search

The Real Deal Logo

Trending

Trump accused of making false statements about $50M Chicago tower loanTrump accused of making false statements about $50M Chicago tower loanHGTV’s “Mr. Flip It” gets four years in jail for $10M fraudHGTV’s “Mr. Flip It” gets four years in jail for $10M fraudH-E-B snags 21 acres in Celina, hinting at development boomH-E-B snags 21 acres in Celina, hinting at development boomLawmakers reach sweeping housing deal with “good cause eviction,” new 421aLawmakers reach sweeping housing deal with “good cause eviction,” new 421a
Commercial
New York

Wall Street calls BS on apartment landlords’ rosy projections

Some multifamily owners have pegged occupancy rates at 90%, but a key index that tracks publicly traded landlords has fallen over 20%

Wall Street isn’t buying the rosy rent and occupancy predictions that many apartment landlords have been offering up. (iStock)
Wall Street isn’t buying the rosy rent and occupancy predictions that many apartment landlords have been offering up. (iStock)

Many apartment landlords across the U.S. maintain that tenants are paying rent, that occupancy remains high and all is going well.

Understandably, investors are skeptical, according to the Wall Street Journal. The FTSE Nareit Equity Apartments index, which follows publicly traded apartment owners, has fallen by more than 21 percent this year.

Sign Up for the undefined Newsletter

Some multifamily owners have been claiming that up to 90 percent of their tenants are paying rent, the Journal reported. But asking rents in cities like New York have fallen about 15 percent since August 2019, the Journal reported, citing data from Green Street Advisors on publicly traded apartment landlords. And investors are preparing for a possibility of more vacancies once landlords are allowed to evict tenants.

Apartments have been hit the hardest by the coronavirus crisis in pricey coastal cities like New York and San Francisco, according to the report. Asking rents in Bay Area cities dropped 9 percent in July, and fell 6 percent in the Bay Area suburbs.
Apartments in the Sun Belt are faring better, however. One landlord with a high concentration of properties in that region, Mid-America Apartment Communities, said July leasing volume was on pace to exceed its amount year-over-year.

Investors expect to see apartment occupancy decline as landlords are allowed to begin evictions. Many cities and states nationwide have had eviction moratoriums since the pandemic’s early days. Many of those are beginning to roll off. Last week, the CDC issued an order to halt residential evictions through Dec. 31. [WSJ] — Keith Larsen