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Archives for April 2018

How Demographic Shifts Are Disrupting The Multifamily Market

April 23, 2018 by CARNM

The demand for amenities—everything from luxury dog spas to Internet-connected collaborative workspaces—is creating a real estate race among well-capitalized developers of next-generation apartment buildings.

The unexpected is business as usual in New York real estate, where priorities and plans can shift on a dime. But one development firm I know of recently made a move that had veteran industry players taking note of a major change we’re seeing in the industry—it delayed the official opening of a new apartment building to install more amenities. It’s just one more way demographic shifts are having profound effects on the multifamily housing market. The demand for amenities—everything from luxury dog spas to Internet-connected collaborative workspaces—is creating a real estate race among well-capitalized developers of next-generation apartment buildings. The demand by Millennial consumers for so-called “smart buildings” with a trove of on-site perks is driving a reinvention of multifamily stock. Investors need to recognize these evolving demographics and be responsive to a new wave of demands.
A demand for amenities Amenitization is one of the new keywords for investors in the red-hot multifamily market. It reflects the fact that, though the square-footage of an average apartment unit may be smaller, consumers are still spending more time within the building in spaces that often include movie theaters and other social areas.
The race for developers to out-do one another with amenities owes partly to the age of consumers. During Capital One’s fourth annual survey at ALM’s RealShare Apartments Conference last fall, 72% of real estate executives predicted that technology-savvy Millennials will have the greatest impact on multifamily demand this year, followed by Gen-Xers (16%) and Baby Boomers (12%).
The waning of the big suburban house This is not to say that other age groups aren’t having their impact. Developers recognize the influence of older Americans, whose housing preferences are also disrupting multifamily.  The share of the American population over age 65 will shift to 21 percent from 13.7 percent by 2050, according to Real Trends: The Future of Real Estate in the United States. The report, sponsored by Capital One, was conducted by the MIT Center for Real Estate and the Urban Economics Lab.
The Real Trends report reveals that today’s older consumers are demanding higher quality housing and retirement communities than their predecessors. In addition, many Baby Boomers and empty-nesters don’t want to own enormous suburban houses anymore. They increasingly want to be in revitalized city centers and they are trading square footage to be close to the cultural venues and restaurants that urban cores have to offer.
The Real Trends study also shows that demographic shifts are ushering in a new era of advanced multifamily housing – from sustainable building materials to innovative layouts – and construction companies and real estate investors are adapting to these new market realities.
New tax law is fueling the multifamily market In addition to the interest in urban centers, new tax law is also presenting many opportunities for investors. New Federal tax law will surely impact multifamily developments – mainly in coastal markets. Although most of the tax issues have yet to be worked out, home ownership will become less attractive largely due to the elimination of certain deductions. With cheap financing available, investors are betting on increased multifamily demand.
The MIT report details other factors that are stoking demand for new multifamily housing. The global economic crisis of a decade ago slowed down housing construction. Experts predict that, over the next decade, the regular demand for new housing, plus filling the vacuum created by the recession, could require more than 1.65 million units a year. Indeed, America would seem to be at the beginning of an extraordinary multifamily housing boom.
Multifamily construction will also get a boost from new types of architectural designs specially aimed at single-parent consumers. According to the Capital One/MIT report, more than a quarter of American children live in single-parent homes, usually headed by a mother. An additional 15 percent of children live with one parent and a second-marriage spouse. Now more than ever, single mothers juggling careers with childcare are looking for multifamily buildings that offer daycare, babysitting, healthy dining, and even homework assistance.
Shaping the future of the multifamily market Plenty of new multifamily housing, infused with innovative amenities, has already been built in urban centers. Cities continue to become safer and transit upgrades are drawing more consumers downtown. Corporations, recognizing urban cores for their concentration of intellectual capital, are continuing to locate their headquarters in cities, reversing a decades-old trend of building sprawling corporate campuses in suburban communities.
Although it is true that a geographic shift to cities has resulted in compressed cap rates, there’s nevertheless a certain amount of risk to looking elsewhere, including tertiary markets. Investors may tolerate slightly lower returns in urban cores because investments in new apartment developments there are more stable.
The changing face of the American city, a steady demand for building amenities, and a robust economy are attracting multiple generations to a new class of multifamily housing. As technology continues to evolve both amenities and building practices, it’s an exciting and important time to be involved in multifamily. Which is why now more than ever it’s crucial to have a financial partner able to navigate shifts in the multifamily landscape.
By: Benjamin Stacks (GlobeSt)
Click here to view source article.

Filed Under: All News

Rio Rancho Estates: Paradise lost

April 22, 2018 by CARNM

Rio Rancho Estates: Paradise lost
On a map, the unincorporated land in Sandoval County to the west of Rio Rancho looks like a sprawling neighborhood. Numbered streets crisscross the terrain to form a precise grid stretching out to the arid Rio Puerco.
But a trip out there reveals a very different sight.
Street signs have been torn down, or never existed, and so GPS is the only way to identify the dirt roads that weave over pitted terrain. Prickly pear and cholla cactus crawl across low hills interspersed with squat juniper trees.

In the 1960s and ’70s, the AMREP Corp. parceled out one-half and one-acre plots of land to be sold to far-flung buyers. But today, few hints of development exist. Instead, the 43,629-acre Rio Rancho Estates Area from Southern to Northern boulevards SW and beyond, west of the city line, is largely vacant.
Mobile homes and trailers, mainly powered by generators and with wells or storage tanks for water, get fewer and farther between as you head west, and 657 miles of well-maintained dirt roads have helped the area become a popular spot for illegal dumping, said Lt. Keith Elder of the Sandoval County Sheriff’s Office.
Elder said that almost 40 percent of all stolen cars that were recovered throughout the county last year were found within 21 square miles. Most of those, he said, were stolen from Albuquerque.
And, since August, the bodies of two slain Albuquerque residents have been left there – one burned, the other buried in the sandy, rocky terrain.
Otherwise, the land is used for recreation both legal and illegal – ATV riders zoom around curves and hills, and gun enthusiasts empty their rifles at makeshift targets.

‘Sunshine paradise’
Rio Rancho was founded on a scam, County Commissioner Dave Heil said matter-of-factly when asked about the land in his district (District 4) that extends outside the city of Rio Rancho to the Rio Puerco.
Contemporaneous clips and history lessons tell the tale of how AMREP sales agents used brightly colored ads and aggressive pitches to ensnare thousands of buyers from around the world into the dream of owning a piece of the West. Some of those plots of land were incorporated into what became the city of Rio Rancho.
But other new landowners soon learned they had bought “semi-arid desert grazing land” that lacked water, utilities and other services, according to a federal indictment of four top AMREP officials as reported by the New York Times. Those officials were convicted in federal court of fraud, according to an article published in 1977.
Heil was one of those land owners. He said he was in his 20s and living in Cleveland, Ohio, working at his family’s business, when he saw an ad for Rio Rancho Estates.
He still has the ad – well-coiffed, sun-soaked men and women lounge poolside or in the spacious lawn of a model home. The area is the “sunshine paradise” of the great Southwest, a “hunter’s paradise” and a “carpet of green.”
He bought five plots of land in a unit nearly adjacent to the Rio Puerco.
But Heil never developed that land and instead traded in the plots over the years to finance a home closer to town.
“It’s very barren out there,” he said. “I never even saw my lots. Like many people who had come out here, most people never find their actual lots, just know they’re out there.”
These days, a spokeswoman for Sandoval County estimates that about 1,200 people live in the area, based on a 2010 estimate of more than 500 homes in the area. She said the county doesn’t have a specific plan for the area.
In 2014, the county passed the Rio Rancho Estates Area Plan to lay out how the space should be divided into different uses in the future.
According to the plan, the state owns 1,100 acres of two truncated parcels of land, and the rest is divided into thousands of plots. Approximately one-third of those plots are still owned by AMREP, the rest are owned by individuals throughout the world.
The Rio Rancho Estates Area Plan addresses neighborhood preservation, land acquisition, water and environmental conservation, private sector development, limited commercial redevelopment and the potential for government intervention in larger-scale redevelopment.
Crime scenes

Although the barren expanse is largely ignored by the public on a day-to-day basis, it has cropped up in the news and court documents related to two separate gruesome murders out of Albuquerque in the past eight months.
One evening last August, around sundown, detectives say two men and a woman drove a Chevy Silverado king-cab to an off-roading area near 21st Street near Northern to bury the mutilated body of a man they are accused of killing over a drug debt. After they buried the body, police say their older red pickup truck got stuck in the sand, and a good Samaritan of sorts ended up digging them out.
Albuquerque homicide detectives later took a couple trips to the area themselves, driving up and down dirt roads, eating trail mix and searching – based in part on what the good Samaritan told them – for the spot where they believed 41-year-old John Soyka was buried.
In mid-September, they found his body buried in a shallow grave off a wide sandy road leading to the Rio Puerco. Six months later, APD crime scene tape remained ensnared in cactus spines at the scene.
Chase Smotherman and Mariah Ferry are charged in Soyka’s death. Mitchell Overhand, notorious for killing his parents as a teenager in the 1980s, was charged with tampering with evidence, because police believe he helped them bury the body. Their trials are pending.
Then, in January, another homicide investigation began about five miles southeast.
Sandoval County sheriff’s deputies found the charred body of 65-year-old Marilyn Gandert of Albuquerque on a mattress by the side of 33rd Street, south of Ninth Street.
Although the roads are easy to find using GPS, the shoulder of 33rd Street is a barren dirt plot, populated only by shrubs and stones. A small memorial of candles and a cross marks the spot where Gandert’s body was found.
No one has been charged in her death.

Shooting range
Some days, gunfire is a near constant echo as recreational shooters risk fines or even jail time if they’re caught by law enforcement. Piles of shotgun shells and bullet casings cluster on overlooks and in shallow gulleys.
On a chilly Friday afternoon, a Journal reporter and photographer accompanied Lt. Elder as he drove up and down the dirt roads in an unmarked Sandoval County Sheriff’s Office SUV.
When Elder spotted a pickup truck parked in a wide rut, he made a U-turn and approached, police lights flashing.

Four young men from Albuquerque, ages 18 to 20, sheepishly handed over the AK-47 they had loaded for target practice. Elder ran the weapon in a national database to see if it had been stolen (it hadn’t) and counseled one of the men who is enlisted in the military against getting in trouble.
He let them off with a warning.
“They looked like they’re pretty decent kids,” Elder said as he drove off. “Let them go merrily on their way.”
Elder said illegal shooting is one of the biggest problems in the area and one of the most frequent calls from nearby residents. But, he said, marksmen are just as likely not to get caught.
“Unless someone drives up on you, or sees you shooting, or one of these residents hears it, you could basically go undiscovered,” he said.
But dumping is also a problem.
Burned out carcasses of stolen, or at least unwanted, vehicles dot the landscape. So do rusted ovens. Old, rotten boats. Splintered televisions.
Over the past five years or so, the sheriff’s office reported that between 25 percent and 50 percent of all recovered stolen vehicles in the county have been found in 21 square miles of the Rio Rancho Estates Area. In 2017, 11 stolen vehicles were recovered there, compared with 18 in the rest of the county, an area 177 times its size.
Many of those vehicles, Elder said, are damaged beyond recognition, making it impossible to know if they were reported stolen. He said it’s often more trouble than they’re worth to remove them.

Life off the grid
Those who do live in Rio Rancho Estates, in modest and isolated homes, tout the peace and quiet – despite the occasional target shooting – and the distance from the big city crime and commotion.
A man and his dog collect brush off the side of a dirt road. A pack of dogs prowls around a small property as their owners fix a broken down truck in the front yard.
A teenage boy peddles his bike as hard as he can up a hill and into a brilliant sunset as he races to borrow tools from his neighbors before night falls.
Alfredo Sandoval, who works for a landscaper in Albuquerque, told the Journal he bought his land 16 years ago for $18,000 and has built it up slowly as he and his wife raised three children. The oldest is about to graduate from Rio Rancho High School, eight miles away.
His property is located on Northern, closer to the edge of the city than the undeveloped mesa. But he still has to haul water from a well every other week even though a utility-size water tank looms within easy eyeshot. It’s six miles to the closest gas station.
Today, Sandoval’s land includes a gazebo, complete with a picnic table, patio chairs and lights, and a fountain that bubbles in the front yard. His double-wide trailer sits next to a tool shed, and a 1-year-old Bernese mountain dog lazes about next to the property’s adobe wall.
“All you hear at night are coyotes,” Sandoval said, speaking in Spanish.
By: Elise Kaplan (ABQ Journal)
Click here to view source article.

Filed Under: All News

NM Tops Nation in Wind-Energy Growth

April 17, 2018 by CARNM

New Mexico ranked as the nation’s fastest-growing state for wind-energy construction last year, according to a new report from the American Wind Energy Association.
The state added enough new turbines to produce 571 megawatts of electricity, growing installed capacity by 51 percent to 1.68 gigawatts, according to the association’s 2017 annual market report, released this morning in Santa Fe. That’s enough electricity to power about 422,000 average U.S. homes every year.
And New Mexico could maintain front-running status for another couple of years, with 1.7 GW of new wind construction projects now in the pipelines for installation through 2020, said association spokesman Evan Vaughn.
“New Mexico is poised to double its wind generation in the near term,” Vaughn told the Journal’s editorial board on Monday. “It had the fastest growth rate of any state in the nation in 2017. There’s tremendous momentum underway.”
The Washington, D.C.-based association chooses a different state each year to unveil its annual report. It released this year’s study in a press conference at the Roundhouse to honor the state for its leadership in wind generation.
Nationwide, installed capacity grew by nearly 9 percent last year to nearly 89 GW. That’s enough electricity to power about 27 million homes, representing about 6.3 percent of the country’s total generating capacity.
New Mexico now derives about 13.5 percent of its electricity from wind energy. It’s one of only 14 states where wind turbines provide more than 10 percent of total generation, although some states use much more, with up to 30 percent in Iowa, Kansas, Oklahoma, and South Dakota.
The association reports about $145 billion in wind energy investments nationwide over the last decade, including $11 billion last year. About 105,000 people now work in the industry, including 23,000 in manufacturing.
New Mexico has attracted about $3 billion in investments to date, with more than 3,000 people employed here.
“Employment runs the full gamut, from front-end field workers who assess wind resources and work with local communities to construction jobs and long-term employment for operations and maintenance folks,” said John Hensley, association director for research and analytics. “Wind technicians make up one of the two fastest-growing jobs nationwide alongside solar installers.”
It particularly benefits rural communities, which absorb about 99 percent of investment, Hensley said. It also generates substantial local and state taxes, plus income for land owners.
In New Mexico, property owners now earn between $5 million and $10 million annually, said Interwest Energy Alliance Executive Director Sarah Cottrell Propst.
“It’s an economic development tool that helps to diversify the economy with competitive, high-paying jobs,” she said.
It’s also good for the environment, offsetting 189 million metric tons of carbon emissions last year, or the equivalent of 40 million cars. In New Mexico, it offset about 466,000 metric tons, or about 99,000 cars.
By: Kevin Robinson-Avila (ABQ Journal)
Click here to view source article.

Filed Under: All News

Marketing to Multiple Generations

April 16, 2018 by CARNM

Today’s renter pool comprises a wide range of ages that can pose challenges to developers, owners and operators. Eric Clark of Bainbridge Cos. shares four tips on how communities can appeal to anyone.
Millennials, Millennials, Millennials. Peruse some industry trades or attend a multifamily conference, and you might get the impression that the renting population consists entirely of this generation.
The focus on Millennials in multifamily is certainly understandable. According to the Pew Research Center, in 2015 Millennials became the largest generation in the U.S. workforce. Furthermore, they are set to become the largest living adult generation next year. So, of course, they are at the very heart of the renter pool.
However, the truth is that renters are a diverse group. As Baby Boomers age, they are selling their homes and opting for the ease and convenience of apartment living. And as Generation Z reaches early adulthood, they are emerging as a sizable segment of the renting population. The post-Millennial cohort will account for 33 percent of the global population by 2020, and they already contribute $44 billion annually to the U.S. economy, according to Commscope.
Clearly, multifamily developers—unless they are building communities specifically targeted at seniors or students—are tasked with creating and marketing properties that appeal simultaneously to different generations. How can they go about doing that?

FLEXIBLE COMMON SPACES

Baby Boomers, Generation X, Millennials and Generation Z all enjoy common areas at apartment communities, but they want them for different purposes. For example, Baby Boomers love onsite group activities that allow for ample socializing. Think dance lessons, wine tastings, cooking classes and brunches with room for large groups to sit together. Gen Z’ers, on the other hand, prefer the “alone together” concept. Yes, they want to spend time in the community clubhouse, but they want to be in their own nook while on their mobile device.
The result is that developers have to strike that balance of designing a community’s common areas so that they can easily accommodate group activities but still allow individuals to use them and have their own space when a group activity isn’t taking place.

UNDERSTAND THE DIFFERING TECHNOLOGY NEEDS

Today we all use technology. Suffice to say, though, each generation has a different relationship with mobile devices and technology.
Millennials grew up immersed in the Internet. Gen Z—they haven’t known a world without the Internet, instant access and as such, they are absolutely wedded to their smartphones and mobile devices. Communities need to offer blazing-fast Internet speeds in both common areas and apartment homes. Similarly, younger residents are perfectly happy, and even prefer, to fill out maintenance requests online and then communicate with the service team exclusively via text afterwards. In fact, they often view phone calls related to the requests as unwelcome encroachments on their personal time. They want to control when and how they communicate with their community; be sure your technologies and platforms can meet that demand.
At the opposite end of the spectrum, Baby Boomers are generally happy to complete that initial service request online, but afterwards they want to speak with the technicians and leasing staff as the work order proceeds and is completed.
On another technology note, apartment owners and operators looking to appeal to a broad swath of renters should outfit their units with enough smart-home technology—say, Nest thermostats and smart locks—to be attractive to younger renters but they shouldn’t go so overboard that they intimidate the older crowd.

CHOOSE THE RIGHT LOCATION

As the old saying goes, real estate has always been about location, location, location. That’s especially true in today’s multifamily industry.
Overall, renters have become more inclined towards in-town living in recent years, but downtown properties can be tough to build in a way that appeals to a mass audience. Instead, development sites that are located about 10 minutes away from a central business district can offer real advantages. These less expensive and bigger sites can allow developers to build units at a size and with a finish level that attract residents in their mid-30s and older, while still allowing younger renters to be within an easy and inexpensive Uber or Lyft ride of downtown. These locations also provide the walkability and proximity to jobs that renters of all ages are seeking.

MARKET STRATEGICALLY

Each generation responds to different marketing tactics. But when trying to generate leads for an apartment community, it’s best to heavily consider geography. For instance, in urban markets that skew younger, chat bots and robust text campaigns will prove to be invaluable tools. In southern suburban areas, you’re going to need to focus more on face-to-face hospitality, regardless of the age of prospects.
Also, don’t underestimate the power of marketing methods that some in the industry might be quick to dismiss as “old school.” You might be surprised at how younger Millennials and Gen Z’ers respond to guerrilla marketing. For example, I’ve seen communities enjoy considerable results from having a leasing agent set up shop in a local coffee house, unobtrusively strike up conversations with the patrons and even offer to pay for their coffee.
Today’s renter pool comprises a wide range of ages. The diversity in age can pose some real challenges to developers, owners and operators. But in the end, these are challenges that, with planning and strategic thought, can be readily overcome.
By: Eric Clark (MHN)
Click here to view source article.

Filed Under: All News

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