How has your market recovered so far and what are you seeing?
I'm in the SF Bay Area and I'm seeing a huge changes in the market just like everywhere else. I am seeing a huge flow of people both out of SF proper into the burbs, and also a huge flow of people out of the metro area to lower COLs like AZ and NV. SF, being the tech hub that it is, experienced huge layoffs from companies like Salesforce, LinkedIn, Uber and Airbnb. Pinterest just axed a development project for expansion and paid nearly $90 million to get out of it. Not small companies, but no surprises either considering what their business model is based on. On top of that, Google and Apple have rolled out announcements of letting workers remain remote till Summer or Fall of 2021, and in some cases even offering remote work permanently. I'm thinking much of the workforce is seeing this as a great opportunity to leave for an extended period of potentially 2 to 3 years at least, if not permanently.
For example, my office consisted of 30 people pre-covid. So far 6 people won't be returning to the office. 1 was let go, 1 retired and the other 4 have chosen to be remote full-time. This was pretty surprising for me, but i think adding in covid with the existing cons of congestion, high home prices and crime are really driving people out.
I'm thinking the SF market will remain strong, but it seems recovery will be very steady and at a slower rate compared to neighboring LA.
Curious to hear from those of you in other markets how things are changing over there and if you're expecting recovery to be slower or faster than average. LA? NYC? Chicago? Texas? Atlanta? Seattle? Boston? Florida? DC?
Bump
Speaking for the multifamily sector. LA is fucked the hardest due to their local rent relief ordinances. We’re collecting 70% of rents there which is crazy considering collections average ~95% in all the other markets. Rent growth wise it’s weak across all markets. We’re able to keep the renewals pretty much flat but new leases are running anywhere from -5 to -25% depending on markets. Generally low COL markets in TX fare well, with Austin even seeing some small growth. But other than that, northeast CBD like Boston and NY are seeing -10 to -15% decline in new leases.
I think recovery rests heavily on the timing of arrival for vaccines. There are sprinkles of folks coming back to cities but largely speaking, we aint seeing folks heading back to the city anytime soon unless people start getting shots in their arms.
Question is, when are the vaccines really arriving?
I'm in the southeast. Class A multifamily (including development) is basically back to normal with the exception of CBD towers which are hurting as these areas are still ghost towns. Rent growth is about 0% but vacancy is holding steady. Collections are 95%+. No real concessions outside the CBD.
Seconding this. Cover Texas Class-A multi-family and am seeing the same trends. Collections have held up pretty well. Dallas seems to still be leasing great, apart from the CBD. Which in this case is the Victory Park area. In Austin though, the CBD is taking a pretty substantial hit as people realize the reasons they want to live in downtown Austin are no longer viable, aka bars. On Austin though, there's been a trend towards home ownership as mortgages are cheap. This trend seems to be very true for those moving into Austin from gateway cities.
Same story on the numbers: rent growth 0% for 2020, vacancy is steady, and collections are solid. Concessions definitely have varied, have seen some pretty high one time stuff.
Over all, I would think that class A multi-family should hold up pretty strong, if there isn't another wave of corporate layoffs.
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