Ivan Kaufman’s Real Estate Blog
This week’s collection of top multifamily news stories features a mix of topics all related to optimizing an apartment portfolio in 2018. First, we hear from Jeff Hayward at Fannie Mae, who presents the ‘triple bottom line’ of benefits related to green financing in Multi-Housing News. Next, Business Insider gives us a look at where smart foreign capital is investing in commercial real estate – and it’s not just the gateway cities you are used to. While small cities are attracting global investors, larger cities remain the preferred destination for new construction, according to the National Multifamily Housing Council. Chandan Economics also presents us with an interesting look at how rents in prewar buildings compare to new apartment stock across various MSAs, and the findings might surprise you. We close things off this week with a macro view of multifamily fundamentals from World Property Journal.
Multi-Housing News – September 13, 2017
“Fannie Mae is shaking up the multifamily lending space with industry-leading investment in environmental sustainability, says the GSE’s EVP Jeff Hayward.”
Business Insider – September 11, 2017
“Global investors, concerned by a cooling Chinese economy and ongoing concerns related to Brexit and the future of the European Union, are increasingly turning their attention to the U.S. for safety, cash-flow, higher returns and stability.”
ALEX Chatter – September 15, 2017
“While rents in prewar buildings can compete with newer stock overall, this story varies considerably across metro areas.”
World Property Journal – September 12, 2017
“A significant majority of the U.S. multifamily industry believes the rental housing market will continue to grow, fueled by increasing demand and a growing population.”
National Multifamily Housing Council – September 15, 2017
“It’s likely that much of the concentration of multifamily permitting activity that’s been concentrated in the top tiers of multifamily markets will continue as people and jobs keep heading toward key central cities.”
In this week’s collection of multifamily reads, we explore the industry’s take on multifamily housing, learn more about millennial households, understand how building age impacts multifamily rents, long term resident retention tips and more.
Freddie Mac – September 6, 2017
“How do lenders, developers, builders and investors feel about the market and where it’s going? What areas pose the greatest challenges? And where should the market be focused in the future?”
Pew Research Center – September 6, 2017
“Looking at households is important because many economic and spending decisions, such as whether to own or rent a home, tend to revolve around the household rather than the individual adult.”
ALEX Chatter – September 5, 2017
“When it comes to apartments, general wisdom says that the newer the building, the higher the rent. This holds true until you reach the ‘prewar’ vintage, which can approach new inventory rent rates for smaller properties.”
Property Management Insider – September 7, 2017
“We spend our money and time on marketing to new residents, even standing on the corner banging our drum, to drive new business. Too often we forget the most important thing—keeping people we’ve got.”
Scotsman Guide – September 6, 2017
“Commercial asset prices made more gains in July even as deal volume has fallen off, according to three leading indices.”
In this week’s collection of multifamily reads, we get a closer look at how renters make decisions. First, we examine the results from Village Green’s recent resident survey. Unsurprisingly, the national apartment manager found that cost and location are the two greatest factors influencing a decision to lease. In third place was a ‘community environment’, which 49% of respondents said was the most important element impacting a leasing decision.
Technology is starting to play an important role in deciding where to lease — and it’s not just about internet speed. Bisnow shares an update on how smart home technology is making its way into multifamily. It starts with best-in-class Wi-Fi and ends with automated thermostats, lighting and coffee makers that learn your morning routine. Smart apartments are also expected to make their way into the seniors housing sector. Technology can aide seniors looking to age-in-place — a growing component of the small apartment market — and notify relatives or caretakers if something is amiss in a daily routine.
This week’s collection of articles ends with an examination of cap rate trends — a factor high up on the list of the market fundamentals investors use when weighing investment decisions.
via National Real Estate Investor – Sept. 1, 2017
“Three factors—rent, location and community environment—make up the top drivers of apartment leasing decisions among renters of every age and across geographic markets.”
via Multifamily Executive – August 29, 2017
“The homey look and feel of the community was the top response for millennials (62%), Gen Xers (66%), and baby boomers (61%).”
via Bisnow – August 27, 2017
“Often, the demand for new technology is driven by its ability to simplify tasks and make things easier. That is also true for smart apartments, which can help make residents’ lives easier and apartment access and control simpler.”
via ALEX Chatter – August 28, 2017
“Seniors are not a monolithic renter group, but rather have varying needs from early retirement to skilled care services. Small property operators must prepare for this generational demand as more seniors are choosing to rent.”
via Reis – August 28, 2017
“We see that the cap rates in most regions have changed very little except for the Southwest that has historically shown the most volatility.”