Soaring Rents Reach Middle America

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Skyrocketing rents continue to plague renters, and the problem is going to only get worse all over the country. “Overall, housing dynamics are currently changing,” says Mark Fleming, CoreLogic’s chief economist. “Rental demand is rising while supply is dwindling as a result of the declining share of distressed assets relative to all homes on the market. Due to this trend, rent prices will continue to climb.”

Rising rents are not just affecting coastal cities such as New York City, San Francisco and Miami, which have long had the highest rents in the nation. Higher rents also are increasingly hitting Middle America.

In the second quarter of this year, several cities in the central U.S. placed in the top 10 regions for highest rent growth, including Nashville, Tenn.; Raleigh, N.C.; Louisville, Ky.; Columbus, Ohio; and St. Louis, according to a report by Reis, a real estate research firm.

“Although average rents in these smaller cities are still lower than in big cities, the rapid increases have been met with sticker shock by residents, especially those with lower incomes,” The Wall Street Journal reports. Economists say that landlords are able to continue raising rents due to strong demand and local job growth.

About half of renters spend more than 30 percent of their income on rent, up from 18 percent a decade ago, according to newly released research by Harvard’s Joint Center for Housing Studies. Twenty-seven percent of renters are paying more than half of their income on rent.

Shaun Donovan, former Secretary of the U.S. Department of Housing and Urban Development, said the nation is in the “worst rental affordability crisis this country has ever known.”

A shortfall in affordable units is particularly troublesome as low-income renters struggle to find a place.

As with all things real estate, we at Landmark Group can help. We have rental properties available at various price levels. And, if you are an investor, we can help you buy or sell rental property.

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David J. Paladino CPM, MSRED

President

Landmark Group 402-672-6566

2702 Douglas St. Omaha NE 68131

 Email: dpaladino@landmarkmg.com

www.landmarkomaha.com

www.dinosstorage.com

www.grncompanies.com

Blog: www.davepaladino.com

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Recycled Commercial Buildings Turn Residential

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Remodelers are taking former barns, churches and factories and converting them into unique, multimillion dollar homes. The idea is to “recycle” old, defunct property and offer buyers something beyond a cookie-cutter house, CNBC reports. These old properties may be refurbished and retrofitted, but still retain characteristics of their former purpose.

The luxury housing market is enjoying a strong recovery at the moment. The only segment of the market that saw prices increase over last year was comprised of homes priced at more than $1 million, according to June data from the National Association of Realtors®.

“These clever conversions often command a hefty price tag because the interior rehabs can be far more high-end than regular new-builds,” CNBC notes. “They are usually a labor of love by the buyer, who has the vision to take, perhaps a water filtration plant and turn it into a home.”

As demand rises, some in the high-end market are finding they can rehab unique properties into their dream home.

A few examples include:

A building at 822 P822Pacificacific Street in Omaha, Neb.,that originally served as the mechanical plant for the Burlington Train Station in the early 1900s was converted into a residence with a unique second-floor art studio and a huge main level workshop. The structure features a large roof-top patio and built-in 2-story garage. There’s also a grand gated entrance on the nearly half-acre lot with extensive landscaping, trees, boulders and waterfall.

A historic stone church from the 1800s in Watertown, Mass., that was converted into a 2,800 square foot condo that occupies the church’s bell tower. Remodelers preserved the church’s old woodwork in the modern space.

Outside of Philadelphia, an early 19th century cattle barn was transformed into a five-bedroom, 8,000-square-foot home.

Whatever your needs – commercial, retail, housing, industrial – Landmark Group is here to help. Just give us a call.

Thanks,

David J. Paladino CPM, MSlandmarkfooterRED

President

Landmark Group 402-672-6566

2702 Douglas St. Omaha NE 68131

Email: dpaladino@landmarkmg.com

www.landmarkomaha.com

www.dinosstorage.com

www.grncompanies.com

Blog: www.davepaladino.com

 

 

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Live-Work Space, A New Old Idea

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Remember the old neighborhood grocery? A place where the owners lived in the back rooms, or the upstairs of the small grocery store. Or the neighborhood music teacher whose home doubled as a studio. Or the beauty shop in the walkout basement of a friend’s home.

Maybe you, or someone you know, works from a home office. Perhaps you have visited a deli or small café where the owners lived on the premises.

The common thread in all of these situations is a double duty space for living and working. A few years back a local developer created several units offering live-work space at Giovanna Rows at 6th & Pierce Streets.

Live-work space is a niche market today, but it is making inroads across the nation. It offers a comfortable place to live with no commuting needed for work. These properties range from condos to stand-alone homes or, in some cases, even larger buildings with lots of room both for living and working.

Landmark Group currently has an ideal property for live-work available and it even has seller financing available. The p3040 Cumingroperty at 3040 Cuming Street near downtown Omaha is being offered at just $250,000 and contains roughly 20,000 square feet of space that can be made into an ideal live-work environment.

Interested? Give us a call.

Thanks,

David J. Paladino CPM, landmarkfooterMSRED

President

Landmark Group 402-672-6566

2702 Douglas St. Omaha NE 68131

Email: dpaladino@landmarkmg.com

www.landmarkomaha.com

www.dinosstorage.com

www.grncompanies.com

Blog: www.davepaladino.com

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Retail Rents Up, Vacancies Down

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The U.S. retail real estate market is heating up, with shrinking vacancies allowing landlords to raise rents. At strip malls, vacancies fell to 10.3 percent in the second quarter and are nearly a percentage point lower than a post-recession high set in the third quarter of 2011, according to Reis Inc., a commercial data provider. At traditional malls, vacancies held at 7.9 percent in the second quarter, dropping from a high of 9.4 percent in the third quarter of 2011, according to Reis.

Retail landlords are raising rents as space becomes a premium. Rents at U.S. malls rose for the 13th consecutive quarter, rising 0.4 percent in the second quarter to $40.32 a square foot a year. Rents at U.S. strip malls posted their 11th consecutive quarter rise, increasing 0.5 percent in the quarter to $19.51 a square foot.

“This is the continuation of a slow, but decidedly upward trend in quarterly rent growth over the last few years,” Ryan Severino, a senior economist at Reis, told The Wall Street Journal.

Builders are projected to complete 45.2 million square feet of retail space this year. In 2015, they are projected to add 71.5 million square feet of retail space in 63 markets, according to the CoStar Group, a real estate research firm. In 2007, builders added 210 million square feet.

“We’ll see a moderate increase in the coming quarters in construction,” Suzanne Mulvee, a director of retail research at CoStar, told WSJ. “But it’s going to be a couple of years before we see construction getting back to even half the pace of what it was in 2007.”

If you are looking to lease existing or new retail space, we at Landmark Group are ready to help.

Just give us a call.

Thanks,landmarkfooter

David J. Paladino CPM, MSRED

President

Landmark Group 402-672-6566

2702 Douglas St. Omaha NE 68131

Email: dpaladino@landmarkmg.com

www.landmarkomaha.com

www.dinosstorage.com

www.grncompanies.com

Blog: www.davepaladino.com

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Will Boomers Leave Their Single-Family Nests?

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As baby boomers – the generation born between 1946 and 1964 – reach retirement age, and the last of their adult children move away from home, will they decide to stay in the suburban home or flock to a smaller place near the city? It’s a question that housing analysts are paying careful attention to, since the large generation’s housing choices can have significant implications for the housing market.

About 10,000 baby boomerhousechoicess hit retirement age each day. As boomers exit the labor force, their retirement “could lead to a downshift in housing consumption if boomers adjust their housing costs to match the reduced earnings of retirement or if they decide to relocate once proximity to work is no longer a consideration,” according to a new commentary by Fannie Mae researchers. One theory is that as baby boomers retire and become empty nesters, they will increasingly choose to downsize from their suburban, single-family homes to urban multifamily residences.

But for now, many boomers appear to be staying put, even with shrinking households and declining participation in the labor force. So far, boomers have not appeared to be altering their housing consumption by abandoning detached single-family homes. In fact, the number of boomers who are residing in single-family, detached homes rose between 2006 and 2012, Fannie researchers note.

A survey in 2010 by AARP found that nearly nine in 10 baby boomers say they prefer to remain in their current residences for as long as possible. Also, economic and housing market conditions may be forcing some baby boomers to stay put, even if they did prefer to move. Some boomers may still be trying to make up for lost equity following the housing crisis.

“Declining home values and the recession-scarred economy have suppressed boomers’ residential mobility, thus slowing the rate at which they can adjust their housing consumption,” notes Patrick Simmons, Fannie Mae’s director of strategic planning economic and strategic research group. Between 2006 and 2012, the percent of boomer households who moved during the preceding year fell from 10.2 percent to 7.9 percent, according to Fannie Mae data.

Fannie forecasters do expect that the stability of single-family detached occupancy among baby boomers will eventually come to an end, either eventually by choice or the inability of boomers to maintain a single-family home as they age.

“Coming changes in the housing consumption of the baby boom generation have potentially far-reaching implications for the U.S. housing market,” notes Simmons. “The housing situation of boomers bears continued close monitoring, even if some indicators have yet to reveal major signs of change.”

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David J. Paladino CPM, MSRED

President

Landmark Group 402-672-6566

2702 Douglas St. Omaha NE 68131

 Email: dpaladino@landmarkmg.com

www.landmarkomaha.com

www.dinosstorage.com

www.grncompanies.com

Blog: www.davepaladino.com

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Home Owner-Landlords On the Rise

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After snagging a low mortgage rate in the 3 percent range, a growing number of home owners say the all-time-low financing is too good to give up, so they’re keeping their home and taking on threntbuye role of landlord, CNNMoney reports.

It’s a trend that Lawrence Yun, chierf economist for the National Association of Realtors®, recently noted. “We have more everyday folks becoming unplanned, accidental landlords in the future because they don’t want to give up their 3.5 percent rate,” Yun said.

This increase in landlords could take a toll on the housing market, as every home converted into a rental property becomes one less that goes on the market for sale, says Glenn Kelman, CEO of the brokerage Redfin.

“It’s a major reason we have low inventory and limited sales growth,” Kelman told CNNMoney. “Clients tell us all the time, ‘We’re never going to sell our home, even after we buy a new one.’”

With rental costs rising about 20 percent nationwide since mid-2006, home owners are finding that assuming the role of landlord could work in their favor. However, some housing experts say that some home owners may be na ve about the challenges landlords face, particularly when it comes to facing repairs, dealing with at-times demanding tenants, and having to cover expenses whenever the property sits vacant.

If you find yourself in the unfamiliar position of landlord, or want to become a landlord, give us a call. We take the worries away and can manage, maintain and even update the property for you!

Thanks,

landmarkfooter David J. Paladino CPM, MSRED

President

Landmark Group 402-672-6566

2702 Douglas St. Omaha NE 68131

 Email: dpaladino@landmarkmg.com

www.landmarkomaha.com

www.dinosstorage.com

www.grncompanies.com

Blog: www.davepaladino.com

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Multifamily Sector Dodges Warnings

LandmarkBannerThe multifamily market continues to post strong gains, despite warnings from analysts as early as 2011 saying that the sector was heading for a cool-down from competition over recovering home prices, The Wall Street Journal reports. As mortgage lending continues to be constrained in the single-family housing market, the multifamily market and number of renters continues to soar.

Nationally, rental apartment values are up 14 percent from 2007, according to the Green Street Advisors index, which tracks the performance of listed rental-apartment landlords. Rents and occupancy rates are pressing upward too. In the first quarter, rents rose 0.6 percent – up 13 percent since rents began their upswing in 2009, according to Reis Inc., a real estate data firm. Vacancies have dropped to 4 percent.

Denver is one of the strongest rental performers lately. The city is benefiting from a high-tech and startup scene that has helped press its job growth 2.8 percent in the past year, higher than the 1.7 percent growth nationwide. Its growing job market has promise for its rental market.

For the past five years, Denver’s rents have been on the rise, increasing 20 percent since peak 2007 levels. Still, landlords realize that while the market is hot, they can’t expect to get 10 percent rent increases every year, says Dan Fasulo, managing director of Real Capital.

Some analysts worry that oversupply in upscale housing eventually will catch up to the market. As such, some developers are refocusing on adding “workforce housing,” in which monthly rents range from $1.20 to $1.35 a square foot. Workforce housing has less risk than upscale apartments since there is less supply. “If the overall economy does improve, you’ll basically reap the benefits,” says Mike Moran, who leads Allstate’s real estate investment group.

If you are interested in buying or selling multifamily properties, we at Landmark Group are ready to assist you. Just give us a call.

Thanks,landmarkfooter

David J. Paladino CPM, MSRED

President

Landmark Group 402-672-6566

2702 Douglas St. Omaha NE 68131

 Email: dpaladino@landmarkmg.com

www.landmarkomaha.com

www.dinosstorage.com

www.grncompanies.com

Blog: www.davepaladino.com

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Blast from the Past May Revitalize Omaha

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The idea of enhancing Omaha’s transit options has been the subject of discussion for the past two decades, but over the past two-years details of the plan and efforts to secure federal funds for it have begun to come together.

Discussions center on a combination of rapid transit buses and an updated version of the 1940s streetcars that once plied Omaha streets. Various routes and combinations of bus and streetcar routes are being considered for the upgrade to Omaha’s mass transit system.

Who would benefit? Those who live, work or visit areas along the proposed routes would have an efficient alternative to using automobiles, while property owners near the routes likely would see increased values. Traffic congestion would be eased and bicyclists would even be able to take their two-wheelers onto the streetcars, or load them on the front of the sleek new buses. Reduction of automobile traffic also would reduce greenhouse gas emissions in the city.

Planners estimate that the transit lines could spark as much as $1 billion in new development, leading to an increase of 8,500 jobs and 3,150 residents downtown.

The proposed system, spearheaded by StreetcarOmaha’s Metro transit agency, has identified bus rapid transit and modern streetcars as options for the corridor. Bus rapid transit is something of a cross between regular bus service and a streetcar, with sleek, rubber-wheeled vehicles. Modern streetcars are larger and operate on rails. Either could run in mixed traffic among other vehicles, or have its own designated lane.

The main options and routes outlined in the study are:

Bus rapid transit from downtown to 72nd and Dodge Streets and Crossroads Mall, then to Westroads Mall, by way of Dodge and Douglas Streets. Capacity would be 90 people and three bikes, serving about 1,200 new riders per day.

Bus rapid transit from downtown to 72nd and Dodge Streets and Crossroads Mall, then to Westroads Mall, by way of Farnam and Harney Streets, connecting with Dodge Street at Saddle Creek Road. Capacity would be 90 people and three bikes, serving about 1,400 new riders per day.

Modern streetcar from downtown to the University of Nebraska Medical Center by way of Farnam and Harney. The route would also run along 10th Street between the Old Market and TD Ameritrade Park. Capacity would be 160 people and six bikes, serving 1,400 new riders per day.

A fourth possible option would combine both bus rapid transit and streetcars. Streetcars would go in the downtown core. Bus rapid transit would overlap in the downtown area and stretch farther west.

A transportation connection involving Downtown, Midtown, University of Nebraska Medical Center, University of Nebraska at Omaha and the Crossroads areas would connect employment and educational hubs, residential neighborhoods, shopping areas, civic resources, historic districts, cultural landmarks and entertainment venues in central Omaha.

The total capital cost for the preferred transit alternative is approximately $170 million. The total operating cost is approximately $10 million per year. These costs may change as detailed engineering and operating plans are developed. Capital costs may include both local and federal funding. Operating costs will include local funding. Specific funding will be determined as the transit alternatives are developed.

The Metro transit authority is currently in the process of applying for a $33 million grant from the U.S. Department of Transportation to help fund the rapid transit buses.

“There are many benefits that go beyond the pure economics, including improved quality of life and faster development and redevelopment in an area, which is a basic foundation to make an urban core more successful,” says Mike Moylan with Shamrock Development, who is involved with development in downtown Omaha. He believes “if you build it, they will ride on it.”

Thanks,

David J. Paladino CPM, MlandmarkfooterSRED

President

Landmark Group 402-672-6566

2702 Douglas St. Omaha NE 68131

Email: dpaladino@landmarkmg.com

www.landmarkomaha.com

www.dinosstorage.com

www.grncompanies.com

Blog: www.davepaladino.com

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Shift From Suburbs to Cities a Costly Move

More Americans say they want the shorter commutes and nearby entertainment that come with living near the city center and they are shelling out big bucks to make that choice.

This marks a shift away from suburban demand, which has driven home construction for decades, The Associated Press reports. Living near city centers is often more costly and may force more Americans to rent, says John Mcllwain, a senior fellow at the Urban Land Institute. “Middle-class Americans are being squeezed out,” he says.

Land prices in cities with attractive amenities is surging, industry strategist and George Washington University professor Christopher Leinberger says.

The convenience of living downtown doesn’t come cheap. In Chattanooga, Tenn., for example, the starting price for a townhome development in the downtown area – with restaurants, stores and a waterfront park – is $610,000. That’s nearly three times the average in the metro area.

In 2012, homebuilder Toll Brothers spent $24 million to buy two-thirds of an acre near Nationals Park in Washingtocitycondosn, D.C. That’s the equivalent of about $830 a square foot. Before the ballpark was there, the going rate was about $5 a square foot for the land.

In Chicago, a complex of 47 luxury row houses in the downtown area broke ground last month and every apartment was sold before construction began. Units start at $562,900. Buyers were willing to wait 12 to 16 months before being able to move in.

The American Planning Association says that even though 40 percent of Americans live in a suburb “where most people drive to places,” only 7 percent expressed a desire to remain in car-dominated neighborhoods.

With vision, savvy investors readily see the potential value of city center land, buildings and construction projects. With help from the professionals at Landmark Group, you can profit from the trend. We’re just a phone call away.

Thanks,

David J. Paladino CPM, MSRED

President

landmarkfooterLandmark Group 402-672-6566

2702 Douglas St. Omaha NE 68131

Email: dpaladino@landmarkmg.com

www.landmarkomaha.com

www.dinosstorage.com

www.grncompanies.com

Blog: www.davepaladino.com

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Shopping Center Construction Ramps Up

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Shopping center completions rose last year for the first time since 2007. Nearly 400 new centers totaling more than 129 million square feet were delivered last year, according to data recently reported in Cushman & Wakefield’s Global Shopping Center Development Report.

“For the first time in a few yeaShoppingCenterrs, large scale mixed-use projects seem to be getting traction,” says Matt Winn, global retail COO in Atlanta for Cushman & Wakefield. “There is no doubt that they are more confined to markets of the East and West Coast as well as the Sun Belt. But they are definitely there.”

While shopping center completions remain low by historical standards, deliveries were 12.7 percent higher than in 2012 and shopping centers have accounted for about 18 percent of total new space since the economic downturn in 2008.

“The biggest issue a high-growth retailer has lack of available real estate,” says Ted Frumkin, senior vice president of business development for Sprouts Farmers Market. “We want to grow, but when we’ve gone out, the build to suit or new development has not been there over the last couple of years. Even in high vacancy markets a lot of the space that’s empty is not desirable for a lot of tenants.”

Over the next three years, an additional 758 centers totaling 120.5 million square feet are expected to be added to the nation’s inventory, according to C&W and CoStar Group data.

Winn said these new projects likely will be small to modestly sized and average under 160,000 square feet. One-third of the construction is expected to be centered in California, Texas and Florida.

If you are looking to build, lease, buy or sell retain space, a phone call to Landmark Group will get you quick, professional assistance.

Thanks,landmarkfooter

David J. Paladino CPM, MSRED

President

Landmark Group 402-672-6566

2702 Douglas St. Omaha NE 68131

 Email: dpaladino@landmarkmg.com

www.landmarkomaha.com

www.dinosstorage.com

www.grncompanies.com

Blog: www.davepaladino.com

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