Multi-Housing News - December 2008 - (Page 11)

okay. They prefer to have the lower rent,” he says. “We see companies installing items such as granite counters and stainless steel appliances. Thirty to 40 units into the rehab, it is hard to cut back on these.” Breneke says that spending on rehab may be reduced 10 to 20 percent, by, for example, installing white appliances instead of stainless-steel ones. Rents can be increased today by maybe $15 for every $1,000 spent rather than $20 for every $1,000 spent, he says. Breneke also advises that developers should look hard at the large-ticket items, such as the roof and HVAC systems—to make sure they are intact when considering an acquisition. “You want a solid environment.” He opines that the rehab should also be executed from “the outside in.” Compromises can be made on the inside, he suggests, “but the curb appeal should look its best.” Katz, of Sterling American Properties, calls for the industry to remain calm. “This is just to remind everyone that we have been through this before. The key is not to panic. You’ll come out of it. Everyone does. So, you’ll have a smaller vacation, and one car instead of two. The key is to keep your head up, and not get depressed.” He said owners also “came back” from the recession of the late 1980s and early 1990s. MHN To comment on this article, e-mail Keat Foong at kfoong@multi-housingnews.com Community Investment Mezzanine Fund, LP MHN ONLINE Limited Range Multifamily Starts 400,000 350,000 Units $8,000,000 CI Mod Rehab Mezzanine Loan secured by an Apartment Complex comprised of 406 Units located in the La Mesa area of San Diego, CA and subject to $33,000,000 of Senior Mortgage Financing originated by Deutsche Bank Berkshire Mortgage Santa Monica, CA 300,000 287,000 250,000 247,000 Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. ’08 Multifamily Starts: Starts are down to 247,000 units (seasonally adjusted annual rate), but that’s not the low for the past 12 months, surprisingly enough. Last December, the starts rate was at 211,000 units. The numbers have been all over the map since then, but they seem likely to stay in the mid-to-low 200,000-unit range for the immediate future. NAHB’s forecast for multifamily starts shows the numbers stalled in that range through 2009, with an upturn beginning in early 2010. That upturn, however, isn’t projected to move much beyond the 250,000 mark. Commentary and Data Supplied by Dean Crist, Senior Economist, National Association of Home Builders (NAHB) To comment, contact kfoong@multi-housingnews.com. Complete series of charts and commentary from NAHB, on Starts, Rent Changes, Interest Rates and Building Materials Prices, www.multi-housingnews.com/marketdata To Discuss Opportunities Please Contact: David Valger Tel: (212) 356-9250 e-mail: cimodrehab@ rcglongview.com Tom Eberhardt Tel: (301) 204-8171 e-mail: Thomas_F_Eberhardt@ fanniemae.com We provide flexible financing options for the rehabilitation and preservation of affordable multi family housing nation wide. For more information, visit www.multi-housingnews.com/productinfo www.multi-housingnews.com | December 2008 11 http://www.multi-housingnews.com/marketdata http://www.multi-housingnews.com/productinfo http://www.multi-housingnews.com

Table of Contents for the Digital Edition of Multi-Housing News - December 2008

Multi-Housing News - December 2008
Contents
From the Editor
NMHC Notebook
Executive Insight
Finance: Acquisitions/Rehabs
Market Pulse
Development & Design: Student Housing
Market Report: 2009 Best Bets
Directory: Software Providers
Tech: Leasing Tools

Multi-Housing News - December 2008