With continued optimism and investor interest in the multifamily sector, Richmond, Va., has shown resilience over the past two quarters, despite COVID-19-induced disruptions. Property managers have strived to find a balance between keeping their employees and residents safe and continuing to do business.
“Though the process wasn’t perfectly seamless, we have been able to flex and pivot with surprising ease,” Sarah Fehr, director of operations for Dodson Property Management’s multifamily division, told Multi-Housing News. The company’s Founder & CEO, Duke Dodson, admits that his biggest concern is continuing to keep everyone safe as the economy reopens. Here’s how Dodson and Fehr expect the Richmond multifamily industry to fare going forward.
We’re more than seven months into the pandemic. How has the Richmond multifamily market navigated the storm so far?
Dodson: For the most part, the Richmond multifamily market has remained fairly resilient throughout this pandemic, especially when compared to other asset classes and property types. Occupancy has remained high. Rent collection has been better than expected. Both renters and landlords have benefited from government intervention, and I expect that to be the case as we move forward. Cap rates and valuations have been fairly constant throughout the last six months and haven’t varied too much due to the pandemic.
Fehr: Though the process wasn’t perfectly seamless, we have been able to flex and pivot with surprising ease. As an industry, we were actually well-positioned to weather the shutdown. We have been continually examining and increasing our electronic and online functionalities prior to the pandemic, including a fully online leasing process, online applications, virtual tours, lockboxes, online service requests and more. Nothing will replace the full benefit of in-person service, but we are learning how to effectively balance both worlds.
Please tell us about one great challenge you had to overcome during the past months. What are your biggest concerns now?
Dodson: Our biggest challenge has been to manage our portfolio to the best of our ability while focusing on the safety of our team and our residents. Our biggest concerns are continuing to keep our folks safe as the world begins to reopen.
Fehr: We want to keep our teams safe, but be able to continue to provide the level of customer service our residents have come to expect from us. We also have to ensure we continue to collect rent in order for landlords to pay mortgages, taxes, insurance, utilities, etc. It is an ever-evolving situation, but one that we are carefully balancing.
What can you tell us about September rent collections across your multifamily portfolio? How did you address delicate situations?
Dodson: Class A rent collections are roughly the same as pre-pandemic levels. Class B delinquency is up one or two percent. Class C delinquency is up three to 10 percent for the most part. We are working hand in hand with our residents and numerous nonprofit groups to help as many folks pay rent as possible.
Fehr: More so than September rent specifically, what we really have seen is residents struggling with prior balances, and we have been heavily promoting Virginia’s Rent and Mortgage Relief Program to our residents who are behind in payments. We felt like a lot of people were unaware of the assistance opportunities available to them and it has been a top priority to get these applications filed. We are working with all of our residents on repayment options and plans. Our number one goal is to keep our residents in their homes.
What should property managers’ top priorities be right now?
Dodson: Safety and working with nonprofit groups to help residents pay rent.
Fehr: We consider it part of our role to help residents understand how to seek and receive the assistance that is readily available to cover housing costs. We want to ensure we’re keeping buildings clean, sanitary and in top-notch condition considering a lot of people are working at home and spending a lot of time in their apartment, indoor common spaces and exterior areas.
What are your predictions for the Richmond multifamily market for the next 12 months?
Dodson: Multifamily, along with industrial, will likely continue to be a preferred asset class, as it is way more predictable and less affected by the pandemic compared with office and retail. I don’t think we are out of the woods just yet. This pandemic can—and probably will—result in a multiyear recession. If enough folks continue to lose their jobs, then rent collection will eventually suffer. It’s unclear what the election will do to the economy and how much the government will choose to intervene after election day.
Fehr: We are still receiving a lot of interest from both local and out-of-state developers looking at markets like Richmond, which is holding a strong market rate. My hope is that value continues to drive the residential and mixed-use multifamily housing markets, which will continue to create exciting prospects for both our multifamily and tweener divisions.