Profimex Market Review Update – November 11, 2020
11.11.2020
Apartment Rents Fall in 40% of the Largest Cities
According to a recent Apartment List National Rent Report, rental rates have decreased in 41 of the 100 largest U.S. cities since March, a significant increase given that only 5 of those cities reported a decrease last year. The cities that were hit the hardest are New York City and San Francisco. However, the report mentions that numerous local markets seem to already have stabilized after people moved to suburbs and cheaper out-of-city options because of the pandemic. This demographic shift strongly favors other cities, shown by the fact that more than half of the 100 largest cities have noted a positive rent growth since March.
New York State Has Denied Over 60% Of Rent Relief Applications
U.S. office vacancy in the third quarter of 2020, according to Moody’s Analytics REIS, is currently 17.4%, an increase of 30 basis points or 9 million SF. This led to a decrease of effective rents of 20 basis points. “As such, distress will likely be reflected in staggered ways, depending on the performance metric. We might not see definitive evidence of a decline in demand for office space until much later, if at all, despite widespread speculations about how remote working is likely to have a lasting impact,” writes Victor Calanog, Ph.D., head of Commercial Real Estate Economics at Moody’s Analytics.
