UD+P News: August 2021
REMINDER: UD+P ANNUAL MEETING IS ON SEPTEMBER 30
Urban Development + Partners 2021 Annual Member Meeting is scheduled for Thursday, September 30, 2021, from 3 to 4:30 p.m. The Meeting will be a virtual event hosted on the Zoom meeting platform. To register or request a calendar invitation, please contact Tina McNerthney at tina@udplp.com on or before September 27, 2021. We will share a video recording with investors following the “live” event.
Our Annual Meeting presentation will include a fund performance overview, market update, development update and investment strategy discussion, followed by a Q & A. Presenters will include UD+P Principal, Eric Cress, Portfolio Director, Julia Albano and Investor Relations Director, Theresa Nute. Questions may be submitted using the “chat” feature during the meeting. Alternatively, you may email questions in advance to tina@udplp.com by 5 p.m. on September 27, 2021.
POST OFFICE Property - SOLD
We are excited to announce the sale of the Post Office property. The sale closed on August 31. In the coming month, we will provide Tabor I and Tabor II members more details on the transaction. We plan to distribute capital proceeds from the sale to members in September.
We acquired the Post Office property in 2014 and assumed the Post Office's long-term lease. The US Postal Service has remained as a paying tenant since that time. Since 2015, we have examined the feasibility of a range of residential concepts. Over the holding period, the value of the site has increased substantially. After weighing a number of programming opportunities for the site, we have determined the best outcome for investors would be to sell the property.
COMMERCIAL RENT COLLECTIONS UPDATE
The table below summarizes office and retail collections from Q1 2020, when the Covid-19 was declared a global pandemic, through August 2021 (as of 8/30/2021). Monthly rent collection data is provided for the current quarter and quarterly averages are provided for past quarters.
COMMERCIAL RENT COLLECTIONS SUMMARY
Following a positive upward trend that began in March, our office rent collections continue to hold strong and steady. We collected 99% of office charges (rent and pass through expenses) assessed in August and July.
The percent of charges collected from retail tenants was 84% in August, up from 78% in July and 77% in Q2 2021. The higher collection rate in August is largely attributed to a tenant that paid a past due balance.
residential rent collections update
The table below summarizes residential delinquency (i.e., past due rent) attributed to both current and past residents as of August 29, 2021. Across our residential portfolio, delinquencies of 31 days or longer totaled $59,292 in August, lower than the $70,032 reported in June. We received several rent relief payments from Rounds II and III of Oregon’s Landlord Compensation Fund in July and August and applied those payments to past due balances. The lion’s share of August’s delinquency is attributed to a small number of renters that have not paid rent, or who have been paying only a small portion of their rent, since the pandemic began. Another source of delinquency is arrearages owed by past renters.
RESIDENTIAL DELINQUENCY BY PROPERTY: AUGUST (as of 8/29/21)
The table below provides a final summary of residential rent relief awarded to UD+P properties through Oregon’s Landlord Compensation Fund. To date, we have received all Round I and II payments, and Round III payments for Slate, Fairmount and Cassi. Under the original program funding guidelines, landlords were required to forgive 20% of past due balances. This week, the Oregon Legislature authorized the Landlord Compensation Fund to pay the remaining 20 percent of unpaid rent, instead of having it forgiven by the landlord. Accordingly, we anticipate to receive additional rent relief payments totaling $49,624—the outstanding Round III payments at 80% for Àlmr and Lyra ($7,341) and the additional 20% payment for all three Rounds ($41,922). Total rent relief awards received from the Landlord Compensation Fund are expected to exceed $209,000.
Landlord Compensation Fund rent Relief Awards
Note: Award totals are provided for the original 80% and new 100% reimbursement scenarios.
On August 26, the Supreme Court struck down the Centers For Disease Control and Prevention’s federal eviction moratorium. While Oregon’s statewide eviction moratorium ended on June 30th, Oregon lawmakers added a safety net for struggling tenants that will "pause" some evictions. Under the "Safe Harbor" amendment of Senate Bill 278, tenants who are unable to pay their July or August rent will not be evicted for 60 days if they provide proof to their landlord that they've applied for rental assistance through Oregon Housing and Community Services.
RESIDENTIAL LEASING UPDATE
The brisk pace of residential leasing activity continued in August. Our leasing team conducted an average of 10 tours a week and processed 17 applications for new leases in August. Compared to the spring, we have received fewer applications for new leases this summer due to low vacancy across the portfolio. When units are available they generally lease quickly. For the first time since the start of the Covid pandemic, we have increased rental rates 2 to 15% on all new leases at all of our properties. We are thrilled to report that our Northeast Portland properties Cassi and Lyra achieved stabilized occupancy (i.e., occupancy rate of 95% or higher) in July.
The table below shows average residential lease rates for individual properties, as well as the portfolio-wide average lease rate across all stabilized properties.
AVERAGE LEASE RATES - STABILIZED RESIDENTIAL PROPERTIES
The portfolio-wide average lease rate was 97% in August (as of 8/27/2021), comparable to July, and up significantly from Q2 (93%). With the exception of Slate, average lease rates for individual properties ranged from 97% to 100% in August. After raising rental rates on two units at Slate that had sat vacant for multiple months, we are pleased to report that both units leased during the last week of August and Slate is now 97% leased.
The table below shows average residential occupancy rates for individual properties, as well as the portfolio-wide average occupancy rate across all stabilized properties.
AVERAGE OCCUPANCY - STABILIZED RESIDENTIAL PROPERTIES
During the third quarter, residential occupancy rates have increased in tandem with lease rates across our portfolio. As of 8/27/2021, the portfolio-wide average occupancy rate was 95%, up two percent from July (93%) and up a noteworthy nine percent (86%) from Q2 2021. Thanks to our leasing team’s tenacity, we saw a marked increase in Àlmr’s average occupancy rate, which rose from 87% in July to 93% in August. We anticipate Slate’s occupancy rate to rise to above 90% in the coming week as residents with new leases move in.
Due to low vacancy across our portfolio and robust demand, as of mid-August we are not offering rent concessions at any of our properties. We continue to offer a zero deposit at move-in policy for new leases.
NEW TEAM MEMBER INTRODUCTION
We are pleased to introduce our new Portfolio Director, Julia Albano. Julia brings over 15 + years of experience in portfolio management. Her experience includes a wide variety of assets ranging from multi-family, mixed-use, retail and commercial. She’s also been involved in every lifecycle of a project from development, lease-up, stabilization, renovation, and disposition.
Since joining UD+P in June, Julia has quickly become an indispensable part of our team. In her first two months on the job, she has recruited additional talent to the Operations Team to support core functions, including leasing, residential and commercial property management and maintenance.
A LITTLE MORE ABOUT JULIA
Where did you grow up?
Hawaii and Los Angeles. We moved back and forth between the two during my childhood.
What was your first job in the real estate profession?
Sixteen years ago, my roommate at the time worked in leasing and it looked like fun. I took a leasing agent position with PREM Group and have been working in the field ever since.
What’s the most challenging part of your work?
The frequent problem solving required to address tenant needs and personnel issues is the biggest challenge. I always remind myself that our work directly touches people’s lives – these are their homes and businesses. We are in the most personal space we can be in.
What’s the most exciting part of your work?
New development. Nothing compares to seeing a building come to life.
Have you had any mentors in your professional life?
Mark Edlen, founder of Gerding Edlen, was a mentor. He had an exciting vision and was part of transforming Portland in a thoughtful way.
What brings you joy?
My biggest joys in life are spending time with my one-year-old son and our three dogs. If we had more space, we’d have more dogs. Growing up, we had horses, ducks and other farm animals. We’re real animal lovers.
What’s something you’re proud of?
Professionally, I am proud of the strong and respectful relationships I’ve formed with coworkers and colleagues. I’ve gained a lot of good colleagues and lasting friendships. Personally, I am proud to have rescued so many animals throughout my life. It’s challenging—and expensive—but really rewarding.
What were you doing before you joined UD+P and what was it that attracted you to us?
Prior to joining UD+P, I worked for 12 years at Green Cities (formerly Gerding Edlen). Most recently, I served as the Director of Property Management for a large portfolio with holdings in Hawaii, California, Oregon and Washington. I supervised 50 employees.
I was drawn to UD+P for a few reasons. First and foremost, I wanted to work for a developer doing creative, interesting projects, including ground-up projects. In my prior position, quite a few of the properties I managed had been acquired after completion. I also travelled a lot for work. As a new mom, I want to travel less and spend more time on a daily basis with my team.
How do you balance parenthood and work?
It’s definitely challenging. My parents moved here during the pandemic. They’ve helped take care of our son while my husband and I are at work and have been a tremendous source of support. They will stay in Oregon until next spring.
What’s your idea of a perfect day?
Sleep in. Husband watches the kid. Pancakes in bed. Lounging all day in the yard with my son and dogs. Guacamole and a margarita at the end of the day.
Find out more about Julia and other UD+P team members here.
Hotel GRAND STARK - PORTLAND MONTHLY FEATURE
In August, Portland Monthly recognized Hotel Grand Stark as one of Portland’s top three hotels to “staycation”.
Read the feature, here.
