Despite the maturing commercial real estate cycle, Boston’s thriving economy continues to generate positive momentum for the metro’s multifamily property marketplace. Over the 12-month period ending June 30, 2017, area employers added 55,700 positions, growing the employment base by 2.1 percent. Job creation was driven by the typically high-wage healthcare and professional fields, and more than 30 percent of the new roles created were in office-using sectors. This healthy growth has supported a surge in household formation, which — along with the high cost of homeownership — is sustaining substantial demand for rental units. The significant affordability gap between renting and homeownership favors renting over homeownership by $591 per month. This, in combination with rising office-using employment, continues to boost apartment demand, which will support this year’s robust construction pipeline. Developers are on track to deliver more than 9,500 units to the marketplace in 2017, marking the highest point of the current cycle. Builders have focused their efforts in the urban core, particularly in the Fenway, Brookline and Brighton submarkets, and in first-ring suburbs. Nearly two-thirds of incoming units will be inside the city limits or in the closest suburban markets like Cambridge and Revere. The two largest deliveries each …
As a lender in construction and permanent financing of new multifamily properties, Mason Joseph Co. is constantly assessing and reassessing future supply and demand estimates for rental properties. Tarrant County has several high-profile apartment properties under construction, causing some in the lending industry to ask if the market is on the verge of being oversupplied. Our answer to that question is a firm “no.” Since 2010, a year in which Tarrant County boasted a ratio of 1.07 housing units per household, the market has suffered diminished production of all housing types. As of 2017, ESRI estimates that the units-to-household ratio is closer to 1.09. While that difference appears small, it means about 14,000 fewer housing units were built in Tarrant County from 2010 to 2017 than would be expected. A review of housing permits issued for the following two periods supports that data. From 2001 to 2010, the volume of housing units permitted exceeded the number of new households by an average of 821 units per year. From 2011 to 2017, the equation flipped and Tarrant County added 354 more households than housing units annually, implying the county has now been undersupplied by about 1,200 units per year for the …
Sometimes there are benefits to being late to the party. Louisville, having lagged behind larger surrounding cities in multifamily development post-recession, is now experiencing a boom in apartment construction, much of which is being supplied by out-of-state developers. For similar reasons, including Louisville’s sustained economic growth fueled by continued strength as an international distribution center alongside a stable manufacturing base, national investor demand for Louisville multifamily properties has intensified. Traditionally known for the Kentucky Derby and the bourbon industry, Louisville is now raising eyebrows with a growing population, robust job growth and balanced multifamily supply and demand. Big Business, Jobs At the heart of this burgeoning story is UPS Worldport, the primary global air hub for the world’s largest package delivery company. UPS, the largest private employer in Kentucky, continues to expand its presence in Louisville, having recently announced a $310 million expansion of its Centennial hub sorting facility. Ford Motor also recently announced that it is investing $900 million in its Kentucky Truck Plant, in addition to the $1.3 billion and 2,000 jobs created at that plant in late 2015 to build Ford Super Duty trucks. Additionally, Qingdao Haier Co., having acquired Louisville-based GE Appliances in June 2016, announced …
The Milwaukee multifamily sector is plowing forward on a number of different fronts. Development activity is continuing its impressive run with a series of high-rise towers in various stages of construction or planning. Popular neighborhoods such as Walker’s Point, Bayview and the East Side are filling in with low- and mid-rise projects, many of which feature a mixed-use component. From an investment standpoint, multifamily is still the sector du jour, with a widening investor pool of both local and out-of-state buyers. Leading the charge on the development front is Northwestern Mutual’s 7Seventy7, which is currently under construction in downtown Milwaukee with an anticipated opening in summer 2018. The 34-story complex will feature 322 apartments, ground-floor commercial and 1,400 parking spaces, many of which will service employees at the company’s recently completed 1.1 million-square-foot headquarters located only one block away. Other major projects yet to break ground but slated to reshape the skyline in the coming years include: • The Couture — Barrett Lo Visionary Development is planning to build a 44-story tower with 300-plus units, retail and parking across the street from the planned Lakefront Gateway Plaza, which will connect the area between the Milwaukee Art Museum and the Summerfest …
With 4,900 new rental units coming on line this year in Northern New Jersey, inquiring minds are asking whether demand here is keeping pace with supply. The short answer is “yes.” New multifamily inventory continues to lease up, especially along the Hudson River Gold Coast, with performance meeting and exceeding developer expectations market-wide. Rental rates for Class A apartment product in Northern New Jersey have increased 3 percent year over year, registering at $2,369 at the midway point of 2017, according to Reis. Vacancy had been trending down since mid-2016, with a slight tick up in the second quarter of 2017, currently resting at 5.2 percent due to the delivery of 1,600 units in the last three months. Compare this to a $1,336 average rent and 4.4 percent vacancy rate nationwide, and New Jersey’s sustained appeal to investors and developers is unquestionable. However, multifamily investment sales to date in 2017 have been fairly measured — with fewer opportunities coming onto the market. For sales in excess of $10 million through August 2017, the volume has totaled $1.07 billion with the number of units sold totaling 4,708 (down 12 percent and 43 percent respectively compared to the same time in 2016) …
Long-time El Paso residents frequently hear people talking about the good things happening in our city. To be sure, El Paso is an enigma and a contradiction — a big small town with its own identity. Cultural, economic, social and ethnic differences are comfortably accommodated in a “mi casa es tu casa” openness. Contrary to our “wild west” reputation, El Paso ranks as one of America’s safest cities by size. The closest major city to El Paso is Ciudad Juarez, a city of 1.5 million people just across the Rio Grande River in the Mexican state of Chihuahua. The economies of the two cities are inextricably linked and create a major trade area on the southern U.S. border with Mexico. Roughly 30 percent of El Paso’s retail sales come from Mexican shoppers who also access educational institutions, medical services and professional services on the U.S. side. American and multinational manufacturers employ more than 200,000 people in Juarez and rely on El Paso’s transportation and trade infrastructure. The expansion of both trade and interdiction at the border has generated thousands of new federal agency jobs paying wages above the city’s median incomes. Apartment development and ownership in El Paso are dominated …
SAN JOSE, CALIF. — An affiliate of Essex Apartment Homes (NYSE: ESS) has purchased 360 Residences, a 24-story, mixed-use residential and retail tower in downtown San Jose. The purchase price was $133.5 million, according to Silicon Valley Business Journal. The mixed-use asset is located at 360 Market St., situated one mile from Google’s proposed office campus as well as the future downtown San Jose and Diridon BART stations. The transit-oriented property also provides access to Interstates 280, 680 and 880, U.S. Highway 101 and State Highway 87. 360 Residences was built in 2010. It features 213 ultra-luxury condominium units with high-end finishes and floor plans that average 1,320 square feet. Community amenities include a resort-style pool, fitness center, community lounge with chef’s kitchen, and executive business center with conference room and concierge services. The asset also contains 10,167 square feet of ground-floor retail that is fully leased. The seller, Capri Capital Partners LLC, purchased 360 Residences from Kennedy Wilson for $118 million in April 2012. HFF’s Scott Bales, Peter Yorck and Miles Kersten represented Capri in this transaction. San Mateo, Calif.-based Essex Apartment Homes is a self-administered and self-managed REIT that owns, operates, manages, acquires, develops and redevelops apartment communities …
NEW YORK CITY — Fortis Property Group has received a $297 million construction loan to develop River Park, a three-building mixed-use project in the Cobble Hill neighborhood of Brooklyn. The 325,000-square-foot project will feature 172 luxury condominium units, 66,900 square feet of community space and 328 parking spaces. Fortis acquired 18 buildings on three adjacent sites that formerly housed the Long Island College Hospital (LICH) medical campus. The company purchased LICH in 2015 for $240 million from the State University of New York. Fortis financed the first phase of the acquisition with a $107.25 million bridge loan from Madison Realty Capital (MRC). The new loan proceeds from MRC will be used to retire the previous bridge loan and complete construction of the three luxury residential condominium buildings. This includes a waterfront tower at 350 Hicks St. (“1 River Park”); a high-rise condominium tower at 95 Pacific St. (“2 River Park”); and a contextual condominium building at 349 Henry St./112 Pacific St. (“5 River Park”). River Park 1, 2 and 5 will anchor the new Brooklyn Waterfront District. Rogers Partners is designing the properties. Brooklyn-based Fortis Property Group is a real estate investment, operations and development company. It has acquired, developed …
Like other metros, Chicago is in the midst of an apartment boom where the hum of multifamily construction has become commonplace. In fact, approximately 8,000 new rental units are slated to deliver by the end of next year, according to Appraisal Research Counselors. Nearly 4,000 units are expected to deliver in 2019. The majority of this multifamily construction is concentrated on Class A rental high-rises. SixForty (640 N. Wells St.) by JDL Development and 8 E. Huron by CA Ventures — both of which The Habitat Co. will be managing — aim to meet the demand of those looking to be closer to the influx of new businesses moving downtown, as well as an urban lifestyle with robust dining and entertainment options. Like its metro counterparts, Chicago has become a city of renters. According to Harvard University’s Joint Center for Housing Studies, the U.S. homeownership rate hovered at just 64 percent at the start of 2017, following 12 years of decline, while the number of renters continued its upswing. In the past five years, an average of 1 million new renter households were formed every year, per the National Multifamily Housing Council. Indeed, these have been good years for those …
PHILADELPHIA — Independence Realty Trust Inc. (NYSE: IRT) has agreed to acquire a nine-property multifamily portfolio for $228.1 million. The portfolio contains 2,353 units across the U.S. The seller was not disclosed. This acquisition will allow IRT to further develop its presence in core markets like Atlanta, Indianapolis and Columbus, Ohio. It will also allow the REIT to enter two new markets, though further information regarding the assets’ locations was not disclosed. IRT maintains a large multifamily portfolio in the South and Midwest, particularly in Arkansas, Georgia, Florida, Kentucky, Missouri, North Carolina, Oklahoma, Tennessee and Texas. Rents range from $455 per month at Raindance Apartments in Oklahoma City to more than $1,265 per month at Sabal Key in Naples, Fla. The communities within the new portfolio were built or renovated between 2000 and 2011 and feature an average occupancy of 95 percent. Average effective rent per unit was $884 for the three months that ended July 31, 2017. “This acquisition represents another key milestone for IRT, bolstering our current portfolio with a collection of high-quality communities located in amenity-rich, non-gateway markets that are core to our investment thesis,” says Scott Schaeffer, chairman and CEO of IRT. “This is a tremendous …