What Multifamily Developers Learned From the Pandemic

LOS ANGELES—The various state and local eviction moratoriums are having a serious impact on many property owners and the future continues to hold great uncertainty. However, there is an air of optimism between property owners and landlords as the nation continues to take the right steps to begin economic recovery and the effects of the stimulus package begin to take hold. Panelists at the national GlobeSt. multifamily conference here in downtown L.A. examined the implications of the eviction moratoriums, if they were even affected negatively by Covid and provided insight into what is to come and lessons learned. 

The Cordish Cos. did well during Covid, according to panelist Emelyna Aurich, director of property management. “We raised rents, maintained occupancy around 95%, and weren’t greatly affected by the downfalls of the pandemic.” 

When the Cordish Cos. built 30,000 square feet of amenity space in its building with 296 units, everyone thought they were nuts, she continued. “But it helped us during the pandemic,” she said. “We were able to allow the residents to utilize the spaces we had in the building, we even had a bar and people could work outside of their apartment, socialize and see life.”

Staying malleable and being able to pivot at a moment’s notice was the focus of Roundhouse. According to Katie Vila, COO, rent growth was even explosive in some of the markets they are in.  The big deal for Roundhouse, though, was that all of a sudden, everyone was home. “It has a huge hit on our operations team with everything from work orders to noise complaints and more,” she said. “The labor markets and supply chains also were a hit to us.” She noted that it was harder to hire certain positions and renovations weren’t getting done.

But some of those personnel issues had been there before the pandemic, Vila continued, but just felt tighter after Covid hit. “Right now, we have increased wages a fair amount. For example, we were looking for a housekeeper and the posting has been up for two months.”

Ogal Claspell, SVP of multifamily investments at Passco Cos., said that where the firm was in January was very very different from where it is now. “In January, occupancy levels were low 90s, rent growth was negative for us during 2020. Fast forward to today and it is a completely different world,” he said. 

Now, for Passco, rent growth has been “phenomenal.” Of course, not all of its properties are behaving that way, but across the portfolio, he said the firm is happy with where things are. “We have some properties that have a high walkability score and those properties took a bigger hit when it came to collections, so it depended on where you were located and what that economy was based on.”

What Passco really took advantage of when the pandemic hit was technology and as the pandemic slowed down, from an operational standpoint, the firm has “kind of gone back to pre-Covid because many of the residents want that personal interaction. The vast majority of our residents still want a guided tour. We are trying to get back to more of the human interaction than what happened during the pandemic.”

He noted that what is important looking forward at its potential properties is having private workable office areas, even cubicle spaces that can be used. “We are not buying micro units, but the last probably four or five deals we have acquired, the unit side has been larger than what we normally do.”

When it comes to future opportunity, without divulging Passco’s secret sauce, he said that the firm is in tertiary markets in the southeast. They went to the southeast to find yield. “We have had a couple dozen properties where we have done quite well. There is probably opportunity in buying value-add plays or properties that are 10-15 years old, but that isn’t a strategy we pursue but I would imagine there is opportunity there.”