The Roll Developers Have Been On Is Starting To Change
A report from Business Den in Colorado. “A 400-unit apartment complex in the Ballpark neighborhood sold this week for $126 million. Greenwood Village-based Griffis Residential bought Skye 2905 just north of Coors Field on Monday, city records show. Monogram Residential Trust, a Texas firm, was the seller. Jim DiRienzo, Griffis Residential’s VP of investment, said the company isn’t worried about a glut of residential units flooding the Union Station/Ballpark neighborhood. Long term, he said, people and businesses will keep moving in. ‘Our view of the Union Station neighborhood is that it’s sort of at its infancy,’ he said. ‘We think we can make it through the cycles.’”
“The 7-year-old complex sold for $315,000 per residential unit. The sale also includes the storefront of a ground-floor liquor store. The property last traded in April 2008 for $21 million, according to city records. Griffis Residential is funding its purchase in part with an $81.9 million loan from Teachers Insurance and Annuity Association of America.”
The Charlotte Observer in North Carolina. “Think you’re paying too much in rent? Chances are, you’re right. The Observer found the average rent for a two-bedroom place in Mecklenburg County increased $250 since 2011, making the payments a financial burden for more than 100,000 people. In some neighborhoods, the cost is much higher, effectively eliminating the areas from thousands of would-be renters. A study released last year by Abodo, an apartment-tracking firm, found 48 percent of renters in Charlotte met the definition of ‘cost-burdened.’”
“Igor Gorlatov and his wife and son, almost 3, recently upgraded from a one to a two-bedroom apartment in the McAlpine Creek area, to get ready for a baby on the way. His current rent, $1,035, is close to what he expected. But rent eats up about 60 percent of his monthly earnings as founder of a consulting startup. That’s twice the percentage of income that housing experts say households should spend on rent. ‘It is a big chunk of our expenses, of course,’ said Gorlatov, who runs Successful Negotiators Club. ‘It was a challenge to find the right place, and find a place that would accept not a regular income that your employer would give you, but my entrepreneurial status.’”
The Philadelphia Inquirer in Pennsylvania. “Philly rent has been climbing but the latest data from two major rental firms, Abodo and Zumper, show numbers falling locally in their March reports. According to Abodo, local monthly rents fell so precipitously last month, Philadelphia is at the top of its biggest decrease list. As usual, we can all breathe a sigh of relief that we don’t live in San Francisco or New York, where rental prices – which are down about 9 and 11 percent respectively from this time last year – are still about $3,000 a month.”
“With that said, it’s still worth mentioning that local rental rates remain north of the national average this month – no matter whose report you reference.”
From SF Curbed in California. “Rental site Zumper on Wednesday ranked Bay Area cities to see where median apartment prices had dropped the most year over year. Where things got interesting was the year-over-year comparison. Earliest this month, Zumper reported that they saw a huge nine percent decline in San Francisco prices since 2016. It turns out this was a region-wide trend: Median rents on Zumper are down 15 percent in Redwood City, Burlingame, and Emeryville, 13 percent in Santa Clara, 12 percent in South San Francisco, ten percent in Fremont, and nine percent in Mountain View.”
From Tulsa World in Oklahoma. “Steve Ganzkow, co-founder of Tulsa-based American Residential Group, was among the panelists who spoke at the 2017 Greater Tulsa Commercial Market Update. Among ARG’s most recent developments is The Edge at East Village, a downtown apartment community that opened last year. ‘The important thing is that people want that 24-hour lifestyle,’ Ganzkow said. ‘When they come home, they want to be able to walk out that door and go do something, whether it’s cultural or sit at a bar. … That’s where these things and these new thoughts and new plans and new ways of doing things are being done.’”
“Such housing, however, needs to become less costly, he said. The Edge’s price point is about $1.65 per square foot, Ganzkow said. Compared with projects in south Tulsa, developments downtown typically run 25 percent more, he said. ‘We have to create a product that is more affordable,” Ganzkow said. ‘I think the answer is going to be a public-private partnership. I know that Fannie Mae and Freddie Mac — that’s one of their goals. If they are going to stay in business, they have to figure out a way to provide a more affordable product for the developers to do that. It’s not just cut back on amenities. It’s going to be a whole capital-structure approach.’”
“He said the ‘roll’ the city has been on the past five to six years, however, is starting to change. ‘We’re currently experiencing a slowdown on a combination of job losses and increases in the supply of newly constructed apartments and renovated projects,’ Ganzkow said.”
From Multi-Housing News on Texas. “Houston’s multifamily market is still reeling from the oil price collapse in 2015, which resulted in thousands of job cuts and slowing investment activity. The outlook for multifamily is not favorable, since the development pipeline includes 58,000 units and the local economy remains unstable. With very low rent growth and an occupancy rate that lags the national average, absorption of the 18,700 apartments added in 2016 will be slow.”
“Transactions remain widespread across the metro, while upcoming development is focused on the West End/Downtown submarket—with 4,800 units under construction.”
