By Chris Wood / April 8, 2009
The recession impairs fundamentals and stresses property performance across all markets and product types. Here’s our report on the state of rents in the multifamily industry.
Multifamily heavyweights always thought they’d be safe in New York City. Even after the horrific events of Sept. 11, 2001, firms were able to navigate the economic downturn and eventually push rents upward. The Big Apple apartment market was solid to the core. Or was it?
Last September, Manhattan became prime media meat again when the cable news networks feasted on the collapse of Lehman Bros. and streamed live video of laid-off employees walking out of the company’s Canary Wharf headquarters, cardboard boxes beneath their arms. That’s when things finally got scary for multifamily.
“I was in New York City visiting clients in December and saw a fear in the eyes of apartment executives that I have never seen before,” says Jake Harrington, director of business development for On-Site.com, a Mountain View, Calif.-based resident lease-up and screening services provider handling more than 100,000 rental applications per month.
“We handle leasing for a major multifamily REIT in New York,” Harrington continues. “And they called me in September and asked specifically what their exposure was at Lehman Bros. and across the broader financial industry. It turned out that 45 percent of their resident base worked in the sector. The fall has been hard and fast, and it has been a shock to the system for many in the industry.” Read more >