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COVID-19 has impacted the U.S. economy and has affected millions of Americans. While it’s difficult to determine how many of the 40 million apartment renters have been negatively affected, it’s clear that many will face financial hardships. The data provided by the National Multifamily Housing Council (NMHC), which is a collection of data from 11.5 million professionally managed units, will help determine how widespread the disruption has been to the apartment sector. On April 8th, NMHC released its initial key data on the impact that COVID-19 has had on the apartment industry, and on April 12th, they released the second set of rent payment tracker data.
Details on Rent Trends
As of April 12th, data revealed that 84% of occupied apartment households had made a full or partial payment, up 15 percentage points from April 5th. Compared historically, the data showed that 90% of rent payments were made April 1-12, 2019, and 91% were made during the same period, March 1-12, 2020. This translates to a payment rate of 93% compared to the same time last month.
This increase from last week suggests that we are experiencing changes in payment schedules and the timing of rent collections. This is not surprising as many leasing offices have transitioned to telework resulting in the delayed collection of checks, and some providers have removed late fees, thus the incentive to pay rent on time.
Apartment owners and operators also see more frequent on-time payments in markets with better geographies and employment compositions. Markets that focus on services and tech businesses are better positioned as employees can work from home, compared to markets that are more focused on retail and hospitality.
Given the size of job cuts, many renters understand their rent payment obligation. They are paying their rent to ensure their properties can continue to operate safely and aid those residents who need rent forgiveness. However, any decline in income has an effect on the industry as the nation still faces an affordability crisis.
Information is sourced from NMHC who will be monitoring and releasing NMHC will be monitoring and releasing updated Rent Payment Tracker data weekly. The next release is scheduled for April 22nd. Please be on the lookout for reports with updated information.
Matthews™ is committed to keeping the commercial real estate community informed and continuing to offer our services during these market changes. With updates and challenges released daily, please contact a Matthews™ multifamily agent for guidance during this uncertain time, and for more insights on COVID-19 and CRE, visit our dedicated coronavirus website.
The Centers for Disease Control and Prevention is offering information and updates on the novel coronavirus (COVID-19) outbreak, the World Health Organization is tracking the number and location of confirmed cases of the virus and Building Owners and Managers Association International has provided the following emergency preparedness guidelines for commercial and residential property managers and landlords.
