A report from Cal Matters on California. “At the start of the pandemic, Brandon McCall’s two tenants ran into financial trouble. With a limited amount of cash coming in, McCall said the two of them stopped paying rent on his Van Nuys condo in Los Angeles. McCall looked into mortgage forbearance, but decided to pass when he learned it would impact his credit. He would also have to pay in full after his deferral period was up. Unsure when the tenants would start paying again, McCall and his wife dipped into savings to cover the mortgage on their condo even as they rent elsewhere for work.”
“‘Landlords rights and tenants rights are the same thing,’ McCall said. ‘They’re often pitted against each other, but they’re the same thing. … I want to stay housed. I want to keep my tenants housed. We’re all in this together.’”
“Noni Richen is the board president of the Small Property Owners of San Francisco Institute, a nonprofit that aids small, local landlords. Most members are retired, and many live in a duplex, renting out the other apartment so they can make their mortgage payments or supplement their Social Security. In December, a San Francisco landlord wrote to Richen, begging for assistance. She had received certified letters from her lender threatening foreclosure.”
“The woman, who had owned and managed two properties for 20 years, skipped three mortgage payments to save up for property taxes when a tenant stopped paying rent and she couldn’t evict them due to the pandemic, Richen said. Other landlords have written to Richen with similar problems. ‘Do you know if it’s legal for banks to foreclose during this pandemic,’ she asked Richen. ‘Is there any relief that you know of for landlords?’”
From Bloomberg on California. “Many of the tech companies that turbocharged San Francisco’s economy are embracing permanent remote work, giving their highly-paid employees less incentive to lease pricey studios and one-bedrooms near the office. The result is that apartment owners have lost the pricing power they once had in a city known for its high housing costs and gaping inequality.”
“‘It’s going to take years for the average landlord’s revenue to get back to pre-Covid levels,’ said John Pawlowski, an analyst at real estate data and research firm Green Street. The drop in rents means that higher-end apartment buildings in the city are now worth at least 20% less than before the pandemic, he said.”
“Lindsay Albert left the city last April because she felt uncomfortable living with roommates in a pandemic. Albert returned at the end of last year and began renting a one-bedroom in the inner Richmond district for $2,000 a month in January. It’s more than she was paying to live in a group house at the start of the pandemic, but about $1,000 less than the one-bedroom units she was looking at a year ago.”
“‘I feel like I’ve won the lottery,’ she said as she rattled off the amenities, including a living area big enough to fit a six-foot table and a couch with a chaise, as well as proximity to Golden Gate Park and the Presidio. ‘I’m 34 years old and I haven’t ever been able to live alone.’”
From WCNC in North Carolina. “The moratorium banning evictions is set to expire at the end of March, and Americans owe an estimated $57 billion in back rent. And a growing number of landlords are going into foreclosure, unable able to pay their own bills. ‘It’s really impacting small landlords who cannot pay their mortgages,’ Josh Clelan, a realtor with Coldwell Bank, said. ‘I know several landlords are putting their houses on the market due to tenants that are not paying rent.’”
“An estimated 10 million homeowners are currently behind on mortgage payments. Neither forbearance nor the moratorium erases what you owe, they just delay the inevitable. Leaving many in a vicious cycle of growing debt, asking ‘where’s the money?’”
The New York Post. “A Brooklyn homeowner unable to evict an allegedly deadbeat tenant because of new state housing laws claims she has been forced to live in her car for weeks. Shawna Eccles, 30, says in court papers she sleeps on the couches of friends and relatives whenever she can, and in her four-door Toyota when she can’t, after fighting and failing for months to evict Sharita Patterson, 33, from the two-family home in Carnarsie.”
“‘There is no one I can stay with until I am able to evict, and all of my money covers the mortgage, water bill and property taxes,’ Eccles told The Post. ‘If anything gets cut off, it will be considered an illegal eviction. I have no additional funds to rent an apartment.’”
“Eccles bought the two-story, semi-detached home on East 91st Street for about $477,000 in February 2019, spending her savings to renovate it, turning the somewhat rundown, barely 1,500-square-foot structure into an updated, modern home. Patterson, who was supposed to pay $2,100 a month, was her first tenant.”
The Real Deal on New York. “Eight months since its owner sought pandemic-related loan relief, the landmark Beekman Tower has exited special servicing after securing a payment deferral. But the value of the corporate housing-centric property has taken a big hit. The 178-unit complex in Midtown East is now appraised at $79.9 million. That’s down 45 percent from the $146 million it was valued at in 2018.”
“The property’s finances appear to justify the drastic valuation cut. ‘The new valuations could be seen as a proxy for the return of NYC business travel and extended stay demand,’ the analysts wrote of the valuation change. ‘The fact that even by 2023, the valuation will be less than two-thirds of the 2018 value could be a hint as to how slow the market will be to recover.’”
“The 26-story Art Deco tower and adjoining 10-story apartment building received a $63 million CMBS refinancing in 2018. Last June, the loan was transferred to the special servicer ‘due to imminent default,’ according to servicer commentary. With a debt service coverage ratio of just 0.54 for the year, the property was barely generating enough income to cover half of its interest payments.”
The Dallas Morning News in Texas. “A New York-based lender has provided $45.5 million in financing for the purchase of a Denton apartment community. Square Mile Capital Management LLC made the loan for the purchase of the Village at Rayzor Ranch rental community near Interstate 35E. The 300-unit apartment property was bought by Plano-based Seven Seas Holdings.”
“Lender Square Mile Capital is the same company that in January took control of one of downtown Dallas’ largest skyscrapers. The institutional real estate finance and investment firm transferred ownership of the 56-story Renaissance Tower after threatening the high-rise with foreclosure.”
From Canada Apartment. “The average rent for all Canadian properties listed on Rentals.ca in February was $1,714 per month, down 6 per cent from $1,823 in February of last year. Vancouver and Toronto are also the top two priciest cities for condominium rentals and apartments, which didn’t fair so well compared to other housing types.”
“‘The condominium apartment market continues to weigh down the overall rental market in Canada, with huge year-over-year declines in average rental rates in BC, Quebec and Ontario, especially for tiny studio apartments,’ said Ben Myers, president of Bullpen Research & Consulting. ‘Investors have been in a race to the bottom for several months, whereas the more institutional owners of the mostly cheaper rental apartments have been more patient in reducing rent, often using this opportunity to renovate vacated suites.’”
“All 20 of the Canadian neighbourhoods with the biggest declines in average rent levels over the last year for all property types were in the Greater Toronto Area. Condo apartments and single-family homes in Canada’s priciest cities — Toronto and Vancouver — both experienced steep declines in the average monthly rental rates year over year. Exacerbating the rental market decline in Toronto recently has been the addition of 2,254 new rental apartments completed over the final four months of 2020.”