Monday, May 11th, 2020
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Rent Collectability Risk High, New Lease Rates Decelerate As Apartment REITs Grapple With Coronavirus Fallout
Rent collections and new lease pricing decelerated in April and will likely continue to do so, according to a new research report on four of the seven apartment REIT’s early year earnings reports.
Rent collection has ranged from about 93%-98% in the first quarter of 2020, with delinquencies increasing in April, while new lease rates decelerated in April compared to Q1, according to a report by Mizuho Securities. Both issues are top of mind for the seven apartment REITS, which are bracing themselves for continued delinquency and new-lease risk into May, June and beyond as the U.S. economy faces historic unemployment.
“Rent collectability risk remains top of mind and a key risk into May and possibly June and beyond,” the survey said. “1Q20 earnings [were] generally in line … but uncertainty remains the storyline.”
Mizuho’s report researched earnings reports from four of the seven apartment REITs: AvalonBay