Bay Area Multifamily Owners Pleasantly Surprised By April, Worried About May
April brought better-than-expected rents for many of the Bay Area's residential landlords, but some said they think May will be a different story.
Colliers' survey posed questions to owners, asset managers and property managers of a combined 22,000-plus units across the Bay Area in mid-April, partnering with real estate economics firm Rosen Consulting Group in the process.
At the same time, even before six Bay Area counties extended shelter-in-place orders through May, 60% of survey respondents expect May rent collection will be slightly or significantly lower than April's, according to Colliers' report.
“April was great given what’s happened and how unprecedented this is," Colliers Executive Vice President Ryan Wagner told Bisnow. "I think May is going to be a different story, and it will be far more telling in terms of what ramifications this will have over the next three to six months for the market.”
Through April 18, California received about 2 million unemployment claims in the month, according to the state's employment development department. In the seven weeks since the coronavirus outbreak began in California, 3.7 million Californians have filed for unemployment, leaving one out of five workers without a job, Gov. Gavin Newsom said Wednesday.
That leaves May an even bigger question mark than April was, and puts many multifamily owners deeper into uncharted territory, Colliers Executive Vice President Brandon Geraldo said.
“It’s going to be really important for owners to stay abreast of all of the local resources that are available for tenants so that when tenants do reach out, owners can respond with a list of resources," Geraldo said.
The Colliers report also shows leasing has slowed considerably for many multifamily owners during the coronavirus outbreak. About 85% of respondents said inbound leasing calls have slowed moderately or significantly or stopped entirely.