Multifamily Capital Markets Update (May 2020)

The 10-year Treasury Yield has remained stable bouncing from .5% to .75%. Debt capital is available from the agencies but with reserves. Equity capital has become selective.

Below are key takeaways from the following reports:

COVID-19’s Impact on Multifamily Real Estate – Webinar – Yardi Matrix Link

Download the PDF version of this report here:

COVID-19’s Impact on Multifamily Real Estate – Webinar

Yardi Matrix

  • May collections look similar to April. Federal stimulus funds kicking in helping tenants who lost jobs to pay rent.
  • A and B properties have held up well. C properties showing some distress.
  • Once the stimulus ends in August, expect to see a decrease in rent collections and loan defaults
  • Unemployment and GDP decline is unprecedented
  • Short term rentals and corporate leases are struggling
  • Markets reliant on tourism (Orlando, Las Vegas) will suffer rental declines in the next year
  • Some gateway markets will suffer the same, including NYC
  • Indianapolis, Twin Cities, Kansas City will have rental increases for 2020
  • Market risk is in the next 12-18 months, long term prospects for Multifamily continue to look good
  • New deliveries will decline significantly 12-36 months from now
  • Markets with newer properties with significant lease-up will have pressure for concessions
  • Markets will recover at different paces depending on the extent of infection, testing and deaths of each market
  • Potential for long term movement to suburban locations from dense city locations