New law gives added protection to short sale hopefuls

By Lily Leung

8 a.m., July 18, 2011

A new California law will further protect homeowners pursuing short sales by barring first and secondary lien holders from going after sellers for money owed after the short sales close.

Gov. Jerry Brown signed Senate Bill 458, authored by Senate Majority Leader Ellen Corbett (D-San Leandro,) into law on Friday.

A short sale is a transaction in which the homeowner owes more on the loan than the property is worth. To sell the home, the lien holder or lien holders must approve the sale because the amount owed to the lien holder will be "short" of what is currently owed by the borrower.

Real estate tracker DataQuick said short sales made up 17.7 percent of Southern California home resales in June.

The new law builds on the protections offered by a previous law, SB 931, which required the first lien holder in a short sale to accept an agreed-upon payment as the full payment for the outstanding loan balance. The previous law did not address junior lien holders.

The new law, which became effective immediately, now prohibits secondary lien holders from pursuing deficiencies after a short sale closes.

"As the economic recession continues to impact Californians, SB 458 will allow homeowners forced to sell at a loss to have closure at the end of the process," said Corbett, in a statement to the Union-Tribune. "By extending anti-deficiency protection to all loans on a home when a short sale occurs, a homeowner can use a short sale as an alternative to foreclosure or bankruptcy."

The California Association of Realtors call the bill's signing a "victory for California homeowners."

"SB 458 brings closure and certainty to the short sale process and ensures that once a lender has agreed to accept a short sale payment on a property, all lien holders – those in first position and in junior positions – will consider the outstanding balance as paid in full and the homeowner will not be held responsible for any additional payments on the property," said Beth L. Peerce, president of the Realtors group, in a statement.

Gov. Jerry Brown — Associated Press file photo

Senate Majority Leader Ellen Corbett

Source: Sign on San Diego

New Luxury Apartment Development in San Marcos Started While San Diego City Redevelopment Projects Take a Hit

By Gabriel Circiog, Associate Editor
RenTV.com reported that Wood Partners has started construction on a new luxury gated apartment community in San Marcos. The four-acre property, located at 815 South Twin Oaks Valley Road, has 12,000 square feet reserved for a future retail development. The residential development is comprised of 42 two-bedroom and 66 one-bedroom units. These will be arranged in four garden style three-story walk-up buildings.
The project will feature granite countertops as well as luxury amenities such as an ultra-modern clubroom with Wifi, electronic gaming systems, a fully-equipped fitness center, a pool and a rooftop terrace. The developer is aiming to offer the highest standard of living in North San Diego County. Construction is scheduled to be completed in October 2012, but the first units will be available in May 2012.
At the same time, 3 Tier Investments LLC will start the construction of its Campus Pointe retail project. The plan comprises two retail building with 12,000 rentable square feet which will include three restaurants and up to seven retail businesses.
In other local news, Signon San Diego informs that the San Diego city redevelopment projects are set to lose $69.8 million in revenues this year and $16.5 million annually henceforth, according to the new state budget plan. Centre City Development Corp. oversees and implements Downtown redevelopment projects and programs.
Frank Alessi, executive vice president of CCDC, told this same source that the organization is facing a $47.6 million payment this year which represents around 38 percent of its tax revenue. The high-profile projects such as the $29.6 million first phase of the North Embarcadero Design and the $8 million expansion of Horton Plaza park will continue as planned if the CCDC board and City Council agree.
Regarding the mega-projects, such as the $550 million expansion of the San Diego Convention center and the $950 million Chargers stadium, Alessi said that the amount of support that the CCDC can offer is problematic.

Source: Multi-Housing New Online

Normal Heights apartment complex sold

By JAMES PALEN, The Daily Transcript

Thursday, July 14, 2011

The lender-owned apartment complex at 4963 35th St. in the Normal Heights neighborhood of San Diego has sold for more than $1 million cash.

Apartment Realty Group represented the seller, 4639 35th Street LLC, which, according to ARG Managing Director James V. Carter, was the San Diego-based private lender that took possession of the property around four years ago. ARG procured more than 10 written offers on the 5,500-square-foot, eight-unit property before closing escrow with the all-cash buyers, Gerald G. Gossman and Rose M. Gossman, for $1,087,500.

Built in 1962, the complex contains six two-bedroom, one-bathroom units and two one-bedroom, one-bathroom units.

Carter spearheaded the sale, while Don Warfield of Donald Warfield & Associates represented the buyer.

Source: San Diego Source The Daily Transcript 

Apartments boost amenities to attract, retain ownership-shy tenants

Sunday, July 3, 2011  03:16 AM 

By Jim Weiker

Fred Squillante | DISPATCH PHOTOS

A lousy housing market has driven hundreds of affluent central Ohioans to apartment complexes.
Now, can community gardens, sports bars, granite countertops and trips to Ikea keep them there?
New high-end complexes from Groveport to Hilliard are offering a bevy of amenities to attract and retain tenants, many of whom are paying more in rent than they might on a mortgage."The same people who rent today might have bought three years ago," said Sam Stark, the sales manager with Lifestyle Communities, whose newest apartment complex - the Paddock at Hayden Run - boasts a 7,000-square-foot sports bar called the Goat.
"There's still fear in the housing market. People want to be mobile, and they're willing to pay a premium for living in an apartment."
Adding to the appeal, the Paddock offers a beach volleyball court, a staffed workout facility, hardwood floors, stainless-steel appliances and 9-foot ceilings.
Down Hayden Run Road, the new Hilliard Grand complex provides a dog park, a community garden, a car wash, 9-foot ceilings, Wi-Fi, a fire-pit terrace and washer-dryer hookups.
Those perks and others are in addition to once-luxurious features now considered a must in high-end rentals: fitness centers, movie rooms, clubhouses, pools, business centers and open floor plans.
To those in the industry, such amenities are more than just brochure fodder: They are tools in what could be a watershed moment in modern housing.
The U.S. homeownership rate has dropped to 66.4 percent of households, its lowest level in 13 years and down from a peak of 69.2 percent in 2004. Although many of America's new renters might be eager to hop back into a home when their finances allow, others are choosing to pay rent instead of a mortgage.
"In the past five or six years, we could have bought a home," said Sri Thokala, 36, who moved into Hilliard Grand in June with his wife, Preeti Kawatra, 30. "But especially looking the last two years at the housing market, and the uncertainty of the job market, I don't want to take that plunge."
The couple was drawn to Hilliard Grand by its proximity to Thokala's software engineering job in Dublin, and by the gym, clubhouse and new appliances. They pay $1,005 a month for a two-bedroom flat.
John Scruggs, a 21-year-old model who recently moved into the Paddock at Hayden Run, doesn't plan to buy a home for "five or six years."
Scruggs' $975-a-month rent could cover a mortgage, but instead of buying, he is considering upgrading to the three-floor town house plan for $1,275 a month.
"It's like living in a condo here. You've got a gym, a bar, a full restaurant and the pool," he said. "It's very classy; there's a lot of young professionals here."
Anthony Verrilli and Noelle Carusillo were drawn to the Paddock by the pool, the workout facilities and their apartment's washer and dryer.
"Not having to have gym or pool memberships, that was huge for us," said Verrilli, whose rent is $800 a month for a one-bedroom unit.
Rent at seven new central Ohio complexes to open in the past 12 months starts in the $700 range and tops out from $1,200 to $1,400 (although some units in Flats on Vine in the Arena District cost more than $1,800) - enough at today's interest rates to buy a $200,000 home.
Stark notes that some Paddock tenants are paying $200 to $300 more to rent a unit than it would cost to buy an almost identical condo in the same complex. Other builders could say the same.
"Tenants now realize they can't sell quickly and move on," said Debbie Rurik-Goodwin, president of the management arm of Edwards Communities, which opened Arlington Park apartments in Hilliard this year. "They're renters by choice, and I think that will continue to be the case for a long time."
Renters also seem to be unpacking their bags for longer stretches.
"I talk to a lot of people in the industry and ask them all this question and, almost uniformly, they tell me retention rates are up 10 to 15percent from the housing collapse," said Greg Willett, vice president of research and analysis at MPF Research, an apartment consulting firm in Texas.
DRK & Co., which has opened three central Ohio complexes in the past year (Prescott Place in Worthington, Albany Landings in New Albany and Winchester Park in Groveport) is finding that tenants stay longer than they did before the housing crash, said company President Tre Geller.
To draw tenants and encourage them to stay, DRK focused on features in its new communities.
"We made a determination a few years ago that the amenities the customers are looking for will be a paramount concern," Geller said. "We upgraded our clubhouse and offer the standard amenities like a pool and exercise facility, but we also have pool tables, 10- to 15-seat movie theaters in the clubhouse, kitchenettes in the clubhouse, and we upgraded the pool and patio areas."
The Edwards Communities, which offered an upscale fitness center in its Quarry community in 1999 and built the Barn restaurant and bar in 2004, pioneered many high-end apartment amenities in central Ohio.
In its new Arlington Park community, the company provides granite countertops, undermount sinks, pendant lighting, side-by-side refrigerators, and, in town house units, screened porches.
The perks seem to have worked: The complex, which opened in January, has rented all but 30 of its 284 units, the fastest lease-up that Rurik-Goodwin has seen in her decade of managing Edwards' apartment communities.
"I think those amenity expectations are only going to grow," she said.
Rurik-Goodwin and others say they are seeing some empty nesters and middle-aged divorced men and women, but renters continue to be dominated by professionals in their 20s and early 30s.
To keep them, complexes are also using tactics beyond physical amenities.
The Paddock and other Lifestyle complexes offer ski clubs and trips to the Cincinnati-area Ikea store.
Hilliard Grand's "purposeful living" is designed to remedy one of renting's main shortcomings: the lack of a sense of community.
"We want to provide opportunities for people ... that will give them more of a purpose than just coming and going, and become attached to others here," said Brett Kaufman, president of the Schottenstein Real Estate Group, which developed the complex.
"Based on what we're seeing in other communities, people who in the past may have seen homeownership as a goal are seeing rental as a long-term option."


Source: The Columbus Dispatch

Rents Rise, Vacancies Go Down

By WESLEY LOWERY 

July 7, 2011

Apartment landlords are enjoying rising rents and falling vacancies.

The average effective rent, the amount paid after discounting, was $997 in the second quarter of the year, up from $974 a year earlier, according to a report scheduled for release Thursday by Reis Inc., which tracks leasing data for 82 markets. Second-quarter rents rose in all but two markets.

Rent levels rose fastest in San Jose, Calif., to $1,501 in the second quarter. The average effective rent in San Francisco was $1,806; Wichita, Kan., $495, and New York, $2,826.

Vacancies, meanwhile, fell in 72 of the 82 markets during the second-quarter vacancy rate to 6%, the lowest since 2008 and compared with 7.8% a year earlier, according to Reis. Vacancies declined fastest in Charleston, W.Va., Greensboro/Winston-Salem, N.C., and Richmond, Va.

"Rising rents and falling vacancies are the perfect situation for landlords," said Rich Anderson, an analyst for BMO Capital Markets. "It's like drinking without the hangover."

But there were some cautious signs in the data. Landlords filled a net 33,000 units in the second quarter, a slowdown from the 45,000 units they filled in the first quarter. That was somewhat surprising because typically, the net "absorption" rate falls faster during the summer as college graduates leave campus and descend on cities in search of jobs. Some analysts said the slower absorption rate could be linked to slower job growth, although it is too soon to know for sure. The peak apartment renting season runs from May to September.

"When you're going from big numbers and getting gradually smaller it's tough to determine if things are in fact cooling," says Haendel St. Juste, an analyst at Keefe, Bruyette & Woods.

Meanwhile, supply remains constrained. Roughly 8,700 new apartment units opened during the second quarter, the second-lowest quarterly tally for new completions since Reis began collecting data in 1999.

But there is new construction in the pipeline. The CoStar Group, a Washington, D.C.-based real-estate research firm, expects about 22,500 units to be added this year, followed by 94,600 in 2012 and more than 109,000 in 2013.

But as long as employers keep adding jobs to the economy, analysts say, they expect vacancy rates to keep falling and rents to keep rising. "Barring some unexpected shock from the global economy, we expect the recovery to continue through 2011," Reis wrote in the report. "Vacancies should continue to decline while rents rise at an even faster pace than we observed in the first half of the year."

Source: The Wall Street Journal

 

Apartment Market Pushing toward 6 Percent Annual Rent Growth

By Joshua Pringle, Online News Editor

Jun 30, 2011

Dallas–Axiometrics Inc., a multifamily data and analysis providor, released a research report today that shows the national apartment market continuing to heat up in May, with effective rents (rents net of concessions) increasing 0.7 percent from April levels. Axiometrics estimates that effective rents will rise 5.9 percent in 2011, which would be the largest annual increase since a rate of 5.8 percent in 2005.

Year-to-date, effective rents nationally have risen 3.17 percent, as compared to 2.55 percent in 2010. Top performing submarkets for annual effective rent growth in May included San Jose (13.0 percent), San Francisco (9.7 percent), Austin (8.7 percent), Seattle (8.5 percent), Boston (7.4 percent) and Dallas (6.5 percent).

Axiometrics President Ron Johnsey says, “With year-to-date increases in effective rents, and continued strong occupancy levels, renters who are able might be wise to sign longer term leases as property owners in most markets will maintain pricing power at least through the rest of 2011.”

Additionally, the national occupancy rate increased for the 12th time in the past 16 months, rising from 93.3 percent in April to 93.96 percent in May. From January through May 2011, the occupancy rate has increased 86 basis points (bps), which is below the rate of 136 bps for the same period of 2010. Axiometrics says that the slowdown in absorption can be attributed partially to the increase in effective rents year-to-date. But occupancy in May was still above the previous peak of 93.5 percent reached in August 2008.

From May 2010, eight major markets increased occupancy by more than 100 bps and have rates above 95 percent: New York, Minneapolis, Austin, San Jose, Cleveland, Orange County, Chicago and Denver. Some of the most overbuilt markets are recovering rapidly as well. Six major markets that had low occupancy rates in May of 2010 have increased their occupancy levels between 142.5 and 333.4 bps: Charleston, Charlotte, Dallas, Orlando, Phoenix and Houston.

Source: Multi-Housing New Online

Employers Are Occupying More Space, but at a Slower Pace

By Eliot Brown

July 7, 2011

In a sign the economic recovery's recent stumbles may be spilling over into the real-estate market, employers took on less office space during the second quarter than earlier in the year.
In all, the amount of occupied office space rose by 3.7 million square feet from April to June, according to real-estate research firm Reis Inc. While that was the third consecutive quarter in which firms added space, the gains were down from the first quarter, when occupied space rose 5.5 million square feet. Reis tracks the office markets in 79 U.S. metropolitan areas.
Rents, meanwhile, rose an average of 0.2% during the second quarter. The office data come as U.S. job growth—always a prerequisite for improvement in the office sector—has been slower than anticipated. In May, the economy added just 54,000 jobs, according to the Bureau of Labor Statistics, and economists predict the figure for June may not top 100,000.
The measured pace of growth in the office sector has only begun to chip away at the vast quantities of unfilled space across the country. Between January 2008 and September 2010, tenants emptied out of 138 million square feet, pushing the vacancy rate from 12.6% to 17.6%, according to Reis. Since October 2010, the amount of occupied space has grown by just 11.9 million square feet.
The amount of new leasing, "relative to the overall inventory, it's not a large amount," said Ryan Severino, an economist at Reis. "We are generally trending in the right direction, even if it is a slower, more inconsistent recovery than market participants would like to see."
The sector's improvements have been led by resilient markets such as New York and Washington, where job growth has been relatively steady and outpaced that of the nation.
"We had a big first quarter from a leasing perspective, and it still was solid for the second quarter," said Ric Clark, chief executive of Brookfield Office Properties, which owns office buildings in many major U.S. cities. While many firms are keeping to their existing sizes, Mr. Clark said some energy and law firms have been looking to expand. "It's not huge expansion, but it's some," he said.
Late last month, Nomura Holding America Inc. signed a lease for 900,000 square feet of space at Worldwide Plaza in Midtown Manhattan, opting to leave its home in the World Financial Center in lower Manhattan. The move, which is slated for 2013, speaks to the ambitions of expansion in Manhattan for the Japanese investment bank, which currently has 545,000 square feet in New York. Overall, rents in the New York City region were up 0.6% from the first quarter, and 3.6% from a year earlier, according to Reis.
Washington, with the nation's lowest vacancy rate of 9%, has benefitted from government-fueled job growth, which has spurred growth in a variety of related industries. In April, law firm Skadden, Arps, Slate, Meagher & Flom LLP announced it was signing new leases for about 415,000 square feet, expanding its presence by about 50,000 feet.
New office construction—which was all but nonexistent for the better part of three years—has also begun to emerge in the stronger markets. Multiple developers have announced projects in the Washington, D.C., area, including a venture led by office landlord Hines Interests LP, which this spring announced a groundbreaking on a mixed-use development slated to contain 520,000 square feet of office space.
In New York, Boston Properties Inc. in May announced its intention to start construction on a 39-story Skidmore Owings & Merrill-designed office tower on Eighth Avenue, after signing law firm Morrison & Foerster LLP as a tenant.
While major coastal cities have been performing well, some of the cities hardest hit by the recession have yet to see conditions hit bottom. Las Vegas, which has one of the highest vacancy rates in the nation at 24.9%, saw rents paid by tenants fall by 0.3% compared with the prior quarter, according to Reis. Rents in Phoenix, with a vacancy rate of 26.5%, fell 0.1%.

Source: The Wall Street Journal