Marketing Multifamily Properties In The COVID Era
June 17, 2020

The past few months have created a market that might seem to be anything but normal. Though the pandemic continues, Essex Realty Group, Inc. brokers are adapting to change by signing new listings and marketing new deals. We asked Principal Steve Livaditis, Director Jacob Goldstein, and Associate Derek Kaptanoglu to share some of their recent experiences about what it is like to release a new multifamily listing during these unprecedented times.

Q: What factors did your team consider before releasing a new multifamily listing?

Derek: One of the biggest factors we considered when analyzing which listings we wanted to release in May and June was whether or not the property was fully occupied. Over the last few months we have prioritized completing marketing packages for properties that were not fully occupied, because once released we would still be able to complete property tours due to the vacant units. Our strategy for fully occupied deals was to wait to release the deal closer to June when the rule regarding entering occupied units might be lifted. My team released two suburban deals in late May and haven’t had any issues with our showings.

We also have tried to be extremely in-tune with our sellers to make sure we understand their motivations. We needed to make sure each seller was aware that the current pandemic could have a possible impact on the valuation of their property. Understanding our seller’s motivations has helped us provide the best advice and guidance we could.

Jacob: I agree with Derek’s sentiments about being in-tune with the seller. My team released a new listing on Lincoln Avenue in Lakeview in early May because our seller was and still is highly motivated to sell the property. We had many conversations with our seller about current state of the market and we check in weekly to make sure we are all on the same page.

Steve: Generally speaking, up until about three weeks ago, it seemed like there was still a lot of confusion in the marketplace and the biggest hurdle was understanding what impact there could possibly be in our industry due to COVID-19. As the weeks have gone on, the multifamily sector continues to be the strongest product type and has survived this pandemic far better than any product type, like retail or office space.

Before launching a new listing we had to make sure our seller was comfortable with all the current unknowns that have popped up due to COVID-19. A big question for example is, “has COVID-19 affected pricing, and if financing was even attainable?”

My approach has been, “we won’t know the ‘COVID factor’ until we market the deal. We won’t know if there is a difference in pricing today compared to pre-COVID times until we truly start marketing a property.” By actually releasing a new listing and marketing the property, we are getting real in-person feedback which is far more important and valuable than the background noise you might be hearing on the news.

Q: What guidance have you shared with your clients over the past few months?

Derek: Essex conducted two surveys in April and May that focused on understanding how COVID-19 was impacting mid-market multifamily owners in the Chicagoland area. We have shared the survey results with our clients because it contained great data about mid-market multifamily rent collection over the last couple months. We have also shared links to online resources with our clients that might help their tenants handle possible financial hardships including information about unemployment benefits, payment plans, job links, etc. Lately we have also been advising owners leave a vacant unit open so that we can show it to prospective buyers without having to deal with the potential liabilities of going into an occupied unit.

Steve: Yes, I have also shared with clients the data we gathered through our survey which indicated rent collections for the past few months was north of 95%. From sharing these results with clients and continuing the conversation about collections we have noticed that very few mid-market multifamily investors in the Chicagoland area have been impacted collections-wise.

Some of my clients have lately expressed delaying the marketing of their property due to the perceived market fear and volatility. Whenever there is uncertainty in the market, sellers constantly sing this same tune. But the reality is that I have navigated through a lot of volatile cycles during my 25-year real estate career, and when markets are volatile, opportunities or perceived opportunities get executed. Back in 2008, most of the market was fearful to invest as liquidity became scarce , but for those who envisioned beyond the market speedbump, capitalized on opportunities that others not only missed but would never get the opportunity to acquire again. There has been so much wealth created in the past 12 years by investors who didn’t wait for the low or the high in the market.

Never fear or pull back from the ups and downs in a market. The operating fundamentals in the Chicago metro market are phenomenally strong, and we are seeing continued strength in tenant occupancy, and renewals which fuels the investment market.

Q: Can you share more about your experiences touring properties during the pandemic?

Jacob: For our new listing on Lincoln Avenue in Lakeview we released the listing with an accompanying YouTube video tour of all three units. This has been a great new tool for us as we are able to limit the number of in-person tours to serious buyers who have taken the time to watch the detailed video. I have enjoyed utilizing the video as a marketing tool because it is a great way to connect with clients and it is fun to talk about the ways technology has impacted our industry. I think there will be a big shift in the mid-market multifamily sector and buyers and sellers will expect a virtual tour to be part of the marketing process.

Steve: I have always believed that good quality listing will yield good results, and that is still true today during these uncertain times. For example, last week we conducted 12 property tours at a new listing we released in Niles. The property has been meticulously maintained by the same owner for the last 20 years and is situated in a great low-density area in Niles. The great activity we have seen from investors has shown us there is still strong activity for good quality real estate in good locations. The only way we will learn about pricing is by going through the marketing process.

One thing that has been interesting about this pandemic compared to previous crises, like the 2008 recession for example, is implementing the new procedures we have put into place when showing a building. We are requiring that everyone wear a facemask for the entirety of the tour. I also provide gloves and shoe coverings to every buyer entering the building. These precautions are important because I want to protect the health and safety of the tenants in the building and I want to make everyone feel as safe and comfortable as possible. We haven’t received one compliant from a buyer or a tenant while operating in this manner which is really encouraging.

I have noticed in the last few months that property owners are generally concerned about making their tenants uncomfortable by listing a building right now. But by implementing these strict touring guidelines and taking all the necessary precautions it is very easy to help make the tenants feel comfortable.

Q: What is something you have learned in the last few months?

Derek: I’ve learned, over the last few weeks of calling to promote our listings, that a lot of the newer buyers that entered the suburban markets in the last two to three years are much more focused on managing their current portfolios and aren’t nearly as interested in looking at new deals coming to the market. This is probably because many of them are still working toward stabilizing their current portfolios with rehabs, tenant turnover, etc. But at the same time, my team has received a large amount of calls from more seasoned investors that are actively looking for multifamily deals and are able to perform under uncertain times with COVID-19 still looming.

Steve: Real estate investors are always looking for opportunities to invest, and you just have to listen, to understand exactly what your client is looking for today. While there are always a small number of investors looking for a “fire-sale”, the remaining majority are not. A lot of investors I work with likely have money yielding 0% in the bank, are hesitant to put money into the volatile stock market, and they aren’t interested in chasing product type like retail or office because they are seen as a higher risk, so they continue to seek good quality multifamily real estate. Today, I have learned that investors continue to be comfortable with investing in multifamily at similar yields as pre-COVID as long as they can get good quality real estate in strong rental neighborhoods.


Since 1990, Essex Realty Group, Inc. has served Chicago's investment real estate market as a top multifamily brokerage firm. Contact us today to learn more about our recent multifamily and mixed-use property sales.