Author: ipgocorp

(RECAP: The FHFA announced Wednesday it had raised a cap on the amount of multifamily loans Fannie Mae and Freddie Mac can buy from lenders, boosting it to $35 billion effective immediately. The adjustment from the previous cap of $31 billion is warranted “based on increased estimates of the overall size of the 2016 multifamily finance market,” the agency said. The cap is supposed to ensure the government-sponsored enterprises don’t crowd private investors out of the multifamily market. The multifamily cap was set last May when FHFA decided to exclude subsidized affordable housing, manufactured housing communities, small multifamily properties (5-50 units) and certain other affordable rentals from the limit. Those exclusions will remain in place. Due to these exclusions, Fannie financed $42.3 billion in multifamily loans and Freddie financed $47.3 billion in 2015 without exceeding the cap. The Mortgage Bankers Association welcomed FHFA’s decision.)

WASHINGTON, DC – Construction spending increased by 8 percent in March compared to a year earlier and was also up slightly between February and March amid growing demand for many types of construction, as the spending total hit the highest level since October 2007, according to an analysis by the Associated General Contractors of America. Association officials said the growth comes amid strong private-sector demand and new federal investments in surface transportation programs.

“Construction should be a significant contributor to economic growth in the remainder of 2016 and beyond,” said Ken Simonson, the association’s chief economist. “Right now the biggest challenge for contractors in many parts of the country is that they are worried about finding enough qualified workers to meet demand.”

Construction spending in March totaled $1.138 trillion at a seasonally adjusted annual rate, 0.3 percent higher than the revised February total and 8.0 percent higher than in March 2015, Simonson said. Private residential spending increased by 1.6 percent for the month and 8.5 percent compared to twelve months earlier. Spending on multifamily residential construction jumped 5.6 percent for the month and 34.6 percent year-over-year, while single-family spending was flat compared to February but rose 13.4 percent compared to March 2015.

Private nonresidential construction spending increased 0.7 percent for the month and 9.3 percent from a year earlier. Simonson observed that all but one segment increased from 12 months before. The largest private nonresidential segment in March was manufacturing construction, which rose 2.2 percent for the month but dropped 2.0 percent year-over-year. The next-largest segment, power (including oil and gas pipelines), lost 1.8 percent for the month but gained 2.0 percent for the year.

Public construction spending dipped 1.9 percent from a month before but is still up 6.7 percent from 12 months earlier. The biggest public segment—highway and street construction—was up 0.4 percent for the month but is up 18.8 percent year-over-year, as new federal surface transportation investments enacted last year began to impact demand, Simonson noted.

Association officials said the new construction spending figures reinforce anecdotal reports that the industry continues to grow amid robust demand for most types of construction services. But officials warned that labor shortages are likely to become even more severe as construction firms continue to expand unless federal, state and local officials act on the measures outlined in the association’s Workforce Development Plan.

“The new spending data, combined with recent employment reports, make it clear that the construction industry is growing faster than the broader U.S. economy,” said Stephen E. Sandherr, the association’s chief executive officer. “But unless firms have enough workers to keep pace with demand, construction schedules are likely to slow as firms are forced to cope with labor shortages.”

WASHINGTON, DC – Whole house remodels and additions are regaining market share according to a survey of remodelers released by NAHB Remodelers, the remodeling arm of the National Association of Home Builders (NAHB). The survey, released today to kick off National Home Remodeling Month in May, revealed the most common remodeling projects in 2016, compared to historical results of the survey.

“While bathroom and kitchen remodels remain the most common renovations, basements, whole house remodels and both large and small scale additions are returning to levels not seen since prior to the downturn,” said 2016 NAHB Remodelers Chair Tim Shigley, CAPS, CGP, GMB, GMR, a remodeler from Wichita, Kan. “Clients want to add more space, but remodeling a significant portion of the home is no easy feat. That’s why it is important to work with a professional remodeler who has the integrity and expertise to take on these large remodeling jobs.”

In the survey, remodelers reported that the following projects were more common than in 2013:

Whole house remodels increased by 10 percent
Room additions increased by 12 percent
Finished basements increased by 8 percent
Bathroom additions increased by 7 percent

Bathrooms topped the list of most common remodeling projects for the fifth time since 2010. Eighty-one percent of remodelers reported that bathrooms were a common remodeling job for their company while 79 percent of remodelers reported the same for kitchen remodels. Window and door replacements decreased to 36 percent from 45 percent in 2014.

(RECAP: Many worry that student loans are a drag on the economy, particularly the housing market. Analyses from the Federal Reserve Bank of New York, cited by leading economists, do not provide compelling evidence for this hypothesis. The New York Fed data contain no information about education. More complete data from researchers at the Board of Governors of the Federal Reserve System reveal a different story. The striking gap in homeownership is not between college-educated people who did and did not borrow, but between those with and without a college education.)

BALTIMORE, MD – TruAmerica Multifamily, in partnership with MSD Capital, L.P., has expanded its geographical footprint to the East Coast with the acquisition of a 1,004-unit apartment portfolio in suburban Baltimore, MD, in an off-market transaction valued at $187 million.

Los Angeles-based TruAmerica, one of the most active multifamily investors in the United States, has acquired a portfolio that now totals more than 17,000 units with an aggregate value over $3 billion. To date, TruAmerica has specialized in the acquisition and repositioning of mid-tier apartment communities in the Western U.S. but the acquisition of this portfolio is the first for TruAmerica east of Colorado as it expands its value-add platform to include select East coast growth markets.

The portfolio is comprised of the 158-unit Bayshore Landing in Annapolis, the 634-unit Sherwood Crossing in Elkridge, and the 212-unit Southfield in Nottingham. Each property is well-amenitized, featuring resort-style pool areas, clubhouses, fitness centers and other recreational facilities. The properties were built between 1984 and 1990.

“Similar to the West Coast markets in which we invest, substantially all of the new apartment inventory being built in the greater Baltimore area is targeted for ‘renters by choice,’ effectively pricing out the working class,” said TruAmerica CEO Robert Hart. “This was a major factor in the decision to target the Baltimore and Annapolis markets for our first East Coast investments.”

“MSD Capital continues to see attractive opportunities in repositioning older multi-family assets,” observed Barry Sholem, head of MSD Capital’s real estate group. “We are excited to partner with TruAmerica on this portfolio, and look forward to pursuing other business together.”

The Baltimore metro has experienced 60 consecutive months of positive year-over-year employment growth, which is expected to continue with an average of 19,000 new jobs per year over the next five years.

“This puts extraordinary pressure on, and underscores the need for, affordable quality rental housing to support that growth,” said Hart.

TruAmerica will complete an interior renovation plan initiated by the seller that includes faux-wood flooring, granite countertops, updated cabinetry and new appliance packages.  TruAmerica’s business plan also calls for thoughtful upgrades to common area amenities.

“Baltimore is one of the top performing economies in the Mid-Atlantic and benefits from one of the most educated resident profiles in the United States.” said Greg Campbell, Senior Managing Director, Acquisitions. “As a result of these healthy, long-term job drivers, the three submarkets where the assets are located are experiencing tremendous demand from a younger population that prefers to rent rather than own.”

According to RealtyTrac, a national real estate information provider, Baltimore is the top market in the United States for renting to Millennials.

SALISBURY, MA – Lincoln Property Company, the second largest multifamily manager in the United States, will be hosting the ribbon cutting for Tidewater at Salisbury on Friday, May 6. The 210 unit apartment community in Salisbury, MA offers a variety of one and two bedroom floorplans with ocean views.

Catered by Seaglass, the ribbon cutting will be attended by everyone involved in making the project happen as well as government officials.

This pet-friendly community features in-home washers and dryers, private patios, a resort-style swimming pool and sundeck, covered parking, outdoor kitchen and a 24 hour fitness center.

Tidewater at Salisbury is steps away from the beach and a quick walk to the Salisbury Beach State Reservation. The location provides equally easy access to Boston or Manchester, NH, each less than an hour away. The community is also a convenient alternative to living in nearby Newburyport, Amesbury, Portsmouth and Exeter.

Headquartered in Dallas, TX, Lincoln focuses on real estate investment, construction and development, in addition to property management. Their national reputation has enabled Lincoln to attract a large client base of owners and investors who count on their ability to deliver quality results and continually serve as a market leader.

IRVINE, CA – CoreLogic, a leading global property information, analytics and data-enabled services provider, released its CoreLogic Home Price Index and HPI Forecast data for March 2016 which shows home prices are up both year over year and month over month.

Home prices nationwide, including distressed sales, increased year over year by 6.7 percent in March 2016 compared with March 2015 and increased month over month by 2.1 percent in March 2016 compared with February 2016, according to the CoreLogic HPI.

The CoreLogic HPI Forecast indicates that home prices will increase by 5.3 percent on a year-over-year basis from March 2016 to March 2017, and on a month-over-month basis home prices are expected to increase 0.7 percent from March 2016 to April 2016. The CoreLogic HPI Forecast is a projection of home prices using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.

“Housing helped keep U.S. economic growth afloat in the first quarter of 2016 as residential investment recorded its strongest gain since the end of 2012,” said Dr. Frank Nothaft, chief economist for CoreLogic. “Low interest rates and increased home building suggest that housing will continue to be a growth driver.”

“Home prices reached the bottom five years ago, and since then have appreciated almost 40 percent,” said Anand Nallathambi, president and CEO of CoreLogic. “The highest appreciation was in the West, where prices continue to increase at double-digit rates.”

(RECAP: It is the No. 1 barrier to entry for young, would-be homebuyers: credit. Millennials are the first generation to come of age in a post-almost-apocalyptic housing market, where lenders, eight years later, are still paying billions in reparations for mortgage misconduct and outright fraud. Millennial homebuyers are also paying a price. “The mortgage industry is poised to experience a monumental shift as more millennial homebuyers begin to enter the market,” said Joe Tyrrell, executive vice president of corporate strategy at Ellie Mae. “There are roughly 87 million would-be homebuyers in the millennial generation and 91 percent of them say they intend to own a home one day.” Millennials are even starting to move to the suburbs, and in fact, last year marked a turning point, where urban centers reached “peak millennial,” according to a new study from Dowell Myers, a professor of urban planning and demography at the USC Price School of Public Policy.)

TAMPA, FL – ZOM Florida and Northwestern Mutual will commence construction on SEAZEN, a 323-unit multifamily apartment community located on the island of Rocky Point, just off the coast of mainland Tampa.

The Rocky Point site, currently home to a Chart House restaurant, boasts over 750 linear feet of direct waterfront, maximizing breathtaking views of the water from the thoughtfully configured three- and six-story building layout. Construction will begin in August this year.

“We are excited to partner again with Northwestern Mutual on a high quality project in Florida,” said Greg West, ZOM’s Chief Development Officer. “The Rocky Point site is unmatched in terms of waterfront location, amenities and convenient proximity to employment.”

John Jacobs, Director of Field Production for Northwestern Real Estate Investments, LLC, added, “The moment I saw the site, I knew it was something very special. There is nothing like it on the west coast of Florida. Almost 85% of the units have views of the expansive Tampa Bay. As I had hoped, ZOM has done a terrific job in designing a community that matches up perfectly with the site, giving it that upscale and contemporary feel while still fitting in with its surroundings. We are most excited about this exceptional opportunity with ZOM.”

Seazen is conveniently located to major employment centers and enjoys excellent linkages to a vast array of shopping, dining, cultural and entertainment venues, as well as connectivity to major transportation networks. Seazen is expected to be completed Summer 2018, with pre-leasing starting in late 2017.

ATLANTA, GA – Federal Capital Partners is making its first multifamily investment in Atlanta, GA with the recapitalization of two apartment communities totaling 369 units in strong submarkets of Atlanta, GA. Magnolia at Whitlock, with 152 units, is located in Marietta, GA, and The Clarion, with 217 units, is in Decatur, GA. FCP is investing in the two communities through a joint venture with Virginia Beach based real estate investment firm, FortCap Partners.

FCP’s investment in the Atlanta communities comes after an active year expanding into multiple southeastern markets, including Orlando, Tampa and Nashville, and in conjunction with an increasing presence in the Raleigh-Durham, Charlotte and Charleston markets.

“Following the planned renovations, Magnolia at Whitlock and The Clarion will both be extremely well positioned to have an enhanced appeal to residents in their respective submarkets,” said FCP Sr. Vice President, Bryan Kane. “These communities fit nicely within FCP’s portfolio. We look forward to working with FortCap to reposition the communities and maximize their operations.”

The Clarion is positioned within the densely populated Decatur submarket near the Avondale MARTA station, Emory University, the Centers for Disease Control and other major employers. The community is surrounded by established residential neighborhoods and is proximate to downtown Decatur, Midtown and Buckhead. The Clarion will receive unit renovations along with improvements to the common areas and community amenities.

Magnolia at Whitlock is one of the most affordable rental communities in Marietta, a submarket that has experienced strong rental rate appreciation as well as a reduction in the number of workforce housing communities. The property consists predominantly of two and three bedroom units with in-unit washers and dryers and spacious floor plans. Magnolia at Whitlock, built in the 1970’s, will receive improvements to common areas, landscaping and amenities. The community is proximate to leading employers, Lockheed Martin and Dobbins Air Force Base and is within easy reach of the new SunTrust Park and historic downtown Marietta.

Joint venture equity was arranged by Mike Ryan and Telly Fathaly of Cushman & Wakefield’s Atlanta-based Equity, Debt and Structured Finance team.