Industry News

Apartment Market Shows Signs of Improvement

Recent measures show that vacancy rates are falling and confidence is rising in rental markets, specifically in apartment buildings, despite only subtle improvements in the nation's employment picture.  "We certainly see the increase in rental demand in 2010, and it's been a little more, frankly, than most apartment experts had anticipated," said Mark Obrinsky, Chief Economist and Vice President of Research for the National Multi-Housing Council.  As units fill up, property owners are feeling more confident.  The NMHC's quarterly market-tightness index had a reading of 83 in August, the highest reading since July 2006.

The Demand for apartments has risen significantly this year, said Greg Willett, Vice President of Research and Analysis for MPF Research, which analyzes apartment trends. "There's no way to look at these apartment numbers and not be impressed," he said.  June vacancy rates in the largest 64 markets in the country averaged 6.6%, down from 8.2% at the end of 2009. The apartment market absorbed 215,000 units in the first half of the year, and at this rate, the market will absorb a little more than 300,000 units by the end of 2010. Absorption was just under 300,000 units in 1999, 2000 and 2004; the record since the early 1990s was 350,000 units in 2005. Source:The Wall Street Journal

HUD Secretary Addresses Green Homes & Sustainable Communities Conference

Leaders in the fields of building, development, and financing recently met in Washington, D.C., for a two-day conference focusing on green, affordable housing and other forms of community development. Now in its fifth year, the Green Homes & Sustainable Communities Conference is recognized as a thought leader in the ever-growing green space. The morning kicked-off with a keynote address from U.S. Department of Housing and Urban Development (HUD) Secretary, Shaun Donovan. “What was considered cutting edge is now very much in the mainstream of the dialogue, not just in Washington, D.C., but across the country,” Donovan began.  He also discussed HUD’s commitment to bringing green into the mainstream of affordable housing, emphasizing cutting energy bills and building healthier homes.

Donovan spoke about various partnerships to increase the level of financial support for green, affordable housing and building a “clean energy economy.” As part of the Recovery Act, approximately 230,000 units have already been greened.  Going forward, HUD plans to strengthen the energy requirements for HUD projects and support federal encouragement of localized development. HUD will also support new tools to achieve these goals, such as a green physical condition assessment, which will analyze cost effectiveness in projects and make suggestions for green improvements to existing housing. Source: Multifamily Executive

Brainstorming: The “Unconvention”

This year’s Executive Brainstorming is just around the corner.  Have you registered yet? Brainstorming is not your typical seminar, conference, or workshop.  In fact, Brainstorming is called the “Unconvention” because it’s such a unique event.  While the multifamily industry offers several annual conventions that address education, technology, and resources; only Brainstorming includes all of these elements.  In addition, you’ll have the unique opportunity to work face-to-face with your peers and the best-of-the-best in the business.

  • When:     September 15-17th
  • Where:    Sheraton Dallas Hotel – Dallas, Texas
  • Cost:      $525 Early Registration – (Before 9/14)

Executive Brainstorming, the only national conference designed exclusively for the industry’s senior-most decision-makers to network with their peers, will explore new opportunities and brainstorm ideas and solutions to your toughest challenges. CallSource is so excited about this year’s event, we’ve become a Gold Sponsor.  Don’t delay another moment! Register Now!

Rents Jump In Cities Where Job Trends Are Mending

Rents at Port 10, a trendy new building in Manhattan's Chelsea district, have gone up twice since late July. Demand is that strong for the property, which targets the army of young people who flood into the city each year to get degrees and start careers. Over in the East Village, rents have risen five times since June in a new rental building targeting higher-income professionals. The rental market is rebounding, especially in New York and other markets where job trends are improving: Washington, D.C., Chicago, San Francisco, San Jose, and Seattle.

But, New York could top them all in rent growth where tenants show an appetite for new and luxury digs. Wall Street is hiring again and "rents are rising, concessions are going away and vacancy rates have gone down each month since November," said Gary Malin, President of Citi Habitats, a residential brokerage. "The market has done a complete 180-degree turn from a year ago." Apartment renting is starting to rebound around the U.S. spurred by tighter lending standards to buy homes, higher down payments, and a modestly improving job market. More people are choosing to rent or are forced to as the American dream of owning a home remains dimmed by the credit crisis and housing market collapse. Source: Investors.com

Multifamily REITs Now King of the Hill

In a new report, SNL Real Estate notes that during the first half of 2010, multifamily REITs outperformed every other kind of REIT in various ways, but perhaps most importantly, in returns to investors. The property type has been having a good run so far this year, and so have the REITs that have specialized in it. Stronger demand for apartments has driven occupancy, and in the case of REIT portfolios, that has been true since the beginning of the recession.  “Occupancy has been on the rise for multifamily REITs since the first quarter of 2008, moving from 93.5 percent at that quarter’s end to 94.9 percent at the end of the 2010 first quarter,” says the report.

Another advantage for the multifamily REIT sector is the relative strength of its capital supply, courtesy of Fannie Mae and Freddie Mac. The rest of the REIT universe doesn’t enjoy that kind of robust liquidity. SNL reports that multifamily REITs have produced greater returns for their investors than the broader REIT universe has thus far in 2010. Still, the report warned that things could change for multifamily REITs because of factors beyond their control in the for-sale residential sector. With continued decreases in home pricing, many tenants that were previously against taking on the cost of homeownership may be willing to take that plunge going forward. Source: MHN Online

CallSource Sponsors Annual Freedom Walk at Reagan Library

CallSource is proud to be the sponsor of the Fifth Annual Simi Valley America Supports You Freedom Walk on Saturday, September 11th, at the Ronald Reagan Library in Simi Valley, California.  Please join us as we remember victims of 9/11 and honor our troops who continue to fight for freedom.  The program includes patriotic music from a military band, brief remarks, and a flyover.  The program will conclude with a 1.8 mile walk from the Library’s main courtyard to the community of Rancho Madera.

The America Supports You Freedom Walk was created in 2005 to establish a national tradition of remembrance for the lives lost on September 11, 2001, to renew our commitment to freedom and the values of our country, and to honor our veterans, past and present.  For more information, visit www.prideamerica.org.

Real Estate Revival Seen by Fund Managers

Real estate mutual funds have been soaring. During the past year, the funds returned 39%, outpacing the S&P 500 by 25 percentage points, according to Morningstar. The rally has been driven by an improving outlook for commercial real estate, which includes offices, apartments and warehouses.

The positive outlook represents a big change from the turmoil of 2008 when financing disappeared and values of many properties collapsed. At the time, some analysts predicted that the commercial real estate industry would not recover for five years or more.  Now the pessimistic forecasts seem to have missed the mark. In recent months, many markets have been reporting improving vacancy rates. At the end of the second quarter, the vacancy rate for offices in central business districts was 14.8%, down from 15% in the first quarter. The modest change in vacancies represented an important sign that the cycle was moving up, analysts say. The vacancy rate had bottomed at 9.7% in the fourth quarter of 2007, and then it rose for nine straight quarters. Source: TheStreet

CallSource Q2, 2010 Multifamily Industry Report Card Now Available

CallSource, the leader in call tracking and recording, performance analytics, sales and management training, announced the availability of its Q2, 2010 Telephone Performance Analysis (TPA) Industry Report Card.

Published quarterly, the Industry Report Card is designed to provide an objective report on how effectively leasing professionals across the industry are answering telephone leads. The findings in the current issue are based on the review of 81,800 calls spanning 1,436 communities nationwide.  Each call is reviewed using a survey of best practices created by industry professionals with a combined total of more than 150 years experience in successful ownership, management, and operation of apartment communities. Among the survey findings:

  • Only 36% of reviewed calls from qualified apartment seekers were converted to appointments
  • 2,623 appointment-setting opportunities were missed
  • 656 fewer leases were written as a result
  • Total lease revenue lost by these communities: $7,742,506*

*Total lost revenue based on industry averages.

“This report reflects the ongoing trend of revenue losses that continue to impact the multifamily industry,” states Jerry Feldman, CallSource CEO.  “This erosion in revenues represents an industry-wide opportunity to improve the leasing skills necessary to set a higher percentage of appointments and close a higher percentage of leases.”

CallSource’s Industry Report Card (IRC) is published quarterly and available free of charge.  For a copy of the Q2, 2010 IRC, or for past issues, visit: www.callsource.com.

Telling Ain’t Selling – Shut Up and Let Them BUY! Fall Sales Series Kick-Off Special with Doug Chasick

It’s simple. The less we talk, the more they buy!  In this class, we’ll be focusing on what’s really important – building rapport and determining the customer’s needs instead of presentations and closing.  We’ll practice how to really listen, and why the less we talk, the more they buy.  Selling is not about closing techniques, overcoming objections, and all the other so-called sales tricks that don’t benefit your customer.  By focusing on “what’s in it for them,” being interested instead of interesting, having a conversation instead of a presentation, and being a problem solver.  You’ll return to your communities with the tools and attitude necessary to be a Superstar!

    When:     Wednesday, September 8, 1-4 PM
    Where:    AATC Office
                  6350 Baker Blvd.
                  Fort Worth, Texas

Doug Chasick is Senior Vice President of Multifamily Professional Services for CallSource. He is a nationwide industry educator and subject matter expert.  Chasick is also a member of the National Apartment Association Education Institute (NAAEI) faculty and is the lead facilitator for their “train-the-trainer” program, Advanced Instructor Training.  He has also served on the NAA Board of Directors and most recently served on the NAAEI Board of Directors. To register for this course go to: aatcnet.org.