SAN JOSE, CA – With the near completion of 200 new, affordable housing homes, the $46 million Charlotte Park Apartments in San Jose, Calif., is a fantastic example of ROEM’s expertise in building a high quality affordable residential rental community located within a market-rate development. In this case, ROEM Corp. satisfied most of the affordable housing requirement of the Hitachi master-plotted community, with ROEM Builders, Inc., acting as both general contractor and construction manager.

“While inclusionary housing policies provide a major source of funding for affordable housing, they can significantly reduce a developer’s return and make long-term obligations,” said Alex Sanchez, Executive Vice President of ROEM Corporation. “Our market-rate developer partners recognize the benefits of having ROEM act as their third-party general contractor. We assume their affordable housing obligations and pay the in-lieu fees while designing and building high-quality affordable housing that seamlessly blends with their market-rate housing. About 430 of our more than 3,000 new affordable housing units completed since 2000 were built by ROEM for a market-rate developer.”

Located on the former Hitachi Global Storage Technologies campus, Charlotte Park is part of a 295-acre master-plotted community that will include condominiums, apartments, attached townhomes, many pocket parks, and a large 10-acre park with a baseball field. Charlotte Park is situated near the intersection of Cottle Road and Highway 85, and within walking distance from the Blossom Hill Caltrain station and the Cottle and Santa Teresa light rail stations. This $46 million development with the construction and permanent financing provided by Citi is affordable to families that make 60 percent or less of the Santa Clara County Area Median Income and provides an amenity-rich residential experience.

“Charlotte Park provides a safe haven to those who are being squeezed out of quality housing in Silicon Valley,” said Jay Abeywardena, Director at Citi. “We are excited to help support this initiative and believe this project will have a meaningful impact on the community.”

Charlotte Park Apartments gained an efficiency of management thanks to two other ROEM developments – Oak Grove Apartments and LEX Apartments – being constructed simultaneously within about a half-mile radius. Although these are separate projects managed by separate teams, ROEM was able to share resources from time to time because of their close proximity.

“With Alliant’s investment of nearly $15 million, Charlotte Park Apartments will provide an additional 200 units of much needed safe and affordable housing to the San Jose Area,” said Brian Goldberg of Alliant Capital, Ltd. “We are proud to be a partner in the development of this property and excited for the residents who will benefit from it for years to come.”

With ROEM’s emphasis on sustainability, Charlotte Park will be pursuing USGBC LEED Gold certification. Because both solar thermal heating and solar photovoltaic power sources are being installed, Charlotte Park has the potential to save up to 85% on utility bills when compared to electric water heating. Per LEED standards, all apartments have high-efficiency flush toilets and faucets as well as “Evolve Roadrunner” showerheads that are thermostatically controlled. In addition, Charlotte Park integrates efficient landscape design by using native species and zero turf on a lot designed to capture and treat all stormwater.

The amenity-rich, four-tale apartment building (with 230-parking space garage) includes a courtyard with outdoor barbecue, dining area, tot lot and lounge area; community room with media alcove, kitchen and entertainment area; storage area; homework and computer room; and laundry facilities. Apartments will be equipped with Energy Star refrigerators and dishwashers, blinds, carpet, coat closets, and electrical four-burner stove/ovens.

With completion slated by the end of June, Charlotte Park is already fully leased.

ROEM Development Corporation, ROEM Builders, Inc., and their affiliated entities are a full-service development and construction organization that has specialized in the acquisition, plotting, financing, new construction, renovation and asset management of market-rate and affordable housing throughout California for more than 30 years. Ranked in Affordable Housing Finance magazine’s Top 50 Affordable Housing Developers of 2015 list and a registered member of USGBC and Build It Green, ROEM is dedicated to making wholesome communities that are not only sustainable but also designed smarter to ensure that residents are healthier, more pleased and safer. ROEM has completed more than 3,000 affordable housing units with more than 1,000 units currently under construction.

Powered by WPeMatico

NEW YORK, NY – The risk of class-A overbuilding is rising in some submarkets, Fitch Ratings says. The concentration of high-end construction in 12 metro areas is intensifying and new supply in the student housing sector continues to break records. But, we do not expect the stress in multifamily asset performance to have an overall impact on ratings.

The majority of new multifamily construction is concentrated in just 12 metro areas. By far, the most common type of construction is in the class-A segment in the higher rent neighborhoods. Asking rents increased by 4.6% in 2015 and are forecast to increase by 3.4% in 2016 according to Reis reports. If the pace of rent increases continues to fall, this concentration could compound downward rent pressure on rents in those areas. Currently, but, the impact of new supply is relatively muted, as asking-rent gains remain strong and vacancy rates are still low (although increasing).

Metro areas with exposure to the oil and gas industry may carry an additional risk. Dallas and Houston, two of the markets with large amounts of new multifamily construction, have diversified their markets in the wake of past energy market crises. That has muted the impact of the current declines in the energy sector so far. But, the longer term impact remains to be seen.

New supply in the student housing subsector has reached record levels in recent years. In 2015 approximately 48,000 beds were delivered and a similar amount is forecast for this year. While individual properties have begun to exhibit performance deterioration due to occupancy declines, we expect overall student housing vacancies will hover around 2% for 2017. We have seen some properties with increased expenses, deferred maintenance, and/or average rent declines.

We believe some of these pressures may be related to superior and newer properties that have entered their submarkets during the rise in construction, as well as declining enrollment at certain institutions. The American Association of Community Colleges found distance-education enrollments accounted for nearly all recent student growth at two-year institutions from fall 2013 to fall 2014. Over the longer run, the trend toward off-campus learning options may lower overall demand for student housing.

Vacancy rates in the multifamily sector have risen by small increments but are forecasted to remain benign overall. Reis reports that the overall vacancy rate increased to 4.5% as of first-quarter 2016 from 4.4% as of fourth-quarter 2015. Reis forecasts a modest increase to the overall vacancy rate to 5.2% in 2020 from the current 4.5% as new supply enters the market.

Powered by WPeMatico

BETHESDA, MD – Walker & Dunlop announced that it has completed the buy of a $3.8 billion commercial mortgage servicing portfolio from a subsidiary of Oppenheimer Holdings for a final closing price of $44.6 million.  The bought portfolio, comprised of 480 permanent loans insured by the U.S. Department of Housing and Urban Development (HUD), has a weighted average servicing fee of 17 basis points.  Annual servicing revenue from the bought portfolio is projected to be approximately $6.4 million. 

Of the 480 loans, 361 loans, with an unpaid principal balance of $2.7 billion, are secured by multifamily properties.  The other 119 loans, with an unpaid principal balance of $1.1 billion, are secured by seniors housing and healthcare properties.  The portfolio is geographically diverse with loans in 43 states, the District of Columbia and the U.S. Virgin Islands. 

The loans in the portfolio have a weighted average note rate of 3.99% and an average age of 44 months. The average remaining life of the portfolio loans is 31 years.  Given the relatively low average note rate and remaining maturity of the portfolio, the Company expects limited prepayments of loans over the coming years.

The portfolio brings with it $230 million in escrow balances and no loss-sharing risk to Walker & Dunlop.  With the addition of this portfolio, the Company will immediately start interacting with our new customers in the process of servicing their loans and meeting their future financing needs.  Walker & Dunlop’s HUD servicing portfolio is projected to exceed $9.3 billion at the end of Q2 2016, making the Company the largest servicer of HUD Multifamily/Healthcare loans in the United States.  

Powered by WPeMatico