Coastal Apartment REITs Fall Victim to Delayed Return-To-Work Timing

The outlook for coastal apartment REITs has lowered as uncertainties around COVID-19 vaccine distribution continue, case counts tick up, and return-to-work plans are increasingly delayed.

While coastal apartment REITs have been among the better performers in “riskier” sectors since November, a new report by Mizuho Securities predicts downside risk to return-to-work timing. The report forecasts a return-to-work (and a corresponding increase in demand and rents) in September or October 2021, a timeline adjusted from previous May/June estimates that assumed coastal CBDs would stabilize by the fourth quarter of 2020 or first quarter of 2021.