Special Report: Multifamily Report, Summer 2020

The Resilience of Multifamily Will Be Tested by the Short-Term Shock of COVID-19; Robust Underlying Dynamics Underpin an Optimistic Long-Term Perspective

June, 2020

Well-established multifamily fundamentals support a rebound on the horizon. The underlying dynamics of the apartment industry remain sound despite short-term challenges. One of the key drivers behind rental housing, the age 20-34 cohort, which makes up roughly one-fifth of the population, will continue to have a high propensity to rent. The affordability gap between renting and owning remains substantial, exacerbated by the situation at hand, making renting a more viable option for many. It was anticipated that in the coming years a wave of young adults would be ready to transition toward homeownership

Report Highlights:

• Turbulence will be felt within the industry in the near term, but well-established fundamentals support a rebound.

• Efficiencies discovered during the pandemic will become lasting industry changes.

• True economic vacancy will surpass physical vacancy and rent growth will be subdued by use of concessions and flat renewals.

• State legislation and the local economic framework will differentiate recoveries.

• Capital accumulates on the sidelines as investors and lenders wait for clarity.