The green building wave has infiltrated every corner of the industry, particularly in the residential sector. In multifamily specifically, developers are applying environmentally friendly elements to projects across the nation. In New York State, two projects exemplify how developers can build green at the affordable and the high end.

Apartments are once again the number one sector in which to invest for return potential, according to PricewaterhouseCoopers LLP and the Urban Land Institute. In their Emerging Trends in Real Estate 2007 report, unveiled at ULI's fall meeting last month, the firms note that bullish trends for the sector are allowing owners of multifamily product to increase rents along with occupancies. For buyers, cap rates will begin to rise slightly, since condo converters will no longer push prices up and eventually compress cap rates to unsustainable levels.

Green Park Financial closed a refinance package worth more than $337 million for a portfolio of 55 properties located primarily in the West and Southwest. Nomura Securities International Inc. provided the funds, which were put together and underwritten by a Green Park team led by vice president Andrew Tapley. Scott Jansen of Black Diamond Capital originated the financing.

Student housing has experienced more resilience than traditional multifamily assets. A recent report from the National Multi Housing Council found rents in many properties in 64 college towns grew between 2004 and 2006, despite weak fundamentals for conventional apartment product.

At a recent CEO roundtable hosted by Bank of America, the heads of three of the biggest apartment REITs expressed optimism that the industry will continue to grow through 2006 and into 2007. David Neithercut, president and CEO of Equity Residential in Chicago, Ric Campo, Houston-based Camden Properties Trust's chairman and chief executive officer, and Tom Toomey, president and CEO of United Dominion Realty Trust Inc. of Richmond, VA, agreed that while they won't likely see double-digit growth in net operating income in some areas, growth in the high single digits should be the norm, at least through next spring.

Changing demographics and development trends are reshaping the nation's downtowns, including Los Angeles and other California cities. More people are opting to live in urban centers rather than suburbs. Developers are following suit, building more communities in CBDs.

Though CMBS delinquencies declined for the sixth quarter in a row in Q2, multifamily loans are exhibiting some weakness. According to Standard & Poor's structured finance division, in the second quarter, delinquent CMBS in terms of loan amount fell 5% over the first quarter to $2.35 billion. The Q2 figure is also 40% off its peak of nearly $4 billion, achieved in December 2003.

Sule Aygoren Carranza is managing editor of Real Estate Forum and editor of Multi Housing forum, from which this article is excerpted.GE Healthcare Financial…