Eleventh District Beige Book 5/27/2020 via Dallas Fed

Eleventh District economic activity contracted sharply in April, while preliminary data from May point to a notable easing in the pace of decline as restrictions on businesses were gradually lifted. Activity in the energy and service sectors remained the hardest hit. Manufacturing output and new orders fell further, though food manufacturing continued to increase. Loan volumes contracted broadly, with the exception of residential mortgages and SBA's PPP funds. Home sales fell sharply from mid-March through mid-April but have been improving from low levels since then. Employment and hours worked continued to plummet, pressuring wages. While input costs were flat to slightly up, food processors noted a large increase in meat prices. Selling prices dipped further. Preliminary results from a May Dallas Fed Survey of Texas manufacturing and service firms indicated that current revenue levels for most respondents were down markedly compared with a typical May, and about a fifth said they would not be able to survive past six months if revenues did not improve. Outlooks remained weak due to uncertainty surrounding the pace and scope of the reopening of the District economy.

Read more...Eleventh District Beige Book 5/27/2020 via Dallas Fed

May Rent Payments Hit 91 Percent via Multi-Housing News Online

Three weeks into May, 90.8 percent of rental households have made full or partial rent payments, according to just-released data from the National Multifamily Housing Council.

By comparison, by the same time last month, 89.2 percent of renters had made a payment, while 93 percent of rental households had made a payment through the same time period last year.

Read more...May Rent Payments Hit 91 Percent via Multi-Housing News Online

Coronavirus Dents Multifamily Development via Multi-Housing News Online

This was supposed to be a year marked by a healthy amount of new multifamily supply, as some 300,000 units were on pace to open by the end of 2020. But federal, state and local stay-at-home orders and other responses to the coronavirus pandemic will likely reduce that to around 250,000 units, according to projections by commercial real estate brokerage Marcus & Millichap and REIS, the property research arm of Moody’s Analytics.

Read more...Coronavirus Dents Multifamily Development via Multi-Housing News Online

CRE Economists Think Current Recession Won't Be as Bad as the 2008 Crisis via GlobeSt

Nearly 40 real estate economists and analysts feel the COVID-19 recession will impact real estate markets and values less severely than the 2008 financial crisis—except for retail and hotel real estate.

The economists predicted there will be a $275 billion decrease in real estate transaction volumes in 2020, according to a survey in May by the Urban Land Institute. But they expected transaction volumes to rise over the next two years, which would create a healthier capital market compared to the 2008 Great Recession.

Read more...CRE Economists Think Current Recession Won't Be as Bad as the 2008 Crisis via GlobeSt

Why Multifamily Rents are Holding Up Better than Expected via NREI

Despite mass unemployment and underemployment, multifamily rental payments have held up far better than many industry experts expected amid the economic wreckage caused by the spread of the novel coronavirus.

More than 36 million people have filed for unemployment in recent weeks and millions of others working fewer hours and taking reduced pay. That’s amid new estimates that real GDP growth for the second quarter will come in at -42.8 percent. Toss in a backdrop in which, as of December, 69 percent of Americans had less than $1,000 in savings accounts, and it would seem to paint a bleak picture on the ability of renters to meet their obligations.

Read more...Why Multifamily Rents are Holding Up Better than Expected via NREI

What Lenders Look for in New Loans: Q&A via Multi-Housing News Online

Pandemic-fueled uneasiness has forced lenders to realign underwriting strategies. Anthony Delfre, managing director of the Real Estate Advisors Group at Brown Gibbons Lang & Co., spoke to Multi-Housing News about the multifamily debt market amid the lingering global health crisis. What deals are lenders focusing on and who is still active in the mortgage industry?

Read more...What Lenders Look for in New Loans: Q&A via Multi-Housing News Online

Almost 88% of renters nationwide have made their May payments via Dallas Morning News

Apartment renters are continuing to make their monthly payments in the face of the pandemic.

Almost 88% of renters nationwide had made their May rents as of this week, according to the latest report from the National Multifamily Housing Council.

Read more...Almost 88% of renters nationwide have made their May payments via Dallas Morning News

Multifamily Loan Maturities Expected to Rise as Net Operating Incomes Drop via GlobeSt

Maturities for multifamily loans will be up this year by double-digits during the disruption of capital markets by the COVID-19 pandemic, according to a new report from CBRE.

The rise in multifamily maturities—up 11.9% to $72.9 billion in the main lender categories—is expected, writes report author Jeanette Rice, CBRE’s head of multifamily research for the Americas. It’s part of “a new ‘wall of maturities’ that is building for the 2022-2026 period.”

Read more...Multifamily Loan Maturities Expected to Rise as Net Operating Incomes Drop via GlobeSt

ALN Monthly Market Stats May 2020 via ALN Apartment Data

ALN Data just released their April 2020 market stats on occupancy and rents for over 80 markets. In Texas, it includes DFW, Austin, Houston, San Antonio, Lubbock, Amarillo, Abilene, Corpus Christi and more. It is a must read from a great provider of apartment data.

Read more...ALN Monthly Market Stats May 2020 via ALN Apartment Data

Waiting Out Multifamily Opportunities in the Aftermath via GlobeSt

Like nearly every industry, the multifamily real estate market has taken a hit during the COVID-19 pandemic, but it may have one advantage that some industries don’t. People always need a place to live, especially during stay at home orders.

For investors or potential investors in multifamily real estate, that means waiting for opportune moments to arise once the worst of the crisis has passed.

Read more...Waiting Out Multifamily Opportunities in the Aftermath via GlobeSt

Most DFW apartment residents are still paying rent via Dallas Morning News

More than 80% of America’s apartment renters have made their May payments. And in the Dallas-Fort Worth area, about 87% of apartment residents so far have paid their rent for the month.

That’s better than some forecasters had expected in a month with record unemployment and pay cuts caused by the pandemic.

Read more...Most DFW apartment residents are still paying rent via Dallas Morning News

What Historic Unemployment Could Mean for Multifamily via Multi-Housing News Online

Jobless claims in the U.S. have hit record levels since nationwide stay-at-home-orders went into effect and businesses shut their doors in mid-March. As the Bureau of Labor Statistics prepares to release its monthly report on employment figures, multifamily leaders and experts discussed what the numbers could mean for the industry.

Read more...What Historic Unemployment Could Mean for Multifamily via Multi-Housing News Online

Texas Economic Activity Sharply Falls in Wake of COVID-19 via Dallas Fed

Economic distress caused by the COVID-19 pandemic has sent the Texas economy into a tailspin. Virus containment measures have prompted unprecedented declines in demand and triggered mass layoffs, shaking business and consumer confidence.

Activity in the service sector has been more severely affected than in manufacturing, precipitating downward pressures on wages and prices. The state’s oil and gas sector has been decimated. The housing market has slowed, too, as sellers and buyers take a wait-and-see approach.

Read more...Texas Economic Activity Sharply Falls in Wake of COVID-19 via Dallas Fed

What $100B in Rent Relief Could Look Like When it Hits the Market via GlobeSt

On Monday Sen. Sherrod Brown (D-Ohio) tweeted the news that he was planning to introduce a $100 billion rent relief bill, surprising many in the industry that had begun to wonder if the federal government had forgotten about them.

Even with the tweet, Washington observers could have been forgiven for feeling jaded about the measure’s prospects: Republicans and Democrats are at odds on what future federal assistance will look like while President Trump has his own ideas about what the next steps should be.

Read more...What $100B in Rent Relief Could Look Like When it Hits the Market via GlobeSt

Senator to Introduce $100B Emergency Rental Assistance Bill via GlobeSt

To date, the multifamily industry has received little assistance from Washington, DC, even as 30 million people have been thrown into unemployment over the last six weeks. While the majority of renters paid their April rents, it is widely believed that fewer will be able to meet their monthly rent obligation for May.

A bill that will be introduced in the Senate could provide relief to both tenants and their landlords.

Read more...Senator to Introduce $100B Emergency Rental Assistance Bill via GlobeSt

Suddenly Apartment Landlords Have Become the Enemy via GlobeSt

So many renters are scared these days. May 1 has come and gone and it is expected that a significant number were not able to come up with the money for their rent. Without a doubt, their stories are heartbreaking: Families that have lost their jobs, have little savings as fallback and in some cases are terrified they won’t be able to feed and properly house and educate their children.

Some renters, though, are also angry and on the first of the month they demonstrated that anger by participating in a rent strike held across several cities in the US. A quick perusal on Twitter (#rentstrike and #cancelrent will do the trick) illustrates just how much ill will these renters hold towards their landlords.

Read more...Suddenly Apartment Landlords Have Become the Enemy via GlobeSt

Weekly New Apartment Lease Signings Match 2019 Levels, While Rents Decline via RealPage

We continue to monitor daily leasing activity for the U.S. apartment market, and the most recent numbers were a shocker: Last week, executed new lease volumes came in nearly on par with the 2019 totals for the same period, based on analysis of RealPage’s rent roll data.

The results marked a continued upward trend in traffic and leasing activity since bottoming in late March, when total lease new signings were down nearly 50% year-over-year. As of April 26, total new lease signings over the trailing seven days were down only 1.6%.

Read more...Weekly New Apartment Lease Signings Match 2019 Levels, While Rents Decline via RealPage

More Apartment Residents Say They Can’t Pay Rent for May via GlobeSt

There is little doubt that apartment renters are hurting from the coronavirus, according to a new survey by Grace Hill, a software company that surveys the multifamily industry.

It found that Covid-19-related related income losses have impacted nearly two-thirds, or 63%, of all renters surveyed. Furthermore 52% indicated they would be able to pay the May rent in full, compared to 69% who said they paid April’s rent in full.

Read more...More Apartment Residents Say They Can’t Pay Rent for May via GlobeSt

COVID-19 Shutdowns Impacted CRE Markets Right Away via Nareit

The business closures and social distancing designed to slow the spread of COVID-19 did not take affect until the final few weeks of the first quarter, but they had a significant impact on demand for commercial real estate, vacancies and rent growth across the major property sectors.

Newly-released data from CoStar show that net absorption of apartments was 65,000 units in the first quarter, the weakest start to a year since 2014 (chart 1 shows four-quarter sums due to seasonal patterns in demand, in dark blue bars. Completions, or new supply, are shown with the sign reversed in the light blue bars). There has been a high level of construction of new apartments, which leaves this sector particularly exposed to slowing demand.

Read more...COVID-19 Shutdowns Impacted CRE Markets Right Away via Nareit