"Shortly after Sept. 11, there was almost no traffic throughout our system for the better part of two to three years," says President and CEO Douglas Crocker II. "Slowly, rental traffic has started to build, though not to the level we'd normally see."
Job losses and corporate housing cancellations have created an uptick in move-outs that Equity Residential has been unable to stop, Crocker says. Adds COO Gerald Spector, "There's clearly been an acceleration in incentives that really has been occurring since last summer. Going into next year, it depends on where you bring your rental rates down. Rental rates have dropped, and they're going to be settling into new levels."
Spector adds concessions probably will continue to increase in 2002 as other multifamily owners strive to increase occupancies. AMLI Management Co. President Robert S. Aisner said last week parent AMLI Residential also was seeing concessions creeping into the market, as well as slow traffic and a large spike in turnover.
Although Crocker predicts "the single-family housing business will suffer next year" despite low interest rates, those historically low rates already were luring some of Equity Residential tenants out of their apartments. "The notices to vacate for home purchases will continue to decline, but residents who are under contract will continue to leave us," he adds.
AMLI Residential is seeing that, too. "Low interest rates are allowing people to buy homes in the Chicago suburbs – both homes and townhomes," Aisner says.
The pressure to maintain occupancy means increased advertising and using apartment locator services for Equity Residential, Crocker says.
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