Properties offering discounts or price breaks to entice renters spiked in spring and fall 2020, but varied by region and asset class
SANTA BARBARA, Calif., Feb. 2, 2021 – With the combined pressures of economic uncertainty and a global pandemic, multifamily housing providers in many parts of the U.S. turned to concessions to attract and retain renters in the second and third quarters of 2020, reports Yardi® Matrix.
But not surprisingly, the price breaks or lease-signing bonuses were unique regionally and were more frequently offered by Class A and B properties. Granular detail on which areas offered the most concessions can be found in the report.
Key takeaways include:
- Concessions increased the most in gateway metros (San Jose, San Francisco and New York) and Class A and high-rise properties
- Concessions grew the least in tertiary markets and in Class C and low-rise properties
- Metros with the most properties offering concessions have seen a pandemic-driven drop in demand and significant new supply delivered last year
“Strategies employed by owners to optimize income—such as offering concessions or lowering asking rent—are affected by competitive pressures, which may differ by metro,” say analysts. And in the final quarter, the number of concessions offered declined. “This could be a sign that the market is stabilizing or that owners are shifting strategies to attract and retain tenants,” notes the report.
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