November 12, 2015

Prime For A Value-Add Strategy

The Associated Press reports on Oregon. “Portland has been a magnet for young, creative adults for over a decade. But the city’s popularity has had another effect: Those who helped make it cool can’t afford to live here anymore. Evictions and skyrocketing rents are putting apartments out of reach for many, especially those working part-time, low-wage or artistic jobs. It’s even harder to afford a house. The hot market has led some rents to double or triple, even in areas once considered less desirable, said Justin Buri of Portland-based Community Alliance of Tenants. Entire apartment complexes are cleared out, the evictions followed by new owners renovating and increasing rents.”

“Susan Langenes and her husband, both professional musicians, lived for over a decade in an apartment complex with other artists. But last year, when their building was sold, the tenants received no-cause evictions. After new owners renovated the complex, Langenes said, rents tripled. She and her husband ended up in Milwaukie, a small town 5 miles away. The best solution? Experts say it’s shifting policies to make building new housing easier. And accepting change — including the city’s popularity and the fact that adding higher-density housing ultimately benefits everyone. ‘People hate new development,’ said Portland economist Joe Cortright. ‘But it’s the price of success.’”

The Boston Globe in Massachusetts. “Boston has some of the highest rent costs in the country. As MotherJones reported last week 87.4 percent of the Hub’s two-bedroom units rent for more than $2,000 per month. Crazy right? Well, not so much. It turns out some of Boston’s luxury rental units are going for a lot more than that – in fact, some of them are going for close to 40 times $2,000 per month. Listing service RENTCafé looked at Boston’s luxury rentals to create a top 10 list of the priciest units for lease in the city today. You might be shocked at not only the amenities (and crazy views) each apartment has, but also what people are expected to pay for them.”

The Puget Sound Business Journal in Washington. “The developer of a 41-story luxury apartment project in Seattle is casting a wide net to catch tenants with different tastes — and budgets. It’s aimed at appealing to ‘the widest audience of apartment users,’ said Scott Koppelman, senior VP of development of Chicago-headquartered AMLI Residential, which is developing the glass-and-metal panel tower. The tower is part of a crop of new apartment projects, including one where units go for as much as $7,525 a month, designed to appeal to the employees of Amazon and other tech companies.”

From Miami Today in Florida. “A downtown site in Miami chosen for a pair of 93-story towers will now become home to a far shorter development. Phase one is to be a condo tower called Vice, from developer Property Markets Group, or PMG. Vice will have an amenity deck with a pool and a bike storage area, said architect Sandy Peaceman. The project also calls for a dog park. The parking facility is designed with a metal mesh façade – a skin like a giant cheese grater and similar to a new garage completed this year in the Design District. The difference is the towering art element on one end of the garage – the image of a human face from artist Javier Martin.”

“Board member Neil Hall asked if the residences would include affordable one-bedroom units. Mr. Peaceman said the units will be smaller and priced toward the ‘high end.’ Mr. Hall asked who the developers are trying to attract. Mr. Peaceman said they’re those young professionals more apt to use public transportation. ‘I’m not sure they can afford this,’ Mr. Hall responded.”

The Phoenix Business Journal in Arizona. “A cutting-edge infill development on Grand Avenue in Phoenix will have one unit set aside for Airbnb rentals. The Containers on Grand development in downtown Phoenix has eight apartments fashioned out of 16 seaport shipping containers. StarkJames partners Brian Stark and Wesley James designed and developed of the avante-garde apartments. They are the first apartments made out of shipping containers in the western U.S.”

“The stretch of Grand south of the Arizona State Fairgrounds has long been a collection of older properties, machine shops and some low-end motels. The Containers development is on the site of a former used-car lot. The Containers on Grand units are approximately 740 square feet and going to be rented out for $1,000 per month. ‘This is a true team of pioneers who have created something brand-new in Phoenix,’ said Stanton.”

Multi Housing News on Colorado. “HFF has recently announced the closing of The Retreat at Park Meadows—a 518-unit, Class A multifamily community in Littleton, Colo.—on behalf of PNC Realty Investors Inc., acting as investment advisor to the AFL-CIO Building Investment Trust. Though the sale price has not been disclosed, data collected by Yardi Matrix shows that the buyer, Invesco Real Estate, paid a whopping $125 million, or an average of $241,313 per unit, to acquire the asset.”

“‘With its low-density design and large unit sizes, Retreat at Park Meadows is a very unique asset within the Denver market and was highly sought after by investors,’ said Managing Director Jordan Robbins in a statement. ‘The property had not been upgraded since it was built 15 years ago and is prime for a new owner to complete a value-add strategy for additional growth.’”

From Westword on Colorado. “By the way the term is being used around this city these days, one would think Denver is the ‘luxury’ capital of America. As new development bullies its way into our neighborhoods, ‘luxury’ is the ubiquitous term used to sell it — ‘luxury apartments,’ ‘luxury high-rises’ and ‘luxury living in the city’ are offered around every corner. With luxury comes a high price tag, of course. I’m beginning to think that in Denver in 2015, ‘luxury’ is just another word for ‘too expensive for most of us.’”

“Last month, South Park nailed the ‘luxury’ issue with its rollout of SoDoSoPa, in an episode titled ‘The City Part of Town.’ And for those very privileged few, the most private and exclusive ownership opportunity is here,’ the slick male voice proclaimed over a muted soundtrack of sushi-restaurant techno. It sounded just like the real-life marketing campaigns for RiNo and LoHi and SloHi and every other made-up Denver neighborhood that has been Columbused, reclaimed and sold to the highest bidder over the last decade.’”

“‘Luxury’ doesn’t have to be a bad word in Denver. But until we face the real issues going on in our city, it will continue to be a divisive term separating the haves from the have-nots. And if there’s anything I miss about the idea of a long-dead ‘old Denver,’ it’s that we used to feel like a place where everyone could afford to belong.”

Bits Bucket for November 12, 2015

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