TAMPA, FL | April 23rd, 2020 | Managing Real Estate Expectations During COVID-19.
For many of our landlords, rent is due this week.
Anxious April, as it’s being termed, is setting in and multifamily owners across Florida are looking for information on how/if/when April and May rents will be paid, as this pandemic continues to trickle into the real estate sector. While the multifamily sector seems to remain well-insulated for the time being, there are many other questions.
Below, is a culmination of thoughts/excerpts (ref: BisNow) from a handful of multifamily owners and we agree that our firm will put similar policies into effect for the coming sixty-days.
“[A]partment renters who are unable to pay rent due to health or financial hardship can pay 50% for April and May. Impacted renters would then have to pay back the remaining balance over a six-month period, interest-free.”
“Universe Holdings has 60 multifamily properties with more than 3,000 units. [The group] understands the current situation and the toll it may have taken on renters. But said has neither time nor tolerance for those who may not have been impacted that think that the next couple of months will be rent-free.”
“We’re asking for a doctor’s note, an employer’s note, pay stubs and bank statements, we’re looking for actual proof. If this is a legitimate reason for sympathy, we can work it out. But we have no tolerance for people that want to play games.”
Data review from S. Rupp, FL, indicates that “[t]he U.S. central bank has moved swiftly relative to the Great Recession to combat the economic downturn caused by the COVID-19 pandemic. Actions from the Fed include dropping the federal funds rate to the “zero-bound,” or near zero and employing unlimited quantitative easing that expands the number of asset-backed bonds the Fed can add to its balance sheet.”
I do expect to see vacancies rise, rents fall, and values take a slight hit — due largely to cap rate inflation from reduced rent rates. Properties that can hold occupancy and their current (or even increased) rent rates, will not see much, if any, reduction in overall value until we get a larger grasp on this market cycle.
I will continue to review meeting minutes, flash calls, economic journals, and our portal metrics to provide the most up-to-date information possible during this ongoing cycle.
We’re in this together, as we have been for over a decade.
WC Equity Group has assembled a Tier-1 network, comprised of agents, contractors, property managers, bankers, attorneys, business owners, and insurance specialists throughout the State of Florida. Our investment insight permits us to provide clear and transparent metrics, thereby allowing our clients to make informed and intelligent decisions.