Post-Pandemic Panels

Multi-family real estate is still a challenging asset class in Manhattan where the eviction moratorium gives tenants unprecedented rights impacting an owner’s ability to collect rent.

Last month, Gov. Kathy Hochul extended a statewide eviction moratorium on pandemic-related residential and commercial evictions until January 15, 2022.

“Throughout the pandemic lenders have required COVID reserves to cover up to 6 months of principal and interest payments,” said Daniel Hilpert, Managing Director at Equicap, a debt and equity brokerage well-versed in multi-family lending. “While some lenders have relaxed their reserve requirements, the continuous extension of the moratorium is coming to an end. The question remains, will landlords be able to recoup the rent losses of the last 18 months?”

Multi-family remains a targeted asset class for both investors and lenders, according to Michael J. Romer, co-founder and managing partner of Romer Debbas, a real estate law firm active in the multi-family space.

“The multi-family market has faced many changes during the pandemic,” Romer told EQ. “Many investor owners were faced with the harsh reality of tenants not paying rent.”

Hilpert and Romer are among the experts who are lecturing at the 2021 Regional Conference of the New Jersey Mortgage Bankers Association (NJ-MBA) in Atlantic City from October 3rd through 7th.

“We have issues in New York with rentals and offices that weren’t being occupied because of the impact of COVID-19 and whether there’s going to be a permanent reduction in the need for office space due to the fact that people are working from home, which is a big issue for everybody,” said E. Robert Levy, an attorney and executive director of NJ-MBA.

This is the first time since the coronavirus emerged that the regional conference is happening in person. Some 1,000 registrants are expected along with 157 exhibit booths. Concern for the safety of the people who are attending is paramount, according to Levy.

“We will provide masks at the registration desk and there will be a lot of hand sanitizer all over the hotel,” Levy told EQ. “We’re separating people in the general sessions so that they are not closer than six feet. We like the idea of if you don’t want people close to you, shaking hands and that kind of thing, you’ll wear a red sticker. If you’re open to everything in terms of contact with people, you wear green and if you’re somewhere in between, you wear a yellow sticker. This is a precedent we’ve never had to deal with in the past.”

Speakers at the 37th annual event include Aaron H. Jodka, director of research with Colliers’ U.S. Capital Markets, Alexander Martin, chief information security officer with Absolute Home Mortgage, Ashley Gravano, vice president of product solutions with Mortgage Cadence, Charles Ruffin, associate vice president with Axos Bank, and Charles H. Kauffman Jr., CMB president with C.H. Kauffman & Associates.

“The retail market and certainly the hotel market have been hurt the most,” Kauffman told EQ. “A lot of tenants obviously couldn’t pay their rent and a lot of hotels were shut down completely. It’s interesting that the two best performing areas and still to this day are multi-family housing and industrial because of e-commerce shopping.”

Another topic being presented at the conference is the Community Reinvestment Act (CRA).

“We’re very concerned about the CRA being applied to the independent mortgage banker (IMB) because the CRA was designed for banks who take deposits from a community, and there was a feeling that they wouldn’t be giving back to that community by way of mortgage lending and such,” Levy said in an interview. “But if you look at the statistics, you’ll see that IMBs are serving low-income communities very well and so the issue of CRA is a solution looking for a problem that doesn’t exist.”

EQ will be there and will have a follow-up with any major developments from the conference.