News
NOTHING'S FREE
July 7, 2011
| Especially rent: yesterday, JLL multifamily guru Christine Espenshade told us big resident concessions are on the wane as landlords lease up their local portfolios. (Don't forget to sign up today to see her and other apartment all-stars at Bisnow?s Baltimore Multifamily Summit July 28.) |
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| Christine (jus back from a vacation at The Homestead) is working on a 98%-leased, 2,000-unit portfolio sale in Baltimore County and tells us the owner has cut out resident giveaways entirely. Young people in particular are gaining financial traction and moving in, she says, making it easier for landlords to fill units. There's also little new supply, which leads to healthy rent growth: Class-A rates have grown 6% since mid-2010, and Class-B and C properties have seen similar bumps. She's especially excited about downtown Baltimore. ?Easy access to 95 and Penn Station opens it up to renters priced out of DC,? she says, ?and there's also healthy job growth between Hopkins and the University of Maryland.? |
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| Last year?s record-breaking lease-up of Bozzuto?s The Fitzgerald(275 units in under a year, above) shows how strong demand is, she says. Soon-to-be under construction projects in the city like Union Wharf (also a Bozzuto) and Obrecht?s 162-unit complex in Butcher?s Hill will take advantage of an undersupplied market, and the number of units slated for delivery over the next 24 months is small enough for demand to continue outpacing supply. She also thinks there's opportunity in the northern ?burbs to provide Aberdeen Proving Ground workers with housing. |
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| And how are new projects getting financed? Christine (whom we snapped with A&R Development's Tony Rodgers at a ULI event this spring) says Fannie and Freddie are still the industry?s ?bread and butter,? and the wait for FHA construction debt is between 18 and 24 months. Developers with equity are seeking out life companies instead, which she says price deals at a 80% LTC with interest rates between 5.75% and 6.5%. Over the next 12 months, she expects more banks to jump into the multifamily financing game. |
