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Urban Apartments Are Struggling. Here’s Why They Will Avoid Distress

Even if there isn’t real distress in the market, a lot of developers will still want to get out of deals as their equity will have been wiped out.

By Les Shaver | December 10, 2020 at 07:38 AM

In a lot of instances, urban Class A apartment deals are facing a double whammy right now. Before the pandemic, there was a softness in some urban areas as construction deliveries rose.

Then, COVID hit. With office workers free to work from wherever they wanted, many have decided to leave urban core apartments in places like New York and San Francisco for cheaper housing with more space. “The markets that are going to struggle are very tourist-driven or the urban cores, like downtown San Francisco and downtown Manhattan,” says Sam Isaacson, president of Walker & Dunlop Investment Partners. “It’s going to be soft.

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