Multifamily Rents Drop, But COVID Impact Less Than Feared
This Yardi report was a nice reinforcement of what many are seeing in their multifamily portfolios during these COVID times: some slight decrease in collections, but overall not nearly the catastrophic impact that some feared. For PGP's portfolio, the impact has been even less of a deal: our collections are stable and rents are actually moving up as we continue to see strong leasing activity.
From the article:
Multifamily rent growth turned negative in the second quarter for the first time since the aftermath of the global financial crisis, Yardi Matrix reported Thursday. That being said, compared to Q2 GDP growth, which saw the steepest quarterly drop in some 80 years, Q2 apartment rent performance wasn’t calamitous.
“Expectations of widespread non-payment of rent did not materialize and the immediate impact was not as severe as feared,” according to Yardi Matrix’s report.
Through mid-July, rent collection for professionally managed apartments was down only slightly year over year, Yardi Matrix reported. Asking rents for properties in Yardi’s database declined 0.7% in Q2.
For the multifamily sector, “it is difficult to handicap the next six to 12 months,” the report states. Broadly speaking, “we expect that occupancy will continue to decline moderately, and rents will fall further in the second half” before rebounding in 2021.