The Center for Real Estate at Portland State University released their Flash Poll for June, the university created the poll to understand the COVID-19 virus, here is their statement below:
This report presents the results for our monthly flash poll conducted at the end of May 2020 among commercial real estate market participants in Oregon and SW Washington. Our goal is to understand how the impact of the COVID-19 crisis on the local real estate community is changing over time as the crisis evolves.
The poll covers a variety of real estate types, including the effects of property managers, lenders, developer, landlords and tenants. What jumped out at me were the following highlights:
- The majority of respondents received 80% or more of their typical rent collections in May/.
- The majority of respondents had less than 25% of their tenants approach them regarding rent reduction, relief, and/or lease modifications for June.
Here is the Executive Summary for the results that contain apartment/multi-family related information:
Landlords/PM (property managers)
Rent Collections in May: The majority of respondents (70.59%) received 80% or more of their typical rent collections in May. This percentage ranges from 75.67% for apartment to 52.17% for healthcare. Compared to our results for the previous month, it is noteworthy that fewer respondents received 100% of their typical rent collections in May. Instead, the share of respondents that received 90 to 99% and/or 80 to 89% in May increased noticeably for different property types.
Rent Relief/Modifications/Reductions for June: The majority of respondents (62.35%) had less than 25% of their tenants approach them regarding rent reduction, relief and/or lease modifications for June. The percentage ranges from 64.87% for apartment to 47.83% for healthcare. The most frequently used tenant strategies are rent deferrals/abatements (24.88%), requesting financials and/or proof of distress (19.51%) and adjustment to lease terms (18.54%). Compared to the previous month, the use of requesting financials and adjustments to term or rent has increased in May.
Landlords – Lender and Loan Modifications/Relief
Irrespective of property type, the majority of owners (78.26%) did not approached (sic) their lenders regarding loan modifications and/or relief in May. Compared to the previous month, the percentage of owners that approached lenders decreased, except for healthcare. If lenders were approached, delaying payments and amortizing them over the remainder of the loan (25%) and extension of loan period (25%) were the most commonly used loan adjustments, followed by periods of interestonly payments and deferral of principal payments (22.73%). Compared to the previous month, the use of delayed payments & amortization and extension of loan periods has increased noticeably.
Tenants – Rent Reduction/Relief or Lease Modification
Tenants most frequently did not approach their landlord(s) regarding rent reduction/relief or lease modifications in May. However, 21.88% of tenants approached some of their landlords and the percentage of tenants that approached all of their landlords has increased in May, particularly for office and industrial. Rent deferrals/abatements remain the most frequently used strategy regarding lease negotiations with landlords (48%). However, the use of adjustments to term or rent has increased compared to the previous month.
Borrowers and Mortgage Payment Relief/Modification of Loan Terms: The majority of respondents (66.67%) has experienced a change in the percentage of borrowers that approached them regarding mortgage relief and/or loan term modifications in May. It is noteworthy that 50% of the respondents experienced a decrease in this percentage while 50% experienced an increase. The most frequently used loan adjustments are periods of interest only payments and deferral of principal payments (37.50%) and delaying payments & amortization.