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 renter priorities shift and a “technical recession” ● takes hold.
● Class B Multifamily Properties Will Remain Solid and Class C Prices to Slightly Drop, Especially Those with Delinquency Issues . - Ellie Perlman, Blue Lake Capital LLC
Class B multifamily properties will remain solid with stable cap rates as occupancy and around 95% of rent collections nationwide remained high during Covid-19. Class C properties and workforce housing naturally has more exposure to Covid-19 implications as many tenants work in the service industry.
● Growing Interest In Suburban Or Rural Living – Jennifer Anderson , Anderson Coastal Group
Right now, homeowners are adapting to a new lifestyle and realizing what doesn’t work in their current home. The global shift toward remote work—and lack of commute—may cause homebuyers to reconsider suburban and even rural living. They’ll also desire more square footage and outdoor space, which is more readily available and affordable in suburban and rural areas.
Variances in Budget - Unknown
Most multifamily organizations cast their budget in the fall of 2019 and looked at 2020 as more of the same: strong demand, strong occupancy, strong pricing and a need for more capacity. A straw poll of MRI conference attendees put a potential recession in 2021 or beyond. While we may or may not have a formal recession, the impacts of this virus, if experienced for a protracted amount of time, could create recession-like conditions, undermining the assumptions used to build 2020 budgets. Reforecasting conversations will need to happen. Expectations will need to be reset and the inevitable conversations about expense reductions will likely take place.
● More Interest In Properties With Fitness Amenities – Salvador Garcia , MAS Development Group
With people spending most of their time at home, the value of on-site dining, fitness and leisure options in multifamily properties has never been greater. As leases expire during the second half of the year and renters seek new apartments in which to live, work and stay entertained, people will be drawn to properties with amenities and easy access to outdoor activities like parks and beaches.
 Kari Negri is the Chief Executive Officer of Sky Property Management and is a member of the Board of Directors of the Apartment Association of Greater Los Angeles. For questions, you can reach Kari at Kari@ SKYprop.LA.
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