Professional Publishing, Inc
Vol. Issue 6
www.TheLandlordTimes.com
June 2013
COLORADO
DENVER METRO • COLORADO SPRINGS • BOULDER
Monthly CirCulation to More than 7,000 apartMent owners, property Managers, on-site & MaintenanCe personnel
Energy Firms Drive Competition in Denver Commercial Real Estate
6 Questions with Joseph Chaplik
Boom Towns: Energy Industry Triggers Heated Competition for Prime Real Estate
The Landlord Times and Apartment News sat down with veteran apartment broker and investor, Joseph Chaplik to discuss Arizona, Oregon and the state of the apartment investment market.
Growth in the domestic energy industry is expected to create more than 3.5 million American jobs by 2035, including 700,000 in the next two years alone*. The same industry growth creating jobs is also driving heated competition for prime real estate - predominantly in a handful of cities where the oil and gas industry is booming. New research from Jones Lang LaSalle (JLL) indicates that the majority of commercial real estate opportunities resulting from this job growth will be concentrated in the following North American cities: Calgary, Dallas, Denver, Houston, Philadelphia and Pittsburgh. In the firm's inaugural Energy Outlook Report, these cities are characterized as benefitting from up to three quarters of the anticipated 3.5 million new energy jobs directly correlating with nearby rural areas experiencing a rise in energy activity. Notably, the remaining 875,000 jobs are anticipated in other regions, including financial centers such as New York City and Continued on page 3
THE LANDLORD TIMES: Give us a brief history of your career. How did you get into the apartment brokerage business?
List of Improving Housing Markets Rises to 263 Metros in June The number of U.S. housing markets on the mend rose by five to a total of 263 in June, according to the National Association of Home Builders/First American Improving Markets Index (IMI), released today. The list includes entrants from 49 states and the District of Columbia. The IMI identifies metropolitan areas that have shown improvement from their respective troughs in housing permits, employment and house prices for at least six consecutive months. Twenty-nine new markets were added to the list while 24 others were dropped from it this month. New entrants included such geographically diverse metros as Salinas, Calif.; Sioux City, Iowa; Chicago, Ill.; Topeka, Kan.; Baton Professional Publishing, Inc PO Box 30327 Portland, OR 97294-3327
Rouge, La.; Laredo, Texas; and Philadelphia, Pa. “This is the fifth consecutive month in which the IMI has designated more than 70 percent of U.S. metros as improving,” observed NAHB Chairman Rick Judson, a home builder from Charlotte, N.C. “While that’s a good sign that the housing recovery is on solid footing, we know that various challenges are slowing its progress – including continuing issues with credit availability for builders and buyers, as well as appraisals that aren’t keeping up with the rising cost of construction.” “As market conditions improve across most of the country, some metros have moved onto the IMI list while marginal seasonal fluctuations
Current Resident or
have nudged others off of it,” noted NAHB Chief Economist David Crowe. “This is to be expected as the recovery expands. Meanwhile, it’s worth noting that the number of improving markets is now more than three times what it was in June 2012.” “The continued strength of the IMI is an indicator of the ongoing, positive momentum in housing markets nationwide as consumers move to take advantage of historically favorable interest rates and affordable home prices,” added Kurt Pfotenhauer, vice chairman of First American Title Insurance Company. The IMI is designed to track housing markets throughout the country Continued on page 3
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JOSEPH CHAPLIK: Previously I was a Vice President of a telecommunication company and started buying apartments when I relocated to Portland. The level of professionalism by the other brokers was not impressive, so I decided to start my own company. I wanted to provide a higher level of professionalism, integrity and service to the apartment investors, which I thought they deserved. Today we represent close to 1/3 of the transactions; more and more clients have been gravitating to our company for our quality care. TL: You now serve four markets... give a brief state-of-the union on multifamily real estate in your new market, Phoenix, AZ. JC: We just opened our newest office in the Phoenix market this year and have been making great progress. The cap rates are around 7% and higher for the B and C quality buildings and locations. The price per unit is significantly lower than other markets, and the vacancy rates are moderate around 6-8%. For the individual experienced investor, this market has tremendous upside in value with purchasing a rougher property and transforming it into a stable building. TL: How about Portland? What is your forecast for the next couple years? JC: We have been operating in Portland for 9 years and the market is strong. Investors have a high demand for rental properties and there is a low supply of buildings. This situation should remain the same well into 2015, and rents should be increasing annually. Vacancy rates are historically low in this area, around 3.5%. Get Social With The Landlord Times