National CRE News In Your Inbox.

Sign up for Connect emails to stay informed with CRE stories that are 150 words or less.

Sub Markets

Property Sectors


Apartment Turnover Ebbs as Renters Shelter in Place

National  + Weekender  | 

Apartment turnover—the percentage of total units not renewed each year—fell to 42.1% in April, the lowest level in more than 20 years, CBRE’s Jeanette Rice says in a new report. Although there has been a long-term trend toward declining turnover anyway, it has accelerated recently due to fewer tenants moving because of the COVID-19 economic downturn as well as lockdown mandates.

Turnover fell by 120 basis points year-over-year to 47.5% in 2019, according to RealPage. For the seven major multifamily REITs, turnover also fell by 120 bps Y-O-Y to 48.7%, based on trailing four-quarter averages for the quarter ended March 31. UDR was the only major REIT without a drop, says Rice; its turnover rate was essentially unchanged.

First-quarter turnover also went against an historical trend, although only two weeks of Q1 fell within the COVID-19 period. Turnover usually rises each spring, but declined this year due to lockdowns and economic concerns.

Benefits of lower turnover generally outweigh disadvantages, Rice points out. “Benefits include cost savings from continuation of rent income and from lower turnover ‘make-ready’ expenses. The National Apartment Association estimates that turnover costs average about $1,800 per unit, and can easily rise to $3,000. Another advantage is that effective rent increases on renewals are generally higher than from new leases generated from vacated units.”

Higher turnover can be advantageous when the market or product segment is achieving high rent growth. At those times, owners may be able to obtain more rent growth from new leases than from renewals.

In the current environment, especially, says Rice, “Low turnover is helping owners maintain occupancy and cash flows.”

That leisurely pace isn’t likely to last, though. “Over the next few months, turnover will likely rise from April’s low level given the acceleration of leasing activity in May,” Rice says. “Yet, through 2020, turnover should still be lower than last year.”

Get CRE News in 150 words

For comments, questions or concerns, please contact Paul Bubny


Inside The Story

Download the reportConnect With CBRE’s Rice

About Paul Bubny

Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 13-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 15-20 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces. Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications. Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).

  • ◦Lease