Navigating the Headwinds: Multifamily Amid COVID-19
Tenant performance measures have taken a marginal hit but have stabilized, beating early predictions.
Headwinds are still forecasted and multifamily continues to weather the storm.
Low-interest rates have led to a refinancing surge but multifamily LTVs fell to 2016-level lows.
Concerns are rising about whether the multifamily sector, including its renters, can sustain economic security as new daily COVID-19 cases remain stubbornly high. Even as the economy stumbled through much of the spring and summer, the apartment sector generally stayed on its feet. While tenant performance measures have taken a marginal hit, they have stabilized and held up better than early predictions had suggested.
Rent collections have ranged between 76.6% and 82.2% since April, according to Census Bureau estimates. In turn, both property-level cash flows and cap rates have remained resilient. However, as coronavirus cases surged across the U.S. in July, it became apparent that the country’s speedy return to normalcy would not occur.
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