Year end wrap-up
To say 2020 has been a tumultuous year would be an understatement. Something we have heard about ad nauseam so I won’t belabor it here. Despite the challenges it is worthwhile to focus on some of the positives CSQ Properties has experienced. Most notably, cash distributions have been made to investors every month without a lapse! We have also renovated several units and turned over several units. Vacancy has not exceeded three weeks and the largest monthly rent concession was $50. Perhaps most importantly CSQ rent collections have been at 98.5%! This is well above the national multifamily collection average of 94% as reported by National Multifamily Housing Council.
As reported by Zumper, one of the leading rental marketplaces and parent company of Padmapper, many of the most expensive rental markets in the U.S. saw declines in rental rates. For example L.A. saw a 15% drop whereas Long Beach experienced a 2% INCREASE over the same period from Oct. 2019 – Oct. 2020. This speaks to the CSQ strategy of investing in Long Beach where there is unprecedented investment, construction, and rent growth.
The successes at CSQ have not come without a lot of hard work and effort, or as we would like to call – Grit. It has taken a team to get here, but through flexible and personalized rent payment plans, consistent communications, and a few tenant gifts to show our appreciation, we have achieved above-average results.
Reseda Medical Arts Building
As Marcus & Millichap noted in their 3rd Quarter 2020 Special Report, “Medical Office is poised for strong returns as patient care adapts and healthcare needs climb”. We have seen just that at the Reseda Medical Arts Building where space was vacant for less than 2 months and was leased this month at 20% higher rent.
Click here to see all updates on Reseda Medical Arts Building
We completed renovation on another unit this month. It is currently on the market for same rent as pre-covid rates and we’re confident this is what it will lease at. There is one tenant who fell behind one month on rent but we have a repayment plan in place which they have been able to adhere to. All things considered, this is a phenomenal performance for a cash-producing real estate asset.
1955 Locust Ave
The tenants at Locust continue to stay current on rent and turnover time has been markedly short – to date, no units have been vacant for more three weeks. The demand for renovated 1 bedroom and 2 bedroom apartments continue to be very strong throughout Long Beach as shown in the Zumper Table above.
8455 Eton Ave
This property was referred to as a hidden gem in the Valley by the Clinical Outreach Coordinator at Breathe Life Healing Centers. We are actively trying to change that sentiment by increasing our marketing on Social Media platforms and direct mail campaigns to local treatment centers and other sober living homes.
The women and children at the home are feeling particularly blessed this Christmas season as one of the CSQ investors anonymously donated a gift to the house for women and children to enjoy. There were many happy smiles all around the house!
The words of Benjamin Franklin ring more true today than ever, “Out of adversity, comes opportunity”. It’s a simple thought but something CSQ holds true to heart as we evaluate properties to acquire. Despite the challenges Covid has created, CSQ has a lot to be grateful for. We are all hoping that the headwinds of 2021 are significantly calmer, but regardless what it throws at us, CSQ will face these challenges head on and focus on delivering significant results for our investors and other stakeholders.