How Long Can COVID Impact the Multifamily Market?

SEATTLE— It’s a peculiar economic time. COVID-19 seemed to be receding, then it started to flare back, continuing to put a damper on the overall economy while commercial real estate investors pace with capital to disperse. According to Seattle-based Candice Chevaillier, principal of Lee & Associates Northwest’s multifamily team, and Don Flanigan, a SVP at Lee, the industry wants to roar back.

“We didn’t break this,” says Flanigan. “The system was in place and functioning very well, everything considered. There’s a tremendous amount of dry capital on the sidelines waiting for opportunistic deals.”

This is especially true in multifamily, which is Flanigan and Chevaillier’s bailiwick. “There’s a bid/ask gap right now,” says Chevaillier. “Sellers don’t want to recognize that anything has changed, and buyers want those opportunistic deals. So it’s a waiting game.”

Ironically, the real estate market is ripe to return. “With the 10-year Treasury trading as low as it is,” says Flanigan, “the debt market will continue to be under pressure to put money out and spreads will continue to tighten, creating an even more appealing lending market.”

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