Om de verspreiding van het coronavirus te beperken, wordt de Nederlandse burger dringend aangeraden drukke plekken te vermijden. De beslissing om wel of niet thuis te blijven, is echter een complexe strategische beslissing die moeilijker is dan op het eerste gezicht lijkt. Immers, zolang iedereen thuisblijft, kan iedereen toch op stap gaan?
With the S&P up 1.4% through February 2, almost at its highest point ever, we sometimes forget that we’re still in the midst of a health crisis. COVID-19 has also had severe consequences for commercial real estate, with occupancy rates and rents of retail and office properties being hammered across the country.
If you look at the headlines in the Wall Street Journal and trade magazines, however, you might not know that to be the case. Looking at rent collections, which are directly observable for owners and indirectly for lenders and investors via REITs and CMBS pools, the general news has been surprisingly or even exceptionally strong. Rent collections in institutional-grade multifamily properties have held steady. Yet unemployment remains at 6.7% – twice what it was pre-pandemic. And 7.3 million people have dropped out of the labor force, 2.3 million more than pre-pandemic. It makes me wonder: are things as good as the headlines say?
In my role at GeoPhy, I wanted to look under the hood of apartment buildings to see how tenants are really doing. Beyond their physical health, which of course is paramount in the midst of COVID, what is the status of their financial health? To understand that, we built Tenant Credit Profile (TCP) to track the credit situation of tenants aggregated to a building level: what’s the credit card utilization rate, are tenants applying for credit, etc.
The last metric has become especially relevant in the current pandemic. Under the $2.2 trillion CARES Act enacted last March, credit card companies and mortgage servicers that enter into payment holiday or deferment agreements with consumers cannot report those consumers as being delinquent. Their credit scores will not be impacted. We consider payment holidays hidden risks: non-payment risks captured neither by credit scores nor by delinquency rates.
