For the last few weeks, we have been running a weekly "downturn" roundtable discussion for our clients (a group that includes some of the most experienced pricing and revenue management practitioners in the industry). Each week we have been summarizing the insights that were shared during our latest discussion.

The content below summarizes audience responses to three prompts (all answers are anonymous) on our most recent call (May 13th). If you have different insights or questions that you would like us to address in the coming weeks, please leave them in the comments or contact us through the site.

This week we opened up with a discussion about demand as we enter week nine of the crisis. We shared some statistics from our own internal aggregate data that showed very similar patterns to early RealPage and Yardi numbers. To summarize:

• There was a huge drop for three weeks from mid-March, but there have been steady demand increases since then
• Secondary and tertiary markets are showing YOY increases in recent leasing, so we appear to be making up some of the lost demand from the first few weeks
• Coastal urban markets are, in most cases, back to within 25% of prior year leasing

We don't know that this will last, but the good news is that we are seeing positive effects from seasonality and some pent up demand from earlier shutdowns.

How are your May collections rent doing?

• 94% as of today which is 2% higher than this time in April
• NMHC reported last Friday 80.2% of households made at least some rent payment up to the 6th. That was two points better than April
• May rent collections on par with April through yesterday, consistent with past months in general. Pretty much on point
• Down about five percentage points historically, but we're up a couple of points vs. April
• 88.6% as of yesterday, rent only, 85% total billing
• Slightly off from our April payments thus far in May but less than one point
• Delinquency for us is at 9.9% through yesterday. That's a 10bps improvement month-over-month
• 92.8% collected so far through May. April was 94.6% at the end of the month
• 90% collected through yesterday, mostly Class-A, largely in line with April so far
• We're at 90% collected and ahead of April by 150bps

We've been more optimistic on rent collections than some others, primarily because of something that's becoming increasingly clear to people. With the $600 weekly federal benefit on top of state unemployment payments, many of those hourly workers are actually making more on unemployment than they were before.

We still have some headwinds as state unemployment offices are overwhelmed. So, there are potential cash flow issues with when that money will get disbursed. We've certainly heard anecdotal stories of people who are on payment plans basically with a rent forbearance until they get their unemployment check. They have filed, so as soon as they get it they'll start to make good. Another headwind, of course, is that the federal benefit only lasts for four months, so we're almost halfway into that period.

Where are you in your (partial) reopening plans? Any specific precautions you're taking? How are you managing varying local requirements?

• As far as opening amenities, it's a case-by-case basis. We're looking at starting with pools, removing furniture, having online signups for gyms (no free weights or yoga equipment), and keeping appointments only for leasing offices. Corporate offices will begin to open per each city's guidelines and will include rotating staff to maintain social distancing and temperature checks
• Evaluating state-by-state and hiring pool attendants where needed
• We're oscillating between reservation only and letting residents self-police. We've not made a final decision
• [Smaller portfolio in the midwest] we're opening the valve slowly. Now remoter workers are transitioning back. Viewing is by appointment only, virtual and self-guided. We're stockpiling PPE and setting up safety measures
• Departments that need an office will start going back at the end of May with rotations. Most of us probably won't be back for the entire summer.

With leasing velocity up, I'm interested to hear what different groups are doing as far as accepting recommended decreases from LRO/Yieldstar in a situation that would cause inversion to in-place rents. The different options I see are:

• Take the decreases and deal with the inversion which can create a challenge on renewals for in-place residents
• Target flat trade-out and utilize concessions to drive leasing velocity

Also, are teams starting to offer concessions on renewals as well?

• Orlando has been very challenging for us: renewal retention has definitely come down
• In single-family rental we never saw a massive reduction in asking rents, so we don't really have that problem right now. [ed. note: This same gentleman  shared with us last week that they are actually doing some small increases on renewals. They had gone with the initial flat the NMHC recommended, but after a couple of months, they were seeing a demand strong enough that it makes sense to introduce some at least small rent increase]
• We put floors in place to keep pricing flat or up YoY, and didn't find it necessary to use concessions
• We're taking decreases and dealing with the inversion. We lost occupancy at the dip and are trying to recapture some of that. We're not too inverted yet. We're doing flat renewals like in June and July. No renewal concessions yet, but we're prepared to deal to keep the backdoor closed
• We targeted one time concessions on new rents and some renewals discussions where the resident rent is above what we're charging for new rents
• Nashville, San Francisco, NY, and Boston are pretty bad for us
• In Houston, we've had some flat renewals with concessions, so net negative, but just isolated assets
• Generally, we look at it on a property-by-property basis. For the most part, we're letting prices flow with the market, but we've traded some of that correction back for none LRO concessions if that was more effective
• Generally speaking, we're not using concessions on renewals
• Orlando has been very challenging for us. Renewal retention has come down
• Propping LRO prices have supported renewal efforts in downtown LA
• Austin has been surprisingly softer than thought

As of right now I am encouraged that we have no markets in "stage 1" anymore. I have not heard of any markets where leasing is down more than 80 percent. Most of the worst markets I'm hearing are in the 20-25% range, so if you've got properties that are down 40-50%, I would take a look at other communities in your market. Whether they are sister properties or if you have a good relationship with your competitors you should find out what's going on. 

It could all reverse at some point, but right now, if anything, we seem to be picking up some pent-up demand from the leases that did not happen in April. Again, it will be very interesting to find out if renewals start to come down at the end of this month.