Local firm investing $1B in West Coast apartments
Wednesday, July 13, 2011
Holland Partner Group
What: A real estate firm comprised of five operating companies that develop and build new apartment communities, manage a portfolio of 20,000 apartment units, and make strategic investments in existing multi-family developments.
Headquarters: 1111 Main St., Vancouver.
Founder, chairman and chief executive officer: Clyde Holland.
Employees: 500, including 125 in Vancouver.
Regional offices: Seattle, Denver and northern California.
A Vancouver-based property firm plans to spend nearly $1 billion this year developing 1,800 new apartment units and buying 4,000 existing units in several West Coast cities.
The Holland Partner Group is betting that demand will continue in the booming rental markets of Denver, Los Angeles, Portland and Seattle, where it broke ground Tuesday on a 284-unit complex in the South Lake Union area. It’s betting on a belief that apartment complexes are a good investment because of a demographic shift and devastation to the national housing market.
Cities on the West Coast are especially attractive to young professionals who want the carefree lifestyle of apartment living, said Clyde Holland, chairman and chief executive officer of the Holland Partner Group, which is not affiliated with Vancouver’s The Holland Co.
Newly graduated college students and young adults, ages 18 to 34, are his company’s primary market, Holland said.
“They have no interest in suburbia. They want to be downtown. They’re delaying marrying, delaying having kids and investing in their lifestyle,” he said.
The company also is buying existing complexes, including The Pointe Apartments off Vancouver’s Northeast 109th Avenue and 37th Street. Holland bought the development for $31.2 million in December.
However, Clark County’s rents aren’t high enough to justify building new units, said Holland, who worked for Trammel Crow Real Estate before launching Holland Partner Group in 2001.
“We think it will be another one to two years before the Clark County market recovers,” he said.
The area’s persistently high unemployment rate could be the cause, pushing more young people to move back in with their parents or double up with friends.
Average vacancy rates in west Vancouver were at 3.8 percent in April, according to the Metro Multi Family Housing Association, while the rate came in at 3.3 percent Beaverton, Ore. , where Holland Partner Group plans to build more than 800 apartments near the TriMet Max light-rail station at Beaverton Creek.
By the same token, landlords in the Beaverton market are able to command higher rent prices, said Phillip Barry, a metro-area broker with Joseph Bernard LLC, a Portland firm that specializes in marketing apartment buildings.
A one-bedroom apartment unit in Portland rents for an average of $1,031 per month, according to Apartments.com. It compares with $1,533 per month on average in Los Angeles, $1,200 monthly in Seattle and $979 per month in Denver.
Phillips said rents in the Portland and Vancouver area have steadily increased over the past year, as the area’s slumping housing market drives up demand for apartments.
“Another thing is lack of construction in the area,” he said. “(There’s) just a lack of product out there competing with the existing apartments.”