Post Investment Group, LLC purchased the 276-unit complex from Village at Quail Springs, LLC. Located at 14520 N. Pennsylvania Ave. Oklahoma City, OK, Village at Quail Springs is ideally situated in one of the most dynamic retail corridors in Oklahoma. The property completed construction in February of 2011 and achieved stabilization a few months later.

“The buyer was attracted to Village at Quail Springs for a variety of different reasons of which the location and asset class were paramount. The buyers do not currently own in the immediate submarket and had been keeping an eye on Oklahoma City for some time”. Village at Quail Springs offered a unique opportunity to acquire essentially brand new product without paying significantly over market”, said David Burnett.

The closing of Village at Quail Springs marks the first large apartment transaction in the Oklahoma City market in 2012.

“There were only two Class A apartment properties that traded in 2011 and both sales reflected an average price per unit of about $73,000. Village at Quail Springs traded slightly higher at $77,700 per unit which can be contributed to the newer age of construction and quality location”, said David Burnett.

About Sperry Van Ness/William T. Strange & Associates, LLC: Sperry Van Ness/William T. Strange & Associates was the #3 SVN office out of 160 in the U.S. in 2011. Andy Burnett and David Burnett are multiple Sperry Van Ness Partner’s Circle award winners (recognizing top performers) and have each placed in the top five nationally in the last three years.  David and Andy Burnett have closed over $400 million in commercial real estate over the past three years.

About Sperry Van Ness: Founded in 1987, Sperry Van Ness is one of the largest commercial real estate investment brokerage firms in the United States and has expanded its national presence into 50 new markets in the past three years. Sperry Van Ness provides advisory, brokerage, consultation, asset management, property management, leasing, financial, accelerated marketing and auction services. To provide the highest value to its clients, Sperry Van Ness is the only national firm that implements a broker marketing plan in addition to its investor marketing plan for all listings. Guided by this principal of cooperation, Sperry Van Ness, based in Irvine, Calif., has advised clients on billions of dollars in multifamily, retail, industrial, office, hospitality and land transactions. For more information, please visit www.svn.com.

The new team will provide full-service brokerage expertise for niche GSA transactions, ranging from site sourcing for developers pursuing GSA contacts to brokerage services for investors seeking completed, occupied and stabilized investments.

“GSA is the nation’s largest public real estate organization and their properties, like Treasury Bonds, are backed by the Federal Government. This creates tremendous stability and growth potential,” said Phillips, who in 2011 formalized SVN’s entry into the GSA market. “Tim’s deep office and industrial expertise will be a great asset as we pursue a product that more and more of our investors are asking for.” 

According to its 2009 Financial Report, GSA renews its first-time leases 96 percent of the time, ranking government-leased properties among the most reliable assets in the nation.

“The challenge is their complex deal structure,” said Phillips. “GSA transactions require training, and experience in this sector. We have that expertise and will bring it to a larger audience through SVN’s philosophy of cooperation with brokers who operate within and outside of our firm.”Strange and Phillips will also grow the SVN National GSA Team as volume and opportunity allow.

Strange, who is Managing Director of Oklahoma City-based Sperry Van Ness | William T. Strange & Associates LLC, is ranked as the company’s #5 top-producing broker and for three years has directed SVN’s #3 ranked firm in the U.S. He specializes in office and industrial properties, closing more than $500 million in sale and lease transactions during his last eight years at SVN. Strange also serves as a Regional Team Leader for SVN’s Asset Recovery Team, is on the SVN Board of Advisors, and is a multiple Partner’s Circle  Award winner.

Phillips serves as Managing Director of Phoenix-based Sperry Van Ness I MVP CRE Advisors. In 2011, he ranked as SVN’s #16 top-producing broker and in the fourth quarter of 2011 alone closed two major GSA deals, the $7.4 million sale of a 23,485-square-foot office building in Sierra Vista, Ariz. and the $13 million sale of a 55,594-square-foot office building in Redding, Calif.

Together, Strange and Phillips deliver almost 50 years of combined industry experience. Both hold designations as Certified Commercial Investment Members (CCIM) and Society of Office Realtors (SIOR).

About William T. Strange & Associates: Based in Oklahoma City, OK, and with an office in Tulsa, OK, Sperry Van Ness | William T. Strange & Associates LLC is a full-service commercial real estate firm providing investment sales, leasing, property management, and asset management services through our affiliate H3 Advisors www.h3okc.com. We believe that long term relationships are more important than our immediate gain. We are committed to providing the “BEST” combination of resources to achieve your real estate objectives. We have specialists in  Multifamily Properties, Retail Sales, Office Property Sales, Industrial Property Sales, Land Sales, Leasing (Tenant Representation and Owner Representation), Accelerated Marketing (Auctions), Sale / Leaseback and Asset Recovery.

About SVN I MVP CRE Advisors:  Based in Phoenix, Ariz., Sperry Van Ness | MVP CRE Advisors, LLC is a full-service commercial real estate brokerage firm specializing in GSA transactions and office and industrial investment sales. As part of the SVN organization, the firm also offers collaborative services for retail and multi-family properties, as well as specialized expertise in asset recovery and accelerated marketing/auctions. In more than 23 years, SVN I MVP has sold and leased more than 6.9 million square feet of space and achieved a sales volume of over $500 million. In the GSA sector, its successful track record has established SVN | MVP as an expert in the complex but advantageous niche market of government properties. For more, visit http://svnmvp.com 

About Sperry Van Ness: Founded in 1987, Sperry Van Ness is one of the largest commercial real estate investment brokerage firms in the United States. SVN provides advisory, brokerage, consultation, asset management, property management, leasing, financial, accelerated marketing and auction services. To provide the highest value to its clients, Sperry Van Ness is the only national firm that implements a broker marketing plan in addition to its investor marketing plan for all listings. Guided by this principal of cooperation, Sperry Van Ness, based in Irvine, Calif., has advised clients on billions of dollars in multifamily, retail, industrial, office, hospitality and land transactions. For more information, please visit www.svn.com.

2011 Office Trends
The Oklahoma City office market fundamentals yielded positive indicators of stability and growth through year end 2011 despite a disconcerting national economy. Oklahoma City’s office market began turning positive in the 2nd quarter when it absorbed approximately 145,000 square feet of vacant space, and, ended the year with absorption of nearly 200,000 square feet. The market continued to remain robust in the 3rd and 4th quarters and, as a result, overall office vacancy measured 11.6% at year end; and, class A and B vacancy rates were 7.1% and 8.9%, respectively. Class A office buildings reported absorption of nearly 297,000 square feet, further reflecting the strength of the local economy and demand for high quality office space.

Chesapeake Energy can be cited as one of the primary engines of growth for the office market. The natural gas giant made a string of large purchases in the suburban office market including Central Park One & Two for $29 Million, Atrium Towers for $17.3 Million, and the Caliber Center for $38.2 Million, these three acquisitions alone accounted for over two-thirds of the total dollar volume in the Oklahoma City Metro for 2011. In total, the energy company acquired ap-proximately 800,000 square feet of multi-tenant office space in the North and Northwest submarkets in 2011.

These acquisitions will continue to spur absorption in the North and Northwest submarkets as the company amasses space in these buildings and existing leases expire, therefore, ultimately requiring tenants to relocate to other properties. Accordingly, these acquisitions have enhanced the market by removing vacant space and contributing to future absorption of other properties.

Nevertheless, those companies required to relocate as a result of Chesapeake’s recent acquisitions could have trouble finding comparative office space in the same area. Many of these companies will likely look towards the Central Business District (CBD) as an alternative as it offers the largest blocks of available contiguous space in Oklahoma City. The CBD experienced a reduction in vacancy from 13.5% to 11.9% for class A and B properties. This reduction is largely attributable to Enogex and Continental Resources moving their corporate headquarters to the sub-market. Vacancy rates in the CBD, however, should increase as Devon Energy begins vacating nearly 600,000 square feet to occupy its new tower. As this occurs, the CBD will have an abundance of vacant space to accommodate new tenants from the suburban market.

The space vacated by Devon and the progressing transformation of the downtown streetscape via Project 180 will provide a challenge to Landlords in the coming years. However, the ultimate challenge for Landlords in the central core will be the lack of sufficient parking for prospective tenants. The availability of parking has not paralleled the influx of new tenants to the CBD. Accordingly, the city has discussed addressing the issue by adding two new parking garages. However, there is yet to be any planned construction in the near-term which poses a challenge to CBD Landlords.

2012 Forecast
As available credit for speculative investors remains tight, user buyers dominated the market in 2011. We expect this trend to continue through 2012, however, an increasing sense of optimism remains among speculative investors. This is evidenced by the sale of 50 Penn Place to Florida based In-Rel Properties for $15.25 Million. Under the new ownership, the building is undergoing ex-tensive renovations in order to be re-branded into a class-A asset. Another notable speculative investment for 2011 is the purchase of One Benham Place for $15.5 Million. This purchase was made by a local investor as a part of a 1031 Tax deferred exchange.

Moving forward through 2012, sales and leasing activity as a whole should increase moderately. The Oklahoma economy remains strong, and with urban renewal initiatives such as MAPS and Project 180 in full swing, the Oklahoma City commercial real estate market shall continue to improve.

View the Full Report:
SVN Advisor Insights Office OKC End of Year 2011 

Tulsa’s apartment vacancy rate for the end of 2011 settled at 7.3 percent, down from 8.9 percent when compared to 2010. The decrease in vacancy can be primarily tied to Tulsa’s stabilizing unemployment rate along with changing perceptions and attitudes towards renting an apartment rather than purchasing a single family home. The unemployment rate for Tulsa peaked at 8.1 percent in the beginning of 2010 and has steadily dropped since then settling around 6.4 percent at the close of 2011. The gap between Tulsa and Oklahoma City’s unemployment rate has been closing and should get even narrower in 2012.

My generation, the Echo Boomers seem to have a different mindset than that of our parents. Gone are the days when renting an apartment seemed to carry with it an unspoken stigma. Much has changed with our generation and the multifamily industry seems to be catching the economic windfall. Anecdotal evidence suggests that we are about seven years behind the historical timeline of our parents when it comes to achieving life’s milestones: marriage, kids and buying a house. It is estimated that there are around 75 million echo boomers, which makes them the largest demographic group in the US behind the Baby Boomers.

Four million Echo Boomers will turn eighteen each year over the next decade and while they suffered disproportionate job losses during the Great Recession, Bureau of Labor Statistics household survey data shows they are now getting the lion’s share of net new jobs as the economy recovers. As a result, this age group is projected to add an additional 7 million renters to the national pool. According to a study generated by Harvard University’s Joint Center for Housing Studies, 80 percent of all households whose residents are under the age of twenty five are renters So over the next decade the largest demographic group in forty years will be flooding the rental market.

Fannie Mae’s 2011 national consumer survey found that across all adult age types, Americans’ attitudes about homeownership are growing more pessimistic. Key indicators from the survey pointed to the underlying fact that more consumers across the country have diminished expectations for home prices and more are thinking about renting as a next step. Despite Americans’ expectations that rental prices will go up in the next 12 months, fewer Americans said they would buy their next home (down 5 percentage points) and more of those surveyed said they would rent (up by 3 percentage points).

Additional statistics evidence the fact that the American dream of home ownership has diminished greatly in the last decade. Home ownership has fallen to 66.5% of the adult population, down from 69.2% in 2004. A recent Harris Interactive poll reflected the fact that 70% of Americans aspire to homeownership, down from 77% a year ago.

The fallout from the boom years of 2005 through 2007 has resulted in a 22% negative equity on home mortgages nationwide. Most of these homeowners who are upside down will most likely be entering the rental pool in the not too distant future. Oklahoma’s single family picture is much brighter in that only 6% of Oklahoma households have negative equity in their homes.

The flip side is that fewer and fewer younger people have the required twenty percent down payment now necessary to become first time home buyers. Most young professionals earn good incomes but their credit card debt outweighs the necessary savings required for such a large down payment. Newer, Class A apartment communities offer a very attractive alternative for this equity-strapped demographic.

Yr. Built           Vacancy Rates          Up/Down from 2010
Pre-1970’s:             10.4%                          Down 0.7%
1970’s:                      11.1%                           Down 2.2%
1980’s:                        6.3%                           Down 0.5%
1990’s:                        3.8%                                 Up 0.2%
2000’s:                       4.3%                            Down 2.3%

Tulsa’s rental rate growth ranked 9th in the Southwest region of the United States out of all major metropolitan markets studied by REIS. Average rental rates at the close of 2011 in Tulsa were as follows:

Unit               Rental Rate/Mo.          Up/Down from 2010
Studio                      $.80                                  Unchanged
1 Bedroom             $.75                                     Up 1.3%
Two Bedroom      $.69                                      Up 2.9%
Three Bedroom   $.72                                     Up 1.4%

There were 15 property sales for Tulsa in 2011 that exceeded 50 units in size, compared to 12 in 2010. Total unit transactional volume was up 26 percent with 2,408 units closed compared with 1,908 in 2010. The average price per unit in 2011 came to $29,706, up 14 percent from the average price of $26,063 in 2010.

This year we will continue to break down the sales by performing versus non-performing properties. A performing property is qualified by having an in place cap rate at the time of sale and generally are in above average locations in above average condition. Non-performing properties are typically distressed assets with high vacancies being sold by the lender.

Non-performing properties contributed 640 units sold in 2011, down 19 percent from the 766 non performing units sold in 2010. They sold for a total of $8,014,500, or $12,523 per unit, down just 2 percent from the $12,851 achieved in 2010.

Performing properties contributed 1,768 units sold in 2011, up 78 percent from the 990 performing units sold in 2010. A total dollar volume of $63,519,000 sold in performing apartment properties in 2011 for an average price per unit of $35,927, which was just higher than the $35,500 achieved in 2010. Performing properties were trading at a 186 percent premium to non-performing properties on a per unit basis in 2011. There were 7 distressed asset sales in 2011 compared to 5 in 2010. 6 performing properties sold in 2011 versus 7 in 2010.

Transactional volume is projected improve further in 2012 with Class A assets pushing the price per unit average much higher than what the Tulsa market has seen in the past three years. Cap rates for quality properties in the strongest locations will continue to compress approaching levels not seen since 2007. As long as no major reform to Fannie and Freddie occurs, sub 5% interest rates should continue to be a major catalyst for Tulsa and Oklahoma City’s multifamily market. We have seen a tremendous peak in interest from nonpublicly traded equity funds that in years past would have flown over our state. These funds are being priced out of most major Midwest markets and ,as a result, Oklahoma has benefitted greatly. Our major markets are now on the radar of most major apartment buyers across the nation which is a tremendous testament to the consistency and emerging vibrancy of our economy.

View the Full Report:
SVN Advisor Insights Multifamily Tulsa End of Year 2011

2011 was a great year for multifamily in Oklahoma City. Sales volume, prices and rental rates increased while vacancies decreased. Cap rates for class A assets in strong submarkets are lower today than they were during the peak of 2005-2007. The only reason you haven’t seen prices in the $100,000 a unit range is because the right product hasn’t been available. That will change in 2012.

Properties that can be sold free of existing debt are commanding the highest premi-ums. Interest rates of 4.25 percent are driving cap rates back to historic lows.

In 2011 there was $121,975,000 in multi-family dollar volume, up 59 percent from 2010. The average price per unit was $32,405, up 16 percent from the same period last year. Our data is derived from actual property sales consisting of proper-ties with 30 units or more, excluding stu-dent housing, partnership and bank note sales.

This year we will continue to break down the sales by performing versus non-performing properties. A performing property will be qualified by having an in place cap rate at the time of sale. These are stabilized properties generally in above average locations in above average condition. Non-performing properties are typically distressed assets being sold by the lender. They have significant amounts of vacancy that will be very difficult to cure due to the location of the asset and the condition of the property.

Non-performing properties contributed 1,312 units sold in 2011, down 12 percent from the total of 2010 and down 25 percent from the peak of 1,748 units in 2009. 2011 saw 10 non-performing properties trade for a total of $9,615,000, or $7,329 a unit. While it appears the number of non-performing properties trading has stabilized, the values are holding at recent lows. These properties are trading at prices that reflect the current condition of the asset and for the most part shouldn’t be viewed as heavily discounted.

One notable outlier that wasn’t included in the statistics of non-performing properties was the Renaissance of Norman, which sold for $13,094,000 or $57,000 per unit. Renaissance was built in 1998 and is one of the few newer Class A properties to involve a special servicer in the sale. We anticipate only one or two more Class A properties to require lenders or special servicers. Many older vintage assets are currently working their way through the foreclosure process.

A total dollar volume of $99,265,000 sold in performing apartment properties in 2011 for an average price per unit of $44,634, down 7 percent from the $48,413 achieved in 2010. Performing properties were trading at an 83 percent premium to non-performing properties in 2011. Don’t ex-pect 1960’s or 1970’s vintage assets to return to the values seen in 2005-2007 in the near future, as lenders are still reluctant to finance this asset class.

Average vacancy and rental rates for the third quarter of 2011 in Oklahoma City according to REIS were as follows:

Yr. Built          Vac. Rates          Rental Rates
Before 1970:     11.0%                        $517
1970’s:                 9.1%                          $514
1980’s:                 4.5%                          $544
1990’s:                 3.8%                          $772
2000’s:                3.5%                          $806

The multifamily operating fundamentals had a fantastic run in 2011. The overall vacancy rate for the Oklahoma City msa for 2010 was 7.1 percent, down 220 basis points from 9.3 percent in 2010. The decline in Oklahoma City vacancy rates reflect an increasing shift in the American perspective on home ownership across the country to renting versus buying. The national vacancy rate fell by 170 basis rates in 2010. We believe this trend will continue for the foreseeable future.

The bigger story was the 240 basis point rent growth in Oklahoma City in 2011. Oklahoma City’s rental growth ranked 16th out of the 82 markets analyzed by REIS over the past year and 7th over the past 3 years. Last year we predicted above average rental and occupancy growth for 2010 and we believe this will continue into 2011.

Job growth will remain the primary determinant of sustained apartment demand over the long term and Oklahoma City appears to be in good shape. Continental Energy will be relocating their corporate headquarters to downtown Oklahoma City and Boeing will be adding 1,550 employees in Midwest City bringing their total to 2,300 employees.

Oklahoma City’s unemployment rate of 5.5 percent in November of 2011, the lowest in the country for cities over 1 million people.

Cap rates for top-quality assets are trading in the range of 6.0 to 6.75. Class B assets are trading at cap rates anywhere from 7.0 to 8.75. Multifamily starts are picking up across the city with new projects planned or under construction in most submarkets. Downtown Oklahoma City will continue to see the majority of attention from developers as the submarket leads in rents, occupancy and cap rates.

2012 will see the return of $100,000 per unit sales comps as well as sub 6 percent cap rates. We believe the total sales volumes will continue to rebound with class A assets leading the way. The Oklahoma City multifamily market will continue to benefit from a strong local economy.

View the Full Report:
SVN Advisor Insights Multifamily OKC End of Year 2011 

The Oklahoma City industrial market remains strong as we continued our trend of lowering the vacancy rate and outperforming the national average. The vacancy rate in 2011 dropped slightly to 8.2% from 8.9% at the end of 2010. The overall national industrial vacancy has also been going down but remains in double digit territory at 13.5% at the end of the year.

The assignment initially consists of eight industrial buildings comprising  274,593 of available square feet and seven office buildings comprising 28,083 of available square feet. Notable industrial buildings include  4401 E. Hefner at I-35 and Hefner Road,  315 Hudiburg Circle at I-40 and Meridian, and 44 E. 42^nd in the Santa Fe Industrial area. Notable office buildings include The Montgomery and Park Harvey in the central business district, and Liberty Trails at I-240 and Sooner Road.

Gardner Tanenbaum Group has become the largest developer of big box industrial and office buildings in the state in the last 14 years having constructed almost 5 million square feet. “We are thrilled to have this major leasing assignment and to work closely with Dick Tanenbaum and his people. I have always admired Dick for his unique vision, uncanny marketing ability and tenacity in getting deals done. We are looking forward to filling up his industrial and office properties and keeping them full” said Tim Strange, Managing Director of Sperry Van Ness/William T. Strange & Associates. The leasing team will consist of Tim Strange, CCIM, SIOR; Brett Price, CCIM industrial specialist; Joe Kokojan, office and land specialist and Danny Ojeda, marketing and leasing coordinator  for industrial and office properties. “I have watched Tim Strange and the work he has done in building a team of specialists. I am excited about having his group of young, aggressive guys working on my portfolio and filling up our empties” said Dick Tanenbaum.

 About Sperry Van Ness/William T. Strange & Associates, LLC: Sperry Van Ness/William T. Strange & Associates was the #3 SVN office out of 150 in the U.S. in 2011 and closed transactions totaling almost $82,000,000 in 2011. Sperry Van Ness / William T. Strange & Associates was named the 22nd fastest Growing of The Metro 50 in Oklahoma City last year. Tim Strange, CCIM, SIOR was recognized as one of the top ten advisors out of over 900 in the company for the third consecutive year. For more information on current or recently closed properties, visit www.svnbest.com

About Sperry Van Ness: Founded in 1987, Sperry Van Ness is one of the largest commercial real estate investment brokerage firms in the United States and has expanded its national presence into 50 new markets in the past three years. Sperry Van Ness provides advisory, brokerage, consultation, asset management, property management, leasing, financial, accelerated marketing and auction services. To provide the highest value to its clients, Sperry Van Ness is the only national firm that implements a broker marketing plan in addition to its investor marketing plan for all listings. Guided by this principal of cooperation, Sperry Van Ness, based in Irvine, Calif., has advised clients on billions of dollars in multifamily, retail, industrial, office, hospitality and land transactions. For more information, please visit www.svn.com.

Tim Strange, Blake Renegar and Daniel Ojeda of Sperry Van Ness/William T. Strange & Associates represented Public Strategies in the lease transaction. Vicki Knotts and Ben Knotts of Grubb & Ellis/Levy Beffort represented the owner.

About Sperry Van Ness/William T. Strange & Associates, LLC: Sperry Van Ness/William T. Strange & Associates was the #3 SVN office out of 150 in the U.S. in 2011 and closed transactions totaling almost $82,000,000 in 2011. Sperry Van Ness / William T. Strange & Associates was named the 22nd fastest Growing of The Metro 50 in Oklahoma City last year. Tim Strange, CCIM, SIOR was recognized as one of the top ten advisors out of over 900 in the company for the third consecutive year.

For more information on current or recently closed properties, visit www.svnbest.com.

About Sperry Van Ness: Founded in 1987, Sperry Van Ness is one of the largest commercial real estate investment brokerage firms in the United States. SVN provides advisory, brokerage, consultation, asset management, property management, leasing, financial, accelerated marketing and auction services. To provide the highest value to its clients, Sperry Van Ness is the only national firm that implements a broker marketing plan in addition to its investor marketing plan for all listings. Guided by this principal of cooperation, Sperry Van Ness, based in Irvine, Calif., has advised clients on billions of dollars in multifamily, retail, industrial, office, hospitality and land transactions. For more information, please visit www.svn.com.

Bless Jason Little’s heart.

Proof of his brilliance is right there on Page 61 of “Brokers Who Dominate: 8 Traits of Top Producers,” a new book by real estate consultant Rod Santomassimo, profiling Little, fellow Oklahoma City commercial property broker Tim Strange and 21 other real estate rock stars from across the country.

Behold Little’s wisdom:
• “Never say “no” to a reporter or journalist.”
• “Reporters and journalists are always looking for content. Send press releases on everything you do — new listings, recent closings, new additions to the team, $10 million deals, 1,000-square-foot leases, and everything in between.”
• “Make a reporter or journalist’s life as easy as possible. This means well-written press releases with complete information, no grammatical errors, high resolution property photos, and a head shot attached to every release.”

Smart stuff — especially that last one.

Nobudy is perfect. But if you want your stuff to see ink, or be seen under a news organization’s banner on the Internet — as opposed to some freerange blog, a realty company’s website or Facebook — you should aim for perfection. And while low-resolution snapshots usually work online, newsprint still requires real high-resolution photos.

This is a self-serving take on the book on my part — but hey, if you’re trying to get a transaction reported, or a story written, you really do have to help me help you. And I can say that Little practices what he teaches in “Brokers Who Dominate,” by Domus Publishing, $24.99 in hardcover.

Little, now with CB Richard Ellis-Oklahoma, is grouped among “The Young Guns” section of the 259-page book. He was 21 when I first wrote about him in a full news feature story in 2004. Do the math.

Tim Strange, managing director of Sperry Van Ness/William T. Strange & Associates, is grouped among “The Dominators” in the book, which truly is stuffed with advice from successful brokers from all over. Strange was an Eagle Scout.

“I operate my business according to the Scout Law, a set of life principles which was ingrained in me when I was 11 years old,” he said. “I try to be trustworthy, loyal, helpful, friendly, courteous and kind in all of my dealings with people, whether they be prospects, clients, vendors or my team.”

Strange and I first crossed paths for a news story in 1999, just six weeks after I landed at The Oklahoman, when he was a principal of Wiggin Properties. Strange goes back further than me here, but I can back what he says in “Brokers Who Dominate,” too.

Strange reveals some inside tips to his approach to business, including hiring. Little, without naming names, talks about something that can “make teams and firms totally collapse” — a clear reference to a dustup in 2009 inside a realty firm here that wasn’t reported because, frankly, it was more gossip and personality conflict than news and business.

Most commercial brokers here, if not all, will be able to read between the lines — and they should. So should people who deal with brokers and people who want to become brokers.

All the profiles in “Brokers Who Dominate” are gems, not just Little’s and Strange’s.

with David Burnett, CCIM, Investment Adviser at Sperry Van Ness

Why do you think multifamily investments seem to be the property of choice right now when compared to other commercial opportunities?

DB: Availability of financing is the key factor and answer to that question. Multifamily is the only real estate property type wherein financing can be secured via the federal government.

This is perhaps the biggest factor in what is driving market values. There is no other property type in which you can secure a 4.5% loan with a 30year term without personally guaranteeing the loan.

The GSEs (government-sponsored entities) Fannie, Freddie and HUD account for 85% of all multifamily loan originations. HUD is the primary source for new-construction financing, and Fannie is the primary source for stabilized Class B-type assets.

Local commercial banks are the only lending sources for office, retail and industrial properties, but their capacity to make loans has been inhibited by recently revised government-mandated, capital-reserve requirements. The local banks simply cannot compete with the federal government when it comes to loan terms, and multifamily is the only property type that benefits from such a restrictive lending environment.

In what way does the looming prospect of inflation affect the multifamily sector?

DB: Historically, inflation has averaged around 2.5% per year, and there is a general consensus among economists that inflationary pressures will soon be felt at much higher levels.

Apartment investments offer a hedge against inflation in that leases are short term, usually 12 months or fewer, as opposed to five- and 10-year terms usually associated with office and retail properties.

As well, rising inflation will result in higher interest rates, which will narrow the pool of qualified buyers for single-family homes. If and when these projections come to fruition, the likely result will be higher occupancy and rent growth for multifamily properties.

Could rising apartment occupancies be a reflection of home ownership fading somewhat when compared to years past?

DB: There is significant evidence that the American dream of home ownership has diminished greatly in the last decade. Home ownership has fallen to 66.5% of the adult population, down from 69.2% in 2004.

A recent Harris Interactive poll showed that 70% of Americans aspire to homeownership, down from 77% a year ago. The fallout from the boom years of 2005 through 2007 has resulted in a 22% negative equity on home mortgages. Most of these homeowners who are upside down will most likely be entering the rental pool in the not-toodistant future.

Oklahoma’s single-family picture is much brighter in that only 6% of Oklahoma households have negative equity in their homes. The flip side is that fewer younger people have the required 20% down payment now necessary to become first-time home buyers. Most young professionals earn good incomes, but their credit-card debt outweighs the necessary savings required for such a large down payment.

Aside from purely financial considerations, are younger people today more prone to rent than in generations past?

DB: Yes, I believe so. My generation, the “echo boomers,” seem to have a different mindset than that of our parents. Anecdotal evidence suggests that we are about seven years behind the historical timeline of our parents when it comes to achieving life’s milestones: marriage, kids and buying a house.

It is estimated that there are around 75 million echo boomers, which makes them the largest demographic group in the U.S., behind the baby boomers. Four million echo boomers will turn 18 each year over the next decade, and while they suffered disproportionate job losses during the Great Recession, Bureau of Labor Statistics household survey data shows they are now getting the lion’s share of net new jobs as the economy recovers.

As a result, this age group is projected to add an additional 7 million renters to the national pool.

According to a study generated by Harvard University’s Joint Center for Housing Studies, 80% of all households whose residents are under the age of 25 are renters. So, over the next decade, the largest demographic group in 40 years will be flooding the rental market.

Generally speaking, what are some of the emerging trends you are seeing in the metro area?

DB: I think the biggest trend I have noticed is that young people are either returning to or staying in Oklahoma City after graduating college.

Historically, most young professionals have fled to the coasts or gone south to Dallas, but the overall dynamic seems to be changing. High-quality job opportunities in the energy and medical industries, coupled with the low cost of living, are contributing to recent graduates thinking twice about heading out of state.

Another significant factor contributing to resident retention is the emerging vibrant urban community currently taking shape Downtown. There has always been a strong demand for Downtown housing, but the supply was not yet sufficient to meet the younger demographic demand.

The high-end Downtown condominium developments were not economically feasible for most young professionals, but this is starting to change in a big way.

There are several high-end apartment communities either planned or in some stage of development that are projected to fit within the desired parameters of this younger demographic. These developments will spur even more young professionals to think twice about leaving OKC in order to become a vital part of a vibrant urban community wherein they can live next to and connect with like-minded people.