Last week, we had the opportunity to gather some of our clients for a round table discussion. It was a chance to share experiences and hear directly from peers how everyone is navigating this ‘new normal.’
While the past few weeks may have felt long, we’re still early into this new phase of business. That’s why we were eager to hear from others about what they’re seeing and how they’re adapting their goals in this uncharted territory. Here are a few of our key takeaways from the conversation:
People Matter More Than Ever
The overarching theme of our conversation was maintaining the health and safety of people. Our owners and operators have been focused on the well-being of their staffs, their tenants and their communities.
We heard insight on how owners have been upholding the safety of their staff members and their properties, how they’ve been communicating with tenants in the case of positive diagnoses, and even had one client offer to advise others on how to address a specific scenario.
We weren’t surprised that our clients remain primarily focused on other people, but we were heartened all the same and reminded of the power in being a force for good.
Optimism Endures Across Our Industry
Our conversation fell a few days into April, and those we heard from in the multifamily industry were pleased in terms of rent collections despite the ramp up in COVID-19 restrictions. At that point, delinquencies and collections were on par (within one to two percent) with the previous month. Additionally, lease renewals were strong, and owners had been seeing more withdrawals of move out notices.
As recently as April 22, the National Multifamily Housing Council (NMHC) found that 91% of renters nationwide were up to date on their payments through the first 19 days of April. This is down from last month, when 93% of renters had made their rent payments by March 12, but a relatively positive sign for multifamily considering the economic disruption that COVID-19 has already wrought on other industries.
Likewise, everyone we spoke to in our survey was still interested in buying and selling. Of course, terms and conditions are evolving, but not one person on the phone said, “No, we wouldn’t be interested in a good deal right now.” That’s music to our ears, as it points to an overall optimism and perspective that is important to keep in mind. In commercial real estate, it’s imperative to take the long view.
Flexibility Is Essential
We’re in a new landscape, that much is clear. Everyone we spoke to on the phone was operating with an unprecedented amount of creativity and flexibility.
For one client, that meant working with an incoming tenant who had been laid off since signing their lease and helping them determine the right course of action, to cancel their move with a full refund of fees from the owner. For another client, that meant leasing agents taking initiative to launch virtual tours and deploying technology for this to all agents, which has helped to maintain lease up.
Our current environment demands new ways of assessing performance, new ways of working with clients, and new ways of evaluating opportunities. Our clients are rising to the challenge and taking it day by day.
Much still remains to be seen as April collections continue. Anticipate greater impact to take effect in May and beyond. We’re eager to reconvene our round table again in the coming weeks to see what else there is to learn and share.
–Kevin Dillon and Jason Krug