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Pair Of Mixed-Use Towers Planned For Wynwood

Author: Admin
Categories: Commercial News,Development,Multifamily,Offices,Retail,Wynwood

On the eastern side of growing Wynwood a developer plans a large mixed-use residential project that will also bring in new commercial tenants.

PRH CHO Dragon Wynwood LLC plans to build the pair of neighboring buildings at 2804, 2810, 2819, 2828, 2838 and 2804 NW First Ave.

The city’s Urban Development Review Board considered the project at a virtual meeting and recommended it for approval with a couple of thoughts.

With a current working title of Wynwood 29, the vast development tops out at 375,383 square feet.

The project includes a 12-story building that connects to an 8-story portion, and a separate 8-story building across the street, with 248 multifamily residential units, 28,071 square feet of ground floor commercial uses, a garage for 372 vehicles and room to park 22 bicycles.

Wynwood 29 will include a pool and amenity deck. The garage is intended for both residential and commercial tenants, as well as patrons.

The project is to have 6,360 square feet of open space.

The collection of parcels is between Northwest 28th and 29th streets, split by Northwest First Avenue.

The 12-story portion is planned for the southwest corner of Northwest 29th Street and First Avenue. The southern end of that block has the connected 8 stories. The ground floor is set for retail uses.

What’s referred to in the plans as Parcel 2 is on the northeast corner of Northwest 28th Street and First Avenue. Planned there is the 8-story building, which has eight levels of parking, seven levels of residential and ground floor retail.

The property is currently vacant and is within both the T5-O and T6-8-O Zoning Transects and the Wynwood Neighborhood Revitalization District (NRD-1) Overlay.

Multifamily structures sit to the east and west of the property.

Attorney Brian Dombrowski, representing the developer, told the review board the project was previously approved in September 2016 and this is a slightly modified design, updated after the company gained an additional parcel.

In a letter to the city, Mr. Dombrowski detailed requests for one warrant and several waivers in order to construct Wynwood 29.

The developer is requesting a warrant to allow on-street maneuverability to access two loading berths. Turning movements associated with more than one loading berth per development may be permitted on-street by warrant, except along Wynwood Corridors, under Miami 21 zoning.

The project proposes on-street maneuverability to access two loading berths from Northwest 28th Street, on the western portion of the project, according to the letter.

The waivers being sought include:

  • Up to a 30% reduction in required parking within the quarter-mile radius of a Transit Corridor. The property is within a quarter mile of multiple bus and trolley stops.
  • Up to a 10% increase in lot size from 40,000 square feet to 44,000.
  • Up to 90% lot coverage through the Flexible Lot Coverage Program, of the NRD-1 Regulations. This additional lot coverage allows both the activation of the roof terrace as well enhancing the pedestrian realm.
  • Up to a 10% increase in lot coverage for the T6-8-O portion of the property, allowing 84.3% of coverage when 80% is allowed.
  • To allow vehicular entry, loading docks, and service entries from the primary frontage, Northwest 28th Street.
  • Up to a 10% reduction in the minimum square footage for a one-bedroom residential unit. Miami 21 typically requires a minimum square footage for a one-bedroom residential unit of 550 square feet. The project proposes one-bedroom units at 531 square feet, 3.5% below the minimum.

“By reducing the minimum one-bedroom unit size, the Project can provide more affordable units. The Project’s proximity to mass transit makes it a great candidate for smaller, more affordable units,” wrote Mr. Dombrowski.

 

“Urban Land Institute studies indicate that smaller units have stronger occupancy rates than typical apartments and individuals choosing to live in smaller units are attracted to them because of a desire to sacrifice space for lower per unit cost and proximity to transit, employment, and vibrant mixed-use neighborhoods,” he said.

The project is designed by the architectural firm of Arquitectonica. Ray Fort, of the firm, described details of the Wynwood 29 project during the virtual meeting.

Mr. Fort told the board: “This quadrant of Wynwood is becoming the residential sector of Wynwood … it is a little bit quieter – there aren’t as many bars – and surrounding projects are planned to be residential,”

Board Chair Willy Bermello said, “I think the project is beautifully designed.”

And while he complimented the bright colors proposed for the project, Mr. Bermello mentioned a concern with the longevity of painted stucco.

“The issue of our Florida sun is that it’s not forgiving when it comes to bright colored paints. [How do you] maintain the crispness of those colors over time?” he asked.

Mr. Bermello asked if they had considered brick for the project.

Mr. Fort said they did not and referred to the size of the development.

Board member Anthony Tzamtzis also voiced concern about the painted surfaces.

“Did you consider glazed tiles? I think the painted stucco is degrading the concept you are trying to promote, which is the industrial [look],” said Mr. Tzamtzis. But he went on to congratulate Mr. Fort for “an extremely elegant presentation and thoughtful design.”

 

Board member Dean Lewis said the project is “well thought out, well detailed.”

He suggested a pedestrian bridge over Northwest First Avenue to connect the buildings.

Attorney Iris Escarra, also representing the developer, said they have discussed a pedestrian bridge but said it would require a separate approval from the city commission. She said such a bridge may be an option.

Board member Ignacio Permuy said: “I commend you on an exceptional job, starting from the massing to the architecture of the buildings … I truly appreciate the screening on the parking garage.”

Mr. Permuy said he understood the others’ comments about the bright painted stucco but added, “I don’t mind the color scheme that much. I understand comments … but this shows levels of playfulness, it shows you enjoyed designing this project.”

 

Board member Robert Behar said: “I like the whole project. You’ve done a great job.”

A motion to recommend approval of the project passed unanimously, with recommendations including the developer considering connecting the buildings, perhaps with a bridge, and to consider materials other than stucco.

 

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Miami-Dade Property Appraiser Getting Sued Over Tax Bills

Author: Admin
Categories: Commercial News,Healthcare,Multifamily,Offices,Retail,Shopping Centers

Affiliates of megamall developer Triple Five, along with Terra and Starwood Capital Group are crying foul over property tax bills from Miami-Dade County.

A number of developers and investment groups have recently filed lawsuits against Miami-Dade Property Appraiser Pedro J. Garcia for their tax appraisals for the 2019 tax year. Others include the owners of Aventura ParkSquare, the SunTrust office building on Brickell and the Delano South Beach.

The latest suits come as Miami-Dade issued preliminary taxable values for 2020 earlier this month, based on assessments and market conditions on Jan. 1. More such suits could arise, as businesses continue to lose money and commercial real estate values fall due to impacts of the coronavirus pandemic.

“A litigation showdown is looming between property owners and the government over property taxes,” said attorney Josh Migdal, a partner at the Miami law firm Mark Migdal & Hayden, who handles real estate cases.

“Property owners are faced with budget shortfalls due to decreased revenue,” Migdal added. “However, a decrease in tax revenue collection due to the virus will require the government to maximize its property tax collection to prevent its own budget shortfall.”

Florida is heavily reliant on property taxes since the state does not have a state income tax.

Overall, preliminary property tax values across Miami-Dade County rose in 2020 compared to the previous year. The estimated taxable value for Miami-Dade County properties totaled $324.36 million, up 5.1 percent from 2019, according to the property appraiser’s office.

The biggest increases were in West Miami (14.6 percent); Florida City (13.8 percent); Homestead (10.8 percent); Hialeah and North Miami (each up 10.4 percent). Much of the boost in appraised value is due to new construction, the property appraiser’s report shows.

Yet, the property appraiser’s office said falling prices for condos properties in Bal Harbour, North Bay Village, Key Biscayne and Aventura will have a negative impact on property taxes in 2020. It also says that coronavirus is starting to impact commercial real estate values.

“I will do everything within my authority to assist property owners who are struggling during these unprecedented times,” Garcia said in a statement. “As the real estate market changes during 2020, my office will consider these factors and make the necessary corrections permitted by law.”

The property appraiser’s office declined to comment on the recently filed suits. Among them, Triple Five, the Canadian developer, sued over the assessed value of its property in west Miami-Dade, where the group plans to build American Dream Miami mall.

The developer alleges the property appraiser gave an agricultural designation for 46.5 acres of its property, but denied the agriculture designation for two parcels totaling 38.32 acres. The properties were valued at $5.13 million and at $1.5 million, respectively, which the Triple Five alleges are “amounts in excess of their agricultural values.” The developer alleges the entire property should be classified as agricultural for the 2019 tax year, according to the complaint.

Developer Terra is also suing over a 11,865-square-foot parcel it owns at 2765 South Bayshore Drive in Coconut Grove. The company alleges the property is based on appraisal practices that are not “professionally accepted appraisal practices nor acceptable mass appraisal standards” in Miami-Dade County.

A company tied to Starwood Capital Group sued the property appraiser over a hotel it owns at 6700 Northwest 7th Street near Miami International Airport. The complaint alleges the $20 million assessment does not represent the value of Springhill Suites Miami Downtown/Medical Center because it exceeds the market value.

An affiliate of Integra Investments is suing the appraiser over Aventura ParkSquare, its mixed-use project in Aventura. The development group claims the property appraiser misappraised its property and it should not owe $106,629 in property taxes. The 1.2-million-square-foot project, at 2920 Northeast 207th Street, was completed in 2018. It includes a 131-unit luxury condo building, a 100,000-square-foot Class A office component, 55,000 square feet of ground-floor retail and restaurant space, and a hotel.

Alliance Re Holdings, the investment group that owns the SunTrust building at 777 Brickell Avenue is suing the property appraiser over its appraised value at the office tower. The group, led by Adolfo Geo Filho, who is tied to Brazilian construction company Construtora ARG, alleges it should not owe $2.2 million in property taxes. Alliance Re Holdings alleges the “Property Appraiser’s assessment of the property is arbitrarily based on appraisal practices.” The Filho-led group purchased the SunTrust building for $140 million in February 2015. Tenants include SunTrust, Truluck’s and Quest Workspaces.

The owner of the Delano South Beach is suing the property appraiser’s office over the hotel’s $172,905 tax bill. A company tied to SBE Entertainment Group, led by Sam Nazarian, also alleges the property assessment is arbitrarily based on appraisal practices that are not professionally accepted nor acceptable in Miami-Dade County.

 

Source:  The Real Deal

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Will The Pandemic Kill Demand For Micro Units?

Author: Admin
Categories: Commercial News,Development,Leasing,Multifamily,Trends,Wynwood

For the past five-plus years, micro-units have been an intriguing subplot in the grand saga of commercial real estate. As demand for housing has boomed, especially in rent-burdened cities like New York and San Francisco, developers gambled that tenants would tolerate tiny units — some as small as 220 SF — for the chance to access cool neighborhoods at affordable rents. Now, though, some real estate experts wonder whether the coronavirus will kill, or at least cripple, the concept.

“Prior to COVID, there was a big surge in the urban areas, urban core, everyone wanting to live in micro-units, and now it looks like everyone wants to move to the suburbs, buy homes, get out of apartments,” FM Capital Principal Aaron Kurlansky said during a Bisnow South Florida webinar last month.

Social distancing is the antithesis of the tight-knit living style that micro-units and their cousin, co-living, promote. With bars and restaurants shuttered and remote work gaining more acceptance, renters may see fewer reasons to remain in city centers, where most micro-unit properties are.

Integra Investments principal Victor Ballestas said his company was considering developing micro-unit projects in the Wynwood and North Beach areas of Miami.

“You sort of have to go towards the micro-market in order to make the numbers work, because the overall rent was pretty high,” he said. But in the wake of the coronavirus, “those are the ones that we’ve probably pulled back the quickest.”

“We always had a little heartburn over the micro-unit model,” he continued. “And then [we] started hearing through the grapevine also that people that are moving into micro-units are, you know, moving out after the year. It’s pretty much like 100% turnover rate, which obviously impacts performance significantly.”

That prompted him to focus on multifamily deals on larger parcels instead, he said. Allen Morris Co. CEO Allen Morris, who also spoke on the webinar, said he shared Ballestas’ concerns.

“People do sometimes tend to move out after a year. They say, ‘Great, look how much money I’m saving!’ and then they say, ‘I can’t stand it! Get me out!’ So, it becomes like student housing — they all move out at the end of the year.”

Kurlansky said the small apartment complexes his company owns in South Beach and Miami Beach have underperformed compared to the larger units farther from downtown in his portfolio, which he attributed to unit size.

“People are in, then they’re out,” he said. “As we’ve played in the student housing space, as someone from my office told me, it’s like convincing your wife every year that she loves you. You go from 100 to zero to back to 100, so it’s an exhaustive process, and, you know, micro-units, it seems to me, are going to follow that kind of trend where you’re just kind of [going to] be in constant lease-up.”

 

Source:  Bisnow

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Multifamily Remains Strong Amid Health And Economic Uncertainty

Author: Admin
Categories: Commercial News,Development,Multifamily,Trends

As cities and businesses begin to reopen following weeks or months of stay-at-home orders, many sectors of the economy face the reality of a downturn. Amid that climate of uncertainty, multifamily remains strong as an investment opportunity.

Backed By History

Multifamily real estate has a long history of weathering economic storms. Last year, CBRE analyzed the effects of the past two recessions on the commercial real estate market and found that “multifamily outperformed office and industrial in the 2001 recession and all major property sectors (office, industrial, retail) during the 2008-2009 recession. Multifamily generally had lower total rent decline and more rapid post-recession rent recovery.”

Following the 2001 recession, multifamily recovered more quickly than other CRE categories and reached a much higher rent growth (10%) beyond its historical peak than either industrial or retail (4.3% and 5.7%, respectively).

The 2008-2009 recession sparked a steep decline in homeownership and demand for single-family homes, which has bolstered the multifamily market for the past decade. That demand has not shown signs of slowing in recent months.

The market has been predicting a downturn for the past several quarters. Although few could have expected a pandemic as the cause, industry experts have been ready for the shift from growth to maintenance for some time. The sector’s strong history of withstanding recessions gives those of us in multifamily confidence that we will bounce back and fare well in spite of challenges. In fact, my firm wrote about the subject in a 2019 newsletter, highlighting some fundamentals that contribute to multifamily success in all economic climates, including location, value-add investments and underwriting.

Effects Of The Pandemic To Date

While the market can expect a dip in occupancy following the pandemic, experts anticipate that it will be short-lived. Multifamily fundamentals will contribute to its ability to react to short-term fluctuations and long-term recovery. Covid-19 has had an impact on multifamily, but we can expect that the sector will continue to demonstrate its resilience.

According to one Globe St. writer, “Demographic trends favor continued multifamily demand. In addition, many businesses are now operating remotely so flexible shelter or renting versus owning remains desirable. And, graduating students with high debt will most likely choose to rent because securing a mortgage remains challenging.”

Recent reporting shows that renters in Class A and B properties have, in large part, kept up with their rent payments through the months of stay-at-home orders, in part because many residents in luxury to midtier apartments have a greater ability to continue their work remotely from home because many of these renters work in information- or technology-centric fields. Apartment communities located near strong professional business centers will continue to attract renters.

In our experience, professionally managed properties also have a greater ability to flex and meet the needs of those remote workers with high-quality technology investments, as well as creative solutions to in-unit and on-site workstations.

In addition, the following will support continued apartment demand:

• Interest rates are at record lows.

• With fewer people able to afford homeownership, tenants who under different circumstances might have become homeowners will remain apartment renters.

• With projected decreases in both homeownership and multifamily apartment deliveries, the current multifamily supply shortfall will increase.

• Resident turnover will lessen as people seek stability.

• Properties that have already deployed technology for marketing, leasing and resident services will be at an advantage in retaining and attracting renters in this environment.

Even as consumer spending tightens and retailers downsize or close entirely during downturns, people continue to need homes. Demand for apartment homes continues throughout all economic cycles. As the economy corrects in 2020, investors should feel a higher level of comfort with their multifamily investment than other investment products.

 

Source:  Forbes

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Moishe Mana Unveils First Phase Of Downtown Miami Development

Author: Admin
Categories: Commercial News,Development,Multifamily,Offices,Retail

Moishe Mana could use the 50 buildings he owns to develop a mass of towers in the core of downtown Miami, but he’s moving forward with a different vision.

Mana will renovate buildings to attract tenants and limit the construction to about four stories, said Bernard Zyscovich, CEO Zyscovich Architects, which crafted the plan with Mana.

Mana spent hundreds of millions of dollars in recent years snapping up property downtown, especially along Flagler Street. The area has some of the oldest buildings in the city. Many of those Mana-owned buildings have vacant space on the ground floors as he works on development plans.

Now, Zyscovich says Mana has a multi-phase plan for his downtown properties, and he’s ready to start construction this summer.

While many of Mana’s properties are zoned for 50 to 80 stories, that’s not his vision, according to Zyscovich.

“We are looking at spreading development throughout downtown instead of coming up with tall buildings out of the box,” Zyscovich said. “We don’t think downtown is ready for high-rise max buildings. We need to develop it as a neighborhood.”

Mana will begin by renovating the 13-story building at 155 S. Miami Ave. Built in 1980 and totaling about 166,000 square feet, the building formerly house federal immigration offices and it looks the part of a staid government office. Zyscovich said its facade will be stripped away and replaced with an artistic facade, which will resemble an optical illusion. The ground floor of the building is currently not accessible from the street and will be opened up so there can be a coffee shop and social space.

Mana wants the building to house office and technology tenants.

“It’s a good first project because there’s enough square feet to occupy the building with many new uses,” Zyscovich said. “We have financing in place and hopefully before the summer is out we will start construction, which is really deconstruction.”

Mana will follow with another project on the same block, at South Miami Avenue and S.W. 2nd Street. That includes a modest-sized new building along with renovations to the parking garage and some historic structures that could house restaurants.

The second area Mana will develop is Flagler Station, at 48 E. Flagler St., Zyscovich said. That will include new storefronts.

“It will become a cool neighborhood with the idea of providing urban services to innovators and technology people,” he said.

As the projects are completed, Mana plans to introduce a membership group called Mana Commons. Members would receive living quarters, office space, and discounts on local food and beverages, Zyscovich said.

“Moishe likes to say he’s not a developer,” Zyscovich said. “He’s a venture capital guy who wants to create something more innovative with real estate than renter space. We rent space, of course, but space oriented toward particular uses that might exchange rent for a venture capital interest.”

 

Source:  SFBJ

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Apartments With Ground Floor Retail Take A Hit On Rent Collections

Author: Admin
Categories: Commercial News,Leasing,Multifamily,Retail

COVID-19 precipitated shutdowns have crippled the retail sector and those troubles have been well-documented.

And the businesses that rent spaces on the ground floors of apartment buildings are generally not big stores or national chains and have had even more trouble meeting their obligations in recent months. As a result, multifamily owners have had to be forgiving in negotiating concessions with their retail tenants, even as rents from apartment tenants have generally held up better than expected.

“We know that small retail businesses have been hit very hard based on payroll figures,” says Kevin Cody, market analytics senior consultant for CoStar, based in Boston. “Their distress from the pandemic was likely amplified due to them having small cash buffers.”

The vast majority—over 80 percent—of the retail space located in apartment buildings can be found in urban areas, according to CoStar. In recent years, these areas were performing well due to strong demographic growth, employment growth, and high levels of tourism, says Cody.

That strong performance stopped with the spread of the coronavirus in early 2020.

“Retail assets in dense, urban areas have been heavily impacted by the current period,” says Cody. “People are working from home at a high rate and tourism has greatly diminished.”

Not surprisingly, the retail tenants that have held up the best for apartment owners in recent months are those that were deemed essential. Drugstores, convenience stores, restaurants equipped to do takeout business are among tenants that been able to continue operating amid the vary levels of shutdowns throughout the country.

From the landlord side, apartment owners have largely been willing to work with their retail tenants on an as-needed basis.

“We have heard that owners of retail space are offering rent deferrals or relief to some tenants that have been impacted by the virus,” says Cody.

“There [usually] isn’t a public balance sheet or strong capitalization,” adds Todd Siegel, senior vice president, CBRE, based in Chicago. “The solution to mutual success requires an individualized and bespoke approach.”

Fortunately, apartment properties generally don’t rely much on the income from  small retail tenants.

“On a pure, net operating income basis, it shouldn’t skew the balance sheet to warrant a default,” says Siegel. “Mixed-use retail in general doesn’t drive the overall value [of an apartment property].”

The managers of apartment properties are also not yet desperate to squeeze money where ever they can get it. That’s because the income from apartment rents has remained strong, so far.

“I would expect apartment owners to have a greater ability to offer rent deferral or relief for their retail tenants, due to the greater rate at which they have been able to collect rent from apartment renters,” says Cody.

As for down the line, while they will need to implement social distancing measures until a vaccine or reliable treatment becomes available, multifamily owners will continue to include ground-level tenants.

“Mixed-use was a strategy we really liked heading into the pandemic,” says Cody. “In the long-term we still believe in it… we expect urban areas to come back, but in the near to medium term, retail will experience reduced spending and foot traffic. We expect migration to slow; there has been a shift to working-from-home, which will sustain to some extent; and tourism has slowed, which will take time to recover.”

 

Source:  NREI

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Construction Of Mixed-Use Development In Miami’s Wynwood District Tops Out

Author: Admin
Categories: Commercial News,Development,Multifamily,Offices,Retail,Wynwood

CIM Group announced that it has topped out construction of the two eight-story towers set above the ground floor retail and three levels of office space which comprise CIM’s significant mixed-use development at 2201 N Miami Avenue in the Wynwood Arts District of Miami.

The development, which is a major contributor to the evolving Wynwood district, includes approximately 60,000 square feet of office space, 27,000 square feet of street-level retail and studio space, 257 apartments and approximately 480 parking stalls. The 1.78-acre site spans a full city block bounded by NE 22nd and NE 23rd Streets, with approximately 250 linear feet of frontage on N. Miami Avenue to the west and fronts the Brightline Rail to the east.

Three office floors are located above the street-level retail and studio space and extend across the full block creating expansive office space that allows for flexible configurations and the ability to divide the approximately 20,000-square-foot floor plates into office suites. The newly-constructed raw space provides the user the ability to design interiors to meet individual needs as well as a fresh approach to delineated employee spaces and distancing that reflect the demands of our new environment. Abundant floor-to-ceiling windows infuse the space with natural light, while 12-foot high ceilings add to the spaciousness.

Set above the retail and office base are two eight-story towers, at the northern and the southern ends of the block, providing contemporary apartments in a variety of sizes and floor plans, from studios to three-bedroom units.

The development has a central position in Wynwood, a distinctive area in the urban core of Miami, nationally recognized as a center for arts, innovation and culture, as well as one of the major settings for Art Basel, and one of the world’s largest street art installations. The ground floor retail space will accommodate a variety of shops, cafes and restaurants, galleries or other businesses that desire a prominent location in Wynwood.

The Wynwood Arts District has been transitioning from an industrial zone to a flourishing center for art, fashion and creative enterprises, with rehabilitated factories and warehouses repurposed for galleries, studios, bars, workshops, and offices — an evolving neighborhood, which includes more residential offerings.

The project is anticipated to be complete in mid-2021. CIM acquired the fully-entitled site in October 2018.

 

Source:  BusinessWire

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Why Multifamily Rents are Holding Up Better than Expected

Author: Admin
Categories: Commercial News,Multifamily,Trends

Despite mass unemployment and underemployment, multifamily rental payments have held up far better than many industry experts expected amid the economic wreckage caused by the spread of the novel coronavirus.

More than 36 million people have filed for unemployment in recent weeks and millions of others working fewer hours and taking reduced pay. That’s amid new estimates that real GDP growth for the second quarter will come in at -42.8 percent. Toss in a backdrop in which, as of December, 69 percent of Americans had less than $1,000 in savings accounts, and it would seem to paint a bleak picture on the ability of renters to meet their obligations.

Yet 87.7 percent of apartment households made a full or partial rent payment by May 13, according to a survey of 11.4 million professionally-managed apartments across the U.S. by the National Multifamily Housing Council (NMHC). That’s up from the 85.0 percent who had paid by April 13, 2020, during the first full month of the crisis caused by the spread of the coronavirus. That’s also down from the 89.8 percent of renter households who made rental payments the year before, when the U.S. economy was still strong and long before the coronavirus began to spread.

“Once again, despite the economic and health challenges facing so many, we have found that apartment residents who live in professionally-managed properties are meeting their obligations,” said Doug Bibby, NMHC President.

So what gives?

There are a few things at work. For one, NMHC’s dataset is weighted towards renters more likely to be able to continue working their jobs remotely and those with some savings as a backstop.

NMHC gathered its data from five leading property management software systems: Entrata, MRI Software, RealPage, ResMan and Yardi. It does not represent all apartments in the U.S. For example, the data does not include many government subsidized affordable housing properties.

“These excluded properties are the ones more likely to house residents experiencing financial stress,” says NMHC’s Bibby.

The data also does not include smaller apartment properties that typically don’t use those software system.

“There are thousands and thousands of buildings with 10 units, 20 units, 40 units,” says John Sebree is the senior vice president and national director of Marcus & Millichap’s Multi Housing Division. “They generally don’t have property management software…. However, they generally have personal relationships with their clientele. [So,] their collections are a little better.”

In all, the percentage of renters who made full or partial payments at less-expensive, class-C apartment properties continues to be lower—by about five percentage points—than the percentage of renters at class-A or mid-tier class-B properties who made payments.

“There’s a little more financial distress among residents of lower-priced Class C properties,” says Greg Willett, chief economist for RealPage, Inc. “Many of those who held jobs in hard-hit industries like hospitality and retail stores live in the nation’s class-C apartment stock.” These families often earn lower incomes and have little or no emergency cash reserves to deal with income interruptions, says Willett.

Still, even in class-C stock, the percent paying rent remains high.

A big reason: The expanded federal $600-a-week unemployment benefits put in place as part of the CARES Act on top of whatever each state normally pays out has left many workers making more money now than when they were in their jobs, enabling them to keep up with rental payments.

As an analysis from Fivethirtyeight.com explained, Congress arrived at the $600 a week figure by looking at the national average unemployment payout of $370 per week and the national average salary for unemployment recipients of $970 per week. So the goal of the $600 was to make up the difference.

But given the income inequality in the U.S., far more workers’ wages are below that average figure than above. The net result has been that for millions of workers, being unemployed has led to a rise in their weekly pay. The multifamily sector has been a backdoor beneficiary of that federal largesse, since it has translated into more people being able to pay rent than one would expect with an official unemployment rate approaching 15 percent.

“The enhanced unemployment benefits provided by the CARES Act are helping the financial burdens of those who have lost their jobs,” says Willett. “These households appear to placing rent payments as a top priority.”

The issue going forward, however, is that the expanded benefits are scheduled to expire at the end of July. So the concern multifamily property owners were feeling before the CARES Act was enacted could rise anew later in the summer if the economy has not sufficiently recovered.

“As current federal support programs begin to reach their limit, it will be even more critical for Congress to enact a meaningful renter assistance program,” says Bibby. “It’s the only way to avoid adding a housing crisis to our health and economic crisis.”

Regional differences

Rental payment rates are also varying by region.

“Rent payments tend to be best in the places where the local economies are heavy on the tech sector or government defense tend to have the high shares,” says Willett. May’s best collections through about the middle of May 2020 are in Sacramento, Calif.; Virginia Beach, Va.; Riverside-San Bernardino, Calif.; Portland, Me.; Portland, Ore.; Denver, Colo.; and San Jose, Calif. “Some 93 percent to 94 percent of households in these places have paid their rent.”

Trouble spots include New York City; New Orleans and Las Vegas. These are locations where the spread of COVID-19 has been especially challenging or where tourism is particularly important to the local economy. The payment figures also are well under normal in Los Angeles, says Willett. Higher-cost markets like New York and Los Angeles are also cities where the expanded federal unemployment payouts are less likely to result in unemployed workers making more than they did while they had jobs.

 

Source:  NREI

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Multifamily Owners Go Virtual to Get Leases Signed Amid COVID-19

Author: Admin
Categories: Commercial News,Leasing,Multifamily,Trends

Virtual and augmented reality have been available for some time and had seen sporadic use, but the mass COVID-19 precipitated shutdowns nationwide have led to rapid adoption of the technologies by multifamily owners in order to get leases signed during the pandemic.

“Owners of apartment buildings across the U.S. are looking for new ways to have contactless touring… anything to decrease one-on-one touring,” says Georgianna Oliver, founder of Tour24, a technology company based in Medfield, Mass.

New technologies let apartments shoppers to check out potential homes without ever being in the presence of a leasing agent. That includes virtual tours, video chats and even “self-guided tours” that let potential renters make an appointment to see a real, physical apartment without a real, physical leasing agent being present.

These technologies are likely to be helpful, even in places where the rules of social distancing, meant to slow the spread of the virus, have begun to relax. “It’s here to stay for some time,” says Dan Russotto, vice president of product for Apartments.com, based in Atlanta. “Even as things re-open, there are going to be people who want to practice social distancing.”

Apartments.com creates virtual tours in which potential renters can move through a three-dimensional computer rendering of a model apartment.

Potential tenants can turn around to get a panoramic view, back into and out of rooms, and even look out of windows. They can take these virtual tours from the comfort of their own homes. The effects are similar to those in computer games in which players move through three-dimensional spaces. Apartments.com uses its “Matterport” technology to wrap a three-dimensional computer rendering of a model apartment with photographs of that model apartment.

These virtual tours are becoming easier to create. Apartments.com used to have to send photographers to create the specialized images needed to create a virtual tour. The company is now creating technology that allows property managers to take their own pictures.

In May 2020, Apartments.com also plans to introduce an online leasing office. Visitors to its website will be able to press a button on the webpage to start a video chat with a leasing professional.

Other property owners and property managers are using video chats and online tours to attract potential renters.

“We have always used these tools in our lease-up efforts… We are ramping it up,” says Jordan Brill, partner at Magnum Real Estate, based in New York City, the center of the coronavirus outbreak in the U.S.

The firm is using virtual tours to lease-to-own condominiums at it new-constructed properties at 196 Orchard in the Lower East Side neighborhood and 100 Barclay in the Tribeca neighborhood.

Potential residents can also now let themselves into an apartment and receive information about the unit and the community without needing the presence of a human leasing agent.

“In the last couple of months the interest in the product has grown tremendously,” Tour24’s Oliver says. The firm launched its technology less than two years ago. Today it provides self-guided tours at over 100 apartment communities, averaging 250 units each.

Apartment shoppers sign up to tour an apartment online and chose an option to take a self-guided tour. These potential renters download Tour24’s app onto their smartphones. They submit an image of a picture ID and a credit card number, which is verified by Tour24’s system.

At the time appointed for the tour, electronic locks let them into the apartment. The geo-location function on their phones track their location as they move through the apartment and the tour the amenities in the community, while listening to recorded information through the Tour24 app.

“You can have a message for the kitchen and another for bedroom,” says Oliver. “We provide a curated experience similar to a museum tour.”

So far, existing residents have not been too worried about having potential residents visiting their community unattended.

“It hasn’t been an issue,” says Oliver. “With all of the short-term rental activity and deliveries, there is already a lot of traffic in and out.”

 

Source:  NREI

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Coronavirus Could Set Back The Pro-Density Movement

Author: Admin
Categories: Commercial News,Development,Leasing,Multifamily,Offices,Trends

The movement toward dense, transit-adjacent development picked up steam over the last few years, but the coronavirus pandemic might prove to be a big setback.

The pandemic has forced a quick national pivot toward telecommuting, which some think could undercut the utility of living near transit, according to the New York Times. If you don’t need to go into the office so often, why not spread out a bit?

Density advocates and lawmakers will likely find the pandemic gives rivals new ammunition to argue against their push for more zoning.

Some pro-density lawmakers, like California State Sen. Scott Wiener cautioned that there will still be a need for housing in his state after the pandemic subsides. Wiener has been trying to pass a statewide transit-oriented development bill for years and presented his most recent version in early March, just before coronavirus took the state by storm.

Developers meanwhile have to weigh consumer interest in such housing. Bob Youngentob, CEO of Maryland-based developer EYA, said his firm might switch its focus from more dense transit developments to townhomes if demand for the former falls enough.

“The forced interaction of sharing doors and elevators has caused some anxiety,” Youngentob told the Times. “Townhomes, where you come in and out of your door, and you know you are the only one touching your door handle, provide some comfort.”

Those who continue to build dense projects might reconsider their design strategy for public health — walkways could become wider and open spaces larger, for example.

 

Source:  The Real Deal

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