Displaying items by tag: occupancy

Tuesday, 08 September 2020 15:08

Stay Away from This Part of Real Estate

(New York)

The real estate space—at least parts of it—have been red-hot since COVID began. Residential real estate in particular has done well, as the fall in interest rates has sent mortgage issuance surging. One area of residential that you might want to stay away from, however, is apartments. Investors have been shying away from the sector. For instance, the FTSE Nareit Equity Apartments index is down 21% to-date. The big fall comes despite landlords saying rent collections are strong. The reason why seems to be the big rent reductions in coastal cities. Landlords in New York, San Francisco etc have had to drop rents by 15% or more to keep tenants and attract new ones, and that figure doesn’t even price-in other incentives, like months of free rent.


FINSUM: Our view here is that COVID will likely lower demand for urban apartments, since the pandemic highlighted some of the weaknesses of densely populated buildings. However, occupancy overall seems likely to stay strong.

Published in Eq: Real Estate

Contact Us

Newsletter

Subscribe

Subscribe to our daily newsletter

Top
We use cookies to improve our website. By continuing to use this website, you are giving consent to cookies being used. More details…