Navigating the Post-Pandemic Eviction Landscape: Insights for Commercial Real Estate Professionals
The commercial real estate sector is witnessing a significant shift in tenant eviction trends across the United States, with several metropolitan areas experiencing persistently elevated eviction rates compared to pre-pandemic levels. As legal professionals specializing in commercial real estate, it’s crucial to understand these post-pandemic tenant eviction trends and their implications for property owners, investors, and managers.
Key Findings:
1. Elevated Eviction Rates: According to Princeton University’s Eviction Lab, eviction filings in several major cities have increased by 35% or more compared to pre-2020 norms. Hotspots include Las Vegas, Houston, and Phoenix with post-pandemic tenant eviction trends.
2. Record-Breaking Numbers: In Phoenix, January saw over 8,000 eviction notices filed – an all-time high for a single month in Maricopa County.
3. Expedited Proceedings: Some jurisdictions, like Phoenix, are processing evictions rapidly, with hearings often lasting less than a minute.
4. Widespread Trend: Of the 33 cities tracked by the Eviction Lab, 10 have seen eviction notices increase by 15% or more over the past year compared to pre-pandemic levels.
5. Regional Variations: While some cities like New York and Philadelphia have maintained lower eviction rates due to increased renter protections, many Sunbelt cities and even some Midwest locations like Columbus, Ohio, are experiencing higher rates.
6. Economic Factors: The surge in post-pandemic evictions follows significant rent increases, with nationwide asking rents rising 30% between 2020 and 2023, according to the Zillow Observed Rent Index.
7. Technological Impact: Property management software is streamlining the eviction process, potentially reducing opportunities for negotiation between landlords and tenants.
8. Rental Assistance: The depletion of emergency rental assistance funds is contributing to the rise in evictions in some areas.
Implications for Commercial Real Estate:
1. Increased Due Diligence: The elevated post-pandemic eviction trend underscores the importance of thorough tenant screening and financial assessment.
2. Lease Agreement Review: Ensure lease agreements are comprehensive and clearly outline terms related to rent payment and eviction processes.
3. Proactive Communication: Encourage clients to maintain open lines of communication with tenants to address financial difficulties early.
4. Legal Compliance: Stay informed about local and state eviction laws, which may have changed in response to the pandemic.
5. Risk Management: Advise clients on strategies to mitigate the financial impact of potential evictions, such as security deposits or rent guarantee insurance.
6. Alternative Dispute Resolution: Consider recommending mediation or other forms of dispute resolution to avoid costly and time-consuming eviction proceedings when possible.
As commercial real estate title attorneys, we play a crucial role in helping our clients navigate this complex landscape. By staying informed about these trends and their legal implications, we can provide valuable guidance to property owners and investors, helping them protect their investments while navigating the challenges of the post-pandemic rental market.
About the author: Myles Lichtenberg, Esq., is a recognized leader in the real estate title insurance industry. Since 1979, Mr. Lichtenberg, and his amazing team, have conducted well over 27,000+ real estate title transactions and over $16 Billion Dollars of settled transactions, involving just about every type and variety of real estate configuration – from commercial to residential, from complex to simple and from single-state to multi-state portfolios.
