Multi-Family News on multihousingnews.com

The multi-family housing market is a viable market segment in many metro areas as people move in from the suburbs to be closer to work and to entertainment. I scanned many articles and blogs on multihousingnews.com and am here sharing with you some of the statistics I found for our Texas market.

Austin

According to the “Austin Multi-family Report – Spring 2019 and an article on the “Top Multi-family Completions in Austin,” both by Anca Gagluc in the Multi-Housing News, the Austin multi-family market had a strong year in 2018 with rent growth of 4.5% despite 11,000 units coming online. The 11,000 units that were constructed and rented in 2018 were in the upscale lifestyle segment and the 20,500 units underway in 2019 are also targeted for that same segment of the market. 

The largest multi-family projects delivered through the end of May 2019 included

  • Bexley Round Rock, 330 Units, Round Rock
  • Hillstone at Wolf Ranch, 332 Units, Georgetown
  • Latitude at Presidio, 337 Units, Cedar Park
  • Crestview Commons, 353 Units, Austin
  • Terra, 372 Units, Austin

Multi-family housing can come in several classifications, affordable, lifestyle, senior, student, or worker housing. Most of the inventory discussed here is in the Lifestyle segment. A multi-family unit in the lifestyle segment is one that offers amenities that improve your daily life. These may be as simple as open areas and great walking trails or more expensive shared amenities like a stable, fitness center, or sauna and pool. The lifestyle property is supposed to enhance your life. It is in effect a neighborhood, or a community. Lifestyle communities are generally upscale in price, can even be luxurious, and often do not meet the need for affordable housing.

Austin added 36,800 jobs in 2018, up 3.5 % from the previous year.  Occupancy rates for Austin multi-family housing rose to 94.4% as of March 2019 and rent growth was 3.7% percent through April 2019.

Dallas-Fort Worth

According to the “Dallas Multi-family Report – Spring 2019” from Anca Gagiuc in Multi-Housing News, the Texas multi-family market continued to show plenty of supply, dampening rent growth, which was 2.8% year-over-year through March, slightly below the U.S. average.

More than 26,800 units were delivered in 2018 with an additional 44,700 underway as of March 2019.  The metro remained a nation leader in job creation last year, adding 102,500 positions for 2.6 percent expansion. Last year’s multi-family transaction volume was $5 billion.  Investors have already traded nearly $900 million in multi-family assets in the first quarter of 2019 at a per-unit-price of $105,032. The average Dallas-Fort Worth rent is expected to rise 4.3% in 2019.

Houston

According to the “Houston Multi-family Report – Spring 2019” from Laura Calugar in Multi-Housing News, the Houston multi-family market showed rent growth on a downward slide, but the market was still strong, underpinned by employment gains and economic expansion. Houston’s occupancy rate was 92.4%, down 140 basis points from the previous year, fueling fears of overbuilding.

Houston added 72,600 jobs in the 12 months ending February 2019. Last year’s transaction volume was $5 billion.  Roughly 14,000 units were under construction as of March 2019, most of that geared to high-income residents. The average Houston metro rent is expected to rise 2.2% in 2019.

REI Capital Resources is a funding source for SFR Fix-n-Flip, Fix-to-Rent, and Refinance projects as well as larger commercial projects such as office buildings, 5-40 door multi-family buildings, and many others.  These programs vary wide and far throughout the gamut of lending. Call or e-mail for more information.

REI Capital Resources Long-Term Rental Program

We offer asset-based and experience-based loans for long-term rental projects, including multi-family projects with the following terms: min FICO 650, BPO required, Up to 85% of purchase price, Cashout/Refinance up to 65% LTV (BPO), Max of 80% ARV, Interest rates starting at 6.5%, and points as low as 2.25%.

Give me a call or send an e-mail.

Patrick StCin, 512-213-2271,

e-mail: patrick@REICapital.cash 00000000 00

Home Affordability Update

According to Realtor.com’s May 2019 monthly housing trend report, the national median listing price for a home sets a new record at $315,000.  Despite the continued rise in home prices, rising wages, more inventory, and declining mortgage rates, have made 74 of 100 metro areas more affordable to buyers in their market.

“…the boost in affordability has yet to translate into more home sales perhaps because. while the shift in trend is welcome, the current monthly savings are small and some buyers are waiting for markets to tip further in their favor.”

Danielle Hale, chief economist at realtor.com

The top ten cities showing the biggest improvements in availability of affordable homes also added decreasing listing price. The ten include:

Charlotte, North Carolina, median home price $329,450

Dallas-Fort Worth, Texas, median home price $350,000

Austin, Texas, median home price $369,995

Cape Coral-Fort Meyers, Florida, median home price $299,900

Portland, Oregon, median home price $474,975

Atlanta, Georgia, median home price $335,00

Lakeland-Winter Haven, Florida, median home price $231,500

San Francisco-Oakland, California, median home price $954,500

Des Moines, California, median home price $288,000

San Jose-Sunnyvale, California, median home price $1,167,444 000.

This data is not telling us that that there are more homes in the lower prices for first-time home buyers. According to the realtor.com report, the number of houses below $200,000 decreased 8% year-over-year, and the number of houses priced above $750,000 increased 11%.

The data is telling us that the price of homes in a specific metro area market, when compared to the price in the same market, became more affordable over the past year to the residents in that market. The market itself may still be a very pricey market, but the buyers in the market with increased income and lower interest rates are more able to afford the median home.

San Antonio-New Braunfels, Texas was also one of the 74 metro areas that became more affordable over the last year with a median home price of $295,000. Houston-The Woodlands et al, Texas metro area registered no change year-over-year with a median home price of $324,945.

So affordable homes in the lower prices are still needed to round out the market and where there is a demand, investment will follow.

REI Capital Resources is a direct lender as well as a broker of funding solutions. We offer short and long-term financing options and are eager to support your project with funding.

Please give me a call when you find that perfect real estate investment and know how much money you need. We are “focused on funding your success.”

Patrick St.Cin
512-213-2271
Patrick@REICapital.cash  ffff

West, East, Central: Where to Invest

According to the 2019 Americas Investor Intentions Survey, CBRE,

The Top Ranked (Tier I) Metros for Investment in the Americas include

  • West
    • Seattle, San Francisco/Northern California, Los Angles/Southern California
  • East
    • Miami/South Florida, Washington D.C., New York, Boston
  • Central
    • Chicago

The Tier II Metros for Commercial Investment include

  • West
    • Portland, San Diego, Denver, Phoenix
  • East
    • Atlanta
  • Central
    • Minneapolis/St. Paul, Dallas/Ft. Worth, Austin, Houston

Tier III Metros for Commercial Investment include

  • West
    • Las Vegas
  • East
    • Orlando, Tampa/St. Petersburg
  • Central
    • Nashville

In Canada: Toronto

In Latin America: Mexico City

Texas

Three Texas cities, Dallas/Ft. Worth, Austin, and Houston appear in the Tier II category, the middle market. As with property classes, being in the middle has its benefits. Market sections move around. In good times and with infrastructure investment, the lower tier markets move up and in times of recessions or obsolescence, businesses in the upper tiers may relocate to cheaper markets to save money.

There is much to consider when investing in commercial real estate. Really the only thing you can tell from this data is that the investors surveyed, whatever their market, were intending to invest in these cities in 2019.

REI Capital Resources is a direct lender as well as a broker of funding solutions. We offer short and long-term financing options for your real estate investment needs.

We are “focused on funding your success!”

Patrick St.Cin
512-213-2271
Patrick@REICapital.cash 

Life Science Space Rentals

Austin

Texas has not been on the list of the top life Science research hubs, but it could be according to an article by Chris Davis of KXAN, a post on the Austincc.edu website.

Central Texas has a need and it is something commercail real estate investors can help with. Central Texas needs for wet lab space for a growing life science industry. One example of the possibilities is the Austin Community College’s (ACC’s), Austin BioScience Incubator (ABI), a State-of-the-Art facility that leases space and equipment to start-up life science companies. The ABI is booming with 16 companies leasing space. Three companies have moved on, outgrown the facility.

Science/Business Incubator

This science business incubator was born out of an approximate 9,500 sf renovation of the iconic Highland Mall in Central Austin, TX. According to its website, the facility features 4,000 sf of wet labs, two ISO I clean rooms, open workspace, conference space, and support offices. Member companies have access to core laboratories and instrumentation.

Mission

The ACC Bioscience Incubator aims to expand on previous successes by establishing a permanent wet lab facility and business incubator to accelerate Central Texas’ biotechnology economy while training a skilled workforce

Austin Community College

The Austin Area Life Science economy was spurred to new growth by the University of Texas at Austin’s Dell Medical School. Austin is now home to more than 240 bioscience companies, according to the Austin Chamber of Commerce, employing 15, 000 workers.

Growing Industry

The life science business is not likely to go anywhere but up in the future. Life science industries involve everything about life including health care for an aging population and DNA research, as well as pharmaceutical research, tissue fabrication, sanitation and food safety, genetics for preventing disease, and nanotechnology for medical devices, computer modeling, and imaging technologies.  This industry has been adding jobs since 2000, 5 times faster than the US economy, according to a report by Cushman and Wakefield published in January 2019.

Adaptable Space

This is an interesting type of real estate to look at for an investment. The key factors in investing in commercial real estate to renovate and rent to life science businesses is that the space needs to have both office space and wet lab space. It needs to be efficient and adaptable space for housing imaging technologies, clean rooms, collaboration, and storage, preferably near universities and cultural amenities to attract and retain scientific talent.

white baby mouse

Photo by Pixabay on Pexels.com

REI Capital Resources is a funding source for SFR Fix-n-Flip, Fix-to-Rent, and Refinance projects as well as larger commercial projects such as office buildings, 5-40 door multi-family buildings, and many others. These programs vary wide and far throughout the gamut of lending. Call or e-mail for more information.

Patrick St.Cin
W – 512-213-2271
Patrick@REICapital.cash
Info@REICapital.cash

References

Life Sciences: Limited Supply, Increasing Demand Driving Increased Real Estate Costs, 1/31;2019, ww.cushmanwakefield.com/en/news/2019/01/life-sciences-report

Life Science Space Continues to Be in High Demand with Low Vacancies and Rising Rents, National Real Estate Investor, Patricia Kirk, April 22, 2019.

Where scientific breakthroughs happen: Three trends shaping labs of the future JLL , Mike Romer, Chicago, February 15, 2018

“Focused on Funding Your Success”