The Slide Continues
A report from Philadelphia Magazine. “The three major apartment search engines all released their monthly rent surveys for February this week, and with one notable exception, they report that rents continued to rise from January to February. On Abodo.com, rents in Philadelphia posted the third-largest monthly drop of the 100 cities it surveys, with the median rent for a one-bedroom apartment falling 6.4 percent from $1,316 to $1,252. Only Pittsburgh, where rents dropped 6.7 percent, and Rochester, N.Y., where they fell 8.8 percent, outranked Philly.”
“At the national level, all three indexes showed rent increases tapering off after a year of significant growth, with rents nationwide even falling on Abodo. Apartment List attributes a lower overall rate of increase in 2016 to the production of a large number of new units this year; locally, this year also saw a significant increase in the supply of new apartments, but as most of those units have been at the upper end of the market, their effect on rents may have been more mixed.”
The Miami Herald in Florida. “It’s getting cheaper to rent an apartment in the Magic City. Rents have dipped 2.8 percent in the past year and 0.9 percent in the past month, according to a monthly report by Apartment List. In early January, Miami’s Downtown Development Authority reported that condo leasing prices also fell. In the third quarter of 2016, they went down to $2,590 — a 3.2 percent dip compared to the previous quarter.”
“Despite the decrease in rents, Miami is still among the priciest places to rent in the metro area. Although downtown Miami is a job center, it’s one of the country’s most expensive housing markets relative to salaries. According to an analysis from apartment search website RentCafé, renter households in Miami spend 48 percent of their income on housing, the second highest rate in the U.S.”
The New York Times on Texas. “As this city prepares to host Super Bowl 51 on Feb. 5, its leaders are eager to show off a makeover that has transformed the city since it last hosted the game more than a decade ago. The nation’s fourth-largest city, Houston is continuing to struggle with the aftershocks of a two-year economic downturn caused by a plunge in oil prices. Energy companies in Houston abruptly shifted from expansion to retrenchment, slashing more than 70,000 energy-related jobs while bowing out of planned projects, consolidating resources and dumping unneeded property.”
“Oil and gas companies based downtown or along the ‘Energy Corridor’ – a mileslong stretch of Interstate 10 west of downtown – scrambled to jettison excess space by vacating offices or by subleasing to other tenants at appealing rates. Single-family home building remains strong, real estate experts say, but a glut in office and apartment developments, largely a result of the boom-to-bust turnabout in energy, has raised fears of substantial cuts in construction jobs. A surplus of apartment units has created what real estate experts describe as a renter’s market, as landlords offer discounts and other concessions to lure tenants.”
From Silicon Beat in California. “As the new year begins, we’ve heard multiple reports about rents, which are said to be declining gradually throughout the Bay Area — a bit of relief, after years of painful increases that have left many tenants reeling. A new analysis from Zumper shows a more complicated picture. According to its National Rent Report for February, the slide continues in San Francisco, which Zumper identifies as the nation’s costliest rental market. There, a one-bedroom apartment goes for $3,310, down 1.2 percent month-over-month and down 5.4 percent year-over-year. Similar declines in price apply to a two-bedroom unit, which typically goes for $4,500 — down 0.2 percent month-over-month and down 4.9 percent from a year earlier.”
“‘Prices of the top rental markets,’ Zumper says, ‘for the most part, have plateaued or declined.’ Anecdotally, relative bargains are to be had these days for those who look hard enough.”
The Real Deal on New York. “Madison Realty Capital is moving to foreclose on Raphael Toledano’s six-story Chelsea rental building at 125 West 16th Street, believed to be the single-most valuable property in his holdings. Toledano’s Brookhill Properties acquired the 39-unit, 39,000-square-foot property for $41.5 million in 2015. At the time of the purchase, the firm secured $34 million in financing from Madison, including $29.8 million in immediate funds to buy the building. The remainder, to be provided at a later date, was allocated for proposed renovations.”
“Madison, in its capacity as the lender, filed the summons filed Monday in New York State Supreme Court, to initiate foreclosure proceedings over the building, which has $29.8 million loan. A source close to Toledano said he and his partners defaulted on the building as a result of a partnership dispute. Toledano’s partners wanted to sell it, but Toledano wanted to continue making renovations, sources said. Critics have said Toledano is overleveraged. Meanwhile, Toledano is looking to sell at least 13 of his buildings.”
