensive
single-tenant retail assets,? says
Mishkin.

SAN FRANCISCO-A research report that GlobeSt.com exclusively obtained from Marcus Millichap Real Estate Investment Services shows that for the San Francisco apartment market, renovating existing properties is key to outsized returns. According to the report, the apartment market here is arguably the strongest in the nation, and the impending construction boom will only have a minor impact on operations.

Job growth in the tech industry remains the key driver for occupancy and rent gains, and owners will likely have a strong negotiating position into next year, says the report. However, some early indications are emerging that rent growth will slow to a sustainable pace during the next several quarters, the report says.

Jeffrey Mishkin, first vice president and regional manager of the San Francisco office, notes that “class A vacancy is leveling off, while lower-tier vacancy tightens. As rents in the top-tier have climbed, many tenants are choosing to move down the quality scale rather than spending more of their income on housing,” he says. “Although new demand has been sufficient to offset these losses, new supply could tip the supply-demand balance. Several thousand units will come online during the next two years, creating competition for class A properties. As a result, operators are expected to slow rent gains to maintain occupancy rates until the development cycle wraps up in 2015.”

Investors will remain active in the San Francisco market, though deal flow could be impeded by the number of available listings, he adds. “Sellers may move money across the bay in search of higher yields or park capital in less management-intensive single-tenant retail assets,” he says. “Some owners see the low cap rates and low interest rates as a favorable time to divest. Buyers, meanwhile, remain focused on the spread, which points toward a strong buy stance.”

Many of these investors are seeking older, larger units that can be upgraded, he says. “Changing a large studio to a one bedroom or a large one bedroom into a two bedroom can have a significant impact on asking rents.”

The new owner may have to wait for rent-controlled units to be vacated to execute this strategy, which could tie up capital for an extended period, adds Mishkin. Nonetheless, he explains, “the return could be much more lucrative than the average 5% yield for a class B asset in today’s market.”

Categories:

West,
Multifamily,
Acquisitions/Dispositions,
Development,
San Francisco

Natalie Dolce Natalie Dolce, editor of the West Coast region for GlobeSt.com and Real Estate Forum, is responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, Natalie was Northeast bureau chief, covering New York City for GlobeSt.com. Dolce?s background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats Arthur Frommer?s Budget Travel magazine, FashionLedge.com, Co-Ed magazine, and has also freelanced for a number of publications including MSNBC.com and Museums New York magazine. Contact Natalie Dolce.

Article source: http://www.globest.com/news/12_484/sanfrancisco/multifamily/Renovating-Existing-Property-Key-to-Outsized-Returns-327035.html

As Housing Recovers, Will Apartment Boom End?

Tue, 28 Aug 2012 08:49:55 +0000

The latest reports on new and existing home sales seem to indicate that the housing market is beginning to find its footing again. While most believe the recovery will be slow, U-shaped, and bumpy, the free fall appears to be over for both sales and prices.

This is not to say that factors like rising mortgage interest rates and economic instability overseas couldn’t set the recovery back a bit, but, again the general consensus is that the worst is arguably over. (Read More: New Home Sales Rose 3.6% in July, but Prices Fell.)

If that is in fact the case, then we have to ask what effect that recovery will have on the recently booming apartment sector, which benefited from the housing crash.

Rents are sky high in most of the largest U.S. markets, and vacancies are down and still falling. Multifamily housing starts were up 30 percent in July from a year ago, according to the U.S. Commerce Department, and multifamily permits were up over 47 percent.

Supply increases are a potential risk to the multifamily sector, and high prices have caused investors to sour on the sector of late. But some say multifamily isn’t exactly heading into the woods. The fundamentals are still strong. (Read More: A Tale of Two Housing Markets: Single and Multi Family.)

“Realistically trees don’t grow to the sky,” said David Toti, a multifamily analyst at Cantor Fitzgerald. “The apartments have had spectacular growth since the depths of the recession, and at a certain point that growth has to moderate. You can only raise rents so much before you force people out.”

Toti noted that multi-family REITs are still doing better than other sectors, despite the fact that dedicated investors have started to rotate out to suburban office and select areas of retail and self-storage. Toti also believes that an improving single family housing market can co-exist for a while with a strong apartment market, and others agree.

“Modestly favorable home-buying indicators are not coming at the expense of apartment rent trends,” wrote Sam Chandan of Chandan Economics. “Multifamily fundamentals continue to improve in advance of pending inventory additions from the construction pipeline.”

The fact is that despite a recovery in single family housing, we are not going to see a housing boom any time soon, and you can thank the still tight credit market for that. (Read More: US Home Builders Begin to See Credit Thaw.)

There has also been a fundamental, cultural shift toward apartment living over the past decade that will drive ever more apartment demand.

While single family homes account for 80 percent of total residential building stock, according to the U.S. Census, that number may be shrinking.

Single-family homes have grown in number and size over the past 60 years, according to a new report from Pike Research (part of Navigant Energy Practice), “but by 2021 the total area of single-family homes in the United states will have shrunk by nearly 4 billion square feet, contracting at a negative compound annual growth rate of 0.2 percent.”

“For the first time since World War II, the United States is experiencing increased levels of urbanization,” said Pike senior research analyst Eric Bloom. “As more people move into cities, they tend to occupy apartments, condominiums, and other attached multi-unit housing types. By 2021, over one-fourth of the residential stock of the United States will be in multi-unit residential buildings.”

Apartment rents, while still rising, are beginning to level off, as the so-called “affordability inversion” comes into play; that means that should home prices continue to fall in most markets, renting becomes far more expensive than owning. (Read More: Is the Apartment Rental Market Overheating?)

In major metropolitan areas, however, high prices are still supported by high demand, and that is why many of the major multifamily REITs like AvalonBay
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] are becoming increasingly urban, building towers downtown and selling older, more suburban portfolio assets.

“Apartments and single family housing can live happily ever after for a little while,” said Toti, who noted that the physical American house is shrinking due to environmental concerns, material costs and a general desire by recession-wary home buyers to carry less debt.

—By CNBC’s Diana Olick

Questions? Comments? And follow me on Twitter @Diana_Olick

Article source: http://www.cnbc.com/id/48802819?__source=RSS*blog*&par=RSS

Bay Area renters squeezed in tight market

Tue, 17 Apr 2012 18:28:05 +0000

A surge of tech hiring and the aftereffects of the housing crash are filling up apartments in Silicon Valley and pushing renters toward the East Bay, where rents also are rising and vacancies dropping, according to a new housing report.

Natalie Gonzales has been looking for an apartment or home to rent in the East Bay for six months, and she’s ready to give up and stay put in Pacifica.

“I feel like it’s impossible to find a decent place for a good price,” she said.

Three factors have converged to make apartment hunting a misery in the Bay Area, experts say: the resurgence of tech hiring that has brought more people to Silicon Valley; potential homeowners still uncertain how far prices will drop continuing to rent; and the release of pent-up demand from young adults moving to their own digs after living with family or roommates during the downturn.

“All three have all happened almost simultaneously during the last 18 months,” said Hessam Nadji, managing director for research at Marcus Millichap, a commercial real estate brokerage with offices around the Bay Area.

The company expects vacancies in Silicon Valley this year to drop below 3 percent, a level not seen since the dot-com boom. Rents will hit $1,522 per month, a more than 7 percent increase from 2011. For San Francisco and the Peninsula, the company forecasts a 7.2 percent increase to $1,947 a month.

East Bay-bound

The

tight Silicon Valley rental market is expected to push more apartment hunters to the East Bay, where rents could rise to $1,361 a month, an increase of 3.8 percent this year, on the heels of a nearly 3 percent increase last year, the company said. East Bay vacancies are expected to drop to about 3.2 percent this year. Marcus Millichap’s forecast is for the entire apartment market for 20 units and above.
“Most of the time everything’s just too expensive,” said Jamie Atkinson, an administrative assistant at an upscale Peninsula grocery store who has searched for a new apartment on the Peninsula and in Hayward, Alameda and South San Francisco. “Big complexes, little complexes, everything — they have gone to outrageous prices.”

The low number of vacancies in large apartment complexes has made the San Jose area the best place in the U.S. for new developments, the company said.

“We’ve had many, many months of increasing employment,” said Steven Seligman of Marcus Millichap in Palo Alto. “There are going to be some apartments coming on line, particularly in San Jose, but in general there hasn’t been lot of construction over the last few years and rents had significant increases in 2011, and most are predicting increases in 2012.”

That’s put pressure on tech workers looking for apartments in complexes that have all the amenities.

Kimberley McInnis, a systems engineer with a startup, was faced with a rent increase and found a place in one weekend of intensive searching — $1,765 a month for a small one-bedroom in a better complex in Sunnyvale. “Rents are ridiculous,” she said.

Aditya Shukla, a project manager at Hewlett-Packard (HPQ), said that three weeks of searching for a new place in Cupertino or Sunnyvale has convinced him that rents are up 10 to 15 percent from last year. “I was able to find multiple apartments,” he said, possibly because he’s looking for a two-bedroom. But they were for high monthly rates with large deposits and “no negotiation — you have to put down this much, then move in if you want.”

New projects

Apartment developers are racing to complete projects, including Crescent Village, a 1,750-unit Irvine Co. development in north San Jose. The first phase with 380 units just opened, with 1,000 to be completed by the end of the year. The units go for $1,750 to $2,950 a month.

“There are all these jobs coming into the market, but there’s been very little construction over the last three or four years,” said Kevin Baldridge, Irvine Co. executive vice president for apartment communities. “We’ve been in an undersupplied environment for the last two to three years. That will begin changing.”

Irvine Co. already has signed 32 leases and had 200 visitors since the first units at Crescent Village opened April 2.

Adding to the rental pressure are foreclosed homeowners looking for places to live. After bailing on a $6,000 monthly mortgage, a $2,000-a-month rental looks affordable to a foreclosed homeowner, said Ron Stern of BayRentals.com, a Bay Area referral service.

Rents are more affordable for smaller units such as duplexes and fourplexes, Stern said. “There’s pretty good supply and rents are reasonable, especially in the smaller units that don’t have all the pools and rec rooms. You can definitely get better deals on them.” But Stern said he thinks rents will rise toward the middle of the year.

Contact Pete Carey at 408-920-5419.

Article source: http://www.montereyherald.com/business/ci_20410464/bay-area-rent-renters-expensive-squeeze-tight-market

New Evidence Mortgage Market Is Choking Housing Recovery

Sat, 09 Apr 2011 22:21:02 +0000

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One piece of data does not a conclusion make…two pieces get closer. A new report on the apartment market out today from Reis, Inc [ REIS 35.00 +27.165 (+346.71%) ]. shows a big surge in net absorptions, despite very little new supply of apartment units. Apartment vacancies dropped 40 basis points to 6.2 percent, which is a record plunge.

Rents are rising steadily, but the renters keep coming.

“We are now seeing the results of a sharp convergence of positive factors for apartment rentals. First, as labor markets continue to improve and hiring picks up, demand for housing is increasing, particularly in the 20 to 34 year segment of the labor market,” notes Reis’ Victor Canalog. “However, with the single family home sales market still on the ropes, and with deflationary expectations for home prices for at least the coming year, few of these newly hired young workers have the appetite to commit to buying a home.”

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Article source: http://www.cnbc.com/id/42453929?__source=RSS*blog*&par=RSS

New Evidence Mortgage Market is Choking Housing Recovery

Thu, 07 Apr 2011 07:49:01 +0000

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One piece of data does not a conclusion make…two pieces get closer. A new report on the apartment market out today from Reis, Inc [ REIS 7.80 +0.05 (+0.65%) ]. shows a big surge in net absorptions, despite very little new supply of apartment units. Apartment vacancies dropped 40 basis points to 6.2 percent, which is a record plunge.

Rents are rising steadily, but the renters keep coming.

“We are now seeing the results of a sharp convergence of positive factors for apartment rentals. First, as labor markets continue to improve and hiring picks up, demand for housing is increasing, particularly in the 20 to 34 year segment of the labor market,” notes Reis’ Victor Canalog. “However, with the single family home sales market still on the ropes, and with deflationary expectations for home prices for at least the coming year, few of these newly hired young workers have the appetite to commit to buying a home.”

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Article source: http://www.cnbc.com/id/42453929?__source=RSS*blog*&par=RSS