Getting Back to Business as Usual

Getting Back to Business as Usual                                                                                                    By: ND

Mark Twain (pictured) once wrote, “never pick a fight with a guy who buys ink by the barrel.”  This quote has weighed heavily on me and many in the real estate industry over the past two months as we have weathered the Covid-19 pandemic and watched daily to identify, interpret and understand real time changes to rent collections in order to optimize the physical and financial performance of our assets.  Apartments and office have done surprisingly well.  Surprisingly, of course, because the media seemed to suggest almost daily in local and national spotlights that paying rent was optional in a time like this.

With April 2020 behind us, we can reflect on YOY data and see that April 2019 saw a 97.7% collection rate and April 2020 saw a 94.6% collection rate.  You can’t really be mad at that.  And as it turns out, according to today’s NMHC report, collections are 1.5% ahead of last month at this time.  Not so much of a story, is it? The real story is the strength of the underlying economy and the support/stimulus injected into it by the Fed and the Treasury.  The combination of Mnuchin and Powell aka Team Go Big or Go Home have helped to keep things moving at the Federal level, if only States would fall in line.

We’ve seen record unemployment claims, surpassing 33 million in total since the pandemic began, but we’ve seen the stock market rally.  We’ve been told that people wouldn’t pay rent or couldn’t pay rent, but they have.  So as states reopen, and we get back to business, let’s hope the real story emerges as how a strong economy and prompt stimulus helped to avert a global financial crisis and in doing so, helped save small businesses and give Americans enough to survive in this most difficult time.

Is that how this story ends?

To be continued…