Professional Publishing, Inc
www.TheLandlordTimes.com
ON-SITE
Vol. 22 Issue 4
April 2013
Published 22 Years
SEATTLE • TACOMA • OLYMPIA • EVERETT 17,000 PAPERS MAILED MONTHLY
TO
PUGET SOUND APARTMENT OWNERS, PROPERTY MANAGERS & MAINTENANCE PERSONNEL
Published in association with: Washington Apartment Association, IREM & Washington Multifamily Housing Association
Seattle Rental Market Strengthens Seattle - Apartment Insights survey shows the rental market strengthening despite competition from new units, reports Tom Cain of Apartment Insights. The data are from his Seattle firm’s 1st quarter statistics and trends on 50+ unit properties in the King/ Snohomish market.
CCIM Institute Releases First-Quarter National Market Trends Report for Commercial Real Estate Industry
VACANCY: 4.58% The vacancy rate for conventional, stabilized 50u+ properties in the King/Snohomish market is 4.58%, down from 4.75% last quarter, and 5.21% a year ago. Of the two counties, King showed the biggest improvement with its rate dropping from 4.76% to 4.53%. Snohomish edged up slightly from 4.70% to 4.78%. The overall vacancy rate which includes properties in lease-up and out-of-service increased from 5.87% last quarter to 5.99% due to new units entering the market. Continued on page 3
6 Questions with Darrel Dickson The Landlord Times recently caught up with apartment owner, broker and real estate entrepreneur Darrel Dickson about multifamily industry trends, the economy and real estate investment and management best practices. The Landlord Times: What about the industry has changed most since you started your career? Darrel Dickson: When I started in the business in 1987 interest rates were substantially higher than what they are today. Right now interest rates on 30 year amortization on a Market rate deal are about four and a half percent fixed for ten years. When I got started in the business it was in the 7-8% range for a ten year Professional Publishing, Inc PO Box 30327 Portland, OR 97294-3327
Commercial Real Estate Market Shows Signs of Stability for Investors
fixed rate loan. Therefore, if you can find an apartment building that is well priced you have a chance to make greater cash flow. There is a large demand to receive a stable return on investment from investors. Many are starved for cash flow. Currently, investors are getting almost nothing on bank certificates of deposits. When I started in this business interest rates on bank certificates of deposits were much higher. The returns through CDs at banks are currently close to zero. Investors can receive 5 to 10% steady cash flow in through owning apartment building. Investors will seek to deploy capital aggressively in the real estate considering the sustained low treasury rates that are available. TLT: What do you perceive for the economy in the next year so? How will this affect the industry?
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DD: Powerful demographic and economic trends will continue to strengthen the apartment market. The apartment market is in the fourth year of an increasing demand for rental units. The US vacancy rates was at 4.3% in 2012, which is resulting in a projected 4-5% rent growth nationally in 2013. The oldest echo boomers turn 28 years old and have created a significant number of new households. Additionally, over the next few years approximately 1.2 million to 1.6 million immigrants will arrive annually through 2017. The unique demographics of increased Echo boomers as well as new immigrants looking for new rentals will put pressure on vacancy notwithstanding the increase in supply of rental units. Continued on page 7
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The commercial real estate industry continues to show robust and consistent growth, despite a sluggish economy and the indecision of governmental sequestration, according to the latest CCIM Quarterly Market Trends report. CCIM Institute (www.ccim.com), one of the largest commercial real estate networks in the world, released the results today in partnership with the National Association of REALTORS®. The report features the findings of CCIM's 13,000 influential, industryleading members. Continued on page 18 Page 16 Washington Apartment Association
WASHINGTON’S COMMERCE DEPARTMENT AWARDED $5.6 MILLION... Page 14
IN SUPPORT OF FAIR HOUSING Page 6
Chapter 27 Institute of Real Estate Management THE ROLE OF WATER IN ECONOMIC GROWTH AND SUCCESSFUL...