Industry leaders have reported the lowest economic outlook observed since 2010, coupled with the lowest optimism around rent growth and highest rate of rent concessions observed in the past 10 years, according to the 2020 Multifamily Leaders study, an annual survey of senior-level and on-site multifamily personnel by J Turner Research. The survey included a new section designed to gather information abut the impact of COVID-19 on multifamily property management.
"For more than a decade, our multifamily leaders survey has foretold the industry’s most pressing concerns and highlighted the executive opinion on overarching issues,” says Joseph Batdorf, president of J Turner Research. “With COVID-19 still an active challenge world over, the pessimism associated with the economy is also reflected in the answers regarding rent growth, rent concessions, and timely rent payment. Additionally, senior executives and on-site team members continue to differ in their opinion regarding the challenging issues and the impact of COVID-19 on property management.”
The study drew 1,651 respondents, of which 70% are on-site multifamily personnel. On a scale of 1 to 5, where 5 is “very favorable,” optimism for the national economy has fallen to 3.00 from 3.71 in 2019. Optimism for rent growth has fallen to 3.32, the lowest level observed since 2009 (2.64). Sixty-six percent of portfolios are offering rent concessions, up from 13% in 2019. Last year’s effective rent increase was 4.27%, slightly higher than in 2019.
When asked about their greatest challenges, 52% reported that timely rent payment was their No. 1 issue. This was not reported as a big challenge on the survey until 2019. Raising rent came in second at 40%, followed by hiring/talent management at 30%. More on-site personnel than C-suite executives reported team motivation, package management, and timely rental payment as major challenges, while more C-level personnel reported hiring/talent management and government regulation among their top issues.
More than half of executives—51%—reported cutting back on 2020’s capital expenditures. One-third said their 2021 budgets would be greater than in 2020, while 30% indicated they would be lower and 37% reported they would remain the same.
In the view of multifamily professionals, in-unit laundry remains the top amenity preferred by residents, apart from rent and location. Pet policies, upgraded appliances, and online reputation are also among the top performers.
While employees reported high overall satisfaction with their companies’ handling of the coronavirus pandemic at 4.16, there remains a discrepancy between ratings given by C-level executives (4.41) and on-site personnel (4.07). On-site personnel reported that managing resident expectations, closing and opening amenities, and securing safety equipment are among their biggest challenges. C-level executives reported difficulty with employee schedule management, eviction moratoriums, and adapting to guidelines related to the pandemic.
Click here to read the full study.
