Past Apartment Residence Has Gone Condo

In the late 1980s and early 1990s, I lived in a really upscale apartment complex in the Columbus, Ohio suburb of Dublin, in northwest Franklin County. St. Andrew Village had a great mix of young married couples and suburban professionals, was was located near old Dublin's town center. Yet it was far newer, with restaurants and offices popping up all around it. Fast forward to 2006: St. Andrews Village is now known as "The Villas at St. Andrews." A condominum conversion has units selling from the 110,000's to the $180,000's, depending on number of bedrooms and location. I am surprised they aren't selling for more, but competing "apartment to condo" conversion projects in the area are putting pressure on prices. Still, these projects are taking apartments out of inventory in Central Ohio and are putting more pressure on existing multi-family properties- especially at a time when they already are in high demand by both residents and investors, alike.

RIISnet Will Be Hot for Matching Acquisition, Disposition Needs

I was invited to a private online demonstration today of a software tool coming to market, exclusive to Prudential CRES (for now), that enables asset managers of commercial portfolios valued at $5 million and higher to electronically -- and quickly -- match their acquisition and disposition needs. It simplifies the buying and selling process as REITs and others regularly buy and sell properties. Called RIISnet, for Real Estate Information and Insurance System network, this is an incredible tool, and I'll be writing more about it in the near future.

Hats off to the guys in Alabama who put together this revolutionary tool! I look forward to working with you!

Mortgage Rates At 2006 Low

Mortgage rates fell for the sixth week in a row, to nearly the lowest level of the year, as a slowing housing market helped keep rates down. The data is the result of the Freddie Mac (Charts) Primary Mortgage Market Survey. The 30-year fixed mortgage rate fell to 6.11 percent in the week ended Dec. 7 from 6.14 percent in the prior week, according to the survey. It was the lowest the 30-year has been since the week of Jan. 19, when it averaged 6.10 percent. A year ago, the 30-year averaged 6.32 percent.

The 15-year fixed-rate mortgage averaged 5.84 percent, down from 5.87 percent last week. A year ago, it averaged 5.87 percent. This is the lowest the 15-year FRM has been since the week ending Feb. 9, when it averaged 5.83 percent. Rates for five-year adjustable-rate mortgages (ARMs) came in at 5.92 percent this week, down from 5.95 percent last week. A year ago, the five-year ARM averaged 5.78 percent. It was the lowest since February, when it averaged 5.89 percent. One-year ARMs averaged 5.43 percent, down from 5.46 percent last week. A year ago, the one-year ARM averaged 5.16 percent. This is the lowest it has been since March, when it averaged 5.41 percent

"Continued signs of slowing in the housing market and weakness in the manufacturing sector helped keep mortgage rates down this week," said Frank Nothaft, Freddie Mac vice president and chief economist.

Who's Guarding Your Mutual Fund Investment?

Well here's another news item I'm going to print off and use when I talk about the benefits of investment real estate. And this time it's not just about its superior financial returns. The Securities and Exchange Commission announced yesterday that high-power brokerage Jefferies & Co. Inc. has agreed to pay some $9.7 million to settle regulators' charges that it illegally lavished nearly $2 million in golf trips, entertainment including a Playboy party and other gifts on Fidelity mutual fund traders in exchange for their trading business. The SEC and the National Association of Securities Dealers, the brokerage industry's self-policing organization, on Monday announced the settlements, under which two Jefferies executives also were sanctioned. Under the agreement, Jeffries neither admitted nor denied guilt. Hmmmmm. I'm sure there are several investors who placed their money with Jeffries who are mad as hornets. Mutual funds can be decent investments. And most brokers are honest. But you don't know how your broker uses your money, and you have absolutely no control over it. Well, actually, with reports like this, you kind of do get an idea how some mutual fund investments are used. Sheeeesh!

Downtown Columbus Holiday Inn To Get $4M Renovation

A Miami, Fla. hotels group yesterday announced it will invest more than $4 million to renovate the rather tired Holiday Inn on Town Street in downtown Columbus. The property has reported low occupancy in recent years. Ben Castera, president of Sound Hospitality, bought the 240-room property in July for $6.1 million. Sound Hospitality's focus is the mid-scale market. Castera said that the lobby and restaurant also will be renovated, and new windows will be installed throughout the hotel. The Columbus Dispatch reports that through September 2006 the Holiday Inn has been only half full, "far below the 65 percent average occupancy for Downtown hotels." Sound Hospitality owns three Holiday Inns in Florida, and Radisson and Hampton Inn and Suites properties in Arlington, Va.

Off Campus Student Housing A Strong Investment Choice

My business partner and I have long advocated the investment benefits of student housing properties. I can show the benefits on paper, but two industry experts have recently written on the subject, calling off-campus student housing an even better bet than most might think.

"Unlike the larger rental market, which is subject to economic swings, student housing is recession-resistant, and may well be practically recession-proof," say Richard Levy and Michael Tucker. The two are executives of the National Multi Housing Council, so naturally, readers might suspect they are biased. Still, they confirm what investors in campus area properties -- and brokers handling those properties -- already know. Off-campus housing is a tremendous place to grow investment funds.

"In addition to the favorable demographics that the echo boomers will create over the next decade, the non-cyclical economic nature of higher education is an important consideration. In good economic times, a college degree provides an important credential in the job market. In difficult economic times, people attend college to improve marketability and temporarily avoid a challenging job market," they write. A quick check with The College Board shows that many students take longer to graduate these days and remain in student housing longer than previous generations. In fact, almost 40% of today's undergraduates are over age 24, The College Board reports. So in either good or bad economies, student housing is in strong demand.

I can tell you that many owners of property around the Ohio State campus, for example, are absentee owners and have never seen their properties in person. They are quite content to get a check once a month, or once a quarter, and fully, and legally exploit their tax advantages. The same can be said for other "big city" campuses. Currently, several out-of-state colleagues in the Prudential CRES network have investors seeking off-campus student housing investments.

Who knew that people would want to return to college after all these years ? . . . only as investors instead of students?

Dollar Falls, Fed Less Likely To Raise Rates

The dollar suffered sharp falls on Thursday, hit by reports of weak US business activity and a benign inflation picture. The euro rose 0.7 per cent against the dollar to $1.3247 by late afternoon in New York. Sterling rose to its highest level against the dollar since its ejection from the European Exchange Rate Mechanism in September 1992 as UK house prices continued to show rapid growth. A report revealed that inflation in US personal consumption expenditure excluding food and energy, the Federal Reserve’s preferred inflation benchmark, held steady in October at 2.4 per cent year-on-year. Data suggested further inflation-fighting interest rate rises by the Fed, which could support the dollar, were even less likely to be needed.