Fascinating Report on Covid’s Impact on Real Estate

One of our resident board members, Jonathan Chambers, shared the Delta Associates Spring 2020 report, “Covid-19’s Impact on the Economy and the Washington Multifamily Market” he helped write. Below are some of the highlights, if you lack the time to review the entire report, which is actually quite interesting.

Washington metro area job growth in April was an unprecedented -319,200, or a loss of approximately 10% of the region’s total employment. The regional unemployment rate also skyrocketed to 9.9% in April, compared to 3.3% in March 2020 and 2.8% in April 2019. The economic impact of the COVID-19 crisis has been wildly uneven among individual business sectors, with some faring far worse than others.

Commercial real estate in the region has been moderately affected by the pandemic, although much of the industry is in a wait-and-see pattern. According to a survey by The Associated General Contractors of America of the Northeast region, 15% of respondents mentioned they have been notified to cease projects that were underway in May. About 33% of respondents are experiencing project delays due to a shortage of
personal protective equipment, and another 28% reported a shortage of construction material. However, domestic production of materials and a national slowdown in construction activity has resulted in a reduction in some construction costs.

Delta conducted a survey of multifamily real estate developers in the Washington metro area to gauge the impact of COVID-19 on scheduled groundbreakings. About half of the respondents have experienced delays due to the difficulty in obtaining financing. Despite delays for some planned multifamily projects, several have started construction amid the pandemic.

A Delta survey of property management firms showed that the pandemic has significantly altered operations of multifamily buildings, including: the closure of common areas, adjustment to cleaning routines, the closure of leasing offices to the public, and the widespread use of virtual tours. During the months of April and May, data from the National Multifamily Housing Council (NMHC) shows that rent collection rates in the U.S. were down in 2020 compared to the same months in 2019, but not as much as expected.

They determined that while the Washington multifamily market has underperformed rapidly growing metros in the Sunbelt and West Coast since the Great Recession, it is better positioned to weather a down cycle than nearly all its peers. They expect minimal delays in deliveries of apartment projects already underway due to the pandemic. The pandemic will likely cause delays in projected construction starts n the second half of 2020, which will reduce the number of deliveries in 2022 and into
2023, well after the end of the medical emergency (hopefully); however, the short-term impacts will be minimal.

They project that deliveries of Class A office space will outpace absorption in all three substate areas over the next year. In turn, they project a rise in vacancy in office space by Q1 2021, reaching close to 5.0% in the metro area compared to 4.4% as of the first quarter of 2020. Rent growth will remain below average and likely turn negative in several submarkets.

While the pandemic will likely not lead to large, permanent migratory shifts away from urban areas, there may be some changes to the design of existing and new multifamily buildings. Some building design features and trends that are likely to become more prevalent going forward include: retrofitting buildings with contactless opening technology, redesigning common areas and amenity space to accommodate social distancing, such as creating office pods or spacing equipment in the fitness center, and adding a greater amount of dedicated workspace in units. COVID-19 will leave its mark on multifamily design just as other market disruptions have over the years.

Covid-19 Update – Record-low Maryland COVID-19 positivity rate

Governor Larry Hogan recently announced that Maryland’s statewide COVID-19 positivity rate has reached a new all-time low of 3.62%. He also said that positivity rate among for those under 35 has dropped nearly 30% since July 23, to 4.78%. The state’s hospitalization metrics continue to plateau, with ICU beds dropping below 120 for the first time since July 14.

Montgomery County’s positivity rate has dropped to 2.94%. On Saturday, the county had 121 new confirmed cases of COVID-19. This is a daily case growth of 0.6%, marking the 32nd consecutive day the increase was less than 1%.

On Saturday, the county added 121 new confirmed cases of COVID-19, bringing its total to 18,260 since the pandemic began in mid-March. There have been 763 confirmed deaths from the virus in Montgomery County.

Delegate Marc Korman posts these statistics everyday on Twitter and Facebook.

Live from the Strathmore Mansion

In this week’s Live from the Mansion, we are joined by Elijah Jamal BalbedIsabelle De Leon, and Mark G. Meadows for a soulful set that is sure to make you move.

Live from the Mansion features host Christylez Bacon and fellow Strathmore Artist in Residence alums of varying genres each week for music and insightful conversation. Learn more at bit.ly/LiveFromTheMansion and tune into our Facebook page Wednesdays at 7:30pm!

Directed by T.L. Benton of Mecca Film Works
Strathmore’s Virtual Programming is supported by AARP Maryland

Montgomery County Provides Guidelines for Businesses to Prepare for Phase 1 Reopening

Montgomery County began Phase 1 of its reopening at 6 a.m. Monday, June 1, as outlined in County Executive Marc Elrich’s Executive Order. To assist businesses to prepare for the transition, the County has developed reopening guidelines. These guidelines are designed to foster a safe environment for businesses and their employees and customers. 

Reopening Guidelines

  • County Executive Elrich’s Executive Order outlines the type of businesses and activities that may reopen in Phase 1.
  • Only businesses referenced in the Executive Order are permitted to reopen; all others must continue to follow the “Stay-at-Home” Order.
  • In order to safely reopen, all businesses must agree to abide by safety requirements to ensure the spread of the virus remains low for employees, patrons and the general public.
  • The County’s Reopening Requirements must be reviewed and posted in a clear and visible location at the business.
  • Any restaurant that plans to offer outdoor dining in accordance with the new safety guidelines must complete an easy registration form confirming their understanding of the new guidelines.
  • Bathrooms must be made available to patrons by restaurants offering outdoor dining.
  • If providing curbside retail pickup, businesses should instruct customers to call or order online first and wait in their vehicles for employees to bring out or deliver merchandise.
  • Employees and customers of hair salons and barbershops are required to use face coverings, gloves, and any other personal protective equipment appropriate to their workplace. In addition, these requirements must be met:
    • Limit of one customer for every 200 sq. ft. of service delivery space;
    • Use of physical distancing markers for staff and customers; and
    • High-contact surfaces (those with hourly or greater contact frequency) must be cleaned with CDC- and EPA-approved disinfectant at least every two hours.
  • The Reopening Montgomery web page features resources, best practices and answers to reopening questions.

As the County moves into Phase 1 of reopening, businesses and patrons are urged to continue practicing safety measures:

  • Wear face coverings always in public indoor spaces and when physical distancing cannot be maintained outdoors;
  • Continue physical distancing;
  • Limit indoor and outdoor gatherings to 10 people or fewer; and
  • Telework whenever possible.

Montgomery County Opens Up on Monday!

Montgomery County Executive Marc Elrich and County Health Officer Dr. Travis Gayles today announced critical benchmarks to reduce the spread of COVID-19 have been achieved, allowing the County to begin a gradual reopening. Phase I will start this Monday, June 1 at 6 a.m. The County plans for an incremental reopening, based on public health data. 

Phase I allows additional businesses and activities to start and/or increase modified operations under specified guidelines. They are:   

  • Retail; curbside only
  • Restaurants and bars; outdoor seating (curbside pick-up still allowed)
  • Childcare; State-approved emergency programs open for dependents of essential employees and Phase 1 reopening employees
  • Personal Services; hair salons and barber shops for hair only appointments
  • Car washes; exterior cleaning only
  • Manufacturing; fully reopen with precautions and guidance
  • Outdoor Day Camps: following Maryland Department of Health guidelines
  • Outdoor Youth Sports; following Maryland Department of Health guidelines

Certain outdoor recreation continues to be permitted; golf courses, archery, shooting ranges, marinas, campgrounds, horseback riding facilities and tennis courts.

The following businesses and services remain closed:

  • Swimming pools; (however, licensing and inspection can be requested and conducted)
  • Senior Centers
  • Fitness Centers
  • Movie Theaters
  • Shopping Malls
  • Nail Salons

Protective measures such as maintaining physical distancing, careful cleaning and disinfecting by staff and face coverings being worn by employees and customers, are just some of the measures being required of businesses that are in this initial phase of recovery. 

“This is an important first step,” said County Executive Elrich. “But it is a first step, and restrictions are still in place. I know we are all eager to resume our activities, but based on careful discussions with our County Health Officer Dr. Gayles, we have identified certain restrictions that can be lifted. I urge you to follow the guidelines so that we can keep moving forward and not have spikes in the number of cases. This first phase can be successful if all of us do our part and follow the guidelines.”

Covid-19 Updates

Courtesy of Delegate Marc Korman, here are the latest Covid-19 statistics for the Pike District, or at least most of it.

According to the Maryland Coronavirus Dashboard: COVID-19 Statistics in Maryland

Number of confirmed cases: 19,487 (Up 906 cases from previous day)
Number of negative test results: 85,489    
Number of confirmed deaths: 858 (Up 31 from previous day)
Number of probable deaths: 87
Currently hospitalized: 1,513 (Up 50 from the previous day)
Acute care: 978
Intensive care: 535
Ever hospitalized: 4,101
Released from isolation: 1,263

COUNTY
Montgomery
CASES
3,843
DEATHS
(190)

Save the Date: FOWF Virtual Meeting May 19

Now that the White Flint 2010 Sector Plan is ten years old, the Montgomery County Planning Department is revisiting the recommendations from the sector plan by initiating the Advancing the Pike District study. The goals of the study are to:

  • Provide an up-to-date Progress Snapshot: Summarize development patterns and trends to date, and identify challenges inhibiting development around the Metro Station area. Highlight successful planning and development practices and lessons learned since the Sector Plan’s adoption.
  • Implement Vision Zero in White Flint’s Core: Integrate Vision Zero concepts and principles to reduce conflicts between vehicles and pedestrians and create a safe environment for all modes of transportation around the Metro Station area.
  • Position the White Flint Metro Station for success:. Create an urban design framework and common vision that maximizes the Metro site’s potential, advances county goals, and enhances access alternatives to the Metro Station.
  • Create an identity for the Pike District through Placemaking: Host a community placemaking event in coordination with the Better Block Foundation and the Pike District rebranding campaign.

This project is intended to spark further implementation by identifying short-term opportunities for success that can be implemented within the next 2-5 years to further the development of the White Flint area, as well as move forward the sector plan.

The Planning Department and Friends of White Flint will hold a virtual meeting Tuesday, May 19 at 7 pm to discuss and get community feedback on the Advancing the Pike District project so save the date!

Strathmore can entertain you during your home stay

FRIDAY, April 10 10:30 am & 4:00 pm   Art Talk & Tours for Kids and Adults 

Explore Shake It Out: Mandi Moerland and meet the artist at our virtual art talks on Friday, April 10, 10:30am for kids and 4pm for adults on Zoom. Moerland’s work captures the movement and grace of dance.

Be sure to also check out their virtual exhibition tours and Artists in Fiction Book Club

SATURDAY, April 11 10:15 am     Family Jam Sessions — Discover Bluegrass with Brad Kolodner

Saturday Family Jam Sessions are now online and free! This week Brad Kolodner introduces kids to the joys of bluegrass. From toe-tapping fiddle tunes to groovy banjo melodies and jubilant sing-alongs, explore the vibrant and rich tradition of bluegrass and old-time music!

See the full list here and check out their video archive.