Rising Unemployment, Stimulus Bill Have Implications for Apartment Sector

Quote by Jonathan Needell  |  Institutional Real Estate, Inc

March 30, 2020

Apartment investors are closely watching developments as the novel coronavirus pandemic creates economic disruption. The multifamily sector is likely to feel significant impacts, especially as job losses mount.

The third week of March saw a staggering 3.3 million new unemployment claims in the United States— nearly five times more than the previous record of nearly 700,000 new weekly claims reached in October 1982.

April will be the big test for apartment landlords, said Jonathan Needell, president and CIO of Kairos Investment Management Corp., who will be paying attention to rent payment trends and whether there are interruptions.

“The proposed Federal stimulus will also be helpful,” said Joe Lubeck, CEO of American Landmark Apartments.

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), a stimulus bill passed March 27, provides direct cash payments that should provide some support for middle- and lower-income renters. Of particular relevance for the multifamily industry, the legislation also included a national eviction moratorium and mortgage forbearance for multifamily property owners.

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