Multifamily Rents Declined at Record Pace in Q3
According to Moody’s Analytics REIS, in Q3 2020, asking and effective rental rates for multifamily properties declined nationally 1.8% and 1.9%, respectively. This is the largest decline in rents since REIS began tracking multifamily rents in 1999. While multifamily has historically been a strong asset class, the economic crisis from Covid-19 is started to show an impact on this asset. “The complicating factor in this downturn was the immense amount of fiscal and monetary support dispensed to help the economy withstand the lockdown – with several policies like eviction moratoria and the Payroll Protection Program helping keep occupancy levels stable and rent collection losses relatively low,” Moody’s Analytics REIS wrote. “However, given the duration of the lockdown, and ongoing uncertainty about the speed and trajectory of the so-called recovery, even multifamily performance metrics have begun reflecting the strain.”
Co-working Gets a Boost as Professionals Seek Workspaces Away from Home
As many people in the US continue to work from home, demand for flexible office space on a needs basis has grown tremendously. Professionals are looking for workspaces outside the home environment to better concentrate on their work. “This (on-demand space) isn’t a new phenomenon, but since March the (flexible office) market has been tilting toward on-demand and new package options are being aggressively promoted to meet current market needs and drive co-working occupancy,” says Mark Gilbreath, CEO and founder of LiquidSpace, a shared-economy platform that markets available flex-office and meeting space globally. “What’s new and improved about on-demand is the package deals,” he explains. Overall, demand for co-working space may continue to experience growth, driven by on-demand space.