Ivan Kaufman’s Real Estate Blog
This week’s roundup takes a special look at the coronavirus (COVID-19), including industry insights for property owners, managers and investors. First, National Apartment Association lists several ways that property managers can stay engaged with their residents while ‘social distancing’ policies are in place, including using technology to host events like online book clubs. Next, the Arbor Chatter blog highlights the coronavirus’ potential impact on the economy and multifamily industry, emphasizing the apartment sector will likely fare better than some other property types. RealPage analyzes how apartment investors are strategically taking the “Wait and See” approach, looking out for smart deals while preparing for longer-term holds on their properties. Then, Zillow does a deep dive into how we can look at past pandemics to inform what we could expect as a result of COVID-19 under different scenarios. Finally, MBA offers a perspective from its Chief Economist Jamie Woodwell on how the outbreak is affecting commercial real estate finance and his outlook for the U.S. economy.
National Apartment Association – March 17
“Now more than ever, apartment owners and operators have a real opportunity to make a difference in how we respond to these challenges by moving resident events and communication online to further engage residents in a different manner.”
Arbor Chatter – March 17
“The coronavirus impact on multifamily property has thus far shown relative resilience when compared to other real estate groups.”
RealPage – March 19
“Talking to investors, ‘Wait and See’ is very much the rule of thumb. The problem isn’t their appetite for apartments. Investors still like this sector. Even if returns diminish, multifamily assets project more favorably compared to other options.”
Zillow – March 13
“During epidemics such as the 1918 influenza or the 2003 SARS outbreaks, economic activity fell sharply during the epidemic but snapped back quickly once the epidemic was over.”
MBA – March 18
“It is also important to note that, while not immune, the longer-term nature of most leases acts as a cushion for the sector – particularly for shorter duration events.”
I had the pleasure of participating in Arbor’s recent webinar, “What’s Ahead for the Multifamily Market in 2020,” where my fellow panelists and I shared insights on the multifamily market’s performance in the current cycle and the top issues to watch in 2020. Listen to some clips from the lively discussion below, and view the full webinar recording on the Arbor website.
This week’s roundup takes a look at the impacts of coronavirus (COVID-19) on commercial real estate, the top cities attracting millennial renters, U.S. apartment performance. First, Real Capital Analytics examines how COVID-19 and the resulting economic slowdown could affect CRE, and why the industry is better prepared than in the previous recession. Next, the Arbor Chatter blog highlights where millennial renters are flocking to, including metros with strong job markets and affordable rental options. RealPage reports that the apartment market continued to perform well in February, with national occupancy remaining at 95.5%. Then, another Chatter blog provides insights into how developers can make affordable housing deals pencil while providing much-needed supply to renters. Finally, MBA notes that the share of renters considered “cost-burdened” has declined in markets with strong labor markets and growing supply of rental housing.
Real Capital Analytics – March 9
“Property income is going to be challenged. However, there have been fewer investors in CRE in this economic expansion using such risky debt.”
Arbor Chatter – March 10
“While Gen Z is emerging as a source of multifamily demand, millennial renters still dominate the apartment market across a variety of metros.”
RealPage – March 11
“Rent growth in February averaged 2.9% annually across the U.S. That rate sits a bit below the 3.2% seen in February 2019 but matches the three-year average.”
Arbor Chatter – March 12
“With rising construction costs, a New York Build 2020 Expo panel shared their thoughts about an industry concern: How can affordable housing yield profits?”
MBA – March 11
“Some common trends emerge when examining the top 10 markets in which the share of rent-burdened households declined the most, including strong wage growth, rising supply of rental properties and low to moderate rates of rent growth.”