Multifamiy Covid-19 Client Survey Results

State of the Market | SF Bay Area Multifamily Survey Results

Thank you for participating in our San Francisco Bay Area Survey of multifamily investors, asset managers and property managers from across the region. The survey results include data from over 22,000 units across the Bay Area from both private and institutional organizations. Colliers International and Rosen Consulting Group (www.rosenconsulting.com), a leading independent real estate economics consulting firm, have partnered to provide our clients with the latest data on multifamily trends in the San Francisco Bay Area. Market conditions are changing on a daily basis and we are finding it more important than ever to provide real-time data to our clients. Overall, the responses clearly show that Bay Area multifamily assets continue to be a top performer across the various major asset classes. In April, nearly 32% of respondents had collected 100% of rents by the middle of the month, while approximately 55% collected between 90% and 99%. Only 13% of respondents were below 90% collected. It is also worth noting that approximately 39% of respondents have tested or utilized virtual leasing and that those owners have had major success in leasing units - 26% of those owners have leased one unit, 74% have leased at least two units, 36% have leased six or more units and 10% have leased more than 20 units. If you are interested in learning more about virtual leasing capabilities, please reach out to our team for ideas and names of third-party vendors providing these services. With the focus now on May 2020 collections, approximately 60% of respondents are projecting May collections will be slightly to significantly lower than April. With that being said, it will be critical going forward that management teams are familiar with the various resources available to help tenants obtain financial relief. Please click HERE for a link to the California Apartment Association website that offers links to various resources at the federal, state and local levels. Our team remains committed to providing useful real-time data during the COVID-19 crisis and encourages you to reach out to discuss current market conditions. We will launch our May 2020 State of the Market survey on May 19, 2020. Also, if there are any additional questions that you would like us to include in the next survey, please do not hesitate to reach out.

Brandon M. Geraldo +1 415 288 7879 brandon.geraldo@colliers.com CA License # 01462707

Ryan Wagner +1 415 288 7865 ryan.wagner@colliers.com CA License # 01760602

Kalah Espinoza +1 415 293 6288 kalah.espinoza@colliers.com CA License # 02028795

Matthew Flaherty +1 415 288 7811 matthew.flaherty@colliers.com CA License # 02075798

please Contact our team for more information

Please note that all responses will remain anonymous, any results shared with third parties will be summarized and stripped of any identifying information.

On March 17, 2020, the day the shelter-in-place went into effect in the Bay Area), what percentage of your SF Bay Area portfolio was physically vacant?

Within your SF Bay Area portfolio, what percentage of residential residents requested April rent forbearance?

As of today, what percentage of April residential rents have been collected?

Please describe your reaction to April residential rent collections in your SF Bay Area portfolio.

As of today, what percentage of your SF Bay Area portfolio is physically vacant?

Within your SF Bay Area portfolio, what percentage of residential residents requested April rent forbearance?

Since March 17, 2020, the number of inbound leasing calls for your SF Bay Area portfolio has been;

During the shelter-in-place, have you tested or utilized virtual leasing to lease vacant units?

If you have tested or utilized virtual leasing, how many units have you leased in the SF Bay Area?

During the shelter-in-place order, have any residents that signed leases prior to March 17 but had not yet moved in backed out of the lease?

As of today, what do you project May residential rent collections to be in your SF Bay Area portfolio?

How many units do you own/manage in the SF Bay Area?

What share of your SF Bay Area portfolio is rent regulated?

Where is the majority of your SF Bay Area portfolio located?

How would you describe your organization?

Survey Comments

"Quality Bay Area units holding strong-97% collections. Garden-style outer markets at 80-90%. May will be lower... Tough to work remotely. All construction stopped."

"Leasing inbounds and activity has been ok/decent. 80% of the units we have are significantly below market so they should continue paying."

"Student housing: summer session will be online and summer occupancy will be significantly lower. But pre-leasing for August semester start is still very strong at no change in rental rates."

"My Vacant units are being remodeled. I have not tried to rent due to COVID shelter in place."

"We are mostly working remotely and leasing revenue is down impacting management fees. "

"It has put a lot more stress on the employees."

"Overall, the effect of Covid-19 had been less than expected. We generally expect occupancy and rate to remain stable as releasing increases and new leasing falls off."

"Construction of new units and remodeling of existing units has come to a halt, as well as maintenance and repair, due to contractors being part of the shelter in place rules."

"As rents have dropped and the number of collections have increased along with the difficulties in leasing and construction, values in our portfolio have dropped by around 10+% and we believe that values will drop further"

"Commercial Tenants Not Paying. Tenants having a hard time finding movers, both to move in and move out. So dates keep getting moved around. Also many tenants call about rent forbearance but when we request back up info most say nevermind(just looking for handouts). I expect May to be twice as bad as April."

"We only had one tenant request a deduction. It is a commercial unit and he is a chiropractor and can't work. Our tenant that is a tattoo artist, can't work, but she paid her April rent and mentioned she may/most likely will with the May rent. We have very good tenants, we are selective when renting. They all have high credit scores and we require renters insurance."

"Obviously different results in different counties - Napa worst, SF best"

"Retail assets are struggling; apartment developments are stopped; The property noted above is a property in lease-up and having a property in lease-up right now is not a good place to be right now. We will survive but not without a lot of pain. "

"Haven't seen too much of an impact in April but I'm sure it will get worse next month. "

"We have Oakland & Berkeley rent-controlled units: Nuisance tenants refusing to cooperate with request for documentation to substantiate inability to pay due to COVID-19; general consensus East Bay courts will eventually waive back rents owed, amplifying Owners' losses. Some Commercial & Residential leases canceling. Lease renewals are all no increase.... Most desired tenants moving out, leaving lower income/ tenant-activist rent-controlled tenants behind = Recession landscape"

"It is badly impacting the construction business. "

"Unit leased to Corporate leasing withdrew its remaining contratual lease"

"While my properties have yet to experience any issues, as a real estate attorney I am addressing multiple rent abatement/waiver requests for my clients in both residential and commercial leases and am dealing with several deals that are blowing up."

"Younger tenants have uncertain employment situations. "

"We have held off on some improvement projects."

"Delayed construction and seismic retrofit work."

"Min impact on residential tenants. Significant impact on retail tenants (unable to collect)"

"So far, there's been little affect. My property managers and vendors are still working, albeit practicing social distancing rules."

"We started off with one active vacancy -- under renovation, which has stopped -- two additional by end of March (pre-planned moves) and another slated for end of April (due to the addition of a partner and need for more space). So we're looking at four vacancies and no realistic way to market them. Although we haven't gotten requests from tenants to temporarily suspend rent payment as yet, we have had two units notify us of changes in work status (fired and forloughed), which may impact their ability to pay or pay in full in May. Furthermore, we were in the process of evicting a tenant and things are working out fairly well for him -- he's able to live rent-free due to ongoing litigation that is anything but active right now. So concerns for the future: how to establish payment plans for those that can't make rent; what can be done to resume evictions started prior to the quarantine and what does that time frame look like (and can we get rent in the meantime without foregoing our action); and finally, when will people start to look for apartments to rent again? A lot of unknowns and concerns."

"So far, we have had no requests for rent reductions or delays in SF but also almost no interest in a four bedroom high-end property that went on the market in April. By contrast, our properties in Santa Monica/LA have encountered tenants needing to move out and/or requesting major rent reductions due to layoffs and/or Covid-19 related financial difficulties."

"We are working harder to keep on top of everything. Our residential tenants are better then our commercial tenants"

"Most of our vacancy is in Berkeley apartments focused on students. The re-opening of UCB will be the driver of leasing next year. "

"NOI has decreased about 15%.No workers have been laid off yet."

"No units available for rent. Current vacant units were in process of renovation at time of stay at home restricting construction. "

"Leasing has screeched to a halt. Lucky we were highly occupied until now."

"Virtual Leasing - working offsite - 2 failed dspositions - dropped all acquisitons - debt markets pullng back significantly on proceeds"

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Brandon Geraldo Executive Vice President CA License No. 01462707 brandon.geraldo@colliers.com +1 415 288 7879

Ryan Wagner Executive Vice President CA License No. 01760602 ryan.wagner@colliers.com +1 415 288 7865

Kalah Espinoza Vice President CA License No. 02028795 kalah.espinoza@colliers.com +1 415 293 6288

Matthew Flaherty Associate CA License No. 02075798 matthew.flaherty@colliers.com +1 415 288 7811

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