Demand for multi-family units continues to rise as housing foreclosures keep swamping the country.

There are many reasons why the multi-family market in St. Louis is thriving these days. One of the biggest? The volatility of the housing market.

That’s the thought, at least, from the researchers at Marcus & Millichap. The company recently released its second quarter 2012 apartment research report for St. Louis. And, not surprisingly, the researchers behind the report found plenty of positive news to report regarding the multi-family market in this key Midwest city.

The Marcus & Millichap report cites soaring housing foreclosure rates in the counties of St. Charles, Jefferson and St. Louis as forcing a growing number of families out of the single-family market and into the rental arena.

This a shift not unique to St. Louis, though. Everywhere from Minneapolis to Topeka, Omaha to Cleveland, we’re seeing high foreclosure rates forcing families to turn to renting.

It’s not certain if this is good news for the country or for the economy. Families that have lost their homes to foreclosure aren’t likely to make many big purchases, at least not for several years. And that’s certainly not something that will provide a boost to a national economy that’s still far too sluggish.

But the shift to renting is good news for any commercial real estate pros who specialize in the multi-family market.

Just look at the news from St. Louis.

According to Marcus & Millichap, 2012 should see builders bring 750 new multi-family units to the St. Louis area. That’s much better than during hte last five years, when apartment stock has been added to this market at a rate of about 280 units a year.

At the same time, vacancy rates in the St. Louis multi-family market are expected to fall 60 basis points to 5.8 percent in 2012. And asking rents should rise 1.8 percent to a record high of $737 a month in the St. Louis area this year.

– Dan Rafter

Staffers at the Columbus office of Colliers International prepare to get their hands dirty while giving back to their community.

These remain challenging times for commercial real estate companies. But that doesn’t mean that industry members aren’t taking the time to support good causes in their communities.

Just look at the Ohio offices of Colliers International.

These offices during the month of May joined forces to support the Ronald McDonald House charity, an organization that provides a “home away from home” for families and their children who are receiving medical care at local hospitals. Ronald McDonald Houses are available to all such families, regardless of their financial situations.

More than 30 employees from the Cincinnati and Columbus Colliers offices participated in “Building Up Communities,” a volunteer program where each office commits hours to a different charitable organization each quarter.

In both Columbus and Cincinnati, employees spent time cleaning the interior of the Ronald McDonald House. The volunteers from Colliers International|Ohio cleaned the common areas and activity spaces, kitchens, library, playroom, hallways and patio areas. Volunteers vacuumed, dusted and washed windows.

“Being a part of Colliers International means we live out our core values each day,” said James Garrett, Jr., chief operating officer of for Colliers’ Ohio region. “It’s extremely important to support the communities in which we work and live. We are glad to help out any way that we can as individuals or an organization and volunteer for a worthwhile cause like the Ronald McDonald House.”

It’s good to read about such efforts. It’s a reminder that commercial real estate pros aren’t shy about contributing to their communities.

– Dan Rafter

The Carefree Industrial Park in Independence, Mo., is just one of three LS Commercial business parks that are doing solid business in the Kansas City area.

Paul Licausi, president of Overland Park, Kan.-based LS Commercial, is happy with what he’s seeing from the economy both locally and nationally. Things are going well for his company, too. LS Commercial boasts three business parks in the Kansas City area that are home to some of the strongest tenants in the region.

But like all commercial real estate pros, Licausi sees room for improvement. He sees the potential for an even stronger economic recovery.

And what would help? Relief from government regulations.

“Too harsh of a regulatory environment stifles growth,” Licausi said. “Heavy-handed regulations stop economic growth. And today, we need to see growth continue. With more growth, you’d see an even stronger economic recovery.”

Of course, Licausi understands the need for what he calls reasonable regulation. We all saw what too little regulation led to: It sent the nation’s economy into a freefall.

Licausi isn’t arguing for no regulations on the business world. He’s not naive. But he is arguing for regulations that accomplish two things: protect the consumer and allow businesses to grow.

“The right amount of regulation can be a real driver, can give the economy a real push,” Licausi said.

Licausi is far from alone. Commercial real estate professionals across the Midwest are eager to see a stronger recovery. They’re ready to see the boost in commercial real estate activity in Midwest markets kick up a notch.

And one way to help this happen? As the commercial pros I speak with regularly tell me, we need government regulations that aren’t designed to stifle growth.

It’s easy to assume that businesses are eager for no government regulations at all. But that’s a simplistic view. The commercial real estate professionals that I interview call for a far more nuanced approach. And it’s an approach that makes sense.

Dan Rafter

And in times of economic turmoil, steady is pretty good.

“We are a stable, steady market,” James said. “Having the state capital here always helps. We have Ohio State University here, too, which is, year after year, one of hte largest universities in the country. We have prestigious research centers here. Big companies are headquartered here. The college graduates are constantly staying in Columbus and getting jobs here. That helps keep us stable.”

Columbus isn’t unusual in this way. Many of the markets that Midwest Real Estate News covers can be called stable. Madison, Wis, for instance, features many of the same factors that benefit Columbus: It has its own Big 10 university and is also the state capital. It, too, benefits from the annual influx of smart, talented graduates who find jobs in the city.

This steady nature often sounds dull, especially during boom times. When commercial property values are soaring on the coasts, they seem to plod along in much of the Midwest.

But when the national economy sours? We’ve all seen the bottoms that markets on the coasts have suffered. In the Midwest? Sure, our markets suffered during the recession and its aftermath. Our markets are still suffering. But they didn’t fall quite as hard. And much of the credit to that goes to the conservative, steady nature of their commercial real estate markets.

Call that boring if you’d like. But James — and the other commercial real estate pros I’ve interviewed — also call it smart. Stable real estate markets look awfully good these days.

– Dan Rafter

Renderings of the spec building that will soon make history in the Kansas City region.

Most people would consider it a risk, building the largest spec building in the Kansas City area in an economy that is still struggling to find its way.

Daniel Jensen, principal and director of industrial brokerage with Kansas City’s Kessinger/Hunter & Company, whose firm is in the beginning stages of constructing a spec building of more than 821,000 square feet, doesn’t disagree. But he refers to Kessinger/Hunter’s project as a calculated risk, and that’s a key distinction.

“Everything is a risk,” Jensen said. “But we are confident that this is the right product in the right place. It remains to be seen if it’s the right time. But we think it is. Importantly, my peers and competitors in the marketplace think it is the right time, too.”

Kessinger/Hunter is now in the process of building an 821,256-square-foot warehouse in the I-35 Logistics Park in Olathe, Kan. This is one of three buildings that Kessinger/Hunter plans to build at the 200-acre park.

The building, known now simply as “Building B,” will serve as a multi-tenant distribution facility. It will be LEED-certified and boast 168 dock doors, 270 trailer parking spots and an ESFR sprinkler system.

It will also make history, of course, as the largest spec building in the Kansas City region.

Construction has already started on the building — “We are moving dirt around as we speak,” Jensen said — and Kessinger/Hunter plans on having Building B ready for occupancy in 10 or 11 months.

In the meantime, Jensen remains confident that Kessinger/Hunter will find plenty of takers for the facility. Building B will simply offer potential tenants the large, high-end space that they won’t be able to find anywhere else in the Kansas City region.

Jensen also bases his optimism on past success. This isn’t the first time that Kessinger/Hunter has taken a big gamble in the Kansas City area. In 2007, Kessinger/Hunter built a 600,000-square-foot spec distribution facility, also in Olathe. At the time, this facility ranked as the largest spec building in the Kansas City area.

That building is now fully leased, with such prime tenants as Bushnell Outdoor Products and FedEx SmartPost calling the building home.

“It is a significant investment to put together a building like this,” Jensen said. “Not everybody is willing or able to make that bet right now. But we are excited about the opportunities here. We think we will attract folks early and often to this building.”

– Dan Rafter

To prepare for the Chicago NATO Summit — which will on May 20 and 21 bring leaders, and protestors, from around the globe to Chicago — the city has closed roads and enacted restrictions on commuters. Those who ride Metra trains into the city, for instance, can’t bring backpacks, liquids or food on their trains.

People today are telling me that the city feels like a ghost town, at least compared to a normal Friday. Mostly it was on the trains that things felt off; normally packed commuter trains were half-full this morning.

Mark Menzies, group publisher of Real Estate Publishing Group, the parent company of Midwest Real Estate News, said that the city this morning barely felt like Chicago.

“Stores, hotels and office buildings are boarding up doors and windows,” Menzies said. “Willis Tower covered its marble foundation all the way around the building with plastic. They want to protect it from having paint thrown on it.”

The Chicago Boeing office building near the Oglivie train station is surrounded by 10-foot-tall fences. And if that wasn’t deterrent enough, armed guards, too, were visible protecting the building. You can see pedestrians jerking their heads to the sky nearly constantly; that’s because of the U.S. Army helicopters flying over the city. Yesteday, a group of protestors set up their own outdoor living room — couch, rug and chairs — outside of the Citibank building to protest the high number of housing foreclosures sweeping the country.

“It’s the calm before the storm,” Menzies said early this morning. “No one knows what will happen.”

– Dan Rafter

Is it time for a new resident here? A lot of commercial real estate professionals think so.

David Zimmer is waiting for a change. And he’d like to see it take place at the highest level.

Zimmer, president of Kansas City-based Zimmer Real Estate Services, might get his wish on Nov. 6 when U.S. voters decide to either re-elect Barack Obama or move Mitt Romney into the White House.

It’s not much of a secret what result Zimmer wants:

“There is still not a lot of confidence in this country’s leadership,” Zimmer told me during a phone interview. “I think that a change in the White House will stimulate this economy like we haven’t seen it stimulated before.”

Zimmer didn’t talk about the politics of Romney or Obama. We didn’t talk about gay marriage, health care reform or which man is a better dog owner. Zimmer was worried about the future of his industry, the commercial real estate business. And he believes that the current administration hasn’t been friendly to business in general and his industry in particular. He doesn’t believe that the Obama White House has done enought to create consumers who are confident about the future of the country.

You may or may not agree with this. But one thing is certain: Zimmer is far from the only commercial real estate professional out there who is eagerly waiting for November. I’ve spoken to several high-ranking commercial real estate executives across the Midwest. Most of them, when we get onto the subject of government, tell me that they want to see a change this November.

Even residential real estate agents have gotten in on the act. HomeGain, a residential real estate Web site, regularly surveys real estate agents across the country about house values, the economy and their confidence in the current sitting president. Agents, according to the company’s surveys, aren’t thrilled with Obama’s performance, and the majority of them say that they, too, want a new White House occupant next year.

Whether that will happen is still anyone’s guess. But if Obama had to rely solely on the vote of the real estate community? Romney would win in a landslide.

– Dan Rafter

Chicago saw its foreclosure rate jump 25.52 percent this April when compared to the same month in 2011. In St. Louis, foreclosure activity rose 28.53 percent. Minneapolis saw a smaller increase in April, 3.44 percent.

There was some good news from the report, though. Detroit saw its foreclosure rate fall 32.22 percent this April when compared to the same month one year earlier.

In Chicago, one in every 321 housing units had a foreclosure filing in April, while in St. Louis one of every 696 houses had a filing. In Minneapolis, that figure stands at one in every 543 housing units. In Detroit, one in every 363 housing units had a foreclosure filing during April.

Across the country, foreclosure activity in April fell 14 percent from the same month in 2011. According to RealtyTrac, one in every 698 U.S. housing units had a foreclosure filing during the month.

What does the future hold? That’s the big question. According to a press release from RealtyTrac, a growing number of potential foreclosures are being sold as short sales. There’s no guarantee, though, that foreclosures won’t jump again as banks work their way through the defaults clogging their books.

– Dan Rafter

Amy Mistler (photo courtesy of Spencer Fane Britt & Browne)

You’re a woman working in the commercial real estate industry. You dream of one day running your own firm. You dream of reaching the heights of your profession.

Is pay as important to you as it is to your male colleagues? Are you as willing to take risks — the reasonable ones — as the man in the cubicle next door?

The answers to those two questions seem obvious. Of course, successful women in this field are willing to take risks to close the big deals. And of course they want to be every bit as well-compensated as are their male counterparts.

Unfortunately, many in commercial real estate still don’t understand this. This is the conclusion of a recent white paper by CREW Network — formerly known as Commercial Real Estate Women — that outlined several of the more pervasive myths hindering women who are attempting to reach the highest levels of their profession. The paper, Success and Satisfaction of Women in Commercial Real Estate: Retaining Exceptional Leaders, found that many in commercial real estate still believe that compensation is not as important to women as it is to men and that women are less willing than their male counterparts to take risks.

And both of these myths, in addition to others, are hampering women in what is still a largely male-dominated field.

“I still think women face real challenges in this industry,” said Amy Mistler, 2012 CREW-St. Louis president and a transactional real estate attorney with the law firm of Spencer Fane Britt & Browne, a firm that has offices in Kansas City; St. Louis; Omaha; Overland Park, Kan.; and Jefferson City, Mo. “I’ve been practicing for nearly 13 years. I’ve been in CREW for about 10. I can’t say that we have many more women in C-suite positions today than we had 10 years ago.”

And that’s the real challenge that women face in commercial real estate. There are exceptions, of course. But women tend to struggle to break into the highest-level of executive positions in this industry.

The myths are getting in the way. If commercial real estate professionals believe that women aren’t willing to take risks, they might not think that they have the bravery needed for the C-suite level. If they believe that women are willing to take lower salaries they might not think, again, that they have the business savvy to thrive at the highest levels of a commercial real estate firm.

“These all influence a woman’s progression in a company or firm,” Mistler said. “If everyone assumes that women care about certain things and men care about others, you can see how that would impede progress to the top ranks of a firm. We see that women tend to make it to a certain point, just below the C-suite level. Moving into the C-suite seems to be the challenge.”

It would be wrong to suggest that women haven’t made amazing gains in the commercial real estate world. But it’d be equally as wrong to suggest that they’re working on a level playing field with their male counterparts.

– Dan Rafter

Multi-family rents are due to soar in Cincinnati in 2012.

Apartment vacancies should fall below 5 percent this year in Cincinnati, according to the latest research from Marcus & Millichap. That’s good news for landlords in the city, who should be able to raise their monthly asking rents without chasing away their tenants.

The multi-family market remains the healthiest of all the commercial real estate sectors. And that’s the case in Cincinnati, too.

According to Marcus & Millichap, multi-family vacancy rates should fall to 4.7 percent this year, a dip of 60 basis points. This follows a dip of 140 basis points in 2011. Marcus & Millichap’s researchers point to a drop in demand for single-family homes — not surprising given the continuing fall in housing values — and an uptick in employment for this fall in vacancies.

Marcus predicts, too, that apartment rents will reach new highs in Cincinnati in 2012. According to the company’s figures, asking rents should increase 2 percent in 2012 to $726 a month. Effective rents should jump 2.4 percent to $692 a month.

And if you’re looking for new construction in the city, Marcus & Millichap has additional good news. According to the company, multi-family construction in Cincinnati will reach a nine-year high in 2012 as builders add 1,000 new units to the market. That’s signficantly higher than the 370 new multi-family units that hit Cincinnati last year.

And it’s yet another sign that multi-family, in just about every Midwest market, continues to thrive.

– Dan Rafter