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Sunrise Speak - California Edition

 January 2012

SERIOUS Growth Seen for Industry
The US Commerce Department reports 50,000 more multifamily starts for 2011 than were originally predicted - the highest figures since 2008. Says NAHB chief economist David Crowe, "There's no doubt that demand for apartments is rising as restrictive mortgage lending policies and concerns about future employment push consumers to pursue rental options." These strong fundamentals and positive demographics suggest the apartment industry is about to enter three solid years of historic levels of growth.

Non-Refundable Deposits Returning
The re-appearance of non-refundable deposits - typically 10% of the purchase price of an apartment building - has many in the industry watching closely as individual marketplaces become increasingly competitive. "The more competitive the market is, the more you see non-refundable deposits, and the higher they get." says one real estate investor. Such deposits are typically used to get a seller's attention by a less-qualified buyer. Non-refundables were quite popular in 2007 as the marketplace peaked, and their resurgence suggests that despite foreclosures and other issues still working their way through the system, the apartment market has regained much of its pre-recession luster.
"It'll keep getting better through next year."
- Jared Franz, T. Rowe Price Economist
The End of the World? FAR from it!
2012 The End of the World? FAR from it!
2011 ended with six months of 100,000+ job growth - a good sign for the US economy. However, with credit tight and new inventory coming online slowly (except in Orange County), 2012 probably won't provide a significant shift from renter to buyer. Look for occupancy rates to be up (97%+ in San Diego!) and rent growth of 4-5% during the coming year.

Gone with the Wind
 It's now official - California landlords can legally prohibit smoking under a new law that took effect on January 1. Taking advantage of this option is expected to lower insurance rates, wear and tear on apartments, and increase overall property values. "While more than 86 percent of Californians do not smoke, there was very little smoke-free housing in California," observes State Sen. Alex Padilla, sponsor of the legislation.
Vol. 17, Issue 1
In This Issue
SERIOUS Growth Seen for Industry
Non-Refundable Deposits Returning
The End of the World? FAR from It!
Gone with the Wind
Who Is Sunrise Management?
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Who Is Sunrise Management?

Currently managing almost 10,000 units in California and Arizona, Sunrise Management is committed to excellence in all that we do, each and every day.

Since 1978, our day-to-day goals have remained the same: To Consistently Provide Spectacular Customer Service, to be on the cutting edge of technology and innovative marketing, and to provide the vision needed to unerringly achieve our clients' real estate investment goals.

Sunrise is an IREM Accredited Management Organization®. Our team includes a highly-trained staff of CERTIFIED PROPERTY MANAGERS® (CPM®) and ACCREDITED RESIDENTIAL MANAGERS® (ARM®), the industry's most respected credential for residential site managers.

For information on how to make Sunrise Management the key to your success, contact Principal Joe Greenblatt at 858-751-6321.profile