With businesses closing down to stay in compliance with local and regional stay-at-home orders, there was widespread speculation that April rent payments for multifamily properties could be a serious problem.
Nationally, there was a drop in payments, but after everything was said and done, 90% of renters made full or partial payments by mid-April, which is a very promising sign. This is especially interesting because this statistic refers to all classes of multifamily.
We are relieved that in our portfolio, April rent payments have surpassed expectations. We anticipate a similar trend in May. This is largely due to the fact that CGI assets cater to a different class than many multifamily investments. Residents who choose CGI properties are high-end creatives, digital entrepreneurs and others from select business classes. Most have stable employment and many already work remote. In fact, the feedback floating through the halls is that many of their digital businesses are thriving in the pandemic.
As unemployment numbers rise, concerns about May rent is mounting. It remains to be seen if government stimulus packages will alleviate the concern, but with a 30% rise in rent payments being made with credit cards, apprehension is warranted.
Communication between tenants and owners will be of paramount importance in the coming months. Concessions will need to be made on both sides of the equation so that we can steer the economic curve ball that has been thrown at us back on track. Our plan is to leverage our tech packages that allow for direct and easy communication between residents and management, so that the open door policy stays in place despite social distancing.
We remain optimistic that negotiations and government programs will help rents get paid and that the nation beginning to open up in mid-May will bring a return to normalcy.