COVID-19 Multifamily Roundup (March 17, 2020)
Local Governments Halt Tenant Evictions
During the COVID-19 upheaval, schools, businesses and events have closed to prevent the spread of the virus. Employers have downsized, which has financially strained some tenants’ ability to pay their rent. CNN reported that cities such as Seattle, Boston and San Francisco, and states including New York have halted evictions. The suspensions will prevent landlords from issuing new notices of eviction or pursuing exiting ones. Even landlords have supported these measures. For example, the Real Estate Board of New York, which represents owners of more than 150,000 rental units, has pledged not to evict tenants for 90 days, according to the article.
COVID-19 Increases Multifamily Investment Appeal
Multifamily has long been a favored asset class during times of economic turmoil. National Real Estate Investor reported this continues to be the case with the coronavirus crisis. With the financial markets tumbling, real estate, particularly the multifamily sector, has a greater investment appeal. Having a larger tenant base, housing also serves a fundamental necessity. In general, this has made multifamily a more stable asset class. Plus, interest rates are at historic lows. The article noted trends such as population shifts to the South. However, NREI also pointed out that residents tend to avoid moving from their current multifamily properties during uncertain times.
Greater Hardships for Certain CRE Sectors
With a COVID-19 economic downturn, the real estate industry will feel negative impacts. However, Paul Fiorilla, director of research at Yardi Matrix, in a GlobeStreet article, stated that he doubted the virus’s effects on job growth would be as severe as what happened during the Great Recession. Fiorilla opined that businesses involved with travel, leisure, hospitality, manufacturing, trade, energy and events will face more immediate hardships.
RealPage Hosts Covid-19 Multifamily Discussion
On Wednesday, March 18, RealPage economists will host a webcast on the impact coronavirus is expected to have on apartment demand. Greg Willett and Jay Parsons will discuss the economic outlook and multifamily fundamentals. They’ll provide their views on whether the current state of the economy is short-term or marks the onset of a recession. The speakers will also address actions property owners can take.
You can find all of Arbor Chatter’s coronavirus coverage including its ongoing COVID-19 Multifamily Roundup here. For a list of industry resources that offer helpful information related to the virus outbreak, please see our Coronavirus (COVID-19) CRE Resource Guide.