Multifamily Update
Where Are We Today?
While we hoped the biggest impacts from Covid-19 were behind us, additional challenges continue to crop up. A number of our staff have tested positive and are having to isolate, but so far, all are doing well. Everyone on our team has stepped up to fill the gaps. A handful of our residents have been affected as well and unfortunately; one did succumb. We expect managing Covid-19 in our midst will continue for some time.
Per John Hopkins Bloomberg School of Public Health, despite current concerning trends, there remains hope for the coming months. Numerous countries—including China, Italy, South Korea, Spain, and others that were severely affected early in the pandemic—have successfully brought their epidemics under control and achieved relatively low levels of transmission.
The Good News
What’s the good news? The good news is, in our region, people are learning to adapt and lessen the spread while improving the economy. Outwardly, people are going about their daily lives – just not to as many places, and always with masks on. We recognize that the stress of the pandemic, along with political and social concerns, is wearing on everyone but are very proud of how our community has responded. We remind those who need a smile that this is a moment in time and won’t last forever. For us, it’s business as usual with some new steps in place.
Property Operations
To help cut through noise, indecision and politicking that plagues our national response to the pandemic, we continue to chart our own science-based course at Better World Properties that meets the needs of our staff and our apartment communities and keeps us compliant with evolving regulations. The response from our team and our apartment residents continues to be positive.
In anticipation of potential additional absences, we have added more floating staff to help ensure we are prepared. Qualified maintenance staff continues to be in especially high demand. As a result, we see some upward pressure on wages, but we are currently fully staffed.
Leasing and occupancy remain healthy across our portfolio and have improved overall. People appear less inclined to move right now – especially when they feel they are being well taken care of.
We are paying extra attention to screening potential new residents. We have seen an upsurge in blank credit histories, questionable identities, bogus pay stubs, phony license tags, and false assistance animal accommodation requests.
Impacts on the supply chain have resulted in a nationwide shortage of appliances. This is slowing delivery of new and rehabbed units, but is not creating significant operational problems at this time.
We are proactively cleaning and disinfecting when and where it counts and is most effective but are also being mindful to not waste time or money going overboard just for show.
Financial Impacts
Some think apartment deals should be plentiful and cheap right now, but we are seeing quite the opposite, particularly with B and C product. Moderately priced housing continues to be much needed and demand for mid-priced multifamily units is surging. Top-end renters-by-choice are increasingly making other choices.
We have begun seeking selective evictions at non-CARES properties, but courts are struggling. Some are still not hearing cases or are experiencing significant delays. While cases have backed up and are increasing, we are in no way overwhelmed or chomping at the bit to evict massive numbers of people as the media headlines suggests. Most residents continue to find ways to be responsible. We are continuing to work with those who choose to work with us. This is the time for open communication and transparency so we can find resolutions together.
There are the few who have willfully decided to not pay rent even though they could. Some have flaunted their refusal to contribute knowing they cannot be currently be evicted. Of course, they will be expelled eventually, but these are also the ones most likely to skate the system, purchase an illegal online identity package and start all over again. We remain vigilant with eyes wide open.
We are conducting a fresh survey to ascertain the potential magnitude of the expiration of unemployment benefits in August. Anecdotal evidence suggests the impact may be relatively small.
Our June rent collections remained steady, down just 0.75% from May. Nationally, July numbers are down a few points from June but ours continue to outpace this.
People Are the Heart of Our Business
We feel fortunate that professional apartment property management in an essential industry and that our results continue to be positive. We believe this is because of our continued dedicated, hands-on human touch approach. Apartments are a numbers business, but skillful property management is also about people and service. We care deeply about our multifamily owners, our Texas apartment investors, our residents and our staff. Together, we will persevere and realize new opportunities.
Hidden Risks and Hidden Value
Are your multifamily assets performing optimally? Are there hidden risks and hidden value in your apartment property balance sheets? If you would like a multifamily portfolio assessment, apartment due diligence for acquisitions or repositioning, help with deal restructuring, and optimization of your apartment operations, please feel free to reach out. At Better World Properties LLC, we offer complete Apartment Life Cycle Solutions – All under one roof.
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Your Better World Properties LLC Team
(713) 559-6975