What Is the Break-Even Point for Apartment Owners?

Los Angeles

It is unclear how long shelter-in-place restrictions will last, and the longer they are in place, apartment rent collections will be insecure. Apartment owners are running analysis to determine break-even and cash-flow trends to determine exactly where low rent collections go from being an annoyance to a problem.

For apartment owner Bainbridge, the break-even point is 90% rent collections. The figure accounts for new developments, which have struggled to lease during the pandemic. “We have a lot of new developments that are in the lease-up process, and they really didn’t have full occupancy to support a global pandemic where we aren’t leasing or occupying units at the rate that we projected,” Dana Caudell, president of property management at Bainbridge, tells GlobeSt.com.