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If you’re a multifamily investor either currently operating a multifamily project or you’re looking to purchase your first multifamily building one of the driving factors of your everyday business will be the demands and needs of apartment renters. And one of the most important factors to keeping your building competitive and purchasing the right property is keeping up to date with the amenities that draw your tenants.

Apartments.com recently compiled a survey of the highest rated tenants amenities and some of the highlights were:

Air Conditioning and more specifically central units were the highest rated amenity on the list, and here in Florida that goes double for most of the year. With many old properties having windows units, an upgrade to new central units would be a smart investment to make, especially if you’re in for a long tenure and not trying to flip your property.

Parking was the second highest rating on the list and is no surprise as well. In urban areas like St Petersburg that offers mostly on street parking, having a property with at least a one to one parking ratio will set your building apart from the others in the area.

In-Unit washer/dryers were also in the top five but having some sort of on-site laundry is always better than offering the tenants no other option but to go to a nearby laundromat. And it’s an excellent source of additional income.

High-speed Internet is also widely coveted by renters in today’s fast paced give-it-to-me-now society. Most of the local cable/phone providers have updated their connections to offer this connectivity so only much older buildings are at a disadvantage in this arena.

Dishwashers round out the top five as no one likes to wash dishes (least of all me). This can be a costly option to add in many buildings as older cabinetry can require a complete remodel in a kitchen to include a dishwasher.

Elevators, pools, and hardwood floors were also high up on the priorities list with fireplaces coming in last, and even less so here in Florida.

Current owners would always do well to stay up to date on these areas and those in the market for properties now should examine their potential investments to make the most out of their commercial real estate investments.

Peter J Barnett, CCIM

First off, my apologies at not updating this blog in weeks but we just completed a move of our physical offices and the infrastructure took some time to get back to working properly.

The Real Estate Research Corporation (RERC) released it’s third quarter Investment Trends report and had some interesting observations about the Southern and Tampa Bay specific markets. A podcast from the CEO of the RERC, Ken Riggs, CCIM observed that on a national level we have not yet seen the market correction in the commercial sector that we are seeing in the residential sector over the past year or two. He also commented that the multifamily and hospitality sectors were the most promising at the present time due to the correction of the housing and sub prime mortgage crisis slowly but surely. He felt the industrial sector is going to stay on a level plane but the retail and office sectors were due for a fall. The retail sector may be hit by a worsening economy and the office sector affected by the increased cost of property owners to lure new tenants to their area, thus lowering the bottom line profits and decreasing values in a sales situation.

The following is a breakdown of the trends in the Tampa Bay Market over the third quarter of 2007 and compared to the previous year:

Office markets saw a rise in both the price per square foot and weighted average cap rates over the last quarter, but the cap rate for the previous year fell overall. The National price per square foot rose by nearly $50 a foot while the Tampa market rose only by nearly $20 a foot respectively over the past year.

Industrial markets rose in price per square foot on both the previous quarter and previous year, but only by a few dollars per square foot as the market remained slow and stable.

Retail markets saw an increase in the price per square foot across both the quarter and the year, while cap rates dropped for both periods. The nation saw a slow and steady increase in retail prices while Tampa saw a sharp fall in prices in early 2007 only to rebound to match national levels by the end of the third quarter.

Apartment markets saw a fall in the price per unit for the year of upwards of $10k per unit for Tampa, while the south region as a whole dropped nearly $15k per unit over the same period. Cap rates for the apartment market finished well above the national rate by almost 2 percent showing the impact the correction of the residential market on the multifamily market.

Mr Riggs also observed that the most likely forces driving the commercial market over the next few years will be risk and available capital. One of the reasons Tampa Bay enjoyed such a frenzied last 5 years was the large availability of capital and the relatively low risk of investing with demand at high levels. Now those same factors are correcting the market as the risk continues to sharply rise for investors that purchased at unrealistic prices. Add to this the drop of available capital and we will see the correction affect the commercial market as well. How much will it be corrected? No one knows for certain but stay tuned into this blog and we will provide the news as it happens to make sure your investments are sound and profitable. We’re looking forward to 2008 to bring about better prices and more favorable investments and you can be confident that we will make sure you have every opportunity to view them first. If you’re not signed up as a user on our site, (it takes less than a minute) then you’re missing out on our direct emails of properties that are available but not yet on the open market. This is just one of the many services we provide our clients and its an important one. Don’t hesitate to contact us with any investment questions regarding investment real estate. It’s our business and our passion.

Peter J. Barnett, CCIM