Ivan Kaufman’s Real Estate Blog
We start off with a look at demand and growth within the youngest and oldest renter cohorts in this week’s collection of the top multifamily reads. First, Axiometrics walks us through the relationship between student enrollment and student housing demand. Next, National Real Estate Investor reveals survey results from its fourth annual Seniors Housing Market Study, which shows a positive outlook for seniors housing across the board. We also get a closer look at a property subset – the garden-style community – which has seen the greatest NOI increase among multifamily asset types in 2016. Two stories examining macro economic and demographic trends round off this week’s stories – one from Fannie Mae and another from the National Multifamily Housing Council.
via Axiometrics – August 10, 2017
“Enrollment growth is the main driver of student housing demand, as we mentioned a few weeks ago. The impact and volatility of growth varies by type and size of university, along with other fundamentals.”
via NREI – August 16, 2017
“Exclusive survey results from the fourth annual NREI / NIC Seniors Housing Market Study indicate a more positive outlook across the board on questions related to improving fundamentals, access to capital and transaction pipeline.”
via Multifamily Executive – August 11, 2017
“The net operating income (NOI) for garden-style apartment buildings rose by 5.3% to $7.13 per square foot nationwide in 2016, the highest percentage increase in NOI across all apartment types.”
Fannie Mae – August 17, 2017
“Consumer spending growth might not moderate as much as we have accounted for in our forecast. A build-up in inventory also should be positive for growth this quarter and nonresidential investment in structures will likely continue to improve as oil prices stabilize.”
via National Multifamily Housing Council – August 15, 2017
“Smaller properties (those with fewer than 50 units) comprise a sizeable portion of the overall apartment stock, but new construction tends to be of larger properties.”
This week’s roundup of the top multifamily and commercial real estate news stories looks at change on several different levels. We start on a small level, examining the various factors that influence whether or not a renter chooses to renew their lease. Age, inventory and employment opportunities all play a role.
A search for value is another reason for turnover, and some Millennials renters are choosing to leave cities for urban-like pockets in the suburbs. As these suburbs come to incorporate amenities typically found in city centers, apartment developers are now working with housing officials to align parking requirements with a decreased demand for cars – due in part to services like Uber and the same day delivery of goods.
The continued growth of e-commerce has also lead to a rethinking of logistics and industrial space, as companies like Amazon open up new fulfillment centers inside the urban core to complete the ‘last mile’ of the supply chain. While overall commercial real estate lending is up 20% year-over-year in 2Q17, lending for industrial properties was up 91%.
via Real Page – August 7, 2017
“Renter turnover is inevitable. Unless rents are absurdly cheap, people are going to come and go. It’s the nature of the multifamily industry.
But what does the turnover ratio tell us?”
via Yahoo Finance – August 7, 2017
“Why live in a metropolis when you can find urban perks in the suburbs? Older millennials are realizing they don’t have a good answer to that question anymore. The result: a migration out of the city.”
via National Real Estate Investor – August 8, 2017
“There is a growing awareness among housing officials that the required parking ratios are out of whack with reality.”
via World Property Journal – August 7, 2017
“Second quarter 2017 commercial and multifamily mortgage loan originations were 20 percent higher than during the same period last year and 28 percent higher than the first quarter of 2017.”
We start this week’s round up of the top multifamily reads with a look at what apartments owners can do to keep their renters around. An article from the National Apartment Association (NAA) examines the top value-add features that not only increase retention but also raise rents. Tech and smart-home features have joined traditional upgrade areas (kitchens, bathrooms and floors) as top targets. While more renters are choosing to renew their leases today compared to five years ago, certain metro areas see a greater prevalence of renters staying put. A guest contributed article from Real Page analyst Brandon Crowell in Forbes dives into the details. Two of the top 10 markets for renter retention – Chicago and Northern New Jersey – also appear on the top 10 list of investment sales markets for the first half of 2017 compiled by National Real Estate Investor (NREI). We close this week’s list of stories with RCA’s update on overall U.S. commercial real estate prices, which hit a new high in June.
via National Apartment Association – July 24, 2017
“At this point in the cycle, it is harder to make money building or buying pristine, core apartments. But if you can add value through renovation—taking an apartment community from a B-minus apartment to a B plus or an A, there is still potential to make a significant return.”
via Forbes – July 31, 2017
“More apartment renters nationwide are choosing to renew their leases when they expire, rather than move out. That trend has been growing for more than five years. The question is where are renters more likely to stay in place?”
via Real Capital Analytics – August 1, 2017
“The US National All-Property Composite index rose 0.9% in June from a month earlier and climbed 7.9% from a year ago.”
via National Real Estate Investor – August 2, 2017
“Even with a decline in transaction volume, sales remain relatively robust in most major metros. Combined, the top 10 most active sales markets during the first half of the year accounted for 35 percent of total sales at $74.4 billion.”