Astute and Loyal

A new fresh approach that differs greatly

from traditional real estate brokerages.

We offer several client centered and task based packages

with flexible consulting compensation packages,

Buyers can get a Rebate of our commission.

Seller commission is optional.

You decide which works, based on your personal goals and circumstances. This allows the client greater flexibility and can amount to great savings depending on the sale price of the property.

Not only do our clients save money, but they also receive total professional help, attention to detail, honesty and trustworthiness. Transparency and full accountability are utmost in mind.

Houston-based commercial real estate firm PM Realty Group is planning a 35-story luxury apartment tower near Highland Village, aiming to make a bold visual statement for the high-end neighborhood and all of Houston.

The final design has not been determined, but one of two drafts being considered is a building that twists as it rises, which would be unlike anything in the city, said Roger Gregory, chief financial officer.

Both draft designs “are really stunning pieces of architecture,” said Gregory, describing the other as having a “plunging neckline” – a visual affect created by balconies that appear to taper as they move up the building.

The project, planned for the northeast corner of West Alabama and Weslayan, will contain 250 one- to three-bedroom apartments ranging from 850 to 3,200 square feet. Rents will average $2.40 per square foot.

The ground floor will have 12,500 square feet of retail space, which the developer hopes to anchor with a restaurant.

PM Realty purchased the 2.6-acre property for an undisclosed amount from Interfin Cos. The Houston company, led by Giorgio Borlenghi, developed Uptown Park and multiple office and condominium towers in the Galleria area.

“It gives us a lot of confidence to buy a site that Giorgio thought was a good site for condos,” Gregory said.

The site used to house the Confederate House restaurant and later the State Grille.

RTKL, an architecture firm with projects around the world, designed the tower.

‘Demand and supply’

Despite many multi- family projects that have been announced for Inner Loop sites, Gregory said the location and product type will set the building apart.

“We’re trying to play in a segment that not only plays to our strength, but to the demand and supply side of the equation,” he said.

Mid-2013

Construction will begin in the second quarter of next year, and the first tenants should be able to move in mid-2013.

This will be the third high-rise multifamily pro-ject for PM Realty. The first two are in Dallas. The company also has a large leasing and property management division.

PM Realty will own the building with its equity partner, the IBEW-NECA Diversified Underwritten Real Estate Fund, of Washington, D.C. Tim Dosch and David Marshall of Apartment Realty Advisors represented PM Realty in the land acquisition.

reprint from the Houston Chronicle     article by Nancy Sarnoff

Driving down Galveston’s Seawall Boulevard on my way to a tour of Tilman Fertitta’s $60 million Pleasure Pier, I thought of Jodie Foster.

See SlideShow

Foster starred as a scientist in that 1997 Hollywood sci-fi film “Contact” where they build a huge space travel machine along the Florida coast. The images of those huge computer-generated steel rings rising up during the machine’s “construction” seemed to match the very real steel roller coaster frames jutting skyward and looming larger the closer I got to the corner of Seawall and 25th Street, where the Pleasure Pier sits.

For Landry’s Inc. and Mark Kane, the company’s regional director who is in charge of the Pleasure Pier and the Kemah Boardwalk attraction, the tourist attraction on the site of the old Flagship Hotel pier is no longer the pie-in-the-sky vision unveiled in January at a splashy press conference at Landry’s Inc. headquarters.

Kane said the amusement park, which extends 1,130 feet over the Gulf of Mexico, is on track to open Memorial Day weekend in May when the motors that drive the 16 rides packed along the deck will roar into action. When I asked about staying within the $60 million budget, Kane hedged slightly but offered this: “The budget and (construction) schedule for something like this is always a challenge, but I think we’re right where Mr. Fertitta wanted to be.”

Kane, who has plenty of experience in the game, having worked as president of the Six Flags amusement park in New Jersey before joining Landry’s about 18 months ago, said the biggest challenge was reinforcing the pier’s underwater infrastructure and also building, in essence, a 32-inch-high second pier on top of the entire 120-foot-wide existing deck to anchor the ride foundations.

Houston’s Ardent Construction is the main contractor for the project. Sub-contractors include Treadwell Electric and Mesa Mechanical Inc., both of Houston, and Mitchell Chouke Plumbing and Kelso Concrete, both of Galveston.

Clusters of construction workers covered the pier the other day. They were sawing cedar paneling and painting walls inside the Bubba Gump Shrimp Co. restaurant — the first to be built in Texas since Landry’s acquired the California-based chain in November 2010 — as well as moving cranes around the pier, to crawling around the top of the roller coaster frame high above the Gulf waters.

Kane expects 1 million visitors a year to visit the Pleasure Pier, which will be open 266 days a year, including every day between Memorial Day and Labor Day.

While 3 million visitors stroll along Landry’s Kemah Boardwalk attraction — open 363 days a year — on the mainland just north of Galveston, the big difference, of course, is that the Pleasure Pier has an admission fee plus additional costs for the rides. A family of four can buy wristbands for pier admission and to ride all day for $85.

The Pleasure Pier will be marketed heavily as a Galveston tourist destination, and not only at Landry’s numerous hotels and restaurants already on the island, but to the horde of cruise ship passengers — who will be able to see the top of the roller coaster and Ferris wheel on the Pleasure Pier from the opposite end of 25th Street where the ships pull into the harbor each week near the downtown Strand area.

The Pier will be open from 10 a.m. to 11 p.m., which means it may really shut down closer to midnight by the time all the crowds disperse.

And that’s what has Mike Martorella, the Pleasure Pier’s general manager of amusements, eagerly anticipating the big opening weekend.

“There really isn’t anything on the island for families visiting here with kids at night. Galveston has lots of bars and that’s about it, and every night I see families just walking along the Seawall,” Martorella said. “Now they have somewhere to go.”

Greg Barr – Managing Editor – Houston Business Journal

With sector fundamentals trending up and leverage ratios heading down, commercial real estate analysts say the signs point to multifamily REITs continuing their strong run.

Research firm SNL Financial is projecting revenue growth in the sector this year on the order of 4 percent to 6 percent. Funds from operations (FFO) are projected to rise at least 9 percent during that same period. Meanwhile, the sector’s average ratio of debt to total capitalization moved down in the last two years from 51.2 percent at the end of 2009 to 38.1 percent at the end of 2011.

Jason Lail, senior industry analyst with SNL, attributed the sector’s bullish outlook to a number of factors. Younger tenants are choosing to “unbundle” and move into their own separate apartments, driving up demand for apartments, Lail explained. They’re expected to have more money to do so, too. Salary offers for members of the 2012 graduating class are approximately 4.5 percent higher than they were for 2011 graduates, according to the National Association of Colleges and Employers, and companies expect to hire 10.2 percent more graduates than a year ago.

“These younger tenants appear to view single-family homeownership a bit differently, and, in many cases, prefer multifamily rentals thanks to their greater flexibility and central locations in most cities,” Lail said.

Stiff mortgage requirements and a limited new supply of apartments also continue to drive multifamily demand in 2012. The average occupancy at the end of 2011 for SNL-covered multifamily properties in the United States was 94.6 percent, up 90 basis points from the 93.7 percent average occupancy at the end of 2009.

“The boon in rental living, combined with the near-bust in supply over the prior three years led to strong rent growth for the industry,” according to Mark Obrinsky, the National Multi Housing Council’s (NMHC) chief economist.

In the NMHC’s annual ranking of the top 50 apartment owners and managers nationwide, released in April 2012, the organization said that there was no dominant strategy employed by apartment firms to capitalize on the surge in the rental market.

“Some pursued aggressive acquisition programs, while others took advantage of growing investor interest in apartments to be net sellers of non-core assets,” said Obrinsky, adding that REITs were among the largest net sellers.

Reprint from reit.com By Carisa Chappell

1. The best long-term, value-appreciating opportunities in real estate will be found at or adjacent to: (1) major colleges and universities; (2) hospitals; (3) coastal and capital cities; (4) corridor or string cities; (5) 24/7 knowledge cities and financial centers; (6) edge cities; (7) areas surrounding ports and transportation hubs; (8) locations proximate to the growing populations of Hispanics, retirees and Generation Y adults; and (9) niche markets serving growing industries.

2. Successful real estate companies will generate as much or more revenues from selling knowledge, access to customer bases and non-asset services as they now receive from management fees. A “tenant multiple” metric will emerge in valuation methodologies.

3. Watch for a rating system to emerge for buildings based on the level of safety and security provided, on the energy efficiency and greening attributes of the building, and on the level of tenant satisfaction.

4. The talent shortage will continue for years to come as the real estate industry transforms itself from a supplier of services to a provider of knowledge and asset solutions for multiple stakeholders. Watch for a greater reliance on technology, temporary employees, contingent workers, leased employees, specialists, job-share employees, near-shoring and the off-shoring of select functions.

5. Telecommuting (now an option in 44% of U.S. businesses) will create a generation of “nomadic offices.” Fixed office space is no longer a necessity.

6. External factors will shift the role of the property manager to the more expansive role of a business manager as building operations increasingly prioritize matters of resource management, energy conservation, asset management, commodities coordination, workplace environment, tenant relationships, safety and security.

7. $1.1 trillion of new apartment buildings will be needed by 2030.

8. An abundance of capital will likely keep cap rates low through 2017.

9. Of the regional/local real estate service firms which existed in 2010, 30% will disappear by 2020.

10. Look for the creation of a global eBay look-alike for the real estate industry.

Today’s guest post comes to us from the Institute of Real Estate Management, one of the commercial affiliate organizations of the National Association of REALTORS(R).

*Out of 100 contained in Transformational Leadership in the New Age of Real Estate, by Christopher Lee, IREM 2012. Mr. Lee will also be speaking on the topic at the IREM Leadership and Legislative Summit on April 16, 2012.

Honing That Competitive Edge: The Attraction of Apartment WiFi

Offering amenities that put your apartments head-and-shoulders above the competition is a marketing strategy that works — without question.
Let’s face it. Many apartments offer the same features. So what makes your apartment community special? What’s that one thing that makes the light bulb go on, followed by, “This is where I want to live; hand me the apartment rental agreement”?

According to “ApartmentNext,” here’s how 8 out of 10 residents in a recent survey responded in ranking their #1 amenity choice: They are concerned with Internet services in their apartment community, and apartment WiFi is the top on their “wish list.” Eight out of ten — 80%! A pool was the only other amenity that came anywhere near the top of that ranking. According to the same survey, only 45% cared about a fitness center and less than 10% cared about having a clubhouse as part of their apartment community. Storage spaces warranted a measly 35% favorable vote. Hands down, apartment wireless is the most important tool in the marketplace for sustaining and increasing occupancy.

Marketing differentiation is critical to all businesses. Ask yourself this: What makes someone choose to become a resident in my apartment community, or equally important, want to remain a resident? How do I fill vacancies?

Apartment wireless service should leap into mind. It’s no secret that in today’s environment, people expect WiFi as the norm. Starbucks figured that out long ago, and it’s certainly served them well.

“Our team was visiting an apartment community in Denver last week,” says PowerHour® President Ernest Oriente, “where two weeks prior we had installed and turned on the community-wide apartment WiFi. The leasing agent immediately got up from behind his desk and trotted over, saying en route, ‘This apartment wireless is the best thing that’s ever happened to us! And we love the custom marketing materials that promote our apartment community WiFi service as a unique resident amenity!’ Enthused, we listened intently as the leasing agent went on to say, ‘We’re really emphasizing apartment WiFi in our discussions with prospects, and I was able to sign three new leasing agreements this week based just on the WiFi feature!’

“I said to him, ‘Your beautiful apartment community complex has a theater, pool, fitness center, you’re situated on a lake — why do you think apartment wireless made such an impact?’

‘See that apartment community across the lake?’ he responded. ‘They have exactly the same amenities we do, and the building was constructed at the same time. Apartment WiFi is the only thing that sets us apart. And people were so thrilled about our community-wide apartment wireless service that it became the major deciding factor for leasing with us.’”

Oriente went on to say, “That was such a great report to hear directly from this leasing agent. We’ve really catapulted our business to the top of apartment WiFi installation and support, and I’m proud to say that PowerHour® WiFi solutions are managed by a team that is the nationwide leader in apartment WiFi solutions for the multi-family industry, so you can rely confidently on the finest in the business.”

By offering apartment WiFi, you’re giving your leasing agents a unique tool in this competitive apartment rental housing environment. Just about everyone expects laundry facilities, a pool, parking — but apartment wireless services? Now you’re talking! The bonus of apartment WiFi can very easily convert a phone call into a leasing tour, and a leasing appointment into a signed rental agreement.

And let’s not overlook the importance of keeping existing residents happy. By offering community-wide apartment wireless service, they will feel as though you’re paying attention to their needs, staying up-to-date with services, and continue to value (and reward) their loyalty.

So where do you start?

PowerHour® is an innovative company specializing in services for apartment communities and property management companies, offering advanced WiFi internet access for apartment communities across the nation. “We’ve been in this industry since 1988 and understand the challenges and opportunities from an apartment and property management perspective,” states Oriente. “We are a trusted resource; when we put our name on something, you can be assured it will go well. We deliver on our promises. With a reach of 25,000,000+ apartment units around the United States and our work in the industry for the past 23 years, our clients know they can trust our team to deliver on our PowerHour® apartment wireless solutions.”

To learn more about PowerHour® WiFi solutions visit: http://www.powerhour.com/propertymanagement/apartmentwifi.html

PowerHour Proudly Announces National WiFi Solution for Apartment Communities

PowerHour®, an innovative company specializing in services for apartment communities and property management companies, is proud to announce advanced WiFi internet access for apartment communities across the nation.

“When I read the survey by Turner Research showing how high WiFi ranked on the ‘wish list’ for apartment residents, I got really excited!” says PowerHour® President Ernest Oriente. “In reality, only a small percentage of residents use fitness or business centers, for example, but almost all of them use Internet services. From a management and ownership perspective, having WiFi is a powerful marketing tool for increasing and sustaining occupancy. WiFi is something residents want, and having that service available is very alluring.”

In today’s competitive apartment rental housing environment, differentiating an apartment community from all the others is critically important in attracting new residents. Residents want WiFi — it’s just that simple. Highlighting WiFi as an amenity in your marketing campaign separates your apartment community from the competition, drawing sought-after attention from potential new residents.

PowerHour® understands the importance of lending its expertise to its property management clients, and their investment in the WiFi business extends far beyond installation and service. “I really want our clients to succeed!” smiles Oriente.

“PowerHour® will help support your marketing campaign by creating custom promotional pieces about your new WiFi service, including banners and postcards focused on your specific apartment community. Imagine a huge banner on the outside of your apartment building announcing WiFi service in your rental units. New and future residents will be attracted because of their desire for WiFi, and in a blink of an eye WiFi becomes the deciding factor in their rental decision. And, we build a custom-designed portal page that is tailored specifically for your residents…and they will love it!”

Technical support is critical for electronic services, and PowerHour’s® WiFi internet access comes with a solid support team that’s available 24/7/365 to handles the complete monitoring

Why own apartments? Following are ten reasons to own multifamily. While real estate investing is a contact sport with numerous pitfalls the rewards can be enormous. Positive outcomes require patience, expertise, access to capital and time with equal emphasis on all of these.

Ron Terwilliger’s talk at the Apartment Finance Today Conference (AFTC) in Las Vegas this week was less keynote speech and more informal chat as the former chief executive officer of Trammell Crow Residential strolled down memory lane and shared hard-learned lessons from a 40-plus-year career in real estate.

After walking the audience through his path to Trammell Crow, Terwilliger set his sights on the thing that keeps him busiest today—lobbying for more quality, workforce housing. And if more isn’t done in that arena, he says, affordability could become an even bigger challenge.

“There will be a minimum of 3 million rental homes needed, probably more, because the demographics are so positive for our sector,” he told AFTC attendees.

But Terwilliger doesn’t think policymakers understand the need for quality affordable housing, so he spends a lot of time lobbying Congress, trying to inform representatives of the severe burden many Americans face in trying to make their monthly home payment.

“We ought to provide quality rental housing, whether it’s single-family or multifamily,” he said.

Terwilliger doesn’t know if the current capital environment is stimulating more affordable development, though. Right now, the large institutional equity wants high-rise, transit-oriented product. That takes time to entitle and isn’t cheap to build. Because of this, Terwilliger thinks garden developments with surface parking are the best solution for the workforce-housing riddle, because of their relative inexpensive construction costs and short development horizon.

In retirement, Terwilliger has become known as an advocate, though during his career, he was first and foremost a developer. And he had lots of lessons for the developers in the room.

Here are his six key takeaways:

1. Real estate is a cyclical business, and there will be downturns. Often it’s not known when the slide will start. “You won’t see it coming,” Terwilliger said.

2. Terwilliger advocates putting in a healthy amount of equity, about 25 percent, in each deal. “In a 15-year development, you may go through two or three cycles,” he said. “Be careful how you leverage [each deal].”

3. In this low–interest-rate environment, getting long-term, fixed-rate debt is of paramount importance. Terwilliger said that even if a developer has to take less to bring in mezzanine, it should try to get a five-year loan. If that doesn’t work, he said, get a three-year loan with two one-year extensions. “Watch out with a year maturity, because 25 percent equity may not be enough to pay out of pocket,” he said.

4. Getting the correct amount of leverage is only the beginning, though. Terwilliger said it’s also important to use architects and subcontractors familiar with the product type that you’re building. He said Trammell Crow usually used its own construction company unless it was unfamiliar with the product type involved. He wanted the construction team involved with the design as soon as possible. “One of the biggest mistakes developers can make is to [take on] something they can’t afford,” he said.

5. In the past five years, a lot of merchant builders have gotten stuck holding assets a lot longer than they anticipated. When that’s happened, they’ve quickly discovered the importance of choosing the right asset and property manager. “A lot of developers don’t understand the importance of the asset manager,” Terwilliger noted.

6. No matter how good your relationship is with your equity partner, things can get contentious if the market turns. Those trusted partners could suddenly get marching orders from their corporate offices to divest themselves of real estate. Because of that, the partnership agreement with the equity partners must be tight, even if your relationship is great at the beginning. “It’s all great when you’re making money,” Terwilliger said. “But those profits mightn’t always be there.”

Reprint from MultifamilyExecutive.com By Les Shaver

How to Test Smoke Alarms. This video is produced by www.rekey.com
If you are a property manager or a real estate agent from time to time you have to deal with smoke alarms. Here is a 3 minute video on how to properly test smoke alarms.

Big risks not always well-disclosed in financials.

Over the next four years about $1.4 trillion in commercial real estate loans will come due, with nearly half the properties expected to be “underwater”–meaning they’re worth less than the amount owed. That’s according to “Commercial Real Estate Losses and the Risk to Financial Stability,” a report released last month by the Congressional Oversight Panel for the Treasury Asset Relief Program.

Real Capital Analytics states that as of last December $203 billion worth of U.S. commercial mortgage assets were “troubled” (defined as properties that are still operating normally but facing financial distress, in the process of being restructured or modified, already real estate owned or in “resolved” status).

The risk that these commercial real estate assets pose to the financial sector is very real. Commercial real estate loans are typically larger than other loans and are generally viewed as posing greater default risk. Audit Integrity examined financial institutions with at least $10 billion in assets that trade on a North American exchange and bear our Accounting and Governance Risk (AGR) rating of Very Aggressive. The 20 banks on our list (an abbreviated version of which appears below) exhibit the following alarming levels of risk:

– Commercial real estate loans comprising a median 26% of total loans

– Commercial real estate loans equal to a median of 170% of Tier 1 capital (defined as equity capital and undisclosed reserves)

– A median increase of 100% in commercial real estate non-accrual loans in the nine months through September 2009

– Commercial real estate non-accrual loans comprising a median 53% of total non-accrual loans

In addition to the standard commercial real estate loans on the balance sheet consisting of construction and mortgage loans, additional risk exists from the following sources:

– Additional real estate obtained primarily through foreclosures

– Agreements to extend customer financing and other commitments and contingent liabilities

– Off-balance sheet assets securitized in special purpose entities

– Operating expenses that include collection efforts and carrying costs for nonperforming assets

Given the weak economy and depressed real estate market, it is more critical than ever that banks report their financial status in a clear and transparent manner. Risk factors outlined in financial reporting include warnings such as “further deterioration in economic conditions may cause increases in delinquencies, problem assets, charge-offs and provisions for credit losses” or “allowance for loan losses may prove to be insufficient to absorb losses that may occur in the loan portfolio.”

Despite the ongoing risks, the actual data that banks report in their financial statements do not necessarily err on the side of conservatism. What’s more, management enjoys a high degree of latitude regarding estimates and assumptions that are integral to assessing creditworthiness and the adequacy of loss provisions. Among the 20 banks we studied we discovered the following:

– Total nonperforming assets grew at a median rate of 85% in the nine months through September 2009

– Net charge-offs grew at a median rate of only 1.16 percentage points year over year

– The median allowance for loan and lease losses was only 80% of the total value of nonperforming loans

With Very Aggressive AGR ratings, these banks are also waving a high number of accounting and governance red flags. These indicators suggest the banks studied are engaging in stretch-the-limits accounting though practices like carrying a large amount of goodwill on their balance sheets. Governance practices, like allowing a lone officer to serve as chief executive and chairman, raise further concerns. Our advice: Investors beware.

James Kaplan is co-founder and chairman of Audit Integrity, a financial research firm based in Los Angeles.

Reprint from Forbes .com