Industry News | Wk of Feb 12
HOT & RELEVANT TOPICS
Wellness Communities Could Be The Next Big Real Estate Trend
Developers are taking aim at widespread national issues like obesity, loneliness and depression by creating wellness communities. These wellness communities are changing the multifamily game by encouraging physical activity while promoting a deeper connection between people and nature. These types of communities centered on health and wellbeing include amenities and features such as organic farms, spas, bookstores and proximity to walking trails. Read Lara O’Keefe’s article on Bisnow.
High-Tech Products for Safety, Efficiency & Effectiveness
Today’s most in-demand multifamily appliances and devices aren’t simply about a sleek modern design. Functionality is a crucial component as well. Some high-tech products for apartments save time, conserve energy and are making the transition from trend to norm. A few of the most-popular, high-operating smart appliances on the market include DXV’x smart toilet, August Home’s smart locks and The Intelligent Oven by June. Read Alexandra Pacurar’s article on Multi-Housing News.
Where Are Multifamily Developers Going Next?
Developers are keeping a watchful eye on fast-growing secondary market to determine how well they’ll absorb the apartments now under construction. Because the current cycle has persisted so long, developing in core urban markets is becoming more challenging. But forward-thinking developers are not flocking to the suburbs and secondary markets without doing their due diligence, such as determining the migration trends of those pushed out of the urban core and examining how well new development is being absorbed. Read Paul Bubny’s article in National Real Estate Investor.
IN THE NEWS
How the New Tax Reform Act Helps Multifamily
The potential multifamily impact created by the Tax Cuts and Jobs Act is often debated, but many industry professionals are viewing any changes with a glass-half-full perspective. Among those is Douglas Fisher of Chicago-based Essex Realty Group, who believes any changes in the act, which became active Dec. 22, will be beneficial to the industry. Fisher breaks down act-induced changes to the capital gains rate, the 1031 exchange, step-up in basis rule and other tax laws, and examines how they might affect the real estate industry. Read Fisher’s article in Multifamily Executive.
How Student Housing Stacks Up to Market-Rent Property
The National Apartment Association’s 2017 Survey of Income & Expenses yields a detailed look into how student housing stacks up against conventional apartments. Among the key findings: Student Housing achieves a smaller share of the gross potential rent (GPR), checking in at 89.9 percent compared to 92.4 for conventional; student housing has higher losses to vacancy (8.1 percent to 6 percent) largely due to its seasonality; but student housing nearly makes up for these disparities through “other revenue” such as amenities and fees. Student’s housing’s “other revenue” accounts for 7.7 percent of its GPR compared to 5.4 for market rate. Read Paula Munger’s article in units.
Rent Control Needs Retirement, Not a Comeback
Past experimentation with rent control should serve as a reminder of why it won’t work, according to Bloomberg’s Megan McArdle. Whispers of a rent-control comeback have been widely published, including by the Wall Street Journal, but the concept hasn’t produced desired results in the past. Initially, residents rejoice and rent control looks like a victory for the poor over apartment operators. But the stifling of prices leads to problems, as wages rise and rents don’t, and people with high incomes have more resources to pursue artificially cheap real estate. Read McArdle’s editorial on Bloomberg View.