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HZ News

September 1, 2016

HZ Acquires Eugene Apartment Complex for $31 million

A group of California apartment investors has bought a large Eugene apartment complex for $31 million, the third time this year that investors from the Golden State have paid $30 million or more for a Eugene apartment building.

Ecco Apartments, a 192-unit complex off River Road and Hatton Avenue built by private developers using federal assistance to create government-subsized housing for lower-income families, sold last week. The majority buyer was San Francisco-based Hamilton Zanze.

“We really, really like the Eugene market,” said David Nelson, managing director at Hamilton Zanze. “We own a bunch of assets in the Portland metro area, but we were looking to Eugene to be a long-term play,” Nelson said. The firm plans to build a pool at Ecco Apartments, but doesn’t have any other changes in store, he said.

Read more at The Register-Guard

 



August 23, 2016

CBRE: “Young Americans Do Like the Suburbs”

A recent article from CBRE’s research team “busts” the popular narrative that millennial migration to cities is causing the decline of the American suburb.

“Census data disagree with the media on where millennials actually live and where they have been moving to,” writes Darin Mellott, Director, CBRE’s Research and Analysis.

The article reports only 30% of millennials live in urban areas. In 2014, more than half a million people between the ages of 25 and 29 moved from cities to the suburbs, while only 426,000 moved in the opposite direction. For younger millennials aged between 20 and 24, the flow was even more pronounced, with 721,000 moving out of cities to the suburbs and 554,000 leaving the suburbs to pursue city life.

Read more at CBREcapitalwatch.com



August 16, 2016

Homeownership Rate Drops to 51-Year Low

The U.S. homeownership rate fell to a five-decade low in the second quarter of 2016, according to the Census Bureau. At 62.9%, the homeownership rate is exactly where it was in the first quarter of 1965.

After reaching a high of 69.2% in the fourth quarter of 2004, the percentage of homeowners dropped dramatically as residents faced the worst recession since the Great Depression. Meanwhile, the rental vacancy rate – which includes all forms of rental housing — dropped to its lowest level since the fourth quarter of 1985.

Read more at Axiometrics.com



August 9, 2016

Apartments Near Coors Field Fetch $20M

A San Francisco real estate firm has notched an eight-figure acquisition near Coors Field.

Hamilton Zanze bought the Diamond at Prospect apartment building at 3001 Fox St. last month for $20.5 million. It’s at least the third Denver area apartment buy for the firm over the last six months, managing director David Nelson said.

“We’ve made a push to purchase affordable housing properties in the past two years, and we’ve had a pretty large presence in Denver,” Nelson said. “This was a unique opportunity because it’s so close to downtown Denver and has great walkability.”

Read more at BusinessDen.com



August 8, 2016

Freddie Mac: Multifamily Mid-Year Outlook 2016

The multifamily housing market is moderating but will remain strong this year and into next, according to Freddie Mac’s Multifamily Mid-Year Outlook 2016, released August 2nd.

Multifamily fundamentals moderated in the first half of 2016, slowing from 2015’s record-high growth, as was expected for this phase of the economic cycle. The moderation indicates a healthy market is moving toward equilibrium. Strong economic and demographic fundamentals will continue to support growth in the multifamily industry, but at more sustainable levels.

“We entered a period of positive moderation during the first half of 2016 that is natural at this point in the economic cycle,” said Steve Guggenmos, Freddie Mac Multifamily vice president of research and modeling. “Rather than indicating overproduction, current and projected supply levels show a measured response to market changes and demand from Millennials and other groups with high propensities to rent. We expect the multifamily sector to continue to grow at above pre-recession levels, although market differences will continue to vary.”

Read more at FreddieMac.com



August 5, 2016

BLS Employment Situation: July 2016

Nonfarm payroll employment increased by 255,000 in while the unemployment rate was flat at 4.9% in June, according to the U.S. Bureau of Labor Statistics. Employment increased inprofessional and business services, health care, and financial activities, while employment in mining continued to decline.

Read more at BLS.gov



July 27, 2016

Fed Keeps Rates Unchanged, Sees “Diminished Risk” in U.S. Economy

The Federal Reserve voted to leave the benchmark federal-funds rate unchanged at 0.25 – 0.50%, but noted the labor market has “strengthened.” After its two-day meeting, the central bank said “near-term risk to the economic outlook have diminished,” leaving the door open to an increase later this year, possibly as early as September.

The pace of hiring bounced back in June to a gain of 287,000 jobs from just 11,000 in May. Officials described household spending as having been “growing strongly,” and economic activity as expanding at “a moderate rate.”

Read more at Nasdaq.com

 



July 25, 2016

IMF: Structural Forces Weigh on Future U.S. Growth

The U.S. economy is currently doing well, but continued long-term growth requires addressing chronic issues, including falling labor force participation, weak productivity, rising income polarization, and high poverty rates, the International Monetary Fund (IMF) said in a recently released review of the national economy.

The report notes even with added stresses of a strong dollar, an energy-sector contraction, and global economic uncertainty, the IMF predicts U.S. GDP growth of 2.2% in 2016 and 2.5% in 2017.

In the longer term, however, the national economy faces a number of headwinds, including lower labor force participation due to an increasing share of the workforce retiring, income and wealth distribution that are increasingly polarized, and high levels of poverty.

Read more at IMF.org



July 18, 2016

HZ Sells Mesa Apartments

Mesa, Ariz.—Gateway on Gilbert Apartments in Mesa, Ariz., has traded hands. San Francisco-based Hamilton Zanze (HZ) and New York City-based Dome Equities sold the property to Capital Real Estate for an undisclosed price. ARA Newmark represented the sellers.

The 432-unit apartment community at 1710 S. Gilbert Road was built in 1985 and is about 20 miles southeast of downtown Phoenix. During an ownership of almost three years, HZ undertook over $3 million in capital improvements to the property, including 216 unit upgrades, a roof replacement and clubhouse remodel.

The one- and two-bedroom units average 819 square feet and feature full-sized washers and dryers, vaulted ceilings, fireplaces, ceiling fans, and walk-in closets. Common amenities include four swimming pools, a fitness center, sports courts, dog park, and picnic and barbecue areas. At time of sale, occupancy was 96 percent.

“We executed on our value-add strategy at Gateway on Gilbert and were able to opportunistically sell the asset due to the strong Phoenix market,” said Kurt Houtkooper, HZ’s chief investment officer. “We look forward to a continued presence in this market.”

HZ has been in a disposition mode lately, selling 13 multifamily properties in 2016 thus far. Dome’s real estate portfolio totals nearly $1.27 billion, of which 94 percent are apartment properties located in 20 metro areas nationwide.



July 13, 2016

Press Release: Hamilton Zanze Sells 432-Unit Apartment Community in the Phoenix Metro

SAN FRANCISCO, CA—San Francisco-based real estate investment company Hamilton Zanze (HZ) and joint venture partner Dome Equities, a private equity real estate investment firm, sold Gateway on Gilbert Apartments to Capital Real Estate, LLC on July 1, 2016 for an undisclosed price. ARA Newmark represented the sellers.


The 432-unit apartment community was built in 1985 and is located at 1710 S. Gilbert Road in Mesa, AZ, approximately 20 miles southeast of Downtown Phoenix and at the center of several business corridors.


 

“We executed on our value-add strategy at Gateway on Gilbert and were able to opportunistically sell the asset due to the strong Phoenix market,” says Kurt Houtkooper, HZ’s chief investment officer. “We look forward to a continued presence in this market.”


During an ownership period of almost three years, HZ implemented over $3 million in capital improvements, including 216 unit upgrades, an extensive roof replacement, and clubhouse remodel. The one- and two-bedroom units average 819 square feet and feature full-size washers and dryers, vaulted ceilings, fireplaces, ceiling fans, and walk-in closets. Community amenities include four swimming pools, fitness center, sports courts, dog park, and picnic and BBQ areas. At time of sale, occupancy was 96%.


HZ has sold 13 multifamily properties in 2016 thus far. Dome’s real estate portfolio totals nearly $1.27 billion, of which 94% are apartment properties located in 20 metropolitan areas in the United States.


Summary of the Disposition

• 432-unit Class B multifamily property built in 1985
• Located at 1710 S. Gilbert Road, in Mesa, AZ (Phoenix MSA)

• Undisclosed price


About Hamilton Zanze

Hamilton Zanze is a private San Francisco-based real estate investment company that owns and operates apartment communities. Since its founding in 2001, Hamilton Zanze has acquired over $2.4 billion in multifamily assets across 10 states in the Western and Southwestern U.S. The company currently owns and operates 84 properties (18,068 units) across nine states. For additional information, visit www.hamiltonzanze.com.


About Dome Equities, LLC

Dome Equities, LLC (www.domeeq.com) is a New York City-based private equity real estate investment firm specializing in core+, value-add, and opportunistic strategies in U.S. real estate with a focus on multifamily rental properties. Dome’s mission is to deliver investment opportunities that provide strong, stable current returns while generating long-term capital appreciation. The firm applies a disciplined investment process marrying top-down economic and demographic research with bottom-up sourcing by accessing local knowledge via an expansive, scalable network of owners/operators. Management currently employs a strategy targeting investment in the multifamily apartment market. Always seeking profit creation as a core objective, Dome acquires apartment properties below their replacement cost, implements best-in-class management practices and invests strategic capital to improve property operations, followed by the sale to a long-term owner, all within a three- to five-year period.

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