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COVID-19 CREA PORTFOLIO TRENDS CONT. ... as well as fund-level and portfolio statistics. As we began reaching out to general partners and management agents, it was evident that their teams were laser focused on the core of our business: the residents. We quickly realized that our “boots on the ground” partners were being pulled in many directions with record level reporting requests, as well as quickly creating and implementing new health and safety protocols for residents and staff. As advocates, our partners were actively reaching out and providing education and resources to residents, such as local subsidy and relief programs, processing interim recertifications, and assisting with unemployment applications. CREA’s requests for information needed to be limited, organized and focused. Like many other syndicators, our external data management system wasn’t set up to immediately begin tracking and efficiently meet the various reporting requests. Within a few weeks, though, we found our groove with an internally managed Excel spreadsheet that allowed us to import data points add new data and feedback, filter and quickly modify as the COVID-19 environment continued to change, new guidance emerged, and legislation, such as the CARES Act, was passed. you think next month is going to look like?” We can’t predict the future and there is no “crystal ball,” but we can examine what we do know: • Approximately 86% of CREA’s stabilized and operational properties have reported monthly rent collection data. We quickly learned that while we wanted to provide collection data to our partners as early in the month as possible, actual collections were taking longer during COVID and data continued to change throughout the month. • Rental collections have averaged 92% across the entire portfolio since May. • CREA’s portfolio reported 94% collection in June and July, likely due to Economic Impact Payments and the additional benefits received under Federal Pandemic Unemployment Compensation. • In contrast, August and September reported a decrease to a 92% average collection rate. The main contributing factor being a 1% decrease in collections for family properties, likely due to an expiration of the benefits previouslymentioned. jump in residents becoming newly unemployed or experiencing a loss of income. Therewas difficultygathering documents needed to process the interim recertifications as many businesses closed or were operating remotely. Since June, the number of subsidized properties reporting less than 80% tenant collections continues to decline. As we look toward year- end, concerns continue to rise as the CDC issued an eviction moratorium, tenant receivables build across the nation, and, for some, the expiration of unemployment benefits is on the horizon. ...continued from page 1
There are some mitigants to the rent- lossthatourportfoliohasexperienced. Properties have managed to decrease cash flow with reduced maintenance expenses and delaying of non-critical capital projects. In addition, some Management Agents were able to receive relief through the Paycheck Protection Program (PPP) under the CARES Act and pass benefits through to properties. In total, we have received reports that Management Agents of 168 properties were awarded PPP proceeds. As of Q2, Management Agents have passed down these benefits to 113 of our properties, with a remaining 37 properties expecting to receive benefits during Q3. Even more recently, a few states have released programs that provide relief for non-payment of rent directly to property owners. In addition, most states have applied for Lost Wage Assistance through FEMA, which
It is important to note that some of the data is skewed by subsidized properties that reported only tenant collections. Investors frequently asked why subsidized properties might experience low tenant collections. We saw this hit a high in June when 58% of the properties reporting less than 80% collections were subsidized properties. This climb was mainly attributed to a sudden
Six months into the pandemic and we can now see trends emerge and better anticipate how various factors might impact our portfolio. Through it all, one question persists: “What do
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