UD+P News: November 2020
RENT COLLECTIONS UPDATE
The table on the right summarizes rent charged versus rent collected by property type on a quarterly basis, from Q1 2020 to present. For the current quarter (Q4 2020), collection data is provided for the months of October and November (as of 11/23/2020). We will publish a summary of fourth quarter collection data when that data becomes available in January 2021.
While retail and office rent collections have held steady since the start of the fourth quarter, during the month of November we have seen a decline both in the percent of residential rent collected (92%) as well as the percentage of tenants paying rent (95%). More than three weeks into November, a total of fourteen renter households are past due on their current month rent. Six households have past due collections spanning multiple months. (This includes four households who have not paid rent since the start of the eviction moratorium in April 2020.) Eight households are behind on their November rent only. The majority of these households have a track record of paying rent late or sporadically. Prior to November, however, most of these consistently late payers have settled their balance by the third week of the month.
Earlier this month, on November 13, a sharp rise in new COVID-19 cases in Oregon led Governor Kate Brown to announce a two week statewide “freeze,” which commenced on November 18. The freeze will be in effect for at least four weeks in Multnomah County, where Portland is located. Service industry businesses and workers will be most impacted by the freeze, which limits restaurants and bars to take-out only, and also temporarily shuttered the doors of gyms, fitness centers, and indoor and outdoor events centers. Retailers can operate at 75% capacity.
The current freeze has likely contributed to lower residential collections in November and we anticipate that our restaurant and retail tenants will also be adversely effected by restrictions and closures. We will gain a greater sense of the impacts on our tenants during the coming months. As always, we will continue to work closely with residents and commercial tenants suffering financial hardship to devise reasonable payment plans and creative strategies for managing through the pandemic.
RESIDENTIAL LEASING UPDATE
As of November 23, across our residential portfolio, an estimated 90% of units in stabilized properties — Álmr, Slate, The George and Fairmount Apartments — are leased. In additional to the customary seasonal slowdown that occurs every autumn as we approach the holidays, spiking numbers of COVID-19 cases are impacting leasing activity, which has been relatively subdued in November.
To attract prospective tenants in a competitive and challenging leasing environment, we have reduced rents for select units at Àlmr, Fairmount and Slate. (The George continues to be 100% leased). We are also offering rent concessions for market rate units (i.e., units where rent has not been discounted). At Àlmr, market rate units are eligible for a concession of 50% off rent for the first three months of tenancy for new leases of 12 months or longer. For all new studio apartment leases at Fairmount, we are offering a monthly utility credit for the length of tenancy. Lastly, for all new residential leases, we have reduced the security deposit from $400 to $99. Our three pronged strategy of lowering rents on some units, offering concessions on others and reducing security deposits across the board, has helped us secure new leases. In particular, we are pleased to report that Fairmount is now 94% leased (up from about an average lease rate of 88% during the third quarter). As new leases are signed, we are simultaneously experiencing some unit turnover attributed to a variety of factors. Some residents are relocating to a different city or buying a home. Others, whose leases are up for renewal, are taking advantage of generous concessions at competitive properties or moving to larger units at a more affordable price point.
Our newest delivery in Northeast Portland, Lyra, is currently 32% leased, with 10 of the project’s 39 units leased. In late October, Portland Housing Bureau (PHB) completed its compliance review process and we are now screening applicants for Lyra’s eight income restricted units, targeted to households earning up to 60% of Portland’s median household income. We are currently offering a concession of two weeks free rent on studios and one month free rent on one-bedroom units at Lyra.
NEW TEAM MEMBER INTRODUCTION
We are pleased to introduce our newest team member, Development Manager, Danny Milman.
Danny is an experienced real estate development professional with a passion for projects that strengthen communities and promote sustainability. For more than 20 years, Danny has managed a wide range of commercial and residential projects, ranging from cohousing and condominiums, apartments, grocery stores, restaurants, tenant improvements, capital upgrades and maintenance, retail centers, and more.
Since joining UD+P in October, Danny has been managing UD+P’s California projects. In addition to 1208 Q Street, a multifamily residential project in the heart of Sacramento, she is managing cohousing projects in Truckee and West Sacramento.
A LITTLE MORE ABOUT DANNY
Where did you grow up?
That is one of the hardest questions for me to answer. I was born in Los Angeles, third generation, but didn’t grow up there. Our family led a nomadic lifestyle going from California to the sugar cane plantations of Hawaii to Fort Lauderdale. Then we migrated back and forth between Kentucky and Mexico for the next ten years. It made me very aware that there are a lot of good ways to approach any situation.
What was your first job in real estate?
In the late 1990s, as a poor graduate student in urban planning at University of Texas, Austin, The CoHousing Company was hosting a cohousing workshop in Austin. I called up and promised to be helpful in exchange for attending. At the time, I was working on my master’s thesis, a case study for affordable housing for women in a tiny home cohousing complex. Eventually Katie McCamant and Chuck Durrett invited me to work for them in Berkeley, California, so I got my dream job straight out of school. I ended up working there for five years, primarily as their construction manager, as well as drawings review, development assistant and site searches. The first cohousing project I worked on was completing the construction of the cohousing community in Bellingham, Washington.
What is something that most people don’t know about you?
In 2008, just before the stock market crash and the start of the Great Recession, my husband and I acquired and ran a kitesurfing shop in Huntington Beach, California. We were in operation for about five years, until 2013. Sadly, I spent too much time in the shop and am not the greatest kitesurfer.
Tell us about where you live now?
For the past two and a half years, I’ve been living in Nevada City, a small gold rush town about 2,500 feet up in pine forests of the Sierra Foothills, about an hour from Sacramento. It used to be one of the largest cities in California, but is down to about 3,000 people now. Before that, we lived in Long Beach, in southern California. I miss the beaches, but love the rivers.
What is one of the talents you bring to the table as a development manager?
One of the main things I bring to the table is my experience in a bunch of the different chairs. I’ve worked on the architect side, I’ve been the on site superintendent, the general contractor’s project manager, the cohousing group member, the landlord’s representative. Knowing the pressure points and focus from each point of view helps me to bring a team together and find solutions everyone can work toward.
What were you doing before you joined UD+P and what was it that attracted you to us?
Prior to joining UD+P, I worked as a Senior Project Manager at Jones Lang LaSalle (JLL). A company with 90,000 employees in 30 countries, JLL is a bit more corporate than UD+P. One of the last projects I worked with a great team on the renovation of the historic food court in Curry Village at Yosemite National Park. One of the all time best parts was being in the park in May during the COVID shutdown. When I saw bears in the wild for the first time, I was very aware that it was just me and my peanut butter for miles. It was an amazing experience having the park to myself.
I was drawn to UD+P for a few reasons. The quality of the development and team is outstanding. I wanted to go to work for a developer so I could be deeply engaged in the visioning and planning process from pre-construction and planning through delivery. I haven't done more than consult on a cohousing project since 2004, and am thrilled to have the opportunity to return to manage cohousing projects. Nothing — no project — is ever loved as much as a cohousing community. There is a certain look to a communal space—it's loved and cared for, but not pristine. There's something gratifying about going back five years later and seeing the transformation. You can see they have been loved. I'm also excited to be able to work on other types of projects, such as Q Street in Sacramento. UD+P's values of sustainability and quality urban design and construction align with my values and make me happy at work.
Find out more about Danny and other UD+P team members here.
