The U.S. Environmental Protection Agency (EPA) announced a final regulation imposing new requirements on anyone—including apartment maintenance workers—engaged in renovation, repair, and painting activities that disturb lead-based paint in housing built before 1978. Congress mandated that the rule be published in 1994; the EPA’s failure to publish it has been the subject of lawsuits and continued congressional inquiry over the years.
The rule, which does not go into full effect until 2010, requires workers who disturb lead-coated surfaces to complete an EPA-certified training course on lead-safe work practices. Workers must also verify that the work site was appropriately cleaned based on EPA standards.
In a move that could cause confusion for property owners, the rule diverges from the previously established standard of when such requirements kick in. All other lead-based paint regulations are triggered when work disturbs more than 2 square feet of painted surface. This latest regulation is not triggered until 6 square feet of painted surface are disturbed. Several advocacy groups that previously sued the EPA have criticized the final rule and are contemplating legal action.
The National Multi Housing Council will publish additional guidance on the rule pending clarification from the EPA.
Firm Helps Apartment Residents Bond
A New York City firm is helping residents of apartments build social networks. The company is called LifeAt. The firm creates password-protected intranets for buildings that have signed up for its service, after which residents can, for no charge, create personal profiles, find other residents with similar interests, send messages, post pictures, participate in online discussions, rate neighborhood restaurants and other businesses, and post classified ads, among a slew of other choices. The building’s owner pays a one-time setup fee for the service.
For building owners and managers, the intranets offer both one more way to provide information about maintenance or special events, and an amenity for residents, according to LifeAt.
The company recently signed up three high-profile residences in Chicago: 600 Lake Shore Drive, 340 on the Park, and 565 Quincy. LifeAt is also expanding internationally into developments in London and Australia, and it plans to launch in Dubai soon.
At press time, more than 400 buildings or communities belonged to LifeAt, and more than 16,000 people were members. Individual sites range from 42 units in size to about 12,000.
Although each building or community gets its own separate intranet, these sites could be tied together in the near future so residents could find a workout partner at another building, for example.
Canyon-Johnson Closes $1 Billion Fund
The Canyon-Johnson Urban Funds has closed its Canyon-Johnson Urban Fund III with equity commitments totaling $1 billion. The vehicle will make $4 billion accessible for real estate projects in underserved urban areas across the United States. Canyon-Johnson is a partnership between Canyon Capital Realty Advisors, LLC, and Magic Johnson Enterprises.
The fund marks Canyon- Johnson’s largest fund ever; the previous two accounted for a total of $900 million. Investors included a range of pension funds, endowments, foundations, and other entities. Like the two previous funds, Fund III will focus on acquisition, development, and redevelopment activities that will marry residential and retail components. Some units will be set aside as workforce housing.
Together, Canyon-Johnson Urban Fund I and II, which closed in 2001 and 2005, respectively, have involved the production or redevelopment of roughly 6,200 residential units, 2.5 million square feet of office space, and 2 million square feet of other commercial space.
“We’re expanding into a few very development-oriented cities where we’re seeing growing ethnic diversity,” said Bobby Turner, the fund’s managing partner. “We haven’t invested in Seattle. And even a city like Salt Lake, which has infrastructure that will attract investment over the next 10 years, we’re very bullish on.”
Industry Remains Stable Despite Lagging Economy
The credit crisis is having little effect on the multifamily sector’s biggest apartment firms, according to the National Multi Housing Council’s (NMHC) 19th annual ranking of the 50 largest U.S. apartment owners and the 50 largest U.S. apartment managers.
For the first time in the survey’s history, the top 10 firms on last year’s NMHC owners and NMHC 50 managers lists made the top 10 again this year, although some shifts in the order of the rankings occurred.
Denver-based Apartment Investment and Management Co. (Aimco) remains the nation’s largest apartment owner for the third year in a row, even after trimming its portfolio down more than 14,000 units. For the first time since 1988, Aimco now owns fewer than 200,000 units, down from its 2004 peak of 278,000 units.
In stark contrast to apartment owners who unloaded assets, most of the firms at the top of the NMHC 50 managers list recorded significant portfolio gains. Dallas-based Riverstone Residential Group added nearly 64,000 units—a 70 percent increase in size.
For the fourth year in a row, multifamily real estate investment trusts were net sellers. They now own just 4 percent of the total U.S. apartment stock, the lowest figure since 1998, and down from a peak of 6.4 percent in 2003.