Professional Publishing, Inc www.TheLandlordTimes.com
METRO
PORTLAND & VANCOUVER
Vol. 17 Issue 1
Published 17 Years
January 2013
MONTHLY CIRCULATION TO MORE THAN 20,000 IN PORTLAND/VANCOUVER APARTMENT OWNERS, PROPERTY MANAGERS, ON-SITE & MAINTENANCE PERSONNEL Published in association with: METRO Multifamily Housing Association; Rental Housing Association of Oregon; IREM & Clark County Rental Association
Portland, Oregon Multifamily Housing Update 3Q12 Payroll Trends and Forecast In spite of a weak September print, Portland payrolls increased at a 17,000-job, 1.7% annual rate during the third quarter, up from 2Q’s 15,100job, 1.5% performance. Slower hiring in the nonprofessional components of the business services sector and the education, health care and hospitality services sectors was primarily responsible for the soft September report. Employment in the foregoing sectors declined -700 jobs year-on year, down from a 6,000-job advance in June.
Seasonally-adjusted data were largely consistent. After creating 13,400 net jobs from April to August, Portland payrolls plummeted -6,100 jobs in September, the worst single month since 2009. The RCR payroll model forecasts job growth rates ranging from 1.2% to 2.0% over the next five years. By the numbers, the metro area should add about 14,000 payroll positions in 2012, followed by an 11,400-job advance next year. Conditions are favorable for faster expansion after 2015 with annual net job creation returning to levels last observed between 2005 and 2007.
3Q12 Absorption and Vacancy Rate Trends Preliminary Reis data show Portland apartment occupancy holding at a lofty 97.8% average in 3Q12 (ranking #2 among the RED 50 after New York), unchanged quarter-toquarter and up 100 basis points yearover-year. Axiometrics (AXM) surveys of larger, professionally managed properties uncovered a moderately lower metro occupancy rate. Same store occupancy averaged 95.3%, down 10 bps sequentially and unchanged y-o-y. The subset delivContinued on page 7
Investors Anticipate Opportunities in Commercial Real Estate across All Major Property Sectors in 2013, According to Latest PwC Real Estate Investor Survey™ Greater Investor Optimism in Retail, Especially for National Regional Malls; Technology Office Markets and Warehouse Sector Showed Steepest Cap Rate Declines in Q4 As 2012 drew to a close and the industry's recovery progresses, commercial real estate offered varied investment opportunities across each major sector and a diverse number of cities, even though macroeconomic uncertainties still exist, such as the fiscal cliff, according to the fourth quarter 2012 findings of the PwC Real Estate Investor Survey. Continued on page 5 Page 3
Apartment Insurance Costs Increase for the Second Consecutive Year According to National Multi Housing Council Report The cost to insure apartments increased by 9.5 percent between 2011 and 2012, marking the second consecutive year of rising insurance expenditures according to the National Multi Housing Council’s (NMHC) Apartment Cost of Risk Survey (ACORS). The survey covers data from more than one million apartment units, the largest number of units covered by the survey to date, operated by 55 apartment firms, Professional Publishing, Inc PO Box 30327 Portland, OR 972943327
tracking three principal components of insurance premiums: property, general liability and workers’ compensation. The 9.5 percent increase in 2012 came entirely from property risk costs, with general liability and workers’ compensation costs staying virtually unchanged from 2011. “Respondents noted that their greatest challenges in 2012 came from obtaining adequate and affordable coverage in traditional catastrophe
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risk zones. In fact, catastrophe exposed properties were the major drivers of the increase in premium costs and higher deductibles,” said Rick Haughey, NMHC’s Vice President of Property Operations and Technology. “With U.S. catastrophe losses in 2012 expected to be moderately higher than average due to Hurricane Sandy, the outlook for insurance costs in 2013 remains uncertain. This uncertainty mitigates what would be downward pressure on 2013 catastrophe rates due to strong underwriting capacity for primary insurers and reinsurers.” Additional key findings: The mean (nonweighted) average for the total cost of risk increased 9.5 Continued on page 3
PRESIDENT'S MESSAGE Page 6
PRESIDENT'S MESSAGE Page 10 Chapter 29 Institute of Real Estate Management
HOW TO GET STARTED IN REAL ESTATE INVESTING Page 14
Clark County Rental Association
PRESIDENT'S MESSAGE