Clubhouse with Office, Laundry Facilities, Fitness Area, Outdoor Pool, and Courtyard
Located in Montgomery Illinois | 40 Miles Southwest of Downtown Chicago
Upgraded Kitchens and Baths
Tenant Paid Electric Baseboard Heat
Value-add component, upside in rents
Marcus & Millichap is proud to present to market Victorian Apartments, a 152-unit apartment community located in west suburban Montgomery, Illinois bordering Kendall County to the South, the fastest growing county in Illinois, and the City of Aurora, IL to the East, the second-largest city in Illinois.
The subject property is approximately 40 miles southwest of downtown Chicago. Victorian Apartments consists of 16 two and three-story apartment buildings and clubhouse spread out over almost 10 acres; offering 32 large studios, 72 one-bedrooms, and 48 two-bedroom apartment homes. Community amenities include a clubhouse, an on-site management office, laundry facilities, a fitness area, an outdoor pool, a central courtyard area with a playground, and ample off-street parking. Each unit has separately metered, tenant paid, low maintenance, electric baseboard heating, and ac sleeve units. Units have updated kitchens and baths.
Updated Kitchens and Baths, Newer Windows, Roofs and Boilers
Very Well Maintained and Operated with Good Collection History
Upside in Rents Ranging from $50-$150 Per Unit
Marcus & Millichap is pleased to present to market a well-maintained and fully occupied 27-unit multifamily offering in Blue Island, Illinois, a southern suburb of Chicago. The property consists of five contiguous five and six-unit apartment buildings with a total of 18 one-bedroom units and nine two-bedroom units.
Each unit has updated kitchens, baths, newer appliances, durable luxury vinyl wood plank flooring, and radiant baseboard heating; some of which are separately metered and tenant-paid. Each three-story brick building offers tenant storage, on-site owned coin-operated laundry, and off-street parking.
Each building has newer energy-efficient vinyl windows and roofs ranging in age from four to ten years and many newer boilers. The parking lot was completely replaced in 2018.
The property is very well run with many longer-term timely paying tenants. Each tenant is thoroughly screened and well documented with written lease agreements. There is market-supported upside in rents ranging from $50-$150 per unit many through simple renewal increases and some with modest unit renovations.
The property is located approximately 16 miles south of Chicago’s Loop just south of the Little Calumet River in a quiet park-like setting across from the forest preserve, but only minutes from Interstate 57, Blue Island Vermont Street train station, and the Vermont and Division Street bus station.
Demonstrators hold signs during an eviction protest in Foley Square in New York, U.S., on Thursday, Oct. 1, 2020. Bloomberg | Bloomberg | Getty Images
The U.S. is narrowly averting a potential eviction crisis at the start of the new year, as Congress is set to pass a coronavirus relief bill that includes funding for rental assistance and the continuation of the nationwide eviction moratorium.
The bill, which is expected to be voted on Monday, provides $25 billion in emergency rental relief and a one-month extension of the nationwide eviction moratorium, through January 31, 2021.
The provisions are “a start,” Rep. Maxine Waters (D-Calif.) tells CNBC Make It. But more aid and a longer eviction ban are likely needed once President-elect Joe Biden takes office in January, she says, noting that she pushed for the inclusion of $100 billion in rental relief in the HEROES Act, the $3 trillion relief bill passed by the House in May.
“We have to do whatever it takes” to keep people housed, Waters says. Plus, more rental relief also benefits the “mom and pop landlords” who still have to pay their mortgages.
At the beginning of December, around 12.4 million adult renters reported that they are behind on their rent payments, according to the Center on Budget and Policy Priorities (CBPP), highlighting the need for aid. How the rental relief will work
The $25 billion in rental assistance will be funded through the Coronavirus Relief Fund (CRF) and administered by the U.S. Department of the Treasury. Once the funds are dispersed to states, tenants will apply for aid through state or local relief organizations.
How quickly the assistance becomes available will be dependent on where you live, Diane Yentel, president and CEO of the National Low Income Housing Coalition (NLIHC), tells CNBC Make It. Some states, like New York and California, already have established emergency rental assistance programs. Other states, like Alabama and Missouri, will have to set them up, which takes time, she says.
That’s why it will be crucial for Biden to extend the eviction moratorium when he takes office, Yentel says. It will take longer than one month for some states and localities to establish relief programs and get the assistance out to people who need it.
The funds can be used for back rent and overdue utility payments from the start of the pandemic, as well as future bills. At least 90% of the money states and territories receive must be used to provide financial assistance to households.
Renters will be eligible for relief if their household income is below 80% of the area median income (which varies by county and household size), and someone living there: Has qualified for unemployment benefits, has lost part of their income, or has experienced financial hardship because of Covid-19, or can show that they are at risk of losing their home
Landlords and utility companies can be paid directly by state and local governments as long as tenants have signed off on the application. If landlords refuse the aid, renters can apply and receive the funds and then pay their landlords. Households are eligible for 12 months of assistance but may receive up to 15 months if it is “necessary” to keep them in their home.
Renters will also be able to access case management and tenant-landlord mediation services.
Month-to-Month Lease Offering Flexibility to Renew, Re-let, Renovate
Off-Street Parking, Storage and Laundry Facility
Marcus and Millichap is pleased to present to market this fully occupied 10-unit value-add multifamily offering in Blue Island, Illinois, a southern suburb of Chicago. The property consists of two adjacent 5-unit brick apartment buildings each containing four one-bedroom units and one two-bedroom unit. Amenities include off-street parking, storage units, and on-site laundry in each building.
Each unit has written month-to-month leases offering the flexibility to retain these tenants, renew or renovate and release at higher market rents as each unit is approximately $150 below current market rent for the area.
The property is located approximately 16 miles south of Chicago’s Loop two blocks from the 119th St Metra Station, 119th Street & Vincennes Bus Stop, and two-minutes from Interstate 57.
Fully-Occupied, Five-Unit Multifamily Property and Commercial Unit (Salon)
New Roof, Electrical Service, Gas Service, Furnace, and Hot Water Tank
Renovated Units, Exterior Paint, and Off-Street Parking Lot Replacement
Low Property Taxes and Tenant Paid Gas Heat
Located in Joliet, the Fourth-Largest City in Illinois
Unit Mix of Studio, One-Bedrooms, Two-Bedroom, Three-Bedroom and a Commercial Unit
Marcus & Millichap is proud to present to market two adjacent, fully-occupied buildings on one parcel, consisting of five multifamily units plus a commercial unit (salon). Each tenant pays separately metered gas heat; combined with low taxes and current market rents provides a healthy return for a smaller investment property. A number of very recent capital improvements have been completed including, but not limited to new roofs, upgraded electrical service, gas service, one of two new furnaces and hot water tanks, exterior painting, and off-street parking lot replacement. The unit mix consists of one studio, two one-bedrooms, one two-bedroom, one three-bedroom, and one small recently renovated commercial space occupied by a salon. Each unit has been partial to fully renovated, is on an annual written lease agreement, and current on their rents as of the drafting of this offering memorandum. The property is situated in Joliet, Illinois, approximately 30 miles southwest of Chicago. The property is just south of central downtown Jolie t with convenient access to public transportation, local shopping, and public services. Jolie t is the county seat of Will County and is the fourth-largest city in Illinois. The largest employers in the area include Amazon, AMITA Health Saint Joseph Medical Center, and Will County.
The latest data from the National Multifamily Housing Council shows that nearly half of respondents believe market conditions are looser than three months ago.
National apartment conditions could be showing signs of improvement, according to apartment owners then responded to the National Multifamily Housing Council’s Quarterly Survey of Apartment Market Conditions.
The market tightness index increased from 19 to 35, which indicates a loosening market. According to the survey, 49% of respondents said that market conditions were looser than in the prior three months. Only 18% of respondents said that market conditions are tighter than the prior three months, while 33% of respondents thought the market conditions were unchanged. According to NMHC chief economist Mark Obrinsky, market conditions are continuing to deteriorate, but the market tightness index shows that there is a growing variation in the market outlook from respondents.
Other areas of the survey show improving market conditions. The sales volume index increased from 18 to 72, and 60% of respondents reported higher sales volume than the prior three months. This was a significant majority. Only 16% of respondents in the survey said that sales volumes decreased compared to the prior three months, and 19% found the market unchanged. This data shows that investment capital is returning to the market after retreating at the start of the pandemic. Historically low-interest rates and greater availability of debt has helped drive capital back to the market.
In the debt financing index, more than half—51%—of respondents are having an easier time securing financing than in the previous quarter, and 35% of respondents thought that the market was unchanged. Only 6% of respondents reported that the debt conditions were worse than the prior quarter.
Finally, the equity financing index also showed stable market conditions. Most respondents to this portion of the survey—42%—said that the market conditions for equity were unchanged from the prior three months. However, 35% reported improving conditions, while 12% of respondents found equity financing was less available than the previous quarter.
Overall, apartment owners’ outlook on the market is improving. The survey asked respondents to share their outlook on these trends, and 46% expect that these conditions will last six to 12 months beyond the end of the pandemic, while 31% of respondents believe that these trends will end when the pandemic ends. Only 8% of respondents believe that these market conditions will persist indefinitely—the most pessimistic outlook—while the additional 16% were unclear on the future of the market.
Source: GlobeSt By Kelsi Maree Borland | October 26, 2020 at 06:52 AM
With sophisticated daily pricing tools, apartments today are better positioned to respond to inflationary pressures than they were forty to fifty years ago.
During the last six months, The Federal Reserve has acted aggressively to thwart the COVID economic crisis. It pushed interest rates to near zero and purchased massive amounts of securities. Add these moves to the $2.2 trillion CARES Act, and you have an enormous increase in money supply and the federal budget deficit.
In a new report, Patrick Lynch, vice president of Research and Analytics Middleburg Communities, wonders, like many observers, if these moves will create inflation in the future. And if so, will the multifamily asset class continue its traditional role of providing a hedge.
To help predict the future, Lynch looks back to the 1970s—the last time the US experienced a significant rise in inflation—and compared the annual average rate of rent growth to the average inflation rate from 1973 to 1983 by studying three data sources.
Looking at the Personal Consumer Expenditures Price Index, rents grew slightly less than overall inflation but marginally more than core inflation stripped of food and energy. The Consumer Price Index (CPI-U) indicates that rents grew at an average annual rate of 6.7% but it was below the average yearly inflation rate. The American Housing Survey showed that the median rent increased by an average yearly rate of 8.5%, which exceeded all measures of inflation, according to Lynch.
Lynch finds that the CPI-U measure of average annual is a bit exaggerated due to its treatment of mortgage interest and he gives more weight to the PCE measures. If you look at the AHS data, which uses constructed units to calculate overall average rent growth, then growth likely exceeded the rate of inflation over this period.
“The history of apartment rents in the 1970s and early 1980s demonstrates the resilience of the multifamily asset class and its strong potential as a hedge against inflation,” Lynch writes. “Despite lackluster job growth and high unemployment, apartment rents nonetheless kept pace with inflation during the most inflationary period to date in postwar US history.”
Better Positioned Now
With sophisticated daily pricing tools, Lynch thinks apartments today are “better positioned to respond to inflationary pressures than they were forty to fifty years ago.”
For instance, revenue management, which didn’t exist in the 70s, can take the guesswork out of pricing decisions.
“By taking into account factors such as exposure, market conditions, and competition to create targeted rent recommendations, management can drive the most amount of leasing demand while optimizing their revenue,” Stacy Holden from AppFolio told GlobeSt in an earlier interview.
Source: GlobeSt Les Shaver | October 23, 2020 at 07:29 AM
Evictions plummeted even in cities without eviction bans.
You probably read over the last six months about a looming evictions crisis of historic scale. It’s been described as a “tsunami” and an “avalanche.” Some forecasters predicted as many to 30 to 40 million renters could be evicted.
What happened? Not much—and that’s wonderful news. Americans will likely experience a record low number of evictions in 2020. Eviction filings since COVID-19 hit in mid-March have plunged 67% from normal levels in the 17 markets tracked by Princeton’s Eviction Lab. Evictions plummeted even in cities without eviction bans. And all reliable indicators continue to show renters are (so far) paying their monthly rent at near-normal levels. This is good news not only because millions of renters haven’t been displaced as feared, but also because accurate numbers lead to more targeted, more affordable policy solutions that, in turn, increase the odds of lawmakers finally approving much-needed direct aid for renters truly in need.
How did forecasters get it so wrong?
It’s easy to credit a patchwork of local and state eviction moratoriums—followed by the CDC’s national ban enacted in September. But our extensive analysis reveals that moratoriums are just one of many critical factors limiting evictions in 2020. Some of the forecasters who made headlines for doomsday predictions chose to ignore or give scant attention to critical factors helping keep evictions low—high rent collection rates, sympathetic property owners working overtime to accommodate distressed renters, and backed-up court systems. Interestingly, dire headlines typically trace back to just three forecasters with peripheral connections to real estate. At the same time, media reports frequently downplayed studies from real estate researchers showing significantly less distress— including those from RealPage, the Mortgage Bankers Association, and the Urban Institute.
One of the most widely cited eviction prognosticators is Stout, a consulting firm that has done several studies on evictions for different organizations. Stout forecasted about 11 million potential eviction filings over a four-month period beginning May 13, according to the consultant’s website, among the 16.2 million households “at risk of eviction.” Stout also predicted 2 million eviction filings in both August and September – meaning 4x the annual number in just a two-month period. Both estimates appear to have overshot by a huge margin. Stout remains very bullish on evictions. In a September report produced for the National Council of State Housing Agencies, Stout wrote: “Stout estimates that by January 2021, up to 8.4 million renter households, which include 20.1 million individual renters, could experience an eviction filing.” That outlook appears highly unlikely.
Another forecast that grabbed headlines came from the Aspen Institute, a think tank, in conjunction with the COVID-19 Eviction Defense Project. This group estimated in June that “19 to 23 million, or one in five of the 110 million Americans who live in renter households, are at risk of eviction by September 30, 2020.” While there is no uniform measure for “at risk,” there is plenty of evidence that actual evictions through September ended up a small fraction of Aspen’s forecast. Curiously, even as the economy showed signs of gradual recovery over the summer, Aspen doubled down in a follow-up report in August, estimating that “30–40 million people in America could be at risk of eviction in the next several months … If conditions do not change, 29-43% of renter households could be at risk of eviction by the end of the year.” That scenario appears nearly impossible to pan out. A third forecaster, Amherst, opined in May the possibility of evictions registering “in excess of the levels we saw in the wake of the Great Recession.” That view has, so far, proven incorrect.
How did forecasters err so dramatically? A study of methodologies and additional datasets reveals multiple explanations. Most of the dire forecasts inexplicably downplayed or ignored a number of major factors that have kept evictions low: relatively normal rent collection rates, widespread eviction moratoriums, a delayed legal system, and a sympathetic base of property owners providing extensive measures to give renters unprecedented flexibility.
Instead, some “tsunami” forecasters leveraged questionable assumptions and experimental datasets. One forecaster, for example, initially assumed a 25-30% unemployment rate (roughly triple the current rate). Others relied heavily on a new Census dataset called the Household Pulse Survey, which the Census itself labels as “experimental” and discloses the risk of overstating distress due to non-response bias.
Additionally, good forecasts wisely separate newly (or additionally) distressed households from the millions challenged even prior to the pandemic, as the latter group is largely accounted for in pre-pandemic eviction baseline numbers. Failing to make that distinction can inflate eviction estimates.
Why does accuracy matter? Because as Congress continues to wrangle over relief packages, bloated price tags decrease the odds of approval for much-needed direct renter aid programs and increased funding for new affordable housing. Both are badly needed.
It’s tremendous news that evictions remain so low. But we also must acknowledge that renter distress is very real and was very real even prior to COVID-19. Evictions would be much higher this year if not for the yeoman efforts of property owners, eviction moratoriums, and—most importantly—the millions of renters paying rent every month. Right now, property owners are taking on much of the burden. But that’s unsustainable, adding more risk for an already fragile U.S. economy. Additionally, the CDC’s national eviction ban is merely a bandaid. Rent is still due when the moratorium expires, and direct renter aid programs are needed to protect both renters and property owners (most of which are small family businesses).
Defining the problem accurately allows for more precise, targeted, affordable solutions. Well-intended researchers may be unintentionally sabotaging their own cause.
Source: GlobeSt By Jay Parsons|October 05, 2020 at 06:53 AM
Clubhouse with Office, Laundry Facilities, Fitness Area, Outdoor Pool, and Courtyard
Located in Montgomery Illinois | 40 Miles Southwest of Downtown Chicago
Many Upgraded Kitchens and Baths
Tenant Paid Electric Baseboard Heat
Value-add component, upside in rents
Marcus & Millichap is proud to present to market Victorian Apartments, a 152-unit apartment community located in west suburban Montgomery, Illinois bordering Kendall County to the South, the fastest growing county in Illinois, and the City of Aurora, IL to the East, the second-largest city in Illinois. The subject property is approximately 40 miles southwest of downtown Chicago.
Victorian Apartments consists of 16 two and three-story apartment buildings and clubhouse spread out over almost 10 acres; offering 32 large studios, 72 one-bedrooms, and 48 two-bedroom apartment homes. Community amenities include a clubhouse, an on-site management office, laundry facilities, a fitness area, an outdoor pool, a central courtyard area with a playground, and ample off-street parking.
Each unit has separately metered, tenant paid, low maintenance, electric baseboard heating, and ac sleeve units. Approximately 60 percent of units have recently updated kitchens & baths as well as other capital improvement made including new windows, parking lot repairs, replacement of all deck footings & supports an updated intercom system with integrated Alexa. Roofs are in good condition approximately 10-12 years old.
There is investor upside in this multifamily offering through the continued renewal and releasing of under-market rents. Further upside may also be realized in future years from job growth and economic development in the area through the redevelopment of the recently sold 350-acre former Caterpillar manufacturing complex minutes from the property.
RealPage recently held a webinar where they discussed the differences between the recent performance and the future prospects of the urban core apartment markets compared to the more suburban markets.
Inspiration for this webcast came from the widespread recent speculation that the COVID-19 pandemic had disproportionately impacted properties in the urban core. The presentation was conducted by Greg Willett, Chief Economist at RealPage, and Adam Couch, Market Analyst at RealPage.
For purposes of this analysis, RealPage defined “urban” areas to be densely populated and highly developed areas around the central business districts of major cities. The “suburban” areas are more affordable and less densely populated areas outside the urban core. However, “suburban” areas may still be within the city limits.
RealPage presented information on occupancy dating back to 2011. It showed that occupancy in urban properties was significantly higher than that in suburban properties at the beginning of the period. However, urban occupancy remained at about the same level, with seasonal variations, while suburban occupancy rose. Starting around 2015, suburban occupancy exceeded that in urban areas, a trend that is still in place today.
Although occupancy has fallen in both urban and suburban areas since the pandemic started, the impact has been more pronounced in the urban areas. This is shown in the first chart from the webinar, below.
While the chart shows the overall occupancy difference between the two regions, the occupancy difference varies by apartment class. Suburban class A and B apartments achieve higher occupancies than their urban core counterparts, but urban class C apartments actually have higher occupancy than their suburban equivalents. However, the higher prices of urban apartments mean that there are fewer class C apartments available there than in the suburbs, so the overall average occupancy for the suburbs remains higher.
Despite reports of people fleeing the urban core, RealPage’s analysis indicates that this is not generally true. Much of the loss in occupancy being seen is the result of young people who are experiencing unemployment moving in with their parents or with roommates. Therefore, the fall that is being observed in occupancy is not so much due to households relocating as it is to the number of rental households decreasing.
While urban flight may be overstated in general, there are metro areas where it is taking place. RealPage identifies these as expensive gateway metros. The second chart, below, identifies several of them and illustrates the extent of their occupancy losses.
In addition to occupancy, pricing changes are a key metric to examine in assessing the disparate impact of the pandemic on urban versus suburban apartment markets. RealPage presented the next chart showing the long term trends in annual changes in effective asking rents for new leases for both markets.
The chart shows that rent growth has been stronger in suburban areas than in urban areas since 2013. While rent growth has fallen in both areas recently, overall rent growth has remained positive in suburban areas while it has fallen to -1.7 percent in urban areas.
Despite the years of higher rent growth in suburban areas, absolute rents remain higher in the urban apartment markets. RealPage estimated the average rent for an urban apartment at $1,955 per month while the average rent for a suburban apartment was estimated at $1,349 per month.
One key to the higher rent growth of suburban area apartments is illustrated in the next chart. It shows the average annual inventory growth rates in the two regions. The much higher inventory growth rate for apartments in the urban core since 2012 has been a factor in dampening rent growth in those markets and in keeping occupancy lower than in suburban apartment markets.
The next chart is the most surprising of the presentation. It depicts the shares of total apartment demand supplied by the urban and suburban markets. The chart shows that the suburban apartment market is much larger than is the urban apartment market. In 2011, over 80 percent of apartment demand was provided by the suburban apartment market. In recent years, that share has fallen to around 75 percent.
While the bars in this chart always add to 100 percent, the actual total number of units being absorbed quarter by quarter could be substantially different. These figures were not provided as part of the presentation.
The chart provides a projection of future demand. It predicts that the share of total demand being supplied by the urban apartment market will rise significantly during the quarter we are now completing and during the next two quarters. This is a little surprising since the attractions of the urban environment: the clubs, restaurants, bars and entertainment, continue to be impacted by COVID-19 related shutdowns.
The next chart projects how occupancy will change through the end of 2021. It is consistent with the previous chart in that it shows occupancy rising in the urban apartment markets over the next two quarters while it continues to fall in the suburban markets. By 2021, it shows apartment occupancy returning to its usual annual cycle, albeit at lower levels of occupancy than in the recent past.
The final chart projects how rent growth will change through the end of 2021. It predicts that the worst is yet to come for rental housing providers, with rent growth in both urban and suburban markets turning negative by the first quarter of 2021. It does not project overall rents to increase until some time in 2022.