Archives for September 2020

Self-Storage Demonstrates Durability Through the Health Crisis So Far as Long-Term Demand Drivers Remain Intact

Many self-storage properties were able to stay open amid lockdowns, utilizing digital tools to onboard renters during turbulent times. Moving forward, household consolidations and relocations stemming from the health crisis may foster new storage use. The sector’s durability has aided investment sentiment, with a widening yield premium and improving capital liquidity supporting transaction activity.

Key Features Include:

• Effect of the national supply chain on property performance and outlook
• Market-by-market breakdown of construction, vacancy and rent trends
• Second quarter sales analysis and investor outlook

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Unemployment Drops Below 10 Percent as Remote Working and Future of Federal Aid Influence Retail and Multifamily Outlooks

• Employment growth continues, but pace slowing.
• Unemployment hits single-digits, many workers still displaced.
• Less foot traffic at offices affecting nearby retailers.

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Split Roll Tax on California’s November Ballot Has Potential to Significantly Reshape Local Real Estate

Proposition 15 has the potential to be the largest commercial real estate tax increase in state history as properties are reassessed every three years rather than at point of purchase. Current law limits property tax to 1 percent of assessed value in 1976 and increases can be no greater than 2 percent each year.

Key Features Include:

• Tax could double for properties owned for 20 years
• Apartments and other residential properties excluded from the initiative
• Between $8 billion and $12.5 billion could be raised

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Rent Collections in the Second Quarter Were Healthy for Most Types of Commercial Real Estate

Second quarter rent collection data released by REIT’s reveal that over 95 percent of medical office, multifamily, office, and industrial tenants were able to meet obligations despite the economic disruption. However, expiration of stimulus and stubbornly high unemployment may press on collections in the third quarter for some property types.

Key Features Include:

• Rent collection data for six property types
• Expectations for third quarter collections
• Property fundamentals in the second quarter

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