Investments

Posts

AXIOMetrics – Market Trends

Last week, AXIOMetrics, a market research company that provides strategic insight reports for real estate professionals, published research detailing November market trends for apartments.

According to the report, “A signal that the national apartment market may be on the road to strengthening in 2018 was sent by November’s performance figures, which showed that annual effective rent growth increased by 21 basis points (bps) to 2.3%. ” This figure stands out because it is only the third time in the past seven years rent growth increased from October to November.

New York, Seattle, and Dallas are metros we are used to seeing toward the top of performance lists, but it is their smaller, surrounding sister cities that have been demonstrating strong numbers. For example, when comparing New York and Long Island, the difference in annual effective rent growth is very apparent. Long Island has averaged 3.8% annual rent growth since 2015. Even though that is middle-of-the-road performance on a national level, it is 250 base points (bps) above New York’s  1.3%. A similar pattern is found when comparing Dallas to Fort Worth and Seattle to Tacoma. 

“To use an age-old axiom in the real estate industry, location certainly does matter. And while not every company’s strategy best aligns with locating in adjacent markets such as these, it should also not be discounted either, as there is potential there for success on a property-by-property or a portfolio-by-portfolio basis.”

AXIOMetrics’ market trends report is filled with useful statistics and visual aids that could affect property and investment strategies, so a personal analysis of the information is advised.

Click here for the full report: AXIOMetrics November 2017 Market Trends

 

Largest San Fransico Landlord Partners with Airbnb

Not long after inking a deal with Florida landlord, Newgard Development Group, Airbnb has signed a deal with San Fransico’s largest landlord, Veritas Investments, and Pillow Residential, a San Fransico-based startup that helps apartment owners turn units into short-term rentals.

According to the partnership, Pillow will now become the preferred partner for landlords enrolled in Airbnb’s Friendly Buildings Program, which allows landlords and tenants to share the revenue generated via home sharing.

Pillow’s services have made short-term renting a more mutually beneficial option for landlord and tenants than ever before. This is achieved by providing tools to each party that helps automate the home sharing process.

For tenants, Pillow’s tools help create Airbnb listings that automatically inputs specific building information such as access codes, emergency contacts, and shared amenities.

For landlords, Pillow automates onboarding tenants and educating them on home sharing, and also provides information about creating and executing home sharing lease addendums.

In addition, landlords are given a dashboard that monitors short-term rentals throughout their properties and indicates if a unit is occupied or available to rent.

It will be worth monitoring how much skin in the multifamily game Airbnb gains as short-term renting become more prevalent via home sharing.

Click on the links below for more information on Airbnb and their transition to the apartment game.

Airbnb Florida

Airbnb San Fransico

Hub by Amazon

Amazon Innovating Apartment Parcel Delivery Process

Anyone who has ordered a product online understands the anxiety that comes along with any shipping process. Despite provided tracking systems, it’s hard not to wonder if a package will arrive on time, is it going to be damaged, will someone be available to receive the package upon delivery, and if not, will the package be stolen? These are all legitimate, but expected concerns any online shopper has to consider, but Amazon has devised a solution to provide customers more peace of mind, especially for customers living in apartment communities.

Earlier this year, Amazon launched the “Hub” program, a parcel-delivery locker service designed for multi-tenant dwellings so residents can receive larger packages and pick them up at flexible times. And the best part it is, Hub by Amazon is NOT exclusive to Amazon purchases. Residents can use Hub for any package that fits in the locker, from any major sender, any retailer, at any time. Hub is a sister service of Amazon Lockers, which is a delivery option for any amazon customer, but only for select items and in select cities.

This is how the locker system works. Upon checkout, the customer selects a specific locker location for delivery instead of a home or business address. Once the package is delivered to the locker, a confirmation email is sent to buyer, along with a unique pickup code that will grant access to their specified locker. When arriving to collect the package, it’s as simple as entering the locker combination or scanning the provided bar code to unlock their locker and obtain their order.

From a resident’s standpoint, Hub provides a level of security and flexibility standard delivery options don’t provide. Residents can know when their package arrives, take comfort it’s in a secure location, and enjoy the flexibility of picking up the package whenever convenient. And on the managerial side of things, employees will spend much less time handling package-related queries and problems from residents. In addition, offices, lobbies, and mail rooms will regain some appeal that has been diminished by an ugly stack of deliveries waiting to be picked up by residents.

Like every other convenience, Hub comes at a cost. The unit measures at approximately 7 feet by 7 feet with 42 lockers varying in size, so it’s not a small footprint. Furthermore, Hub will cost managers and owners a pretty penny with the price landing somewhere between $10,000-$20,000 with no further monthly fees. Considering the large footprint and even larger price tag, installing a Hub is certainly not ideal for every property. Having said that, Hub’s cost might not be as daunting as it appears.

It’s important to view the locker unit for what it really is: an amenity. Comparatively speaking, the Hub cost is similar to other amenities such as a dog park, laundry room renovations, or a children’s play place among others. It comes down to the demographic of each property, what that demographic desires, and if the property’s budget allows for such an amenity. With all factors considered, it’s hard to deny the convenience and allure of having such an amenity like Hub available to your tenants and employees.

 

Extra Heads-Up for Colorado’s Short-Term Tenants

Last week, Colorado legislature officially implemented a new law – Senate Bill 17-245 – requiring landlords to provide their short-term tenants at least 21 days’ notice before increasing rent rates or terminating their leases. Tenants now also must give at least 21 days’ notice before terminating their own short-term lease.

According to Colorado law, short-term leases run on a month-to-month basis or last no longer than six months.  Before the new law was enacted, either party could terminate a short-term lease with just seven days’ notice, one of the fastest turnaround times in the country. Colorado State Representative Dan Pabon described reasons for the law passing in a written statement:

“In this overheated housing market, more and more people are facing rent increases and having to find short-term accommodations. This new law will relieve some of the pressure on renters when faced with these situations, and give them more time to find an alternative if needed.”

With Senate Bill 17-245 in effect, tenants and landlords should feel less pressure and more equipped to adjust to an unforeseen lease termination or rent increase.

Click here to read more from The Denver Post

Airbnb and its Impact on Real Estate

If there are any Airbnb listing located near an apartment community, odds are that multifamily property has experienced some benefits.

According to a new academic study conducted by researchers from MIT, UCLA, and USC, a 10% increase in Airbnb listings would lead to a 0.39% increase in rents and a 0.64% increase in home prices in a zip code on average, meaning neighborhoods with listings are becoming more valuable. Data was collected by MIT Research Assistant Kyle Barron, UCLA Professor Edward Kung and USC Professor Davide Proserpio, as they compiled research from resources such as Google Trends, Zillow, Airbnb, and the Census Bureau.

While the report proves an increase of Airbnb listings has an effect on home prices, perhaps the most noteworthy finding from the report, especially for the multifamily industry, is Airbnb’s  impact on rents appearing to be linked to the availability of commercial listings in a particular market.

Fast Company’s writer, Ruth Reader explains, “They found that the percent of non-owner-occupied units listed in a given region determines the rate at which rents will increase. Rents rise more heavily when there is a preponderance of home listings that the owner is not living in.” More specifically, the study shows rental rates increase when landlords/owners take long-term inventory and move them to short-term markets like Airbnb.

As services like Airbnb and VRBO become more popular, it is only a matter of time before this new form of housing market has a larger effect on residential, commercial, and multifamily real estate from a monetary and regulation standpoint.

Read the entire Fast Company article here

An Expert’s Opinion

Yesterday we discussed some useful research tools commercial real estate professionals can take advantage of to gain insight on their targeted market. We highlighted Yardi Systems as one of the industry leaders in real estate investment and property management software by providing detailed analyses pertaining to market characteristics such as demographics, median incomes, and other important micro and macro indicators.

Today we will be listening to a recent interview provided by Multifamily 5, a podcast hosted by the Dallas-based multifamily broker, Mark Allen, aimed at interviewing real estate investors, brokers, and other industry pundits to learn some of their keys to success.

In this particular podcast, the leader of the Yardi Matrix team, Jeff Adler, discusses his top six markets that are poised for success in the near future, how the real estate industry interacts with Yardi Matrix software, the benefits of class B, value-add properties, future economic cycles, and much more.

Click here to hear Adler’s expert opinion on his top six markets and how to use Yardi software programs to gain a better understanding of your desired market.

Helpful Research Tools

Accurately assessing the real estate industry takes much more than a good hunch. Gaining a full understanding of a market takes years worth of knowledge and experience, solid relationships with other industry professionals, and continuous research to stay updated on current and future trends.

Fortunately, with so many useful tools, software programs, and other analytical technologies readily available, making well-informed, successful real estate decisions is more achievable than ever before.

For example, Yardi Systems, an industry leader in real estate investment and property management software, provides valuable research to real estate professionals in markets such as multifamily, single family, senior, military, and many other housing categories. Yardi also offers business solutions to other real estate market segments such as retail, self-storage, office, and industrial property types.

Click here for more information on Yardi multifamily research and business solutions: Yardi Matrix  

Aside from Yardi, there are numerous corporations such as CBRE, CoStar, and REIS who provide industry reports and research insights to assist asset managers and owners in making the most informed real estate decisions possible.

Check out tomorrow’s blog post for an in-depth interview between DFW-based multifamily broker, Mark Allen, and Jeff Adler, Vice President of Yardi Matrix Products. Discussions include Adler’s top six markets to keep an eye on and how industry professionals can benefit from Yardi Matrix Products.

The Advantages of Online Property Management Services

Recent technological advances have made online property management tools less expensive and easier to use, even for smaller portfolio owners and managers. Online portals and other software programs make the renting process easier for all parties involved. As a result, online services are no longer viewed a bonus for tenants, but more so an expectation.

Having the ability to pay rent online is arguably the best perk of online property management services. Paying rent online offers multiple benefits for renters. For example, tenants don’t have to take the time to hand-deliver their monthly rent check, setting up automatic online payments ensures their rent is paid on time, and it eliminates the possibility of a tangible rent payment being stolen, lost, or misplaced.

Owners and managers see similar advantages when tenants pay rent online. In a recent article for Multi-Housing News, Ray Szabo, residential and commercial property manager with Santa Barbara Real Estate & Investment, stated:

“Having an online payment system eliminates the opportunity for a myriad of excuses that residents have for why they weren’t able to pay their rent on time, such as issues with the mail, running out of checks and so on.”

But making and receiving rent payments is not the only benefit of online property management services. An invaluable resource of online property portals is the ability to centralize maintenance management. Tenants can issue maintenance requests in the touch of the button, schedule preferred repair times, and track when the request was issued and completed. 

On the other hand, the maintenance team has an organized system to promptly and efficiently maintain the well-being of the property. Furthermore, maintenance workers are held more accountable with the online portal documenting the maintenance progress throughout the property.

Online rent payments and maintenance management are only two of the many benefits of online property management services. If property owners and managers correctly utilize such services, managing the property and communicating with the property’s community should become more stable and effective.

Trump’s Affect on Multifamily, or Lack Thereof?

Since stepping into the political realm, Donald Trump has been one of the most polarizing figures in the world. And after being elected president, the real estate industry started holding its breath to see how Trump and his administration would impact the economy. Some were cautiously hopeful for business-friendly policies while others had their reserves about approval rates and beliefs.

Fast forward to today. Six months have passed since Trump entered the Oval Office and the economy has had some time to adjust to new leadership. But how have those adjustments affected the multifamily sector, if at all?

Recently, the National Apartment Association (NAA) issued anarticle examining how Trump has impacted the multifamily and real estate industry. A number of industry CEO’s such as Ric Campo of Camden Property Trust, Greg Mutz of AMLI Residential, and David Schwartz at Waterton chime in to tell how the political climate has affected their actions and the real estate market as a whole.

Click here to read the full article and gain insight on what the Trump election has meant to the real estate sector so far.

Apartment Demand Continues to Rise

Last week, Multifamily Executive published an article pertaining to the continuously rising demand for apartments across the country. Substantiated data provided by RealPage and Axiometrics indicate 2017’s second quarter meets less than half the current level of apartment demand.

Chief economist for RealPage, Greg Willett, accredits high apartment demand to strong job growth, limited loss of renters to home ownership, and attractive new apartment communities.

Click here for the full Multifamily Executive article and additional detailed statistics from RealPage and Axiometrics regarding apartment demand, occupany rates, and rent growth for the second quarter of 2017.