All eyes are on the multifamily sector as the pandemic continues, the next round of stimulus remains undecided and news of eviction moratoriums continues to hit the press. While some renters are in fact experiencing difficulties paying rent, the sector remains resilient, especially in comparison to other sectors such as hospitality, office and retail where the distress is much more substantial. While multifamily is experiencing some setbacks, it is undoubtedly an essential asset class and is expected to ultimately weather COVID-19.
Here are some of the key factors when looking at the apartments sector: Housing is Essential. Unlike many other sectors, housing is necessary. With people spending more time in their homes due to social distancing measures, apartments are more of a focus than ever. Whereas hospitality, retail and office have all struggled immensely due to business closures, and have proven to be less fundamental during these trying times, multifamily demand has remained strong. Additionally, little will need to be reimagined about the sector once the pandemic passes, unlike office and retail – which are both undergoing a major upheaval as working from home becomes more widely accepted and e-commerce demand replaces brick and mortar. This unwavering demand for apartments will bring the sector to a recovery sooner than other real estate types, with perhaps the exception of industrial.