BACK IN THE GAME
UDR?s playing offense again. It's made big acquisitions and has new construction planned in DC, the West Coast, and DFW, says company development SVP Mark Culwell. (We hear he's stopped wearing eye black and yelling for the coach to put him back in.)
We visited with Mark on Friday in his Lincoln Center office where he tells us that he's glad to see the optimism return. He says UDR (along with its peers) hunkered down and waited out the downturn focusing on being the best operators they could be. With some product already in the pipeline under construction in good markets, UDR was in a good position and delivering units into a recovering market in cases such as the Vitruvian Park project in Addison, which delivered 392 units last year. The search continues for development opportunities largely in the coastal markets and gateway cities. With strong operating fundamentals in the apartment universe, UDR isn't the only company looking for multifamily development opportunities, he says.
Mark tells us UDR plans to break ground this summer on the third phase of Vitruvian Park with an additional 400 units slated for construction. The project is located at 3990 Vitruvian Way in Addison and slated for a 2013 completion. This spring, UDR acquired 10 Hanover Square, a 493-home apartment community in New York City for $261M, and completed a $500M asset exchange with AvalonBay Communities, swapping six communities in Southern California for two in Boston and another in San Francisco. UDR now owns about 60,000 apartments including 1,170 units under development.
Mark (not pictured) will be among the panelists speaking at our second annual Bisnow DFW Multifamily Summit on June 29 at the Westin Galleria. (Register now!) He says real estate people want to know when banks will be lending again, which banks, what kinds of projects are starting now, and how likely is it that those in the planning stage will find the debt and equity to get the project built. Simply put: they want to know the metrics that give the industry cause for optimism. But there's an elephant in the room (the Westin Galleria is big, we're sure they can find a seat for him): What's going to happen with single-family housing? At a ULI conference in Phoenix a few weeks ago, Mark says he heard talk that while older adults believe renting is throwing money away, young people think owning a home is throwing freedom away. Whether that's a temporary mindset or not is yet to be seen.