CNSREIT-AR-2024 Final - Flipbook - Page 49
Short-term multifamily community leases associated with any multifamily residential properties we acquire may expose
us to the effects of declining market rent and could adversely impact our ability to make cash distributions to you.
If we invest in a joint venture that purchases multifamily residential properties, substantially all of the multifamily
community leases could be on a short-term basis. Because these leases generally permit the residents to leave at the end of
the lease term without penalty, our rental revenues may be impacted by declines in market rents more quickly than if our
leases were for longer terms.
Increased levels of unemployment could adversely affect the occupancy and rental rates of any residential properties we
acquire.
Increased levels of unemployment in residential markets could significantly decrease occupancy and rental rates. In
times of increasing unemployment, residential occupancy and rental rates have historically been adversely affected by:
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oversupply or reduced demand for apartment homes;
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rental residents deciding to share rental units and therefore rent fewer units;
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potential residents moving back into family homes or delaying leaving family homes;
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a reduced demand for higher-rent units;
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a decline in household formation;
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persons enrolled in college delaying leaving college or choosing to proceed to or return to graduate school in
the absence of available employment;
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rent control or rent stabilization laws, or other laws regulating housing, that could prevent us from raising
rents sufficiently to offset increases in operating costs;
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the inability or unwillingness of residents to pay rent increases; and
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increased collection losses.
These factors generally have contributed to lower rental rates. To the extent that we invest in any residential properties,
our results of operations, financial condition and ability to make distributions to you may be adversely affected if these
factors do not improve or worsen.
If any credit market disruptions or economic slowdowns occur, any investments in multifamily properties may face
increased competition from single-family homes and condominiums for rent, which could limit our ability to retain
residents, lease apartment units or increase or maintain rents.
Any multifamily communities in which we invest may compete with numerous housing alternatives in attracting
residents, including single-family homes and condominiums available for rent. Such competitive housing alternatives may
become more prevalent in a particular area in the event of any tightening of mortgage lending underwriting criteria,
homeowner foreclosures, declines in single-family home and condominium sales or lack of available credit. The number of
single-family homes and condominiums for rent in a particular area could limit our ability to retain residents, lease
apartment units or increase or maintain rents.
Climate change and climate-change related regulation may adversely affect our business and financial results and
damage our reputation.
There has been increasing awareness of severe weather and other climate events outside of the historical norm as well
as increasing concern from government agencies about the effects of climate change on the environment. Transition risks,
such as government restrictions, standards or regulations intended to reduce greenhouse gas emissions and potential climate
change impacts, are emerging and may increase in the future in the form of restrictions or additional requirements on the
development of commercial real estate. Such restrictions and requirements could increase our costs or require additional
technology and capital investment by our borrowers, which could adversely affect our results of operations. This is a
particular concern in the western and northeastern U.S., where some of the most extensive and stringent environmental
laws and building construction standards in the U.S. have been enacted.
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