The Demand Solutions Blog

Multifamily Downturn Q&A - May 26th, 2020

Posted by Donald Davidoff on May 26, 2020 12:21:37 PM

Each week our "downturn" roundtable enables us to discuss current pricing and revenue management (PRM) issues with some of the most experienced PRM practitioners in the industry. Each week we summarize the most recent insights. 

Below we summarize the audience responses to prompts (all answers are anonymous) on our most recent call (May 20) along with some information we re-shared from RealPage. If you have different insights or questions that you would like us to address in the coming weeks, please leave them in the comments or contact us through the site.

This week we opened up with a discussion about some key metrics we saw in a RealPage blog:

  • Despite the pandemic, occupancy April remained well above the prior ten-year average and slightly above April 2019. Strong February and March occupancies helped with that as April 2020 occupancy was below March 2020. Normally April occupancy is higher than March
  • Through mid-April, canceled move-outs were roughly double the historical norm. We look forward to future reports to see how long this tailwind sustains
  • Retention rates in April were at least 400bps higher than normal (at 57.9%)
  • All the above was at the expense of rent growth. Effective asking rents went from >2.5% YOY to 1.0%, the largest drop we've seen in our entire history in the industry
  • The focus on asking rents can be misleading: executed effective rents were down 4.5% YOY, and likely will drop further

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Topics: Future, COVID-19 Downturn

3 Reasons Multifamily Needs to Prepare for September 1

Posted by Donald Davidoff on May 20, 2020 8:00:00 AM

During these first few months of the COVID-19 crisis, the two things that multifamily operators are most concerned about are rent collections and leasing volumes. So far the results have been more than a little bit interesting (and to many people counter-intuitive).

On the leasing side, we saw a massive drop in demand in the first three weeks. Overall, leasing was down more than 50%, and some urban coastal markets were down 80-90%. Since then, however, leasing has recovered such that most secondary and tertiary markets are now at or above prior year volume while the urban coastal markets are generally within 20-25% of prior year volumes.

Meanwhile, rent collections were a topic of great angst, first for April 1; then, when April numbers came in generally off only 4-6 points from prior year, there was a great concern that May 1 could be a disaster. Based on data from NMHC, May appears to be coming in slightly better than April.

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Topics: Future, COVID-19 Downturn

Multifamily Downturn Q&A - May 18th, 2020

Posted by Donald Davidoff on May 18, 2020 10:21:36 AM

For the last few weeks, we have been running a weekly "downturn" roundtable discussion for our clients (a group that includes some of the most experienced pricing and revenue management practitioners in the industry). Each week we have been summarizing the insights that were shared during our latest discussion.

The content below summarizes audience responses to three prompts (all answers are anonymous) on our most recent call (May 13th). If you have different insights or questions that you would like us to address in the coming weeks, please leave them in the comments or contact us through the site.

This week we opened up with a discussion about demand as we enter week nine of the crisis. We shared some statistics from our own internal aggregate data that showed very similar patterns to early RealPage and Yardi numbers. To summarize:

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Topics: Future, COVID-19 Downturn

Taking Stock: Nine Weeks Into COVID 19

Posted by Donald Davidoff on May 11, 2020 9:28:44 AM

As we enter the 9th week of the public health and the ensuing economic crises, it’s probably a good time to take stock. It’s been a bit of a roller coaster, and the ride is clearly not done yet.

The first three weeks starting March 16 were brutal. We saw leasing drop by more than 50% and more like 90% in markets like New York, the San Francisco Bay area and the Greater Los Angeles Metro area. These numbers appear consistent with data that RealPage and Yardi have released.

Since then, numbers have been remarkably good: leasing has risen every week since then and is now on par nationally with last year. The three markets above appear to still be off 20-25%, but some other markets are showing YOY increases [we should note that Realpage is reporting a roughly 6% decline in rent, so leasing activity is coming at a price]. Rent collection was off roughly 4 points in April, but NMHC has reported through May 6 that May collections are trending 2 points better than April.

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Topics: Future, COVID-19 Downturn

Multifamily Downturn Q&A - May 4th, 2020

Posted by Dom Beveridge on May 4, 2020 5:48:56 PM

For the last few weeks, we have been running a weekly "downturn" roundtable discussion for our clients (a group that includes some of the most experienced pricing and revenue management practitioners in the industry).  Each week we have been summarizing the insights that were shared during our latest discussion.

The content below is presented below in Q&A format, and all responses are anonymous. If you have different insights, opinions, or questions that you would like us to address in the coming weeks, please leave them in the comments or contact us through the site.

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Topics: Multifamily Trends, Future, COVID-19 Downturn

Multifamily Downturn Q&A - April 27th, 2020

Posted by Donald Davidoff on Apr 27, 2020 10:23:49 AM

For the past few weeks, we have been holding a weekly "downturn" roundtable discussion for our clients. This group includes some of the most experienced pricing and revenue management practitioners in the industry. Each week we have been summarizing insights shared during our latest discussion.

Below we share our observations of the first five weeks of this recession, with the Q&A that followed the presentation. All responses are anonymous. If you have different insights, opinions, or questions that you would like us to address in the coming weeks, please leave them in the comments or contact us through the site.

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Topics: Multifamily Trends, Future, COVID-19 Downturn

Multifamily Downturn Q&A - April 20th, 2020

Posted by Dom Beveridge on Apr 20, 2020 1:13:12 PM

Last week we shared some of the talking points from our weekly "downturn" roundtable discussion for our clients. We are convening this group, which includes some of the most experienced pricing and revenue management practitioners in the industry, every week so this week we summarize insights that were shared during our latest discussion.

The content below is presented below in Q&A format, and all responses are anonymous. If you have different insights, opinions, or questions that you would like us to address in the coming weeks, please leave them in the comments or contact us through the site.

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Topics: Multifamily Trends, Future, COVID-19 Downturn

Multifamily Downturn Q&A - April 13th, 2020

Posted by Dom Beveridge on Apr 13, 2020 12:01:47 PM

For the last couple of weeks, we've been sharing insights designed to help multifamily companies to steer through the challenging market conditions created by COVID-19. Last week we initiated a weekly roundtable discussion for our clients, a group that includes some of the most experienced pricing and revenue management practitioners in the industry.

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Topics: Multifamily Trends, Future, COVID-19 Downturn

The "Downturn" Playbook - Your Questions Answered

Posted by Dom Beveridge on Apr 6, 2020 9:22:11 AM

Last week we ran a webinar where three of our experts shared their first-hand experiences of managing multifamily pricing through previous recessions. The session (a recording of which is available on our website) was well-attended and generated some great discussion. We answered some, but not all of the questions during the session.

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Topics: Multifamily Trends, COVID-19 Downturn

Why This Downturn is Different for Multifamily

Posted by Donald Davidoff on Mar 26, 2020 4:01:22 PM

I often think of the economy as a metaphorical set of pipes with money (the "water") flowing through them. Recessions typically happen when the pipes "clog," causing the water to flow well below its normal pressure. Governments have to respond, taking actions to "unclog" those pipes to get the "water" flowing again.

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Topics: Multifamily Trends, Future, Change Management, COVID-19 Downturn