Hello!
Winter is thawing, along with the effects of COVID on CRE. For the first time in the past 12 months, operators and investors are expressing optimism about market conditions moving forward. Landlords also see light at the end of the tunnel for rent delinquency and management woes. This is a 180° turn from January and February.
Before we dive in this month, who do you know that would enjoy these market updates? Please share this link or forward this email so they can receive monthly insights straight to their inbox: Eastern WA Monthly Market Updates
One of my goals for 2021 is to bring value to double the number of property owners, investors, and developers across Eastern Washington, I appreciate your help in achieving that goal.
Enough delay! - Here is your monthly deep dive into Eastern Washington real estate.
Overall Market
- Rent payments are on the rise and rent growth is projected in the second half of 2021. See NMHC’s rent payment tracker or this report from Yardi, which is packed full of insights.
- Two months ago, most property owners told me they projected flat-to-declining rents in 2021. In the last two weeks that sentiment has changed. Owners and managers are projecting rent growth for the second half of 2021. What’s this mean for you? If you don’t have plans to increase rents over the next year, you will likely fall behind the market.
My Deals
- 8-unit multifamily property in Walla Walla, available off-market. Bring your contractor for a value-add opportunity. Visit this page for more information, underwriting documents, and to see photos.
- 12-unit multifamily property in Pasco, available off-market. Amazing price with textbook value-add opportunities. Visit this page for more information, underwriting documents, and to see photos.
- Want to submit an offer on either of these deals? Give me a call – 509.221.9354.
- Upcoming: a few value-add properties in the 15 to 30-unit range are in the works and they will likely be presented off-market. Interested in being on that off-market list? Reply to this email so I get to know your buying criteria and send you deals that meet your metrics.
- Under Contract: 10 acres of multifamily dirt for two developers, 5-unit off-market acquisition representing the buyer, two fourplex achieving top dollar for sellers.
Multifamily
- Eviction Moratorium: Just two days before the federal eviction moratorium was set to end on March 31, 2021, the CDC has extended the notice through June 30th. Washington owners, the federal guidelines now coincide with our statewide eviction moratorium, which is in effect through June 30, 2021.
- While the end of June feels far away, I’m encouraging all owners to consider their options when the moratorium ends. This article evaluates the options for a landlord with non-paying tenants, considering the numerous pros and cons of evictions, workouts, or payment plans.
- As I mentioned above, rent growth is moving to healthy levels again. I will be tracking this closely. Another key component to watch is operating expenses. These are often overlooked in national headlines, but likely continued to rise 4-7% while income was declining 1-3% (depending on delinquency). The net result is a 6-13% decrease in Net Operating Income! This has a significant impact on your property value.
- As a multifamily advisor, my focus is on helping owners maximize their cash flow and their property value, increasing your NOI in challenging market conditions. Interested in learning about the strategies I deploy with my clients to boost NOI and increase property values? Let’s schedule a cashflow conversation about your property and goals to make sure you’re maximizing cashflow each month.
Development
- A favorite of my clients, the multifamily pipeline report, which details new construction across Eastern WA is being updated currently. Expect to receive the report from me in the next two weeks. I look forward to the conversations it will bring.
- The hottest topic in today's market? Rising construction costs driven by global supply chain disruptions, lasting impact of the pandemic, and continued growth in the construction industry. Needless to say, we are in uncertain times for developers.
- Regardless of the above headlines, every developer I am working with is pressing forward on projects in Eastern WA. One developer is picking up an additional 100 lots, two developers are purchasing dirt for new multifamily development, and others are full speed ahead on new opportunities. They are finding a way to work around the rising cost of construction.
- What's this tell you? Demand for new construction is strong enough to overcome supply challenges. Expect to see great projects come to life. Want the latest on new developments? Reach out with any questions.
I hope you’re finding these updates helpful. Have questions on any of the above? Have a new project you’re looking to kick off? Give me a call any time – 509.221.9354.
Best,
Mason Fiascone
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