The COVID-19 pandemic has had a tremendous impact across all businesses in our country. Although Virginia does not report significant job concentrations in industries that have been severely affected by this pandemic—such as tech or tourism—I think we can all agree that, regardless of where we are across the country, we’ve all experienced COVID-19’s unmistakable impact on our daily lives.
When it comes to the multifamily market in Virginia, many renters have been furloughed or laid-off due to COVID-19. Though there have been challenges, government assistance programs have aided these individuals and sustained collections. As Virginia begins to take steps forward, we wanted to share some perspective on the impacts of COVID-19 on the state’s multifamily occupancy and workforce thus far:
Occupancy is High in Coastal Virginia
Broadly, the multifamily industry across the Mid-Atlantic region has held its own during this time. However, that is not to say we haven’t faced our own fair share of obstacles. In fact, we saw various fluctuations in occupancy rates in the state of Virginia throughout the first quarter of this year. Berkadia’s research team found that Richmond’s occupancy rate decreased from 96.4 percent at the end 2019 to 95.4 percent at the end of the first quarter of this year. On the other hand, Virginia Beach’s occupancy rate has actually increased from 95.7 percent to 96 percent over this same time frame.
As occupancy rates for the multifamily market across Coastal Virginia have remained high, apartment operators across the state have been fiercely focused on tenant retention and leasing activity.
Workforce Housing Residents Weather the Storm
While Coastal Virginia has seen strong occupancy performance, almost 26 percent of the region’s workforce still face unemployment—and the future remains uncertain for their retail and hospitality employers.
Like Coastal Virginia, the shutdown of nonessential business and restricted social gatherings in Richmond’s metro-area contributed to the more than 500,000 Virginians’ who were left unemployed at the end of Q1 2020. Given this, the extension of unemployment benefits and federal aid initiatives offered a much-needed reprieve for our area’s tenants. Furthermore, the commonwealth chose to ban evictions through June this year. Both sets of these initiatives provided critical security and have aided renters during these unusually difficult times.
Where the Virginia Multifamily Market Goes from Here
Though COVID-19 has brought its challenges, we have still been able to close deals and continue serving our clients. With a high demand for housing in the Virginia area, plans for multifamily market expansion have been made. With steady momentum throughout our market, we look forward to continuing to serve our community despite current adversity.
Though I am personally looking forward to getting back to the office and restoring some sense of “normalcy,” we will be facing and fighting this pandemic for some time. However, if we continue to keep perspective and safety in mind, I know we will be able to continue to address the commercial real estate needs of our local market in this moment and for the future.
-By John Reed, Senior Managing Director