Mixed-Use Could Pose Trouble for Apartments
While multifamily is in relatively good shape, one observer sees potential issues in Class C and mixed-use apartments.
August 5, 2020 | Les Shaver | GlobeSt.com
So far, the apartment market has held up relatively well after COVID-19 hit. But Jake Reiter, president of Verde Capital, does see some issues on the horizon.
In higher-end, mixed-use apartments, the retail and hospitality portions could “pull-down” building performance, according to Reiter. “The hotel piece, the WeWork piece or the retail piece could be distressed.”
With some smaller apartments, the retail owner could also be the building owner. “It could be a travel agency [on the first floor],” Reiter says. “The owner of the building may also own the business. If that business is closed and there is not a huge amount of multifamily upstairs, the closing of the retail is not immaterial to the overall economics of the building,” Reiter says.
