CHICAGO (November 13, 2012) - The Habitat Company announced the
acquisition of two assets in the Creve Coeur submarket of St.
Louis, Missouri in a joint venture with Goff Capital Partners, L.P.
for an aggregate purchase price of $30 million. These
acquisitions mark the third and fourth assets in which Habitat has
partnered with Goff Capital Partners in the past year. In
addition, The Habitat Company is the managing agent for Goff
Capital Partners at a 500+ unit asset in Tampa, FL.
The 254-unit Edgewater Court Apartments and 105-unit Tuscan Villas Apartments are prime assets located in one of the most sought after submarkets in St. Louis. These assets offer a value-add opportunity through both management improvements and renovations. "By combining the location of these assets in a premier submarket and having healthcare as its economic driver with Habitat's industry leading operations platform, we create value for our investors. These properties offer Habitat a perfect opportunity to continue to methodically expand our geographic footprint," said Matt Fiascone, Senior VP of Finance and Investment at The Habitat Company. The assets were built in the late sixties and seventies and were renovated from 2005 to 2008. Sitting on 23.5 acres, the properties share extensive amenities including private entrances, three outdoor pools, sand volleyball courts and a fitness center. Additionally, the properties have great visibility, directly off a major thoroughfare and are close to transportation arteries and downtown St. Louis.
"We are pleased to continue to expand our partnership with The Habitat Company," said Conrad Suszynski, Managing Principal of Goff Capital Partners, L.P. Goff Capital Partners is a Fort Worth based private equity firm that concentrates on real estate related assets.
The Habitat Company currently manages for its own account and for third parties over $2 billion in assets comprised of more than 20,000 residential units of market rate, affordable, student, condominium and public housing units in six states. Since December 1, 2011, The Habitat Company's total transaction value for acquisitions and development is approximately $260 million.
By: Alby Gallun, November 12, 2012
Rents at top-tier downtown apartment buildings inched up to a
new high in the third quarter, but the increases are likely to
moderate next year, when a development boom eases a shortage that
has given landlords the upper hand.
Effective rents at Class A apartment buildings downtown rose to $2.58 a square foot, up 0.4 percent from the second quarter and 7.5 percent from a year earlier, according to a report by Appraisal Research Counselors, a Chicago-based consulting firm. Effective rents include concessions such as free rent.
The downtown Class A occupancy rate was 95.6 percent, vs. 96.0 percent in the second quarter and 95.1 percent a year earlier.
With more downtown residents choosing apartments over condominiums, demand for rental housing is outpacing supply, giving landlords the power to hike rents without losing tenants. But supply will catch up with demand next year, when developers complete 2,686 units. Another 2,000 are on tap for 2014.
"Right now, we're seeing rents reflecting the shortage of units downtown," said Appraisal Research Vice-President Ron DeVries. "As we head into next year, as these buildings start to lease, the upward pressure on rents is going to subside."
The question is whether the construction boom will result in a glut of apartments, dragging rents and occupancies lower. Mr. DeVries doesn't expect that to happen, predicting instead that rents will continue to rise next year, but at a lower rate - 3 percent to 4 percent annually.
Class A rents have risen 24 percent since the market hit bottom at the end of 2009, meaning the average high-end apartment now costs $428 more a month than it did it three years ago - or $5,128 a year.
An increase that big should drive more renters into condos, especially considering how much mortgage rates and condo prices have fallen. While more stories are emerging to suggest that may be happening in places, the evidence is purely anecdotal at this point.
Some would-be buyers are waiting for more signs of a recovery in the condo market. Others are still trying to scrape together the money they need for the higher down payment required to get a loan in the post-bubble era.
"As rents continue to rise, it makes for more of a compelling reason for people to buy," Mr. DeVries said. "But they still have to get over the emotional and financial hurdles."
Yet many landlords are counting on 20- and 30-somethings to stay in apartments much longer than they did in the past. After seeing home prices plunge during the bust, some renters view ownership as burden, limiting their flexibility, for instance, if they get a job in another city, the theory goes.
"People are looking at housing and thinking it's more of a lifestyle choice than an investment decision," said Mark Segal, president and CEO of the Habitat Co., a Chicago-based landlord that is building a 450-unit apartment tower in River North.
Landlords are also hoping to get some help from the job market. If downtown employers boost hiring, that will create more demand for apartments.
The much publicized trend of companies moving their headquarters to the city from the suburbs also could benefit landlords, if their employees follow them to the city and the companies continue to hire. Mr. Segal, for instance, is optimistic about Motorola Mobility's recent decision to move from north suburban Libertyville to the Merchandise Mart in River North. Habitat's new building, at 360 W. Hubbard St., is about a block away.
Effective rents at less expensive Class B downtown buildings were $2.20 a square foot in the third quarter, down 0.9 percent from the second quarter but up 4.8 percent from a year earlier, according to Appraisal Research. The Class B occupancy rate was 94.9 percent, vs. 94.7 percent in the second quarter and 95.1 percent a year earlier.
One key metric of demand, absorption - or the change in the number of occupied apartments in downtown Chicago - has fallen recently, dropping to 1,198 in the last four quarters from 1,365 in the prior 12 months and 2,194 in the year before that, according to Appraisal Research.
That might worry some, especially with developers adding nearly 4,700 high-end apartments over the next two years. But the drop primarily reflects the shortage of apartments in the market, not any decline in demand, Mr. DeVries said. Many renters today can't find what they're looking for, he said.
"As we add supply next year, I think it's going to induce some demand," he said.
CHICAGO (November 28, 2012) - The Habitat Company LLC is pleased
to announce that it has been selected as the property management
company for 21 E. Chestnut, a 24-story condominium building located
in the Gold Coast, one of Chicago's most vibrant
neighborhoods. Nestled on this tree-lined street, 21 E.
Chestnut offers a roof top pool, a fitness center and a party
"Heavy weights lifted off my shoulders just hearing Habitat's proposal to be our new management company. I thought the Association could save money and the building would be better if they only delivered half of what I was hearing. Within two months Habitat has exceeded my expectations in every area. Without being given a good paper trail on past budgets, they pulled together for 2013 one of the best budgets I have ever seen. Habitat is a real partner with our Association. Lastly, our onsite manager is providing a consistent welcoming and professional presence for our residents and staff that makes coming home a wonderful experience", said Susanne Smith, 21 E. Chestnut Association, Board President.
For almost 30 years, The Habitat Company's Condominium Management Group has employed the highest levels of integrity, customer service and expertise to protect and preserve the value of the overall property and each unit owner's home. The company is one of the Midwest's largest privately owned property management firms, with everyone from the corporate to on-site staff treating each property like it is their own home. Habitat's condominium management portfolio includes more than 3,300 condominium units managed in Chicago and Detroit.
"It is The Habitat Company's distinct pleasure to partner with 21 E. Chestnut Condominium Association and continue to build upon the community's positive reputation," added Diane White, Senior Vice President of Condominium Management.
"The Habitat Company's leadership team continues to bring transformative service change to our condominium communities and we are pleased to include 21 E. Chestnut in our portfolio as we continue to grow our condominium business. 21 E. Chestnut joins The Bristol, The Buckingham and 400 E. Randolph among other premier condominium associations where we strive to deliver the highest level of service every day", said Mark Segal, President and CEO of The Habitat Company.