NMHC reports apartment REITs topped counterparts The Washington, D.C.-based National Multi Housing Council reports apartment REITs outperformed all other REIT sectors in the first quarter of 1999. Compared to a 5.5% overall decline in the NAREIT index, apartment REITs were down just 1.2%. For March 1999, apartment REITs posted the second-highest gains at 1%, while the overall index fell .5%.
GMAC closes loan for historic Prospect Tower apartments Horsham, Pa.-based GMAC Commercial Mortgage closed a $15.2 million underlying cooperative mortgage for Prospect Tower apartments, a 23-story historic building in New York's Tudor City. The cooperative obtained a 6.8% interest rate for a term of 15 years with a 30-year amortization.
Prospect Tower contains 403 residential units and three commercial stores and features a gothic-style lobby. The property is in the Tudor Park Historic District of New York City - an area developed in 1928 as a self-contained city within New York City itself. With panoramic views of the Manhattan skyline and East River, these units are typically in strong demand.
Apartments expected to produce above-average returns in 1999 According to Outlook '99, a report by Hartford, Conn.-based Allegis Realty Investors, apartments may not deliver the high returns (in excess of 12%) they posted the past five years. However, Allegis expects apartments to produce above-average investment performance over the next few years. Outlook '99 also reports 1998 as the first year in the last seven that apartment completions outpaced demand. As a result, the firm forecasts higher vacancy rates in coming years. For a copy of the report, e-mail Jayne Brundage at [email protected]
DLJ development study shows demand for Las Vegas A recent 58-city study on apartment supply and demand by New York-based Donaldson, Lufkin & Jenrette has listed Las Vegas as the least risky market to build new apartments, with demand outpacing supply by nearly 4%. DLJ also found that demand outpaces supply by less than 1% in the 58 cities studied, with 0% meaning apartment supply growth is meeting demand growth.
After Las Vegas, demand outpaces supply in areas such as, Riverside-San Bernardino, Calif. (-3.3%); San Diego (-3%); Austin, Texas (-2.6%); and Phoenix (-2.5%).
As the city with the most oversupply of apartments in the study, Orlando, Fla. (2.1%), was listed as the most risky market to build new apartments. Orlando was followed by the Salt Lake City-Odgen, Utah area (1.1%); Dallas (.75%); Pittsburgh (.68%); and Seattle-Everett, Wash. (.48%).
ARCS closes $103 million Southeastern portfolio Calabasas, Calif.-based ARCS Commercial Mortgage Co. has closed a $103 million loan for a portfolio primarily in Georgia. The seven-property portfolio contains a total of 1,988 units located in Atlanta, Alpharetta, Decatur, Norcross, Smyrna and Lilburn, Ga.; and Gainesville, Fla.
The 10-year loan, with 30-year amortization, carries a rate of 6.6% with a loan-to-value of 80%. ARCS now services a total portfolio worth more than $3.6 billion.
The company also has created an FHA multifamily and healthcare division. The new division will be headquartered in Chicago and managed by ARCS senior vice president Joseph A. Spina Jr., whose specialty is FHA, HUD and Fannie Mae programs. ARCS has been Fannie Mae's top multifamily lender since 1995.
Internet-based tenant-screening system cuts decision time by days Denver-based Saferent LLC has teamed up with Loveland, Co.-based Factual Data Corp. to create an outcomes- and Internet-based resident-screening system that allows property managers to give prospective residents a rental decision almost instantly. The Saferent Resident Screening System takes about 30 seconds by using a proprietary statistical model that evaluates an applicant's credit history and ability to pay rent. The system is powered by credit data, communications, programming support and Web hosting provided by Factual Data Corp.
According to John Britti, Saferent's CEO, the objectivity and quickness of the system's recommendations are intended to reduce the possibility of qualified applicants getting lost to competitors, and to reduce liability associated with Fair Housing and Fair Credit violations. "We think it has the potential to be the new industry standard," he says. "The system has been tested against a client's traditional, rule-of-thumb tenant-screening approach. Holding the approval rate constant, Saferent was found to reduce their loss exposure by 32% without sacrificing revenue, compared to the client's slower, more traditional method."