Archive for the ‘Multifamily’ Category
Thursday, May 16th, 2013
A press release from the Minnesota Department of Employment and Economic Development (DEED) highlighted 11,400 jobs lost statewide in April of this year. The largest losses occurred in trade, transportation, utilities, and government sectors. The information, education, and health care sectors all grew during the month.
DEED May 2013 Jobs Report
The Twin Cities Metro Area has bucked the statewide trend, having added 26,000 jobs over the past year. A market report by Marcus & Millichap predicts that the metro will add 49,000 jobs during 2013, of which a significant number will be in the health services sector. This employment growth, couple with stronger renter demand, has kept multifamily vacancy in the range of 2.5%, among the lowest rates in the nation.
The Twin Cities metro has added jobs every year since 2009 (source: Marcus & Milllichap)
Multifamily vacancy has remained low despite increasing supply (source: Marcus & Millichap)
Tags: DEED, jobs, Marcus & Millichap, Minnesota, twin cities
Posted in Industry News, Multifamily, Twin Cities Real Estate | No Comments »
Wednesday, April 24th, 2013
In another sign of improvement in commercial real estate the Calculated Risk blog in a recent posting notes a continuing increase in the AIA Architecture Billings Index. When architects get busier that usually indicates an increase in new construction is not far behind.
Note: This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment.
From AIA: Architecture Billings Index Continues to Improve at a Healthy Pace
With increasing demand for design services, the Architecture Billings Index (ABI) is continuing to strengthen. As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lag time between architecture billings and construction spending. The American Institute of Architects (AIA) reported the February ABI score was 54.9, up slightly from a mark of 54.2 in January. This score reflects a strong increase in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 64.8, higher than the reading of 63.2 the previous month – and its highest mark since January 2007.
“Conditions have been strengthening in all regions and construction sectors for the last several months,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “Still, we also continue to hear a mix of business conditions in the marketplace as this hesitant recovery continues to unfold.”
• Regional averages: Northeast (56.7), Midwest (54.7), West (54.7), South (52.7)
• Sector index breakdown: multi-family residential (60.9), mixed practice (56.9), commercial / industrial (53.3), institutional (50.7)
emphasis added
This graph shows the Architecture Billings Index since 1996. The index was at 54.9 in February, up from 54.2 in January. Anything above 50 indicates expansion in demand for architects’ services.
Every building sector is now expanding and new project inquiries are strongly positive (highest since January 2007). Note: This includes commercial and industrial facilities like hotels and office buildings, multi-family residential, as well as schools, hospitals and other institutions.
According to the AIA, there is an “approximate nine to twelve month lag time between architecture billings and construction spending” on non-residential construction. This index has been positive for seven consecutive months and suggests some increase in CRE investment in the second half of 2013.
Tags: Commercial Real Estate, development case study, industrial development, local real estate, real estate, real estate development, trends
Posted in Commercial Real Estate, Development, Economics, Investment Real Estate, Multifamily, Office Real Estate, Real Estate Trends, Retail Real Estate | No Comments »
Monday, February 18th, 2013
In the Seward neighborhood of Minneapolis, Redesign, Inc. is close to finishing construction on the first building in a multi-phase transit-oriented development called Seward Commons. The project is happening on light industrial property to the southeast of the Franklin Avenue light rail station on the Hiawatha Line. Phase I of the project is a $10 million, 4-story, 60-unit supportive housing project developed in partnership with Project for Pride in Living. Seward Commons will ultimately encompass 4 acres and include a mix of 300 multifamily units and approximately 20,000 SF of commercial space developed in six phases.
An aerial view of the Seward Commons site (Source: Redesign)
Redesign worked closely with the local neighborhood group and business association to develop a shared vision for the site, which includes transit-oriented design principles and a focus on sustainable stormwater management methods. As a non-profit, Redesign has a mission-based approach to development. While they do use traditional market fundamentals to analyze the feasibility of a project, their real estate decisions are based on their mission to build healthy neighborhoods and engage community members.
Redesign was drawn to the Seward Commons site in part because of the opportunity to better connect residential areas of the Seward neighborhood to the nearby Hiawatha Light Rail station. In order to accomplish that, they worked closely with the City of Minneapolis to improve the transportation infrastructure in and around the site, including adding a street connection to Cedar Avenue and bicycle access from 24th Street to the Hiawatha trail which runs parallel to the Hiawatha Light Rail line adjacent to the site. These improvements where consistent with transit-oriented principles of improving street grid connectivity and walkability. They also added value to the Seward Commons site by making it more accessible, which may improve the feasibility of retail development in future phases.
Seward Commons site map, showing planned development phases and infrastructure improvements to 22nd and 24th Streets (Source: Redesign)
The project has not been without its challenges. According to Eddie Landenberger, Senior Project Manager at Redesign, the biggest hurdle thus far was securing the acquisition finance package, which included a mix of private loans and public funding from Hennepin County and the City of Minneapolis. Eddie also noted the complications associated with managing short-term industrial tenants in the properties on the site which are planned for redevelopment in future phases. Those short-term tenants provide cash flow which is vital to defray operating costs during the long-term redevelopment process, but lease agreements must be carefully structured to allow flexibility when the time comes for the next phase of redevelopment.
Redesign is now working on closing on Phase II of the project, which will be a HUD 202 senior housing project co-developed by Common Bond. Phase III is currently in the planning stage and will likely involve market-rate apartments. The final phases will be developed according to market conditions at the time, but will likely involve some amount of retail space.
Source: Eddie Landenberger, Senior Project Manager, Redesign
Tags: Eddie Landenberger, Hiawatha Light Rail, minneapolis, Project for Pride in Living, Redesign, Seward, transit-oriented development
Posted in Affordable Housing, Development, Multifamily | 1 Comment »
Tuesday, September 4th, 2012
This post was written by Dan Jackson, a 2012 UST MBA graduate. Dan completed many of his electives in real estate including participation in the spring 2012 REAL 714 International Real Estate Development course in the Cayman Islands.
Photo credit: IKEA
The Big Blue Box… furniture products that are easy to assemble… cheap and affordable, yet chic items… Swedish meatballs and cheap meals are all items that remind people of the retail giant IKEA. But the retailer now wants to get you to think outside of the big blue box.
The popular Swedish home furniture products company IKEA has its sights set on expanding its well-known footprint. The next endeavor for the company, which already has a large international presence, revolves around building entire communities where people will be able to live, work, stay and play. According to the Globe and Mail IKEA is “launching a bold push into the business of designing, building and operating entire urban neighbourhoods.” The Globe continues to state that while this is a new and bold endeavor for the furniture icon they still want these new neighborhoods to have an emphasis on the traditional affordability concept that IKEA is well-known for with its furniture products model. One of IKEA’s current slogans is “Affordable solutions for living better,” and this is the type of slogan that the property development division anticipates as they move forward into the first phase of development of these new communities. The property development team wants to create communities that are beautiful, well-maintained and allow for a maximum lifestyle benefit, but yet still affordable for families and individuals. (more…)
Tags: Camana Bay, Dart Company, European development, IKEA, IKEA corporation, IKEA Europe, IKEA hotel
Posted in Affordable Housing, Commercial Real Estate, Development, International Real Estate, Multifamily, Real Estate Trends, Retail Real Estate, Think Outside The Box, Urban Planning | No Comments »
Tuesday, August 14th, 2012
Several urban job centers have committed to building tiny, affordable housing units.
There is a new multi-family housing trend beginning to appear in some of the higher priced housing markets around the country. Ultra small “mirco-apartments” are one answer that can make apartments affordable to young renters in these high priced areas. Will this trend find it’s way to the Minneapolis / St. Paul Market? This article by John Caulfield recently appeared in BUILDER
From: BUILDER 2012
An 11,775-square-foot building with 23 micro apartments is being wedged onto a 3,750-square-foot lot between two other buildings in San Francisco’s SoMa district.
Construction has begun on an infill project at 38 Harriet Street in San Francisco that its developer, builder, and module supplier believe could determine whether micro apartments remain a highly publicized curiosity or are seen as legitimate housing alternatives for young urban professionals seeking cheaper, greener, and walkable living spaces.
“There are a lot of eyes on this project, a lot of interest,” says Naomi Porat, president and co-founder of Zeta Communities, whose factory in Sacramento, Calif., is close to completing the 12- by 65-foot modules that will be used to construct an 11,775-square-foot four-story wood-framed building squeezed onto a 3,750-square-foot lot in this city’s South of Market Street (SoMa) district. That building will contain 23 micro apartments measuring around 300 square feet each, with nine-foot ceilings, kitchens and baths, washers and dryers, and multipurpose built-ins for storage and workspaces that can convert to sleeping areas.
These apartments reflect a “Smart Space” concept that the project’s developer, Panoramic Interests, created with a team of architects and designers to address the needs of millenials poring into urban job centers where affordable housing is perennially in short supply.
“In San Francisco, 8,000 new tech workers have been hired this year alone,” says Patrick Kennedy, the owner of Panoramic Interests, to illustrate the potential demand for micro apartments. His firm test-drove its Smart Space design with a 160-square-foot prototype it built in a warehouse in Berkeley, Calif., and housed an MIT grad student for three weeks who provided feedback about what he thought did and didn’t work.
Kennedy told the San Francisco Chronicle that prospective residents of micro apartments are looking for a “launching space as they get established.” In an interview with Builder, he described micro apartments as “a return to more collaborative communal living.” He observed that millenials view apartments in the context of a lifestyle that is more socially and technologically defined. “They’ll trade 100 square feet of space for 100 more megabytes of Internet,” he quips.
And with monthly rents expected to start at $1,500 (with five of the 23 apartments being offered at a below-market rate of $910 per month), these micro apartments should be available for significantly less than the $2,000-plus per month an under-500-square-foot studio apartment fetches, on average, in San Francisco.
John Caulfield is senior editor for Builder magazine.
The 300-square-foot apartments will feature 9-foot ceilings, kitchens and baths, storage, and flexible built-ins.
Panoramic Interests
These renderings show how renters can manipulate the space inside the apartments to turn a sleeping area into a work or eating space.
Panoramic InterestsLarge windows and high ceilings give these tiny spaces a more capacious feeling.
Tags: Commercial Real Estate, Multifamily, real estate development, Residential Real Estate, trends
Posted in Affordable Housing, Commercial Real Estate, Development, Green Building, Industry News, Multifamily, Real Estate Trends, Residential Real Estate, Think Outside The Box, Urban Planning | No Comments »
Friday, June 22nd, 2012
This is a reposting of of a blog post by Shaun McElhatton from the CREtrends.com, a blog about commercial real estate published by Leonard Street & Deinard. They have many interesting postings about commercial real estate. I would encourage you to check them out at www.cretrends.com.
A new Brookings Institution study suggests that walkability increases values for both for-sale and rental housing, as well as office and retail real estate. The study concludes that office, residential, and retail rents, retail revenues, and for-sale residential home prices all increase faster in walkable communities than in communities where walking is more difficult. The study also finds that rents and home values increase even more quickly in areas where walkable communities are clustered together to form walkable districts. While the study is based on Washington, D.C. real estate rental and sales data, in a related New York Times editorial, one of the study’s authors argues that data from Seattle, Columbus and Denver support the study’s conclusions.
Tags: affordable housing, Brownfields, Land Use, Mixed-use Development, Residential Development, Retail, Transportation, Uncategorized
Posted in Commercial Real Estate, Development, Economics, Industry News, Multifamily, Real Estate Trends, Residential Real Estate, Retail Real Estate, Senior Housing, Student Housing, Urban Planning | No Comments »
Friday, January 27th, 2012
This article was written by Catherine Davies-Nelson, a student in the UST MS degree in Real Estate.
Early January, Integra Realty Resource (Integra) served as a co-sponsor of the 2012 Real Estate Outlook.
At the event, Integra presented their comprehensive data detailing market conditions and forecasts as presented in the organization’s outlook Viewpoint 2012. The panelists, who consisted of local and national experts in the areas of office, retail, multi-family and industrial real estate, discussed Integra’s findings and issues surrounding each of the 4 commercial sectors.
As depicted on the graph below, the CRE cycle as presented by Integra has 4 main cycles/phases termed Recovery, Expansion, Hypersupply, and Recession. There are 3 stages (Stages 1, 2, and 3) with each market phase. The 1st stage indicates the entry of the new phase, and the 3rd stage indicating the near exit of the phase.
Photosource: Integra Realty Resources
(Click here to Download a copy of Viewpoint 2012)
These four main phases of the RE cycle are defined by Integra are as follows: (more…)
Tags: CRE, Integra Realty Resources, Minneapolis Apartments, Minneapolis Real Estate, real estate cycles, Real Estate Recovery, St. Paul Real Estate
Posted in Commercial Real Estate, Industrial Real Estate, Multifamily, Retail Real Estate | No Comments »
Friday, January 20th, 2012
Property Owners: As If You Didn’t Have Enough Issues To Deal With Already.
Apparently, the Department of the Treasury feels that a significant number of real estate property owners have mis-reported rental income. They, as a group, have been singled out for special attention by the IRS. See the article below by Steven Katkov. Steven is an adjunct instructor who teaches Real Estate Law at the University of St Thomas. He is also the Senior Partner in the Katkov Law Group.
The Internal Revenue Service (IRS) should increase its examinations of personal tax returns that report losses from rental real estate activity, according to a new audit report released publicly today by the Treasury Inspector General for Tax Administration (TIGTA).
TIGTA’s report, “Actions are Needed in the Identification, Selection, and Examination of Individual Tax Returns with Rental Real Estate Activity,” was conducted because a Government Accountability Office report in August 2008 stated that at least 53 percent of individual taxpayers with rental real estate activity for Tax Year 2001 misreported their rental real estate activity, resulting in an estimated $12.4 billion of net misreported income. (more…)
Tags: department of the treasury, Income taxes, Internal Revenue Service, IRS, Property owner rental income, real estate tax, rental income, TIGTA, Treasury Inspector General for Tax Administration
Posted in Economics, Government Policy, Industrial Real Estate, Industry News, Multifamily, Property Management, Real Estate Trends, Retail Real Estate, Senior Housing | No Comments »
Friday, January 13th, 2012
This article was written by Catherine Davies-Nelson, a student in the UST MS degree in Real Estate.
Dr. Tom Stinson, Minnesota State Economist, recently spoke at the University of St. Thomas Shenehon Center for Real Estate on the 2012 Real Estate Outlook. He communicated 2012 will look much like 2011, and likely to improve in 2013 and 2014. Looking at the big picture and as noted by many economists, this recovery is a long slow recovery, slower than the past recoveries.
Regarding the real estate recovery, Dr. Stinson asserted that “household formation is key” as the demand for residential housing ultimately drives demand for commercial development. Lackluster economic growth has encouraged people to move in with friends and family. When the economy improves enough to encourage these individuals to move out and help clear the oversupply of properties, real estate prices will recover, however they will recover to a new normal. Favorable to this household formation growth, is an approved consumer sentiment and a declining unemployment rate. Minnesota’s current unemployment rate is at 6.5% (2% below the national average). Additionally, there is more confidence (30% more) the U.S. won’t go back into a recession. (more…)
Tags: Ben Bernanke, Commercial Real Estate forecast 2012, Commercial Real Estate Outlook 2012, Dr. Tom Stinson, European Recession, household formation, Minnesota new demographics, Minnesota State Economist, Minnesota Unemployment rate, New normal
Posted in Commercial Real Estate, Development, Industrial Real Estate, Multifamily, Retail Real Estate | 2 Comments »
Friday, December 9th, 2011
The historic Pillsbury A-Mill site, as seen from the Stone Arch Bridge in Minneapolis
After 40 years of successful affordable housing development, Dominium’s growth is stronger than ever. With 15,000 units owned in 21 states, the Plymouth-based company is not only committed to affordable housing, but it is also raising the bar for transformational historic projects in the Twin Cities and beyond.
Mark Moorhouse, Senior Vice President and Project Partner, revealed Dominium’s elaborate plans for its upcoming projects at the Buzza building in Uptown Minneapolis, the iconic Pillsbury A-Mill site on the riverfront in downtown Minneapolis, and the Schmidt Brewery in St. Paul.
Pillsbury A-Mill
Schaefer Richardson worked on a redevelopment plan for the site for nearly a decade but ultimately the project wasn’t feasible, especially for the proposed use of 1500 units, mostly condos. Dominium is taking a more conservative approach by developing less units initially (250) and designating them as affordable artist lofts. Moorhouse explains that neighborhood groups are more receptive to affordable artist housing than typical affordable housing, since artists are a special asset to the community.
(more…)
Tags: A Mill redevelopment, affordable artist housing, affordable housing projects, artist housing, artist lofts minneapolis, artist lofts st paul, Buzza building, Dominium, historic rehab, Landmark Building, mn historic tax credits, multifamily redevelopment, Pillsbury A Mill, Schmidt Brewery
Posted in Affordable Housing, Development, Executive Insight Series, Green Building, Historic Tax Credits, Multifamily, Real Estate Trends | No Comments »
