Multifamily Financial Activities

Scanning news items the past couple of weeks indicate that Multifamily is the business to be in during this terrible economy of ours. Here are a few headlines I’ve seen lately…

Philly Multifamily a Bright Spot in Market
PHILADELPHIA-Its a sector that has actually benefited from the housing collapse, and in this market, there is still rent growth in the suburbs, one speaker says.


UIP Primes $70M Multifamily Pipeline
WASHINGTON, DC-The Company is looking at $21 million of real estate acquisitions and renovations under contract or in negotiations for its next fund.

Even as multifamily loan originations declined sharply overall, Fannie Mae and Freddie Mac this week both announced they broke records for apartment mortgage lending volume in 2008.

MC Cos. Acquires 7,000 Multifamily Units
SCOTTSDALE, AZ-MC Cos. bought the entire management portfolio of Encore Management to launch MC Residential of Texas.

Industry leaders at the National Multi Housing Council's annual meeting believe the multifamily sector could be the first to recover, but the big question is when.

Criterion Real Estate Services was formed to help lenders, owners and investors improve performance of distressed multifamily assets.

What activities are you seeing at your companies and local markets?

Unemployment is hitting Saint Louis like a ton of bricks. We are starting to see concessions varying from two weeks to two months in the various sub-markets. I think there will be small pockets of growth but the overall MSA will see no growth in 2009.

We are seeing it pretty bad here in Seattle too--way too many concessions after being used to a strong market with no concessions for years! Our biggest struggle has been in our higher end buildings...everybody living there wants to either move somewhere cheaper (even if it means breaking a lease sometimes) or everybody is transferring from 3BR to 2BR, from 2BR to 1BR.

Our buildings that are on the lower end rent wise are doing awesome, but it's difficult even getting traffic to the nicer places! What to do?

A news article I thought was appropriate to this thread:

Markets challenge multifamily REITs, but not as much as other types

tinyurl.com/dxj5qb

Here in Southern California we have just topped 10% unemployment and have seen a steady rise in vacancies. PArt of the problem which flys under the media radar is the fact that the huge Hispanic population in So Cal has taken an about face and your seeing both legal and illegal immigrants crossing the boarder the other way thus a significant part of the uptick in vacancies.

As a commercial broker in the area, the fundmentals of the multi-family sector continue to be strongerr than the other commercial classes such as retail and Office as both of those product types have double-digit vacancy factors and significantly greater debt loads than most multi-family assets. I've advised my clients to pay attention to the many cost segreagation programs, water/gas/electric programs run by various government entities to make these utilities more efficient and of course to be extremely aggressive in tenant retention and use of incentives for new tenants