BRE in Rancho Santa Margarita
According to the transcript (Thanks, Seeking Alpha!) of a recent investor chat, here’s what Edward Lange, chief operating officer of apartment landlord BRE (11 O.C. projects) had to say about local conditions ….
I think that the explanation on terms of the market rent growth that we’ve seen in Orange County and the occupancy and granted that’s not a lot of market rent growth and I think the explanation’s pretty candidly is that we’re catching up a little bit.
Operating team’s been working real hard down there. We probably made up some ground that we had lost in the first half of the year, we’re right where we want to be and the occupancy has to do with the fact that again there’s a lot of traffic going around the Orange County area.
And what you’re seeing is we’re beginning to see, and we don’t have great data on this, but when you look at the traffic levels, they’re running about 10 to 20% higher than what we estimated they would for this year and we’re seeing people move from the Inland Empire back into Orange County.
So if you moved into the Inland Empire to buy a house and you’ve been foreclosed on or you’re under water in terms of equity, there’s a lot of movement back into Orange County to be closer to where they were and I think we’ve been able to take advantage of that move.
Did you see our Zippys rankings?
- Newport Coast took the biggest fall from the second quarter
- Seal Beach was ranked as Q3’s #2 zippiest market
- 5 Santa Ana ZIPs in Bottom 25
- ZIP-by-ZIP rankings HERE!
Other real estate trends …
Makes sense to me. I’d rather live in OC.
yea buts those prices are great now in the IE, closer to a bottom, OC still has more room to fall
But, can they clear credit?
Great article Jon.
that was an interesting earnings conference call from seeking alpha. They seem to doing all they can to adapt to the current conditions.
They also talk about ‘consesions’ or Free Rent. They seem to be profitable even in areas where other operators are lowering rents and giving 2 months free rent for new sign ups.
i still need time to read over the conference again, but it was interesting to see how an apartment rental company runs and thinks.
interesting, but i wonder what accounts for the 25% vacancy rate at my apartment complex. it certainly wasn’t that way a year ago, when vacated units were rented. some units near me have been vacant for nearly a year now. also, is see lots of apartment buildings with big signs out front touting move-in specials and a month of free rent. all of that doesn’t seem to dovetail with what Lange is saying.
Does anyone believe this nonsense. I renewed my lease in laguna Niguel in March and the price has fallen about 5% on Windridge’s web site since then.
My next lease I’m looking for a reduction or renting something else. It looks like prices of RE in OC will fall another 35% in the next year or 2 so it is still too early to buy.
Makes sense - but it’s exactly the opposite of what I’ve been seeing in my community as well. Lots more out movement than in. And there are huge specials. Perhaps it’s just seasonality…
I have to agree with the others here. In that last few months I have seen maybe one move in for every 5 or so departure. Many units have been empty for months. The complex is also trying to put some serious upgrades to these vacant units to try to attract new renters. It doesnt appear to be working.
So I havnt really seen anything close to what this article claims. I will say, I dont live in the nicest complex in town, so that may have something to do with it.
I live in westpark irvine. When I take my dog for a walk I am now seeing like 8 vacant apartments instead of the usual 3. I guess all that chinese and korean money is deflating in the asian markets.
I see at least five vacancies in the condo complex
where I live- and thats just in the immediate area-
rents will drop as the vacancies increase - its simple
supply and demand– this guy is to rentals what lereah was to
NAR- their talking head spokesman
Not seeing it in my small part of the OC. I own a small condo that I rent, and I price it near the rents of nearby apartments that are very similar in layout.
The apartment pricing has definitely dropped from over the summer until now - maybe its the wiinter months - don’t know. I won’t be raising my tenant’s rents for awhile unless I see the pricing on the apartments rise. I am hoping I don’t have to lower them . .. . .