We’ve chosen these articles to keep you up to date current as an investor with the latest news and trends in commercial real estate investing in Lane County. We are sharing articles on changes in retail trends and the rise of Dollar General, the issues of real estate transfer taxes and enforcement of fair housing laws in Oregon, and the growing demand for single-tenant net-lease properties.

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Top Articles for Real Estate Investors

More and more Dollar General stores are opening throughout the United States as the middle class gets squeezed. For commercial real estate investors, these represent a great opportunity available to Lane County investors. Find out more in the full article.

Thousands of retailers are closing – but Dollar General is opening almost 20 stores a week

Thousands of retail stores are on track to close by the end of the year as consumers embrace online shopping. But one company continues to rapidly expand its physical footprint and rake in profits year over year – Dollar General.

Back in 2012, after the great recession had done its work on housing prices, Oregon voters decided in favor of Measure 79, which prohibited real estate transfer taxes. Now Governor Brown wants to change that in the name of using the money collected toward affordable housing measures.

Take, Take, Take… Oregon’s Governor Proposing a New Statewide Real Estate Transfer Tax – 1031 Exchange Experts Equity Advantage

Despite the Fact Oregon Tax Payers have made such action unconstitutional, Gov. Kate Brown wants voters to approve a tax for affordable housing. Eight years ago, amid a cratered housing market, Oregon voters decided the state shouldn’t impose taxes when real estate changes hands.

Two Oregon Democrats are seeking greater enforcement of fair housing laws. Oregon Labor Commissioner Val Hoyle and Senator Shemia Fagan are pushing to reestablish a partnership between the state of Oregon and the U.S. Department of Housing and Urban Development to investigate cases of reported housing discrimination in Oregon.

2 Democrats call for Oregon to step up its enforcement of housing discrimination laws

The Senate Bill proposal calls for allocating $299,000 in one-time funds to hire a prosecutor and four staff members at the state Bureau of Labor and Industries to investigate complaints about housing discrimination and educate landlords on fair housing laws.

According to a fourth-quarter report on net leases from the Boulder Group, demand for single-tenant net-lease properties continues to grow and is causing cap rates to decline. Many investors realize the opportunities and benefits these properties offer.

Single-Tenant Net-Lease Market Firing On All Cylinders As Cap Rates Hit Historic Lows

9229 Lincoln Ave., Lone Tree, Colorado Competition among investors for single-tenant net-lease properties intensified last year, sending cap rates down to historic lows nationwide, and the widespread eagerness to buy in this market may not slow down in 2020, according to a Q4 net-lease report by Wilmette, Illinois-based The Boulder Group.

There are numerous opportunities in Eugene-Springfield right now for investors interested in multifamily and other commercial properties. Some of these are silent opportunities that will not be listed. Contact me to find out more: 541-912-6583, rene@1031guru.com.

As an investor, it pays to stay up-to-date with the trends in the Lane County apartment market. Understanding the impact of rent control as well as the construction pipeline and rent forecasts for the area will help you make sound investment decisions.

What You Will Learn in This Video

• Overview of the Oregon multifamily market, including supply, demand, and vacancy in the Portland and Eugene markets
• The construction pipeline and rent growth in the Portland and Eugene multifamily market
• The trends in multifamily market pricing and cap rate
• In-state versus out-of-state apartment sales in Oregon (March–November 2019)

Educated investors make better decisions, but it can be challenging to identify trends in the U.S. economy and the capital markets. As a result, investors sometimes wait too long to capitalize on trends. Use this valuable information to help you make the most of opportunities.

To reach Emily Anderer, CoStar market analyst, call 844-289-1145, or email her at eanderer@costar.com.

Check out the other videos from the conference:
Key Issues Affecting the Apartment Market in Eugene – René Nelson
Understanding the Eugene-Springfield Apartment Market – Zoe Swartz

Looking back at rent trends and vacancy rates in Eugene-Springfield offers a window on the future for investors. Understand where the apartment market has been to help you make wise commercial property investment decisions.

What You Will Learn in This Video

• Supply and demand in Eugene-Springfield, including the UO submarket
• Vacancy trends in Eugene-Springfield, including the UO submarket
• Eugene-Springfield rent trends and projections
• Local cap rate rent trends and projections

Low Springfield construction has mitigated potential over-supply in the market. Most volatility and risk is observed in purpose-built campus projects. Stabilization is likely in the near-term, but rent control is a major consideration for older projects. Educating yourself about the trends empowers you as an investor.

If you need an appraisal, contact Zoe R. Swartz, MAI, at 541-687-1938 or via email at zoe@duncanbrown.com.

Check out the other videos from the conference:
Key Issues Affecting the Apartment Market in Eugene – René Nelson
Trends and Forecasts for the Eugene Apartment Market – Emily Anderer

Numerous issues, including rent control, are making a profound impact on the apartment market in Eugene, Lane County, and throughout the state of Oregon. As an investor, it’s wise to educate yourself and stay ahead of the curve. Know your options as a savvy real estate investor.

What You Will Learn in This Video

• The impact of rent control on Oregon apartments
• The top 10 issues impacting commercial real estate
• Multifamily investor’s measurements for performance
• Cap rate versus investor’s yield
• Market rent study
• Commercial property analysis
• When it’s time to make a change
• How to get out of rent control

It’s valuable to understand the trends taking place in the broader commercial real estate market as well as the way rent control is affecting the apartment market in Eugene. A thorough commercial property analysis will help you to decide when and if it’s time to shift strategies and get out of rent control.

Stay current with the latest information and opportunities in commercial real estate in Eugene-Springfield. I’m here to talk with you about the apartment market and your investment goals. Let me help you identify and evaluate the best options for you. Call or email me today. 541-912-6583

Check out the other videos from the conference:
Understanding the Eugene-Springfield Apartment Market – Zoe Swartz
Trends and Forecasts for the Eugene Apartment Market – Emily Anderer

In December and January I featured articles in my newsletter to help real estate investors continue to stay on top of trends and evaluate their options for investing in Lane County and beyond. This roundup features a few highlights from the past two months. There are links to articles on investing in commercial real estate to create retirement income, ways to find tax savings, the housing costs and trends over the past decade, and evaluating whether you need an “investor-friendly” agent.

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January and December Highlights for Real Estate Investors

Commercial real estate investment is a great plan for saving for and generating income during retirement. The average lifespan is almost 79 years of age, which means Americans are living longer in retirement, but saving for retirement has only grown more difficult. This article provides some practical guidance for creating retirement income.

8 Ways to Use Rental Properties to Create Retirement Income | Blog

Americans are increasingly on their own for saving, investing, and planning their retirement. Fortunately, saving a nest egg in stocks and bonds and then spending it down in retirement isn’t the only game in town anymore. Many are turning to real estate to help with their retirement income.

Real estate investors should pay attention to tax issues year round. This article offers some valuable recommendations for finding ways to save on taxes.

2019 Year End Tax Savings Tips for Real Estate Investors – RealtyBizNews: Real Estate News

Don’t just think of tax time as a few weeks in April. Of course, you should work on tax savings all year long but the end of the year can have the most impact for investors, landlords, property owners, and vacation property owners.

In this article on RENTcafe, Irina Lupa examines the decade in housing costs, housing trends, and construction trends. Rentcafe named 2010–2019 the renters’ decade. As a commercial real estate investor, it pays to know the trends!

The Decade in Housing Trends: High-Earning Renters, High-End Apartments and Thriving Construction – RENTCafé rental blog

This past decade has transformed the relationship between America and its housing, especially when it comes to renting. While the recession pushed many to rent out of necessity, the economic expansion which followed, coupled with changing attitudes towards family and homeownership, lead to the rise of the renter by choice.

In this article on BiggerPockets, Nate Shields examines whether you need an “investor friendly” agent when you’re looking to buy an investment property. He looks at questions worth asking an agent and identifies the questions that aren’t relevant. He also looks at what commercial real estate investors really need from their agent.

Do You Need an ‘Investor-Friendly’ Agent to Buy an Investment Property?

Many real estate investors think they need an investor-friendly agent to purchase investment properties. This influences them to ask the wrong questions when vetting potential agents. Don’t make this mistake! Here’s how to choose the right agent for your needs.

There are plenty of opportunities in Lane County right now for investors interested in multifamily and other commercial properties. Some of them are silent opportunities that will not be listed. Contact me to find out more: 541-912-6583, rene@1031guru.com.

In November I featured articles in my newsletter to help real estate investors continue to stay on top of trends and make wise investment decisions. This roundup features articles on this fall’s rent report in Oregon, ideas for retiring on rental income, the growing demand for apartments, and advice for women interested in pursuing real estate investment.

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November Highlights for Real Estate Investors

The Oregon Rent Report for September 2019 looks at trends throughout the state and makes comparisons to national trends.

Oregon Rent Report – September 2019 – RENTCafé rental blog

The national average rent went up by 3.2% in the past year but dipped by 0.1% month-over-month, reaching $1,471 in September according to data from Yardi Matrix. Springfield, OR renters saw the highest monthly rent increase in September, with the average rate reaching $1,077 per month.

Whitney Hutten’s article on Bigger Pockets has numerous ideas for investors interested in maximizing their retirement cash flow and retiring on real estate investments.

How to Supercharge Your Retirement Through Real Estate Investing | Blog

Regardless of when you want to retire, you need to have a plan in place. Real estate investing is a great way to help you secure that plan. I give you eight different real investing tactics so you can take a path that suits you.

Michael Blank looks at the reasons that demand for apartments has been growing and will continue to grow.

Why Apartment Demand Is Growing

It’s no secret that the demand for apartments in the USA, from both the consumer and investor perspective, is growing. It’s one of the reasons that I am so passionate about investing in the multifamily space. But have you ever wondered why the demand is so high and why it continues to grow?

Writer David Green interviews a woman who began investing in real estate five years ago. She provides ideas and advice for women who are considering pursuing real estate investment.

From Woman to Woman: Don’t Be Intimidated by Real Estate Investing

At times, real estate investing can seem like a male-dominated field. We’re often asked at BiggerPockets why there aren’t more women who are doing this. On an episode of the BiggerPockets Podcast, Ashley Kehr describes her experience as a woman in the industry. Is it extra challenging?

There are plenty of opportunities in Eugene-Springfield right now for investors interested in multifamily and other commercial properties. Some of them are silent opportunities that will not be listed. Contact me to find out more: 541-912-6583, rene@1031guru.com.

I send out newsletters that every savvy real estate investor should read. In October, my newsletters featured articles about the mindset and principles of an investor, key factors affecting commercial real estate right now, the impact of rent control on investors and renters, and the trend of converting mall space into commercial property that includes apartments.

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October Highlights for Real Estate Investors

I am passionate about educating and empowering individuals to identify key financial opportunities and become savvy investors. Doug Marshall has some helpful insight into the mindset that serves commercial real estate investors well.

The Six Surprising Laws of CRE Investing – MarshallCf

James Montier, the author of the well-known book The Little Book of Behavioral Investing, wrote a white paper called “The Seven Immutable Laws of Investing.” In his thesis, he identifies seven principles for sensible investing in the stock or bond markets.

This blog post by Allen Buchanan, a broker in southern California, looks at some of the key factors affecting commercial real estate these days—supply, interest rates, the re-positioning of mall space, rent control, and more.

Trends, Trends, and More Trends!

What is in store for the real estate market over the next 18 months? What about interest rates, commercial leasing, mall re-positioning, rent control, homelessness, and the question of “what keeps you awake at night?”

This GlobeSt.com article by John Salustri looks at some of the ways that rent control will make a bigger impact on potential renters than on real estate investors.

Advice to Landlords: We Can Deal With Rent Control | GlobeSt

Don’t miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now! Free unlimited access to GlobeSt.com’s trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.

This article by Jeffrey Steele in Multi-Housing News explores a deal going on in Florida and discusses the larger trend of converting malls into multifamily properties.

Retail Store Converted Into Luxury Multifamily Building

A former department store at the Santa Rosa Mall in Mary Esther, Fla., will be redeveloped into a luxury community with 229 units. Renaissance Santa Rosa will be developed by Rea Ventures Group and Radiant Partners. Working through the Department of Housing and Urban Development, Walker & Dunlop structured $35.4 million in construction financing for the redevelopment.

There are plenty of opportunities in Eugene-Springfield right now for real estate investors interested in multifamily and other commercial properties. Some of them are silent opportunities that will not be listed. Contact me to find out more: 541-912-6583, rene@1031guru.com.

Starbucks is a great example of a triple net property in which the tenant is responsible for the taxes, insurance, and maintenance. For some real estate investors, this is the dream come true. This gives the landlord freedom to focus on other things than the day-to-day management of the real estate. A lot of Oregon multifamily owners are 1031 exchanging into these types of properties for a more landlord-friendly type of property.

A recent article on Loopnet looks at the opportunities with Starbucks properties:

Investors Find Starbucks Real Estate Just As Tasty As the Coffee

It’s no secret that a lot of people love Starbucks coffee. But many investors find the Seattle-based chain’s real estate just as tasty, especially newly built standalone locations.

With a net lease, the tenant pays for most of the property’s operating expenses. For their part, landlords get monthly rent.

Through the first half of the year, the Boulder Group’s report noted that private investors made up 80% of the buyers for quick-service restaurant real estate.
Read Full Article »

As much as many people love Starbucks coffee, real estate investors are eager to invest in their standalone properties. Consider what writer Richard Lawson had to say on LoopNet:

Starbucks real estate sits among the top performers in sales volume for new construction in the quick-service restaurant sector, according to the Wilmette, Illinois-based Boulder Group’s latest report on this net-lease sector.

The article shares a number of current opportunities for Starbucks properties. My goal as a commercial real estate investment broker is to help you understand the developments in commercial real estate Eugene and how to make the most of them as an investor. Call or email me today if you would like more details. 541-912-6583

Link to original article

Whether the city of Eugene wants it or likes it, it appears that denser neighborhoods will be coming to the city. Oregon lawmakers have approved a new law that bans single-family zoning in the state’s larger cities. Neighborhoods that were previously restricted now must accommodate duplexes, triplexes, and townhomes. This will create more opportunities for infill for more multifamily in Eugene. Little by little we are chipping away at solving the housing shortage in Eugene. You can read the full article here:

Eugene has been at odds over density. A new state law could force the issue

Eugene will kick and scream, but denser neighborhoods likely will become a reality for Oregon’s second-largest city in the coming years.Three weeks ago, Oregon lawmakers gave final approval to legislation that effectively bans single-family zoning in larger cities by requiring those neighborhoods to accommodate duplexes, triplexes and town homes.The legislation, if signed into law by Gov.

The primary land-use zoning in Eugene is for single-family homes, and although this permits some duplexes and other higher-density dwellings, regulations make the process complex. The new law changes that dramatically. According to writer Christian Hill in his article:

[T]he legislation, House Bill 2001, requires cities to allow duplexes on every lot on land zoned for single-family housing. In addition, it requires cities to allow “all middle housing types” — so named because they fall between homes and apartment complexes — in these neighborhoods…The city’s regulations have stymied construction of new duplexes. In the past 10 years, the city has issued building permits to construct 2,192 single-family homes but only 78 duplexes, according to the city’s online database

Many consider there to be an affordable housing crisis in Eugene. Low- and middle-income people have found themselves priced out of home ownership. Some consider this law to be a step in the right direction, and others are concerned about the impact on noise, traffic, and privacy in neighborhoods.

My goal as a commercial real estate investment broker is to help you understand the developments in commercial real estate Eugene and how to make the most of them as an investor. The professionals at Pacwest Commercial Real Estate are Eugene multifamily experts. Call today if you would like to discuss this further at 541-912-6583.

Link to original article

[embedyt]https://www.youtube.com/watch?v=Zd3oM-wjUZA[/embedyt]
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Rent Control and Multifamily Property Investment

Zoe York: I’d really love to hear about your perception of rent control.

René Nelson: Rent control is impacting a lot of my multifamily owners that I deal with on an ongoing daily basis. I continue to educate myself and learn as much as I can so I can help give them advice and tell them here’s when you need to contact an attorney, here’s where you need to ask your property manager some of the important questions. You definitely need to be using the newest rental agreement forms, as an example. I am always advising people to consult with their real estate attorney, because one mistake can cost a minimum of three months rent plus the damages. It can get really expensive quickly.

That said, I also feel like it’s important to learn the ins and outs and what we’re going to be able to do as property owners. I’ve attended seminars and done a lot of research to keep on top of the latest information.

In our area there are a lot of 1970s and 1980s apartment units, where people really haven’t done much for improvements and their rents are below market. Their rents are in the $662 to $700 range for a one bedroom, one bath, but right now if you looked in the Eugene market, I’d say it’s closer to probably $850 at a minimum. So if you’re at $650 because you have been lagging behind the market and you haven’t had any vacancy, you’re going to have a tough time at 10 percent rent increases annually to catch up to where you should be at 850.

For that reason I think a lot of multifamily owners may consider selling because they’re just going to get to that point where they’re concerned about rent control, they don’t like the government mandating what they should be doing. And I think for a lot of people may also be in that final stage of retirement and now they’re looking at rent control, thinking, “I wonder if they’re going to change the rule or the limit.” Because at 7 percent plus the 3 percent CPI, it’s around 10.3% this year, but if they lower that in the next legislative go round, maybe in two years, they could change that. There’s no guarantee that it’s going to stay at a 7 percent on an annual basis. Last year San Francisco was around 1.7 percent. If all of sudden rents were capped at 3 percent, then that’s hard to even keep pace with maintenance and repair and property taxes.

Using Value-Add to Increase Rents

I have been encouraging my multifamily owners that are wondering what to do to consider a value-add opportunity, where they transition their tenants out. Of course, they have to ask their attorney or their property manager and talk about this, but there is a carve-out in Senate Bill 608 that allows you to give a 90-day no-cause notice if you’re going to have a family member that lives in the property or if you’re going to do a substantial rehab or renovation to the property.

An easy measurable tool for this is habitability, which I heard an attorney explain at a seminar. His example was that if you’re going to go into an apartment and rip out the bathroom and the kitchen, then the unit would have no hot water, no toilet, no sinks, and no way to cook, making the unit technically not habitable. If you have an available unit in your apartment complex, you have to move them there first. But let’s say it’s your average 20-unit apartment complex and it’s 100 percent full and you want to go in and rehab five of those units, you could give notice to those tenants. In this situation, the owners are going to have to pay one month of rent because that allows the tenant to have some cash to pay deposits for when they want to move. But this gives multifamily owners the opportunity to go in and rehab those units and get rents back up to where they should be.

Zoe York: I agree with that, and I do think habitability is an important thing to consider and to talk to an attorney about. Owners want to meet that standard of the unit not being habitable for renovation, because if you have below market rent in this strong market, it’s going to be very tempting to go in and just paint and do the floors and call that a significant renovation. I’m not sure that would classify as not being habitable, so I think multifamily owners are going to want to be careful. They should talk to their attorneys, make sure they’re not doing the bare minimum, which could get them in trouble and open them up to liability.

We have a lot of these older complexes that have deferred maintenance, and so they need some improvements anyway. A lot of them need improvements to the exterior and to the roof. And those types of improvements would not classify for making the unit uninhabitable, but if you’re going to do those things anyway, this is a great opportunity to get your rents up to market and kind of loophole around the rent control. When you’re looking at a pretty significant capital expenditure, but you’re looking at a capitalized a couple hundred dollars per unit per month rent increase, I think it probably does start to pencil out for property owners.

Another consideration is if you have a property that’s below market like that and you don’t have the value-add when you go to sell it. You basically have to get your rents back up to market over the long-term with the rent increases in order for you to maximize your property value. That makes you not very liquid in your real estate during that stabilization time, or you have to be willing to take a hit because somebody else is going to have to do that stabilization.

I think you take a risk as a property owner if you’re just slowly increasing your rents with the rent control ordinance because over that stabilization period, your property is worth less because the rents are lower. This makes value-add an important opportunity to make sure that your real estate is a little bit more liquid by adding that value immediately rather than waiting for the market to catch up.

René Nelson: I agree. I’ve put together a rent control packet especially for out-of-town investors because I think a lot of owners are unsure how to proceed since Oregon is the first state that now has statewide rent control. I want to educate owners on what they need to do to protect themselves.

Zoe York: I think at this point owners need prudent management and to really understanding what they can and cannot do. The rent control cap is very large. We’ve previously discussed that historically rent increases have been at 3 percent per year, and 10 percent is well above that. The true impact on values right now doesn’t appear to be on anything that’s not well below 10 percent below market rent. But I think the big problem for investors right now is this concern that it might change in the future.

We seem to have this balance of what’s currently happening with rent control, and numerically it’s not actually causing that much of an impact, except for the properties that are well below market, and the fear of what could happen. You have the investor perception of fear of change and fear of government control in the future. I believe those two things are going to be balanced for both investors coming into Oregon and current property owners; both have to deal with what is actually happening as well as their perceived risk. Because this is a fairly new bill, we’re going to see over the next 9 to 12 months what’s actually going to happen in the market.

If you have questions about rent control and investing in multifamily properties, contact me today: René Nelson 541-912-6583 / rene@1031guru.com    www.eugene-commercial.com. You can also visit Rent Control Central.