CBRE Survey: Canadian Apartment Tenants Demand Unit Features That Support Remote Work and Social Distancing
14 Oct 2020
In-suite laundry, home offices, outdoor space and walk-up access have become of greater importance to residents during the pandemic
In the midst of a pandemic that has confined many residents to their homes, a new CBRE survey of Canadian landlords reveals that multifamily owners and operators have seen big increases in tenant demand for unit features that support work-from-home and social distancing, including in-suite laundry, dens or home offices, balconies and walk-up access.
To gauge the impacts of COVID on multifamily properties, CBRE surveyed more than 80 Canadian multifamily owners/operators, representing over 200,000 units nationwide. Participants were asked to provide insights on their portfolio’s performance and the challenges they have faced through the pandemic. Overall, the survey reveals that the residential sector has weathered the storm well so far, and that fundamentals for multifamily assets in particular have remained strong, with the investment market poised to make a full recovery in much of the country.
Here’s what the survey found:
- 47% of landlords report that overall apartment vacancy rates have not been impacted by COVID-19. Alberta is the one outlier, already challenged by an ailing energy sector, where 43% of landlords surveyed said COVID led to a 3-5% increase in vacancy rates within their portfolios this year.
- Rent collection has not been significantly impacted by the pandemic, either. Our survey shows that over the first four months of the crisis landlords indicated that rent collection rates within their portfolios had consistently averaged 96%, with no discernible downward trend from month to month.
- There has been a significant shift in tenant turnover patterns. Amid financial security concerns, most residents have delayed moves until there’s greater clarity regarding a COVID recovery, with 35% of landlord respondents reporting decreased turnover rates.
- While the majority of respondents noted a decrease in turnover, there were some segments which had seen increases as financial issues pushed tenants to seek accommodations with a roommate, downgrade to more affordable building, or move in with family members.
- Landlords are seeing increased demand for pandemic-friendly features such as: in-suite laundry, to avoid laundromats and shared laundry rooms; balconies (for outdoor time); walk-up access (to avoid elevators); and dens or small home offices, to facilitate remote work. Landlords also report growing demand for building amenities like outdoor terraces, co-working spaces and private gyms.
“We’ve heard so much about how working-from-home is impacting the office world, but there has been little corresponding discussion about how the home can do a better job of supporting remote workers,” says CBRE Canada Research Director Marc Meehan. “The fact that residents are spending more time than ever in their homes has resulted in noticeable shifts in their preferences and requirements, and landlords are having to adjust accordingly.”
CBRE’s survey shows that investment prospects for Canada’s multifamily sector have been untarnished by COVID. Investment activity started 2020 at a breakneck pace, on course for a new annual record of $11 billion. And while the lockdown curbed that momentum considerably, investment volumes for the multifamily sector have been more resilient than those for other income-producing asset classes.
Multifamily was able to maintain 65.0% of its 5-year trailing quarterly average investment volume in the second quarter of 2020, the smallest decline of any sector, and pricing is now even higher compared to pre-pandemic times for select properties and geographies.
Read more in our new survey: Canadian Multifamily in the Post-Pandemic Era
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