The CARES Act has proven to effectively buoy the multifamily sector. Class B assets are emerging as an early outperformer and the “goldilocks” in this bear market.
In Cushman & Wakefield’s Multifamily Update report, we assess how markets have fared so far and may fare without a commensurate extension of the CARES Act benefits. Key findings include:
- Delinquency rates for Class A and Class B assets have remained relatively stable, but affordability challenges will intensify absent further stimulus, particularly in markets like New York, San Francisco and Los Angeles.
- Class A asset performance has softened on the top end with a decline in effective rents year-over-year in Q2 2020.
- Class B asset performance is advantaged by a steady employment base, limited new supply and trickle-down demand from top-end Class A tenants.
- Class C assets have had the highest delinquency rates with its renter population experiencing the brunt of COVID-19 job losses.
