12 minute read
Mold 101: Identification, Remediation, and Prevention
ONLINE EDUCATION
Mold can be an environmentally hazardous and financially costly problem for rental housing providers. It often grows undetected — behind walls, under floors, inside ceilings, and in other hard to see places. If left untreated, some molds can become toxic and are believed to cause significant health problems, including: rashes, chronic fatigue, nausea, cognitive losses, hemorrhaging, and asthma. Taking steps to prevent mold, before it becomes a problem, is important. Taking steps to eliminate it, once discovered, is critical. Join us for this informative webinar as we address the following topics: • Water Damage • Facts about Mold • Mold Health Risks • Mildew vs. Mold • Toxic Mold • Mold Remediation Process
Presented By:
Date: Tuesday, May 4, 2021 Time: 10 a.m. Location: Zoom Webinar Cost: $20 members $45 non-members
Sponsored By:
Pulse on the Marketplace
A Quarterly Review of Key Financial Data for the
Apartment Data
Total Apartment Sales Transactions
Total Sales Volume
4th Quarter 2020 Update
Orange County
4th Qtr 2018 4th Qtr 2019 4th Qtr 2020 4th Qtr 2018
USA 4th Qtr 2019 4th Qtr 2020
36 40 55 3,573 3,915 3,775
$543 Million
$419 Million
$751 Million $53.1 Billion $52.3 Billion $51.3 Billion
• Actual Average Cap Rate 4.07 4.22 4.12 5.67 5.45 5.28
• Average Gross Rent Multiplier 17.56 15.01 14.77 13.97 13.84 13.43
• Price per Square Foot $425.21 $399.21 $356.39 $158.91 $174.79 $168.79
Data Source Qualifications
Source: Co-Star www.costar.com 5 unit + properties
• Price Per Unit $368,398 $337,773 $332,709 $159,071 $168,202 $170,851
Average Rent Level
$2,080 $2,147 $2,139 $1,364 $1,421 $1,410 Source: RealPage, Inc. www.realpage.com Annual Effective Rent Growth 2.6% 3.0% –1.0% 2.9% 3% –1.1% Primarily 100 unit + properties; “concession percentage” is the Concession Percentage 1.9% 2.4% 3.9% 3.4% 3.4% 5.7% percentage of units offering concessions.
Average Occupancy Rate
Average Monthly Employee Wages** 96.2% 96.4% 96.8% 95.4% 95.8% 95.6% Source: RealPage, Inc.
$4,770 $4,961 $5,247 $4,188 $4,287 $4,484 Source: US Bureau of Labor Statistics; uses private sector wages, last month of quarter;
not seasonally adjusted
Apartment Building Permits Issued by total # of units (not buildings)** 2–4 Units 497 466 463 8,900 10,300 12,700 Source: U.S. Census Bureau: Privately owned, 5+ Units 3,7930 5,390 4,399 110,800 129,700 110,500 new construction
Consumer Price Index*
Unemployment Rate** 3.2% 3.0% 1.5% 1.9% 2.3% 1.4%
4.12% 5.9% 9.9% 3.9% 3.6% 6.7% Source: U.S. Bureau of Labor Statistics; % change using last month of quarter versus same month one year previous Source: U.S. Bureau of Labor Statistics; reflects last month of quarter
Pulse on the Marketplace is produced and edited exclusively for Apartment News by Nick Lieberman, President, Bona Fide Mortgage and AAOC Board Member. For questions or comments: (949) 651-0999, or nlieberman@cox.net
* For CPI, “Orange County” includes Orange, Los Angeles, and Riverside Counties. ** For Apartment Building Permits, Average Monthy Employee Wages and Unemployment Rate, “Orange County” includes the Los Angeles–
Long Beach–Anaheim, CA Metropolitan Statistical Area.
e Marketplace
Return on Investment and the Covid Relief package
Will U.S. citizens and taxpayers get their anticipated money’s worth from the $1.9 trillion they will spend on the Covid legislation signed into law by President Biden in March?
That $1.9 trillion price tag breaks out to about $6,000 per person, meaning, in a sense, that each American is putting up $6,000 of their net worth to cover this spending. That’s a gargantuan ask of America’s current and future taxpayers relative to historical social spending outlays. The entire U.S. economy was roughly $21 trillion in 2020 as measured by Gross Domestic Product (GDP). This makes the Covid package by itself ~9% of last year’s GDP, a prodigious percentage indeed.
But just because the scale of the spending measure is record-breakingly high doesn’t make it a bad idea, or unworthy. As with all ventures, large or small, it’s about returns, and getting bang for the buck commensurate with resources expended and risks taken.
We’ll note here that in the economic disaster of a year that was 2020, U.S. GDP fell about 3.5%, which constitutes the largest economic contraction the nation has experienced since 1946. Ten million American jobs withered away under the stress of the pandemic. That woeful situation, in concert with the election results of November 2020, set the stage for this behemoth spending package.
In essence, the Biden fiscal stimulus plan is designed to put a floor under the U.S. economy that will, theoretically, allow sufficient economic traction to take hold which will in turn enable the nation’s private sector to re-assert itself and deliver sustainable, long term GDP growth, and as byproduct of that, get America back to full employment. As the adjacent chart shows, we finished 2020 at a painful 6.9% national unemployment rate. A return to the 3.9% unemployment rate that we enjoyed at the conclusion of Q4 2019, or something close to that, is the goal sought.
Unlike the experience of deploying funds to purchase an apartment building, where analysis exists in the realm of cap rates and projected future cash flow, the returns on the Covid Relief package will not be as neatly quantifiable.
That being said, it IS clear that an enormous bet is being made here that science and medical expertise can keep Covid and its nefarious variants at bay long enough to achieve herd immunity and allow the economy to fully and safely re-open. But the stimulus spend-
ing needs time to take root in order to maximize its effects.
If science wins and a significant Covid resurgence is avoided, then the stimulus spending will have the opportunity to allow the seeds it plants to sprout. On the other hand, a major virus spike could end up making Covid relief legislation merely a gigantically expensive band-aid rather than a foundational building block.
For now (as of the writing of this article on March 18) it appears that investors are putting their money on science and vaccines. Almost all U.S. equity markets are at or near all-time highs, suggesting Wall Street expects a
strong economic recovery without
significant Covid interference.
The fact that the Covid relief spending will flow disproportionately to lowerincome Americans is the novel aspect of this legislation. It contains the supposition that getting money into the hands of the poor and disadvantaged will translate to greater social stability and a resultant strengthening of the underbelly of the economy. The elements of a social safety net embodied in the plan reflect somewhat of a European model, versus the traditional American approach.
For apartment owners, Covid relief
should almost certainly be a boon. It puts money in the pockets of tenants, which facilitates the payment of rent… that looks like a win for landlords.
As to the macro view, the spending strategy ostensibly provides the platform on which heavy pent up consumer demand can meet up with and embrace the many business efficiencies and innovations that have been quietly developing over the past year; and that is a formula for a springboard recovery and extended productivity, again, assuming Covid remains relatively contained.
So yes, there’s legitimate sticker shock over the price of this legislation. But if America is able to right itself and fully engage its economic firepower using stimulus money as fuel, the returns — financial and societal — will justify the investment.
By niCK lieBeRman
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HEALTHCARE IV DSTLocation: Multiple Locations 1Total Offering Amount $13,183,211.00Leverage 50.24%Type of Asset Medical OfficeOffering Status Fully Funded
PORT ORCHARD WALGREENS DSTLocation: Port Orchard, WATotal Offering Amount $5,925,500.00Leverage 0.00%Type of Asset PharmacyOffering Status Fully Funded AXIS WEST DSTLocation: Orlando, FL Total Offering Amount $69,900,683.00Leverage 54.93%Type of Asset MultifamilyOffering Status Fully Funded BEACH HOUSE DSTLocation: Jacksonville Beach, FLTotal Offering Amount $51,576,436.00Leverage 58.61%Type of Asset MultifamilyOffering Status Fully Funded BIG CREEK DSTLocation: Alpharetta, GATotal Offering Amount $84,455,103.00Leverage 57.86%Type of Asset MultifamilyOffering Status Fully Funded
HEALTHCARE PORTFOLIO 2 DSTLocation: Multiple Locations 2Total Offering Amount $15,661,000.00Leverage 0%Type of Asset PortfolioOffering Status Fully Funding DIVERSIFIED DIALYSIS DSTLocation: Multiple Locations 3Total Offering Amount $22,449,000.00Leverage 55.45%Type of Asset Medical PortfolioOffering Status Fully Funded
This material does not constitute an offer to sell nor a solicitation of an offer to buy any security. Such offers can be made only by the confidential Private Placement Memorandum (the “Memorandum”). Please read the entire Memorandum paying special attention to the MARYLAND MEDICAL DSTLocation: Baltimore, MDTotal Offering Amount $2,314,580.00Leverage 0.00%Type of Asset Medical OfficeOffering Status Fully FundedGLENWOOD DSTLocation: Atlanta, GA Total Offering Amount $55,403,834.00Leverage 58.95%Type of Asset MultifamilyOffering Status Fully Funded GRAND AT WESTSIDE DSTLocation: Kissimmee, FLTotal Offering Amount $74,444,763.00Leverage 55.82%Type of Asset MultifamilyOffering Status Fully Funded CHARLOTTE WALGREENS DSTLocation: Charlotte, NC Total Offering Amount $5,436,250.00Leverage 0.00%Type of Asset PharmacyOffering Status Fully Funded GRAND DOMINION DSTLocation: San Antonio, TXTotal Offering Amount $56,898,729.00Leverage 59.17%Type of Asset MultifamilyOffering Status Fully Funded SONOMA POINTE DSTLocation: Kissimmee, FLTotal Offering Amount $44,533,951.00Leverage 57.77%Type of Asset MultifamilyOffering Status Fully FundedFRESENIUS LOUISBURG DSTLocation: Louisburg, NCTotal Offering Amount $4,924,000.00Leverage 0.00%Type of Asset Medical OfficeOffering Status Fully Funding WINCHESTER MOB DSTLocation: Winchester, VATotal Offering Amount $5,074,000.00Leverage 0.00%Type of Asset Medical OfficeOffering Status Fully Funded FAIRWAY DSTLocation: Lawrenceville, GeorgiaTotal Offering Amount $32,105,000.00Leverage 57.09%Type of Asset MultifamilyOffering Status Fully Funded FRESENIUS PORTFOLIOLocation: Capitol Heights, MD; WA, D.C.Total Offering Amount $10,000,000.00Leverage 46.80%Type of Asset PortfolioOffering Status Fully Funded HIGH RIDGE ATHENS DSTLocation: Athens, GA Total Offering Amount $18,695,000.00Leverage 54.23%Type of Asset MultifamilyOffering Status Fully FundedNET LEASE PORTFOLIO 15 DSTLocation: Multiple Locations 4Total Offering Amount $58,790,000.00Leverage 53.07%Type of Asset PortfolioOffering Status Fully Funded WINSTON SALEM FEDEX DSTLocation: Winston-Salem NCTotal Offering Amount $2,735,250.00Leverage 0.00%Type of Asset IndustrialOffering Status Fully Funded 1000 WEST CHARLESTON DSTLocation: Charleston, SCTotal Offering Amount $45,775,000.00Leverage 54.66%Type of Asset MultifamilyOffering Status Fully Funded FRITO LAY DC MSALocation: Sterling, VA Total Offering Amount $6,996,739Leverage 0%Type of Asset IndustrialOffering Status Fully Funded BOJANGLES DSTLocation: Nashville MSA, Atlanta MSA Total Offering Amount $5,921,522.00Leverage 0% - All-Cash/Debt-FreeType of Asset Fast FoodOffering Status Lmtd. Avail.; Accepting FundGERBER ROAD TICLocation: Asheville, NC Total Offering Amount $12,427,419.00Leverage 0%Type of Asset Self StorageOffering Status Fully Funded POOLER TICLocation: Pooler, GA Total Offering Amount $13,867,027.00Leverage 0% - All-Cash/Debt-FreeType of Asset Self Storage Offering Status Fully Funded GREENVILLE ZIPS DSTLocation: Greenville, SCTotal Offering Amount $4,480,585.00Leverage 0% - All-Cash/Debt-FreeType of Asset Industrial Offering Status Fully Funded NET LEASE INCOME FUND 18 LLCLocation: Multiple Locations 5Total Offering Amount $50,000,000.00Leverage TBAType of Asset Income FundOffering Status Accepting Funds ACQUISITION FUNDLocation: Multiple Locations 6Total Offering Amount $10,000,000.00Leverage TBAType of Asset Acquisition FundOffering Status Accepting FundsSEATTLE RAINIER DSTLocation: Seattle, WA Total Offering Amount $7,135,372.00Leverage 0% - All-Cash/Debt-FreeType of Asset MultifamilyOffering Status Lmtd. Avail. Accepting Funds THISTLE WOOD TOWNHOMES DSTLocation: Clarksville, TNTotal Offering Amount $5,225,798.00Leverage 0% - All-Cash/Debt-FreeType of Asset MultifamilyOffering Status Fully Funded MISSOULA POTTER PARK DSTLocation: Missoula, MT Total Offering Amount $5,455,319Leverage 0% - All-Cash/Debt-FreeType of Asset MultifamilyOffering Status Fully Funded 1 - Healthcare IV DST: Elmhurst, IL; Oklahoma City, OK; Dallas, TX; Salt Lake City, UT 2 - Healthcare Portfolio 2 DST: Raleigh, NC; Houston, TX; West Jordan, UT3 - Diversified Dialysis DST: Fort Worth, TX; The Woodlands, TX; Grand Prairie, TX; Sinton, TX; Kingsport, TN; Martin, TN; Middletown, NY; Ypsilanti, MI; Eupora, MS 4 - Net Lease Portfolio 15 DST: Advance Auto Parts Norcross, GA; Advance Auto Parts Mokena, IL; CVS Pharmacy Bolingbrook, IL; Dollar General Hammond, LA; Dollar General Saint Amant, LA; Dollar General Baton Rouge, LA; Dollar General Gadsden, AL; Dollar General Sugar Creek, MO; Dollar General Goshen, IN; Family Dollar Baton Rouge, LA; Fresenius Medical Care St. Louis, MO; Goodwill Skokie, IL; Hobby Lobby Brunswick, GA; Indianapolis Osteopathic Hospital, Inc. 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Plus get a FREE book on 1031 Exchanges! Call today at 1.855.899.4597 risk section prior investing. IRC Section 1031, IRC Section 1033 and IRC Section 721 are complex tax codes therefore you should consult your tax or legal professional for details regarding your situation. There are material risks associated with investing in real estate securities including illiquidity, vacancies, general market conditions and competition, lack of operating history, interest rate risks, general risks of owning/operating commercial and multifamily properties, financing risks, potential adverse tax consequences, general economic risks, development risks and long hold periods. There is a risk of loss of the entire investment principal. Past performance is not a guarantee of future results. Potential cash flow, potential returns and potential appreciation are not guaranteed. 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