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CBRE: Houston Apartment Rents Were at a Record-High, Then The Covid Hit

Hines is developing a 46-story, 373-unit apartment tower on the site of the former Houston Chronicle parking garage downtown at Preston and Milam. Photo taken May 9, 2020 by Ralph Bivins, Realty News Report.

HOUSTON – (Realty News Report) – Houston’s multifamily market was strong in the first quarter before the Covid-19 upended the economy, according to CBRE.

Houston’s first quarter average monthly effective rent of $1.19 per SF was a record high, CBRE reported.

Occupancy stood at 89.3 percent in the first quarter, even as Houston added 5,645 new units in a spate of heavy construction, CBRE reported. In the first quarter, 24,872 multifamily units were under construction in the Houston area.

Of course, the Covid-19 pandemic changed the trajectory in the spring. More than 30 million Americans have filed for unemployment benefits in recent weeks.

“Multifamily owners anticipate that enhanced federal unemployment benefits bode well for May rent collections,” CBRE said in its Covid-19 report. “Most multifamily owners are considering rent deferment for renters in need. Rents declined by 1 percent in April from March as owners adjusted to maintain occupancy.”

A national report issued Friday by the National Multifamily Housing Council (NMHC) found 87.7 percent of apartment households made a full or partial rent payment by May 13 in its survey of 11.4 million units of professionally managed apartment units across the country.

This is a 2.1-percentage point decrease in the share who paid rent through May 13, 2019 and compares to 85.0 percent that had paid by April 13, 2020.

The NMHC report, which covers market-rent apartments. Does not capture data from smaller landlords and many Class C and D units.

“Once again, despite the economic and health challenges facing so many, we have found that apartment residents who live in professionally managed properties are meeting their obligations,” said Doug Bibby, NMHC President. “But it’s important to understand that our metric does not capture rent payments for smaller landlords or for affordable and subsidized properties. These excluded properties are the ones more likely to house residents experiencing financial stress. In addition, as current federal support programs begin to reach their limit, it will be even more critical for Congress to enact a meaningful renter assistance program.  It’s the only way to avoid adding a housing crisis to our health and economic crisis.”

“It is heartening the degree to which apartment operators, their employees and their residents have come together during this crisis,” said David Schwartz, NMHC Chair, and CEO and Chairman of Chicago-based Waterton. “This crisis is not over, and we will need to maintain the same spirit of solidarity in the coming months.”

May 16, 2020 Realty News Report Copyright 2020

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