Features

InterFace Keynote: Economist Expresses Optimism Amid Concerns Over Economy, Labor

by Jeff Shaw September 14, 2022

ATLANTA — After a quarter characterized by rising costs of living and mounting inflation, “recession” is the word on everybody’s lips. But Roger Tutterow, professor of economics at Kennesaw State University in Georgia, states that “it is not a foregone conclusion that we’re in a recession today or that we’ll get there in the next several months.” The official definition of a recession is not two consecutive quarters of negative growth in gross domestic product (GDP). “Most of the time it works out that way,” Tutterow said, “but the technical definition of a recession is a period of diminishing activity in production, trade, employment and income.” Tutterow noted that looking at these four components of economic activity and comparing them to today indicates a softening economy and an elevated risk of recession, but he does not believe that the economy is necessarily contracting. He puts the risk of a recession in the next 12 months as roughly one chance in three. Tutterow’s assessment of the current state of the economy and his near-term outlook came during a keynote address Tutterow delivered at the ninth annual InterFace Seniors Housing Southeast, a networking and information conference hosted by France Media’s InterFace Conference …

September 14, 2022

Features

Over 90 Percent of Construction Firms Are Struggling to Find Workers, New Survey Shows

by Jeff Shaw September 13, 2022

Construction firms are eager to hire more employees, but a dearth of qualified workers has stymied their efforts, according to an annual workforce survey conducted by the Associated General Contractors of America (AGC) in conjunction with Autodesk. Among firms with job openings, 91 percent report they are having a hard time filling some or all positions. A total of 1,266 individuals from a broad range of construction firm types and sizes participated in the workforce survey conducted in July and August. Some 77 percent of contractors report there are few workers available who meet the minimum qualification standards, including being able to pass a drug test, which is something insurance companies require for all workers in the industry. With the unemployment rate in the construction industry hovering around 4 percent, finding qualified applicants is sure to remain a challenge in the near term, says Ken Simonson, AGC’s chief economist. “Construction workforce shortages are severe and having a significant impact on construction firms of all types, all sizes and all labor arrangements. These workforce shortages are compounding the challenges firms are having with supply chain disruptions that are inflating the cost of construction materials and making delivery schedules and product availability …

September 13, 2022

Paul Darrow LA multifamily investment sales

Acquisitions California Content Partner Development Features Leasing Activity Multifamily Walker & Dunlop Western

LA Multifamily Investment Deals See Volume Normalization, Pricing Resets for Select Assets

by Sarah Daniels September 13, 2022

Multifamily investment transaction volume had an unprecedented year in 2021, and the first six months of 2022 were quite robust. Now, economic uncertainty in the form of rising interest rates and a cooling economy has created some hesitancy on the part of investors. “Some normalization is occurring in the market now, in addition to a pullback because of what is going on in the capital markets and economy,” says Paul Darrow, a managing director of Walker & Dunlop’s investment sales team based out of Los Angeles. Walker & Dunlop is one of the largest providers of capital to commercial real estate industry in the United States. Darrow sat down with REBusinessOnline to talk about multifamily investment sales trends in the Los Angeles area and the opportunities he sees for investors down the road. REBusiness: Investor interests have shifted in the past few months. What kinds of properties are investors most interested in now? Darrow: It’s a mixed bag when it comes to investor appetite. Those who raised money to buy specific types of buildings are obviously guided by what they’ve promised their investors in the form of return profiles and risk. Core funds, for example, can’t just switch to value-add or …

September 13, 2022

Features Multifamily Student Housing

Here’s How Student Housing Owners Can Obtain Fair Property Tax Assessments

by Kristin Harlow September 12, 2022

By John Stark, Popp Hutcheson Student housing valuation is often saddled by two common units of comparison that multiply the opportunities for confusion and disagreement in appraising value for property taxation. For a more convincing property tax appeal, it is important for the taxpayer to ensure their property’s valuations line up on both a per-square-foot and a per-bed basis. This article will discuss the importance of a proper unit mix and rent roll analysis to reconcile values between these units of comparison. We will also discuss current trends in student housing, including free services and concessions designed to boost occupancy, that should be accounted for in an income analysis to make sure appraisal districts do not overvalue the real estate. Price Per Square Foot vs. Price Per Bed Although student housing owners typically lease their properties by the bed and calculate investment value by that metric, many appraisal districts value student housing on a price per-square-foot basis. This can lead to errors in an assessor’s potential gross income assumptions. Further exacerbating overvaluations, many appraisal districts do not distinguish lease-per-bed student housing from traditional, lease-per-unit multifamily apartments. This failure to differentiate leads to erroneous assumptions of market rents and cap rates. …

September 12, 2022

Conference Coverage Features Multifamily

InterFace Panel: Multifamily Managers Brace for Increases in Labor Costs

by Taylor Williams September 8, 2022

By Taylor Williams The multifamily management industry has been beset by labor shortages for years, which has in turn prompted the rise of numerous technological platforms designed to streamline, automate and simplify daily work. But the business of running apartment communities carries an inherent and irrevocable human element, and the cost of acquiring and maintaining that service is about to go up. As an industry, multifamily management is hardly alone on this front. Businesses in countless sectors across the country are deadlocked in labor battles. While overall unemployment remains low at 3.7 percent, at 62.4 percent, the labor force participation rate remains about 100 basis points below its pre-pandemic mark, according to data from the Federal Reserve. In addition, according to the Society for Human Resource Management, resignations hit record highs in 2021, with some 4 million Americans quitting their jobs every month. With much of the labor supply in flux and potentially looking to shift careers, the advantage shifts to deep-pocketed, well-capitalized employers who can not only offer higher salaries, but also greater workplace flexibility. As such, multifamily management firms will likely be competing for talent among one another in 2023, as well as sparring with recruiters from completely …

September 8, 2022

Conference Coverage Features Multifamily Seniors Housing Southeast Southeast Feature Archive

Supply Chain Issues Slow Seniors Housing Development as Demand Balloons, Say InterFace Panelists

by Kristin Harlow September 7, 2022

ATLANTA — Delays in the arrival of building materials — everything from windows and roof trusses to microchips for electrical panels — is one of the biggest hurdles slowing down new seniors housing developments, according to Kristin Kutac Ward, CEO of Solvere Living. Ward’s comments came during the ninth annual InterFace Seniors Housing conference. The event, which took place Aug. 17 at the Westin Buckhead in Atlanta, was hosted by France Media’s InterFace Conference Group and Seniors Housing Business and drew 324 attendees. Joining Ward on the development panel was Tod Petty, vice chairman with Lloyd Jones Senior Living; Matthew Griffin, senior vice president, eastern states, with Griffin Living; and Jim Vogel, president of Solvida Development Group. Rick Shamberg, managing director of Scarp Ridge Capital, served as the moderator. Despite the challenges in today’s building environment, there is pent-up demand and plenty of excitement regarding new seniors housing projects, said Ward. As baby boomers age, there will be a need for seniors housing care for about 50 million more people in the U.S., according to Shamberg. There’s ample opportunity for developers to fill that void in housing. According to Petty, the need for seniors housing units will be most pronounced …

September 7, 2022

Features Multifamily

Multifamily Market Experiences Increased Demand Despite Rising Rents and Interest Rates, Berkadia Poll Shows

by Jeff Shaw September 6, 2022

NEW YORK CITY — Berkadia’s newly released 2022 Mid-Year Powerhouse Poll reveals that the multifamily market continues to experience increased demand among investors and renters despite rising rents and interest rates. The survey respondents included 123 Berkadia investment sales agents and mortgage bankers across 65 offices, 80 percent of whom reported that they expect multifamily rental demand to continue to outpace supply for the remainder of 2022. The survey was conducted in July. Nearly 80 percent of Berkadia mortgage bankers and investment agents responded that millennials, persons born roughly between 1981 and 1996, are likely to be the generation that will make up the highest percentage of multifamily renters in the next one to two years. An even greater percentage of Berkadia professionals in the Western region (88 percent) report that the majority of their current renters are millennials. The survey results also revealed that baby boomers tend to rent single-family rental/build-for-rent (SFR/BFR) housing most commonly, while Gen Z typically rent workforce housing. Seventy-two percent of advisors reported that, besides cost, location is most important to renters today. While movement away from metropolitan areas continues — a trend made popular during the COVID-19 pandemic as renters sought more space — 59 percent of …

September 6, 2022

Bohler Content Partner Development Features Leasing Activity Midwest Multifamily Northeast Southeast Texas Western

Multifamily Developers Must Find Balance Between Density, Amenities

by Sarah Daniels September 6, 2022

Finding a balance between density and amenities has never been simple for residential developers, but rising interest rates, density restrictions and an increased desire to solidify multifamily projects within the community mean that there is much to be gained from creative approaches to this old problem. Starting the process of planning early, using zoning to the developer’s advantage and creating an adaptable, sustainable and welcoming place for tenants can allow for a successful project with a lower overall price tag. This method can solve some of the trickier problems faced by multifamily developers, including density, parking and zoning considerations. Starting Off Right — Creating a Master Site Plan Success in multifamily is easier to achieve if the project starts with a shared team vision from the outset, says Bill Rearden, principal at Bohler, a land development design and consulting firm. Rearden explains that Bohler has its own planning, landscape architecture and survey teams and works with many industry partners for environmental and geotechnical due diligence. “We work with these teams in the very early stages to understand what the configuration of a property is and what its constraints are. We know upfront any underlying zoning a property might have, so …

September 6, 2022

Development Features Multifamily Western Feature Archive

Want to Appeal to Multifamily Tenants? Go Green

by Jeff Shaw September 1, 2022

By Barry Manuel, CIO, MEB Management Services Did you know that 39 percent of energy-related carbon dioxide emissions are generated through manufactured buildings? We spend the majority of our lives using indoor spaces to gather, work, socialize and live, which means multifamily developers and managers need to consider environmentally friendly options that don’t contribute to the global climate crisis. It’s the right thing to do, and we’re not the only ones who know that. Residents are getting wise to the impact their buildings play in the climate crisis. Creating A Solution With this in mind, we recently created the MEB Sustainability Committee to address environmental issues and adapt sustainability practices for our multifamily properties throughout Arizona and New Mexico. Our goal is to have at least 75 percent of all MEB properties engaged in energy-saving initiatives. MEB is taking a two-pronged approach. We’re using ESG ratings to measure long-term environmental, social and governance risks while educating and sharing sustainable practices with our residents and management teams. Through a collaborative effort, we’re reducing emissions by making changes to both new and existing apartment buildings. Part of our strategy and collaboration involves partnering with one of the most sustainably conscious builders in Arizona …

September 1, 2022

Features Multifamily

Gap in Median Asking Rents Between Urban, Suburban Markets Narrows, New Report Shows

by Jeff Shaw August 30, 2022

SANTA CLARA, CALIF. — During the pandemic, moving to the suburbs could save apartment renters more than $600 per month. Today, that difference is only $100. Regardless of location, rents everywhere reached an all-time high in July. Avail, a subsidiary of Realtor.com, recently released its Quarterly Landlord and Renter Survey, which collected and analyzed rental data from about 50 metros and suburbs. The study found that median asking rents in cities were $1,928 per month in July, while suburban rents averaged $1,821. That’s a stark difference from just a few years ago, when lower rents lured many remote workers to the suburbs to save money during the pandemic. A report published by Yield PRO in September 2020 estimated median urban asking rents to be $1,955 per month while suburban apartments were a much better bargain at an average of $1,349. Nationally, asking rents are about 23 percent higher today than they were in July 2020, according to Realtor.com, which also claims the latest across-the-board average of $1,879 is the highest rate in the past 17 months. Rent growth in the double digits is historically significant, but landlords are expected to lay off rent hikes in coming months while tenants grapple with inflation. …

August 30, 2022

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