The trend toward more workforce and low-income housing will be a very big part of Los Angeles’ future. Additionally, new and existing housing located near major transportation corridors will be in high demand amongst investors. The City of Los Angeles has proposed a 5-year housing plan with a $5 billion price tag to help provide more housing for those two market segments. Los Angeles apartment fundamentals are expected to have softened mildly coming into 2009, though vacancy will still be one of the lowest rates in the nation. Predictions are that the vacancy rate will have risen slightly to 4.5 percent by year-end 2008, then remain unchanged this year. The era of vacancy in the vicinity of 3 percent is not expected to return. Rent gains are decelerating from the invigorating pace of the past decade. This year, Los Angeles’ average asking rate is predicted to rise only slightly, approximately 0.7 percent, to $1,469 per month. In November, the 40,544-unit Beverly Hills submarket had an average asking rent of $1,909 per month; the Santa Monica submarket was at $2,404 per month; the 43,645-unit Wilshire/Westlake submarket at $1,308 per month; the 50,936-unit Hollywood/Silver Lake submarket at $1,468 per month; the Sherman …
Multifamily
To most people, the word Baltimore conjures up images of the city’s vibrant downtown and historic areas, including Fells Point, the Inner Harbor, Federal Hill and Canton. In recent years, a number of significant multifamily developments have contributed to the rejuvenation of these trademark neighborhoods, bringing new households to areas previously dominated by daytime office workers and tourists. Recently completed multifamily projects in Baltimore include The Eden, Elm Street Development’s 270-unit project in Fells Point and The Zenith, Legacy Harrison’s 191-unit tower near Camden Yards. These properties have all leased briskly since opening in mid-2007. Across the Inner Harbor, Mark Sapperstein’s 250-unit project at the McHenry Row mixed-use development promises to be a major catalyst for the Locust Point neighborhood. Baltimore has experienced an unprecedented amount of development activity during the last 5 years, as nearly 3,000 new multifamily units were recently delivered inside the city’s boundaries. The Baltimore region is also home to the Baltimore-Washington Corridor, which runs along Interstate 95 in Howard and Anne Arundel counties, another hot spot that stands to see an even greater volume of construction and investment during the next 20 years. Among the major catalysts for the Baltimore-Washington Corridor’s rapid growth during the …
What area is your expertise? Multifamily Investments — Greater Seattle Area What trends do you see presently in multifamily development in your area? With vacancy rates below 5 percent in the greater Seattle area, we see continued rental rate growth, and continued demand for apartment rental units. In general, the number of apartment units is down, and more units in development for 2009 – 2011 will increase the unit count in the downtown areas. Who are the active multifamily developers in your area? Avalon, Lorig, SRM Development and SP Real Estate are some of the active multifamily developers with new projects underway. Please name one or two significant multifamily developments in your area. What impact will these projects have on the market? Avalon’s new Avalon at Meydenbauer recently opened in downtown Bellevue adding over 350 units within walking distance to Bellevue Square and the new Lincoln Center. SRM Development is underway with 130 units being developed in Seattle in South Lake Union nearby Vulcan’s new developments, Amazon’s new Headquarters and the new Bill and Melinda Gates Foundation. Where is the majority of development taking place? Why is this area doing well? The majority of new development is occurring in and …
What area is your expertise? Phoenix Metropolitan Area What trends do you see presently in multifamily development in your area? As construction on the first phase of the Phoenix light rail system wraps up, we’re seeing a major trend towards mixed-use projects with multifamily housing with commercial space along the line’s route from Central Phoenix to Tempe and Mesa. Developers are also targeting the renters-by-choice market by building upscale apartments that offer high-end amenities and finishes. Who are the active multifamily developers in your area? Alliance Residential, Embrey, Fairfield Residential, Trammell Crow Residential, Gray Development, Mark-Taylor, Greystone, Trillium Residential, and the Zaremba Group. Please name one or two significant multifamily developments in your area. What impact will these projects have on the market? CityScape — RED Development and CDK Partners are building this $900 million, 2.5 million-square-foot project in downtown Phoenix. CityScape will feature 1,200 multifamily units, along with a 600,000-square-foot office tower, shops, restaurants, and a 250-room hotel operated by San Francisco-based Kimpton Hotels & Restaurants. Office tenants already committed to the project include Wachovia (regional headquarters) and Squire, Sanders & Dempsey LLP (global law firm). This project is currently supporting more than 3,000 construction jobs, and on-site employment …
What area is your expertise? Greater Grand Rapids, Michigan. What trends do you see presently in multifamily development in your area? From 2002 to 2007, we had a tremendous amount of condo construction. Those projects are finishing up and a few new projects are being announced. Several condo projects that were announced have been pulled due to insufficient sales. Apartment construction has been moderate over the past few years. A few new projects have broken ground this year. Student driven markets like Allendale (Grand Valley University) have seen consistent deliveries of new units the past several years — and more units will be added to the market in 2008. Condo conversion projects started in 2006 are still selling out. Who are the active multifamily developers in your area? Condos: Second Story Properties, Parkland Properties, McKay Tower Partners LLC, Moch International, Kegle Construction, Robert Grooters Development, Eastbrook Homes, Redstone, and Epcon Communities. Apartments: Miller Valentine Group, Hof Investment Group, IPA, Copper Beech, and Fusion Properties. Please name one or two significant multifamily developments in your area. What impact will these projects have on the market? River House Condominiums — Robert Grooters Development: 207 units, Downtown. Under construction, estimated completion date 4/2009. …
What area is your expertise? The St. Louis Metropolitan Area What trends do you see presently in multifamily development in your area? Many of the St. Louis area developers are including residential components (both rentals and sales) in their developments. The desire to work, live and shop in the same area is desirable in the St. Louis region — from shopping, to office, to education, to entertainment. Who are the active multifamily developers in your area? Local office and retail developers are adding residential components to their developments. Please name one or two significant multifamily developments in your area. What impact will these projects have on the market? Clayton is seeing an increase in condominium construction as well as housing units becoming a part of retail and office developments. For example, Maryland Walk opened with 99 high-end condominiums and has added a retail component. The Crescent development includes 72 luxury condominiums and 26,000 square feet of retail. The $73 million, 390,000-square-foot project was developed by Mark S. Mehlman Realty. Where is the majority of development taking place? Why is this area doing well? Condo and apartment development and redevelopment are on the rise in the Central Business District as a …
Infill locations are highly desired in San Antonio’s multifamily market, as the last available tracts of land suitable for development are being picked off. Areas popular with developers are north central San Antonio, the South Texas Medical Center, and the area of the city just north of downtown, known as Alamo Heights/Fort Sam Houston. A recent trend is for multifamily developers to raze existing commercial buildings to make way for new projects, such as Chancellor Property’s site on Austin Highway, Regent Communities’ site across from the Pearl Brewery, or Bakke Development’s redevelopment of El Chaparral on Harry Wurzbach. With the high price of gas, renters have a stronger desire to live in close proximity to where they work and play. This is driving developers to create urban infill communities. The new development that will have the greatest impact on San Antonio is River North, the city’s initiative of an expansion of the River Walk just north of downtown. The city of San Antonio is creating a new urban lifestyle that will invigorate the urban core. The overall goal with this new development is to produce a downtown that is as attractive to locals as it is to tourists. The Stone …
What area is your expertise? Multi-housing properties (rental only) and Central Midwestern markets. However, my answers here apply only to the Indianapolis area. What trends do you see presently in multifamily development in your area? There has been a shift in development activity from the south side of Indianapolis to the north side. Approximately 3,000 units are slated for completion through 2009 along the 146th Street corridor and surrounding areas in Hamilton County. With the recent extension and opening of 146th Street, development activity has intensified along this critical corridor. Who are the active multifamily developers in your area? Currently active: Flaherty & Collins, Pedcor Investments, J.C. Hart, Welbourne Companies, Herman & Kittle Properties, Edward Rose of Indiana and Sheehan Development. Prepared to resume development activity: Paragus, Gene B. Glick Co., and Hearthview Residential. What trends do you see presently in multifamily development in your area? Roughly two-thirds of our buyer base is coming from the East Coast. We have historically had East Coast capital but not significant levels. The heightened interest from coastal investors is due to a widely recognized rental market recovery and stable employment growth. Please name one or two significant multifamily developments in your area. What …
The Memphis apartment market is expected to record mixed performance this year, due to a spike in new inventory and decelerating employment growth. On the demand side, weakness in the housing market is keeping many individuals within the renter pool, boosting retention rates and supporting a modest uptick in tenant demand. Foreclosure activity rose 15 percent in the first quarter, when compared to the same period one year earlier, and is expected to continue this year as more adjustable-rate mortgages reset. Subsequently, apartment demand for Class B and Class C properties should pick up in this year, causing vacancy for the metro’s affordable rentals to improve. On the supply side, development activity is accelerating after 5 years of below-average additions to stock. By year-end, developers are expected to boost inventory by 1.1 percent, or nearly double the 5-year average, pushing vacancy higher while moderating rent gains. Builders have brought approximately 175 new apartment units to the Memphis market during the past 12 months, representing a modest 0.2 percent increase in inventory. One year ago, deliveries had totaled approximately 210 units. Development activity is picking up, as builders have roughly 1,100 units underway in the metro area. As for significant developments, …
What area is your expertise? Utah Multifamily What trends do you see presently in multifamily development in your area? Rental rates for apartments are on the rise. Utah realized the highest rent growth in all western states over last year. 9.9 percent increase. The condo market has definitely slowed down considerably. We are starting to see platted projects available for sale as developer confidence with current market conditions are low. Rental rates will continue to climb over the next two years. Who are the active multifamily developers in your area? Active multifamily developers in the Utah market are Cow-boy partners, The Church of Jesus Christ of Latter-Day Saints (LDS), and The Metro Condominiums. Please name one or two significant multifamily developments in your area. What impact will these projects have on the market? City Creek Center in downtown Salt Lake City is a sustainably designed, walkable urban community of residences, offices and retail stores that will rise over the next four years on approximately 20 acres across three blocks in the heart of downtown Salt Lake City being developed by LDS. Upon project completion in 2012, the city will be one of few in the nation with a vibrant, mixed-use …