Another exciting list! And what a coincidence that Hurricane Katrina made this list too since Riverstone Residential managed toxic mold infested Jefferson Lakes Apartments is in Baton Rouge, Louisiana. This is one apartment complex where the mold infestation can’t be blamed on Katrina, it was already severe and had been spreading for years before katrina hit.
December 23, 2009
Multifamily Executive scoured the headlines of the past decade to reflect on the 10 biggest news stories of the 2000s. Here’s a look back.
1) Tishman Speyer and BlackRock’s purchase of Stuyvesant Town / Peter Cooper Village. In November 2006, Tishman Speyer and BlackRock Realty paid $5.4 billion for the 11,200-unit 56-building mega-apartment complex in New York City known as Stuyvesant Town / Peter Cooper Village, still the largest single U.S. multifamily property deal in history. The deal has faced problems from the start, not the least of which was the ownership group’s inability to make payments on its $3 billion mortgage, which was transferred to special servicing under CWCapital in November 2009. Mezzanine lenders on the deal purportedly have been wiped out, and on December 15, the New York State Supreme Court approved a deal to return 4,000 StuyTown units back to rent control after previously ruling that Tishman Speyer and BlackRock illegally turned them into market-rate units while still receiving J-51 tax abatements.
2) The Federal Takeover of Fannie Mae and Freddie Mac. On September 7, 2008, Federal Housing Financing Agency director James Lockhart announced that government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac were to be placed under FHFA conservatorship, a move supported by U.S. Treasury chief Henry Paulson and Federal Reserve Chairman Ben Bernake. One of the more sweeping moves by the federal government during the economic bailout, Fannie and Freddie have nonetheless remained true to the mulitfmaily component of their charters. That was National Multi Housing Council president Doug Bibby’s prediction at the time. Bibby also said, “it will be very much business as usual going forward. They’d be crazy not to make sure the markets function effectively. Those multifamily loans have been profitable for them and help them meet their mission very effectively.”
3) Trammell Crow exits fee management; Riverstone Residential is born. In October 2005, the Trammell Crow Residential executive property management team of Christy Freeland and Terry Danner spun off the management portfolio of some 55,000 Trammell Crow units to create Riverstone Residential. Now a Consolidated American Services company—with Freeland and Danner still at the helm—Riverstone Residential has developed into a 182,000-unit property management behemoth through successive market acquisitions as well as organic growth, and continues to challenge Pinnacle for the top fee-management spot in the industry. The company has often been rumored to be an eventual IPO play, although Riverstone officials have never commented on their interest in going public.
4) Archstone-Smith deploys LRO yield management software. In March 2001, Archstone-Smith became the first in the industry to deploy revenue optimization software across its garden apartment communities. By year’s end, the entire garden portfolio and 75 percent of the newly acquired Charles E. Smith high-rise apartment portfolio had rolled out revenue management software to its leasing offices. Though the industry has been slow to adopt LRO and competing yield management technologies, including Carrolton, Texas-based RealPage’s Yieldstar and a revenue management component available as part of Santa-Barbara, Calif.-based Yardi’s Voyager system, by the end of the decade, the use of revenue management has become commonplace, with adopters experiencing rent uplifts between 2 percent and 5 percent from the “little black box.”
5) The Dismantling of JPI. On December 29, 2008, Carrollton, Texas-based multifamily technology products and services provider RealPage announced that it had acquired the JPI Resident Solutions team of multifamily technology advisors, led by industry veteran Henry Pye. Why the Irving, Texas-based owner/operator would choose to divest itself of its entire IT team became clear just a week later, when the company announced it had sole its entire 41,000-unit management portfolio to Charleston, S.C.-based Greystar Real Estate Partners. Although JPI has retained ownership of what it claims is a $2 billion multifamily asset portfolio, the company’s future continues to remain uncertain. In June 2009, Jim Butz, former president of JPI East, and Greg Lamb, former executive vice president of JPI East, announced that they’re leaving the firm to start Jefferson Apartment Group, effectively an asset-less spin-off of the JPI East operational platform.
6) The End of Construction. Iconic real estate magnate Donald Trump has always had a way with words, but when the Don announced in September 2008 at a topping-off ceremony for the Trump Tower in Chicago that high-rise construction as we know it was dead, who would have thought he would be right? Trump—like many developers—has since been forced to extend and even default on construction loans. Hamstrung by frozen capital markets and virtually zero construction lending to bridge projects beyond GSE agency financing, major multifamily developers have repositioned staff and mothballed operations. Even the most equity-flush developers are looking at the next 12 to 16 months as a continuation of the current era, devoid of development.
7) Archstone-Smith’s Privatization by Tishman Speyer and Lehman Bros. Holdings. On October 5, 2007, a partnership between Tishman Speyer and Lehman Bros. paid $22.2 billion to take Archstone-Smith out of the public markets. At the time, Archstone had a development pipeline approaching $8 billion but has since seen development activity grind to a halt even as its ownership group faces bankruptcy and trouble over other real esate deals due to the collapse of the U.S. economy. Expectations of a portfolio dump have not come to fruition. Indeed, the retention of CEO Scot Sellers and the core Archstone management team continues to add fuel to a rumor fire that says Archstone is quietly repositioning for an eventual IPO that would return the REIT back to the stock market.
8) Hurricane Katrina. On the morning of August 29, 2005, Hurricane Katrina made landfall on the Gulf Coast as the sixth-strongest Atlantic hurricane in recorded history, leaving in its wake hundreds of deaths and the destruction of more than 200,000 housing units. Major regional multifamily players were quick to assist in the disaster: Companies such as the Lynd Cos. and the Domain Cos. have done much since then to assist in the rebuilding effort of both hearth and heart. Since the hurricane, New Orleans alone has issued 4,803 commercial work permits for work valued at $3.1 billion, and the Gulf Opportunity Zone Act (or GO Zone Act) continues to encourage private investment into the Gulf Coast Rebuild.
9) September 11, 2001. The terrorist attacks on the United States at the dawning of the decade continue to define the society, politics, and economics of the country and its industries, and multifamily has not been immune. “I think 9/11 was a shocker for us,” says Rockrose Development Corp. president K. Thomas Elghanayan. “It really knocked the wind out of our sails. I think that’s true for all New York City developers. Everything was going great. There were some worrisome things on the radar screen, but, by and large, the office market was strong, the residential market was strong, and the future seemed so bright for New York that you could be optimistic.” Buildings not destroyed in lower Manhattan were mostly evacuated in the devastation ensuing form the collapse of the World Trade Center, and clean up efforts as well as hard-felt memories persist to this day.
10) Changing of the Guard at HUD. On March 31, 2008, amidst charges of favoritism, retaliation, and inappropriate conduct, Alphonso Jackson announced his resignation as Secretary of the U.S. Department of Housing and Urban Development (HUD). “He broke every business rule to keep his allegiance of social elites happy,” said one-time associate turned critic and Philadelphia Housing Authority Chief Carl Greene, who refused to participate in shady land deals to benefit Jackson’s friends and business partners. “He had a total collapse of his sense of morality and judgment. People are losing their houses everyday while he is riding around with a full security detail and chefs and jets, living the life of a king. Hopefully, he is the last king of HUD.” Little more was expected from interim chief Steve Preston, but the multifamily industry seemed to finally get what it was asking for when longtime industry veteran and affordable housing advocate Shaun Donovan was nominated to the HUD Secretary post by President Barack Obama.
Information on Riverstone Residential knowingly exposing tenants to extreme amounts of mold toxins at Toxic Mold Infested Jefferson Lakes Apartments in Baton Rouge, Louisiana
Toxic Mold Infested Jefferson Lakes Apartments managed by Riverstone Residential
Riverstone Residential Litigation
A letter to the NAA regarding an email they deleted without reading – please retract your amicus in the Abad case in Arizona – it is fraud by a political action committee, the National Apartment Association, that is furthering another fraud by another political action committee, the US Chamber of Commerce
Political Action Committee – NAA – files Amicus Brief in mold case (two infant deaths in mold filled apt – Wasatch Prop Mgmt) citing US Chamber/ACOEM ‘litigation defense report’ to disclaim health effects of indoor mold & limit financial risk for industry
“Changes in construction methods have caused US buildings to become perfect petri dishes for mold and bacteria to flourish when water is added. Instead of warning the public and teaching physicians that the buildings were causing illness; in 2003 the US Chamber of Commerce Institute for Legal Reform, a think-tank, and a workers comp physician trade organization mass marketed an unscientific nonsequitor to the courts to disclaim the adverse health effects to stave off liability for financial stakeholders of moldy buildings. Although publicly exposed many times over the years, the deceit lingers in US courts to this very day.” Sharon Noonan Kramer