Sending Strong Signals — A Luxury No More

BY RANDY JARA, REDROCK TECHNOLOGIES, INC.

Over the years, developers have come to recognize the importance of strong in-building Wi-Fi and cellular data systems to be on par with other critical utilities. It’s no exaggeration to say that a powerful signal is nearly as important to building residents and staff as water and electricity! In fact, we are living at the height of the connectivity-conscious era, with remote workers making reliable and stable communications a primary factor in their move-in decision.

But what about situations where a strong signal can mean the literal difference between life and death? In the case of Emergency Responder Radio Coverage Systems (ERRCS), that is exactly the case. These systems, which use a network of antennas called a Distributed Antenna System (DAS), allow first responders to reliably communicate even in challenging conditions created by modern construction materials (steel, reinforced concrete, low-E glass, etc.).

ERRCS was mandated by The National Fire Protection Association in 2007 and is enforced under Section 510 of the California Fire Code and NFPA 1221. The code is determined by your local Authority Having Jurisdiction, but multi-family developers involved with new projects should assume they are required to have an ERRCS installed by a team of FCC licensed radio testers, design engineers, and integrators.

A Distributed Antenna System (DAS) consists of a number of antennas located throughout a building connected back to an RF source with cabling designed to help provide adequate radio signals in areas that may otherwise experience poor coverage.

In response to the World Trade Center disaster in 2001, the National Fire Alarm and Signaling Code (NFPA72) was updated to ensure that wireless coverage in existing buildings, new buildings, and parking structures was drastically improved.

The code mandates that public safety radio coverage shall be provided throughout a building with 99% floor area radio coverage in Critical Areas and 90% floor area radio coverage in General Building Areas with a minimum signal strength of -95db. Testing is required by an FCC Certified Technician qualified with a General Radiotelephone Operator License (GROL/PG), to certify that all existing buildings conform to this mandate. Buildings and structures that do not pass testing are required to install a DAS/ERRCS system to comply with the Building Department and the local law enforcement agencies. For newly constructed buildings, or buildings undergoing tenant improvements, a certificate of occupancy won’t be issued until a certified bi-directional amplifier (BDA) and accompanying antenna are installed and tested by an FCC Certified Technician.

While not mandated by code, there are other ways to boost cellular and wireless signal strength that compliment overall building connectivity and improve resident satisfaction.

Cellular DAS, for example, can significantly boost carrier (e.g., Verizon, Sprint, AT&T) signal strength in your building(s). But how to design the best system can be a challenge with so many passive, active and hybrid DAS options, not to mention the varieties of OEM

and small cell or BTS carrier signal source equipment available today.

Other considerations include public area Wi-Fi. In many multi-family projects, providing a robust signal in both outdoor/indoor spaces have become standard, but there are numerous implementation options, including managed cloud Wi-Fi solutions that can vastly reduce technical maintenance and overall costs.

Choosing a qualified partner to determine the best approach for the design, installation, and testing of your system is a must. Done correctly, a project can succeed not only in meeting increased public safety needs, but the growing expectation for persistent connectivity and convenience.

About the Author: Randy Jara is a partner and the Chief Operating Officer of RedRock Technologies, Inc.

Preparedness — continued from 30

maintain supplier relationships and communicate who they are so that team members are aware, avoiding scammers who are attempting to take advantage of emergency situations.

understand the plan. Having a

plan is crucial, but team members being familiar with and knowing the plan is just as important.

least annually. Things change, like new team members coming onboard or regulations evolving. An annual review will help your plan stay relevant as changes occur.

“When you are expecting the worst and you have those plans in place, it’s so much better when things are going smoothly because you’re doing it with the confidence that if something goes wrong, you’re ready,” Haynes said.

About the Author: Andrew Ruhland is a Junior Account Executive and Assistant Content Writer for LinnellTaylor Marketing.

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A Quarterly Review of Key Financial Data for the

Total Apartment Sales Transactions

Total Sales Volume

42 32 66 3,720 2,724 4,671

$281 Million

$149 Million $1.03 Billion $49.3 Billion $24.9 Billion $69.7 Billion

• Actual Average Cap Rate 4.59 4.10 3.83 5.63 5.58 4.73

• Average Gross Rent Multiplier 15.19 14.53 16.25 13.59 13.38 14.27

• Price per Square Foot $332.43 $291.84 $427.73 $161.17 $154.75 $205.17

Source: Co-Star www.costar.com 5 unit + properties

• Price Per Unit $246,372 $287,587 $399,093 $160,849 $143,736 $198,737

Average Rent Level

$2,140 $2,108 $2,386 $1,427 $1,418 $1,577 Source: RealPage, Inc. www.realpage.com Annual Effective Rent Growth 3% –1.7% 12.4% 3% –1.4% 10.3% Primarily 100 unit + properties; “concession percentage” is the Concession Percentage 2.7% 3.9% 6.1% 3.2% 4.8% 6.4% percentage of units offering concessions.

Average Occupancy Rate

Average Monthly Employee Wages** 96.7% 96.4% 98.6% 96.3% 95.7% 97.2% Source: RealPage, Inc.

$4,922 $5,086 $5,310 $4,268 $4,402 $4,606 Source: US Bureau of Labor Statistics; uses private sector wages, last month of quarter;

Apartment Building Permits Issued by total # of units (not buildings)** 2–4 Units 524 484 441 10,900 13,200 12,600 Source: U.S. Census Bureau: Privately owned, 5+ Units 5,858 4,399 4,845 122,500 110,900 142,900 new construction

Consumer Price Index*

Unemployment Rate** 3% 1.2% 4.6% 1.7% 1.4% 5.4%

4% 12.3% 7.4% 3.6% 7.8% 4.8% Source: U.S. Bureau of Labor Statistics; % change using last month of quarter versus same month one year previous Source: U.S. Bureau of Labor Statistics; reflects last month of quarter

Pulse on the Marketplace is produced and edited exclusively for Apartment News by Nick Lieberman, President, Bona Fide Mortgage and AAOC Board Member. For questions or comments: (949) 651-0999, or nlieberman@cox.net

* For CPI, “Orange County” includes Orange, Los Angeles, and Riverside Counties. ** For Apartment Building Permits, Average Monthy Employee Wages and Unemployment Rate, “Orange County” includes the Los Angeles–

Long Beach–Anaheim, CA Metropolitan Statistical Area.

Surging apartment rents are turning heads.

In the past year rents advanced 12.4% in Orange County and 10.3% nationwide at properties with 100+ units. This is in stark contrast with the past ten years where annual rent increases averaged 3.7% in OC and 3.3% nationally (per rental housing analytics firm, RealPage).

What led to the outsized increases in apartment rents? And, as one might inquire in this pandemic era, is this yet another manifestation of a virus-caused anomaly in the economy?

Certainly Covid may have played a role, as we’ll discuss below, but it’s not the primary driver of the sharp rent increases. The main culprit is the lack of affordable housing, a condition that investors, rental housing professionals and government officials have been aware of for years. But efforts to grow the pool of affordable rental units have yet to dent the severe supply shortage.

Occupancy rates in the third quarter of 2021 illustrate the depth of the market’s supply/demand disequilibrium.

As the chart on the opposite page reveals, apartment occupancy in Q3 2021 was a stunningly high 97.2% across the nation, and hold on to your hats, a blistering 98.7% in Orange County. Apartments are re-leasing virtually the moment they go vacant.

But while the shortage of rental housing inventory is the fundamental issue that continues to squeeze the marketplace, I would suggest that the eyepopping occupancy rates, as well as the jump in average rent levels, are at least “wind aided” by Covid in two ways:

First, virus concerns incentivize people to live in less dense environments. Thus, young adults living with mom and dad are now more likely to look for independent living quarters, while some apartment roommates are electing to break up to rent their own units. While such “distancing” actions should produce safer, less Covid-risky living situations, they also put upward pressure on apartment occupancy at a time when many buildings in Orange County are already nearly bursting at the seams.

And second, substantial governmentfunded rent relief programs for tenants who declare under penalty of perjury that they have experienced “Covid-19Related Financial Distress” have, essentially, brought substantially more liquidity to the rental marketplace, particularly in year 2021. This enhanced market liquidity helped landlords increase overall rent collections in 2021 and more readily raise rents. Government rental assistance programs weren’t as accessible in 2020. Under the California Covid Assistance program, the state sends a check directly to the landlord for 100% of the rent, an endearing program feature to landlords.

Two additional likely contributors to the rising tide of apartment rents not heretofore mentioned would be: (1) the strong US economy and (2) recent spikes in inflation…as of this writing (12-15-21) the consumer price index had jumped an unsettling 6.8% over the twelve months ending November 2021.

Whatever the causation of the high rents and low vacancy, apartment properties fly right off the shelves when put up for sale. And rental housing sales prices are climbing commensurate with upward rents.

Even with eviction moratorium issues, rent control concerns, the eventual termination of Covid rental assistance programs, as well as the ongoing unknowns surrounding Covid variants, the multifamily sector shows no sign of losing its strong appeal to investors in 2022. Until the supply of affordable rental housing units catches up with demand to rent them, the asset class will likely remain bullet proof.

Due to strong price appreciation on 1–4 unit residential properties the past year, Fannie Mae and Freddie Mac have raised their conforming and high balance maximum loan amounts by a hefty 18% for the new year, providing buyers of smaller properties substantially more loan dollars to finance their acquisitions. On purchases, investors can get 80% LTV loans on a 1-unit property, 75% LTV on 2–4 units. 2022 2022 high conforming limit balance limit 1 unit $647,200 $970,800 2 units $828,700 $1,243,050 3 units $1,001,650 $1,502,475 4 units $1,244,850 $1,867,275