[June 29, 2020]

KBRA Releases Research - Coronavirus (COVID-19): A Closer Look at State Multifamily Rent Legislation

Kroll Bond Rating Agency (KBRA) releases a report titled Coronavirus (COVID-19): A Closer Look at State Multifamily Rent Legislation.

With the first confirmed coronavirus (COVID-19) case in the U.S. on January 21, 2020, the crisis has now reached its sixth month. And while May 2020's unemployment rate fell to 13.3% from 14.7% in April, for many of the roughly 21 million unemployed Americans, it is going to take some time before labor markets are back on solid footing.

The upshot for multifamily landlords is that many residents may be unemployed or underemployed, which will create cash flow pressure for many building owners. This is particularly true given the state or local ordinances that prevent tenants from being evicted for the failure to pay rent, or subject landlords to rent caps or freezes. On the bright side, renters may be more inclined to renew leases rather than move in today's uncertain economic environment.

KBRA examined CMBS 2.0 and rated Freddie Mac K-Series deals to identify the locations where much of the securitized multifamily stock is located. KBRA identified four states that accounted for approximately 40% of the total CMBS 2.0 and rated Freddie K Series multifamily universe ($155 billion). The states include Texas ($20.8 billion), California ($19.7 billion), Florida ($12.2 billion), and New York ($11.7 billion).

As state and municipal legislation in the COVID-19 environment has continued to evolve, be revised, and updated, the report seeks to provide some clarity surrounding evictions, rent control, rent caps, freezes, and other rental provisions.

Click here to view the report.

Related Publications

• Rating Considerations for Maturing CRE Loans in a Challenging Environment
• Coronavirus (COVID-19): CMBS Loan Performance Trend Update
• Coronavirus (COVID-19): CMBS Special Servicing and Watchlist Trends
• Coronavirus (COVID-19): CRE Recovery Clues from the Great Recession and China
• Coronavirus (COVID-19): The Commercial Real Estate Landscape

About KBRA and KBRA Europe

KBRA is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and is a certified Credit Rating Agency (CRA) with the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe is registered with ESMA as a CRA. Kroll Bond Rating Agency Europe is located at 6-8 College Green, Dublin 2, Ireland.

View source version on businesswire.com: https://www.businesswire.com/news/home/20200629005710/en/

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