NAA's COVID-19 Economic Update
NAA has released its latest COVID-19 economic impact report and it highlights some of the effects the crisis has had on the apartment industry:
- The leasing season has resumed, as prospects have adjusted to self-guided and virtual tours. Leasing activity
has dramatically picked up since the last week in April.
- Weekly apartment listings views from RENTCafé are up 16.7% since 2019 as of May 3rd.
- Leasing call center volume has also surged by 155% year-over-year.
- A warning sign for Class A properties is if increased concessions start a cascading decline in rent.
- Small floor plans in Class A properties in major cities are struggling as younger renters who do not have a tie to
the city are terminating leases and moving home.
- Short-term rental exposure is another smaller, but potentially concentrated risk factor.
- Federal relief to individuals should limit multifamily property financial distress at least until August.
- 5.8% of multifamily CMBS loans were 30+ days in default in April, up from 2.8% in March.
- Debt market conditions have improved since Fed included Agency CMBS in the Term Asset-Backed Securities
Loan Facility (TALF).
As far as the overall economy goes, here's a couple of lowlights:
- Private sector employment shrunk by 15.1% from March to April.
- Arts Entertainment & Recreation, Food Service & Drinking Places and Dentist Offices each lost more than half their workforces in just one month.
You can see the full report here.