Pandemic’s Long Term Impacts on Multifamily Examined by Yardi Matrix in New Report

Nationwide decline in asking rents, weakened consumer demand may be harbingers of challenging times to come

SANTA BARBARA, Calif.,
July 6, 2020 – With the U.S. economy
in a recession, unemployment numbers sky high and COVID-19 cases surging in the
south and west, multifamily owners and operators face challenging times ahead.
And things may get worse before they get better, according to a new
special report from Yardi® Matrix.

The report is
based on a study of 107 major metros, with data reflecting April and May 2020
asset performance. Over that period, multifamily asking rents dropped .4%
nationally, and twice as many markets saw rents decline as opposed to increase.

Renters are
looking for less expensive units, with the biggest impacts in the sector felt
by Class A+ properties. Rents for “luxury lifestyle” properties dropped by
-1.2% over the last two months, compared to a decline of .5% for “renter by
necessity” properties.

“Multifamily’s
nearly decade long run of healthy performance increases came to an abrupt and
unexpected end this year,” said Jeff Adler, vice president of Yardi Matrix. “Job
losses have been particularly high among apartment renters, and simply
collecting rents and maintaining occupancy is a new area of focus for owners
and managers.”

What’s ahead will
be determined by a complicated combination of economic factors, public health
metrics and renters’ feelings about the future. If renters decide to eschew
urban apartments for a more distanced standard of life in the suburbs or
smaller cities, multifamily could be in for a prolonged pain period.

Gain all the
insight of the national analysis in this special
multifamily report from industry data leader Yardi Matrix.

Yardi Matrix offers the industry’s
most comprehensive market intelligence tool for investment professionals, equity
investors, lenders and property managers who underwrite and manage investments
in commercial real estate. Yardi Matrix covers multifamily, student housing, industrial,
office and self storage property types. Email [email protected], call (480) 663-1149 or visit yardimatrix.com to learn more.

About Yardi

Yardi^® develops and
supports industry-leading investment and property management software for all
types and sizes of real estate companies. Established in 1984, Yardi is based
in Santa Barbara, Calif., and serves clients worldwide. For more information on
how Yardi is Energized for Tomorrow, visit yardi.com.